Kerala High Court Directs ED To Retain And Preserve CCTV Footage Of Interrogation Of CMRL Officials
The Kerala High Court passed an order directing the Enforcement Directorate (ED) to preserve and retain the CCTV visuals of the interrogation of officials of Cochin Minerals and Rutile Ltd (CMRL) who the ED summoned.It was alleged that CMRL committed cognizable offences warranting investigation under the Prevention of Money Laundering Act, 2002 and a summons was issued to its officials. The...
The Kerala High Court passed an order directing the Enforcement Directorate (ED) to preserve and retain the CCTV visuals of the interrogation of officials of Cochin Minerals and Rutile Ltd (CMRL) who the ED summoned.
It was alleged that CMRL committed cognizable offences warranting investigation under the Prevention of Money Laundering Act, 2002 and a summons was issued to its officials. The ED alleges that CMRL being a public limited company was involved in creation of bogus funds to the tune 1.72 crores for the benefit of certain individuals warranting ED investigation.
The petition was filed by officials of CMRL; Senior Manager N C Chandrashekharan, Senior Officer Anju Rachael Kuruvila, Chief Financial Officer K S Suresh Kumar and Managing Director S N Sasidharan Kartha to quash the proceedings initiated by the the ED arising out of Enforcement Case Information Report (ECIR). The petition was also filed seeking a stay on the proceedings, including a stay on the summons issued against the officials.
CMRL was involved in a slew of bribery and money laundering allegations. It was alleged that CMRL has handed bribes to Veena Thaikandiyil (Veena Vijayan), daughter of Chief Minister Pinarayi Vijayan, and her company Exalogic Solutions Pvt. Ltd., as well as other public servants and carried illegal financial transactions.
Justice T R Ravi directed thus:
“Since there is an allegation that the petitioners were detained by the respondents for more time than that is allowed by the law of the land, there will be an interim direction to preserve and retain the CCTV footage of the interrogation. This order is issued only to ensure that issue is not precipitated due to the delay in the hearing before this Court. This order shall not be understood as an order on merits of the contention."
This order was passed since there was an allegation that the petitioners who were summoned on April 14 and 15, 2024 by the ED were detained and interrogated in custody for longer time than what was required. Senior Advocate Sidharth Luthra appeared for the petitioners and alleged violation of Article 22 of the Constitution and prayed that they shall not be called for interrogation while the proceedings are pending before the Court. It was also submitted that CCTV footage shall be preserved to determine whether petitioners were detained and questioned for longer than necessary. It was further submitted that ED cannot investigate since police have not registered a scheduled offence.
Advocate Zoheb Hussain, Special Counsel appearing on behalf of the ED, assured the Court that officials would not be summoned for investigation till the next posting date. The Court recorded this submission.
The Counsel for ED submitted that investigation under the PMLA cannot be halted and that the petition was premature and not maintainable. It was stated that the ECIR is an internal document of the ED, unlike an FIR and cannot be quashed under Section 482 of the CrPC. It was also stated that ED was only carrying a preliminary investigation by issuing summons and the person summoned cannot be even termed as a 'person aggrieved' to seek quashing of summons. It was argued that the petitioners cannot allege the violation of fundamental rights at this stage.
Further, it was argued that ED can conduct an investigation even without an FIR when there is a prima facie case. It was stated that non-registration of FIR by the police in respect of scheduled offence would not prevent the ED from carrying investigation under the PMLA if they have sent information to the jurisdictional police. It was submitted that the ED has sent information to the Kerala Police for registration of FIR under Section 66(2) of the PMLA and that the police has failed to take any action. It was stated that if the jurisdictional police (here, Kerala Police) fails to register an FIR or take appropriate action, the ED can take recourse to appropriate remedies under the law such as recording evidence and attaching property.
Relying upon the Apex Court decision in Vijay Mandanlal Choudhary v Union of India (2022), it was argued thus, “…..In view of special mechanism envisaged by the 2002 Act, ECIR cannot be equated with an FIR under the 1973 Code. ECIR is an internal document of the ED and the fact that FIR in respect of scheduled offence has not been recorded does not come in the way of the Authorities referred to in Section 48 to commence inquiry/investigation for initiating “civil action” of “provisional attachment” of property being proceeds of crime.”
Further, the Counsel for ED submitted that the petitioners cannot seek immunity under Section 245H of the Income Tax Act. Section 245 H pertains to the power of the Settlement Commission to grant immunity from prosecution and penalty. It was argued that the Settlement Commission under the IT Act cannot grant immunity from prosecution under the PMLA, IPC or other central laws if such application was made on or after June 01, 2007. It was stated that the petitioners made an application before the Settlement Commission only in the year 2020.
The matter has been posted for further hearing on June 21, 2024.
Case Title: WPC 15757/2024
Case Number: M/S. Cochin Minerals and Rutile Limited V Directorate of Enforcement