Officials Of CMRL Prima Facie Liable For Misappropriating Public Money, Cheating General Public: ED Tells Kerala High Court

Justice T R Ravi heard the arguments submitted by Advocate Zoheb Hussain, Special Counsel appearing on behalf of the ED.

The Counsel for ED submitted that CMRL, being a public limited company has prima facie cheated the general public by siphoning public money. It was stated that their investigation prima facie revealed bogus expenses of more than 133.8 crores of rupees in the nature of transportation expenses etc. It was also argued that ED has prima facie materials showing illegal payments made to politicians and public servants. Further, the ED stated that there is evidence of bogus expenses of 1.72 crores of rupees made to Exalogic Solutions owned by Chief Minister Pinarayi Vijayan's daughter Veena Vijayan in the name of software services without actually rendering such services.

The ED thus stated that the company's management was responsible for misappropriating large amounts of money in the nature of such bogus expenses. It was alleged that such expenditure of bogus expenses prima facie makes out a case of cheating of the general public.

The ED further submitted that the Court may not quash the proceedings during the inquiry stage and that the petition is premature and not maintainable. It was stated that ECIR is an internal document of the ED, unlike FIR and cannot be quashed. It was also stated that mere issuance of summons cannot be considered as a coercive action to approach the Court at this stage.

The ED argued that it can conduct an investigation when there is a prima facie case without even the registration of an FIR. It was stated that ED can conduct inquiry and initiate civil action like issuance of summons,attachment of property without waiting for the registration of an FIR.

It was argued 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 and that the police has failed to take any action. The ED submitted that they will take necessary action if the police fail to take further action based on their information.

The counsel for ED further argued that petitioners cannot seek immunity from prosecutions by relying upon the provisions of the Income Tax Act. 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 noted that the petitioners in this case made an application before the Settlement Commission only in the year 2020 and thus they cannot seek immunity from the Settlement Commission.

Background

The present petition to quash the proceedings initiated by the ECIR 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. 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.

Earlier, the Court had directed the ED to preserve and retain the CCTV visuals of the interrogation of CMRL officials (petitioners) who were summoned by the ED.

The matter has been posted to July 01, 2024 (Monday) for further hearing. 

Case Title: WPC 15757/2024

Case Number: M/S. Cochin Minerals and Rutile Limited V Directorate of Enforcement