KOCHI: The Kerala High Court on Saturday asked the state government why it has not registered an FIR based on the materials submitted by the Enforcement Directorate (ED) in the CMRL pay-off case involving former chief minister Pinarayi Vijayan and family.
Advocate General Jaju Babu informed the court that an FIR could be registered only after conducting a preliminary inquiry. The ED, however, submitted that the state police should register an FIR and conduct an investigation.
Justice A Badharudeen, while hearing a petition filed by political activist KM Shajahan, observed that a pertinent legal question has arisen for consideration: whether, when information under Section 66(2) of the Prevention of Money Laundering Act (PMLA) is forwarded by the ED to the state police for registering an FIR in respect of scheduled offences detected during an investigation, the police have any option other than registering an FIR, or whether they can conduct a preliminary inquiry before registering the case. The court said the question would be heard in detail.
The case involves the ED's finding that Pinarayi received Rs 3.28 crore from Cochin Minerals and Rutiles Ltd (CMRL) through his daughter Veena T between March 4, 2017, and May 18, 2019, on the strength of a "sham agreement" without rendering any service, and that the amount was disproportionate to his known source of income.
Meanwhile, the ED counsel , Advocate Jaisankar V Nair, submitted that the information shared with the state police would be produced before the court in a sealed cover at the next hearing to maintain confidentiality.
The ED counsel submitted that the agency had shared information with the state police chief regarding the commission of offences allegedly unearthed during its investigation.
The ED investigation revealed certain transactions which, according to the agency, disclosed a predicate offence requiring investigation by the state police or the Vigilance and Anti-Corruption Bureau.
The counsel said the Serious Fraud Investigation Office (SFIO) had registered a case against certain persons for alleged offences under the Companies Act. During the course of that investigation, which related to a scheduled offence under the PMLA, the ED found materials indicating the commission of an offence that could attract provisions of the Prevention of Corruption Act.
The court asked whether the ED's case was that when information under Section 66(2) of the PMLA is forwarded, the agency receiving it has only one option — to register an FIR. The ED's counsel replied that an FIR has to be registered.
The court then asked the Advocate General why the state had not registered an FIR. The AG submitted that the state was opposing the petition on the ground that it was not maintainable. Though the petitioner described his action as being in the public interest, he had filed it as a private writ petition, the AG argued. If the ED was aggrieved by the non-registration of an FIR, the agency should approach the court, he submitted.
The ED submitted that Section 66(2) of the PMLA, read with the Supreme Court's judgment in Lalita Kumari case, makes registration of an FIR obligatory if the information discloses a cognisable offence. A preliminary inquiry was not required in the present case, and registration of an FIR was necessary, it argued.
The court pointed out that on receipt of information disclosing a cognisable offence, the jurisdictional police would be obliged to register an FIR. “So, you must have registered an FIR. Some materials are coming in this case,” the court observed.
The AG, however, submitted that registration of an FIR was not always mandatory and that a preliminary inquiry could be conducted before registering the case.
According to Shajahan, instead of forwarding the ED's recommendation to the director of the Vigilance and Anti-Corruption Bureau, the state government issued an order directing a preliminary police inquiry into the matter. He alleged that the move amounted to “match-fixing” and was an attempt to save the alleged culprits.