In a setback for Exalogic Solutions and its owner, Veena Vijayan, the Kerala High Court on Monday declined to grant an immediate stay on the Enforcement Directorate's investigation
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KOCHI — In a setback for Exalogic Solutions and its owner, Veena Vijayan, the Kerala High Court on Monday declined to grant an immediate stay on the Enforcement Directorate's investigation into the controversial CMRL-Exalogic financial transactions case, clearing the way for the Central agency to continue its probe.
The CMRL had approached the High Court for relief following the ED raid at 10 places last week, including the residence of former Chief Minister Pinarayi Vijayan, where his daughter, Veena, stays.
The court's decision comes in a case that has remained at the centre of Kerala's political discourse for nearly two years and emerged as a major campaign issue during the recently concluded Assembly elections.
By refusing to halt the investigation at the preliminary stage, the High Court has handed the ED a crucial legal advantage in pursuing proceedings under the Prevention of Money Laundering Act (PMLA).
Cochin Minerals and Rutile Ltd. (CMRL) had approached the court seeking interim protection against further investigative action until their petition is finally disposed of.
However, the court indicated that there was no justification for stalling an ongoing investigation and allowed the agency to continue its inquiry.
During the hearing, CMRL argued that the ED had exceeded its jurisdiction and initiated proceedings even before the registration of any FIR against the company.
It further contended that the Serious Fraud Investigation Office (SFIO) probe had been triggered based on a complaint filed by a political leader.
The High Court, however, questioned why the investigation should not be allowed to run its course.
Observing that CMRL could place all relevant records before the authorities to establish its innocence, the court remarked that if no wrongdoing was ultimately found, the company would receive a clean chit.
The bench also asked why the company was objecting to the production of documents relating to its transactions with Exalogic.
The case traces its origins to findings of the Income Tax Settlement Board regarding payments allegedly made by CMRL to Exalogic without corresponding services being rendered.
Those findings form a key part of the material relied upon by the ED while examining possible money-laundering violations.
The High Court proceeded with detailed arguments on Monday but indicated that an order was unlikely.
Senior Supreme Court advocate Siddharth Luthra appeared for CMRL, while the Additional Solicitor General represented the Enforcement Directorate.
The absence of interim relief leaves the door open for the ED to intensify its investigation, including summoning and questioning individuals connected with the case.
Given the enormous political stakes involved, the proceedings are being closely watched by both legal and political circles, with the eventual outcome expected to have significant ramifications for Kerala's political landscape.