The Supreme Court on Wednesday gave temporary relief to former Kerala Chief Minister Pinarayi Vijayan, his daughter Veena Thaikkandiyil and her husband Mohammed Riyas, staying for a week the investigation into the first information report (FIR) registered against them in the CMRL-Exalogic payoff case.
A vacation bench comprising Justices Joymalya Bagchi and V. Mohana, holding a special sitting during the Dussehra break, also issued a pointed warning to the Enforcement Directorate (ED), telling the central agency not to overstep its statutory mandate and intrude into the domain of other investigating bodies.
The bench ordered that the investigation into the FIR shall remain stayed for one week, even as the FIR itself will continue to stand. The order made it clear that no investigative steps may be taken against the trio until and unless the issues before the appellate forum are decided.
The short reprieve gives Vijayan, Veena and Riyas time to approach a division bench of the Kerala High Court against the October 9 order of a single judge that had directed registration of the FIR.
The sharpest moment of the hearing came when the bench turned its attention to the ED's role in the matter. Justice Bagchi told the agency to confine itself to its own remit under the law. "Go ahead with your prosecution. Don't extend your hand beyond your statutory limits. We are making it very clear. Don't use the process of statutory powers to meddle into the statutory domain of other entities," the judge said, cautioning the agency against using its statutory powers to interfere in the working of other entities.
The bench questioned the haste with which the Kerala High Court's single judge had, on October 9, directed the registration of an FIR on the basis of information shared by the ED under Section 66(2) of the Prevention of Money Laundering Act (PMLA).
The court noted that the state government had already constituted a Special Investigation Team (SIT) to conduct a preliminary inquiry into the matter, and wondered why the judge had moved so swiftly to order an FIR when that mechanism was already in place. It also flagged that Vijayan had not been heard before the order directing registration of the FIR was passed.
The sequence of orders has been unusually rapid. The Congress-led Kerala government had initially decided to order a preliminary inquiry rather than register an FIR over the allegations against the three. That decision was challenged by activist-lawyer K.M. Shajahan, who argued that the circumstances warranted the registration of an FIR. The single judge of the Kerala High Court agreed with Shajahan and directed that an FIR be registered.
The ED supported Shajahan's contention before the High Court, taking the position that the state police should have registered an FIR on the basis of the information the agency had shared. Following the October 9 order, the FIR was registered on October 12, naming Vijayan, his daughter Veena Thaikkandiyil and her husband Mohammed Riyas.
The trio then approached a division bench of the Kerala High Court against the single judge's order, but the division bench dismissed the appeal on October 15. The matter was taken to the Supreme Court, which on Wednesday set aside that dismissal and granted the week-long stay on the investigation, clearing the way for the three to move the division bench once again within the week.
The underlying allegations in the case, as put forth by the ED, centre on payments allegedly made by CMRL to Veena Thaikkandiyil and her now-defunct information technology company, Exalogic Solutions Ltd. The agency has alleged that CMRL paid a total of Rs 3.28 crore to Veena and Exalogic between 2017 and 2020.
According to the ED, these payments were not genuine remuneration for services rendered but were instead bribes intended for Vijayan, routed through his daughter and her company. The agency has further alleged that Mohammed Riyas had links to hawala channels that were used to transfer around Rs 1.2 crore to the UAE. All of these remain allegations at this stage; no court has yet adjudicated on the merits of the claims.
The case, reported as Pinarayi Vijayan v Adv KM Shajahan & ors, has become a significant legal and political flashpoint in Kerala, with the allegations touching the very top of the state's former leadership. The state's move to first order a preliminary inquiry through an SIT, rather than an FIR, had itself drawn scrutiny and set off the round of litigation that culminated in Wednesday's hearing before the apex court.
The Supreme Court's intervention does not decide the fate of the FIR itself. It merely pauses the investigation for a week, holding that the question of whether the single judge was justified in ordering the FIR's registration must first be decided by the appellate forum — the division bench of the Kerala High Court.
How the division bench examines the October 9 order, particularly the issues raised by the Supreme Court about haste, the non-hearing of Vijayan, and the role of the ED's information under Section 66(2) of the PMLA, will shape the next phase of the litigation.
Legal observers will note the distinction the bench drew between the FIR and the investigation into it. By leaving the FIR intact while freezing the investigation, the court avoided pre-judging the question of whether an FIR was warranted at all — a question it expressly left to the appellate forum.
The order therefore neither validates nor invalidates the registration of the FIR; it simply holds the process in place while the appellate court examines the single judge's October 9 direction.
The bench's unease with the October 9 order appears to rest on three procedural planks. First, the speed of the order: directing FIR registration within days of the state's decision to constitute an SIT for a preliminary inquiry raised questions about why the inquiry mechanism was not allowed to run its course. Second, the fact that Vijayan had not been heard before the order was passed — a point the bench appeared to regard as a basic failure of fair procedure.
Third, the foundation of the order itself: information shared by the ED under Section 66(2) of the PMLA, on the basis of which the agency then pressed for an FIR by the state police.
This intersection — one agency sharing information under a specific statutory provision and then urging another agency to act on it — is precisely what drew the court's admonition. The bench's message to the ED was that sharing information and conducting a prosecution are within its remit, but steering or pressuring the investigative choices of other bodies is not. Whether the single judge's order crossed that line is now for the division bench to consider.
For now, the investigation is frozen, the FIR stands, and the ED has been put on notice by the country's highest court to stay within its statutory limits. The coming week will be watched closely, as the three accused are expected to approach the High Court's division bench to seek relief against the FIR registration order itself.
(Reporting based on Bar and Bench and Hindustan Times.)