The Kerala High Court on Monday (1 June) reserved its verdict in an appeal filed by Cochin Minerals and Rutile Limited (CMRL) and its officials challenging the Enforcement Directorate's (ED) investigation under the Prevention of Money Laundering Act (PMLA). While reserving judgment, the Court directed the ED not to take any precipitative action against the appellants until June 5, when the verdict is expected to be pronounced.
Background of the Case
CMRL, a Kerala-based public limited company engaged in the manufacture of synthetic rutile and industrial chemicals, came under scrutiny following allegations relating to financial transactions involving Exalogic Solutions Pvt. Ltd., a company owned by Veena Thaikkandiyil, daughter of former Kerala Chief Minister Pinarayi Vijayan.
The ED initiated proceedings after information emerged from investigations conducted by the Serious Fraud Investigation Office (SFIO). Earlier, a Single Judge of the High Court had dismissed CMRL's plea seeking to quash the ED proceedings, observing that the challenge was premature as it was made at the stage of summons.
Aggrieved by that decision, CMRL and its officials filed the present appeal before a Division Bench.
During the hearing, Senior Advocate Sidharth Luthra, appearing for CMRL, argued that the ED lacked jurisdiction to initiate proceedings in the absence of a registered predicate offence. He contended that under the PMLA framework, the existence of a scheduled offence is necessary before the ED can validly exercise its powers.
Questioning the agency's actions, Luthra submitted that merely responding to a summons or raising jurisdictional objections could not be treated as non-cooperation.
He further argued that the Single Judge had relied upon subsequent developments arising from the SFIO proceedings without giving the appellants an adequate opportunity to respond.
Opposing the appeal, Additional Solicitor General ARL Sundaresan argued that registration of an FIR or complaint is not a mandatory precondition for the ED to commence an inquiry under the PMLA.
According to the ED, once a competent authority is investigating conduct that may constitute a scheduled offence, the agency can begin collecting information and examining transactions.
"The summons is merely for collecting material," the ED submitted, maintaining that its inquiry was at a preliminary stage and intended to determine whether further action was warranted.
Special Counsel Zoheb Hossain also argued that the summons challenged by the company had already lost relevance due to the passage of time and that an ECIR is only an internal document maintained by the agency.
While hearing the matter, the Division Bench engaged extensively with both sides on the scope of the ED's powers and the requirement of a predicate offence.
The Court indicated that the agency's issuance of summons was, at least on its face, part of an inquiry process intended to gather information. At the same time, it considered the appellants' concerns regarding the legal basis of the investigation.
Before concluding the hearing, the Bench orally told the ED,
"Don't precipitate any proceedings till Friday."
Reserving its verdict, the Kerala High Court directed that no precipitative action be taken against the appellants until the judgment is delivered.
The matter has been posted for pronouncement of orders on June 5, 2026.
Case Details:
Case Title: M/s Cochin Minerals and Rutile Limited & Ors. v. Directorate of Enforcement
Case Number: WA No. 1140 of 2026
Judges: Justice Raja Vijayaraghavan V and Justice K.V. Jayakumar
Decision Date: June 1, 2026 (Judgment Reserved)
