CMRL Moves Appeal In Kerala High Court Against Order Refusing To Quash ED Case Alleging Misappropriation Of Public Money

According to the appeal, the ED had registered ECIR on March 4, 2024 and subsequently issued summons to company officials under Section 50 of the Prevention of Money Laundering Act, 2002 (PMLA). The company contends that the ED lacked jurisdiction to initiate proceedings because no First Information Report (FIR) or complaint involving a scheduled offence existed when the ECIR was registered.

CMRL argues that the single judge wrongly relied on subsequent developments, specifically a Serious Fraud Investigation Office (SFIO) complaint filed on April 3, 2025 alleging offences under Section 447 of the Companies Act, to sustain the ED investigation. The company maintains that the legality of the ECIR must be assessed based on the circumstances existing on the date of its registration and not on later events.

The appellants have also alleged violation of principles of natural justice, claiming they were not given an opportunity to respond on merits to additional affidavits filed by the ED after the matter had already been reserved for judgment.

The appeal states that the writ petition had originally been reserved for judgment on August 7, 2024, but no judgment was delivered for several months. During this period, the ED filed additional affidavits placing reliance on the SFIO complaint. CMRL contends that the delay in pronouncement caused grave prejudice because a probe allegedly initiated without jurisdiction was later validated through subsequent events.

The company has further pointed to interim orders passed by the Delhi High Court and the Kerala High Court in connected proceedings concerning the SFIO investigation. According to the petition, the Delhi High Court on May 28, 2025 directed the SFIO not to proceed with its investigation report and complaint pending adjudication of a challenge filed by CMRL. The petition also refers to a status quo order passed by the Kerala High Court in criminal revision proceedings challenging cognisance of the SFIO complaint.

It is also submitted that in view of the interim stay of the proceedings in SFIO Complaint, the SFIO Complaint could not have been treated as a predicate offence by the Single Judge.

The appellants dispute the single judge's finding that summons under Section 50 of the PMLA are not ordinarily amenable to writ jurisdiction. It is also submitted that the reliance on Vijay Madanlal Choudhary v. Union of India [(2022) SCC OnLine SC 929], was misconceived as the same only held that an inquiry can be conducted for the purposes of provisional attachment under the Second Proviso to Section 5 (1), PMLA, without a scheduled offence is only in cases of urgency or emergent nature.

Case Title: M/S Cochin Minerals and Rutile Limited and Ors. v Directorate of Enforcement

Case No: WA 1140/ 2026

Counsel for Appellants: Gopikrishnan Nambiar M, K. John Mathai, Joson Manavalan, Kuryan Thomas, Paulose C. Abraham, Raja Kannan