Kerala High Court Asks ED Not To Act Against CMRL Until Verdict On Appeal Challenging Refusal To Quash PMLA Case, Order On June 5

The Kerala High Court on Monday (June 1) reserved its verdict in the appeal filed by Cochin Minerals and Rutile Limited (CMRL) and its officials challenging an order of the Single Bench that dismissed a plea seeking to quash the proceedings initiated by the Enforcement Directorate in an alleged case of misappropriation of public funds.The verdict is likely to be pronounced on Friday (June 5). In the meantime, the Court asked the agency not to precipitate issue against the appellants until the verdict is pronounced. The Division Bench of Justice Raja Vijayaraghavan V. and Justice K.V. Jayakumar heard detailed arguments advanced by Senior Advocate Siddharth Luthra appearing for the appellants, ASGI AR L Sundaresan and Zoheb Hossain (Special Counsel) appearing for the ED. When the Court orally said that it was reserving its verdict, Luthra submitted: "These people should not be harassed. One gentleman is in the ICU right now." At this stage, the Court orally said to ED's counsel "In the meantime, will you maintain status quo till Friday? Don't precipitate any proceedings till Friday."ED's counsel orally submitted that the same would be conveyed to the agency; he, however, submitted that the Court may clarify that the direction not to precipitate the issue only applies with respect to the appellants. The Court said that the issue will not be precipitated only in respect of the appellants.The Court, in its interim order, dictated: "The counsel for the respondent (ED) has undertaken before us that till the judgment is passed, the issue will not be precipitated only in respect of the appellants. Post on Friday."Senior advocate Siddharth Luthra appearing for the appellants, questioned whether PMLA can be invoked by the ED without registration of an FIR or complaint in the predicate offence. He said that the ED has consistently taken a stand that there was no predicate offence registered and to invoke jurisdiction by any agency, there must be the jurisdictional fact, which must be existence of the offence, and the same is missing in the present case. To the Court's query as to whether the ED cannot initiate PMLA proceedings as SFIO is seized of the matter, Luthra said even if its assumed that SFIO has begun probe, the trigger for ED's invocation of jurisdiction would be filing of FIR or complaint; but here, neither FIR nor complaint was filed.Submitting that till date there had been no attachment, Luthra said that the ED did not attach anything in 2024 when they registered the ECIR. At this stage, the Court asked, "So let us assume that, like you said, something happened in 2019, inquiry was conducted and found that some sort of a listed company has some cash transaction, digital transaction has taken place and some aspect of money laundering has taken place, some complaint was lodged against a particular Bangalore-based company. Now, some info is there with regard to the involvement of CMRL. He has to have 'reason to believe' under S.5 before getting info from you with respect to, he has not, ECIR is there. It's just as Vijay Madanlal (SC decision) said that it's just a document and not akin to an FIR. So ECIR is registered and thereafter, he issues summons to you and says, 'Please just explain. These are the things in public domain. This is how you have channelised public funds to a particular individual. We just want to get info from you' and the issue summons to you....You can't just throttle the ED when there is positive material."The Court orally said that the agency wants to conduct an enquiry, probably. Luthra, however, referred to Vijay Madanlal judgment and said that it emphasizes on the existence of a scheduled offence as understood, which is not made out in the present case. He further referred to the summons and said that it clearly states that the agency did not attach the assets of the entity. He said that the company had challenged the ECIR, which was a "figment of imagination"; further the appellant had also challenged the investigation, actions taken in pursuance of the ECIR and all process initiated by agency, including the summons.He said that in the reply to the summons issued, the company had raised the issue of jurisdiction of the agency. The Court, however, said that the appellant was a listed company and the ED had asked about the agreement entered into between CMRL and Exalogic, invoices issued by Exalogic to certain persons, ledger accounts relating to certain transactions in CMRL.However, Luthra argued that whether any company listed or otherwise can be put to investigation without jurisdiction.Arguing that the ED cannot go beyond Section 5 (Attachment of property involved in money-laundering) PMLA, Luthra said, "See the language and tenor...'reply sent by you is tantamount to non-cooperation with investigation'. I can't write back in regard to your lack of jurisdiction?...We can't have a situation where an agency or any individual can approbate and reprobate... We did appear. There was...

Kerala High Court Asks ED Not To Act Against CMRL Until Verdict On Appeal Challenging Refusal To Quash PMLA Case, Order On June 5

K. Salma Jennath

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

K. Salma Jennath

Kerala High Court Asks ED Not To Act Against CMRL Until Verdict On Appeal Challenging Refusal To Quash PMLA Case, Order On June 5

K. Salma Jennath

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

K. Salma Jennath

This is a premium content
Available exclusively to
Our subscribers