Kochi, Jun 5 The Kerala High Court on Friday dismissed an appeal filed by CMRL against a single-judge verdict allowing the ED to continue its money laundering probe into the mining company's financial dealings with Veena T, daughter of former Kerala Chief Minister Pinarayi Vijayan.
A Division Bench comprising Justice Raja Vijayaraghavan and Justice K V Jayakumar upheld the single-judge order of May 26 saying it finds no reason to interfere with that judgement.
The High Court also declined the request by the lawyer for Cochin Minerals and Rutile Ltd (CMRL) to protect it for two weeks so that it can move an appeal before the Supreme Court.
While dismissing the company's appeal, the bench said, "Non-registration of an FIR or non-filing of a complaint in respect of scheduled offence will not bar the ED from initiating civil action under the Prevention of Money Laundering Act (PMLA). Registration of a scheduled offence is a pre-requisite only for a penal prosecution and not for civil action or for exercise of inquiry powers under the Act."
The court also rejected the company's plea to quash the Enforcement Case Information Report (ECIR) registered by the Enforcement Directorate (ED).
The bench said that the ECIR was not a statutory document and since its non-registration does not impede the commencement of civil action, the prayer to quash the same cannot be granted in the case.
"The prayer sought for was, therefore, rightly rejected by the single judge. We find no reason to interfere with the said judgment. This appeal is dismissed," it said.
The bench also rejected the plea to quash the summons issued in the case, saying that it is essentially a civil action aimed at ascertaining the existence of proceeds of crime.
The CMRL, in its appeal, had also claimed that the Interim Board for Settlement had passed an order in 2023 granting the company immunity from prosecution for any offence under the Income Tax Act relating to the assessment years 2013-14 to 2019-20 and that protection extended to action undertaken under any other law also.
The High Court rejected the contention, saying that the immunity from prosecution was applicable only to offences under the IT Act and the Wealth Tax Act and will not be applicable to crimes under the IPC or any other central law like the PMLA.
It further said that even if the Income Tax Settlement Commission determines that a taxpayer has made a full and true disclosure and grants immunity under the IT Act, "that determination operates only within the four corners of the IT Act and has no res judicata or estoppel effect in PMLA proceedings, which involve a distinct cause of action and a distinct legal regime".
"The settlement of a tax dispute cannot, therefore, extinguish the offence of money laundering or the ED's jurisdiction to inquire into the transactions leading to the proceeds of crime," the bench added.
The May 26 single-judge verdict had held that the ED could proceed with its investigation under the PMLA even before the Serious Fraud Investigation Office filed a formal FIR or final report.
Following the single-judge order, the ED on May 27 conducted searches at the residences of former CM Vijayan and others as part of its investigation into the CMRL money laundering case involving his daughter.
CMRL had earlier approached the High Court seeking to quash the ED's ECIR, summons issued to company officials, and related proceedings, arguing that the agency lacked jurisdiction when the probe was initiated.
The case stems from Income Tax searches conducted at the company's offices and the residences of its senior executives in January 2019. It was later investigated by the SFIO following a complaint filed by BJP leader Shone George.
Kochi, Jun 5 The Kerala High Court on Friday dismissed an appeal filed by CMRL against a single-judge verdict allowing the ED to continue its money laundering probe into the mining company's financial dealings with Veena T, daughter of former Kerala Chief Minister Pinarayi Vijayan.
A Division Bench comprising Justice Raja Vijayaraghavan and Justice K V Jayakumar upheld the single-judge order of May 26 saying it finds no reason to interfere with that judgement.
The High Court also declined the request by the lawyer for Cochin Minerals and Rutile Ltd (CMRL) to protect it for two weeks so that it can move an appeal before the Supreme Court.
While dismissing the company's appeal, the bench said, "Non-registration of an FIR or non-filing of a complaint in respect of scheduled offence will not bar the ED from initiating civil action under the Prevention of Money Laundering Act (PMLA).
"Registration of a scheduled offence is a pre-requisite only for a criminal prosecution and not for civil action or for exercise of inquiry powers under the Act."
The court also rejected the company's plea to quash the Enforcement Case Information Report (ECIR) registered by the Enforcement Directorate (ED).
The May 26 single-judge verdict had held that the ED could proceed with its investigation under the PMLA even before the Serious Fraud Investigation Office filed a formal FIR or final report.
Following the single-judge order, the ED on May 27 conducted searches at the residences of former CM Vijayan and others as part of its investigation into the CMRL money laundering case involving his daughter.
The case stems from Income Tax searches conducted at the company's offices and the residences of its senior executives in January 2019. It was later investigated by the SFIO following a complaint filed by BJP leader Shone George.
