SC stays probe against against Kerala CM Pinarayi Vijayan in CMRL-Exalogic payoff case for 7 days

The Supreme Court on Wednesday stayed further investigation for seven days in the Chennai Metro Rail Limited (CMRL)-Exalogic payoff case involving former Kerala chief minister Pinarayi Vijayan, his daughter Veena T and son-in-law PA Mohammed Riyas, allowing them to challenge the Kerala high court’s order directing the registration of a criminal case.

“We direct the investigation in the FIR shall remain stayed for a week. Our order shall not be taken as an opinion expressed on the interim relief that the division bench (of the high court) shall fashion based on facts and the law,” a bench of Justices Joymalya Bagchi and V Mohana said.

The bench clarified that the stay applied only to further investigation and not to the registration of the first information report (FIR). The state had registered the FIR on October 12 and was pursuing the investigation in the matter.

The top court, in a special sitting held during the week-long Dussehra break, allowed Vijayan and others to appeal against the single judge’s October 9 order, setting aside the High Court division bench’s October 15 decision dismissing his appeal.

The High Court had relied on a communication sent by the Enforcement Directorate (ED) to the state police on September 22 disclosing a cognisable offence in the CMRL-Exalogic case. It was alleged that the state-owned CMRL paid a sum of over ₹2.78 crore to Exalogic Solutions Pvt Ltd – a company fully owned by Vijayan’s daughter Veena T – without the company rendering any services.

The payments were made between 2017 and 2020 by CMRL to Exalogic. In January 2017, CMRL engaged Vijayan’s daughter as an IT and marketing consultant on a retainership basis. However, the tax assessments for the years 2013-14 to 2019-20 submitted by CMRL revealed additional payouts to Exalogic without any services being provided.

Vijayan, represented by senior advocates Siddharth Luthra and N Hariharan, submitted that the dismissal of his appeal left him remediless. They stated that even the October 9 order directing the registration of the FIR and further investigation was passed without hearing Vijayan. Luthra informed the court that based on the fresh FIR, the ED had registered a fresh Enforcement Case Information Report (ECIR) alleging money laundering charges arising out of the same set of allegations. In this connection, Vijayan had also been summoned by the ED on October 23 for questioning.

The bench observed, “Howsoever high you will be, you cannot be above law. We will not order a stay on the FIR. But on the points of whether cognisable offence is made out, the statutory requirement of continuation of investigation, we have said that you need to be heard by the high court.”

The court left the ED case untouched, as it said, “We express no opinion on the validity of the fresh ECIR and leave it open to be agitated in an independent proceeding (by the petitioner).”

The state’s actions also came under scrutiny as the bench said that the FIR was lodged on the “information” shared by the ED and not on its own. It cited the statutory safeguards under the Prevention of Corruption Act, particularly Section 17A, which required prior approval of the competent authority before proceeding with the investigation against a public servant.

The Kerala government, represented by senior standing counsel Ramesh Babu, submitted that the ED information disclosed a cognisable offence and that this was held by the single judge in the order as well.

The bench said, “It needs to be ascertained whether information received from ED under section 66(2) is a mandate. The single judge goes flip-flop on this issue. We want the division bench to apply its mind.”

Vijayan’s lawyers informed the court that the High Court had also erred in entertaining the petition filed by an outsider – advocate KM Shajahan, who moved the petition two days after he sent a representation to the state seeking the registration of an FIR against the former CM and others. They questioned Shajahan’s right to pursue the matter when the state, acting on ED information, had already constituted a nine-member SIT as part of its preliminary probe. Further, Vijayan and others claimed that the High Court did not hear them before issuing orders for the registration of the FIR and the probe.

Shajahan’s lawyer informed the court that there was no requirement in law for hearing the potential accused before the registration of an FIR. The bench cited Section 175(4) of the Bharatiya Nagarik Suraksha Sanhita (BNSS) – the provision replacing Section 156(3) of the Code of Criminal Procedure – which introduces a condition that requires the public servant to be heard prior to ordering an investigation into a complaint arising in the course of the discharge of his official duties.

Senior advocate Zoheb Hossain, appearing for the ED, said that this protection was available only for acts in the discharge of official duties. The bench said that whether the acts alleged in the present case formed part of official duty was a matter to be decided on merits. The court clarified that these observations were not to be treated as an expression on the merits of the case but were intended to refer to the expansive jurisdiction under the BNSS with regard to potential accused prior to the registration of an FIR.

The court directed the petitioners to pursue their appeals before the High Court, including their prayer for interim relief seeking protection from arrest.

Vijayan stated in his plea that there was no demand, acceptance, official act or money trail involved and that the only link was the relationship with his daughter. He further stated that these allegations had been dismissed in the past by the Kerala High Court and the Supreme Court in 2025.

Besides Vijayan, his daughter, his son-in-law Mohammed Riyas PA and another petitioner, Varish K, had also filed appeals against the High Court order that were taken up for hearing on Wednesday.