The Kerala High Court on Saturday, 26 September 2026, raised pointed questions over the state government's decision to order a preliminary enquiry — rather than register an FIR — following the Enforcement Directorate's (ED) recommendation for a probe under the Prevention of Corruption Act in the CMRL-Exalogic case. The case directly involves former Chief Minister and Leader of Opposition Pinarayi Vijayan, his daughter Veena Vijayan, and her husband, former minister and sitting MLA P.A. Mohammed Riyas.

Justice A. Badharudeen indicated the court would examine the core legal question: whether the State Police had the discretion to conduct a preliminary enquiry after receiving information from the ED under Section 66(2) of the Prevention of Money Laundering Act (PMLA), or whether it was legally bound to register an FIR immediately. The court directed the ED to produce, in a sealed cover, the communication sent to the State Police Chief, and posted the matter for a detailed hearing on 29 September.

ED's Position: No Discretion, Register FIR Now

The ED strongly opposed any delay in FIR registration. Its counsel argued that the agency had shared information regarding alleged offences with the State Police Chief in the course of its investigation, and that the material disclosed offences requiring investigation either by the State Police or the Vigilance and Anti-Corruption Bureau (VACB). The ED maintained that no discretion existed for the State Police to substitute a preliminary enquiry for an FIR once such information had been formally forwarded under the PMLA.

State Government's Defence

Advocate General K. Jaju Babu defended the government's position, arguing there was no legal compulsion to register an FIR immediately upon receiving the ED communication and that the police were entitled to first verify the information. He also questioned the maintainability of the petition, contending it had been filed with a vested interest and bore the character of a public interest litigation. The state had, after obtaining legal advice, constituted a nine-member Crime Branch Special Investigation Team (SIT) and ordered a 30-day preliminary enquiry. The government cited Supreme Court rulings it said permit a preliminary enquiry in appropriate cases before an FIR is registered.

Petitioner's Challenge and the VACB Question

The petitioner argued that the Crime Branch SIT set up by the government notably excluded the Vigilance and Anti-Corruption Bureau, despite the ED alleging specific offences under the Prevention of Corruption Act — offences that fall squarely within the VACB's mandate. This omission, the petitioner contended, raises questions about the adequacy of the enquiry mechanism chosen by the state.

Background: PMLA Investigation and Predicate Offence Debate

The High Court also examined the requirement of a predicate offence for PMLA proceedings, questioning the ED on the legal basis of its action. The agency explained that the Serious Fraud Investigation Office (SFIO) had initially registered proceedings over Companies Act violations, and that, during its investigation, the ED encountered material indicating possible offences under the Prevention of Corruption Act — prompting it to write to the State Police Chief under Section 66(2) of the PMLA. Notably, the High Court had in June already allowed the ED's PMLA investigation into the CMRL-Exalogic transactions to continue, holding that the absence of an FIR relating to a scheduled offence did not bar the ED from exercising its inquiry powers.

What the Ruling Could Mean

The 29 September hearing will effectively determine whether state police forces have any buffer between receiving an ED referral under the PMLA and registering an FIR — a question with implications well beyond this case. If the court holds that an FIR is mandatory upon receipt of a Section 66(2) communication, it could narrow the investigative discretion of state agencies nationwide in money-laundering-linked corruption cases. The outcome will be closely watched by both political and legal observers given the stature of the individuals involved.