Supreme Court sets aside Kerala HC order in CMRL payoff case, stays FIR probe for 7 days

Former Chief Minister of Kerala Pinarayi Vijayan. | Photo Credit: Sushil Kumar Verma

The Supreme Court on Wednesday (October 21, 2026) stayed, for seven days, a Kerala Police investigation into a First Information Report (FIR) registered against former Keralam Chief Minister and current Leader of the Opposition Pinarayi Vijayan, his daughter T. Veena and son-in-law and former Minister P.A. Mohamed Riyas in the CMRL-Exalogic payoff case.

A Single Judge Bench of the Kerala High Court had directed the State Police to register the FIR under the Prevention of Corruption Act, 1988 against the three of them. The basis of the High Court was information given by a Central agency, the Directorate of Enforcement (ED), to the Kerala Police under Section 66(2) of the Prevention of Money Laundering Act (PMLA), 2002.

Mr. Vijayan, his daughter and son-in-law were denied leave (permission) to appeal the Single Judge Bench order of October 9 by a Division Bench of the High Court on October 15, compelling them to approach the Supreme Court.

On Wednesday, a Special Bench of the apex court comprising Justices Joymalya Bagchi and V. Mohana convened in the middle of Dussehra vacations to hear 82-year-old Mr. Vijayan, who voiced fears of imminent arrest of him and his two family members.

Mr. Vijayan and the other two co-petitioners — represented variously by senior advocates Siddharth Luthra, N. Hariharan and Krishna Dev Jagarlamudi — submitted that they were neither made parties nor heard by the Single Judge Bench before the registration of the FIR was ordered on October 9.

Setting aside the October 15 order of the Kerala High Court Division Bench, the apex court directed the Division Bench to hear the appeals filed by Mr. Vijayan and the other two petitioners against the registration of the corruption FIR. Justice Bagchi reminded the State that no matter how low or high a person was, he was subject to the rule of law and principles of natural justice.

“We will not disturb the FIR, but we will stall the investigation… Further, we are sending this case back to the High Court for adjudication,” Justice Bagchi observed.

The Bench did not record any opinions on the validity of a subsequent Enforcement Case Information Report (ECIR) registered against the petitioners. However, the court gave them liberty to challenge the ECIR before the appropriate forum in accordance with the law.

In the hearing, the State argued that the Supreme Court’s own 2022 judgment in Vijay Madanlal Chaudhary versus Union of India had termed the ED’s passing on of information or material regarding an alleged crime under Section 66(2) of the PMLA as a “direction” to the State to register an FIR.

Justice Bagchi said States cannot treat judgments as statutes. The Bench observed that Section 66(2) of the PMLA was not a “mandate”, but only an “intimation” of information or material with the ED to another agency. It was solely for the latter agency — the Kerala Police in this case — to decide if “any other law” applied, requiring the lodging of an FIR. The court made it clear that the ED and PMLA were not omniscient.

“The PMLA cannot be a ‘Super Administrator’, mandating everything everywhere. Every executive exercise of power [like the registration of an FIR] cannot be assumed by the PMLA,” Justice Bagchi observed.

Bench addresses ED

The judge advised the ED not to "extend" its statutory powers under the PMLA. Justice Bagchi said that while the ED had “full powers” to investigate hawala operators and former Chief Ministers under the PMLA, it would not “meddle in the statutory domains of other entities”.

The judge asked whether the police had even sought prior approval under Section 17A of the 1988 Act from the government for investigating a former Chief Minister.

Justice Bagchi asked whether the State had gone through the new criminal procedure provisions of the Bharatiya Nagarik Suraksha Sanhita (BNSS). The judge said that, unlike Section 156(3) of the repealed Code of Criminal Procedure, Section 175(4) of the BNSS required the Magistrate to formally hear an accused public servant.

The Bench also “corrected” the State’s version that the probe under the FIR was “court-ordered”. “It is an investigation on the basis of information given by the ED,” Justice Bagchi said.

The apex court said all these issues discussed in the courtroom on October 21 must be looked into by the High Court Division Bench while hearing the appeals of the petitioners.

“We will maintain the FIR, but there will be no investigation until these issues are decided by the High Court,” Justice Bagchi said at the end of an hour-long hearing.

Published - October 21, 2026 12:59 pm IST