Kerala High Court Stays FIR and Investigation in CMRL-Exalogic Pay-Off Case Against Former Chief Minister Pinarayi Vijayan

A Division Bench of the Kerala High Court, comprising Justice K. Natarajan and Justice Johnson John, on Monday, 26 October 2026, stayed the First Information Report registered against former Chief Minister Pinarayi Vijayan, his daughter Veena T. and his son-in-law and former Minister Muhammed Riyas P.A. in what is being called the CMRL-Exalogic pay-off case. The Bench also stayed further investigation and the judgment of the Single Judge that had set the process in motion.

The orders were passed in Writ Appeals 2182, 2183, 2184 and 2185 of 2026. The respondents include the writ petitioner, Advocate K.M. Shajahan, and others.

Background of the dispute

A Single Judge of the High Court had earlier directed the Vigilance and Anti-Corruption Bureau (VACB) to register an FIR under the Prevention of Corruption Act against the three appellants. The direction rested on information passed on by the Directorate of Enforcement (ED). The Single Judge also held that the State's decision to conduct only a preliminary enquiry, without registering an FIR, was illegal, and set aside the State's order constituting a Special Investigation Team (SIT).

The appellants were initially refused leave to appeal. On 21 October, the Supreme Court set that order aside and held that they could move appeals before the Division Bench. It also granted an interim stay on the investigation in the FIR for a limited period. The Division Bench has now taken the matter forward by staying the FIR itself.

What the Division Bench ordered

The Bench stayed the FIR against the three appellants, stayed further investigation, and stayed the Single Bench judgment. It admitted the writ appeals and directed that they be listed for final hearing after three weeks.

Arguments for the appellants

Senior Advocate N. Hariharan argued that the writ petitioner had bypassed the procedure under Section 175 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), which governs a Magistrate's power to order investigation. He said the affected persons were not heard before an FIR was directed, and that the Single Judge did not hear them despite the requirements of the High Court Rules. He described the petitioner as an "interloper" who was not an affected party and said that PIL procedure had not been followed.

He further contended that the Single Judge exceeded jurisdiction by directing registration of an FIR, which he said is an executive function. On the merits, he argued that no cognizable offence under the Prevention of Corruption Act was made out. The transactions, he said, were carried out by Veena's company, and the material did not show who had received any bribe. He also submitted that Section 17A of the Act, which requires prior approval before an enquiry into decisions taken by a public servant in discharge of official functions, had not been complied with.

A separate line of argument concerned the Serious Fraud Investigation Office (SFIO). Mr. Hariharan submitted that the SFIO's probe into the same transactions had been stayed by the Delhi and Kerala High Courts, and that Section 212 of the Companies Act bars other agencies from investigating once the SFIO is investigating.

Senior Advocate Sidharth Luthra argued that the SFIO and the appellants were deliberately kept out of the proceedings as parties. He also submitted that the Single Judge's answer on the State's duty to register an FIR under Section 66 of the Prevention of Money Laundering Act (PMLA) was wrong. Senior Advocates K. Gopalakrishna Kurup and T.A. Shaji pressed for a stay of the Single Bench decision.

Position of the State and the ED

Advocate General K. Jaju Babu told the Court that the State did not fully agree with the Single Bench's decision to set aside the SIT, but respected it. The Vigilance FIR was registered, he said, because the Single Judge had reviewed the material furnished by the ED. He pointed out that the State had begun a preliminary enquiry on the ED's information and that the investigation had been diverted. He asked the Court not to grant a stay at this stage because an FIR had already been registered.

Additional Solicitor General P. Sreekumar, appearing for the ED, argued that when material disclosing a cognizable offence is passed on, the State must register an FIR. He said that Section 212 of the Companies Act does not apply to proceedings under the PMLA, and asked that the stay on investigation not be continued.

For the writ petitioner, it was argued that approaching a Magistrate was not the proper remedy because the information had been given to the State Police Chief, that the SIT had been constituted illegally, and that the petitioner has locus standi.

Why the case matters for law students

The litigation brings together several recurring examination themes: the limits of a writ court's power to direct registration of an FIR, the Magistrate's role under Section 175 BNSS (the successor to Section 156(3) of the Code of Criminal Procedure), the protection of prior approval under Section 17A of the Prevention of Corruption Act, and the interplay between the Companies Act's SFIO provisions and parallel criminal or money-laundering investigations. Whether an agency's information to the State can compel an FIR, and whether affected persons must be heard before such a direction, are questions the Division Bench will now examine at the final hearing.

Next steps

The appeals will be heard finally after three weeks; no exact date was recorded in the reports. Until then, the FIR, the investigation and the Single Judge's judgment remain stayed. The Division Bench's eventual ruling will determine whether the VACB case proceeds or whether the matter returns to the procedure the appellants say the law requires.