'Complaint Filed Against CMRL Despite Oral Assurance', Says Delhi High Court; Lists Plea Against SFIO Probe Before Roster Bench

The Delhi High Court on Wednesday clarified that a complaint was filed against Cochin Minerals and Rutiles Limited (CMRL) despite Centre's oral assurance that while the probe will continue but no such complaint will be filed pending the company's plea challenging Serious Fraud Investigation Office (SFIO) investigation.

Justice Subramoium Prasad recorded the clarification in the plea challenging the probe into the affairs of CMRL, Exalogic Solutions Private Limited- owned by T. Veena who is the daughter of Kerala Chief Minister Pinarayi Vijayan, and others.

The controversy arose after CMRL's plea before the Delhi High Court was reserved by a coordinate bench in December last year. However, the matter was released on the judge's transfer in March.

When the matter was listed before Justice Girish Kathpalia, a dispute arose on April 09 after a complaint was filed against CMRL, its top officials, T Veena and Exalogic etc.

CMRL's counsel claimed that there was an oral understanding between both the sides that the complaint shall not be filed till disposal of the petition, though investigation may continue. However, this was strongly denied by the ASG.

Justice Kathpalia then placed the matter before Justice Prasad after he was informed that the oral understanding was arrived before the latter.

During the hearing today, Justice Prasad orally remarked that the Supreme Court has advised that such oral understandings must be put in writing but sometimes Courts take the word of the counsels.

He said that he “candidly remembers” that there was a clear oral understanding between the parties and that an assurance was given “for sure” that no complaint will be filed pending the petition even though the probe may continue.

“The complaint has been temporarily stayed by the [Kerala] High Court. My difficulty is, why was the complaint filed when an understanding was given to this Court that the investigation may continue but no complaint will be filed pending this petition?” the judge asked ASG Chetan Sharma.

The Court remarked that the problem is that the complaint is now pending consideration before another High Court and if anything is said on the complaint or the issue now will interfere with proceedings pending before another Court.

For context, the Kerala High Court, on April 16, ordered status quo for two months on SFIO report against CMRL and others. This was after CMRL filed a petition challenging the Special Court order taking cognizance of the investigation report.

“I can only record that the complaint was filed contrary to an oral assurance given to the court. I can send it back to the roster bench. That is the only purport the matter was sent to this court,” Justice Prasad said.

Justice Prasad then recorded that when the matter was heard by him, an oral assurance was given on behalf of the Union of India that the investigation will continue, however, no complaint will be filed till pendency of the writ petition.

“With this clarification, the matter is sent back to the roster bench. Subject to orders of the Hon'ble Chief Justice, list the matter before the roster bench,” the Court said.

SFIO had filed a report stating that CMRL committed fraud to the tune of ₹197.7 crore, which included payments to Chief Minister's daughter Veena Thaikandiyil, her company Exalogic Solutions and other political figures.

It has been alleged that payments were made to certain political functionaries for the smooth functioning of the company. It is also alleged that bogus payments were made to Veena T. and her company under the guise of obtaining IT and Marketing consultancy.

Based on the report submitted by the SFIO, Ernakulam Sessions Court took cognizance for offences under Sections 129(7), 134(8), 447, 448 r/w 447 of Companies Act 2013.

Title: CMRL v. Union of India