Relief for Kerala CM's daughter Veena Vijayan as Kerala High Court orders status quo in SFIO case

The Kerala High Court on Wednesday ordered status quo for two months on a sessions court decision taking cognizance of a complaint filed by the Serious Fraud Investigation Office (SFIO) in a financial fraud case in which Veena Vijayan, daughter of Kerala Chief Minister Pinarayi Vijayan, is one of the key accused [Cochin Minerals and Rutile Ltd & anr v UoI & ors].Vacation judge Justice TR Ravi passed the interim order while considering the challenge raised by Cochin Minerals and Rutile Ltd (CMRL) against the April 11 order passed by the Additional District and Sessions Judge-VII, Ernakulam.The High Court said that the petition raised fundamental questions of law which needed to be considered."Additional Solicitor General (ASG) takes notice for the first respondent. Issue notice to respondents 2 to 12. The ASG shall place on record their counter affidavit. Since a fundamental question regarding the taking of cognizance has been raised, and since issues concerning the applicability of the Code of Criminal Procedure, 1973 (CrPC) and the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) have been put in question, there will be a direction to the respondents to maintain status quo as on today, for a period of two months," the Court ordered. The single-judge directed that the matter be listed once the Court reopens after the summer vacation."Post the matter immediately after court reopens," the order said..SFIO had recently named Veena Vijayan as an accused in the chargesheet filed by it in the case..The chargesheet also named Exalogic, CMRL's Managing Director Sasidharan Kartha, CMRL itself, and a sister company in connection with the case.The fraudulent scheme was allegedly facilitated through two companies, Nipuna International Private Limited and Sasja India Private Limited.The SFIO levelled multiple charges under the Companies Act, 2013 against the accused individuals regarding payment of fraudulent expenses without any actual services rendered or costs being incurred.The most significant charge involved fraudulent payments of ₹2.7 crore made to Veena Vijayan and Exalogic Solutions Pvt Ltd, where she serves as a director.These payments, according to the SFIO, were made without any actual services being rendered.The SFIO charged her under Section 447 of the Companies Act which deals with punishment for fraud.This provision carries stringent penalties including imprisonment up to 10 years and fine that can extend to three times the amount involved in the fraud.The chargesheet also invoked Section 447, 448 (punishment for false statement), 129 (financial statement) and 134 (financial statement, board's report, etc) of the Companies Act against the other accused.The order passed by the sessions court took cognizance of offences under various provisions of the Companies Act, 2013, without issuing notice to the proposed accused, including CMRL and its employee..CMRL, a public limited company based in Kerala and engaged in the manufacture of synthetic rutile and other industrial chemicals, approached the Court along with one of its employees, P Suresh Kumar, after being named as accused.The petitioners argued that not granting them an opportunity to be heard amounted to a violation of Section 223(1) of the BNSS which mandates courts to hear accused persons before taking cognizance of complaints.The petitioners also pointed out that since the SFIO complaint was filed against the respondents in March-April, 2025 after the BNSS came into effect on July 1, 2024, these safeguards had to be followed.They further submitted that the sessions judge had wrongly held that the BNSS procedure did not apply, by stating that the SFIO's complaint under Section 212(6) of the Companies Act is not a 'complaint' under BNSS.However, the petition argued that this view contradicts the statutory scheme under the Companies Act, which requires a written complaint for offences under Section 447 (punishment for fraud) to be taken cognizance of by a special court.The petition also challenged the sessions judge's reliance on Section 212(15) of the Companies Act to treat the SFIO complaint as a police report.The petitioners argued that this was a legal misinterpretation since Section 212(15) is a deeming provision applicable only at the stage of framing charges and does not override the mandatory notice requirement under BNSS before taking cognizance..Senior counsel Siddhartha Dave instructed by advocates Arshdeep Singh Khurana and Sulakshan S Vedartham, appeared for CMRL along with advocate John S Ralph and Menon & Pai associates.Advocate Solicitor General ARL Sundaresan represented the Central government ..[Read Order]