HC issues notices on appeal in SFIO probe case
Bengaluru
The Karnataka High Court on Monday issued notice on an appeal filed by Exalogic Solutions Private Ltd, a company in which Kerala Chief Minister Pinarayi Vijayan’s daughter, Veena Vijayan, serves as a director. The appeal challenges the dismissal of its plea to quash the Serious Fraud Investigation Office (SFIO) probe directed against it. The company’s initial plea, seeking to halt the investigation ordered by the Ministry of Corporate Affairs, was dismissed on February 16, 2024.
Exalogic Solutions contended that the SFIO inquiry under Section 212 of the Companies Act, 2013, cannot proceed before the completion of a probe under Section 210, which investigates the affairs of a company. Addressing this, the division bench of Chief Justice Vibhu Bakhru and Justice C.M. Poonacha observed that the issue raises an important legal question, noting the absence of judicial precedent on Section 212.
The company also sought interim protection from coercive action, which the court declined, stating that the question of law regarding SFIO’s powers will be examined in the main hearing. Notices were subsequently issued to the SFIO Director and the Union of India, and the matter is scheduled for December 3.
The case arose following allegations that Exalogic Solutions received Rs 1.72 crore from Cochin Minerals and Rutile Ltd (CMRL) between 2017 and 2020 without providing services. The Income Tax Interim Board of Settlement had flagged the transactions, suggesting possible kickbacks routed to the company. The Registrar of Companies initiated an inquiry in 2021, and Veena Vijayan appeared in 2022 to provide clarifications. In January 2024, the SFIO probe was formally ordered, and the company received notices to produce documents.
The Union, represented by Deputy Solicitor General Shanthi Bhushan H, submitted that the Ministry’s order is administrative in nature, requiring the company to submit certain documents.