The case has been registered under sect 10(4) of the Act, police sources said.
Whether or not to register a case against the artist Jonas Staal would be decided later, the sources said.
Special branch had filed reports seeking a ban on the work and it had been forwarded to the Intelligence ADGP at Thiruvananthapuram.
The installation had 45 billboards depicting flags of banned organisations, including 24 from India, at the pavilion of the New World Summit at Aspinwall, the main venue of the Biennale.
The Special branch had also sought legal advice for initiating action against the artist for putting up the controversial billboards.
The artist had maintained that his installation was 'completely legal'.
Biennale sources said the artist had been told earlier itself not to use the controversial billboard of banned organisations. After the controversy broke, the flags of the banned outfits had been removed.
