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The Kerala High Court on Tuesday (September 22) observed that it would decide whether sanction is required to prosecute the accused persons in the ₹15.85 crore SNDP Microfinance Fraud case, including Vellappally Natesan and former MDs of Kerala State Backward Classes Development Corporation Ltd. (KSBCDC).

The development comes in two pleas registered in 2020 seeking appointment of a Special Investigation Team headed by an efficient officer to investigate into the crime registered by the Vigilance and Anti-Corruption Bureau (VACB) in 2016. 

Justice A. Badharudeen today heard arguments advanced by petitioner's counsel D. Anil Kumar and State Attorney Anoop V. Nair, who appeared for the State Home and Vigilance departments as well as the Backward Classes Development Department (BCDD).

"Post for orders to decide the question of grant of sanction in accordance with law," the Court observed.

Last week, the Court had orally criticised the perceived differences of opinion between the State government and its advocates regarding the question of requirement of sanction. The BCDD Secretary had reported that sanction was not required whereas the special public prosecutor for Vigilance had taken a stand that sanction was needed.

Today, the State Attorney maintained that the government's stand is that prosecution sanction is not required. He submitted that SNDP Yogam was not a nodal agency of the BCDD and that it would not fall under the definition of 'public servant' as per the Prevention of Corruption Act.  He added that the loans for the micro finance scheme was sanctioned by the KSBCDC to SNDP in the capacity of an NGO and it was permitted to release this amount to various persons.

Hearing the submission, the Court sought clarification:

"So Vigilance and Home department say it is a case in which the accused persons are public servants for which sanction is necessary but the BCDD says otherwise. So this is a fact even anybody infer from the way of proceeding the matter. They have investigated this crime, find the commission of crime and then they found that this matter wherein prosecution sanction is necessary. That is the view of the Home and Vigilance department. Therefore, they proceeded for getting the sanction. Now the authority, the Secretary says no sanction is required. That is the position...you say that vigilance and home dept is wrong and the other one is right?"

The State Attorney clarified that both the departments are concurring in their views that sanction is not needed.

"that means that the earlier view of the Home and Vigilance department is wrong," Justice Badharudeen orally said.

Then the State Attorney submitted: "Your Lordship can record that. Government stand is that sanction is not to be given by the government."

The petitioner's counsel, on the other hand, took a view that sanction to prosecute was required in the case.

Hearing the parties, the Court reserved the matter for orders and orally added: "To decide upon the question whether sanction is necessary or not, we will decide it on the basis of legal provision...This is a matter wherein a legal issue is involved. So, both of you and public may wait for the order of this Court, which will illustrate what is the law."

Case No: WP(C) No. 14599 of 2020 and Crl.MC No. 5539/2020

Case Title: M.S. Anil v. State of Kerala and Ors. and connected case

Counsel for the petitioners: D. Anil Kumar & O.V. Maniprasad, Jose Antony, S. Shiv Shankar

Counsel for the respondents: Anoop V. Nair - State Attorney

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