The Kerala High Court on Friday (November 6) held that no prosecution sanction as per the Prevention of Corruption Act is required to proceed against 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).

A crime was registered by the Vigilance and Anti-Corruption Bureau in 2016 and it is alleged that the officers of the SNDP Yogam and former Managing Directors of KSBCDC were involved in the scam.

Justice A. Badharudeen today passed an interim order while considering 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.

"Interim order passed holding that no prosecution sanction is required," it was pronounced in open court.

The case is posted for further consideration on November 17 (Tuesday).

In September, the Court had heard detailed arguments 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). The State Attorney maintained that the government's stand is that prosecution sanction is not required. He had 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 had also stated 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.

The petitioner's counsel, on the other hand, took a view that sanction to prosecute was required in the case. It had then reserved its verdict on the question of whether prosecution sanction is required.

On an earlier occasion, 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. Subsequently, State Attorney argued that sanction was not required.

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

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