The Kerala High Court on Friday (September 18) orally criticised the perceived differences of opinion between the State government and its advocates regarding the question of requirement of sanction to prosecute the accused persons in the ₹15.85 crore SNDP Microfinance Fraud case.

When the matter came up before Justice A. Badharudeen, the special public prosecutor for vigilance placed a government order as well as report by the Dr.Veena N. Madhavan, IAS, Secretary of Backward Classes Development Department.

In the report, the Secretary had opined that prosecution sanction was not necessary to prosecute the accused, including SNDP General Secretary Vellappally Natesan, President Soman and former Secretary Sabu K.S. since these persons were private persons, not public officials.

The special prosecutor, however, submitted that in his opinion, sanction to prosecute was necessary as per the Prevention of Corruption Act. It was also submitted that the Advocate General (AG) had also expressed the same view and this was communicated to the department.

On hearing the submissions, the Court orally remarked:

"When the government is saying that, then vigilance prosecutor is against it. According to you, AG is also against it and he filed a report. Then government is running through the left, the government's officers, who are legally bound to represent the interests of the government, in accordance with law, are running on the right side and government on the left side. That means either the government appointed incompetent officers to represent them or else the government is not having any interest to the society as a general to keep law and order and also rule of law in the matter of administration of justice. They want to be very very segregative. That is the inference to be drawn. They are not ready to rule the State in accordance with law. They want to rule the State in accordance with their whims and fancies. They want somebody to be prosecuted. Excluding somebody not to be prosecuted. They are also failing in their duty in that way."

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) relating to the SNDP micro finance fraud case. A crime was registered in 2016 and it is alleged that the officers of the SNDP Yogam and former Managing Directors of Kerala State Backward Classes Development Corporation Ltd. (KSBCDC) were involved in the scam.

In the order passed last week, the Court had directed the Additional Chief Secretary of the department, who had appeared in person, to decide and pass orders, within a week, on the sanction request given by the investigating officer. It was observed that the Secretary is to appear again unless an order making decision is produced by the next posting date.

When the report of the Secretary was produced, the Court asked the prosecutor whether he agreed with the stance taken in it and it was answered that, in his personal view, sanction was needed.

"Personal view has nothing to do with this. Making submissions before the High Court, being the legal officer appointed by the government making submission on behalf of the government as a responsible officer, then your submission is based on your understanding of the legal provision, not personally and officially. You are appearing officially only. I don't want your personal opinion. What is your official stance regarding the stand taken by the secretary?," the Court pressed.

The prosecutor replied that sanction was necessary. The Court orally asked whether he had advised the officer regarding the issue:

"You didn't advice the Secretary that this GO, which has found that no sanction is needed, is wrong? You don't have the duty? Did he inform the Secretary that as per my legal understanding this is a case in which sanction is necessary and for that this order is not in accordance with law. Did you inform her?...Can you produce this order before the Court? Then what is your option? You must have returned the same with your opinion that your order stating that sanction need not be issued is wrong because of this. So consider sanction. That should have been the option. You are failing in your duty. You are vigilance prosecutor. You are dealing with those matters. You are an absolute failure."

The prosecutor submitted that the AG had written to the department advising that sanction is required in the case and that the present GO was produced since the case was posted for appearance of the Secretary unless the order passed is produced. The judge, however, retorted and asked whether the High Court was a place where whatever they wanted to write can be produced. To this, the prosecutor's reply was that he was compelled to do so.

At this point, the Court orally said:

"You are, in fact as an officer of the government, is doing mischief before this Court. You are unfit to hold the post. I have no hesitance to say that you are unfit to hold the post. You leave the post and entrust somebody to do this. You are not expected to produce all the papers before this Court. I am not inclined to discuss this issue with you. You are incompetent."

The matter was passed over and this time, the State Attorney appeared on behalf of the government. To the State Attorney, the Court orally said that the government is showing interest in pursuing the proper course of prosecution only in certain cases while in others, dilatory tactics are being played:

"In certain cases only this. Otherwise, everything in order. Orders have been produced before this Court...Only when cases of this nature comes, some dilatory tactics, one way or another. It is not digestible. It may not work."

The petitioner's counsel Advocate D. Anil Kumar submitted that prosecution sanction was needed in the case since the accused persons included officers of the KSBCDC. Taking note of the submissions, the Court recorded in its order:

"According to the learned counsel for the petitioner...since the accused persons herein are public servants, as defined under Section 2(c)(xii) of the Prevention of Corruption Act, 1988 in order to prosecute them, sanction is necessary. In this connection, the learned Special Public Prosecutor for the Vigilance also submitted that the view of the Secretary is incorrect and according to him, sanction is necessary...Post on 22.09.2026, treating the matter as part heard for hearing the learned State Attorney and for orders."

Further, the Investigating Officer is directed to produce copies of the final report(s) submitted for prosecution sanction.

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

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