The Kerala High Court on Friday, November 6, held that no prosecution sanction under the Prevention of Corruption Act is required to proceed against the accused persons in the alleged Rs 15.85-crore SNDP microfinance fraud case, including SNDP Yogam general secretary Vellappally Natesan and former managing directors of the Kerala State Backward Classes Development Corporation Ltd. (KSBCDC). Justice A. Badharudeen passed the interim order in open court while considering two pleas filed in 2020 that seek a Special Investigation Team probe into the case.

Source: LiveLaw

The case goes back to 2016, when the Vigilance and Anti-Corruption Bureau (VACB) registered a crime over alleged irregularities in microfinance loans released under a scheme routed through the KSBCDC and the SNDP Yogam. It is alleged that officers of the SNDP Yogam and former managing directors of the corporation were involved in the irregularities. The allegations are yet to be tested at trial, and the court has expressed no view on their merits.

The sanction question the court had reserved in September

In September, the court had heard detailed arguments and reserved its verdict on whether sanction was required. State Attorney Anoop V. Nair maintained the government's stand that sanction is not required, submitting that the SNDP Yogam was not a nodal agency of the Backward Classes Development Department and would not fall under the definition of 'public servant' under the Prevention of Corruption Act, and that the KSBCDC had sanctioned the microfinance loans to the SNDP in its capacity as an NGO. Counsel for the petitioners, D. Anil Kumar, took the opposite view that sanction was required. On an earlier occasion, the court had orally criticised the differing stands within the government itself: the department secretary had reported that sanction was not required, while the Vigilance special public prosecutor had argued that it was.

Friday's interim order removes the sanction hurdle that had held up proceedings, but it does not decide the SIT demand or the merits of the fraud allegations. The case is posted for further consideration on November 17, and the reasons for the interim order are awaited.