Kerala HC directs govt to consider sanction for prosecuting Vellappally in microfinance scam

The Kerala High Court has directed the Additional Chief Secretary of the Backward Classes Development department to consider the Special Investigation Team's (SIT) request for prosecution sanction in the microfinance scam involving SNDP Yogam general secretary Vellappally Natesan.

Justice A. Badharudheen was examining a report submitted by lead investigating officer S. Sasidharan, which detailed the status of 124 cases registered in connection with the alleged misappropriation of loans disbursed to the SNDP Yogam between 2003 and 2014 by the Kerala State Backward Classes Development Corporation. These loans were meant for the welfare of backward communities under the corporation's microfinance programme.

During the proceedings, Special Government Pleader P.K. Sajeevan, representing the Vigilance department, informed the court that eight instances of misappropriation had been found across seven units of the community organisation — Pulpally, Mananthavady, Ranni, Kunnathunadu, Kanayannoor, Chittoor, and Taliparamba.

The Vigilance and Anti-Corruption Bureau (VACB) Director has already approved seeking prosecution sanction in three of these cases. For the remaining cases, final verification is underway to ensure that the investigation is complete in all respects. The court directed Mr. Sasidharan to finalise the sanction process within seven days and complete the verification within 20 days.

The report names the accused in the three cases at Pulpally, Ranni, and Mananthavady units. They include Mr. Natesan, M.N. Soman, K.K. Mahesan, K.S. Sabu, Vasanthkumar, T. Prabhakaran, and R. Purushothaman.

Providing an overall status of the 124 cases, the court noted that 19 are still pending with the SIT, while factual reports in 52 cases are being reviewed by Mr. Sasidharan. Further action has been dropped with the approval of the VACB Director in 30 cases. Eight cases have been recommended for prosecution, six have been accepted by the respective vigilance courts, and final reports in nine cases are pending before them.

The High Court's directive marks a significant step in the legal process, as it places the onus on the government to decide on prosecution sanction, which is a mandatory prerequisite for proceeding against public servants or certain officials. The decision will be closely watched for its implications on accountability and the pace of the investigation.