Kochi, Nov 6 — The Kerala High Court on Friday cleared a major legal hurdle in the Rs 15.85 crore SNDP Yogam microfinance scam, ruling that prior government sanction is not required to prosecute the accused, including Yogam General Secretary Vellappally Natesan and former Managing Directors of the Kerala State Backward Classes Development Corporation (KSBCDC).
Justice A. Badharudeen passed an interim order on the question of prosecution sanction while hearing petitions seeking an effective investigation into the alleged fraud.
"Interim order passed, holding that no prosecution sanction is required," the court said.
The case will be taken up again on November 17.
The case relates to the alleged misappropriation of Rs 15.85 crore released under a microfinance scheme meant to benefit members of marginalised communities.
The money was sanctioned by the KSBCDC as loans to the Sree Narayana Dharma Paripalana (SNDP) Yogam, which allegedly diverted the funds.
The Vigilance and Anti-Corruption Bureau (VACB) registered the case in 2016.
Natesan, the Yogam General Secretary, and other office-bearers were among those accused.
The alleged involvement of former KSBCDC Managing Directors also came under the scanner.
The SNDP Yogam is a powerful socio-cultural organisation representing the Ezhava community, the single largest Hindu community in Kerala.
The High Court was hearing petitions filed in 2020 seeking an investigation by a Special Investigation Team headed by an efficient officer.
The question of prosecution sanction had held up further proceedings against some of the accused.
In August this year, the investigating officer informed the court that the involvement of several accused had been identified in eight cases and that sanction was required from the government to proceed against certain officials.
However, the state government maintained that no such sanction was necessary.
State Attorney Anoop V. Nair argued that the SNDP Yogam was not a government nodal agency and did not come within the definition of a public servant under the Prevention of Corruption Act.
The petitioners had taken the opposite stand, arguing that prosecution sanction was necessary.
The court's interim order settles this legal question in favour of proceeding without prior sanction.
The petitions seeking an effective investigation will come up again on November 17.