- Apprentice Lawyer
The Kerala High Court on Monday reserved its judgment in plea seeking quashing of Central Bureau of Investigation (CBI) probe into Kerala LIFE Mission project (Chief Executive Officer v. CBI, Santhosh Eappen v. Union of India).
The matter was heard by a single-judge Bench of Justice P Somarajan which extended the interim stay on investigation.
The hearing saw detailed arguments (and a barrage of metaphors) by various counsel appearing in the case, which has been a political flash point between the Central and the State governments.
The matter was heard on Thursday, December 17, and concluded on Monday, December 21, 2020.
Senior Advocate KV Viswanathan represented the Chief Executive Officer of the LIFE Mission while advocate Francis Mangalath appeared for Unitac Builders’ Managing Director Santhosh Eappen (one of the accused)
Senior Advocate K Ramkumar argued for the Central government, and CBI Standing Counsel Sasthamangalam Ajithkumar apprised the Court of the Central Bureau of Investigation’s stance.
Advocate KB Gangesh, represented the complainant Anil Akkara.
The LIFE Mission, Kerala government’s flagship housing project, ran into trouble after Anil Akkara, MLA for Wadakkanchery in Thrissur district filed a complaint stating that the LIFE Mission Project violated Foreign Currency Regulation Act (FCRA) norms.
His specific complaint was against the project at his constituency at Wadakkanchery.
For the project, the State government had agreed to allot land to building contractors chosen by the donors. The project at Wadakkanchery was funded by the UAE consulate’s Red Crescent. Akkara claimed that the Kerala government obtained funds for Unitac builders (which was chosen as contractor) from Red Crescent, thereby, violating the FCRA.
The CBI proceeded to file an FIR pursuant to the complaint, naming Unitac’s Santhosh Eappen, Sane Ventures (another contractor), and “unnamed officials of the LIFE Mission project”.
There were charges that the LIFE Mission project was awarded to Eappen and Sane venture at the behest of former UAE Consulate employee and gold smuggling accused Swapna Suresh working with former Principal Secretary to the Kerala Chief Minister’s Office, M Sivasankar.
Shortly after the CBI’s FIR, the LIFE Mission CEO approached the Kerala High Court seeking quashing of the investigation. Close on the heels of the LIFE Mission plea, Eappen also filed a writ petition praying that the investigation against him and his company be quashed.
In October, the Kerala High Court admitted the case and granted a two-month interim stay on investigation in respect of the LIFE mission. The Court however refused to quash the probe against Eappen and Unitac.
Aggrieved, the CBI had pushed the Court to vacate the stay in favour of LIFE Mission and post the matter for a ‘near date’. This request was rejected, with the Court instead asking the CBI why it had not yet filed a counter affidavit to the petitions.
Last week, the CBI again moved the Court seeking a vacation of the stay. The matter is now being heard.
Pertinently, the CBI is yet to file a counter to the writ petition.
“CBI is throwing the cart before the horse”: Senior Advocate KV Viswanathan for LIFE Mission
Senior Advocate KV Viswanathan, appearing for LIFE Mission CEO, UV Jose, submitted that the CBI’s investigation of the LIFE Mission for FCRA violations was unfounded.
Starting with the facts of the case, he emphasized that the housing project was salutary and ought to be encouraged. After taking the court through the scheme of the FCRA legislation, he quoted from Indian Social Action Forum v. Union of India to buttress his point that the FCRA only barred foreign currency contributions to government servants, journalistic entities, and entities actively involved with party politics to prevent influence on governance.
Since the LIFE Mission Project only provided the land for an independent building contract between the foreign donor and the building contractor, the legislation was not attracted, he asserted. The lawyer then adverted to the Memorandum of Understanding between the UAE Consulate and the LIFE Mission, which contained specific provisions that promoted both the parties’ freedom of contract except for the execution of the project itself.
In pursuance of this ‘independence’ Unitac Builders was chosen by the UAE Consulate for the project and there was an independent contract and transfer of amount between them, it was stated.
Therefore, it was his case that the FCRA was not attracted.
Justice Somarajan raised a query on the nature of the LIFE Mission and whether it was a government department or agency, to which the Senior Counsel replied that it was an 'executive ‘project’.
To additional queries as to the validity of the MoU, Viswanathan pointed out that even the CBI had not questioned the legality of the project or the objectives. The scope of the inquiry before the Court was whether the transactions involved in the project attracted the FCRA.
The Senior Advocate then went on to question the names of persons accused in other offences being thrown around and the allegations of kickbacks. Investigating ‘kickbacks’ was beyond the purview of an FCRA probe and Indian Penal Code offences cannot be investigated under the cover of FCRA investigation, he contended.
It was also his submission that hauling up public officials for their involvement in government projects could lead to policy paralysis where government servants would be hesitant to function or take decisions for fear of penal consequences.
In the course of his submissions, Viswanathan also referred to probable political motivation for the complaints and the subsequent CBI investigation, pointing out that the political parties at the Centre and the State were different.
"The State Elections are six months are upon us," he pointed out on Monday.
There are black sheep everywhere, he said, and any other instances of wrongdoing by other accused could be investigated through laws other than the FCRA. In this regard, he also highlighted the vigilance investigation that was already set-in motion in September. On this note, he urged the Court to nip the FCRA investigation in the bud and serve the ends of justice.
Emphasizing that the Government, and in this case, the officials of the LIFE Mission had the locus standi to present a petition seeking a quash of proceedings, the Senior Counsel urged the Court not to dismiss the plea on this count.
“Kerala LIFE Mission is connected to the Gold smuggling case,” Senior Advocate K Ramkumar for Central government
Senior Advocate K Ramkumar, representing the Central Government, specifically opposed the writ petition filed by Santhosh Eappen questioning why Eappen had raised objection only to an investigation by the CBI but had not raised similar objection to the state-led vigilance investigation.
An accused cannot choose an investigating agency, he argued, relying on the Supreme Court’s iteration of Romila Thapar v. Union of India in its recent Arnab Goswami ruling.
The lawyer also questioned the maintainability of Eappen’s writ petition arguing that the proper remedy for quashing a case would be a petition under section 482 of the Code of Criminal Procedure and not a writ petition under Article 226.
The Senior Counsel also asserted that Unitac was not chosen by a valid tender process, but was awarded the project as consideration for kickbacks to gold smuggling accused Swapna Suresh and former CMO principal secretary Sivasankar.
Referencing a letter written by the Kerala Chief Minister in July seeking a coordinated investigation by central Agencies into all aspects of the gold smuggling case, he submitted that the LIFE Mission transactions were connected to the gold smuggling case.
The Senior Counsel averred that for investigation of economic offences, Courts were not to take an ordinary attitude.
There is no question said about locus standi, the question is about legal right, whether there was a legal right in question, he argued further.
The Senior Advocate stated that any exercise of quash at this stage would not be proper.
He pointed out that vigilance inquiries were instituted only if Prevention of Corruption Act offences were attracted. These provisions applied only if public servants were involved, he additionally stated, in what could be construed as an implicit reference implying the culpability of LIFE Mission officials.
On these counts, he prayed for an unimpeded CBI investigation.
“You cannot bathe with a raincoat on”: Sasthamangalam Ajithkumar for CBI
CBI Counsel Sasthamangalam Ajithkumar also questioned the maintainability of LIFE Mission’s petition at this stage of the investigation. No LIFE Mission official was specifically named an accused so far, he submitted.
Ajithkumar described the proceedings as misconceived stating that filing a quashing petition without specific charges being framed is akin to bathing with a raincoat on.
He prayed for vacation of the stay order presently in force contending that the halt on investigation against the LIFE Mission officials was impeding the investigation.
He also offered to submit to the Court a sealed cover containing the CBI’s case diary narrating the details investigation so far conducted.
“Building contracts are exempt from FCRA restrictions:" Advocate Francis Mangalath for Unitac MD
Santhosh Eappen’s counsel advocate Francis Mangalath refuted the applicability of the FCRA to the contract between the UAE Consulate and his client. Claiming that his contract was a building contract, he asserted that it was exempt from the applicability of the provisions of the FCRA. He also stated that none of Unitac’s transactions were hidden, and the company was chosen after a valid tender process.
Responding to the judge’s query as to how the land for the LIFE Mission project was transferred without any document evidencing the transfer, he explained that the land in question was not transferred at all. The land remained under the ownership and possession of the government, with the contractor allowed to construct upon the land for the government, he averred.
There were also two intervention applications moved in proceedings, one by a public-spirited individual who took issue with the manner in which the CBI conducted the investigation. Both Senior Advocate KV Viswanathan and CBI Counsel Sasthamangalam Ajithkumar opposed the petitions stating that they were not maintainable in a quashing proceeding.
Complaint was made bonafides, in role as a 'watchdog': Advocate KB Gangesh for Anil Akkara
Advocate KB Gangesh appearing for complainant Anil Akkara averred that his complaint was not motivated by political considerations, but was merely preferred in his role as a watchdog.
Advocate Gangesh averred that Akkara was not challenging the LIFE Mission project as a whole but only the project planned at Wadakkanchery.
He asserted that the Memorandum of Understanding showed that the project at Wakkanchery was to be executed jointly between UAE Consulate's Red Crescent and the LIFE Mission.
On hearing these submissions, the Court declared the hearing closed and reserved judgment on the case.