Kerala HC Stays CBI Investigation Against LIFE Mission CEO For 2 Months [Read Order]

The High Court of Kerala on Thursday stayed for two months the CBI investigation against the Chief Executive Officer of the LIFE Mission, which handles the Kerala Government's free home project for the homeless.

"...the provisions of the FCRA and the materials on record do not justify arraying of the petitioner in Crl.M.C No. 4375 of 2020(CEO, LIFE Mission) as an accused", the Court observed.

At the same time, the Court has not interfered with the investigation against the other accused in the case, which include the private contractors who got the tender work.

A bench of Justice V G Arun passed the stay order in the petition filed by U V Jose, CEO of the LIFE Mission Project, seeking to quash the FIR registered by the central agency alleging violations of the Foreign Contributions Regulation Act over the receipt of foreign contributions from the United Arab Emirates for the construction of housing units for the flood victims at a government plot in the Thrissur district. The bench had also considered a petition filed by Santhosh Eappen, the Managing Director of Unitac Ltd, the private builder, who was arrayed as first accused in the CBI FIR.

"Undisputedly, LIFE Mission has not received any foreign contribution directly from the sponsor (UAE Red Crescent)", the Court noted in the order.

The Court also stated that the amounts received by Unitac and Sane Ventures in terms of the agreements executed by them with the foreign sources are exempted from the definition of "foreign contribution" by virtue of Explanation 3 of Section 2(h) of the FCRA, being amounts received in lieu of goods or services rendered in the ordinary course of business.

The Court also held that LIFE Mission or the builders do not fall under any of the categories under Section 3(1), which speaks of the entities prohibited from receiving foreign contribution.

At the same time, the Court said that it needed to consider whether the revelations made by Santhosh Eapen in the writ petition regarding payment of kickbacks and facilitation charges to personnel from UAE Consulate and other persons would constitute an offence.

In this regard, the Court referred to Section 3(2)(b) of the FCRA, which prohibits a person from delivering any of any currency, whether foreign or Indian, accepted from a foreign source, to any other person if the deliverer has reasonable cause to believe that the currency is likely to be delivered to any person or entity prohibited from accepting foreign contribution under Section 3(1). 

In this regard, the Court noted that Section 3(2)(b) does not use the word "foreign contribution" and uses the word "currency, whether foreign or Indian".

"The persons to whom the currency was delivered by the builders having accepted it on the assurance that it will be utilized for getting the requisite clearances and permits, the builders have to be attributed with the knowledge of possibility of such currency, or at least a portion of it, being delivered to public servants or governemnt employees. As such , registration of crime against Santhosh Eappen warrants no interference at this stage", the Court observed.

It was on October 8 that Justice V G Arun reserved orders on the petitions after hearing Senior Advocate K V Viswanathan (for LIFE Mission CEO), Advocate K. N Abhilash (for Unitac MD), Advocate Gangesh K. B (for Congress MLA Anil Akkara, the complainant) and Sasthamangalam S. Ajith Kumar, Standing Counsel for the CBI.

LIFE(Livelihood, Inclusion and Financial Empowerment) Mission' is a housing project mooted by the Kerala Government for the benefit of the homeless.

The issue relates to the project for the construction of 140 housing units in Wadakkanchery in Thrissur district. As per the application filed by the CEO in the HC, in 2019, the 'Red Crescent Authority' of the United Arab Emirates offered to sponsor the project and accordingly, a Memorandum of Understanding was entered into that year itself. As per the MoU, the sponsor was to execute the project through independent contractors.

Alleging that foreign contributions to the tune of 10 Lakh Arab Emirates Dirham were transferred to the private contractors - Unitac Ltd and Sane Ventures - in violation of FCRA norms, a legislator belonging to the Congress party, Anil Akkara, filed a complaint before the CBI on September 20.

After four days, the CBI registered the FIR under Section 35 read with Section 3 of the FCRA and Section 120B of the Indian Penal Code arraying the Managing Directors of Unitac and Sane Ventures as accused numbers 1 and 2 respectively.

As the third accused, the FIR mentioned "unknown public servants/private citizens".

Seeking to quash the FIR to the extent it relates to government officials, the government agency approached the High Court, raising the prime argument that the CBI could not have registered the case directly without the sanction of the state government.

To register the FIR directly, the CBI cited a notification of the Government of India, which empowered it to investigate FCRA offences. In this regard, the Kerala Government agency contended that FCRA was not applicable to the transaction, as government agencies are exempted from the ambit of the Act. 

Further, the LIFE Mission did not receive any amount from UAE Red Crescent, and the contributions were given to the private contractor, which is also exempted from the FCRA being consideration received for contractual work, submitted Senior Advocate K V Viswanathan.

CBI's standing counsel, Sasthamangalam S Ajithkumar, had contended that the transaction was an 'eyewash' for corruption involving senior government officials. He argued that Unitac obtained the contract through the influence of Swapna Suresha and other accused in the gold smuggling case, who had links to M Sivasankar, the former Principal Secretary to the Chief Minister's Office.

In response to these allegations, Viswanathan submitted that CBI needs state sanction to investigate offences related to corruption, and cannot use the "subterfuge" of an FIR under FCRA to undertake such a "roving enquiry".

Detailed report about the arguments in the case may be read here.

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