Kerala HC stays CBI investigation into Life Mission project for 2 months

Court says 'the provisions of the Foreign Currency Regulation Act and the materials on record do not justify’ the investigation against the LIFE Mission

The Kerala government had moved the Kerala High C our seeking the quashing of the FIR filed by the CBI for alleged violation of FCRA rules in a project in Thrissur district.

The Kerala government, caught up in a series of investigations by multiple central agencies such as the NIA, Enforcement Directorate and Customs Department, got a huge relief on Tuesday when the high court stayed the CBI investigation into the ‘Life Mission’ scheme intended to provide housing to the poor. 

The CBI was investigating violation of the Foreign Currency Regulation Act in the financial assistance receive for a project under the scheme. The high court said ‘the provisions of the Foreign Currency (Regulation) Act and the materials on record do not justify’ the investigation against the LIFE Mission and stayed it for two months. It, however, did not quash the FIR filed by the CBI has requested by the Kerala government.

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The Livelihood, Inclusion and Financial Empowerment (LIFE) Mission is a housing project that was launched by the present government in 2016 to provide housing for all the homeless and landless people in the state. The project contemplates construction of housing units funded by various sources such as government funds, sponsorships and funds of local-self governments. According to the progress report released by the LIFE Mission, 2,26,490 houses are in the completion stage. 

While there are various housing projects in different parts of the state under the Mission, the CBI was investigating the one in Wadakkanchery in Thrissur district for alleged corruption. The project envisaged building an apartment complex of 55,000 sqft for 140 landless families (500 sqft each) and a mother and child care hospital. It was to be completed with the financial support offered by the government of UAE through its charity mission Red Crescent affiliated to the International Federation of Red Cross. Red Crescent offered a financial assistance of one crore AED for the construction of homes for the victims of the 2018 floods and a hospital.

A memorandum of understanding (MoU) was signed between the general secretary of the Red Crescent and the CEO of LIFE Mission in June 2019. According to the MoU, AED 70,000 would be made available for constructing housing units and AED 30,000 for constructing a hospital in the land provided by the government. 

The government made available  2.17 acres of land it owned in Wadakkanchery for the project. The MoU contained the provision to keep the independence and freedom of each party to enter into contracts with a third party except in the context of executing joint projects. Red Crescent, therefore, executed construction contracts with two companies, namely ‘Unitac Builders and Developers’ and ‘Sane Ventures LLP’ for the construction of the housing units for 140 families and the  mother and child care hospital, respectively. Forty per cent of the project cost was transferred to the account of Unitac Builders and Sane Ventures in August 2019 within a few days of signing the contracts.

Anil Akkara, the Congress MLA representing Wadakkanchery constituency, filed a complaint with the CBI alleging the  acceptance of funds by Unitac and Sane Ventures with the concurrence of LIFE Mission, a government agency, is illegal and is in violation of the provisions of the FCRA (Foreign Contribution (Regulation) Act of 2010). Based on this complaint, the CBI registered a crime under section 120 B of Indian Penal Code (Conspiracy) read with section 3 of the FCRA against Santhosh Eappan, the managing director of Unitac, and officials of Sane Ventures and Life Mission. 

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Swapna Suresh, a primary accused in a gold smuggling case that was detected at the Trivandrum International Airport on July 5, allegedly received a commission from Unitac for facilitating the deal when she was employed at the UAE Consulate in Thiruvananthapuram. 

The Congress and the BJP unleashed massive street protests demanding the chief minister’s resignation based on these allegations. The media also, according to the ruling CPM, had played a partisan role in inflating the controversy though none was able to provide any material evidence to show that anybody from the government was involved in corruption in the project.

The government filed a petition for quashing the FIR filed by the CBI in the case, arguing that the allegations (of paying commission), even if accepted in whole, do not implicate the LIFE Mission as the entire monetary transaction was done directly to the accounts of Unitac Builders and Sane Ventures. It said LIFE Mission only had a supervisory role in ensuring the quality of the project. The Counsel for the government argued that provisions of the FCRA cannot be applied against LIFE Mission or any other officials of the government. It was also submitted that the central government had exempted all statutory bodies from the FCRA provisions by an order issued on July 1, 2011. 

In another recent order issued by the Ministry of Home Affairs, on January 30, all the organisations constituted by an act or an executive order also were exempted from the provisions of FCRA.

While the High Court did not quash the FIR, the order that no provisions of FCRA can be applied against LIFE Mission is a huge victory for the government. 

Related News: Did Kerala minister KT Jaleel unwittingly help gold smuggling racket?

In another development, Swapna Suresh, the accused in the gold smuggling case, was granted bail in a case registered by the Enforcement Directorate under the Prevention of Money Laundering Act. She will, however, remain in jail as there are non-bailable offences charged against her by the NIA in the case. 

Suresh is accused of being a part of a racket that used the diplomatic channel to smuggle gold into Kerala. She is said to have operated the racket with the help of a former PRO in the UAE Consulate in Thiruvananthapuram.

The chief minister’s former principal secretary M Sivasankar and higher education minister K T Jaleel are also under the investing agencies’ radar. Sivasankar is said to have close ties with Swapna Suresh and allegedly helped her get a job under a government project, while Jaleel helped distribute religious texts that came through the UAE consulate. Investigating agencies suspect the parcels containing the religious texts could have been used to smuggle gold.     

The Opposition staged protests demanding Jaleel’s  resignation when he was interrogated by the NIA and the Enforcement Directorate in connection with the gold smuggling case as well as for distributing copies of Koran that arrived through the UAE Consulate.

 

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