Kerala High Court Questions Conflicting Government Positions on Sanction in ₹15.85 Crore Microfinance Case

The Kerala High Court has not yet decided whether sanction is legally required; the present development concerns the Court’s concern over contradictory positions within the State’s own prosecution machinery.

Background to the criminal proceedings

The Backward Classes Development Department secretary had taken the position that prosecution sanction was unnecessary for certain private accused in the alleged microfinance fraud.

The special public prosecutor for vigilance disagreed and told the Court that sanction was necessary under the Prevention of Corruption Act. He also said the Advocate General had communicated the same view to the department.

Why the Court intervened

Justice A. Badharudeen orally criticised the disconnect between the government and the officers expected to represent it in court, particularly in a case involving allegations of misuse of public-linked funds.

The petitioner also argued that some accused fell within the statutory definition of public servant and therefore required sanction before prosecution.

Present legal consequence

The investigating officer was directed to produce copies of the final reports submitted for prosecution sanction. The matter is listed on September 22 for the State Attorney's submissions and further orders.