The Hindu : Kerala News : Palmolein case: Government has to wait till disposal of SLP

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Monday, Sep 20, 2004

Kerala

Kerala

Palmolein case: Government has to wait till disposal of SLP

By M. Harish Govind

THIRUVANANTHAPURAM, SEPT. 19. Even though the Government is in favour of dropping the palmolein import case against the former Chief Minister, K. Karunakaran, and seven others on the ground that the alleged offence is a "technical" one, any move will have to wait until the Supreme Court disposes of the matter.

Mr. Karunakaran had taken bail from the Vigilance Special Court here and filed a Special Leave Petition (SLP) in the Supreme Court seeking a stay on the proceedings on the ground that the Lok Sabha Speaker's sanction is needed to prosecute him. At present, the trial in the case is pending the vacation of the indefinite stay granted to him by the apex court. On the other hand, if the Lok Sabha Speaker grants the required consent, the Special Court can take cognisance of the case and begin trial, since Mr. Karunakaran's SLP hinges on this point.

Legal sources point out that once the Supreme Court stay is vacated and the case is handed back to the Special Court for trial, the Government can, as per procedure, ask the special prosecutor to file a petition in the court seeking the withdrawal of the case.

Accused

Apart from Mr. Karunakaran, the other accused are T. H. Mustaffa, former Minister, S. Padmakumar, former Chief Secretary, Zachariah Mathew, former Additional Chief Secretary and former Chairman of the Kerala State Civil Supplies Corporation (KSCSC), Jiji Thomson, former Managing Director, KSCSC, V. Sadasivan and Sivaramakrishnan, directors of the Mala Trading Corporation, Chennai, which represents Power & Energy Private Ltd., Singapore, and P. J. Thomas, former Director Board member of the KSCSE.

According to the charge-sheet in the case, various important conditions stipulated by the Central Government while permitting the import of 15,000 m.t. of palmolein, such as the price limit for procurement, terms of payment, fixation of the retail price for the distribution through the Public Distribution System (PDS), etc., were violated. Procedures laid down by the State Government for the purchase of the item were also violated. The decision for import was taken without consulting the Finance Department.

A formal agreement was entered into by the then Managing Director of the KSCSC with Power & Energy Ltd. on November 29, 1991, without due sanction from the State Government and without qualifying the price. The price was fixed much later on January 24, 1992, at $ 405 per m.t., which was far above the average procurement price of $ 392.25 of the State Trading Corporation.

The charge-sheet further said the price was fixed in terms of the value of the dollar on the date of supply, as against the rupee on the date of supply, resulting in huge losses to the State Government on account of the repeated increase in the value of the dollar against the rupee during the intervening period. This was a fact which was known or anticipated at the time of signing the agreement.

The supply was delayed till the end of March, 1992, as the against the agreed period of February, 1992, resulting in an increase in the price in real terms and in terms of the rupee. Further, the KSCSC did not invoke the relevant penal clause applicable to delayed supply of palmolein, the charge-sheet said.

The FIR in the case was filed against Mr. Karunakaran and six others under Section 13 (2) read with 13 (1) (d) of the Prevention of Corruption Act, 1988, and Section 120 (B) of the IPC on March 21, 1997. The name of Mr. Thomas was later added as the eighth in the array of the accused.

Original petition

Mr. Karunakaran filed an OP in the High Court in May, 1997, seeking the quashing of the FIR as well as all further proceedings in the case, alleging that it was politically motivated, among other things. On the basis of an order of the High Court, Mr. Karunakaran filed an SLP in the Supreme Court for quashing the FIR.

In an interim order on January 16, 1998, the Supreme Court directed the Vigilance to continue the investigation of the case. However, the court directed that the final investigation report should be submitted only with its permission. Accordingly, after completing the investigation, the Vigilance submitted a petition to the Supreme Court in September, 1999, seeking its permission for filing the charge-sheet.

The Supreme Court then issued another interim order on October 11, 1999, permitting the Vigilance to file the charge-sheet in the Special Court. The Judge was also permitted to frame charges in the case. Following this, the Vigilance filed the charge-sheet in the case on November 23, 1999.

On March 29, 2000, the Supreme Court dismissed the SLP filed by Mr. Karunakaran seeking the quashing of the proceedings against him on the ground that they were mala fide and politically motivated, clearing a major legal hitch.On March 23, 2001, the Vigilance submitted a revised charge-sheet, the only change from the first one being that the corruption charge against the two IAS officers was dropped. The charge against them was only that of criminal conspiracy under Section 120(B) of the IPC, for which Central sanction is not needed.

Vigilance plea

The Vigilance also submitted that the sanction of the Lok Sabha Speaker was not required to prosecute Mr. Karunakaran as the alleged offence was committed when he was not a member of the Lok Sabha. On April 2, 2001, the Special Court, however, "rejected" the revised charge-sheet saying that sanction of the Lok Sabha Speaker was needed to prosecute Mr. Karunakaran under the Prevention of Corruption Act.

The offence is being claimed to be a technical one on the ground that the loss occurred solely due to delay in opening an escrow account with the Reserve Bank of India (RBI) following the Cabinet decision to make the palmolein import. In support of the claim, it is pointed out that the Government would have got a higher profit had the contract been executed earlier as the value of the rupee against the dollar had fallen during the period.

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