Kochi. The Kerala High Court has expressed serious concern over differing positions taken by the State government and its legal representatives on whether prosecution sanction is required in the ₹15.85 crore SNDP microfinance fraud case. The court observed orally that the government’s position and the submissions made by the vigilance prosecutor appeared to be at odds. The matter will next be heard on September 22.
During the hearing before Justice A. Badharudeen on September 18, the Special Public Prosecutor for Vigilance placed before the court the relevant government order and a report submitted by the Secretary of the Backward Classes Development Department. The report stated that prosecution sanction was not required against the accused because the persons concerned were private individuals and not government officials. However, the Special Public Prosecutor told the court that, in his legal view, sanction was necessary under the provisions of the Prevention of Corruption Act. He also informed the court that the Advocate General had expressed a similar view to the department.
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The court questioned the situation, observing that when a government department takes the position that prosecution sanction is unnecessary while the legal officer representing the government takes the opposite view, the State’s official position should be clear. The court viewed the difference as a serious issue concerning administrative and legal responsibility.
During the hearing, the court also asked the Special Public Prosecutor whether he had clearly advised the department secretary that prosecution sanction was required. The court observed that submissions made by a government-appointed legal officer before the High Court should reflect the government’s official legal position rather than a personal opinion.
The court further asked whether the prosecutor had informed the department that the government order stating that sanction was unnecessary was, in his legal understanding, incorrect. The bench also made strong oral observations regarding the manner in which the prosecution side had handled the issue.
The State Attorney subsequently appeared on behalf of the government. The court observed that the government appeared to show interest in pursuing proper prosecution procedures in certain cases, while allegedly adopting delaying tactics in others. The court stressed that such an approach could not be accepted and that the proper legal procedure had to be followed.
The matter arises from two petitions filed in 2020 seeking the constitution of a Special Investigation Team headed by a competent officer to investigate the SNDP microfinance case. The original crime was registered by the Vigilance and Anti-Corruption Bureau in 2016. The case concerns alleged involvement of office-bearers associated with SNDP Yogam and former officials of the Kerala State Backward Classes Development Corporation.
During an earlier hearing, the court had directed the Additional Chief Secretary of the department, who had appeared personally before the court, to decide within a week on the prosecution sanction sought by the investigating officer and pass an appropriate order. The court had also directed that the officer appear again on the next date unless the decision order was produced before the court.
During the latest hearing, counsel for the petitioner argued that certain accused persons in the case fall within the definition of a public servant under Section 2(c)(xii) of the Prevention of Corruption Act and that prosecution sanction was therefore necessary. The Special Public Prosecutor for Vigilance also disagreed with the view expressed in the secretary’s report and maintained that sanction was required.
The High Court has listed the matter for further hearing on September 22, 2026. The investigating officer has also been directed to produce copies of the final report or reports submitted for obtaining prosecution sanction.
The proceedings are expected to clarify the State’s position on the requirement of prosecution sanction and determine the further course of the case concerning the alleged ₹15.85 crore microfinance fraud.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
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