Kerala High Court Upholds Vigilance ‘Quick Verification’ of Graft Complaint Against Ex-CIAL MD Over Alleged Benami Share Transfer | Verification Subject to Section 17A PC Act Sanction
Isabella Mariam
The High Court of Kerala, Single Bench of Justice A. Badharudeen on September 18 upheld the Vigilance Court’s order directing quick verification in a complaint against V.J. Kurian, former Managing Director of Cochin International Airport Ltd. Kurian had sought to quash the order, but the Court dismissed his plea, noting that the allegations of acquiring CIAL shares through a benami arrangement warranted scrutiny. Justice Badharudeen observed that such conduct, if established, would fall under the Prohibition of Benami Property Transactions Act, 1988 and the Prevention of Corruption Act, 2018. He clarified that approval under Section 17A is necessary before proceeding, and vacated the interim stay.
This criminal miscellaneous case was filed under Section 482 of the Code of Criminal Procedure, 1973, by V.J. Kurian, former Managing Director of Cochin International Airport Ltd. (CIAL). The petition sought to quash Annexure A2 order dated 18 January 2023 passed by the Enquiry Commissioner and Special Judge (Vigilance), Muvattupuzha, which directed quick verification of allegations raised in CMP No.300/2020.
The complaint alleged that during 2004, Kurian allotted 1,20,000 shares of CIAL to one Sebastian, a non-employee, purportedly in violation of the Employees Stock Ownership Plan (ESOP), which was meant exclusively for CIAL employees. The petitioner contended that no ESOP scheme had ever been implemented, that the allotment of shares was pursuant to a decision of the CIAL Board of Directors, and that he had no personal role. His counsel argued that the quick verification order was unwarranted and should be quashed.
The State opposed the plea. It was submitted that an earlier quick verification in QV No.33/2016/EKM had examined various allegations, including those of misuse of CIAL resources, irregularities in tendering, and disproportionate assets, and found them unsustainable. However, it was pointed out that the allegation concerning procurement of a large quantity of CIAL shares through a benami arrangement in the name of Sebastian had not been examined in the earlier verification. The State argued that the present complaint therefore required a fresh quick verification.
The Public Prosecutor further submitted that, since the complaint dated back to 2020, the Prevention of Corruption (Amendment) Act, 2018 applied, and prior approval under Section 17A of the Act was necessary before conducting any enquiry. It was noted that such approval had already been sought.
The petitioner’s counsel later raised the same issue regarding sanction under Section 17A of the PC Act, 2018. The Court examined statutory provisions including Section 482 of CrPC, Section 17A of the Prevention of Corruption Act, 2018, and Sections 3, 4, and 5 of the Prohibition of Benami Property Transactions Act, 1988. The judgment also referenced precedents from the Supreme Court and High Courts relating to the necessity of sanction, retrospective application of statutes, and the scope of preliminary inquiries.
Justice A. Badharudeen considered whether Annexure A2 directing quick verification was liable to be interfered with. The Court recorded that the complaint concerned “procurement of large quantity of shares of CIAL by the petitioner through a benami named Sebastian.” It noted the Vigilance contention that “for the said purpose, quick verification is required and in such view of the matter, facilitating quick verification of the said fact, in tune with Annexure A2 order, this Crl.M.C is liable to be dismissed.”
On the issue of sanction, the Court stated: “since the present complaint was lodged, which led to passing of Annexure A2 order, in the year 2020, Section 17A of the Prevention of Corruption (Amendment) Act, 2018 would apply and therefore, for conducting enquiry as per Annexure A2 order, prior approval under Section 17A of the PC Act, 2018 is necessary for which the prosecution already applied for.”
The Court referred to the Special Judge’s finding that “a non-employee of CIAL obtained a huge shares of CIAL through Employees Stock Ownership Plan without any entitlement contrary to the true scope and spirit of the Employees Stock Ownership Plan (ESOP), prior approval under Section 17A of PC Act, 2018 is not applicable in the present case.”
The Court noted precedents. Referring to State of Rajasthan v. Tejmal Choudhary, it quoted: “It could not possibly have been the intent of the Legislature that all pending investigations upto July, 2018 should be rendered infructuous. Such an interpretation could not possibly have been intended.” It further noted that “S.17A does not have retrospective operation.”
On the relevance of the Benami Prohibition Act, the Court observed: “Purchasing shares by the public servant as benami in the name of a third person is not within the domain of Section 17A of PC Act, 2018. In this case, an investigation as to commission of offences punishable under the Benami Prohibition Act also steps in.”
The Court examined other precedents on preliminary enquiry and FIR registration, quoting that “when the information received prima facie discloses a cognizable offence, the police have no discretion to conduct a preliminary inquiry before registering an FIR.”
Finally, the Court stated: “On scrutiny of the materials, along with the statement filed by the Investigating Officer to get prior approval under Section 17A of the PC Act, 2018, there is no necessity to interfere with the order impugned and the further steps as per the order can be proceeded on getting approval under Section 17A of the PC Act, 2018, sought for.”
Justice A. Badharudeen directed: “there is no necessity to interfere with the order impugned and the further steps as per the order can be proceeded on getting approval under Section 17A of the PC Act, 2018, sought for. Interim order of stay granted by this Court stands vacated.”
Advocates Representing the Parties
For the Petitioner: Sri. Thomas J. Anakkallunkal, Shri. Jayaraman S., Shri. Nirmal Cheriyan Varghese, Smt. Litty Peter, Smt. Anupa Anna Jose Kandoth, Sri. P. Vijaya Bhanu (Sr.)
For the Respondents: Shri. Dinoop P.D., Sri. K.P. Prasanth, Smt. T.S. Krishnendu, Smt. Archana Suresh, Smt. Sunitha K.G., Sri. C. Unnikrishnan (Kollam), Shri. Ananda Padmanabhan, Smt. Uthara A.S., Shri. Goutham Krishna U.B., Sri. Nidhi Balachandran, Shri. Vijaykrishnan S. Menon, Sri. Rajesh A., Special Public Prosecutor, VACB, Smt. Rekha S., Senior Public Prosecutor, VACB
Case Title: V.J. Kurian v. State of Kerala & Anr.
Neutral Citation: 2025:KER:69617
Case Number: CRL.MC No. 991 of 2023
Bench: Justice A. Badharudeen
