In a significant development, the Kerala High Court on Thursday dismissed a plea by former Cochin International Airport Limited (CIAL) Managing Director V.J. Kurian to quash a vigilance inquiry into alleged benami share purchases. The order, delivered by Justice A. Badharudeen, paves the way for the Vigilance and Anti-Corruption Bureau (VACB) to proceed with a quick verification into claims that Kurian used a proxy to acquire a large number of CIAL shares meant for employees.
Background
The controversy dates back to 2004, when CIAL reportedly allotted 1,20,000 shares to one Sebastian, who was not an employee. The complaint alleged that Sebastian acted as a front for Kurian, allowing him to corner shares under the Employee Stock Ownership Plan (ESOP), which were intended solely for CIAL staff.
Read also:- Supreme Court Holds Quippo’s Containerised Gensets Are a New Product, Liable for Excise Duty
Kurian, now 65, argued that the allocation was done following a board decision and that there was no ESOP scheme implemented at the time. His counsel insisted that he played no personal role and that the allegations were baseless.
Interestingly, a previous vigilance inquiry in 2016 (QV No.33/2016/EKM) had cleared Kurian of several unrelated accusations, including misuse of company resources and disproportionate assets. However, the current allegation - benami shareholding - was not examined back then.
Court's Observations
Justice Badharudeen took note of the arguments from both sides. The Public Prosecutor pointed out that, while the earlier probe found no wrongdoing, the present complaint raised a fresh and serious allegation of benami ownership.
"The earlier verification did not touch upon this specific charge," the prosecutor stressed.
Kurian's legal team countered that even if an inquiry is to be held, it cannot be done without prior sanction under Section 17A of the Prevention of Corruption Act, 2018 (PC Act). This section requires prior government approval before probing any decision taken by a public servant while discharging official duties.
The bench examined this argument in detail. It noted that Section 17A applies only when the alleged act was an official decision or recommendation. Buying shares in someone else's name, the judge reasoned, cannot be considered an official duty. Therefore, the protection under Section 17A would not apply here.
The court also referenced the Supreme Court's rulings, including State of Rajasthan v. Tejmal Choudhary, which held that Section 17A is not retrospective, and Pradeep Nirankarnath Sharma v. State of Gujarat, which clarified that when a complaint reveals a cognizable offence like corruption, police must register a case without waiting for a preliminary inquiry.
In a pointed observation, Justice Badharudeen remarked,
"Purchasing public property under a benami would not come within the purview of Section 17A of the PC Act."
Decision
Ultimately, the court declined to interfere with the order of the Special Judge (Vigilance) at Muvattupuzha, who had directed a quick verification of the allegations. The High Court said the VACB may proceed with the verification after obtaining the formal government nod already sought under Section 17A, though the judge clarified that such approval may not even be required in this context.
"The further steps as per the order can be proceeded on getting approval under Section 17A of the PC Act, 2018, sought for," the judge concluded, while vacating the interim stay that had been shielding Kurian from the probe.
With this, the path is now clear for vigilance to dig deeper into whether the former CIAL boss secretly amassed shares through a proxy holder - an allegation that, if proven, could have major repercussions.
Case Title: V.J. Kurian vs State of Kerala & Another
Case Number: Crl.M.C. No. 991 of 2023
