In a relief to the LDF government, the Kerala High Court on Tuesday stayed for two months the CBI probe against the CEO of LIFE Mission, a state housing project, over alleged FCRA violations in respect of funds received from a foreign sponsor for construction of dwelling units in Thrissur district.
Justice V G Arun granted the interim stay on a plea by Life Mission CEO U V Jose challenging the registration of the FIR by the central agency against unknown officials of Life Mission.
The Judge, however, allowed the CBI to continue its probe initiated against the Managing Director of Unitac, a private firm which has been awarded the contract for construction of the houses in Wadakkanchery Municipality.
The case against the firm and others was registered on the basis of a complaint by Congress MLA Anil Akkara alleging violation of the provisions of the Foreign Contribution (Regulation) Act in acceptance of funds from a UAE aid agency for executing the housing project for the poor.
Akkara, representing Wadakkancherry constituency, in his complaint with the CBI's unit here contended that acceptance of funds by Unitac Builders and Developers and Sane Ventures LLP from Red Crescent, the UAE-based aid agency, with the 'concurrence' of the LIFE Mission, a Kerala government agency, was illegal and in violation of the provisions of the FCRA.
Based on the complaint, an FIR was registered by the CBI, for offences under Indian Penal Code Section 120B (punishment of criminal conspiracy) read with Section 3 of the FCRA against Unitac Builders and Developers Managing Director Santosh Eappen, Sane Ventures LLP and unknown officials of the LIFE Mission Kerala and others.
Jose and Eappen filed separate pleas for quashing the CBI case alleging that it was registered in a hasty manner.
During the hearings, senior counsel for the LIFE Mission had submitted the complaint does not even make out a case prima facie the registration of the case "in hasty manner" indicated a deliberate attempt to malign the state government.
He also referred two central government notifications issued in 2011 and 2020 to drive the point that the project has received exemption from the operation of all provisions of the FCRA.
The standing counsel for CBI had claimed a conspiracy was hatched much before the MoU between Red Crescent and the Life Mission, to award the work to Unitac and Sane Ventures, which are only name lenders, and to siphon off the foreign contribution in the guise of kick backs to the officials at the UAE consulate.
The CBI also contended that senior officials in the state government, including the then principal secretary to the chief minister, were parties to the conspiracy and further investigation was required to unravel the truth.
In the interim order, the Judge said the provisions of the FCRA and materials on record do not justify arraying of the LIFE Mission CEO as an accused in the case and granted interim stay of all further proceedings in the CBI case against him for two months.
He, however, rejected the prayer for interim stay in the plea filed by Unitac Managing director, saying registration of case against him warranted no interference at this stage.
The alleged FCRA violation had snowballed into a major political issue with opposition parties alleging that Swapna Suresh, a key accused in the gold smuggling case, had admitted before an NIA court that she had received Rs one crore as commission from the project.
The opposition parties have alleged that there was corruption involved in the selection of the contractor by the Red Crescent.
LIFE Mission (The Livelihood, Inclusion and Financial Empowerment Mission), an ambitious programme to provide secure and adequate housing facilities to all landless and homeless families in the state, was launched by the LDF government on September 28, 2016.
The project contemplates construction of housing units by utilising government funds, sponsorships, and funds of local self-government institutions.
In early 2017, the Emirates Red Crescent, the volunteer humanitarian organisation, affiliated to the International Federation of the Red Cross and Red Crescent Societies, expressed willingness to provide about Rs 20 crore financial assistance for the construction of homes for the victims of the Kerala floods and also a health centre.
The offer fructified through a Memorandum of Understanding (MoU) entered into between the general secretary of the UAE Red Crescent Authority and the Chief Executive Officer, Life Mission, on July 11, 2019.
The MoU also contains provisions for execution of joint projects by the parties and ensures the independence and freedom of each party to contract with a third party, except in the context of executing the joint projects.
Land belonging to the Wadakkanchery Municipality admeasuring 2.17 acres was made available for construction of the dwelling units and the health centre.
Thereafter, construction agreements were executed between the UAE consul general, Unitac Builders and Developers and Sane Ventures on July 31 last year for 140 apartments of 500 sq ft each, and a mother and children health care centre with a total area of 4,000 sq ft.
Later, money to the tune of 40 per cent of the project cost was transferred to the two companies which began the construction with the concurrence of the Life Mission and under its supervision.
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