Kerala High Court Upholds Order For 'Quick Verification' Of Graft Complaint Against Ex-MD Of CIAL Over Alleged Illegal Transfer Of Shares

Justice A. Badharudeen passed the order while considering a plea by Kurian challenging the quick verification order passed by the Special Judge. The judge observed:

“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.”

The allegation against the petitioner was that he allotted 1,20,000 shares of CIAL, meant to be the Employees Stock Ownership Plan (ESOP), to a non-employee, one Sebastian. Earlier, the Court had granted a stay of the proceedings against Kurian, which now stands vacated with the disposal of the petition.

The senior counsel for the petitioner had argued that the petitioner has no individual role in the allotment of shares and decisions are made by the Board of Directors. Therefore, it was prayed that the quick verification order be quashed.

Earlier, another quick verification looked into several other complaints against the petitioner, including misuse of CIAL funds, amassing of disproportionate assets, etc. The allegations were found to be unsustainable and therefore dropped. The Government Pleader (Vigilance) stated that the present allegation was not included in the earlier quick verification and therefore had to be looked into.

The Special Judge had found no need for Section 17A sanction since the allegation relates to the transfer of shares contrary to the ESOP scheme. While disposing of the plea, the Court also looked into the need for prior approval under Section 17A of the Prevention of Corruption Act in the case.

It observed: “So Section 17A of the PC Act, 2018 would apply only when an offence alleged to have been committed by the public servant under the PC Act where the alleged offence is relatable to any recommendation made or decision taken by such public servant in discharge of his official functions or duties, without the previous approval. 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, where offences under the PC Act, 2018 also involved. Purchasing public property under a benami would not come within the purview of Section 17A of the PC Act, 2018.”

The Court recorded the submission of the prosecutor that prior approval is awaited, but had not been obtained till now due to the stay of proceedings. Thereafter, it upheld the Special Judge's order and observed that further steps can be taken to obtain prior approval.

Case No: Crl.M.C. No. 991 of 2025

Case Title: V.J. Kurian v. State of Kerala and Anr.

Citation: 2025 LiveLaw (Ker) 577

Counsel for the petitioner: Thomas J. Anakkallunkal, Jayaraman S., Nirmal Cheriyan Varghese, Litty Peter, Anupa Anna Jose Kandoth, P. Vijaya Bhanu (Sr.)

Counsel for the respondents: Dinoop P.D., K.P. Prasanth, T.S. Krishnendu, Archana Suresh, Sunitha K.G., C. Unnikrishnan (Kollam), Ananda Padmanabhan, Uthara A.S., Goutham Krishna U.B., Nidhi Balachandran, Vijaykrishnan S. Menon, Rajesh A. – Special Public Prosecutor – VACB, Rekha S. – Senior Public Prosecutor – VACB

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