SNC-Lavalin case Explained: How Kerala CM Vijayan came to be prosecuted, discharged

Outcome of the KSEB-Lavalin deal

Though renovations of the hydel stations were to be completed by September 2001, they were done only in February 2003, after exhausting Rs 250.40 crore, apart from a financing liability of Rs 69.83 crore. There was a failure on the part of the KSEB in getting technology transfer and training of personnel as envisaged in the contract with Lavalin. The equipment supplied by Lavalin turned out to be defective, and some of it was unusable.

Lavalin had agreed to mobilise funds for the construction of a hospital, the Malabar Cancer Centre (MCC), in north Kerala. For this, Rs 98.30 crore was to be mobilised by Lavalin. But the actual contribution made up to February 2001 was only Rs 8.98 crore. The government did not receive the rest of the grant. Funds for the MCC was an integral part of the agreement awarding the project.

Trouble begins

The Assembly Subject Committee in 2001 found the deal with Lavalin had led to huge losses for the government. CPI (M) leader Kodiyeri Balakrishnan, now party state secretary and a member of the Politburo, was a member of that panel. A year later, back in power, the Congress government ordered a Vigilance probe, but it failed to make any headway.

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CAG report changes course of scandal

The 2005 CAG report said the state had lost Rs 374.5 crore in the deal. The audit report finding changed the course of the scam and subsequently the Vigilance probe was revived. Early 2006, the Vigilance submitted its preliminary report in court, arraigning eight people as accused. The Vigilance bid to file the FIR in court, without informing the then Congress government, kicked up a controversy. Only KSEB officials were in the list of the accused. Towards the end of the Congress rule in 2006, then Chief Minister Oommen Chandy announced that the case will be handed over to the CBI, amid allegations that the police had let politicians off the hook.

V S Achuthananthan after attending the KSEB Pensioners’ Association meeting in Kochi. (PTI Photo/File)

CBI probe begins, Vijayan made accused

In May 2006, the LDF government led by V S Achuthanandan assumed office. The government was not keen to hand over the probe to CBI. Vijayan was party state secretary then. A public interest litigation was moved in the high court, where the state government objected to the probe by the central agency. But in 2007, the high court allowed the CBI to probe the case. There was a delay in the probe, which again invited high court intervention.

In January 2008, the CBI submitted the final report in the high court, arraigning Vijayan as an accused. CBI sought Kerala governor’s sanction to prosecute Vijayan as he had been the minister. In June 2009, Governor R S Gavai accorded the sanction to prosecute Vijayan. It was also the first time a Poliburo member was being prosecuted for corruption.

Charges against Vijayan

Vijayan emerged as an accused when the CBI submitted the final report. There had been 11 persons as accused. Except Vijayan and a senior executive of SNC-Lavalin, all the other accused were bureaucrats then associated with KSEB and the power department. All of them retired over years then and a few even died as years elapsed.

Vijayan was charged under Sections 120B, 420 of the IPC and with Sections 13(1) and 13(2) of the Prevention of Corruption Act. The CBI found that Vijayan had shown unusual enthusiasm in the deal. CBI, in its report on Vijayan, said, “the final contract with Lavalin was entered into without Cabinet consent; he held direct discussions with a senior manager of the SBI to get exemption of bank guarantee for the amount promised to the MCC; he finalised the contract without the formal approval of the KSEB; and that he had been keen to retain the Malabar Cancer Centre under the KSEB.”

CBI court allows discharge petition

In 2013, the CBI trial court in Thiruvananthapuram allowed the discharge petitions of Vijayan and six other accused in the case. But the CBI challenged the decision in the High Court. The High Court partially allowed the agency’s revision petition, as Justice Ubaid set aside the discharge of three accused, including Vijayan, in the case.

High Court uphold trial court allowing discharge petition

On August 24, 2017, the Kerala High Court upheld the verdict of the CBI court, which had allowed Chief Minister Pinarayi Vijayan’s discharge in the case. The HC then observed that the prosecution does not have sufficient and satisfactory material to work out a prima facie case against the accused. Justice Ubaid said, “I find that despite material showing failure and inaction on part of many ministers who succeeded him (Vijayan), the CBI wrongly picked and chose the seventh accused for prosecution on an allegation of conspiracy without the support of any material.’’ The CBI had moved the petition in the Supreme Court in 2017 itself.

Adds fuel to intra-party feud

The Lavalin case has been extensively debated in Kerala politics and media mainly because of Vijayan’s naming as an alleged accused. Vijayan’s rival V S Achuthanandan, who had been the chief minister from 2006-2011, did not subscribe to the party view that the case was politically motivated. Achuthanandan had been reprimanded more than once for adopting an anti-party stand on the issue. He kept raking up the issue often, until Vijayan assumed office in 2016.

Outcome of CBI petition in SC

The outcome of the CBI petition in the SC would be another crucial moment for Vijayan. The CPI (M) has always adopted the stand that the case was used to besmirch the image of Vijayan as well as the party.