People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 46

November 17, 2013


Lavlin Verdict: Inevitable Ending

Of a McCarthyian Conspiracy


K K Ragesh


THE term McCarthyism refers to the practice of making unfair allegations or using unfair investigative techniques, especially in order to restrict dissent or political criticism.  The US senator Joseph McCarthy led a witch-hunt against communists during the 1950s claiming that “there were large numbers of Communists and Soviet spies and sympathisers inside the United States federal government and elsewhere”. He could not prove his claims and later the term McCarthyism applied to similar anti-communist activities.


In Kerala too the same evil design of McCarthyism is at work against the CPI(M) and its state secretary Pinarayi Vijayan so as to keep the Party and its leaders under the smokescreen of suspicion. It includes manufacturing fabricated tales against the CPI(M) leaders, propagating unfounded accusations time and again, arranging to file suits in the courts so as to keep the propaganda alive, periodically introducing false testimony and hence proliferate a scathing campaign etc. This is being done on such a level that it may even astonish Joseph McCarthy! However, the recent CBI special court verdict discharging the CPI(M) state secretary Pinarayi Vijayan in the SNC Lavalin case because “the charges leveled are groundless, frivolous and unsustainable” is undoubtedly a blow on the face of those anti-communist conspirators.


The CBI special court while discharging the CPI(M) state secretary Pinarayi Vijayan and six others from the list of the accused in the SNC Lavalin case came down heavily on the investigating agency with vehement criticism. The court held that “a person having a modicum of law in his cranium cannot accept such an absurd proposition propounded by the prosecution and the prosecution cannot be permitted to project such an absurd proposition in support of its case”. The charge sheet submitted by the CBI vividly vindicates the fact that all the allegations leveled against Pinarayi Vijayan are politically motivated. In fact, the CBI did not have any substantial evidence to substantiate any of its accusations made in the charge sheet.




The major accusation of the CBI was that all the accused abused their respective official positions with fraudulent and dishonest intention and thereby awarded the contract for renovation and modernisation of the Pallivasal, Sengulam and Panniyar (PSP) power projects at an exorbitant cost to the SNC Lavlin, Canada at a fixed rate by violating all rules and regulations. The CBI further alleged that in furtherance of the criminal conspiracy the accused did not execute a binding agreement with the SNC Lavlin in the matter of receiving the grant of Rs 98.3 crore assured for Malabar Cancer Center (MCC) and thus shown undue favour to SNC Lavlin, causing wrongful loss to the government exchequer and corresponding wrongful gain to SNC Lavlin. The finding of the CBI is that it is the non-execution of a binding agreement that enabled the SNC Lavlin to back out from its commitment to arrange the grant and further argued that as the Lavlin had spent only Rs 12.05 crore for the MCC project, thus caused loss of the rest of the amount, i.e. Rs 86.25 crore. The CBI, contrary to the venomous campaign unleashed by some quarters against Pinarayi Vijayan by manufacturing a fabricated mystery on Technicalia, had to agree that Lavlin had spent Rs 12.05 crore for the MCC project through its (emphasis added) consultant Technicalia.


The court noted that the CBI has no case that any of the accused obtained any valuable thing or pecuniary benefit in connection with the deal. The CBI in its affidavit filed before the court earlier, in reply to a query of the court whether any evidences were left out to prove a monetary gain, affirmed that there was no evidence to prove that Pinarayi Vijayan or any middlemen had made any monetary gain. The CBI, which did not accuse any monetary gain, invents that the main consideration in awarding the supply contract (Addendum) to the SNC Lavlin was the offer of grant of Rs 98.3 crore to set up Malabar Cancer Center (MCC) at Thalassery. In its eagerness to appease its political masters, the central investigating agency ridiculously accused Pinarayi Vijayan for taking utmost concern and interest to set up the MCC. The CBI in its charge sheet blatantly accuses Pinarayi Vijayan of appointing his personal staff member as a special officer and initiating land acquisition proceedings and further argues, even after relinquished the post of electricity minister, he was keeping in touch with the special officer concerning the establishment of the MCC! The CBI was too blind to appreciate the commendable earnestness shown by Pinarayi Vijayan to materialise a dream project so as to serve the interest of the general public, but ludicrously depict such diligence as fraudulence.




The hollowness of the CBI’s arguments got exposed in the court. The court while analysing the argument of the CBI that the consideration for awarding supply contract is the offer of grant for establishment of MCC asked the CBI whether such a consideration can be branded as a consideration without any public interest. The court observed that “the prosecution is simultaneously attempting to brand the act of awarding supply contract a dishonest and fraudulent act abusing the official position of the accused and also an act taking into consideration the offer for grant for establishing MCC at Thalassery, a laudable object involving public interest” and held that the “allegations are mutually contradictory and destructive”. The court while rejecting the charge pronounced that when the contract was awarded taking into consideration a laudable object, no fraudulent or dishonest intention can be charged against the accused on that score.


The CBI’s charge that Pinirayi Vijayan entered into a non-binding agreement in the form of MoU on 25th April 1998 instead of a legally binding agreement in the form of MoA for MCC to be established with the grant offered to be arranged by the SNC Lavlin. The CBI further argued that it is the absence of a legally binding agreement that facilitated the Lavlin to back out from its commitments. The MoU to renew the PSP project was signed between SNC Lavlin and the KSEB in August 1995; subsequently an implementation/consultancy agreement was signed in February 1996. All these developments occurred under the UDF government when Congress leader G Karthikeyan was the electricity minister.


The court observed that till the execution of the consultant’s agreement dated 24th February 1996 there was no proposal to provide any grant for establishing any community development programme, including a cancer hospital at Thalassery. The court also notes that Pinarayi Vijayan was not there in the scene during that period. The proposal for a cancer hospital was mooted for the first time by the high power delegation led by Pinarayi Vijayan during October 1996 i.e. 11 months after the execution of the MoU and seven months after the execution of Memorandum of Agreement (MoA). Taking note of the documents submitted before it, the court held that there is absolutely nothing on record to show that SNC Lavlin had given any promise to fund or make available grant from any other Canadian agencies for the establishment of the MCC till the execution of the supply contract. Thus the court asked how a legally binding MoA can be executed between the government of Kerala and SNC Lavlin when there was no promise made. The court rejected the arguments of the prosecution and asked if it was a belated promise from SNC Lavlin how that promise can be the basis of a legally binding MoA.


The court exposed the mysterious intention of the CBI by stating that “the prosecution in the charge practically conceded the performance of promise, if any, on the part of the SNC Lavlin touching this undertaking and that is evident from the charge sheet that SNC Lavlin had shelled out Rs 12.05 crore from its purse”.


It is to be noted that the MoU for the MCC was signed on 25th April 1998, more than a year after the execution of the supply contract (Addendum was signed on 10th February 1997).  Hence it vividly establishes the fact that the MCC grant was not at all a consideration for the contract given to the SNC Lavlin as the CBI argued. In fact, the proposal to set up the cancer hospital was by way of general assistance package which was being offered by certain developed countries to third world countries. It was in June 1997, during the visit of the delegation led by E K Nayanar, the late chief minister, to Canada that the Canadian officials agreed to set up a cancer hospital in the Malabar area where no specialised treatment facilities were available for cancer. And subsequently on the basis of the MoU, the SNC Lavlin had spent Rs 12.05 crore for the MCC project and commissioned the first phase of the hospital by 2001.


One should not lose sight of the fact that Pinarayi Vijayan relinquished the post of electricity minister on 19th October 1998. Even though the SNC Lavlin submitted the MoA to be executed with the state government to the subsequent UDF government, it did not take any step to execute the MoA even after repeated reminders from the Canadian agencies. The execution of the MoA was absolutely necessary for the Lavlin to arrange funds from various Canadian agencies such as CIDA and EDC. The CBI while levelling false allegations against Pinarayi Vijayan conveniently hid such crucial issues, thanks to the ‘caged parrot’ that echoes its political master’s voice.


The premier investigating agency was not ashamed of painting the effort to reduce the foreign loan component from Rs 173 crore to Rs 157 crore as a crime! The CBI termed it as an arbitrary move arguing that the delegation was without a technical member in the team but deliberately undermined the fact that a technical member has nothing to do with the Canadian loan. The court rejected the allegations of the CBI and held that “if the accused had any intention to help the SNC Lavlin for making unlawful enrichment, such substantial reduction in the amount would not have been made”. During the UDF period when Congress leader G Karthikeyan served as the electricity minister, the original consultant contract was signed on 24th February 1996 and the total amount earmarked was Rs 181.57 crore, including the equipment cost of Rs 157.47 crore.


It is vividly clear that all the accusations levelled by the CBI in the charge sheet are made without any backing of evidences. The court did not accept any of the charges levelled by the CBI against Pinarayi Vijayan. In fact, it effectively punctured all the cock and bull stories, nurtured and propounded by the anti-communist camp, and that were incorporated in the charge sheet by the CBI.