THIRUVANANTHAPURAM: It is a double whammy for the Enforcement Directorate (ED), which is probing the so-called ‘Karuvannur Cooperative Bank scam’ in Kerala.
The central investigation agency suffered a twin setback when both the Supreme Court and the Kerala High court came down heavily on the ED’s manner of conducting probes.
The HC directed a borrower, who had repaid his loan taken from the Karuvannur Service Cooperative Bank mortgaging his property, to make a request before the bank for the return of the title deed and execution of the release deed after the closure of the liability. The petitioner, Francis of Mukundapuram, had alleged that many borrowers like him are facing difficulties as the Enforcement Directorate had seized the original title deed in connection with investigations into the so-called scam.
The Kerala government has welcomed the court order. Minister for cooperation and registration V N Vasavan said the court order would benefit many borrowers who are suffering because of the ED’s illegal seizure of the title deeds. Reports say that the ED had taken into custody as many as 162 deeds worth Rs 186 crore in connection with the probe. The people who came to clear their liabilities could not do so as the title deeds were with the ED. Vasavan said the taking away of the title deeds did not serve any purpose. If the ED needed them as part of its probe, they could have taken copies. Its failure to do that was aimed at hampering the functioning of the Karuvannur bank in particular and the whole cooperative sector in general. The biased conduct of the ED proves the charge that the probe is politically motivated, the Minister added.
The favourable order from the court has come as a shot in the arm for the Government. It will further strengthen its resolve to counter the ED. In a significant development, the government and the Opposition have formed a joint panel to counter the ED. A common platform, Cooperative Employees Coordination Cooperative, has been formed by the Congress, the CPI(M), the CPI and the Indian Union Muslim League (IUML). The Committee has decided as part of their future strategy to organize strong protests against the ED’s intervention in the cooperative sector. The contention of the CPI(M) is that the ED is being used by the Union Government to further its political agenda.
Kerala Cooperative Employees Congress (INTUC), Kerala Cooperative Employees Union (CITU), Cooperative Employees Council (AITUC) and Cooperative Employees Organisation are also part of the newly-formed Coordination Committee. The unions allege that in the name of corruption charges, the ED is trying to destabilize and destroy the cooperative sector in the State, which is of immense benefit to lakhs of poor and middle-income group people. The move is also to help private players and multistate cooperative institutions. The ED action has caused grave concern to lakhs of farmers and small scale merchants, who are dependent on cooperative societies. The attempt is also to create an impression that the cooperative sector in the State is not safe for deposits and attract deposits to multi-state cooperative institutions.
The Coordination committee said it would not wink at corruption in the cooperative sector. But the ED’s aim is to discredit the entire cooperative sector in the State. Out of the 16,225 cooperative societies in the state, corruption was reported only a few, the Committee claimed.
In a swift move to defuse the crisis in the Karuvannur Bank, the State Government has initiated several steps, including immediate mobilization of Rs 50.75 crore and the appointment of a senior officer from Kerala Bank as chief executive of the Bank.
The Government has also moved the court to recover the title deeds seized by the ED. This is necessary as the Bank cannot accept repayment by borrowers without these deeds. It may be mentioned that the Karuvannur Bank has deposits at Kerala Bank (Rs 12 crore), Consumerfed (Rs 25 lakh) and Irinjalakkuda hospital (Rs 10 lakh) which are being recalled. Besides, cooperative societies in Thrissur will shell out another Rs 20 crore to the Karuvannur bank to tide over the ongoing liquidity crisis.
Meanwhile, the Karuvannur Bank will repay depositors 10 per cent of their fixed deposits that matured on September 30, apart from 10 per cent of the accumulated interest amount. The Bank has so far repaid Rs 73 crore to depositors since the crisis erupted. The rest will be returned in the coming days, according to the Cooperation Minister. The Bank has to recover Rs 501.61 crore, but it has to return Rs 202 crore in fixed deposits. Action will also be taken against those who wilfully defaulted on their loans. As many as 18 cases have already been registered in various police stations in this regard, the Minister pointed out.
In an equally momentous development, the Supreme Court has strongly criticized the ED for the manner in which it conducts raids. The apex court has asked the ED to stop being vindictive in its conduct, adding that it must act with utmost probity, dispassion and fairness.
The observation was made by a bench of Justices AS Bopanna and PV Sanjay Kumar while disposing of a petition relating to the probe and arrest of M3M directors Basant Bansal and Pankaj Bansal. The SC also allowed their appeal and overturned a previous order of the Punjab and Haryana High Court which refused to quash the arrest orders and associated proceedings against the Bansals in connection with a money laundering investigation. (IPA Service)