The Kerala High Court on Thursday denied bail to M Sivasankar, former principal secretary to Kerala Chief Minister Pinarayi Vijayan, in connection with the alleged violation of the Foreign Contribution (Regulation) Act in the Life Mission project. The court said he could tamper with evidence as he had influence with the ruling party and the CM.

Justice A Badharudeen also denied bail to Sivasankar on medical grounds, saying the prosecution agency or jail authorities would ensure that he is provided adequate treatment.

"In the instant case, the petitioner (Sivasankar) could not be held as a person who would flee from trial. However, his propensity to tamper with the evidence and to influence witnesses could be foreseeable, since the petitioner is a person having very much influence in the ruling party of Kerala, particularly with the Chief Minister of Kerala," the high court said. The court noted that even after his initial arrest, and subsequent release on bail, Sivasankar had been reinstated in service by the government, "ignoring his involvement in serious crimes", and that he continued to hold a "pivotal post" in the state till his retirement.

"That is to say, his involvement in serious crimes prior to this crime in no way affected his official stature because of his authority in the state government," it said.

The court also said that the probe was at an initial stage in the case and many accused, including Swapna Prabha Suresh, are yet to be arrested.

"Why the prosecution is delaying the arrest of Swapna Prabha Suresh is also a matter of serious concern, though she had an active role in the present crime. "For the above reasons, the petitioner cannot be released on bail at this stage and this application is liable to be dismissed. In the result, this bail application is dismissed," the court said.

Sivasankar had moved the High Court for bail in the case after he was denied relief by a special court last month.

The special court had said that in view of the nature and gravity of the offence involved and the investigation being in the preliminary stage, Sivasankar could not be released on bail. Sivasankar was arrested on February 14 in connection with the alleged violation of FCRA in Life Mission, a flagship housing project of the Left government. The project was conceived by the Kerala government to provide houses for the homeless in the state.

As part of the project, the construction of a housing complex at Wadakkancherry was to be undertaken using funds offered by the international humanitarian organisation Red Crescent. The construction contract was awarded to Unitac Builders and Sane Ventures.

The two companies undertook the construction based on an agreement that they entered into with Red Crescent, which had agreed to provide Rs 20 crore towards the Wadakkancherry project of Life Mission.

It has been alleged that Unitac builders gave kickbacks to Sivasankar and the Consul General of the UAE to get the contract.

This came to light when former UAE Consulate employees Swapna Suresh and Sarith PS were arrested by the ED and Customs in another case related to the smuggling of gold into Kerala.

The CBI in 2020 filed an FIR in a Kochi court under Section 120B of the Indian Penal Code (punishment of criminal conspiracy) and Section 35 of FCRA on a complaint by the then Wadakkanchery MLA and Congress leader Anil Akkara, listing Unitac Builders' Managing Director Santhosh Eappen as the first accused and the company Sane Ventures as the second accused.

The alleged FCRA violation and corruption in the project had snowballed into a major political issue at the time with opposition parties accusing Swapna Suresh, the prime accused in the controversial gold smuggling case, of having admitted before an NIA court that she had received Rs 1 crore as commission for the project. She had reportedly claimed that the money was meant for Sivasankar.

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