Advocates’ Welfare Fund Scam: Kerala High Court Orders CBI Probe

Team SoOLEGAL 30 Dec 2021 3:20pm

Advocates’ Welfare Fund Scam: Kerala High Court Orders CBI Probe

The Kerala High Court has ordered the CBI to investigate a scandal involving the misuse of more than 7.5 crores from the Kerala Advocates Welfare Fund. Over a ten – year period, the money was reportedly swindled using forged documents.

According to Justice Sunil Thomas, the inquiry had to be turned over to the CBI due to the heinousness of the crime:
“After considering the complexity of the nature involved and the fact that the matter is of a general importance, applicable to interest of all the lawyers as a community who have a right to know, how their contribution was misused, to sustain the faith of the public in the Bar Council as well as the Advocate’s Welfare Fund Trust, the deep and pervasive nature to the crime involved, the matter needs investigation by a specialized agency.”

The Trustee Committee in charge of preserving the fund was also hauled up by the Bench when it was discovered that it had not kept any documents or properly audited the money for over a decade, as required by law:
“What shocks the conscience of anybody is that, during the long period of ten years, no records were maintained and the records whatever meant were shabbily retained… Shockingly, nobody verified the records and that during this long period; the records were not even audited, even though trustee committee was under an obligation to get the records audited…
This indifference from the Trustee Committee has led to this enormous squandering of the money by the persons concerned.”

The Court was deliberating on two petitions submitted by attorneys enrolled with the practice in various courts around the state. They also claim to be members of the Advocates Welfare Fund, which was established under Section 15 of the Kerala Advocates Welfare Fund Act.

The fund was established to give retirement benefits and social security to Kerala – based lawyers. The fund’s sources include amounts paid by the Bar Council, Voluntary donations or contributions made by the Bar Council of India or any other Bar Associations, and all sums raised through the sale of stamps under section 22 of the Kerala Court Fees and Suit Valuation Act.

The Trustee committee is responsible for administering the fund and holding the assets of the funds and the trust, according to Section – 9 of the Act. According to Section – 10(4) of the Act, all Trustee Committee finances must be audited yearly by a Chartered Accountant appointed by the Bar Council.

However, the petitioners claim that the same was not done correctly for several years. Allegations of major financial irregularities in the use of money were raised in 2017, and the Trustee Committee deliberated on the matter at its meeting in 2019. Following that, it was decided to take action and request a vigilance investigation into the anomalies and defalcation in the production and distribution of welfare fund stamps entrusted to the Kerala Bar Council.

As a result, the vigilance department filed a first information report against one Chandran, the Trustee fund’s accountant at the time, citing violations of section 13(2) read with Section 13(1)(c)(d) of the prevention of Corruption Act.

Investigations indicated that there had been widespread theft of cash and that there had been no audits since 2007. According to the petitioners, the inability to examine the account for such an extended period allowed the perpetrators to misappropriate cash through fraud and deception.

As a result, the petitioners petitioned the Court and requested that the Central Bureau of Investigation investigate the case.

Advocate Sooraj T Elenjickal, Abu Siddik P, and KN Peer Mohammed Khan represented the petitioners. Muhammed Janaise V. Aswin Kumar MI, Mohammed Musthafa AK, and Helen PA are the members of the team.

The Vigilance and Anti – Corruption Bureau filed a thorough statement indicating that one inquiry was moving along steadily and that considerable evidence had been gathered.

They claimed that two audits were conducted during the investigation, one by the Kerala Local Fund Audit, which revealed a monetary loss of 7,72,51,250 and another by the statutory auditor appointed by the Kerala Advocates Welfare Fund Trust Committee, which revealed a misappropriation of 7,61,24,725.

Furthermore, two of the suspects, accountant MK Chandran and one Babu Scaria, were detained in 2019 as a result of their inquiry, they stated.

However, it was revealed that their inquiry found no proof of a criminal conspiracy by the Kerala Bar Council’s office – bearers or any of its members/Secretary of the Kerala Advocate’ Welfare Fund Trustee Committee.

The Kerala Advocates’ Welfare Fund Trustee Committee submitted a second counter – affidavit in support of the facts stated by the Kerala Bar Council.

However, it was claimed that the petitioners in the current case were political in nature. The court reasoned that, given vast sums involved, the complexity of the crime, the lack of various documents, and the fact that the materials were scattered over two states, it should have been examined efficiently with a bigger team of investigators from the start. As a result, it directed that the inquiry be turned over to the CBI within a month.

Tagged: Kerala High Court   CBI   Kerala Advocates Welfare Fund   Justice Sunil Thomas   Bar Council   Bar Associations   Kerala Court Fees   Suit Valuation Act   Kerala Bar Council  
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