CVC and Palmolein issue

The Kerala IAS Association

2nd November,2010
STATEMENT

The Kerala IAS Association expresses its deep concern about casting aspersions on the integrity and honesty of Sri P J Thomas , the CVC . Sri P J Thomas has served more than 35 years in Kerala in various capacities and his record of service is an open book .Most of the members of the Association have worked under him and have personal knowledge about his impeccable integrity and honesty.
It is now widely recogonised in Kerala that dragging his name into Palmolein controversy is very unfortunate. He was just acting in his official capacity as Secretary, Government of Kerala . We once again express our the deep concern.

President : Vice President Secretary
T Balakrishnan Paul Antony Dr Rathan U Kelkar
Addl Chief Secretary, Principal Secretary Secretary,

So much is mentioned these days about the involvement of Sri PJ Thomas, the Central Vigilance Commissioner in the Kerala Palmolein case, but what exactly is the case against him?

As per the charge sheet filed in the Vigilance court in Kerala, the main charge against him is that as the Secretary Food & Civil Supplies of the Government of Kerala in 1991, he signed, on the basis of a Cabinet Decision, the Government Order (GO) sanctioning the purchase of 15000 MTs of palmolein,. The only other charge is that he was part of a criminal conspiracy to purchase the palmolein.

The other accused in the case are Sri K Karunakaran, the then Chief Minister of Kerala, the then Minister for Food, the Chief Secretary, the Additional Chief Secretary, the then MD of the Kerala State Civil Supplies Corporation and the Directors of P & E Pte Ltd Singapore, through whom the palmolein was purchased.

The conspiracy angle against Sri Thomas is sought to be proved through a telex sent by him to the Government of India (GoI), Ministry of Civil Supplies, seeking allotment of palmolein under a Govt of India scheme to import palmolein by State Governments or their undertakings for sale through the public distribution system. This letter was written on the directions of the Chief Secretary, who in turn acted on the directions of the Chief Minister. Even according to Vigilance, the only “irregularity” in this letter to the GoI is that the allotment of palmolein is sought in connection with Makar Sankranti, “which is not a major festival in Kerala”. It is admitted even by the Vigilance Department that the GoI scheme envisages such a request from the State Government. That other State Governments had sent similar letters to the Govt of India are ignored. The charge sheet also ignores the fact that the 15000 MTs of palmolein were sold in small pouches to ration card holders, at rock bottom rates, in record time, through the Maveli stores of the Civil Supplies Corporation, fetching the cash starved Corporation nearly Rs 17 crore by way of profit (yes, profit and not “loss”).

The Kerala Vigilance case admits that the decision to purchase the palmolein without tender was taken by the State Cabinet (as an outside the Agenda item) and all that Mr. Thomas did was to issue the GO, on the basis of the Cabinet Decision, formally communicated to him by the Chief Secretary. The Kerala Government Rules of Business say that orders on Cabinet decisions have to be issued by the Secretary concerned in 48 hours. “He did not get the GO vetted by the Finance Department before issue”, says Vigilance, although this is required only if the file had never been seen by the Finance Department before it was placed in the Cabinet and if State Government funds were involved. In this case, the file was seen by the then Finance Minister before it was placed in the Cabinet. The Chief Minister, the Food Minister and the Finance Minister all attended this cabinet meeting. The funds for this commercial transaction was entirely met by the Civil Supplies Corporation and not the State Government. Admittedly, Sri Thomas had no role to play in the purchase, other than issuing the G.O. It is interesting that in the original case registered by Vigilance, Sri PJ Thomas was not an accused, his name was added as the 9th accused much later.

The charge sheet admits that there was a GoI scheme in operation which did not envisage inviting of tenders and which clearly provided for payment of 15% of the cost of palmolein to the supplier towards his expenses and profit. The irregularity, according to Vigilance, is in the price fixation done by the Corporation (that Sri Thomas had nothing to do with this is conveniently forgotten). Vigilance argues that the price should not have been the spot price of the day (which was what was followed) but the average of the last 30 days daily spot prices, which not even the Government of India will say is practical. Imagine going to the market and buying edible oil not at the day’s price of US$ 392 per MT, but at the average of last 30 days’ prices of US$ 380! The report also ignores the fact that 4 other State Governments had obtained the approval of the GoI under the scheme; 2 of these, Tamil Nadu and West Bengal, actually purchased palmolein without tender, under the same scheme, from the same vendor, after signing exactly similar contracts, with the price being fixed in the same manner as was done in Kerala (ie. spot prices and not the average of past 30 years). There are no “palmolein cases” in these States.

Needless to mention, the case is seen politically, as one against Sri K Karunakaran, the then Chief Minister. It is not surprising that the charge sheet was filed when the Left Democratic Government came to power during 1996-2001. The UDF Government during their 2001-06 rule decided to drop the case, but the LDF which came back to power in 2006 decided to revive it. Not even the LDF leaders will claim that Thomas’s integrity is suspect; otherwise, the same Chief Minister who was a party in the Supreme Court in the public interest litigation in the palmolein case against Sri K Karunakaran would not have appointed the same Mr Thomas as his Chief Secretary.

The case is still pending trial, which has not even commenced on account of stay by the Supreme Court. For 19 years, Sri Thomas has been “unable to prove his innocence” or find a forum where he can present his side of the case. He will probably have to wait for another 19 years to do so. A right man, caught at the wrong place, at the wrong time!!