1. M/s. SNC Lavalin is a Canadian Consultant Company having long standing association and transactions with the Kerala State Electricity Board (K.S.E.B). In the political and social circles in Kerala, “Lavalin” is a controversial figure, and Lavalin is now the subject matter of political discussions and political fights in Kerala. Some contracts between M/s. SNC Lavalin (Lavalin) and the K.S.E.B gave rise to the present case, started long back. “Lavalin” had undertaken some projects under the K.S.E.B on earlier occasions, like the Kuttiyadi project, Idukki project etc. There were no complaints or allegations regarding those projects undertaken and carried out by Lavalin. In 1995, the K.S.E.B took a decision for the renovation and modernisation of three Hydro Electrical Projects at a time when there was severe shortage of electricity in Kerala. Those are the “Pallivasal, Sengulam and Panniyar projects” (PSP Projects). After effective negotiations between the officials and office bearers of the K.S.E.B and the senior Vice President of the S.N.C. Lavalin, the parties came to terms preparatory to the making of enforcible contracts, and accordingly, as a first step, a Memorandum of Understanding (MOU) was signed on 10.8.1995. After further discussions, regarding the terms of the contract and the nature of the modernisation and renovation works required for the three projects, the K.S.EB and Lavalin executed three separate contracts on 24.2.1996 with respect to the three Hydro Electrical Projects. For the smooth functioning of the works relating to the projects, the parties decided to have three different contracts. In the making of the three contracts, the K.S.EB was represented by the Electrical Member, and the SNC Lavalin was represented by its senior Vice President. The works were undertaken by the SNC Lavalin for a total consideration of Rs.243.49 cores. The works proceeded in terms of the contracts, but finally, the K.S.E.B had to meet a total expenses of 389 crores. Such excess Rs. payment happened to be made, consequent to the replacement of the three Consultancy Contracts by three supply contracts dated 10.2.1997. At that juncture also, no allegation came from any quarter, and the KS.E.B cleared the payments also. Doubts and complaints regarding the projects and the excess payments made by the KS.E.B came when the Principal Accountant General of Audit (Kerala) found out and reported some serious irregularities and anomalies in the project. The Principal Accountant General (PAG) found out, that there was very serious violation of the prescribed and accepted procedure in the matter of awarding contracts, that the K.S.E.B decided to modernise and renovate the three projects without conducting any feasible study, that the various equipments replaced as part of modernization later developed defects, and that in spite of such renovation and modernisation, the K.S.E.B could not make any achievement in the generation of electric energy. The PAG also found out that excess payments were made to the Lavalin Company unauthorisedly, and thus, the K.S.E.B had to incur a loss of crores of rupees. The PAG even reported that the whole renovation process turned out to be a waste.

2. The report of the PAG triggered off a controversy, which led to an enquiry by the Vigilance and Anti-Corruption Bureau (VACB). On enquiry, the VACB found some substance in the report of the PAG as regards the suspicious circumstances, and elements of misconduct in the making of the contracts. The VACB also detected the dishonest and vicious involvement of some officials and officers of the K.S.E.B including the then Chairman in the making of the contracts. Accordingly, a crime was registered on 27.9.2006, as Crime No.1/2006 of the Eastern Range of the VACB, Kottayam. Investigation proceeded to unearth the dishonest involvement, and the elements of corruption in the making of the contracts. While such investigation was going on, some writ petitions came b