THIRUVANANTHAPURAM: The state government has released an internal note, signed by KSIDC managing director and addressed to principal secretary (industries), to claim that it has cancelled the memorandum of understanding (MoU) it signed on fishing rights and building trawlers with controversial US-based firm EMCC International.
The note — signed on February 26, 2021 — was released on Wednesday in response to TOI’s report that the government has not issued an order so far cancelling the parent MoU with EMCC.
However, several serious questions are being raised on the validity of this ‘cancellation’, notably on who authorised it and as to why no show-cause notice, or even a cursory right to respond, was given to EMCC. The note says the MoU signed as part of ASCEND 2020, and the subsequent allotment of land to EMCC at KSIDC Mega Food Park at Pallipuram in Cherthala, stands cancelled and that the steps are taken on the basis of instructions from the government on February 24 and 25.
23 MoUs signed by KSIDC may get into a legal tangle
The MoU signed by M G Rajamanickam, managing director of KSIDC, a public corporation, on February 28, 2020, says it is being signed “for the state government”. Legal experts question his right to do so. “The KSIDC is a body corporate registered and owned by the government. The government has framed rules under Article 166 (3) of the constitution. Any MoU on behalf of the government can be cancelled only by the secretary of the department to which the particular business has been allocated,” former law secretary B G Hareendranath said.
Similarly, neither the government nor KSIDC has assigned any reason whatsoever to cancel the MoU unilaterally or given EMCC a show-cause or opportunity to explain its lapses. These apparent loopholes will help EMCC retain the leased land in the event of a legal challenge, especially since EMCC International was a “prospective investor” who took part in ASCEND and was selected by an empowered committee of the government. An arbitrary action against a company selected by the empowered committee, that too after signing the MoU, will be favourable to the company if it moves court. A legal battle is on the cards as the long-term lease of four acres of prime commercial land is of high value.
The signing of an MoU by the KSIDC MD -- who is not an “official of the state government” but an officer on “state deputation” to a public sector company who cannot legally represent the government -- also shows that no legal scrutiny or procedures were followed at the ASCEND meet. Legal experts said all MoUs executed at ASCEND would be legally valid only if the government had authorised the KSIDC MD, through an order, to sign agreements with investors. “As per article 299 (1), all contracts made in the exercise of the executive power of the Union or of a state shall be expressed to be made by the president or the governor and should be executed by those who are authorised to do so, which are secretaries of departments concerned. If there is no such specific order delegating the power to the MD, KSIDC, the MoUs signed by the officer would be invalid,” Hareendranath said.
As many as 23 MoUs and 40 letters of intent (LoIs) signed by the KSIDC during ASCEND 2020 are likely to get into a legal tangle. The role of the KSIDC, as per a government order on ASCEND, was limited to being the overall in-charge of the event -- such as arranging the venue, preparing the briefs for speakers, registration of delegates, preparing the delegate kits etc. Nowhere does it say that the KSIDC MD will enter into MoUs with investors for the government.