[Kandala Bank scam] Granting Anticipatory Bail In Economic Offences Would Hamper Effective Probe: Kerala HC Denies Relief To Bank's President, Secy

Justice Mohammed Nias C P stated that economic offences have to be treated separately as they involve deep-rooted conspiracies including huge loss of money. It also held that there was an apprehension that the accused persons would try to intimidate or influence the depositors.

“The grant of anticipatory bail will frustrate the investigating agency in interrogating the accused and collecting useful information and materials that might have been concealed. Success in such interrogation would delude the accused knows that an order of court protects him. Grant of anticipatory bail, therefore, in such economic offences would certainly hamper an effective investigation. The charges being multiple, I do not think that this is a case where section 438 Cr.p.c can be invoked.”, 

Rejecting the anticipatory bail application, the Court further stated thus: “Since the details of the amount collected, where the money has been parked, etc., are inevitable parts of an impartial investigation, to lead to a meaningful prosecution, granting anticipatory bail in these cases would certainly defeat that objective. I do not find any merit in the applications and the applications will stand dismissed”.

A complaint was registered against the President and Secretary alleging that they dishonestly induced depositors to invest money by promising a higher interest rate for investment. The depositors alleged that even after the completion of the investment tenure, they were not paid promised amounts. 

The Counsel for the depositors submitted that the President and Secretary of the Bank were responsible for not getting their deposits back and their money was misused for oblique purposes.

On the other hand, the Public Prosecutor opposed the bail application stating that huge amounts of misappropriation have taken place and proper investigation would have to be conducted.

The Court found that an enquiry has been conducted under the Kerala Co-operative Societies Act and Rules. It stated that the enquiry showed the role of the President and Secretary in the unauthorized appointment of staff, unauthorized construction, wasting money, unauthorized lending of loans, other unauthorized payments and unauthorized purchase of vehicles.

It noted that as of October 9, 2023, the State Police Chief has transferred 56 financial fraud cases against the Bank's President and Secretary to the State Crime Branch. It noted that thorough enquiry was required as huge financial fraud was committed by them.

The Court held that granting anticipatory bail in economic offences would hamper the course of investigation as it would prevent the investigating agencies from interrogating the accused persons and collecting useful information.

It held that since the allegation against the accused persons involved huge misappropriation of money, arrest and custodial interrogation were essential for conducting a proper investigation.

Accordingly, the Court dismissed their bail application.

Counsel for the accused: Advocate P V Baby

Counsel for the respondents: Senior Public Prosecutor T V Neema, Public Prosecutor M C Ashi, Advocates S Nikhil Sankar, Bencilal B S, Rinu S Aswan, Gopika H H, Lekshmy I, Aginov Mathappan

Citation: 2023 LiveLaw (Ker) 752

Case title: N. Basurangan V State of Kerala & Connected Cases

Case number: Bail Appl. Nos. 5661, 5948, 5950, 5952, 5956, 5959 of 2023

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