Family Booked For Cheating Depositors Found Involved In More Than 100 Other Cases: Kerala High Court Refuses Bail

Justice C S Dias observed that the petitioners were accused of being involved in more than 100 crimes registered across various police stations in the State. The Court noted that petitioners were charged with committing serious economic offences, where they took money from depositors by promising them high interest rates and subsequently cheated them by siphoning off more than 8.2 crore rupees.

“On an overall consideration of the facts, rival submissions made across the Bar and the materials placed on record and on comprehending the nature, gravity and seriousness of the economic offences alleged against the petitioners, the prima facie materials that show the petitioners' involvement in the crime, that the investigation in the case is at its nascent stage, there are nearly 100 cases registered against the petitioners, and that there is a likelihood of the petitioners intimidating the witnesses and tampering with the evidence, I am not convinced that the petitioners are entitled to be released on bail at this stage”, stated the Court.

The 1^st and 2^nd accused are husband and wife, the 3^rd and 4^th accused are their sons. They approached the High Court with bail applications. They were accused of committing offences punishable under Sections 406 (punishment for criminal breach of trust), 409 (criminal breach of trust by public servant, banker, merchant or agent), and 420 (cheating and dishonestly inducing delivery of property), read with Section 34 (common intention) of the IPC, and Section 4 (fraudulent default in regulated deposit schemes), read with Section 22 (punishment for contravention) of the BUDS Act.

The petitioners were accused of dishonestly inducing approximately 15 lakh rupees in deposits from the de facto complainant. The 1^st accused, who was the Managing Partner of M/s. Nedumparambil Credit Syndicate, allegedly made this promise along with other partners (2^nd, 3^rd and 4^th accused) that they would pay 12.5% interest per annum and return the amount upon request to the complainant. They refused to pay the capital amount and promised interest to the complainant. 

The petitioners argued that they had not compelled the complainant to deposit money in their firm and he made the deposit voluntarily. It was also submitted that petitioners have the license to conduct business under the Kerala Money Lenders Act, 1958 and that the offences alleged under the BUDS Act were bailable. It was further argued that they should be granted bail under Section 409 of the IPC due to the statutory provision in Section 167 of the CrPC, which mandates completion of investigation within 60 days, surpassing which they have been in judicial custody for 70 days.

The Public Prosecutor submitted that petitioners have cheated depositors and siphoned off their money. It was stated that more than 100 crimes were registered against petitioners in various police stations for committing similar serious economic offences.

The Court noted that punishment under Section 409 of IPC is punishable with life imprisonment or for a term that may extend to ten years. Thus Magistrate may order 90 days judicial custody (Section 167 of CrPC).

Referring to Rakesh Kumar Paul v. State of Assam (2017), the Court stated that the petitioners were not entitled to be released on statutory bail under Section 167 CrPC considering the seriousness of the offences. It said, “In view of the above discussions and that Section 409 IPC permits the court to sentence an accused to imprisonment for life, and the ratio in Rakesh Kumar Paul's case, that is, the period of investigation should be relatable to the gravity of the offence, there is no room for any doubt that for an offence under Section 409 IPC, the period for filing the charge sheet is extended up to 90 days.”

Relying upon Jagan Mohan Reddy Y.S. v. Central Bureau of Investigation (2013), the Court stated that bail applications in economic offences should be considered differently since it involve large conspiracies and huge loss of public money.

Accordingly, the Court dismissed their bail applications on finding that they were not entitled to be released on bail at this stage.

Counsel for Petitioner: Senior Advocate P Vijaya Bhanu, Advocate Jai George

Counsel for Respondents: Public Prosecutor Seetha S, Advocates Susanth Shaji, Anwin John Antony Sidharth O., Albin A. Joseph

Citation: 2024 LiveLaw (Ker) 450

Case Title: Raju George @ N M Raju v State of Kerala & Connected Case

Case Number: Bail Appl. No. 4911 of 2024 & Connected Case

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