Will Demoralise The Police Force: State Opposes Plea Urging CBI Probe Into Massive Bank Fraud Before Kerala High Court

The State government submitted its counter-affidavit on Wednesday before the Kerala High Court in a plea seeking CBI investigation into the controversy that rocked the State wherein a Rs 100-crore bank fraud was uncovered in Thrissur's Karuvannur Cooperative Bank.

The petition seeking a mandamus to entrust the investigation to the CBI was filed by M.V.Suresh, a former employee of the bank, alleging that since the bank was managed by a committee owing allegiance to the CPI(M), an investigation by the police or the Crime Branch would not be fair or impartial.

This allegation was based on the fact that the investigation significantly impacts the ruling party CPI(M), since the bank's Board had members of the party, and was led by local CPI(M) leader KK Divakaran when the scam was exposed.

However, turning down all the accusations, the State in its counter-affidavit asserted that there was no necessity to transfer the investigation to the Central Bureau of Investigation as the crime branch was probing the case in an effective and fair manner.

Opposing the plea, the State submitted that if the investigation was handed over to the CBI, it would adversely affect the morale of the police force.

The primary allegation posed by the petitioner was that the Managing Committee of the Cooperative Bank committed massive financial irregularities and thereby syphoned huge amounts of monte, estimated to be around ₹300 crores from various accounts of the bank for illegal activities. 

However, the State denied all such claims and stood its stand that there was absolutely no merit, basis or bonafide in any of these allegations or apprehensions raised by the petitioner and that they were not backed by any material whatsoever. 

The affidavit further said that the allegations that the misappropriated amount had been utilised for purchasing land and for holding conventions of certain outlawed outfits for terrorist activities were too "casual and uphazard" made without any materials whatsoever to evidence the same.

In fact, the investigation was being conducted from all angles of the case, it added. Besides, there was nothing on records to show that the investigation was tainted and in the wrong direction.

To support this claim, the counter affidavit elaborated on the details of the investigation conducted so far in the matter. 

The residences of all the accused were searched with a search warrant, and a total of 113 documents including electronic gadgets were seized during the search, the State submitted.  

During the course of investigation, it was revealed that the Board of Directors of the Bank had deliberately abused their official positions and the accused had committed grave financial fraud and misappropriation with the connivance of the Board members. 

Upon finding the same, a report indicating the same was also submitted before the Judicial First Class Magistrate.  

It was added that the government had already stated in an unmistakable term that there shall not be any sort of interference in the investigation and the culprits would be brought to book.

The amount involved was huge and voluminous documents relating to the transaction over a considerable period had to be verified. In fact, the crime committed included sanctioning of loans on fake addresses by mortgaging the landed property without the knowledge of the actual owner of the property.

The State government also submitted that the crime branch was a specialized agency, fully competent and authorised, to investigate serious economic offences such as cyber and bank frauds amounting ₹5 crores and above.

"It is understood that persistent efforts are being made from different corners to give this case a political dimension," the counter reads.

The fact that the management of the bank owed allegiance to a particular political party or ruling party was not a ground to change the investigation agency.

Efforts were on to find out other persons who were involved in the offence and their respective responsibilities, it was asserted. 

The State also claimed that the plea was filed merely because the petitioner had an axe to grind against the Bank and its authorities since he was dismissed from service in 2017 for financial misappropriation. 

According to the respondents, the charge sheet against the petitioner, establishing a financial misappropriation of ₹1,28,631 had been submitted before the Judicial First Class Magistrate Court as well.

Case Title: Suresh M.V v. State of Kerala & Ors