Vincent Joseph & Ors. vs State Of Kerala & Anr.

A. Badharudeen, J.

Accused Nos.1,2 and 6 in Crime No.270 of 2026 of Kudiyanmala Police Station, Kannur, have filed this petition seeking pre-arrest bail under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023.

Heard the learned counsel for the petitioners/accused Nos.1,2 and 6, the learned Public Prosecutor and the learned counsel appearing for the 2^nd respondent/defacto complainant – M/s.Naduvil Service Co-operative Bank. Perused the records.

Here the 2^nd respondent filed a complaint before the Judicial First Class Magistrate Court, Taliparamba, alleging that accused Nos.1 to 7 in the complaint have committed offences punishable under Sections 316(2), 316(4), 318(4) r/w 3(5) of the Bharatiya Nyaya Sanhita, 2023 (`BNS’ for short). The precise allegation in the complaint which led to registration of FIR as Crime No.270/2026 of Kudiyanmala Police Station is that, while the 1<sup>st</sup> accused had been serving as the Administrative Committee member and the President of the Administrative Committee of Naduvil Service Co-operative Bank (for short `Bank' hereafter) during 2002 to 2023, he had availed multiple loans for huge amounts in the names of accused Nos.2 to 7, who are his wife, mother, children and other relatives, by pledging properties having very less value than the value assessed. Accordingly the allegation of the prosecution is that all the accused persons jointly misappropriated an amount of Rs.2,19,74,908/-(Rupees Two crores nineteen lakhs seventy four thousand nine hundred and eight only) and the attempt of the bank to realise the amount from the properties mortgaged went in vain as nobody was inclined to purchase the property on public auction even for very very lesser amounts. This is the premise on which the FIR got registered alleging commission of the above offences, by accused Nos.1 to 7.

It is submitted by the learned Public Prosecutor that, in this case, commission of offences under the Prevention of Corruption Act (amendment), 2018 [PC(amendment) Act, 2018’ for short hereafter] also found, prima facie, and accordingly steps for incorporating the said offences against the 1^st accused, the administrative committee members and the respective Secretaries during the relevant periods, are under progress and for which, prior approval under Section 17 of the PC(amendment) Act, 2018 has been awaiting.

While canvassing anticipatory bail to the petitioners, it is submitted by the learned counsel for the petitioners that, as per Annexure A1 order, the learned Sessions Judge, Thalassery, dismissed the bail application filed by the petitioners herein, finding that, prima facie, the allegation of misappropriation of Rs.2,19,74,908/- is made out. It is pointed out by the learned counsel for the petitioners that, the loans were availed after providing 6 acres of land owned by the 1^st accused as security through the power of attorney holder, who is the 2^nd accused. Apart from that, 25 cents of property belonging to accused No.2 and 3 acres of property belonging to accused No.7 also were mortgaged. According to him, the bank proceeded against the properties of the petitioners by realising the same. Thus according to the learned counsel for the petitioners, there is no misappropriation as alleged, as the amount could be realised by proceeding against the properties. It is also pointed out that, in the instant case, the petitioners are ready to co-operate with the investigation and, therefore, they may be released on anticipatory bail.

The learned counsel appearing for the 2^nd respondent/defacto complainant filed a counter affidavit and zealously opposed grant of anticipatory bail to the petitioners. The counter affidavit filed by the 2^nd respondent reads as follows:

It is submitted by the learned counsel for the 2^nd respondent/defacto complainant that, in fact, as on 08.09.2026, Rs.2,31,94,030/- is outstanding towards the loans availed by the petitioners. He also pointed out that the contention raised by the learned counsel for the petitioners that if the property would be proceeded, the amount could be realised, is an utter falsehood, as the entire properties would not fetch much value and when the entire properties were proceeded for sale, even after fixing the upset price to the tune of Rs.20 lakh, nobody turned up to bid the property. Further, even though the 2^nd respondent/bank decided to bid the properties, for the amount of Rs.20 lakh, then also, the said procedure could not succeed, as the properties found to have some other complications and encumbrances. It is specifically pointed out by the learned counsel for the 2^nd respondent that, in a serious case involving misappropriation of Rs.2,31,94,030/-, grant of anticipatory bail to the petitioners would be fatal to the investigation, as custodial interrogation with reference to the documents pertaining to the loans is very much essential for a proper and effective investigation and successful prosecution. He submitted further that grant of anticipatory bail in this case definitely would destroy the investigation so as to facilitate the petitioners to get out of the prosecution.

The learned Public Prosecutor also strongly opposed grant of pre-arrest bail to the petitioners and shared the argument advanced by the learned counsel for the Bank. According to him, grant of pre-arrest bail in the instant case would adversely affect the investigation and custodial interrogation of the petitioners, recovery of the money and also to get details regarding how the misappropriated money was used or diverted, which are absolutely necessary in this case.

On reading the prosecution records, including the report filed by the Investigating Officer, it could be gathered that, while the 1^st accused was holding the post of President of the 2^nd respondent bank, he had granted loans in the names of accused Nos.2 to 7 by pledging properties belonging to him by executing power of attorney in respect of the said properties and also mortgaging properties in the names of his mother and wife, which were of very less value than the amounts of the loans availed, and as of now, an amount of Rs.2,19,74,908/- is outstanding towards the bank. It is discernible from the records further that, even though the properties were proceeded against, as pointed out by the learned counsel for the 2^nd respondent, no amount so far has been realised since nobody turned up to bid the properties even at a very lesser price of Rs.20 lakh. This aspect alone would go to show the deceitful intention on the part of the accused persons in mortgaging the properties which would not fetch much value, by showing higher valuation for availing loan amount of Rs.1,05,99,100, during the period from 2003 to 2023. It is pertinent to note that thus the prosecution records would reveal that though properties more extent which would not fetch more than Rs.20 lakh at present (2025-2026) was mortgaged to avail loan of Rs.1,05,99,100/-. Shockingly after availing this much huge amounts, substantially no repayment was made which would show the deceitful intention to misappropriate the loan amount and the arrears as of now would come to Rs.2,19,74,908/- (i.e, Rs.22,03,210/-, Rs.29,50,385/-, Rs.47,56,576/-, Rs.34,53,143/-, Rs.36,586/-, Rs.43,99,608/-, Rs.51,69,440/- etc., by way of 24 loan transactions). Thus the allegation of prosecution as to commission of the offences alleged by the petitioners could be found, prima facie, from the prosecution records and the allegations are very serious and the same have impact on the public at large, as the amount alleged to be misappropriated is public money, due to the depositors who believed the Bank. That apart, these types huge misappropriation reported in multiple numbers in the State would show that the people have lost belief in the co-operative sector, which played an active role in assisting the local people in times of need without much hassles and the same definitely have an impact on the economy of the country also.

Apart from that, the administrative committee members, the secretaries and other responsible officers, who granted loans in excess of the permissible limits after showing higher valuation to the properties which would fetch only meagre sums, also appear to have involvement in this crime, as submitted by the learned Public Prosecutor on the submission that, incorporation of the offence under the PC Act (amendment), 2018 also is on the anvil, so as to proceed against the accused already arrayed and the aforesaid persons, who are proposed to be arrayed as accused.

On evaluation of the evidence, it could be seen, that the allegations of the prosecution are made out, prima facie, and are of serious nature. It is relevant to note that, when the allegations relate to a scam involving crores of money, deposited by the public at large are involved, the same cannot be viewed lightly, particularly when the allegation of misappropriation is at the helm of the responsible officers, who were given trust by the people in the locality to entrust their money on the strong belief that the money would be safely kept and would be released to them along with reasonable interest, as agreed, in times of need. In this connection, it is relevant to observe that huge scam of public money in large numbers in Co-operative Banks are emerging and the same created a situation, whereby the people lost their belief in co-operative sector. Thus misappropriation from banks, including co-operative banks, which would have an impact on the public and public money, could not be viewed lightly, so as to grant anticipatory bail to the offenders to go clean hands even at the investigation stage, without subjecting them for interrogation, recovery of materials, documents and collecting the details of the money so misappropriated, and without attempting to recover the money allegedly misappropriated. In fact, if the above steps to be curtailed by granting anticipatory bail, the same would be very fatal to meaningful investigation and successful prosecution and its outcome is spoiling the investigation of a serious case.

In the above circumstances, the petitioners are not entitled to get anticipatory bail as canvassed, and therefore, this petition must fail.

In the result, this bail application is dismissed, with direction to the petitioners to surrender before the Investigating Officer and to co-operate with the investigation, without fail.

It is specifically made clear that, if the petitioners fail to surrender or do not co-operate with the investigation, the Investigating Officer shall be at liberty to take coercive steps, as may be warranted, as per law to ensure a fair and effective investigation in a serious case like this, without fail.