Sri G Gopinath Vs the State of Karnataka

SRI G. GOPINATH S/O G.V. GOWDAIAH AGED ABOUT 55 YEARS R/O NO.321, PRAHARSHA NILAYA 11TH MAIN ROAD, 9TH CROSS BEML 3RD STAGE, R.R. NAGAR BENGALURU - 560 098.

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…APPELLANT

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(BY SRI S.V. GIRIDHAR, ADV., FOR SRI SHATHABISH SHIVANNA, ADV.)

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AND:

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Digitally signed by SUMA B N Location: HIGH COURT OF KARNATAKA

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THE STATE OF KARNATAKA BY CUBBON PARK POLICE STATION REPRESENTED BY SPP OFFICE HIGH COURT OF KARNATAKA BANGALORE - 560 001.

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(BY SRI VINAY MAHADEVAIAH, HCGP FOR SRI NARAYANA REDDY M, ADV.)

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…RESPONDENT

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THIS CRL.A. IS FILED U/S.16 OF KPIDFE ACT PRAYING TO SET ASIDE THE ORDER DATED 18.12.2025 PASSED IN CRL.MISC.NO.10283/2025 ON THE FILE OF THE PRINCIPAL CITY CIVIL AND SESSIONS JUDGE AT BENGALURU AND ENLARGE THE PETITIONER ON REGULAR BAIL IN CRIME NO.199/2025 BY THE CUBBON PARK POLICE FOR THE OFFENCE P/US/ 61(1),314,316(2),316(4),316(5),318(4),336(2),336(3),338,340(1),3

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HC-KAR

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40(2),344 OF BNS 2023 AND SEC.9 OF THE KPID ACT 2004 PENDING ON THE FILE OF THE 3rd ACJM COURT BENGALURU.

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IN CRL.A NO. 75/2026:

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BETWEEN:

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SMT LAKSHMI R C/O RAMANUJA AGED ABOUT 38 YEARS RESIDING AT NO.611 ROYAL PARK RESIDENCY J.P. NAGAR, 9TH PHASE BENGALURU - 560 062.

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...APPELLANT

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(BY SRI SHRAVAN MADHAV K.P, ADV.)

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AND:

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THE STATE OF KARNATAKA BY CUBBON PARK POLICE STATION REP. BY S.P.P. HIGH COURT OF KARNATAKA BENGALURU - 560 001.

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...RESPONDENT

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(BY SRI VINAY MAHADEVAIAH, HCGP FOR SRI NARAYANA REDDY M, ADV.,)

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THIS CRL.A. IS FILED U/S.16 OF KPIDFE ACT PRAYING TO SET ASIDE THE ORDER DATED 18.12.2025 IN CRL.MISC.NO.10313/2025 ARISING OUT IN CRIME NO.199/2025 PASSED BY THE HONBLE PRINCIPAL CITY CIVIL AND SESSIONS JUDGE AT BENGALURU (CCH1)

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THESE APPEALS, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL

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HC-KAR

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ORAL JUDGMENT

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Crl.A.No.34/2026 is filed by accused No.2, while Crl.A.No.75/2026 is filed by accused No.4 under Section 16 of the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004 (for short, 'the Act') being aggrieved by the order dated 18.12.2025 passed by the Court of Prl. City Civil & Sessions Judge, Bengaluru.

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Facts in brief are as under:

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That upon a complaint filed by the defacto complainant namely C.J.Muralidhar, the Former President of Employees Provident Fund Organization Staff Credit Co-operative Society Ltd., (hereinafter referred to as 'the Society') a case in Crime No.199/2025 dated 31.10.2025 came to registered for the offences punishable under Sections 61(1), 314, 316(2), 316(4), 316(5), 318(4), 336(2), 336(3), 338, 340(1), 340(2), 344 of the Bharatiya Nyaya Sanhita, 2023 (for short, 'BNS 2023').

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The allegation is that accused No.2 being the Chief Executive Officer of the Society, having been authorized to transact and conduct the affairs of the society, had misappropriated a sum approximately amounting to Rs.70

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Crores which were the deposits made by about 300 members who were the present and retired employees. The society had maintained its bank account with BD & BRDCC Bank, Malleshwaram Branch, with its account bearing No.000061904000203. That upon the investigation, a preliminary charge sheet consisting of 21 volumes running into 9,000 pages has already been filed. The allegations against accused No.4 is that she being the wife of accused No.3 who is also the accountant of the said bank, was the recipient of sum exceeding Rs.6.5 Crores.

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Accused No.2 was arrested on 02.11.2025, while accused No.4 was arrested on 02.11.2025.

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An applications were filed by the accused Nos.2 and 4- appellants herein under Section 483 of Bharatiya Nagarika Seva Sanhitha, 2023 (for short, 'BNSS, 2023')/Section 439 of Cr.PC before the Court of Principal City Civil & Sessions Judge, Bengaluru. By order dated 18.12.2025, the Sessions Judge has rejected the said application. Being aggrieved by the same, the present appeals are filed.

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Learned Counsel appearing for the accused No.2 submits that the order passed by the Sessions Court, more particularly the reasons assigned at paragraph nos.9, 11 and 14 are without any basis and on erroneous reading of the records. It is submitted that principal allegation against accused No.2Gopinath was that he had transferred a sum of Rs.63,64,911/on three occasions to his account and to the account of his wife and daughter. That as against the said sum of Rs.63,64,911/-, he has already deposited an aggregate sum of Rs.63,80,000/between the years 2023 and 2025. It is submitted that the said money transaction was not by misappropriating his authority, but it was a loan transaction to which he as a member was entitled to borrow. That on 29.12.2020, a sum of Rs.22,45,000/- was transferred from the account of the society to the account of accused No.2 maintained at Canara Bank. That on 10.10.2022, a sum of Rs.1,00,000/- was transferred to the account of his wife which was maintained at HDFC Bank. That on 15.02.2021, a sum of Rs.20 lakhs was transferred to the account of his daughter maintained at AXIS Bank. Another sum of Rs.19,99,911/- was transferred to the account of his daughter. That all these amounts were accounted as the same

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were borrowed by him in the manner known to law, as such there is no misappropriation of money by him as alleged.

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Referring to the charge sheet contents, submits that the allegation made against the appellant is that he is involved in illegal transfer of a total sum of Rs.17,79,25,000/-, of which, it is alleged that he is part of transferring a sum of Rs.6.5 Crores to the account of accused No.4 herein. He submits that since the allegations made against accused No.2 only with regard to the money transactions, amounts, dates, and the persons between whom the amount is transacted is already crystallized by seizure of the accounts and other details. That his retention in custody is no longer required as it serves no purpose. He further submits that accused No.2 was a Government employee and he does not even own a house of his own and resides in a rented premises. The allegations made against him are baseless. He is ready and willing to abide by any conditions that may be imposed by this Court. In support of his submissions, he has placed reliance on the judgment of the Hon'ble Apex Court in the case of SANJAY CHANDRA VS CENTRAL BUREAU OF INVESTIGATION reported in (2012)1 SCC

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40 , referring to paragraph 21 as well as paragraphs 39 to 42 of the said judgment, he insists that the facts of the instant case are squarely covered by the principles enunciated by the Hon'ble Apex Court in the aforesaid judgment. He submits that the primary requirement for refusing of bail would be the test of requirement of the accused for the purpose of investigation and should there be any allegation of he tampering with the witnesses. He submits that the respondent-State has not specifically pointed out with regard to any of these apprehensions which accused No.2 may involve in the event of his release. Therefore, as a rule, the appellant/accused No.2 is entitled to be released on bail.

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Learned Counsel appearing for accused no.4 supplementing the submission made by the learned Counsel appearing for accused no.2, in addition submits that accused no.4 is a housewife and she has two minor children to take care of who are aged six years. She has been falsely implicated by impersonation. She is completely unaware of her account being misused for the purpose of alleged transaction running into Rs.6 Crores. That her assets have already been

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attached/seized. She being under confinement not able to defend her case properly as she is completely unaware of what is happening around her. That her involvement even if it is only as a recipient of the alleged money to which she has not actively participated, therefore her retention in custody would serve no purpose. He also submits that the charge sheet contents, even according to the prosecution, indicate that her account has been misused by accused No.3. Therefore, her retention is of no consequences. Even if she is released, there is no apprehension of she tampering with any of the witnesses. Hence, seeks for her release on bail.

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Per contra, learned HCGP appearing for the State submits that what is filed by the prosecution is only a preliminary charge sheet which itself runs into 9,000 pages of 20 volumes. Still the forensic auditing of the accounts is in progress. That there are 300 and above members whose monies were deposited with the Society. That preliminary investigation as of now has revealed that the amount which was available with the Society was approximately Rs.70 Crores. Of which transaction of Rs.16 Crores is traceable. Assets apparently attached are

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worth of only Rs.20 Crores which is not even 1/3^rd of the amount which was allegedly misappropriated by the accused persons. The auditing of the accounts as of now indicate that an approximate sum of Rs.17 Crores has been circulated/transferred amongst accused persons and their family members and the details and the trail of the remaining money is yet to be investigated and established, which would take approximately 2 to 3 months with the current situation and if the accused persons are released now at this juncture, there is every likelihood that they may interfere and cause impediment in smooth progress of the investigation. It is contended that the daughter of accused No.2 who is also the recipient of the amounts, who is absconding and her arrest is still pending. If accused No.2 is released, there is every likelihood that he may assist her in not coming within the apprehension of the investigation officers. Therefore, it is obvious that this is not the stage for consideration for request of bail and the Trial Court has committed no error in rejecting their applications.

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Learned counsel appearing for the defacto complainant

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today has filed the synopsis along with certain annexures which are in the nature of extract of the account details, which according to him, indicate the magnitude of the financial irregularities to which the accused No.2 is primarily responsible. Referring to the document produced at Annexure-1 to the said synopsis, he submits that the said document prima facie establish the fact of accused No.2 having been authorized by the resolution of the Board of Directors of the society to be the person in charge of the affairs of the society including release and payment of money and signing of cheques. He also refers to the circular dated 09.11.2020, which, according to him, got issued by accused No.2, enhancing the limit of loan payable to the members which was a design by him to withdraw the money in excess of the limit which was otherwise prescribed. He also refers to the documents produced at Annexure-3 series, which are the abstracts of the account verified and referring to the same, he submits that a total sum of Rs.17,79,25,287/- have been transacted by accused No.2 between his family members and accused Nos.3 to 13. He submits that out of the said amount, a sum of Rs.77,50,000/-

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alone has been transferred by accused No.2 to the account of his wife, daughter and son-in-law. He further submits that the preliminary investigation as of now also indicate that amounts have also been transferred to the accounts of close and distant relatives of the other accused. He further submits that though it was initially found that accused No.4 was the recipient of only a particular amount of Rs.6 Crores, it is found that an addition of Rs.59,00,000/- has been further credited to her account. Thus, he submits that the process of investigation is still on and the investigation officers have not come to the conclusion as to the exact amount which has been transferred/misused by accused No.2 and other accused. Until such figures are arrived at and crystallized, it would not be appropriate to consider the applications of bail of these accused persons at this juncture. He relies upon the judgment of the Apex Court in the case of RAKESH MITTAL VS AJAY PAL GUPTA @ SONU CHAUDHARY & ANR. - SLP (Crl.) No.19708/2025 . Relying upon paragraph 19 of the said order of the Apex Court, he submits that even in the instant case the Members whose number exceeds 300, which include employees and retired employees who had deposited their hard earned money with

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the society, has been misused and siphoned off by accused No.2, which factum has also been kept in mind while considering the application being sought for by the appellants.

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11. Heard. Perused the records.

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The point that arise for consideration in these appeals is,

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"Whether accused No.2 in Crl.A.No.34/2026 and accused No.4 in Crl.A.No.75/2026, are entitled for bail as sought for at this juncture?''.

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13. The Apex Court in Sanjay Chandra's case (supra) at paragraphs 21 to 28, has held as under:

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"21. In bail applications, generally, it has been laid down from the earliest times that the object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Deprivation of liberty must be considered a punishment, unless it is required to ensure that an accused person will stand his trial when called upon. The courts owe more than verbal respect to the principle that punishment begins after conviction, and that every man is deemed to be innocent until duly tried and duly found guilty.

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22. From the earliest times, it was appreciated that detention in custody pending completion of trial could be a cause of great hardship. From time to time, necessity demands that some unconvicted persons should be held in custody pending trial to secure their attendance at the trial but in such cases, “necessity” is the operative test. In this country, it would be quite contrary to the concept of personal liberty enshrined in the Constitution that any person should be punished in respect of any matter, upon which, he has not been convicted or that in any circumstances, he should be deprived of his liberty upon only the belief that he will tamper with the witnesses if left at liberty, save in the most extraordinary circumstances.

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23. Apart from the question of prevention being the object of refusal of bail, one must not lose sight of the fact that any imprisonment before conviction has a substantial punitive content and it would be improper for any court to refuse bail as a mark of disapproval of former conduct whether the accused has been convicted for it or not or to refuse bail to an unconvicted person for the purpose of giving him a taste of imprisonment as a lesson.

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24. In the instant case, we have already noticed that the “pointing finger of accusation” against the appellants is “the seriousness of the charge”. The offences alleged are economic offences which have resulted in loss to the State exchequer. Though, they contend that there is a possibility of the appellants tampering with the witnesses, they have not placed any material in support of the allegation. In our view, seriousness of the charge is, no doubt, one of the relevant considerations while considering bail applications but that is not the only test or the factor: the other factor that also requires to be taken note of is the punishment that could be imposed after trial and conviction, both under the Penal Code and the Prevention of Corruption Act. Otherwise, if the former is the only test, we would not be balancing the constitutional rights but rather “recalibrating the scales of justice”.

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25. The provisions of CrPC confer discretionary jurisdiction on criminal courts to grant bail to the accused pending trial or in appeal against convictions; since the jurisdiction is discretionary, it has to be exercised with great care and caution by balancing the valuable right of liberty of an individual and the interest of the society in general. In our view, the reasoning adopted by the learned District Judge, which is affirmed by the High Court, in our opinion, is a denial of the whole basis of our system of law and normal rule of bail system. It transcends respect for the requirement that a man shall be considered innocent until he is found guilty. If such power is recognised, then it may lead to chaotic situation and would jeopardise the personal liberty of an individual.

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26. This Court, in Kalyan Chandra Sarkar v. Rajesh Ranjan [(2005) 2 SCC 42 : 2005 SCC (Cri) 489] observed that: (SCC p. 52, para 18)

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“18. … Under the criminal laws of this country, a person accused of offences which are non-bailable is liable to be detained in custody during the pendency of trial unless he is enlarged on bail in accordance with law. Such detention cannot be questioned as being violative of Article 21 of the Constitution, since the same is authorised by law. But even

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persons accused of non-bailable offences are entitled to bail if the court concerned comes to the conclusion that the prosecution has failed to establish a prima facie case against him and/or if the court is satisfied by reasons to be recorded that in spite of the existence of prima facie case, there is need to release such [accused] on bail, where fact situations require it to do so.”

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27. This Court, time and again, has stated that bail is the rule and committal to jail an exception. It has also observed that refusal of bail is a restriction on the personal liberty of the individual guaranteed under Article 21 of the Constitution.

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28. In State of Rajasthan v. Balchand this Court opined: (SCC pp. 308-09, paras 2-3)

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“2. The basic rule may perhaps be tersely put as bail, not jail, except where there are circumstances suggestive of fleeing from justice or thwarting the course of justice or creating other troubles in the shape of repeating offences or intimidating witnesses and the like, by the petitioner who seeks enlargement on bail from the court. We do not intend to be exhaustive but only illustrative.

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3. It is true that the gravity of the offence involved is likely to induce the petitioner to avoid the course of justice and must weigh with us when considering the question of jail. So also the heinousness of the crime. Even so, the record of the petitioner in this case is that, while he has been on bail throughout in the trial court and he was released after the judgment of the High Court, there is nothing to suggest that he has abused the trust placed in him by the court; his social circumstances also are not so unfavourable in the sense of his being a desperate character or unsocial element who is likely to betray the confidence that the court may place in him to turn up to take justice at the hands of the court. He is stated to be a young man of 27 years with a family to maintain. The circumstances and the social milieu do not militate against the petitioner being granted bail at this stage. At the same time any possibility of the absconsion or evasion or other abuse can be taken care of by a direction that the petitioner will report himself before the police station at Baren once every fortnight.”

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There cannot be any dispute with regard to the principles of law enunciated by the Apex Court, which is reiterated in the aforesaid judgment. More pertinently, the observations made by the Apex Court under the fact situation of the said case as enunciated at paragraph 39, is the possibility of accused person tampering with the witness. Facts involved in the said case and the present case differs on one point viz., in the said case charge sheet had already been filed and their detention was found to be of no avail by the Apex Court. In the instant case, admittedly only preliminary charge sheet has been filed as noted above, running into 9,000 pages consisting of 20 volumes. The number of the members who had apparently deposited the amount in the society which as of now stated to be Rs.70 crores runs more than 300.

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Accused Nos.1 to 13 who have been now arraigned in this matter, are shown to be the recipient of the amounts. According to the prosecution, the amount sought to be transfer as of now stands crystallized only to a sum of Rs.17 Crores as against Rs.70 crores and still the trail of the remaining money is yet to be investigated and identified. There is no dispute of

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the fact that accused No.2 at the relevant point of time has

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been the Chief Executive Officer of the Society being exclusively authorized to deal with the affairs of the Society including signing of the cheques, release of the money and receiving of the amounts. It is under his authority, control and supervision, it is alleged that these amounts have been misappropriated.

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This Court even going by the law laid down by Apex Court in Sanjay Chandra's case (supra), is of the opinion that since only preliminary charge sheet is filed and according to the prosecution it may take another two to three months for them to file the final charge sheet, it may not be appropriate to consider release of accused no.2 on bail at this juncture.

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No doubt the submission made by the Counsel for the appellant though at the first blush appears to be acceptable i.e., these transactions are all documented and even if the accused no.2 is let out there is no possibility of he tampering with the documents which are already in the custody of the prosecution, the fact remains that the trail of remaining sum of amount apart from Rs.17 Crores, apparently is yet to be

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investigated and brought on record by filing the final charge sheet. It is for this reason, this Court is of the opinion that it may not be an appropriate stage at this juncture to consider his application.

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As regards the plea of accused No.4 is concerned, though it is pleaded on her behalf that she is innocent and her account has been misused by impersonation and she is completely not aware, even if such submission is acceptable a sum exceeding Rs.6 Crores has been found to have been transferred to her account.

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Learned counsel for the defacto complainant while filing the

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synopsis has submitted that a further sum of Rs.59,00,000/has been found to have been transferred to her account. He further submits that there is likelihood of further sums being transferred to her account which is yet to be discovered after investigation. Therefore there is justification in opposing bail to accused No.4 at this juncture.

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For the aforesaid reasons and analysis, this Court do not find any good reasons to interfere with the order passed by Trial Court.

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Reserving liberty to the appellants to move this Court on

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filing of the final charge sheet, the appeals are dismissed .

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Considering the period the accused persons are already confined which appears to be more than five months, prosecution shall make endeavour to complete the remaining investigation, as expeditiously as possible, within the time frame submitted by them which is 2 to 3 months.

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(M.G.S. KAMAL) JUDGE

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KK

Sri G Gopinath v. the State of Karnataka

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Sri G Gopinath v. the State of Karnataka

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