Allowed

Sahadulla v. State of Kerala

Kerala HC23 Sept 2020Bail Appl./4877/2020

Case brief

AI extract

What is this about?

The High Court of Kerala allowed an application for anticipatory bail under Section 438 Cr.P.C. The applicants, accused of financial fraud and misuse of bank loans, were senior citizens. The Court found no necessity for arrest as they had been cooperating with the investigation, directing surrender within two weeks subject to bond and sureties.

What did the court decide?

Application for anticipatory bail allowed; directed to surrender within two weeks; bond of Rs. 1 lakh with two sureties.

Sahadulla Vs State of Kerala — Corruption | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE ASHOK MENON

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WEDNESDAY, THE 23RD DAY OF SEPTEMBER 2020 / 1ST ASWINA, 1942

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Bail Appl.No.4877 OF 2020

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CRIME NO.411/2019 OF CBCID, THIRUVANANTHAPURAM

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PETITIONER/S:

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1 DR.M.I.SAHADULLA, AGED 75 YEARS, CHAIRMAN, (WRONGLY SHOWN AS CHAIRMAN & MANAGING DIRECTOR IN THE FIR), KIMS BELLEROSE INSTITUTE OF MEDICAL SCIENCES PVT.LTD., KUDAMALOOR P.O., KOTTAYAM-686016 RESIDING AT HOUSE NO.66, RPD MARG., KURAVANKONAM, KOWDIAR P.O., THIRUVANANTHAPURAM-695003.

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2 NAJEEB ELLIAS MOHAMMED, AGED 65 YEARS, HOUSE NO.66, RPD MARG, KURAVANKONAM, KOWDIAR P.O., THIRUVANANTHAPURAM – 695003.

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3 DR.GOVINDAN VIJAYARAGHAVAN, AGED 77 YEARS, 'GOVINDAM', M C HIGH SCHOOL LANE, KUMARAPURAM, MEDICAL COLLEGE P.O., THIRUVANANTHAPURAM – 695011.

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4 DR.ZUHARA PADIYATH MOHIDDIN AGED 75 YEARS, HOUSE NO.66, RPD MARG, KURAVANKONAM, KOWDIAR P.O., THIRUVANANTHAPURAM – 695003.

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5 MUHAMMAD SALIKUNJU, AGED 56 YEARS, POOCHANA PARAMB HOUSE, P.O. KUTHIATHODU, CHERTHALA, ALAPPUZHA. 688533

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BY ADVS. SRI.P.VIJAYA BHANU (SR.) SRI.M.SREEKUMAR

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Bail Appl.No.4877 OF 2020

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RESPONDENT/S:

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1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM – 682031. 2 SUPERINTENDENT OF POLICE, CRIME BRANCH, KOTTAYAM P.O KOTTAYAM – 686 002. 3 JOBEY M.DEVASIA, AGED 54 YEARS, PADINJAREKALAYIL HOUSE, KUDAMALOOR P.O., KOTTAYAM – 686 016. R1-R2 BY SRI.S.SAJJU, SR PP R3 BY ADV. SRI.R.ANIL R3 BY ADV. SRI.M.SUNILKUMAR R3 BY ADV. SRI.SUJESH MENON V.B. R3 BY ADV. SRI.THOMAS ABRAHAM (NILACKAPPILLIL) R3 BY ADV. SRI.T.ANIL KUMAR R3 BY ADV. SHRI.MAHESH BHANU S. R3 BY ADV. SMT.S.LAKSHMI SANKAR OTHERS PRESENT:

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THIS BAIL APPLICATION HAVING COME UP FOR ADMISSION ON 23.09.2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

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Bail Appl.No.4877 OF 2020

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O R D E R

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Dated this the 23rd day of September 2020

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This is an application for anticipatory bail under Section 438 of Cr.P.C.

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The applicants are accused 1 to 5 in Crime

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No.411/2019 of CBCID, Thiruvananthapuram for having allegedly committed the offences punishable under

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Sections 409, 420 467, 468, 471 and 120B of the I.P.C.

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The applicants are Chairman and Directors of a medical institution, namely, KIMS Bellerose Institute of Medical Sciences Pvt.Ltd., Kudamaloor in Kottayam

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District. The 1st applicant is the Chairman; while the others are the Directors. The defacto complainant and

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his wife are also Directors. Earlier, the defacto

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complainant and his wife were conducting a medical

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institute named “Bellerose Institute of Medical

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Sciences Pvt. Ltd.” in Kottayam and that, M/s KIMS

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Bail Appl.No.4877 OF 2020

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Health Care Management Ltd. approached the defacto complainant and his wife, and as mutually agreed, 55 per cent of their share amount was agreed to be purchased and a new institute, named as “KIMS Bellerose Institute of Medical Sciences Pvt.Ltd.” was formed. For the purpose of development of buildings and purchase of paediatric ventilators, a loan of Rs.43 crores was allegedly taken from the South Indian Bank

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with the connivance of accused 7 and 8, who are officials of the said Bank, and that the entire amount was misutilised and misappropriated by the accused, including the applicants, and money was diverted and invested into other shell companies of the applicants. The defacto complainant came to know that there was no Neurosurgery Department in the hospital, which requires paediatric ventilators, and that no portion of the loan was actually utilised for the purpose of construction of the building for the company, and that inferior quality goods were used for the construction and thereby the applicants have allegedly cheated the

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Bail Appl.No.4877 OF 2020

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defacto complainant and his wife by forging documents and had misappropriated the entire amount for themselves. In the absence of the defacto complainant and his wife, decisions were taken by the Board by conspiracy consisting of the applicants to increase the share to Rs.6,50,00,000/- from Rs.5,50,00,000/-.

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The facts would further indicate that the

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defacto complainant and his wife had approached the

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Company Law Tribunal, Chennai with Annexure-12 complaint, but the same was dismissed by the Tribunal vide Annexure-13 order. In the appeal preferred before

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the Company Law Appellate Tribunal, New Delhi against Annexure-13, the order was upheld by Annexure-14 order. The defacto complainant challenged that order before the Hon’ble Supreme Court and the Hon’ble Supreme Court has ordered status quo vide Annexure-16 and thereafter

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clarified that the status quo will be status quo qua arbitration only. This being the situation, the applicants had approached this Court with

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Bail Appl.No.4877 OF 2020

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Crl.M.C.No.6289/2020 for quashing the proceedings under

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Section 482 of Cr.P.C. There was initially a stay

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regarding the arrest of the applicants, but

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subsequently, that was vacated with a direction to the applicants to approach this Court for anticipatory bail

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under Section 438 of Cr.P.C. Accordingly, the

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applicants are before this Court seeking anticipatory bail apprehending arrest.

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The applicants would contend that the amount

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which was taken as the loan was entirely utilised for

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the purpose of construction. But because of some

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constraints, the initial plan of the construction was

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altered and they had to go for a lesser option. It is

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also submitted that Rs.41.67 crores have been repaid

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towards the loan and only a meagre amount still remains to be repaid. The allegation that the applicants did

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not utilise the amount or it was misutilised for other

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purposes, is totally denied by the applicants. They

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have also produced a utilisation certificate at

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Bail Appl.No.4877 OF 2020

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Annexure-11, which is alleged to be detailing the manner in which the amounts were spent by the applicants. It is also stated that the applicants,

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except 5th applicant, are all senior citizens. The 1st applicant and his wife (4th applicant) are aged 75; the 2nd applicant is aged 65; while the 3rd applicant, who

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is a Padmasree recipient, is aged 77 years. The 5th

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applicant alone is younger compared to the others, aged only 56 years.

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Heard the Senior Counsel Sri.P.Vijayabhanu

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appearing for the applicants; Sri.R.Anil, Counsel appearing for the defacto complainant and also the learned Public Prosecutor, Sri.Saiju S.

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Going through the documents, which have been

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produced and the submissions made by the learned Senior Counsel, as also the Counsel appearing for the defacto

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complainant and the learned Public Prosecutor, I

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understand that the investigation has been taken over by the Crime Branch and similar contentions of

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Bail Appl.No.4877 OF 2020

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misutilisation of the assets of the institute raised

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before the Tribunal, was not accepted by the Tribunal, but anyhow the matter is still pending consideration of the Hon’ble Supreme Court. Application for quashing the entire criminal proceedings is also pending consideration. Therefore, consideration of those

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matters by a prolix discussion in this application for bail is unnecessary.

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The learned Counsel for the defacto

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complainant would also indicate that Annexure-11 utilisation certificate is not signed and that the genuineness of such a certificate is not established. Anyhow, it is for the investigating officer to find out the genuineness of the documents, which are produced and it is also alleged by the defacto complainant that documents were forged for the purpose of availing the loan and for utilising it with the concurrence of the bank officials. It is the argument for the learned Counsel for the defacto complainant that granting of

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Bail Appl.No.4877 OF 2020

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anticipatory bail to the applicants would create

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hindrance to the prosecution and that they also need to be interrogated. It is submitted that considering the financial fraud, running into crores of rupees, it is only appropriate that the applicants be arrested, taken into custody and subjected to custodial interrogation by the investigating officer and any hindrance, would affect the investigation.

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The learned Senior Counsel appearing for the

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applicants would admit that so far the applicants were cooperating with the investigation and that they have also produced some documents before the investigating

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officer. The learned Public Prosecutor has also admitted that the applicants were so far cooperating with the investigation.

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Therefore, there is no reason to believe that

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the applicants may either abscond or not cooperate with the investigation. Considering the entire facts and circumstances of this case and also the present

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Bail Appl.No.4877 OF 2020

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pandemic situation, I find that incarceration of the applicants, particularly most of whom are senior citizens, may not be necessary. The applicants are all persons well established in their field of activities, and I find no reason why they should shirk away from their responsibilities to assist the investigation or refrain from the production of documents. There is no indication that the investigating officer had called upon the applicants to produce any documents and they refused to do so. Therefore, it has to be believed

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that the applicants so far were actively cooperating

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with the investigation, and therefore, I find no

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necessity for custodial interrogation of the applicants.

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In the result, the bail application is allowed and

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the applicants are directed to surrender before the investigating officer within two weeks. After interrogation and recovery, if any, and in the event of their being arrested, they shall be released on bail on

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Bail Appl.No.4877 OF 2020

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the execution of a bond for Rs.1,00,000/- (Rupees one

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lakh only) each, with two solvent sureties for the like amount each to the satisfaction of the

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investigating officer, and on the following conditions:

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witnesses or tamper with evidence;

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(ii) They shall appear before the investigating

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officer as and when called for; and

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(iii) During the bail period, they shall not get involved in any similar offences.

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In case of breach of the bail conditions, the

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prosecution shall be at liberty to apply for

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cancellation of the bail before the jurisdictional court.

Sd/-

ASHOK MENON

JUDGE

dkr

Sahadulla v. State of Kerala

Case brief

What is this about?

What did the court decide?

Sahadulla v. State of Kerala

Case brief

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