The High Court dismissed two bail applications filed by directors and shareholders of a company accused of cheating and financial fraud. The court held that despite allegations of conspiracy by a CEO, the accused had control over the company involved in the scam and bail would spoil the investigation.
The petitions seeking pre-arrest bail are dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
TUESDAY, THE 21ST DAY OF MARCH 2023 / 30TH PHALGUNA, 1944
BAIL APPL. NO. 876 OF 2023
CRIME NO.206/2023 OF THRISSUR EAST POLICE STATION
PETITIONERS/ACCUSED NOS.8 TO 10:
1 ATHUL P RAJ AGED 30 YEARS S/O RAJ, R/O GOKULAM SNRA 90, SOORYA NAGAR, NETTAYAM, THIRUVANANTHAPURAM, PIN – 695013.
2 DEEPAK P UTHAMAN AGED 34 YEARS S/O M.S PURUSHOTHAMAN, R/O MECHERY HOUSE ROSE GARDENS 15/686, THIRVAMBADI P.O., THRISSUR, PIN – 680022.
3 RENJITH K.R AGED 34 YEARS S/O K.A ROBERT, R/O KADAVIL HOUSE, NAMBYAR ROAD, PUTHUR P.O., THRISSUR, PIN – 680014.
BY ADVS. HARIKRISHNAN M.S. K.DHRUV KUMAR SHAKTHI PRAKASH V.VINAY(K/355/2009)
RESPONDENTS/STATE:
1 STATE OF KERALA REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA, PIN – 682031.
B.A.Nos.876 & 886 of 2023 2
2 THE STATION HOUSE OFFICER THRISSUR EAST POLICE STATION, VELIYANNUR, THRISSUR, PIN – 680001. 3 ADDL.R3. GILBERT LOURDURAJ JAMES RESIDENT OF 16, VIVEKANANDA NAGAR COIMBATORE - 641005. IS IMPLEADED AS PER ORDER DATED 22-0-2023 IN CRL.M.A. NO.1/2023. BY ADVS. SENIOR PUBLIC PROSECUTOR SRI P.G.MANU THOMAS J.ANAKKALLUNKAL NIRMAL CHERIYAN VARGHESE ANUPA ANNA JOSE KANDOTH LITTY PETER JAYARAMAN S.
THIS BAIL APPLICATION HAVING BEEN FINALLY HEARD ON 28.02.2023 ALONG WITH B.A.NO.886/2023, THE COURT ON 21.03.2023 DELIVERED THE FOLLOWING:
B.A.Nos.876 & 886 of 2023 3
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
TUESDAY, THE 21ST DAY OF MARCH 2023 / 30TH PHALGUNA, 1944 BAIL APPL. NO. 886 OF 2023
CRIME NO.205/2023 OF TOWN EAST POLICE STATION, THRISSUR
PETITIONERS/ACCUSED NOS.7 TO 9:
1 ATHUL P RAJ AGED 30 YEARS S/O RAJ, R/O GOKULAM SNRA 90, SOORYA NAGAR, NETTAYAM, THIRUVANANTHAPURAM, PIN – 695013.
2 DEEPAK P UTHAMAN AGED 34 YEARS S/O M.S PURUSHOTHAMAN, R/O MECHERY HOUSE ROSE GARDENS 15/686, THIRVAMBADI P.O., THRISSUR, PIN – 680022.
3 RENJITH K.R AGED 34 YEARS S/O K.A ROBERT, R/O KADAVIL HOUSE, NAMBYAR ROAD, PUTHUR P.O., THRISSUR, PIN – 680014.
BY ADV SHAKTHI PRAKASH
RESPONDENTS/STATE:
B.A.Nos.876 & 886 of 2023 4
BY ADVS. SENIOR PUBLIC PROSECUTOR SRI P.G.MANU THOMAS J.ANAKKALLUNKAL JAYARAMAN S. NIRMAL CHERIYAN VARGHESE LITTY PETER ANUPA ANNA JOSE KANDOTH
THIS BAIL APPLICATION HAVING BEEN FINALLY HEARD ON 28.02.2023 ALONG WITH B.A.NO.876/2023, THE COURT ON 21.03.2023 DELIVERED THE FOLLOWING:
B.A.Nos.876 & 886 of 2023 5
A. BADHARUDEEN, J.
================================ B.A.No s. 876 & 886 of 2023
================================ Dated this the 21 st day of March, 2023
O R D E R
The common petitioners in B.A.No.886/2023 and B.A.No.876/2023 arising out of Crime No.205/2023 and Crime No.206/2023 respectively of Town East Police Station, Thrissur, seek the relief of pre-arrest bail. In Crime No.206/2023 the petitioners are accused Nos.8 to 10, whereas in Crime No.205/2020 the petitioners are accused Nos.7 to 9.
2 . Heard the learned counsel for the petitioner s as well as
the learned Public Prosecutor and the learned counsel appearing for . Perused the relevant records . the defacto complainant
3 . In Crime No.205/2023, the prosecution alleges
commission of offences punishable under Sections 406, 420 and
B.A.Nos.876 & 886 of 2023 6
120 B r/w 34 of the Indian Penal Code (`IPC’ for short hereinafter).
The prosecution case is that accused 1 to 9 in this case hatched conspiracy to make unlawful enrichment and to make corresponding loss to the defacto complainant and thereby collected Rs.1.94 Crores on 02.11.2020 with offer to give dividend. The further allegation is that as part of conspiracy, the accused herein introduced business proposal of the 6 th accused under the name PRIMEROGLOBAL FIN CORP, CBE, and collected money on that premise.
4. In Crime No.206/2023, the allegation is the same and therein Rs.2.2 crores is the amount alleged to be misappropriated by the accused herein. In the said case, the prosecution alleges commission of offences punishable under Section 120(B), 465, 468, 471, 420 r/w 34 of IPC.
5. While canvassing anticipatory bail to the petitioners, the learned counsel for the petitioners would submit that the petitioners are innocent. Accused 1 and 3 are Directors of Quarous
B.A.Nos.876 & 886 of 2023 7
Technologies Private Ltd. (got arrayed as 6 th accused in Crime No.206/2023 and 7 th accused in Crime No.205/2023), which is a website and application development company incorporated in the year 2018, having its registered office in Thrissur. The 2 nd petitioner is a share holder. The petitioners developed a mobile application “Zoopy.live’ through which the users could play a game `Movie Premier League’. Further the users could participate in the quiz like game and earn money. Popularity of the game increased. Many high profile persons, including celebrities, approached the petitioners with offer to invest huge amount in the said business. At this juncture, the 1 st accused approached the petitioners and assured to invest for the expansion and development of the above mobile application and he lied that he had close connection with film stars and he would induce persons to the business. Accordingly, believing the 1 st accused, 33% of the share of the company was allotted to the 1 st accused. The 1 st accused initially invested Rs.60 lakh in the company and he agreed to invest Rs.10 crore in total. Thus the 1 st
B.A.Nos.876 & 886 of 2023 8
accused acted as the CEO of the company and managed the entire affairs. But thereafter the 1 st accused, who dealt with the company matters, failed to provide bank statements regarding the 3 accounts of the company and the 1 st accused acted against the interest of the company. It is submitted further that the defacto complainant in Crime No.206/2021 deposited Rs.45 lakh in the account of the company and immediately on deposit, the same was transferred by the 1 st accused in his personal account. The sum and substance of the argument made by the learned counsel for the petitioners is that the entire amount of money was dealt and misappropriated by the 1st accused and the petitioners have no role in this crime. He also submitted that the 1 st accused was granted anticipatory bail by the Sessions Court in all crimes, though his complicity is much more than that of the petitioners. Therefore, the petitioners are also liable to be released on bail and they are ready to co-operate with the investigation.
6. Whereas the learned Public Prosecutor as well as the
B.A.Nos.876 & 886 of 2023 9
learned counsel for the defacto complainant strongly opposed bail and submitted that the petitioners herein are the respective Directors of the company and accused 1 to 9, after hatching conspiracy, collected deposits to the tune of Rs.1.94 crores (in Crime No.205/2023) and Rs.2.2 crores (in Crime No.206/2023) and thereafter the entire money was misappropriated. Since the transactions include crores of rupees, arrest, custodial interrogation and details regarding the way in which the money was dealt with, are essential part of the investigation and in such a case relief of anticipatory bail would stall the investigation.
7. It is submitted by the learned counsel for the defacto complainant that the 1 st accused is the CEO of the company, appointed by petitioners 1 and 2. Further it is submitted that though the 1 st accused was granted anticipatory bail in 5 cases, the implementation of those orders being stayed by this Court, vide order dated 02.03.2023 in Crl.M.C.Nos.1779/2023, 1793/2023, 1794/2023, 1797 and 1806/2023, when this Court appraised the
B.A.Nos.876 & 886 of 2023 10
case of the defacto complainant at the time of admission of the above Crl.M.Cs. Copies of the said stay orders have been placed
by the learned counsel for the defacto complainant to buttress this point.
8 . Admittedly, petitioners 1 and 3 are the Directors of Quarous Technologies Pvt. Ltd. (company got arrayed as the 6 th accused in Crime No.205/2023 and 7 th accused in Crime No.206/2023). It is surprising, rather shocking to note that the Directors and share holders of the company would allege that they have no role in collecting the money with offer to give more profit and the entire responsibility is that of the 1 st accused, who acted as the C.E.O of the company. On no stretch of imagination, it can be held that the Directors of the company could wriggle out from the criminal liability, merely alleging that the 1 st accused is the person who dealt with entire money and misappropriated the same. Although the learned Sessions Judge granted anticipatory bail to the 1 st accused, may be on wrong understanding of facts, this Court
B.A.Nos.876 & 886 of 2023 11
stayed implementation of the said bail orders as per the relevant orders placed by the learned counsel for the defacto complainant. The legality of the bail orders given by the Sessions Judge, shall be considered by this Court in the Crl.M.Cs, which are pending. As things stand now, the 1 st accused also not released on bail.
9 . The prosecution records would reveal that 4.14 (1.94 + 2.2) crores of rupees involved and the entire money was collected in the account of the company, where petitioners 1 and 3 are the Directors and the 2 nd petitioner is a share holder. Therefore, their responsibility in the matter of collection of deposits and misappropriation of the same could not be read in a light manner to enlarge them on pre-arrest bail. The prosecution records would convince that arrest, custodial interrogation and probe regarding the details of the money misappropriated are inevitable part of impartial investigation to accomplish meaningful prosecution. In such a case, grant of pre-arrest bail to the Directors and share holder of a company, where huge scam is alleged, cannot be
B.A.Nos.876 & 886 of 2023 12
considered, being a discretionary relief. Indubitably, in the facts of the given case, grant of pre-arrest bail to t he petitioners not only would hamper and spoil the investigation, but the same may have the effect of an honourable/honorous acquittal of the petitioners, even before completion of investigation. Therefore, these petitions must fail.
Accordingly, both the petitions stand dismissed.
Sd/- (A. BADHARUDEEN, JUDGE)
rtr/
2 issues framed by the court
Whether pre-arrest bail should be granted to directors and shareholders of a company accused of a huge financial scam involving misappropriation of crores of rupees.
Whether the grant of bail would hamper the investigation due to the necessity of custodial interrogation regarding the collection and misappropriation of funds through the company.
5 provisions across 1 enactments
ATHUL P RAJ
DEEPAK P UTHAMAN
RENJITH K.R
STATE OF KERALA
THE STATION HOUSE OFFICER THRISSUR EAST POLICE STATION
A. BADHARUDEEN
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
