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2024 Supreme(Online)(KER) 28547
HIGH COURT OF KERALA
A. BADHARUDEEN, J
K.R.SADASIVAN, – Appellant
Versus
STATE OF KERALA, – Respondent
Bail Appl. 10312/2023
ADV NIREESH MATHEW, SRI.M.P.PRASANTH, PUBLIC PROSECUTOR, SRI.RENJIT GEORGE, SENIOR PUBLIC PROSECUTOR
The court emphasized the necessity of custodial interrogation of the accused to effectively investigate the offenses under the Banning of Unregulated Deposit Schemes Act, 2019 and to secure the recovery of the misappropriated funds.
Headnote:
Banning of Unregulated Deposit Schemes Act - Cheating and Breach of Trust - Sections 406, 420 IPC - Sections 3, 5, 21, 23, 25 BUDS Act - Anticipatory Bail Denied
Fact of the Case:
The accused, who are the Managing Director and Directors of M/s. S.N. Chitty Fund and Bankers, are alleged to have collected deposits from various persons by offering exorbitant interest rates without having a license from the Reserve Bank of India to run a finance business. They are accused of cheating and breach of trust by failing to pay the promised interest and principal amounts.
Finding of the Court:
The court found that the accused had suppressed the fact that they did not have a license to run a finance business and had collected deposits illegally. The court also noted that the accused had a previous criminal record of similar offenses. The court held that custodial interrogation of the accused was necessary to investigate the misappropriation of the collected funds and to proceed under the Banning of Unregulated Deposit Schemes Act, 2019. Accordingly, the court dismissed the anticipatory bail applications.
Issues: Whether the accused are entitled to anticipatory bail in the cases registered against them for offenses under Sections 406, 420 of the Indian Penal Code and Sections 3, 5, 21, 23, 25 of the Banning of Unregulated Deposit Schemes Act, 2019.
Ratio Decidendi: The court held that the grant of anticipatory bail would be fatal to the investigation, as custodial interrogation of the accused is necessary to uncover the manner in which the huge amounts were misappropriated and to collect details regarding the misappropriated funds and their use, in order to proceed under the Banning of Unregulated Deposit Schemes Act, 2019.
Final Decision: The anticipatory bail applications filed by the accused are dismissed, and they are directed to surrender before the investigating officer forthwith to facilitate the investigation.
i) B.A. No.10309/2023 is an application for anticipatory bail filed by the 1st accused in Crime No.336/2023 of Thiruvalla Police Station. B.A. No.10293/2023 is also filed seeking anticipatory bail and the petitioners are accused Nos.3 to 5 in the same crime. ii) The prosecution allegation in this crime is that the 1st accused being the Managing Director and the other accused who are the Directors of M/S. S.N. Chitty Fund and Bankers offered 18% interest (Rs.1,500/- per month for Rs.1 lakh) and on the said offer jointly collected Rs.7 lakhs (Rs.4 lakh from the husband and Rs.3 lakh from the wife) in between 26.05.2019 to 17.06.2019 on assuring them that M/S. S.N. Chitty Fund and Bankers obtained licence from Reserve Bank to run finance business after suppressing the fact that they had no licence to do financial business. Accordingly, they illegally collected the above said amount and they failed to give interest along with the principal amount as agreed and thereby committed breach of trust as well as cheating punishable under Sections 406 and 420 of the Indian Penal Code (' IPC ' for short hereinafter) read with 34 . They also (3), 5 r/w 23, 25(1) of the Banning of Unregulated Deposit Schemes Act, 2019 (hereinafter referred to as 'BUDS Act).
i) B.A. No.10277/2023 is an application for anticipatory bail filed by the 1st accused in Crime No.234/2023 of Thiruvalla Police Station. B.A. No.10305/2023 is also filed seeking anticipatory bail and the petitioners are accused Nos.3 to 5 in the same crime. ii) The prosecution allegation in this crime is that the 1st accused, being the Managing Director and the other accused who are the Directors of M/s. S.N. Chitty Fund and Bankers jointly collected Rs.13,20,000/- from the defacto complainant offering 12% interest on assuring them that M/S. S.N. Chitty Fund and Bankers obtained licence from Reserve Bank to run finance business after suppressing the fact that they had no licence to do financial business. Accordingly, they illegally collected the above said amount and they failed to give interest along with the principal amount as agreed and thereby committed breach of trust as well as cheating punishable under Sections 406 and 420 of the Indian Penal Code (' IPC ' for short hereinafter) read with 34 . They also committed offences punishable under Sections Section 3 r/w 21(2),(3), 5 r/w 23, 25(1) of the Banning of Unregulated Deposit Schemes Act, 2019 (hereinafter referred to as 'BUDS Act).
i) B.A. No.10304/2023 is an application for anticipatory bail filed by the 1st accused in Crime No.336/2023 of Thiruvalla Police Station. B.A. No.10271/2023 is also filed seeking anticipatory bail and the petitioners are accused Nos.3 to 5 in the same crime. ii) The prosecution allegation in this crime is that the 1st accused, being the Managing Director and the other accused who are the Directors of M/s. S.N. Chitty Fund and Bankers jointly collected Rs.15,00,000/- from the defacto complainant offering 12% interest from 01.10.2017 to 23.10.2019 on assuring them that M/S. S.N. Chitty Fund and Bankers obtained licence from Reserve Bank to run finance business after suppressing the fact that they had no licence to do financial business. Accordingly, they illegally collected the above said amount and they failed to give interest along with the principal amount as agreed and thereby committed breach of trust as well as cheating punishable under Sections 406 and 420 of the Indian Penal Code (' IPC ' for short hereinafter) read with 34 . They also (3), 5 r/w 23, 25(1) of the Banning of Unregulated Deposit Schemes Act, 2019 (hereinafter referred to as 'BUDS Act).
i) B.A. No.10311/2023 is an application for anticipatory bail filed by the 1st accused in Crime No.261/2023 of Thiruvalla Police Station. B.A. No.10276/2023 is also filed seeking anticipatory bail and the petitioners are accused Nos.3 to 5 in the same crime. ii) The prosecution allegation in this crime is that the 1st accused is the Managin
