O R D E R

Dated this the 8th day of February, 2024 The application is filed under Section 438 of the Code of Criminal Procedure, 1973, for an order of pre-

arrest bail.

2. The petitioners are the accused 2 to 5 in Crime No.224/2023 of the Crime Branch Police Station, Ernakulam, registered against the accused (six in number) for allegedly committing the offences punishable under Sections 408, 420, 465, 468 and 471 r/w Section 34 of the Indian Penal Code, 1860 (‘IPC’, for short).

3. The prosecution case, in brief, is that: the first accused Company had availed a business loan from the second respondent/de facto complainant on 26.09.2014, for an amount of Rs. 20/- Crore by forging the stock statement and, thereafter, sold the stock given as security without the knowledge of the second respondent. The accused 2 to 6 are the directors of the first accused Company and the guarantors of the loan. The accused misappropriated the loan amount and have failed to repay the loan amount. Accordingly, they have caused the second accused a loss of Rs.32.52/- Crore.

Thus, the accused have committed the above offences.

4. Heard; Sri. K.K. Dheerendrakrishnan, the learned counsel appearing for the petitioners, Smt. Neema. T.V, the learned Senior Public Prosecutor appearing for the State and Sri. P. Vijayabhanu, the learned Senior Counsel for the second respondent.

5. The learned counsel for the petitioners submitted that the petitioners are totally innocent of the accusations levelled against them. The petitioners had availed of the loan as early as on 26.09.2014 based on the stock and the guarantees offered by the first accused Company and the petitioners/the accused 2 to 6. The petitioners were diligent in repaying the loan till the Covid-19 pandemic. After the Covid-19 pandemic, the business ran into troubled waters and due to reasons beyond the petitioners’ control, they were unable to repay the loan. It is then that the second respondent filed Annexure A1 FIR, and Crime No.267/2022 was registered by the Thrissur East Police Station for the very same set of offences. The police, after investigation, by Annexure A2 refer report, found that the transaction between the accused and the de facto complainant was civil in nature. Accordingly, the case was referred. Then, the second respondent approached the State Police Chief, and sought for further investigation. Accordingly, Annexure A3 FIR was registered by the Crime Branch. The first accused Company is under liquidation. By Annexure A4 order dated 16.12.2022, passed by the National Company Law Tribunal, Kochi Bench (‘NCLT’ in short) the entire assets of the Company have been taken over by a liquidator. The second respondent has filed PIRP No.3214177/00660/2023 before the NCLT to recover their money and the petitioners have filed similar applications to declare them insolvents. In the first crime that was registered by the local police, the petitioners had cooperated with the Investigating Officer and the entire documents of the first accused Company were recovered by the Investigating Officer. It is after a threadbare investigation of the entire materials, that Annexure A2 refer report was filed finding the transaction to be civil in nature. By no stretch of imagination can the petitioners be attributed of committing the offences alleged against them. Even if the allegations are taken on their face value they do not constitute the offences. The petitioners are law-abiding citizens. The petitioners 1 and 2 are the Senior citizens. The second petitioner is a lady. The petitioners 3 and 4/ the accused 4 and 5 were minors at the time the loan was availed. The learned counsel for the petitioners relied on the decision of the Hon’ble Supreme Court in Satishchandra Ratanlal Shah V. State of Gujarat and Another ((2019) KHC 6300) to drive out the point that the mere inability of an accused to return the loan amount will not attract the offence of cheating, unless there was a fraudulent or dishonest intentio