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2024 Supreme(Online)(KER) 28076
HIGH COURT OF KERALA
P.V.KUNHIKRISHNAN, J
1. ISAAC N A – Appellant
Versus
STATE OF KERALA – Respondent
Bail Appl. 2770/2024
Bail is the presumption; hence, detention should be justified by clear evidence of necessity, especially when accused show willingness to settle claims.
Headnote:
Bail - Criminal Procedure - Section 439 Cr.P.C. - The court allowed bail applications for accused in financial fraud cases, emphasizing that bail is the rule, based on interpretations of fair trial principles and the intent to facilitate settlement with victims.
Fact of the Case:
The petitioners, as executives of a finance company, allegedly cheated depositors by failing to return their funds following the RBI's cancellation of their license, leading to multiple criminal complaints of fraud.
Finding of the Court:
The court acknowledged the financial distress of the company and the ongoing attempts to settle with complainants, ruling that continued detention would not serve justice. It noted precedents supporting bail as a general principle.
Issues: Whether to grant bail to the petitioners who are accused of financial fraud and have been in custody since their arrest, considering the principles of justice and the circumstances of the case.
Ratio Decidendi: The court established that bail is generally favored unless strong grounds for detention exist, supporting the idea that the accused should have the opportunity to resolve matters with complainants.
Final Decision: Bail applications are allowed with specific conditions.
These Bail Applications are filed under Section 439 of the Criminal Procedure Code (Cr.P.C.)
2. The petitioners in these cases are accused in Crime No.363/2024 of Fort Cochin Police Station, Crime No.302/2024 of Hill Palace Police Station, Crime Nos.166/2024, 174/2024, 175/2024, 183/2024, 179/2024, 177/2024, 186/2024, 180/2024, 185/2024, 188/2024 & 189/2024 of Koothattukulam Police Station, Crime Nos.204/2024, 205/2024 & 625/2024 of Ernakulam Central Police Station, Crime No.455/2024 of Muvattupuzha Police Station, Crime No.535/2024 of Thoppumpady Police Station, Crime No.188/2024 of Kuravilangadu Police Station and Crime No.433/2024 of Ernakulam South Police Station. Different cases are registered against the petitioners in these cases mainly alleging offences punishable under Sections 420 IPC.
3. The prosecution case in brief is as follows: The petitioners being the Chairman and Managing Director of Nedumpilli Finance, with the intention to cheat and to make unlawful gain from the defacto complainants in these cases, received huge amount as deposit for a period of 5 years and cheated the defacto complainants without returning the deposit amount and its interest.
Hence it is alleged that the accused committed the afore said offences.
4. Heard the learned counsel for the petitioners and the learned Public Prosecutor.
5. The learned counsel for the petitioners submitted that the petitioners' company is a non-banking financial company (NBFC) namely Nedumpilli Finance Company Limited, incorporated on 30.12.1996 as evident by Annexure A2. It is submitted that the company is having validly registered license and is working under the supervision of the RBI. It is also submitted that, as per the license conditions, regulations and rules issued by the RBI in respect of working of NBFC's, the company is permitted to collect funds, permit investments from the public by way of financial instruments like Debentures, Preference Shares and Subordinate debt. The petitioners admit the deposits made by the defacto complainants in almost all the cases. It is also submitted that the petitioners paid a prominent amount as interest till July
2023. According to the petitioners, due to an audit finding report by the RBI, the RBI cancelled the company's certificate of registration as a Non-Banking Financial Institution as per an order dated 17.11.2022. Annexure A3 is the copy of the letter dated 22.11.2022 issued by the RBI cancelling the certificate of registration of the petitioners' company. Challenging the order of the RBI, it is submitted that the petitioners preferred a Writ petition before this Court and this Court was pleased to pass an interim order stating that, no coercive steps shall be taken against the petitioners. Annexure A4 is the order. It is also submitted that the petitioners preferred an appeal before the Appellate Authority, Ministry of Finance, Government of India and the same was dismissed by the Appellate Authority upholding the finding of the RBI. Challenging the above order, the petitioners filed W.P.(C)No.23932/2023 before this Court and the order passed by the Appellate Authority is stayed as evident by Annexure A5 order is the submission. It is submitted that the cancellation of the certificate of registration by the RBI caused a huge impact on the financial management of the company. It is submitted that, even after that the petitioners paid interest on the deposit to the customers till July, 2023. The petitioners were arrested on 08.03.2024 and they were in custody from that day onwards. It is submitted that, one of the petitioner is aged 73 years and he is suffering from different ailments.
6. The learned Public Prosecutor opposed the Bail application and submitted that the petitioners cheated several persons and this Court may not release them on bail.
7. This Court considered the contentions of the petitioners and the Public Prosecutor. It is true that there are several victims in these cases. The petitioners admit t
