Court denied pre-arrest bail due to serious allegations of misappropriation, emphasizing the need for custodial interrogation to ensure thorough investigation.

ORDER

This bail application is filed under section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (for short ‘ BNSS ’).

2. Petitioner is the second accused in Crime No.

277/2025 of Kovalam Police Station, Thiruvananthapuram, registered alleging offences punishable under Sections 403 , 406, 465, 477A, 420 r/w Section 34 of the Indian Penal Code, 1860 (for short, ‘ IPC ’).

3. According to the prosecution, the accused who is the President of Venganur Co-operative Rural Development Society from 2002 onwards, along with other accused, had with intent to make unlawful gain and corresponding loss to the society and other persons, misappropriated a total amount of Rs.1,33,49,000/- by creating forged documents of deposits of members of the society and also falsified the Society’s Balance Sheets and defrauded the society and its members and entered into benami transactions, and also colluded with each other to embezzle amounts of the society and thereby committed the offences alleged.

4. I have heard Sri. P.N. Mohanan, the learned counsel for the petitioner as well as Smt. Sreeja V., the learned Public Prosecutor.

5. The learned counsel for the petitioner contended that the prosecution allegations are false and the petitioner has no role in the alleged crime. It was also submitted that the only instance in which the petitioner can be faulted is the amount of Rs.3 lakhs transferred as a cheque discounting facility in the year 2015, pointed out by the statutory auditor as per Annexure A2 report, which was immediately on noticing returned back to the depositor itself, and therefore, the petitioner ought to be protected with an order of pre-arrest bail. The learned counsel also submitted that petitioner is a respectful person, and in the absence of any material against him, arrest being a very serious act, it will cause serious prejudice. It was also submitted that the petitioner is willing to abide by any conditions, and he is also ready to appear as and when directed.

6. The learned Public Prosecutor, on the other hand, submitted that the allegations are serious and the investigation conducted so far has identified an amount of Rs.13,74,26,614/- as having been misappropriated by the accused together. It was also pointed out that petitioner has been the President of the Society since its inception in 2002 and that various fake deposits and other fake entries have been made in the balance sheet to tally with the entries therein, and also loans were identified as having been provided on the basis of fake fixed deposits as security, apart from misappropriating money by falsification and forgery of accounts and even by creating benami accounts. It was submitted that in the absence of custodial interrogation the investigation, itself will be prejudiced.

7. The learned counsel for the third respondent also submitted that the allegations are serious, and even though three cheques were issued in repayment of the amounts deposited by the defacto complainant, the first cheque itself got dishonoured, and the same is the result of misappropriation in the society committed by the accused.

8. I have considered the rival contentions, 9. Petitioner has been the President of the Society from its formation in 2002 till date. Serious allegations are raised, though the FIR refers to only Rs.1,33,49,000/- having been misappropriated. From the investigation conducted so far, it is revealed that more than Rupees 13 crores have been misappropriated by various means by the accused. The necessity of a detailed investigation looms large in the circumstances of the case.

10. In a recent decision in P. Krishna Mohan Reddy v.

State of Andhra Pradesh (2025 LiveLaw SC 598), the Supreme Court had observed that custodial interrogation is