Criminal charges must be supported by prima facie evidence; mere procedural violations in loan granting do not constitute criminal misconduct under the Prevention of Corruption Act.

ORDER :

A.BADHARUDEEN, J.

Accused Nos.13 and 14 in C.C.No.36/2010 on the files of the Enquiry Commissioner and Special Judge, Kottayam are the petitioners herein and they seek quashment of Annexure A1 final repot in Crime No.6/1998/KTM (33) VACB, Kottayam, and C.C.No.36/2010.

2. Heard the learned counsel for the petitioner and the learned Special Public Prosecutor in detail. Perused the records.

3. As per the final report, the prosecution alleges as under:

“That A1 being secretary, A4 being the president and A5 to A10 being members of Board of Directors and All being the Administrator of the Elangulam Service Co- operative Bank Ltd No 3576, Koorali (ESCB, Koorali) and as such being public servants in their official capacity by abusing their official position, entered into criminal conspiracy with A12, A13 and A14 with intention to misappropriate the funds of the said Bank and in furtherance of their criminal conspiracy Al, A4, A5 to A10 dishonestly and fraudulently resolved to pay Bill Discount advance (BDA) and Amended the Crl.M.C.No.7858/2025 3 Byelaw without the sanction of the Joint Registrar of Co- operative societies, Kottayam and A2 and A3 being the Managers of the said Elangulam Service Cooperative bank Ltd No 3576 joined the conspiracy, hatched by Al, A4 to A10 and A12 and in furtherance of the said conspiracy A1, A2 and A3 illegally paid BDA No 3278-96-97 for 7,50,000/- and BDA 3279/96-97 for 6,79,370/25 on 31/3/97 by falsifying the accounts and records of the Bank by recording cheque No.21388 of Bank of Baroda, Kottayam Branch and cheque No.268230 of SBI, Thidanadu Branch respectively purported to issue to A12 and disbursed the said amounts to A12 and did not presenting the cheque in the Banks concerned for collection as if those would appear as a payment effected by discounting the said cheques to A12. All illegally given membership to A13 who is residing out the service area of the Bank and A13 was sanctioned illegal C C loan No.455/96-97 for 4 lakhs by A4 to A10 and A1, A2, A3 paid the loan amount to A13. Similary A14 was sanctioned illegal C C Loan No.456/96-97 for Rs. 5 lakhs by A4 to A10 and A1, A2, A3 paid the loan amount to A14. The total amount of the above two BDA’s and 2 CC loans of Rs.23,29,370/25 was used for closing BDA No. 99/96-97, 101/96-97, 1614/96-97 and 1716/96-97 availed by A3 and BDA 100/96-97 availed by Sri.M.R Somarajan and BDA No 1489/96-97, 1490/96-97, 1847/96-97, 2746/96-97, 2789/96-97, 2949/96-97 and 3087/96-97 availed by Sri Varkey George and for paying additional share of A14 and thereby all the accused dishonestly and fraudulently misappropriated an amount of Rs.23,29,370/25 on 31/3/97 and by this committed criminal misappropriation, cheating, falsification of accounts, conspiracy and criminal misconduct punishable U/s 13(2) r/w Crl.M.C.No.7858/2025 13(1) (c) and (d) of PC Act ,1988 and sec.409, 420, 477A and 120 В IPC.”

4. The learned counsel for the petitioners submitted that as per the final report, the allegation against the petitioners is that accused No.11 illegally given membership to the 1^st petitioner/accused No.13, who is residing out of the service area of the Elamgulam Service Co-operative Bank, Koorali (hereinafter referred to as ‘Bank’ for short) and also granted CC loan of Rs.4 lakh. Similarly, the allegation against the 2^nd petitioner/accused No.14 is that in the same way A4 to A10 granted CC loan of Rs.5 lakh to the 2^nd petitioner/accused No.14, who also is a resident out of the service area of the Bank. According to the learned counsel for the petitioners, when the petitioners applied for loan after providing security, the Bank sanctioned the loan, after ensuring its repayment on production of