Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Ker) 34551

IN THE HIGH COURT OF KERALA AT ERNAKULAM
A. Badharudeen, J
Balakrishnan Nair – Appellant
Versus
State Of Kerala – Respondent
BAIL APPL. NO. 2409, 2410 & 2412 OF 2026

Advocates:
For the Appellants/Petitioners: S.Rajeev, V.Vinay, M.S.Aneer, Sarath K.P., Anilkumar C.R., K.S.Kiran Krishnan, Azad Sunil, T.P.Aravind, Akash Cherian Thomas, Maheswar Padickal, Akshara S., Nivedita Rajeev, Dipa V.

Anticipatory bail in serious financial offences is not granted where custodial interrogation is vital to recover missing voluminous records and trace misappropriated funds. Previous bail in similar crimes does not bind the court, as each case warrants an independent assessment of the necessity for custodial investigation to ensure justice.

Headnote:(A) Bharatiya Nagarik Suraksha Sanhita, 2023 - Section 482 - Anticipatory Bail - Economic Offences - Misappropriation - Custodial Interrogation - Principles governing grant of bail in financial scams - Importance of recovering missing records and tracing diverted funds - Necessity of custodial interrogation for a meaningful investigation. (Paras 1, 9, 11)

(B) Criminal Investigation - Scope of - Previous grant of bail in similar cases - Relevance - Detention of an accused in one case does not preclude custodial interrogation in others - Each case requires independent assessment for the purpose of effective investigation, particularly where tampering with evidence is apprehended. (Paras 9, 11)

Facts of the case:
The petitioner, holding a managerial position in a financial society, faced multiple criminal charges involving breach of trust, cheating, and violations of financial regulatory laws. The prosecution alleged that the accused was responsible for the disappearance of critical financial registers and the misappropriation of public deposits. The petitioner sought anticipatory bail, having previously secured bail in other similar matters, while the prosecution maintained that the accused was non-cooperative and that custodial interrogation was essential for the recovery of missing records and funds.

Findings of Court:
The court noted that the investigation into the allegations requires the recovery of specific financial documents and the tracing of substantial amounts of misappropriated funds. The court emphasized that in serious cases of financial irregularity, allowing anticipatory bail would hamper the investigating agency's ability to conduct a thorough inquiry and prevent the destruction of evidence.

Issues: The central issues were whether the petitioner should be granted anticipatory bail in the face of serious allegations of financial misappropriation and whether custodial interrogation was justified despite prior bail grants in other matters.

Ratio Decidendi: The court held that in cases involving complex financial crimes, the necessity of custodial interrogation for recovering evidence and tracing misappropriated funds overrides the request for anticipatory bail. It established that previous bail grants in other distinct crimes are irrelevant to the investigative requirements of the current proceedings, and failure to cooperate justifies compelling the accused to surrender for custodial investigation.

Result: Petitions dismissed.

Table of Content
1. factual allegations of financial fraud and deposit non-return (Para 1 , 3 , 4 , 5)
2. procedural history and investigative forensic findings (Para 2 , 8)
3. bail arguments focused on investigation needs and custodial interrogation (Para 6 , 7 , 9 , 10)
4. denial of bail due to necessity of custodial interrogation (Para 11)

COMMON ORDER

Dated this the 12th day of June, 2026

Sri.Balakrishnan Nair, who is arrayed as the 2nd accused in Crime Nos.1291/2025, 1176/2025 and 1750/2025 of Kollam West Police station, now being investigated by the Crime Branch, seeks anticipatory bail in all these petitions filed under Section 482 of the the Bharatiya Nagarik Suraksha Sanhita, 2023.

2. Heard the learned counsel for the petitioner and the learned Special Public Prosecutor appearing for the Vigilance and Anti-Corruption Bureau (VACB) in detail. Perused the relevant records and the case diaries along with the report submitted by the Investigating Officer.

3. In crime No.1750/2025, the prosecution alleges commission of offences punishable under Sections 420 and 406 r/w. 34 of the Indian Penal Code (hereinafter referred to as ‘IPC’ for short) and Sections 21 r/w. 3, 22 r/w. 4 and 23 r/w. 5 of the Banning of Unregulated Deposit Schemes Act, 2019 (hereinafter referred to as ‘BUDS Act’ for short) and under Section 13(1)(a) r/w. 13(2) of the Prevention of Corruption Act, as amended in 2018 (hereinafter referred to as ‘PC (Amendment) Act, 2018’ for short). The prosecution case is that, 1st accused and the 2nd accused, who is the petitioner herein, were the Secretary and the President of the Co-operative Building Society Ltd. No.Q157, (hereinafter referred to as ‘Society’ for short), Kollam respectively and they, along with the Board Members of the Society, with criminal intention to make illegal gain and cause corresponding loss to the de facto complainant, made to believe him that if he deposit money in the Society he would get high rate of interest and the deposited amount would be returned as and when the de facto complainant required. On believing the same, the de facto complainant deposited an amount of ₹ 1,25,000/- (Rupees one lakh twenty five thousand only) as Fixed Deposit on 31.03.2023, and for the same, the 1st accused who is the Secretary of the Society issued Fixed Deposit Receipt No.355 with her signature and official seal of the Society. Subsequently, the de facto complainant further deposited ₹ 1,00,000/- on 07.09.2023, ₹ 1,50,000/- on 08.12.2023, ₹ 2,45,000/- on 26.03.2024, ₹ 1,10,000/- on 30.03.2024, and ₹ 5,75,000/- on 12.04.2024. The accused persons issued Fixed Deposit Receipts for the above deposits with serial Nos.996, 174, 693, 805 and 365 respectively, with signature of the 1st accused/Secretary and the official seal of the Society. Thereafter, on maturity of the deposits, the de facto complainant approached the Society but the accused persons failed to return the above said Fixed Deposits amounting to ₹ 13,05,000/- (₹ 1,25,000 + ₹ 1,00,000 + ₹ 1,50,000 + ₹ 2,45,000 + ₹ 1,10,000+ ₹ 5,75,000). Thereby the accused persons dishonestly made illegal profit and caused corresponding loss to the de facto complainant and thus committed the above offences.

4. Similarly, in Crime No.1291/2024, the prosecution alleges commission of offences punishable under Sections 409 and 420 r/w. 34 of IPC, Sections 21 r/w. 3, 22 r/w. 4 and 23 r/w. 5 of the BUDS Act and under Section 13(1)(a) r/w. 13(2) of the PC (Amendment) Act. Here, the prosecution allegation is that, 1st accused and the 2nd accused, who is the petitioner herein, were the Secretary and the President of the Society respectively and the accused persons, with criminal intention to make illegal profit and cause corresponding loss to the de facto complainant, made to believe him that if the de facto complainant deposits an amount of ₹ 10,00,000/- (Rupees one lakh only), his daughter ‘Mohini’ would give employment in the office of the Society. On believing the same, the de

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2026 Supreme(Online)(Ker) 34551

IN THE HIGH COURT OF KERALA AT ERNAKULAMA. Badharudeen, JBalakrishnan Nair – AppellantVersusState Of Kerala – RespondentBAIL APPL. NO. 2409, 2410 & 2412 OF 2026

IN THE HIGH COURT OF KERALA AT ERNAKULAM
A. Badharudeen, J
Balakrishnan Nair – Appellant
Versus
State Of Kerala – Respondent
BAIL APPL. NO. 2409, 2410 & 2412 OF 2026