Mere State Assertion for Custodial Interrogation Insufficient for Denying Pre-Arrest Bail: Kerala High Court Grants Relief to NRI Director in Cheating Case - 2025-08-20

Kerala High Court Grants Pre-Arrest Bail to NRI Director in Appollo Jewels Cheating Case, Citing Lack of Need for Custodial Interrogation

Kochi, Kerala – In a significant ruling concerning the scope of pre-arrest bail, the Kerala High Court has granted anticipatory bail to Basheer, a director of M/s. Appollo Jewels Kannur Pvt. Ltd., who faces allegations in 86 cheating and fraud cases. Justice Bechu Kurian Thomas, presiding over the single-judge bench, emphasized that the prosecution must demonstrate a compelling need for custodial interrogation and cannot rely on mere assertions to oppose bail.

Case Background

The case involves a series of criminal complaints filed against M/s. Appollo Jewels and its directors, including the petitioner, Basheer. The prosecution, led by the Crime Branch (CBCID), Kozhikode, alleges that the company unlawfully collected large sums of money from numerous individuals by promising high returns on their investments. The company, which lacked the requisite license to accept public deposits, subsequently failed to repay the principal amounts or the promised profits.

The petitioner is accused under Sections 406 (criminal breach of trust) and 420 (cheating) of the Indian Penal Code, 1860, along with provisions of the Banning of Unregulated Deposit Schemes (BUDS) Act, 2019. Faced with the prospect of arrest in dozens of registered crimes, Basheer approached the High Court seeking pre-arrest bail across all cases.

Arguments from Both Sides

Petitioner's Stance: The counsel for Basheer argued that he was not involved in the day-to-day operations of the company. It was submitted that the petitioner has been a non-resident Indian, living and working in Dubai since 2008, a fact substantiated by travel records. The defense portrayed Basheer as a victim who had also invested in the company, only to be wrongly implicated as an accused.

Prosecution's Opposition: The State strongly opposed the bail applications, highlighting the large scale of the alleged fraud involving 86 separate crimes. The prosecution contended that as a director, the petitioner was prima facie responsible for the company's actions and that custodial interrogation was necessary to uncover the full extent of the conspiracy and trace the misappropriated funds.

Court's Analysis and Legal Precedents

Justice Bechu Kurian Thomas acknowledged that a prima facie case of cheating and illegal deposit collection was established against the company. However, the central issue for the court was whether the petitioner's custodial interrogation was essential for the investigation.

The Court heavily relied on the petitioner's prolonged absence from India since 2008 as a crucial factor. This circumstance cast doubt on his direct involvement in the alleged scheme, which was primarily managed by other directors, particularly one Sri. Moosa Haji, who was identified by complainants as the person who induced them to invest.

In its order, the Court cited two key Supreme Court judgments to fortify its reasoning:

- Sushila Aggarwal and Others v. State (NCT of Delhi) and Another [(2020) 5 SCC 1] : This case affirmed that the grant of anticipatory bail is a matter of judicial discretion, guided by factors such as the gravity of the offense and the specific role of the applicant.

- Ashok Kumar v. State of Union Territory Chandigarh [2024 SCC OnLine SC 274] : The High Court quoted this recent precedent, which held that "a mere assertion on the part of the State while opposing the plea for anticipatory bail that custodial interrogation is required would not be sufficient." The State must demonstrate why such interrogation is indispensable for the investigation.

Applying these principles, Justice Thomas observed:

"Having regard to the circumstances arising in all the above referred cases, the prosecution has not been able to convince this Court as to the necessity of a custodial interrogation of the petitioner."

The Court concluded that since Basheer had been abroad for over a decade, his custodial interrogation was not required.

Final Decision and Conditions for Bail

The Kerala High Court allowed all 86 bail applications filed by Basheer, granting him pre-arrest bail. The court imposed several conditions, including:

1. The petitioner must appear before the Investigating Officer within four weeks for interrogation.

2. If arrested, he shall be released on bail upon executing a bond of ₹50,000 with two solvent sureties for each of the 86 crimes.

3. He must cooperate fully with the investigation and appear before the officer as and when required.

4. He is prohibited from intimidating witnesses, tampering with evidence, or committing similar offenses while on bail.

This common order provides significant relief to the petitioner while ensuring his cooperation in the ongoing investigation, striking a balance between individual liberty and the interests of justice.