Anticipatory Bail Denied In Angamaly Co-op Scam | Kerala High Court Criticizes Investigating Officer For Inaction Despite Prima Facie Financial Misconduct
Sanchayita Lahkar
The High Court of Kerala Single Bench of Justice A. Badharudeen dismissed the second anticipatory bail applications filed by three petitioners accused in the Angamaly Urban Co-operative Society scam. The Court held that custodial interrogation of the petitioners was “very much essential to effectuate meaningful investigation” and rejected their applications on the ground that no change in circumstance had been shown since the earlier dismissal of their bail pleas. The Court directed the petitioners to surrender before the Investigating Officer forthwith, failing which arrest must be effectuated as per law.
The case arises from Crime No.338/CB/EOW/EKM/2024, initially registered as Crime No.112/2024 at Angamaly Police Station and later transferred to the Crime Branch, Ernakulam. The accused in this matter include members of the Managing Committee of the Angamaly Urban Co-operative Society, who allegedly sanctioned and renewed fraudulent loans using fabricated documents in fictitious names. The initial estimated misappropriation of ₹55 crores was later revised to ₹115.8 crores during the course of investigation.
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The petitioners—accused nos. 5 (P.C. Tomy), 8 (V.D. Tomy), and 13 (Elsy Varghese)—previously filed anticipatory bail applications which were dismissed by the Court. They filed second anticipatory bail applications citing alleged changes in circumstances, primarily referencing the grant of bail to another co-accused, Sri T.V. Benny.
The allegations stem from reports prepared by the Assistant Registrar under Sections 65 and 68(1) of the Kerala Co-operative Societies Act, identifying large-scale fraudulent loan transactions. According to the prosecution, loans were granted on the basis of forged documents, reused title deeds, and even photocopies of previously pledged properties, with some loans sanctioned without any formal applications.
The prosecution submitted that Sri V.D. Tomy, while serving on the Director Board between 2017–2018, participated in meetings that approved over 600 fake loans and personally conducted valuations for 130 of them. The prosecution contended that he endorsed loan renewals without verifying their legitimacy and thereby facilitated further fraudulent activities.
Sri P.C. Tomy, a Director Board member from 2012 until his dismissal in 2024, was alleged to have participated in Board meetings that sanctioned 599 fake loans, and also verified and valued 53 fake loan files. Similarly, Smt. Elsy Varghese was part of meetings where over 300 fraudulent loans were approved and is alleged to have conducted valuations for several of them. Although she contended that her financial deposits in the Society showed her lack of intent, the prosecution maintained that her deposits did not negate her active role in the scam.
The State opposed the bail applications, asserting that the gravity of the offence, the scale of the misappropriation, and the petitioners' participation in the fraudulent transactions necessitated custodial interrogation. It was further submitted that anticipatory bail granted to Sri T.V. Benny was not relevant, as his circumstances were materially different—he neither signed meeting minutes nor endorsed the fraudulent loans.
The petitioners claimed they were elderly and unwell, and that they were willing to cooperate with the investigation. They also contended that their roles were akin to Sri T.V. Benny, who had been granted pre-arrest bail earlier.
However, the State pointed out that Sri Benny had dissented from fraudulent decisions and had not signed incriminating records. In contrast, the petitioners had actively participated and endorsed numerous fraudulent loan disbursements.
The Court was also informed that, despite dismissal of their earlier bail pleas in October and November 2024, the petitioners had failed to surrender and had instead remained at large until reapplying in late December 2024 and early 2025.
The Court stated: “It is the settled law that, change in factual circumstances can be a reason to seek pre-arrest bail for the second time, though normally such applications could not be entertained, being abuse of process of Court.” It recorded that the contentions now raised were already addressed in detail when dismissing the first applications.
Regarding the argument about parity with Sri T.V. Benny, the Court noted: “It could not be held that, grant of anticipatory bail to Sri.T.V. Benny on the above grounds is a change in circumstances to consider anticipatory bail applications at the instance of the petitioners.”
Referring to the findings against the petitioners, the Court recorded: “The complicity of Sri.V.D.Tomy in this crime could not be taken so lightly… he conducted valuation of documents of 130 fake loans… and acted as an aid to Accused No-1.”
As to Sri P.C. Tomy, the Court quoted: “This shows his clear participation in the crime and he acted as an aid to Accused No-1 Mr PT Paul and associates for misappropriating the money deposited by the public.”
With respect to Smt. Elsy Varghese, the Court referred to the findings that she had attended meetings where hundreds of fake loans were passed and had signed the minutes: “All these meetings of the Director Board were attended by the petitioner Elsy Varghese and the minutes were signed by her. This shows her clear participation in the crime.”
The Court found the allegations to be “very serious offences” and held that they could not be construed as civil liabilities alone. It noted: “The arrest and custodial interrogation of the petitioners are very much essential to effectuate meaningful investigation.”
The Court concluded by stating: “Accordingly, these bail applications stand dismissed, with direction to the petitioners to surrender before the Investigating Officer, forthwith.”
It further ordered: “Failing which, the Investigating Officer is directed to effectuate meaningful investigation, by recording the arrest of the petitioners, as per law, as it is pointed out by the learned ADGP that, their arrest and custodial interrogation are necessary.”
The Court took strong exception to the conduct of the investigation, noting: “The attitude of the Investigating Officer is noted with extreme displeasure as the same shall have adverse impact on effective investigation of a very serious crime.”
Advocates Representing the Parties
For the Petitioners: Sri. Jeswin P. Varghese, Advocate (for V.D. Tomy), Sri. B. Raman Pillai, Senior Advocate; Sri. R. Anil, Shri. Sujesh Menon V.B., Sri. Thomas Sabu Vadakekut, Sri. Mahesh Bhanu S., Sri. Ressil Lonan, Sri. Joel George Kampiyil, Sri. Ananth Krishna K.S. (for P.C. Tomy), Sri. S. Rajeev, Sri. V. Vinay, Shri. Sarath K.P., Sri. M.S. Aneer, Sri. K.S. Kiran Krishnan (for Elsy Varghese)
For the Respondents: Shri. Athul Roy, Public Prosecutor, Shri. C.K. Suresh, Additional Director General of Prosecution, Shri. P.A. Martin Roy, Additional Director General of Prosecution
Case Title: V.D. Tomy v. State of Kerala & Anr. and connected matters
Case Numbers: B.A. Nos. 1315/2025, 3177/2025 & 11104/2024
Bench: Justice A. Badharudeen
