Kerala High Court | Angamaly Co-op Scam | Bail Granted To Two Elderly Accused In ₹115.8 Crore Fake Loan Misappropriation Case
Sanchayita Lahkar
The High Court of Kerala Single Bench of Justice A. Badharudeen delivered a common order on August 18, 2025, granting bail to two petitioners accused in a large-scale financial misappropriation case linked to the Angamaly Urban Cooperative Society. The Court held that continued custody of the petitioners was not required for the progress of the investigation and directed their release on bail subject to specific conditions. The decision followed detailed submissions from both sides and consideration of the investigation’s current status.
The proceedings concerned two bail applications filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023. The petitioners, arraigned as accused Nos. 5 and 12, were charged in Crime No. 338/CB/EOW/EKM/R/2024 of the Crime Branch, Ernakulam. This matter was originally registered as Crime No. 112 of 2024 at Angamaly Police Station, Ernakulam. The allegations centered on financial irregularities, specifically the sanctioning of fake loans, renewal of loans using duplicate documents, and large-scale misappropriation of funds belonging to the Society.
The prosecution contended that the petitioners, along with other members of the Managing Committee of the Angamaly Urban Cooperative Society, abused their official positions to cause undue loss to the Society. It was alleged that the total misappropriated sum initially recorded as Rs.55 crores had escalated to Rs.115.8 crores as revealed during investigation.
The fifth accused, aged 73, was alleged to have participated in board meetings and approved decisions regarding the disputed loans. The prosecution, however, did not place on record allegations of conspiracy involving him and other accused. His senior counsel submitted that he was aged, suffering from ailments, and in judicial custody since June 25, 2025. On this basis, counsel argued that further detention was unnecessary since the investigation had already progressed substantially.
The twelfth accused, a 70-year-old woman, was alleged to have also been a signatory to the minutes authorizing fake loans. Her counsel argued that she herself deposited Rs.10 lakh and an additional Rs.70 lakh from her relatives into the Society, asserting that she lacked any intention of misappropriation. She had been arrested on June 24, 2025, and remained in custody since then. Counsel submitted that further detention was unnecessary and sought her release on bail.
The Additional Director General of Prosecution opposed bail, stating the magnitude of the alleged scam and its impact on depositors. He contended that the petitioners’ roles were well established, prima facie, in the commission of the offences. At the same time, he acknowledged that the petitioners had no criminal antecedents.
Earlier, anticipatory bail sought by both petitioners had been rejected by the High Court through a common order dated June 18, 2025, in separate bail applications. The subsequent arrests of the petitioners in June 2025 followed those denials. The matter before the Court thus involved consideration of regular bail after more than seven weeks of judicial custody.
The offences invoked against the petitioners included Sections 406, 408, 417, 465, 467, 468, 471, and 420 read with Section 34 of the Indian Penal Code, as well as Sections 13(1)(a) and 13(2) of the Prevention of Corruption Act, 1988.
Justice A. Badharudeen recorded that “crime was registered alleging that the accused persons, who are the members of the Managing Committee of the Angamaly Urban Cooperative Society, abused their position with intention to cause undue loss to the Society, have sanctioned fake loans and renewed loans by using the same documents in the name of fake persons and misappropriated Rs.55 Crores belongs the Society. Thereafter, as submitted by the learned ADGP, during the course of investigation, it is revealed that, as of now, the misappropriation of money would come to Rs.115.8 Crores.”
The Court observed in relation to the fifth accused that, “even though, the 5th accused was also a member of the Director Board of the Society and he had participated in various meetings and conceded the decisions to grant fake loans, as alleged by the prosecution, there is no allegation for the prosecution that, there was conspiracy in between him and the other accused.” The Court noted the submissions concerning his age, ailments, and period of custody beginning June 25, 2025.
Regarding the twelfth accused, Justice Badharudeen recorded that “the 12th accused is a lady aged 78 years and she deposited Rs.10 Lakh by herself and Rs.70 Lakh of her relatives in the Society. The learned counsel conceded that, even though being a Board member, the 12th accused also signed in the minutes whereby the alleged fake loans were granted, she had no intention to misappropriate the money.” The Court further noted her continuous custody since June 24, 2025.
The prosecution’s position was also taken into account. Justice Badharudeen stated, “the learned ADGP opposed grant of regular bail to the petitioners. According to the learned ADGP, this is a huge scam, whereby many depositors were affected and the role of the petitioners in this crime are well made out, prima facie. The learned ADGP also pointed out the progress of investigation and conceded that the petitioners have no criminal antecedents.”
The Court acknowledged its earlier rejection of anticipatory bail, recording, “earlier, anticipatory bail plea at the instance of the petitioners/accused Nos.5 and 12 was negatived by this Court as per the common order dated 18.06.2025 in B.A. Nos.11104 of 2024 and 3177 of 2025. Thereafter, accused Nos.5 and 12 were arrested on 25.06.2025 and 24.06.2025 respectively and have been in custody since then.”
Ultimately, Justice Badharudeen concluded, “in fact, the allegations against the petitioners are very serious and the same would require effective investigation. However, having considered the custody of the petitioners from 24.06.2025 and 25.06.2025 onwards, who have no criminal antecedents and on noticing the progress of investigation, I am of the view that, further custody of the petitioners, for the purpose of investigation is not necessary and they can be enlarged on bail.”
The Court allowed the petitions and directed the release of the petitioners on bail, subject to strict conditions. Justice Badharudeen ordered, “Therefore, these petitions stand allowed. The petitioners are enlarged on bail on conditions.” The Court specified that each petitioner shall execute a bond for Rs.50,000 with two solvent sureties for the like amount to the satisfaction of the jurisdictional court.
The Court mandated that the petitioners shall not intimidate witnesses or tamper with evidence. They were directed to cooperate with the investigation and to remain available for trial. The Court further ordered that the petitioners must appear before the Investigating Officer as directed and, in addition, appear before the Investigating Officer on all Mondays between 9 am and 10 am for a period of three months or until the completion of investigation, whichever is earlier.
The order stated that the petitioners shall not, directly or indirectly, make any inducement, threat, or promise to dissuade any person acquainted with the facts of the case from disclosing such facts to the Court or to any police officer. The petitioners were also directed not to involve themselves in any other offence during the currency of bail, with any such event being grounds for cancellation of bail.
Furthermore, the Court stipulated that the petitioners shall not leave the jurisdiction of the jurisdictional court without prior permission. The order concluded with the observation that violation of any of the conditions imposed would result in cancellation of bail.
Advocates Representing the Parties
For the Petitioners: Sri. R. Anil, Sri. B. Raman Pillai (Senior Advocate), Shri. Sujesh Menon V.B., Sri. Thomas Sabu Vadakekut, Shri. Mahesh Bhanu S., Shri. Ressil Lonan, Shri. Joel George Kampiyil, Shri. Ananth Krishna K.S., Shri. George Vinci Jose, Sri. S. Rajeev, Sri. V. Vinay, Sri. M.S. Aneer, Shri. Sarath K.P., Shri. Anilkumar C.R., Shri. K.S. Kiran Krishnan, Smt. Dipa V., Shri. Akash Cherian Thomas.
For the Respondents: Senior Public Prosecutor Sri. C.K. Suresh, Additional Director General of Prosecution T.A. Shaji.
Case Title: P.C. Tomy v. State of Kerala & Elsy Varghese v. State of Kerala
Neutral Citation: 2025: KER:61962
Case Number: Bail Appl. Nos. 8716/2025 and 8757/2025
Bench: Justice A. Badharudeen
