Safiya Malik

The Kerala High Court, Single Bench by Justice P.V. Kunhikrishnan, considered a series of bail applications arising from multiple cases registered at Perumbavoor Police Station, Ernakulam. The petitioners, including present and former members and staff of the Perumbavoor Urban Co-operative Society, were accused of financial misappropriation, forgery, and fraud amounting to crores of rupees. The prosecution opposed bail, citing the gravity of the offenses and the necessity of custodial interrogation.

The prosecution alleged that the accused, comprising former and present members and staff of the Perumbavoor Urban Co-operative Society Ltd. No. 2024, engaged in financial misconduct from 2011 to 2016. The allegations include forging documents to grant memberships and issuing loans without adhering to the Cooperative Society Rules, resulting in a loss of approximately Rs. 33.33 crore to the Society.

The case was initiated based on an inquiry conducted under Section 68(1) of the Kerala Co-operative Societies Act, 1969, which found significant irregularities. The petitioners in various bail applications are accused of being involved in illegal disbursement of loans, fraudulent transactions, and document forgery.

The petitioner in BA No. 3759/2024, who held a key administrative position, was specifically accused of misappropriating Rs. 4,47,025/- deposited in a joint account and additional fixed deposit amounts of Rs. 18,14,099/- and Rs. 38,20,399/-. According to the prosecution, these amounts were deposited by the complainants but were not returned upon maturity.

The petitioner in BA No. 5881/2024 was accused of securing a loan of Rs. 20 lakhs without the knowledge of the actual account holder. Similar charges were raised against the petitioner in BA Nos. 5890/2024 and 5896/2024, where loans were allegedly sanctioned based on forged documents, raising concerns about procedural violations.

The prosecution further contended that the accused, through fraudulent means, sanctioned loans to ineligible individuals without securing proper documentation. The loans were disbursed in cash instead of being credited to bank accounts, making it difficult for investigators to ascertain the actual recipients. The investigation also revealed that the addresses provided for loan applications were vague and unverified, causing further complications in tracing the money.

Additionally, it was alleged that the members of the Board of Directors approved loans far beyond the permissible limits of the Society, ignoring financial regulations and internal audit mechanisms. Investigators noted that in multiple instances, loans were sanctioned against undervalued or even non-existent collateral, leading to severe financial losses.

The court noted that the prosecution presented substantial evidence demonstrating financial misappropriation. It stated: "The accused persons allotted loans with deceitful intention to cheat the Society, and the funds were disbursed in cash, raising serious concerns about the legitimacy of these transactions."

Regarding Beevija P.H., one of the key accused in multiple cases, the court observed: "The Director Board meeting on 03.01.2017 sanctioned 39 loans of Rs. 20 lakhs each by pledging property belonging to a former staff member. The petitioner, who was the Secretary of the Society at the time, signed the minutes approving these transactions." The court found that the fraudulent nature of these transactions necessitated further custodial interrogation.

For K.M. Abdul Salam, the court acknowledged his health concerns but stated: "While the accused is seriously laid up, he remains involved in key transactions that facilitated financial loss to the Society. His release on bail shall be conditional."

Additionally, the court found that K. Ravikumar, the 17th accused, had a direct role in approving unauthorized loans. While he presented medical records indicating a 60% disability due to a cerebral haemorrhage, the court determined that custodial interrogation remained necessary. The court further recorded: "The allegations against the accused are severe, and the investigation is at a crucial stage where their custody is necessary to ascertain the full extent of financial loss caused."

The court also took note of a report submitted by the investigating officer, which detailed how loan amounts were sanctioned under suspicious circumstances. The report indicated that: "Many of the individuals in whose names loans were issued either do not exist or have denied receiving any funds, suggesting that the money was misappropriated."

The court considered the argument that some of the accused merely followed decisions made by the Board of Directors. However, it stated: "While officials act under the guidance of the Board, they are still responsible for ensuring due diligence and adherence to financial protocols. Failure to do so cannot absolve them from liability in a case involving such large-scale financial loss."

The court issued the following orders regarding the bail applications:

• Bail Denied: The bail applications of Beevija P.H. (in BA Nos. 3759/2024, 5881/2024, 5890/2024, 5896/2024), K. Ravikumar (BA No. 4969/2024), and other accused in related cases were dismissed.

• Conditional Bail: K.M. Abdul Salam (BA No. 4860/2024) and Babu John (BA No. 4864/2024) were granted bail on the condition that they execute a bond of Rs. 50,000/- with two solvent sureties and cooperate fully with the investigation.

Case Title: State of Kerala v. Beevija P.H. & Others

Case Numbers: BA Nos. 3759, 4860, 4864, 4876, 4969, 4906, 5561, 5881, 5890, and 5896 of 2024

Bench: Justice P.V. Kunhikrishnan

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