Kochi: The Kerala High Court has refused to grant anticipatory bail to N. Basurangan in connection with an alleged ₹101 crore financial misappropriation case involving a cooperative bank. The court observed that custodial interrogation plays a significant role in investigating large economic offences and held that pre-arrest protection in such cases could potentially hinder the probe.
The court emphasised that the parameters for granting bail in large-scale financial crimes are different from those applied in ordinary criminal cases. Considering the nature of the allegations, the magnitude of the alleged financial loss, and the complexity of transactions involved, the bench indicated that interrogation in police custody may be necessary to uncover the complete facts of the case.
Allegations of Massive Financial Irregularities
The matter pertains to alleged widespread financial irregularities and diversion of funds in a cooperative banking institution. The prosecution alleged that the accused operated deposit schemes offering unusually high interest rates without statutory sanction. It was further claimed that loans were sanctioned without adequate collateral security, funds were diverted to other societies, and several appointments were made without proper authorization.
According to investigation records, the total alleged misappropriation amount is approximately ₹1,01,00,67,858. Enquiries conducted under Sections 65 and 68(1) of the Kerala Co-operative Societies Act, 1969 reportedly revealed indications of large-scale corruption, illegal fund transfers, and administrative irregularities. In addition, surcharge proceedings were said to have fixed a liability exceeding ₹51 crore against the accused.
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Court Finds Custodial Interrogation Necessary
The 71-year-old petitioner approached the court seeking anticipatory bail, arguing that he had earlier obtained relief from the Supreme Court in some connected matters and was willing to cooperate with the investigation. However, the state government opposed the plea, contending that the seriousness of the alleged scam required custodial interrogation to trace the entire money trail and the network involved in the transactions.
Economic Offences Treated as a Distinct Category
During the hearing, the bench led by A. Badharudeen referred to recent Supreme Court jurisprudence dealing with economic offences. The court observed that economic crimes constitute a special class of offences as they often involve organised conspiracy, sophisticated financial structures, and long-term planning.
Anticipatory Bail Is an Extraordinary Relief
The court reiterated that anticipatory bail is an extraordinary relief that must be granted sparingly and only under exceptional circumstances. Particularly in cases involving massive financial fraud and deep-rooted conspiracies, custodial interrogation may become essential for effective investigation.
The bench further noted that the gravity of the allegations, the necessity of continuing investigation, and the requirement to unravel the entire chain of financial transactions justified denial of pre-arrest protection. The court expressed apprehension that granting anticipatory bail to the principal accused could impede the investigation process.
Direction to Surrender
Dismissing the petition, the High Court directed the accused to surrender before the investigating officer immediately. The court also clarified that in case of non-compliance, the investigating agency would proceed in accordance with law to ensure meaningful investigation and successful prosecution.
The court stressed that the prosecution must be given a fair opportunity to conduct an effective probe into the alleged scam and trace the complete series of financial dealings associated with the case. The matter will now continue under investigative supervision, and further legal proceedings are expected to depend on the progress of the investigation.
