Hyderabad. The Telangana High Court has granted anticipatory bail to practising Chartered Accountant Annam Leela Sundaram in an alleged share transfer fraud case, observing that custodial interrogation was not necessary at this stage. The court noted that a professional role in audit or compliance work cannot automatically make an auditor part of a criminal conspiracy unless there is clear evidence of criminal intent or direct involvement.
Court Examines Professional Role of Auditor
The case relates to alleged fraudulent transfer of shares, with the role of multiple individuals under investigation. The petitioner was accused of being involved in documentation and financial procedures connected to the alleged irregularities while acting in a professional capacity.
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The investigating agencies claimed that suspicious activities had surfaced during scrutiny of financial transactions and corporate records, following which proceedings were initiated. The defence, however, argued that the accused had only rendered audit and compliance-related professional services and had no direct role in the alleged share fraud.
The defence further submitted that the petitioner had no personal financial gain from the alleged fraud, had been cooperating with investigators and was not likely to abscond or tamper with evidence.
Custodial Interrogation Held Unnecessary
During the hearing, the High Court referred to earlier judicial precedents and observed that custodial interrogation is not mandatory in every economic offence case, particularly where the accused’s role appears documentary or professional in nature.
The court noted that investigators had already collected relevant records and documents required for the probe, reducing the immediate need for arrest. It also observed that the role of Chartered Accountants and audit professionals is often limited to compliance verification and examination of records.
The court said an auditor cannot automatically be presumed to be part of a criminal conspiracy solely because financial irregularities later emerge in a company or business entity. At the same time, it clarified that investigating agencies would remain free to continue a fair and independent investigation.
Probe Into Share Transfer Records to Continue
The prosecution informed the court that the investigation was examining possible misuse of financial procedures and alleged manipulation of corporate documents linked to the disputed share transfers. It also submitted that several technical and corporate records were still under scrutiny and that questioning the accused could be relevant to the investigation.
Despite these submissions, the court held that arrest was not warranted in the present circumstances. The petitioner has been directed to cooperate fully with the investigation and appear before authorities whenever required.
Cyber crime expert and former IPS officer Prof. Triveni Singh said the role of professional advisors in economic and corporate fraud cases must be assessed carefully and in a balanced manner. He noted that auditors and financial consultants often work on the basis of documents made available to them, while the actual fraud may be orchestrated by others. Researchers associated with the Future Crime Research Foundation also warned that misuse of digital documentation, e-signatures and online share transfer systems is increasing in India’s financial and corporate crime landscape.
