[Cites 4, Cited by 0]
Kerala High Court
Sugila K vs State Of Kerala on 12 February, 2026
Author: C.S.Dias
Bench: C.S.Dias
B.A. No. 509 of 2026 1
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.S.DIAS
THURSDAY, THE 12TH DAY OF FEBRUARY 2026 / 23RD MAGHA, 1947
BAIL APPL. NO. 509 OF 2026
CRIME NO.1050/2025 OF Kannur Town Police Station, Kannur
AGAINST THE JUDGMENT DATED 07.01.2026 IN Bail Appl. NO.12156
OF 2025 OF HIGH COURT OF KERALA
PETITIONERS/ACCUSED 1 AND 2:
1 SUGILA K,
AGED 48 YEARS
VIDYA NILAYAM (H), NEAR SPINNING MILL,
CHOVVA, KANNUR, PIN - 670006
2 VINOD K,
AGED 49 YEARS
VIDYA NILAYAM (H), NEAR SPINNING MILL,
CHOVVA, KANNUR, PIN - 670006
BY ADVS.
SMT.K.RAJESWARY
SHRI.ANIL PRABHA.K
SMT.ALEENA ANABELLI A.
RESPONDENTS/STATE/INTERVENOR:
1 STATE OF KERALA,
REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA,
ERNAKULAM (THROUGH THE STATION HOUSE OFFICER, KANNUR
TOWN POLICE STATION, KANNUR CITY), PIN - 682031
2 SAMEER AHAMED.C.H
S/O KUNHAHAMEED, BEEBIS, ONDAN PARAMB, KAKKAD CIVIL
STATION.P.O, KANNUR DISTRICT, PIN-670002 IS IMPLEADED
AS THE ADDITIONAL SECOND RESPONDENT AS PER ORDER DATED
06.02.2026 IN CRL MA 1/2026 IN BA 509/2026.
BY ADVS.
SRI.V.SETHUNATH
SHRI.THOMAS ABRAHAM (K/1051/2010)
SHRI.SREEGANESH U.
SMT.ATHEESHA M.V.
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OTHER PRESENT:
SENIOR PUBLIC PROSECUTOR- SRI.C.S.HRITHWIK
THIS BAIL APPLICATION HAVING COME UP FOR ADMISSION ON
12.02.2026, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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Dated this the 12th day of February, 2026
ORDER
The application is filed under Section 483 of the
Bharatiya Nagarik Suraksha Sanhita, 2023, by the
accused Nos. 1 and 2 in Crime No. 1050/2025 registered
by the Kannur Town Police Station, Kannur, alleging the
commission of offences punishable under Sections
316(2), 318(4) and 316(5) of the Bharatiya Nyaya
Sanhita, 2023. The petitioners were arrested and
remanded to judicial custody on 12.01.2026.
2. The prosecution case, in a nutshell, is that:
The first petitioner was appointed as a Chief
Executive Officer of a group of business establishments
named "Sheri or Sherry brand," which is owned by the
second respondent (defacto complainant) and his wife.
The second petitioner, who is the husband of the first
petitioner, was engaged in the managerial and
supervisorial role on a commission basis. During the
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period from 01.08.2024 to 18.08.2025, the petitioners
had, to make unlawful gain for themselves and to make
unlawful loss to the second respondent, misappropriated
Rs.1,40,00,000/- from the business establishments. Thus,
the petitioners have committed the above offences.
3. I have heard the learned counsel appearing for the
petitioners, the learned Public Prosecutor, and the
learned counsel for the second respondent (intervenor).
4. The learned counsel for the petitioners vehemently
submits that the petitioners have been falsely implicated
in the crime. In fact, the first petitioner was diligently
looking after the business of the intervenor. The
intervenor had executed a power of attorney in favour of
the first petitioner. Subsequently, the intervenor
compelled the petitioners and other employees of the
establishment to permit him to use their personal
accounts for looting foreign remittance on his behalf.
Consequently, the money was transferred from various
financial institutions to the bank accounts of the
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petitioners and the other employees, which is evidenced
by Annexure A7 bank statements. When the benami
transactions became a routine affair, the employees
started raising resistance against the said transfer.
Ultimately, this led to a unrest in the establishment, and
the employees went on a strike. Immediately, the
employees were illegally terminated, and they lodged a
complaint before the Labour Officer. The first petitioner
also filed Annexure A9 complaint before the Cyber Crime
Police Station, Kannur. As a retaliatory measure to the
said complaint, the intervenor has filed the present
crime. Even though the petitioners had approached this
Court and filed an application for pre-arrest bail, the
same was dismissed. Immediately, the petitioners
surrendered before the Investigating Officer on
12.01.2026. The petitioners have been in judicial custody
for the last one month. By Annnexure A13 statement
filed by the Investigating Officer before the jurisdictional
Magistrate, he has empathetically stated that the
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petitioners have cooperated with the investigation and
the investigation is practically complete. In light of the
above statement, the petitioners' further detention is
unnecessary. They are ready and willing to abide by any
stringent conditions that may be imposed by this Court.
Hence, the application may be allowed.
5. The learned Public Prosecutor and the learned
counsel for the intervenor, in unison, vehemently oppose
the application. The learned Public Prosecutor submits
that the petitioners are not cooperating with the
investigation. There are documents money to be
recovered from the petitioners for the proper
investigation of the crime. If the petitioners are let off on
bail at this stage, it may hamper the investigation.
Hence, the application may be dismissed. The learned
counsel for the intervenor submits that since the
petitioners have siphoned off more than Rs. 1/- Crore,
they have approached the State Police Chief for
transferring the investigation to the Crime Branch
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(Economic Offence). Their application for the transfer of
the investigation is still pending consideration. If the
petitioners are let off on bail, there is every likelihood of
them intimidating and influencing the witnesses and
tampering with evidence, which would jeopardise the
investigation. Therefore, the application may be
dismissed.
6. The crux of the prosecution allegation is that
the petitioners had siphoned Rs. 1,40,00,000/- belonging
to the intervenor and his business establishment.
7. Apprehending arrest, the petitioners had filed
B.A. No.12156/2025 before this Court. This Court, after
considering the gravity of the offences and the economic
offence involved in the case, held that the petitioners are
not entitled to an order of pre-arrest bail since their
custodial interrogation was necessary.
8. Indisputably, on 12.01.2026, the petitioners
had surrendered before the jurisdictional court and filed
an application for the bail, which was dismissed by
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Annexure A10 order. Consequently, the petitioners were
remanded to the judicial custody and also were given to
the police custody for two days, from 14.11.2026 to
16.02.2026, for the purpose of the investigation of the
crime. After that, the Investigating Officer has filed
Annexure 13 report before the jurisdictional Magistrate
specifically stating that the petitioners have cooperated
with the investigation and the investigation is almost
complete.
9. In Sanjay Chandra v. CBI [2012 1 SCC 40],
the Honourable Supreme Court has categorically held
that the fundamental postulate of criminal jurisprudence
is the presumption of innocence until a person is found
guilty. Any imprisonment prior to conviction is to be
considered as a punitive and it would be improper on the
part of the Court to refuse bail solely on the ground of
former conduct.
10. Recently, in Manish Sisodia v. Directorate of
Enforcement [2024 INSC 595] the Honourable
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Supreme Court has observed that, over a period of time,
the trial courts and the High Courts have forgotten a
very well-settled principle of law that bail is not to be
withheld as a punishment. From its experience, it
appears that the trial courts and the High Courts attempt
to play safe in matters of grant of bail. The principle that
bail is the rule and refusal is an exception is, at times,
followed in breach. On account of non-grant of bail even
in straight forward open and shut cases, the Honourable
Supreme Court is flooded with huge number of bail
petitions thereby adding to the huge pendency. It is high
time that the trial courts and the High Courts recognize
the principle that "bail is the rule and jail is an
exception.
11. Similarly, in Jalaluddin Khan v Union of India
[2024 INSC 604] has observed in the following lines:"21.
xxxxx When a case is made out for a grant of bail, the
Courts should not have any hesitation in granting bail.
The allegations of the prosecution may be very serious.
But, the duty of the Courts is to consider the case for
grant of bail in accordance with the law. "Bail is the rule
and jail is an exception" is a settled law. Even in a case
like the present case where there are stringent conditions
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for the grant of bail in the relevant statutes, the same rule
holds good with only modification that the bail can be
granted if the conditions in the statute are satisfied. The
rule also means that once a case is made out for the grant
of bail, the Court cannot decline to grant bail. If the
Courts start denying bail in deserving cases, it will be a
violation of the rights guaranteed under Article 21 of our
Constitution. "
12. After bestowing my anxious consideration to
the facts, the rival submissions made across the Bar, and
the materials placed on record, especially taking note of
Annexure A13 report filed by the Investigating Officer
and considering the fact that the first petitioner is a lady
and the second petitioner is her husband, and they have
been in judicial custody since 12.01.2026, which is
exactly one month now, I am of the definite view that
the petitioners' further detention is unnecessary. Hence,
I am inclined to allow the bail application, but subject to
stringent conditions.
In the result, the application is allowed, by
directing the petitioners to be released on bail on them
executing a bond for Rs.2,00,000/- (Rupees one lakh
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only) each with two solvent sureties each for the like
sum, to the satisfaction of the court having jurisdiction,
which shall be subject to the following conditions:
(i) The petitioners shall appear before the
Investigating Officer on every second and fourth
Saturday between 9 a.m. and 11 a.m till the final
report is filed;
(ii) The petitioners shall not directly or
indirectly make any inducement or threat to the
victim or her witnesses or to any person acquainted
with the facts of the case, so as to dissuade them
from disclosing such facts to the court or to any
Police Officer, or tamper with the evidence in any
manner, whatsoever;
(iii) The petitioners shall not commit any
offence while they are on bail;
(iv) The petitioners shall surrender their
passports, if any, before the jurisdictional court at
the time of execution of the bond. If they have no
passports, they shall file affidavits to the effect
before the jurisdictional court on the date of
execution of the bond;
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(v) The petitioners shall not leave the State
of Kerala without previous permission of the
Jurisdictional Court;
(vi) The petitioners shall not enter the
business premises of the intervenor;
(vii) In case of violation of any of the
conditions mentioned above, the jurisdictional
court shall be empowered to consider the
application for cancellation of bail, if any is filed,
and pass orders on the same, in accordance with
law;
(viii) Applications for deletion/modification
of the bail conditions shall be moved and
entertained by the court below;
(ix) The observations made in this order are
only for the purpose of considering the application
and the same shall not be construed as an
expression on the merits of the case, which shall be
decided by the competent Court.
Sd/-
mtk/dkr C.S.DIAS, JUDGE
B.A. No. 509 of 2026 13
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APPENDIX OF BAIL APPL. NO. 509 OF 2026
PETITIONER ANNEXURES
Annexure - 1 THE TRUE COPY OF THE FIRST INFORMATION
REPORT IN CRIME NO. 1050 OF 2025 OF
KANNUR TOWN POLICE STATION, REGISTERED ON
02.09.2025.
Annexure - 2 A TRUE COPY OF THE APPOINTMENT LETTER
DATED 01.04.2024, ISSUED BY THE DE FACTO
COMPLAINANT IN FAVOUR OF THE FIRST
PETITIONER.
Annexure - 3 A TRUE COPY OF THE BANK STATEMENT OF THE
SECOND PETITIONER, PERTAINING TO THE
ACCOUNT MAINTAINED WITH CANARA BANK FOR
THE PERIOD FROM 01.03.2024 TO 23.06.2025,
EVIDENCING THE PROFESSIONAL AND FINANCIAL
DEALINGS BETWEEN THE SECOND PETITIONER
AND THE DE FACTO COMPLAINANT.
Annexure - 4 TRUE COPIES OF THE RELEVANT WHATSAPP
GROUP COMMUNICATIONS.
Annexure - 5 TRUE COPIES OF PAYMENT RECEIPTS
EVIDENCING THE UTILISATION OF THE
PERSONAL BANK ACCOUNT OF THE FIRST
PETITIONER FOR EFFECTING PAYMENTS ON
BEHALF OF THE ESTABLISHMENTS, AND
DEMONSTRATING THE KNOWLEDGE AND APPROVAL
OF THE DE FACTO COMPLAINANT IN THIS
REGARD, INCLUDING PAYMENT RECEIPTS ISSUED
BY THE KERALA STATE FINANCIAL ENTERPRISES
(KSFE) AND THE KERALA STATE ELECTRICITY
BOARD (KSEB).
Annexure - 6 TRUE COPIES OF THE TRANSACTION DETAILS
AND RECEIPTS ISSUED BY UNIMONI, KANNUR
CITY CENTRE, EVIDENCING THE TRANSFER OF A
TOTAL SUM OF RS. 21,00,000 [ TWENTY-ONE
LAKHS RUPEES] FROM THE BANK ACCOUNTS OF
THE FIRST PETITIONER, THE SECOND
PETITIONER, AND THEIR RELATIVE, SANDHYA,
TO THE OVERSEAS BANK ACCOUNT OF THE DE
FACTO COMPLAINANT, DESCRIBED AS
‘PERSONAL GIFT.'
Annexure - 7 A TRUE COPY OF THE AXIS BANK STATEMENT OF
THE DE FACTO COMPLAINANT FOR THE PERIOD
FROM 23.05.2024 TO 01.01.2025.
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Annexure - 8 A TRUE COPY OF THE COMPLAINT, SUBMITTED
TO THE DISTRICT LABOUR OFFICER, DATED
04.07.2025, FILED BY THE FIRST
PETITIONER.
Annexure - 9 A TRUE COPY OF THE RECEIPT ISSUED BY THE
CYBER CRIME POLICE STATION, KANNUR,
ACKNOWLEDGING THE COMPLAINT DATED
12.08.2025.
Annexure - 10 A TRUE COPY OF THE ORDER DATED 20.01.2026
PASSED BY THE HONOURABLE JUDICIAL FIRST
CLASS MAGISTRATE COURT, KANNUR, IN C.M.P.
NO. 1 OF 2026.
RESPONDENT ANNEXURES
Annexure R2(a) THE TRUE COPY OF THE POWER OF ATTORNEY
EXECUTED BY DR.MANSOOR AHMED CHAPPAN IN
FAVOUR OF THE IMPLEADING PETITIONER DATED
6-8-2025
Annexure R2(b) THE TRUE COPY OF THE POWER OF ATTORNEY
EXECUTED BY SHERINE .MANSOOR AHMED
CHAPPAN IN FAVOUR OF FAVOUR OF THE
IMPLEADING PETITIONER DATED 6-8-2025
Annexure R2(c) THE TRUE COPY OF THE F.I.R IN CRIME NO.
1050/ 2025 OF KANNUR TOWN POLICE STATION
Annexure R2(d) THE TRUE COPY OF THE APPOINTMENT LETTER
ISSUED TO THE 1ST ACCUSED DATED 1-4-2024
Annexure R2(e) THE TRUE COPY OF THE NOTARIZED POWER OF
ATTORNEY EXECUTED BY THE DR.MANSOOR AHMED
CHAPPAN IN FAVOUR OF THE 1ST ACCUSED
DATED 17-5-2024
Annexure R2(f) TRUE COPY OF THE RENTAL AGREEMENT
EXECUTED BY 1ST ACCUSED FOR AND ON BEHALF
OF SHERRY GROUP IN FAVOUR OF LAND LORD
DATED 21-5-2021
Annexure R2(g) TRUE COPY OF THE AFFIDAVIT FILED BY THE
1ST ACCUSED BEFORE KANNUR MUNICIPAL
CORPORATION DATED 26-3-2025
Annexure R2(h) TRUE COPY OF THE FORENSIC AUDITING REPORT
SUBMITTED BY FORENSIC AUDITOR & CHARTED
ACCOUNTANTS , PUNE
Annexure R2(i) THE TRUE COPY OF THE FACE BOOK POST OF
1ST ACCUSED DATED 23-9-2025
Annexure R2(j) THE TRUE COPY OF THE REPORT FILED BY THE
INVESTIGATING OFFICER BEFORE THE J.F.M.C,
NO.I, KANNUR
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Annexure R2(k) THE TRUE COPY OF THE ACCOUNT STATEMENT OF
THE DEFACTO COMPLAINANT IN AXIS BANK, NRO
ACCOUNT FROM 23-5-2024 TO 1-1-2025
PETITIONER ANNEXURES
Annexure A11 A. THE TRUE COPY OF THE WHATSAPP
SCREENSHOT FROM THE GROUP MAINTAINED BY
THE DE FACTO COMPLAINANT, WHEREIN HE
ACKNOWLEDGES THAT THE PETITIONERS HAVE
NOT ENGAGED IN ANY ILLEGAL ACTIVITY,
DATED 14.06.2025
Annexure A12 B. A TRUE COPY OF THE WHATSAPP SCREENSHOT
OF THE CONVERSATION BETWEEN THE DE FACTO
COMPLAINANT AND THE PETITIONER, WHEREIN
THE BANK ACCOUNT DETAILS OF THE 2ND
PETITIONER WERE REQUESTED FOR REMITTANCE
OF MONEY THROUGH A UNIMONI TRANSACTION
DATED 05.06.2024
Annexure A13 C. THE TRUE COPY OF THE REPORT OF THE
INVESTIGATING OFFICER, SUBMITTED BEFORE
THE HONOURABLE JFCM - I COURT, KANNUR, IN
CMP 1 OF 2026
Annexure A14 D. TRUE COPY OF THE PAYMENT OF SELF-
ASSESSED TAX, GST CMP - 08 FORM, FOR THE
FINANCIAL YEAR 2024 - 2025
Annexure A15 E. TRUE COPY OF THE GST ASSESSMENT REPORT
ISSUED BY SANDEEP & ASSOCIATES,
ACCOUNTANTS AND TAX PRACTITIONERS (GST &
INCOME TAX), DATED 10.10.2025
Annexure A16 F. THE TRUE COPY OF THE WHATSAPP
SCREENSHOT FROM THE GROUP MAINTAINED BY
THE DE FACTO COMPLAINANT, WHEREIN THE
DEFACTO COMPLAINANT ACKNOWLEDGES THAT THE
ESTABLISHMENT SHALL BE BROUGHT UNDER THE
COMPOSITION SCHEME
