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Kerala High Court
Lucy Kuriakose vs State Of Kerala Represented By The ... on 13 February, 2026
2026:KER:13358
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
FRIDAY, THE 13TH DAY OF FEBRUARY 2026 / 24TH MAGHA, 1947
CRL.MC NO. 7858 OF 2025
CC NO.36 OF 2010 OF ENQUIRY COMMISSIONER &
SPECIAL JUDGE, KOTTAYAM
PETITIONERS/ACCUSED NOS.13 & 14:
1 LUCY KURIAKOSE, AGED 66 YEARS,
KANDATHIL HOUSE, VATTAKATHARA BHAGOM, CHENAPPADY KARA,
ERUMELY THEKKU VILLAGE. KANJIRAPPALLY, KOTTAYAM
DISTRICT, PIN - 686510.
2 TONY C. MATHEW, AGED 50 YEARS,
CHERIPURAM HOUSE, PANTHAMAKKAL BHAGOM, CHENGALAM
VILLAGE, NOW RESIDING AT CHERIPURAM HOUSE, METTUKUZHY
KARA, KATTAPPANA VILLAGE, IDUKKI, PIN - 685508.
BY ADVS.
SRI.SERGI JOSEPH THOMAS
SHRI.A.MOHAMMED
RESPONDENTS/COMPLAINANT:
1 STATE OF KERALA REPRESENTED BY THE PUBLIC PROSECUTOR
HIGH COURT OF KERALA, ERNAKULAM, PIN - 682031.
2 ELAMGULAM SERVICE CO OPERATIVE BANK LTD NO. 3576
KOORALI (ESCB, KOORALI) KOTTAYAM.
[IMPLEADED AS PER ORDER DTD 18.09.2025 IN CRL.MC
7858/2025]
BY ADVS.
SPECIAL PUBLIC PROSECUTOR SRI RAJESH.A
SENIOR PUBLIC PROSECUTOR SMT.REKHA.S
R2 BY SRI.K.P.SREEKUMAR
THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON
04.02.2026, THE COURT ON 13.02.2026 PASSED THE FOLLOWING:
"C.R"
A. BADHARUDEEN, J.
================================
Crl.M.C No.7858 of 2025
================================
Dated this the 13th day of February, 2026
ORDER
Accused Nos.13 and 14 in C.C.No.36/2010 on the files of the
Enquiry Commissioner and Special Judge, Kottayam are the petitioners
herein and they seek quashment of Annexure A1 final repot in Crime
No.6/1998/KTM (33) VACB, Kottayam, and C.C.No.36/2010.
2. Heard the learned counsel for the petitioner and the
learned Special Public Prosecutor in detail. Perused the records.
3. As per the final report, the prosecution alleges as under:
"That A1 being secretary, A4 being the president
and A5 to A10 being members of Board of Directors and All
being the Administrator of the Elangulam Service Co-
operative Bank Ltd No 3576, Koorali (ESCB, Koorali) and as
such being public servants in their official capacity by abusing
their official position, entered into criminal conspiracy with
A12, A13 and A14 with intention to misappropriate the funds
of the said Bank and in furtherance of their criminal
conspiracy Al, A4, A5 to A10 dishonestly and fraudulently
resolved to pay Bill Discount advance (BDA) and Amended the
Byelaw without the sanction of the Joint Registrar of Co-
operative societies, Kottayam and A2 and A3 being the
Managers of the said Elangulam Service Cooperative bank Ltd
No 3576 joined the conspiracy, hatched by Al, A4 to A10 and
A12 and in furtherance of the said conspiracy A1, A2 and A3
illegally paid BDA No 3278-96-97 for 7,50,000/- and BDA
3279/96-97 for 6,79,370/25 on 31/3/97 by falsifying the
accounts and records of the Bank by recording cheque
No.21388 of Bank of Baroda, Kottayam Branch and cheque
No.268230 of SBI, Thidanadu Branch respectively purported
to issue to A12 and disbursed the said amounts to A12 and did
not presenting the cheque in the Banks concerned for
collection as if those would appear as a payment effected by
discounting the said cheques to A12. All illegally given
membership to A13 who is residing out the service area of the
Bank and A13 was sanctioned illegal C C loan No.455/96-97
for 4 lakhs by A4 to A10 and A1, A2, A3 paid the loan amount
to A13. Similary A14 was sanctioned illegal C C Loan
No.456/96-97 for Rs. 5 lakhs by A4 to A10 and A1, A2, A3 paid
the loan amount to A14. The total amount of the above two
BDA's and 2 CC loans of Rs.23,29,370/25 was used for
closing BDA No. 99/96-97, 101/96-97, 1614/96-97 and
1716/96-97 availed by A3 and BDA 100/96-97 availed by
Sri.M.R Somarajan and BDA No 1489/96-97, 1490/96-97,
1847/96-97, 2746/96-97, 2789/96-97, 2949/96-97 and
3087/96-97 availed by Sri Varkey George and for paying
additional share of A14 and thereby all the accused
dishonestly and fraudulently misappropriated an amount of
Rs.23,29,370/25 on 31/3/97 and by this committed criminal
misappropriation, cheating, falsification of accounts,
conspiracy and criminal misconduct punishable U/s 13(2) r/w
13(1) (c) and (d) of PC Act ,1988 and sec.409, 420, 477A and
120 В IPC."
4. The learned counsel for the petitioners submitted that as
per the final report, the allegation against the petitioners is that accused
No.11 illegally given membership to the 1 st petitioner/accused No.13, who
is residing out of the service area of the Elamgulam Service Co-operative
Bank, Koorali (hereinafter referred to as 'Bank' for short) and also granted
CC loan of Rs.4 lakh. Similarly, the allegation against the 2 nd
petitioner/accused No.14 is that in the same way A4 to A10 granted CC
loan of Rs.5 lakh to the 2nd petitioner/accused No.14, who also is a resident
out of the service area of the Bank. According to the learned counsel for
the petitioners, when the petitioners applied for loan after providing
security, the Bank sanctioned the loan, after ensuring its repayment on
production of sufficient security and execution of Gahan in favour of the
Bank. It is submitted further that after availing the loan, the loan amounts
including the interest were repaid. Thereafter documents of the petitioners
were also returned to the petitioners after releasing the gahan executed in
favour of the Bank. Thus, the allegation of the prosecution that the
petitioners, who reside outside the service area of the Bank, availed
pecuniary benefits on the strength of the loan granted to them, is baseless.
It is also submitted that no loss sustained to the Bank, or no illegal
pecuniary advantage derived by the petitioners. Therefore, the contention
that the petitioners have committed the alleged offences are without
support of any prosecution records. Therefore, the prayer for quashment is
liable to be allowed.
5. The learned counsel appearing for the additional 2 nd
respondent, the Bank, filed a statement through its present Secretary
narrating the events leading to the registration of this case.
6. The learned Special Public Prosecutor, though supported the
allegations in the final report, failed in his endeavour to justify whether
any illegal pecuniary advantage was obtained by the petitioners, or by any
other accused, as alleged by the prosecution.
7. On the crux of the matter, it could be seen that a
complaint was lodged by P.A.Sebastian who was a resident of third ward
of Elamgulam Panchayat and also President of Elamgulam panchayat
during the year 1998 along with 26 members of the Bank complaining that
though the Bank, which is intended to function within the territorial limits
of the Elamgulam panchayat confined to ward Nos.1,2,9 and 10, instead of
giving loan to those who are residing therein, had given loans to 40% of
the members who are the residents beyond the area of the Bank and
to 20% persons outside the territorial limits of Elamgulam panchayat
and even outside the Kottayam district. This is the base on
which investigation was proceeded and final report as extracted herein
above was filed.
8. On reading the entire case, as far as the petitioners are
concerned, they had applied for the loans before the Bank and the same
were granted on getting sufficient securities to ensure its realisation on
default in repaying the loans. Then the petitioners timely repaid the loan
and the liability was closed. Annexure A8 is the release deed dated
13.03.2014 executed by the President of the Bank in favour of the 2 nd
petitioner and Annexure A7 is the letter pertaining to the 2 nd petitioner.
Similarly, Annexure A9 is the letter issued in relation to the 1st petitioner
and Annexure A10 is the release deed executed in favour of the 1st
petitioner after closure of the loans. Thus it emerges that the petitioners
herein availed loans when the same were sanctioned by the Bank on
getting security for realisation of the loans in the event of default.
Thereafter, the petitioners properly repaid the loans and the entire liability was
closed. In such a case, how it could be found that there is
misappropriation or pecuniary loss to the Bank or any other person,
particularly, when the prosecution has no case that any members of the
Bank were denied loans for diverting and granting of the money meant
for loans in favour of the petitioners and those who are not residing
within the service area of the Bank. When a Co-operative Society/
Bank grants loan to a person outside its service area, that may be
considered as an improper action, but the same by itself would not attract
any offences. Thus on the facts discussed above, none of the offences
alleged against the petitioners would attract prima facie. In such a case, it
is not justifiable to find that the petitioners herein committed the offences
punishable under Sections 13(2) r/w 13(1) (c) and (d) of PC Act, 1988 and
Sections 409, 420, 477A and 120 В of IPC, prima facie, to proceed with
trial. Hence the entire prosecution against them is liable to be held as an
abuse of the process of the court.
9. Holding so, this petition is allowed. As a sequel thereof,
Annexure A1 final report and the case pending as CC 36/2010 on the files
of the Enquiry Commissioner and Special Judge, Kottayam, as against the
petitioners stand quashed.
Registry is directed to forward a copy of this order to the
jurisdictional court for information and compliance.
Sd/-
A. BADHARUDEEN, JUDGE
rtr/
APPENDIX OF CRL.MC NO. 7858 OF 2025
PETITIONER'S ANNEXURES
Annexure A1 TRUE COPY OF THE FINAL REPORT IN FIR NO VC
6/98/KTM (33), WHICH IS NOW PENDING AS CC NO.
36/2010 ON THE FILES OF THE COURT OF ENQUIRY
COMMISSIONER & SPECIAL JUDGE, KOTTAYAM.
Annexure A2 TRUE COPY OF CRL.M.P NO 2018 OF 2017 IN C.C.
NO. 36/2010 SUBMITTED BY THE PETITIONERS U/S
239 OF THE CODE OF CRIMINAL PROCEDURE.
Annexure A3 TRUE COPY OF THE ORDER DATED 29/01/2024 IN
CRL.M.P NO 2018 OF 2017 IN C.C. NO. 36/2010
OF THE COURT OF ENQUIRY COMMISSIONER &
SPECIAL JUDGE, KOTTAYAM.
Annexure A4 TRUE COPY OF THE ORDER DATED 04/04/2019 IN
CRL R.P. NO. 948 OF 2018 AND CONNECTED CASES.
Annexure A5 TRUE COPY OF THE ORDER DATED 04/11/2019 IN
CRL M.C. NO. 6345 OF 2019 AND CONNECTED
CASES.
Annexure A6 TRUE COPY OF THE ORDER DATED 26/10/2023 IN
CRL M.C. NO. 4479 OF 2020 AND CONNECTED
CASES.
Annexure A7 TRUE COPY OF THE LETTER DATED 13/03/2014 SENT
BY THE SECRETARY OF THE BANK TO THE PRESIDENT
OF THE BANK.
Annexure A8 TRUE COPY OF THE RELEASE DEED DATED
13/03/2014 EXECUTED BY THE PRESIDENT OF THE
BANK.
Annexure A9 TRUE COPY OF THE LETTER DATED 09/01/2025 SENT
BY THE SECRETARY OF THE BANK TO THE PRESIDENT
OF THE BANK.
Annexure A10 TRUE COPY OF THE RELEASED DEED DATED
13/01/2025 EXECUTED BY THE PRESIDENT OF THE
BANK.
Annexure A11 TRUE COPY OF THE JUDGMENT DATED 18/02/2025 IN
CRL.M.C. NO.1060/2024.
Annexure A12 TRUE COPY OF REPLY DATED 09/03/2009 SENT BY
THE INFORMATION OFFICER, ELANGULAM SERVICE
CO-OPERATIVE BANK LTD NO. 3576.
RESPONDENT'S ANNEXURES
Annexure R2(a) True copy of the loan application dated
31.03.1997.
Annexure R2(b) True copy of the application dated
09.01.2025.
Annexure R2(c) A photocopy of the loan application submitted
by the 2nd petitioner.
Annexure R2(d) A true photocopy of the mortgage deed.
Annexure R2(e) A true copy of ledger entry dated 13/03/2014.
