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Kerala High Court
Sony vs State Of Kerala on 29 January, 2026
2026:KER:7400
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
THURSDAY, THE 29TH DAY OF JANUARY 2026 / 9TH MAGHA, 1947
BAIL APPL. NO. 354 OF 2026
CRIME NO.VC-01/2024 OF VACB, THIRUVANANTHAPURAM, Thiruvananthapuram
AGAINST THE ORDER DATED 20.12.2025 IN CRMC NO.3490 OF 2025 OF
SESSIONS COURT, THIRUVANANTHAPURAM
PETITIONER/4TH ACCUSED:
SONY
AGED 48 YEARS
S/O.KARUNAKARAN, RESIDING AT SNRA 85 A, SHIVASAKTHI
NAGAR, AAKKULAM P.O.,CHERUVAKKAL VILLAGE,
THIRUVANANTHAPURAM DISTRICT, PIN - 695017
BY ADVS.
SRI.G.P.SHINOD
SHRI.AJIT G ANJARLEKAR
SRI.GOVIND PADMANAABHAN
SHRI.ATUL MATHEWS
SMT.GAYATHRI S.B.
RESPONDENTS/STATE AND INVESTIGATING OFFICER:
1 STATE OF KERALA
REPRESENTED BY ITS PUBLIC PROSECUTOR, HIGH COURT OF
KERALA, ERNAKULAM, PIN - 682031
2 INSPECTOR OF POLICE
VIGILANCE AND ANTI-CORRUPTION BUREAU, SIU-1, POOJAPURA,
THIRUVANANTHAPURAM DISTRICT, PIN - 695012
BY SPL.PUBLIC PROSECUTOR SRI.RAJESH.A,
SR.PUBLIC PROSECUTOR SMT.REKHA.S
THIS BAIL APPLICATION HAVING COME UP FOR ADMISSION ON
23.01.2026, THE COURT ON 29.01.2026 PASSED THE FOLLOWING:
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ORDER
Dated this the 29th day of January, 2026
The 4th accused in Crime No.VC-01/2024/SIU-1 of the
Vigilance and Anti Corruption Bureau, Poojapura, registered on
09.02.2024, is the petitioner herein.
2. Heard the learned counsel for the petitioner and the
learned Special Public Prosecutor. Perused the records.
3. The prosecution case is that the Mayor of
Thiruvananthapuram Corporation lodged a complaint alleging
misappropriation of funds by the accused involved therein and
accordingly, Crime No.721/2022 of Museum Police Station was
registered alleging commission of the offences punishable under
Sections 468 and 471 r/w 34 of the Indian Penal Code (for short,
'the IPC' hereinafter). Thereafter, the investigation was taken over
by the VACB, since Prevention of Corruption Act offences also
found involved. Now, the prosecution alleges commission of
offences punishable under Sections 409, 420, 468, 471 and 120B
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r/w 34 of the IPC as well as under Section 13(1)(a) r/w 13(2) of the
Prevention of Corruption Act, 1988. The allegations, as per the
FIR, in brief disclose that the 1 st accused, while working as
Industries Extension Officer (IEO) under the Corporation of
Thiruvananthapuram, was responsible for implementing
development schemes and was entrusted with the authority to
grant loan subsidies to women belonging to the Scheduled Caste
category as the implementing officer of the project. He was also in
charge of receiving applications and granting benefits to members
of Scheduled Caste women's groups. The 1 st accused, in criminal
conspiracy with others, fraudulently acted upon forged documents
produced by accused Nos.2 to 20, used the same as genuine, and
misappropriated funds by creating false records, manipulating the
list of eligible beneficiaries under the scheme, and disbursing
subsidies to fake beneficiaries who were not entitled to receive any
benefits during the financial year 2021 - 2022. Despite having
knowledge that the documents were fabricated, the 1 st accused
misused his official position and conspired with the other accused
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with the intention of securing unlawful gain for them. It is alleged
that they misappropriated a total sum of ₹24 Lakh, thereby causing
corresponding loss to the Government and unlawful gain to
themselves. Thus, the prosecution alleges commission of the above
offences by the accused.
4. According to the learned counsel for the petitioner, the
petitioner is innocent. It is further submitted that the Industries
Extension Officer (IEO), through a letter, instructed the 4 th accused
to adjust the subsidy amounts against the loans availed by the
beneficiary groups, wherein it is stated that "we have released the
subsidy amount of ₹1,17,00,000/- (Rupees One Crore Seventeen
Lakhs only) to the following groups as per the loan sanction letter
given by your bank. The bank can adjust this subsidy amount as
per the bank norms ......" (Annexure R1(a)). The learned counsel
also submitted that the petitioner was arrested along with other
accused and produced before the learned Special Judge, but the
learned Special Judge set them free finding that the arrest was not
in accordance with law. It is further submitted by the learned
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counsel for the petitioner that the petitioner is ready to co-operate
with the investigation and he had no role in this crime and what he
had done is his official duty and therefore, he deserves anticipatory
bail.
5. The learned Special Public Prosecutor strongly opposed
bail and submitted that in this case, the involvement of the
petitioner by transferring the amount in the name of groups as
instructed by the 1st accused and sudden transfer of the same in the
name of the 2nd accused, which in fact, a fake firm so as to facilitate
misappropriation could be gathered, prima facie. It was further
submitted that, in such circumstances, the grant of anticipatory
bail would impede the investigation, as arrest and custodial
interrogation are necessary for obtaining vital details to facilitate a
proper investigation involving a huge amount of ₹1.26 crore. In
addition to that, the learned Special Public Prosecutor placed the
statement of facts submitted by the Inspector of Police, VACB,
Poojapura, Thiruvananthapuram. Paragraph Nos.8 to 20 of the
same read as follows:
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"8. It is respectfully submitted that, during the course of
investigation, it was further revealed that under Project
Nos. SO.38/21 and 1054/21 of the Thiruvananthapuram
Corporation, the accused are alleged to have
misappropriated a total sum of Rs. 1.26 crores. Loans were
granted to ineligible women who were not included in the
list of beneficiaries approved by the Corporation Council,
and without verifying the authenticity of the documents
submitted by them. In violation of the procedures and
guidelines of the scheme, the accused, by abusing their
official position, dishonestly and fraudulently committed
criminal misappropriation and breach of trust. By forging
documents and using such forged documents as genuine,
they granted subsidies to illegal beneficiaries.
Subsequently, the officials caused the disappearance of
documents by willfully misplacing the original records
from the relevant file, which facilitated the issuance of loan
subsidies. As a result, the Government sustained a
wrongful loss of Rs. 1.26 crores and the accused obtained a
corresponding unlawful gain and thus thereby committed
the aforementioned offences.
9. It is respectfully submitted that the present petitioner is
arrayed as Accused No. 4 (A4) in the ongoing
investigation. During the relevant period, he was serving
as the Manager of the Pattom Service Co-operative Bank,
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Pattom Branch.
10. It is respectfully submitted that, before adverting to the
specific overt acts attributed to the petitioner/Accused No.
4 (A4), it is necessary to set out a brief summary regarding
the implementation of the project.
11. It has been revealed during the investigation that as
part of the five-year plan, under the subcategory of
"People's Planning," local economic development aims to
promote small-scale industries has been stated. For this
purpose, groups of SC women with an income of less than
five lakh rupees are provided with a subsidy of maximum 3
lakh rupees per JLG group (Joint Liability Group) at an
85% subsidy rate, from the Corporation Development
Fund, which is directly credited as subsidy into the JLG
group's loan account and it should be held as back ended
subsidy in bank.
12. It is submitted that the various projects implemented by
the Thiruvananthapuram Corporation for the upliftment of
people are related with industrial self-employment
ventures. Therefore, the officer responsible for executing
these projects are the Industries Extension Officer. This
officer is appointed to the corporation by the Industries
Department. The working method of the Industries
Extension Officer involves reviewing the applications
submitted by beneficiaries included in the beneficiary list
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approved by the Corporation Council, interviewing the
beneficiaries in each group, physically verifying whether
the group ventures were started and implementing the
project based on the eligibility criteria fixed by the
government (G.O (MS) No 22/2018 LSGD, dated
14.02.2018).
13. As per Project No. SO-38/2021 of Thiruvananthapuram
Corporation, an amount of Rs.99 lakhs was spent during
the financial year 2021-22, by distributing Rs.3 lakhs each
to 33 groups. Similarly, under Project No. SO-1054/2021,
an amount of Rs.27 lakhs was spent during the financial
year 2021-22, by distributing Rs.3 lakhs each to 9 groups.
Thus, a total of Rs.1.26 crores was expended, distributing
Rs.3 lakhs each to 42 groups. During investigation, it was
revealed that the responsibility for proper monitoring of
project implementation lies with the implementing officers.
As per Serial No. 2.8 of the guidelines contained in G.O.
(Ms.) No. 22/2018/LSGD dated 14.02.2018 of the LSG (DA)
Department, the implementing officer is required to
personally verify and ensure the proper execution of the
project, and only thereafter transfer the subsidy amount to
the respective bank accounts. It has further come to light
during investigation that the groups were identified and
selected by the then Industries Extension Officer, Sri
Praveenraj (A1), without conducting interviews with the
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beneficiaries of each group, without verifying the
authenticity of the documents, and without physically
verifying whether the group ventures had commenced or
whether they had availed any bank loan for starting the
ventures, etc.
14. It is submitted that as project implementation officer, it
is the 1st accused who selected the beneficiaries illegally as
part of the criminal conspiracy with A2 Sindhu (former SC
Promoter Thiruvananthapuram Corporation, A3 in VC
06/2025/SIU-1) and A3Ajitha (A4 in VC 06/2025/SIU-
1)which paved the way for the transaction of the
government money to the SB accounts of the JLGs who
were not listed in the authorized beneficiary list of the
Thiruvananthapuram Corporation. On the contrary, the
beneficiaries in various JLGs of the Thiruvananthapuram
Corporation are not matching with the beneficiaries of the
respective groups in the Bank. It is for the implementing
officer to ensure that the projects are properly monitored,
verified, whether loans were given by the bank and the
group ventures have been initiated or not. A1 was duty-
bound to personally verify and ascertain whether the Joint
Liability Groups (JLGs) were functioning properly,
whether the previously implemented portion of the scheme
was progressing on the right track, and whether the
projects were ongoing. The subsidy amounts should be
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transferred to the respective bank accounts only after such
verification. However, A1, illegally transferred the subsidy
amounts without conducting the required verification. It is
the duty of the Implementing Officer to ensure that the
projects are active and progressing before releasing any
subsidy. A1 failed to fulfill this obligation and sanctioned
subsidies to 42 JLGs without confirming the operational
status of their ventures, thereby causing financial loss to
the Government.
15. It is respectfully submitted that the petitioner/Accused
No. 4 (A4) was serving as the Manager of the Pattom
Service Co-operative Bank, Pattom Branch, at the time of
the commission of the crime. All forty-two beneficiary
groups had opened accounts at the said branch. The
Industries Extension Officer (IEO), through a letter,
instructed A4 to adjust the subsidy amounts against the
loans taken by the beneficiary groups. The wording of the
said letter reads as follows: "We have released the subsidy
amount of Rs. 1,17,00,000/- (Rupees One Crore Seventeen
Lakhs only) to the following groups as per the loan
sanction letter given by your bank. The bank can adjust
this subsidy amount as per the bank norms.... ." (Annexure
R1(a)). Out of the thirty-four groups that were granted
subsidy under this letter, nineteen groups are included in
the present project. The petitioner/A4, despite knowing
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that no loan had been granted to any of the groups,
illegally transferred the subsidy amounts to the accounts of
the said groups. Thereafter, the petitioner/A4 took steps to
transfer the subsidy amounts from the accounts of the
groups to the account of the firm "Aswathy Suppliers,"
owned by Accused No. 2 (A2). This act was in violation of
the instructions issued by the Corporation. Further, the
petitioner/A4, in writing, informed the Secretary of the
Pattom Service Co-operative Bank to transfer the entire
subsidy amount to the account of Aswathy Suppliers,
purportedly at the request of the groups. One such instance
of the petitioner's letter to the Secretary is produced
herewith as Annexure R1(b). Through this illegal act of A4,
public funds were diverted and reached the hands of
undeserving persons.
16. It was further revealed that these 42 groups had not
availed any loans from the banks. With a common intent to
obtain unlawful gain for himself and for others, they
entered into a criminal conspiracy and thereby
misappropriated the Government money by releasing it to
the Banks in which JLGs had opened only SB accounts,
based on the fraudulent documents and against the existing
government procedures and guidelines. This resulted in the
transfer of money from Thiruvananthapuram Corporation
into the hands of the fake beneficiaries who had only
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opened SB accounts in the bank and later into the hands of
A2 Sindhu through her firm named Aswathy suppliers. The
investigation revealed that there was no such firm and was
actually a paper created one for the alleged purpose.
17. It is respectfully submitted that, upon verification of the
Scheduled Caste certificates produced by the beneficiaries,
it was revealed that all such certificates were found to be
fake, and the involvement of the Industries Extension
Officer (A1) in the said forgery cannot be ruled out.
Further, on cross-verification of the beneficiary list of the
Joint Liability Groups (JLG), the documents of
beneficiaries available in the Corporation records, and the
savings bank account opening documents of the JLG
furnished by the bank, it was found that the members who
opened savings bank accounts in Pattom Service Co-
operative Bank were not the persons included in the
approved beneficiary list.
18. As the project implementing officer it is the duty of the
IEO to verify the genuineness of the records and the
members of the JLGsin accordance with the GO (MS)
22/2018/LSGD dated 14.02.2018. As per the GO (MS)
17/2018/LSGD dated 02.02.2018, if ineligible persons are
included in the beneficiary list or eligible candidates have
been excluded, the matter shall be examined on the basis of
the facts and the order of priority can be changed and the
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ineligible candidates can be removed and eligible
candidates can be included by the Implementing Officer.
This proves that the implementing officer can change the
beneficiaries in the approved list of the Corporation if they
are found ineligible.
19. The contention that the acts committed by the
petitioner/A4 were merely part of his official duty, and
that he had duly discharged such duty, is not borne out by
facts and is therefore denied. The investigation has
revealed that the loan sanction letters of the Joint Liability
Groups (JLGs) were improperly handed over to Accused
Nos. 2 and 3 (A2 and A3) by the bank authorities (A4),
instead of being forwarded through the prescribed channel.
A2 and A3 subsequently submitted these letters to the
Corporation. Accused No.1 (A1), being the Implementing
Officer and duty-bound to verify the authenticity of such
documents, failed to conduct any verification. Despite
being fully aware that the receipt of loan sanction letters
through A2 and A3 was irregular, particularly in a matter
involving substantial Government funds, A1 and A4
bypassed the prescribed guidelines and accepted the said
documents from A2 and A3. Furthermore, A4, who was
fully aware of the instructions issued by the Corporation
through Annexure R1(a)-specifically that the bank could
only adjust the subsidy amount as per bank norms, and
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also that no such loans had in fact been sanctioned-failed to
intimate the Corporation of these facts. Instead, A4 abused
his official position, adopted corrupt and illegal means,
and thereby facilitated the transfer of Government funds to
accounts of fictitious beneficiaries, which were later
diverted into the hands of A2 through her firm, a non-
existent entity. The acts of A4 thus enabled large-scale
misappropriation of Government money.
20. A1, the implementing officer, who was entrusted with
the implementation of the government projects, and A4 the
Bank Manager, being public servants who were duty
bound to act in accordance with the government
guidelines, issued from time to time, violated the same and
colluded with private persons with the common intention
to misappropriate the government fund."
The learned Special Public Prosecutor also placed decision of this
Court in Praveen Raj v. State of Kerala reported in [2025
KHC OnLine 949] whereby the 2nd accused moved for pre-arrest
bail before this Court and this Court dismissed the bail plea and
footing of the 4th accused/petitioner herein also is similar to that of
the 2nd accused and therefore, no different view is warranted in the
present case.
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6. On perusal of the prosecution case, on par with the
arguments tendered from both sides, the specific allegation against
the petitioner herein is that the petitioner while working as the
Manager of the Pattom Service Co-operative Bank opened accounts
in the name of all 42 beneficiary groups in the said branch acting
on a letter given by Industries Extension Officer (IEO). Thereafter,
the 4th accused, despite having knowledge that no loan had been
granted to any of the groups, illegally transferred the subsidy
amounts to the accounts of the said groups and also moved steps to
transfer the subsidy amounts on the accounts at the groups to the
account of the firm by name "Aswathy Suppliers" owned by the 2 nd
accused in violation of the instructions issued by the Corporation.
Further, the petitioner in writing informed the Secretary of Pattom
Co-operative Bank to transfer the entire subsidy amount to the
account of Aswathy Suppliers purportedly at the request of the
groups and Annexure R1(b) is the letter so produced. Thus, the
prosecution allegation is that the 4th accused, having knowledge of
the instructions issued by the Corporation,
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failed to intimate the Corporation regarding the factual position
and thereby, abused his official position and facilitated the transfer
of Government funds to the accounts of fictitious firms, which were
authored by the 2nd accused. Thus, the misappropriation is, in fact,
on a large scale.
In such view, the grant of pre-arrest bail could not be granted.
Therefore, the application for pre-arrest bail is liable to be
dismissed.
In the result, this bail application stands dismissed.
Sd/-
A. BADHARUDEEN
JUDGE
Bb
