Advocates Prabhu K. N., Satheesh Mohanan, Athul Soman Thekkedath and Christo Simon were appearing for the petitioners, and Sreeja V. (Senior Public Prosecutor), K. A. Noushad (Senior Public Prosecutor) and Shiba M. Samuel for the respondents.
In a case arising from alleged misuse of a visually impaired man’s pledged documents, the High Court granted pre-arrest bail to accused bank employees but refused the same to the complainant’s brother, holding that his custodial interrogation was necessary.
Court’s Decision
Justice Dr. Kauser Edappagath of the Kerala High Court has granted pre-arrest bail to accused Nos. 1 to 5, who are employees of a service co-operative bank, while declining the same relief to accused No.6, the brother of the de facto complainant, in Velayi K. V. v. State of Kerala, B. Appl: Nos. 14710 and 14245 of 2025. Justice Dr. Kauser Edappagath passed the order on March 13, 2026, in connection with Crime No.1216/2025 of Mala Police Station, Thrissur District.
Case Background
The applications were filed under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking pre-arrest bail. The applicants in B.A. No.14245/2025 were accused Nos.1 to 5, while the applicant in B.A. No.14710/2025 was accused No.6. The offences alleged in the crime are punishable under Sections 406, 409, 420, 463, 465, 468 and 120B read with Section 34 of the Indian Penal Code.
According to the prosecution, accused Nos.1 to 6 conspired to misuse documents pledged by the defacto complainant in 2009 before the Vennur Service Co-operative Bank, Meladur Branch, and obtained a loan of Rs.31,50,000 in his name without his knowledge or consent. The prosecution alleged that the amount was then misappropriated.
Submissions Before the Court
Counsel for the applicants argued that the accused were innocent and had been falsely implicated. It was submitted that no material on record connected them with the alleged crime and that they were therefore entitled to bail. On the other side, the Senior Public Prosecutors submitted that the incident formed part of the applicants’ intentional criminal acts and that releasing them on bail at that stage would affect the investigation.
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Court’s Assessment of the Materials
The Court noted that the defacto complainant is blind and that accused No.6 is his brother. It recorded that the documents produced in B.A. No.14245/2025 showed that five loans were availed in the complainant’s name in the years 2009, 2010, 2013, 2015 and 2016. However, the complainant’s case was that he had availed only two loans, in 2009 and 2015, and that both had already been repaid. He alleged that, because he was blind, accused No.6 was managing his affairs and misused that position in collusion with bank employees to avail further loans and cause him loss.
The Court further noted that the documents produced by accused Nos.1 to 5 prima facie showed that the loans availed in 2009, 2010 and 2015 had been closed. It also recorded that ARC proceedings in relation to the 2013 loan were still in force, and that ARC proceedings concerning the 2016 loan had ended in a decree on March 30, 2023, after which the present crime came to be registered.
Why Bail Was Granted to Accused Nos.1 to 5
Justice Dr. Kauser Edappagath held that, based on the investigation conducted so far and the materials available on record, there was nothing to show that accused Nos.1 to 5, the bank employees, had any role in the crime as alleged by the defacto complainant. The Court found that their custodial interrogation did not appear necessary and held that they could be granted pre-arrest bail.
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Why Bail Was Refused to Accused No.6
As regards accused No.6, the Court observed that none of the loan documents produced by accused Nos.1 to 5 showed him as a party, and that the documents then on record did not indicate his role in the five loans allegedly availed by the complainant. Even so, the Court noted that the defacto complainant had made a definite allegation that, being blind, he had entrusted his affairs to his brother, who misused that position and, in collusion with bank authorities, re-pledged documents that had already been pledged in 2009 for the first loan, obtained money from the bank, and misappropriated it. In those circumstances, the Court held that interrogation of accused No.6 was necessary.
Final Directions
The High Court directed that accused Nos.1 to 5 be released on bail in the event of arrest on executing a bond of Rs.1,00,000 each with two solvent sureties each for the like sum. It also imposed conditions requiring them to cooperate with the investigation, submit to deemed police custody for discovery if demanded, appear before the investigating officer every Saturday between 10.00 a.m. and 11.00 a.m. until further orders, refrain from committing similar offences, avoid contacting prosecution witnesses or tampering with evidence, and not leave Kerala without the permission of the trial court. The Court also directed that any application for deletion or modification of bail conditions, or for cancellation of bail on the ground of violation, be moved before the jurisdictional court.
In respect of accused No.6, the Court directed him to appear before the Investigating Officer within a week and submit to interrogation. It further ordered that, if he is arrested after interrogation, he must be produced before the jurisdictional court without undue delay. The Court added that if accused No.6 files a bail application upon such production, the jurisdictional court shall consider it, preferably on the same day, in accordance with law, with advance copy to the Prosecutor.
Case: Velayi K. V. v. State of Kerala, B. Appl. No. 14710, 14245 of 2025
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