IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.RAMKUMAR TUESDAY, THE 31ST DAY OF MARCH 2009 / 10TH CHAITHRA 1931 Bail Appl..No. 1029 of 2009() ----------------------------- CBCID CRIME NO.231 OF 2008 .................... PETITIONER --------- SABARINATH, S/O.RAJAN, SABARI NIVAS KODANGAVILA SARADHA NIVAS, ADIYANNUR VILLAGE NEYYATTINKARA TALUK. BY ADV. SRI.S.RAJEEV RESPONDENT(S): --------------- STATE OF KERALA REP. BY PUBLIC PROSECUTOR HIGH COURT OF KERALA,ERNAKULAM (CB CID CRIME NO 231 OF 2008) PUBLIC PROSECUTOR SRI. SURESH C.K. THIS BAIL APPLICATION HAVING BEEN FINALLY HEARD ON 27/03/2009, ALONG WITH BA NO. 1031 OF 2009 THE COURT ON 31-03-2009 PASSED THE FOLLOWING: V. RAMKUMAR, J. ........................................ B.A. Nos. 1029 AND 1031 OF 2009 ............................................ Dated: 31-03-2009 ORDER In these petitions filed under Sec. 439 Cr.P.C. the common petitioner who is the first accused in CBCID Crime Nos. 231/CR/Tvpm/08 and 223/CR/Tvpm/08 respectively, seeks his enlargement on bail. He was arrested in connection with Crime No. 169/CR/Tvpm/08 on 1-9-2008. His formal arrest in these two cases was recorded on 27-1-2009. 2. In Crime No. 231/CR/Tvpm/08 the offences involved are those punishable under Sections 120B, 406, 409, 415, 418 and 420 read with Sec. 34 I.P.C. In Crime No. 223/CR/Tvpm/08 the offences involved are those punishable under Sections 120B, 406, 409 and 420 read with Sec. 34 I.P.C. 3. The case of the prosecution in Crime No. 231/CR/Tvpm/08 is as follows:- A1 (Sabarinath-the petitioner herein) with the assistance B.A. Nos. 1029 AND 1031 OF 2009 -:2:- of his father (Rajan) (A4) started an establishment by name Nest Investment Solutions in Mundakkal Arcade near Medical College, Thiruvananthapuram on 30-04-2007. The said establishment was got registered with the Registrar of Firms at Vanchiyoor on 13-09-2007. Subsequently under the cover of the said establishment certain sister concerns by name “I Nest“ at West Fort, Tatal 4 You at Capital Centre, Statue and S.J.R. Group at Palayam in Thiruvananthapuram were also started by them. A2 (Bindu Mahesh) was the Manager , A5 (Rahul) was the business Development Officer and A6 (Sanal) was the sales staff in Nest Investment Solutions. A7 (Bindu Suresh) and A8 (Adheela Beevi) were holding managerial posts in the sister concerns and A3 (Hemalatha) was looking after the accounts in the aforementioned concerns. On 24-12- 2007, A2 Bindu Mahesh and A7 Bindu Suresh had entered into an agreement with A1 Sabarinath to fetch deposits worth Rs. 30,00,000/- per month. Pursuant to the criminal conspiracy hatched by the accused, prospective investors were allured by holding out promises that the establishment run by A1 had the permission from the NBFC-ND of the Reserve bank of India and that interest rates higher than other B.A. Nos. 1029 AND 1031 OF 2009 -:3:- similar establishments were being paid since deposit amounts were invested in commodities and shares and that the depositors would be getting insurance coverage from Met Life Insurance Company. On 12-7-2008 the de facto complainant Jayanthan was induced to invest a sum of Rs. 5,00,000/-, a further sum of Rs. 1,00,000/- on 27-8-2008 and another sum of Rs. 1,5 lakhs on 8-8-2008. Consequent on the breach of promise committed by A1 and others when the complainant demanded the promised interest and the principal amount deposited, the same was refused by the accused persons who had misutilised the funds received from the complainant and others, for other personal gains of the accused. 4. The case of the prosecution in Crime No. 223/CR/Tvpm/08 can be summarised as follows:- There are altogether nine accused persons in this case. They are:- A1 Sabarinath A2 Bindu Mahesh A3 Rajan A4 Adhila Beevi A5 Vinodh B.A. Nos. 1029 AND 1031 OF 2009 -:4:- A6 Beneef A7 Chandrika A8 Feni Felix and A9 Bindu Suresh On 6-8-2008 the accused persons in furtherance of the criminal conspiracy hatched by them with a view to cheat the investors and thereby make unlawful gains therefrom, induced the de facto complainant Sajeevan to deposit Rs. 1,00,000/- in the concern by name Nest Investment Solutions near the Medical College, Thiruvananthapuram and thereby committed criminal breach of trust and cheating by not paying the interest or the principal amounts as promised earlier. 5. I heard Adv. Sri. S. Rajeev, the learned counsel appearing for the common petitioner and Sri. C.K. Suresh, the learned Public Prosecutor appearing for the State. 6. The learned counsel appearing for the common petitioner made the following submissions before me in support of his request for bail:- The petitioner who is aged 20 years has an excellent track record in his academic career. He is a good sportsman B.A. Nos. 1029 AND 1031 OF 2009 -:5:- and gifted with varied talents. He was working as an agent in Met Life Insurance. Using his skill he decided to conduct a financial firm and collected amounts from various customers and invested a portion of the amounts in Met Life Insurance, a portion in share business and a portion in real estate. Until his arrest he was never involved in any other crime nor was there any complaint from any of the subscribers. Unfortunately, at a time when the petitioner was away on a foreign trip, one Pramod siphoned off a sum of rupees four crores from the establishment of the petitioner. Since the said Pramod was a close confidant of the petitioner, he was not in a position even to file a complaint against the said Pramod for fear of damage to the reputation of the establishments floated by him. The act of betrayal by Pramod was committed at the instance of one Chandramathi who had worked as an agent in the petitioner's firm and who had later started a rival business and informed the petitioner's subscribers that they would not get their money from the petitioner. All on a sudden the customers of the petitioner barged into his establishment demanding their money back. Since no financial institution can withstand such a mass B.A. Nos. 1029 AND 1031 OF 2009 -:6:- claim, the petitioner had no other alternative except to court arrest and face the consequences. The total liability of the petitioner is only 9 crores and the petitioner has got assets of more than 10 crores now under the custody of the Court Receiver in a suit pending before the Sub Court, Thiruvananthapuram. The recession which is a global calamity is also a reason for the petitioner not being able to meet the unexpected demand from his customers. The petitioner is not going to flee from justice. His passport which was seized by the Medical College Police is presently in the custody of the Court of the Addl. Chief Judicial Magistrate, Thiruvananthapuram. If the petitioner is released on bail, he may be able to pay off his customers. 7. I am afraid that I cannot agree with the above submissions made in support of the petitioner's fervent request for bail. There are about 29 cases in which the petitioner is the common accused. Crime No. 231/CR/Tvpm/08 is the case re-registered by the Crime Branch Police (CBCID). The said Case arose out of Crime No. 252/08 of Kadakkavoor Polcie Station. Likewise, CBCID Crime No. 223/CR./Tvpm/08 arises out of Crime No. 287/Kadakkavoor B.A. Nos. 1029 AND 1031 OF 2009 -:7:- Police Station. Almost all the cases registered against the petitioner are at the instance of depositors who are alleged to have been duped by the petitioner and his associates. It was promising attractive returns that the petitioner and the other co-accused mobilised deposits totalling to more than Rs. 10 crores from various depositors. They are believed to have deceived more than 1200 depositors and after amassing the ill-gotten wealth, they allegedly went underground closing the establishments namely Nest Investment Solutions, I - Nest, S.J.R. Group and Total 4 You etc. The petitioner was heading all the fake institutions and he took an active part in inducing the depositors to make huge deposits in the establishments promising 30 to 50 percentage returns on their deposits. Bulk of the depositors who had deposited their money in Nationalised Banks for the purpose of the marriage of their daughters and allied purposes had withdrawn those deposits and deposited in the establishments of the petitioner expecting the high interest offered. The prime confidants of the petitioner namely, Chandramathi and Dr. Remani are still absconding. The petitioner started the fake institutions only one and a half years back. His father was a Class-IV employee B.A. Nos. 1029 AND 1031 OF 2009 -:8:- and his mother is a house wife in Neyyattinkara. His family has only 10 cents of property in Neyyattinkara which is a rural area. The initial version of the petitioner to the police was that he had secured COT recognition by canvassing policies worth Rs. 74 crores from the public. But on perusal of the records of Met Life Insurance it was found out that almost all the policy holders for whom the petitioner was the sponsor are either co-accused or suspects or even the Ext- staff of the petitioner and through them more than Rs. 1,15,36,296/- had already been remitted as premium amount. The policy holders of the petitioner in Met Life Insurance had told the police that they had furnished application forms for obtaining the policies in Met Life Insurance on the representation made to them by the petitioner that their premium amounts had already been remitted by the petitioner. The police are investigating into the Benami nature of the policies. The investigation thus far conducted by the Crime Branch Police has revealed that the petitioner had purchased 19 luxury Cars with the money fraudulently obtained from the general public. The following are the details of the Cars purchased by the petitioner:- B.A. Nos. 1029 AND 1031 OF 2009 -:9:- 1. A Maruthi Swift Car bearing Reg. No. KLO1 AK 35 from one Latheef for Rs. 6,40,000/-. 2. A Honda CRV with Register No. KL 20 A 1919 was purchased by the petitioner inhis name for Rs. 18,30,000/- in which Rs. 10,00,000/- was hire purchase loan from Kotak Mahindra Bank, Vellayambalam 3. A Skoda car bearing Reg. No. KL 20 A 11 was purchased in his name for Rs. 21,00,000/-. 4. A Lancer Cedia car bearing Reg. No. Klo1 AS 8002 was brought for another accused Lekshmi Mohan in her name for Rs. 9,00,000/- 5. A Wolswagen Beetle car bearing Reg. No. MP45 C 382 was brought from Ernakulam Vyttila fo Rs. 28,00,000/- ready cash. 6. Another Honda Accord car bearing Reg. No. KL07 At 2 was purchased for 8,25,000/-. 7. Another Maruthi Swift car bearing Reg. No. KL07 AT 2 was purchased for Rs. 8,25,000/- 8. Another Lancer Cedia Car with Reg. No. KL 20 8400 was purchased for Rs. 9,20,000/- and registered at Neyyattinkara RTO. B.A. Nos. 1029 AND 1031 OF 2009 -:10:- 9. A Nippon Toyotta Camry car with Reg. No. purchased in the name of the father Rajan who is another accused for Rs. 22,00,000/. 10. Another old model car by name Vanguard car with Reg. No. MDN 3567 was purchased from Salem for Rs. 70,000/- 11. A Tata Indica car bearing Reg. No. KL01 AP 6104 in the name of the petitioner was purchased from a private person for Rs. 2,80,000/- 12. A Honda Accorde with Reg. No. KL 39/Tem. New Registration (Temporary) was purchased for 19,00,000/- in the petitioner's name. 13. A Lexes Car with Reg. No. OL6C 3500 was purchased from one Raj Kumar for Rs. 11,00,000/- 14. A Mitzubishi Pajew car with Reg. No. KL 20 A 555 was purchased by the petitioner in his name for Rs. 16,30,000/- out of which s. 10,00,000/- is Hire purchase loan from HDFC. 15. A Skoda Loura car with Reg. No. KLO1 AS 2002 was purchased by the petitioner for Rs. 17,00,000/-. Rs.11,00,000/- is hire purchase loan from ICICI Bank , Statue Branch. B.A. Nos. 1029 AND 1031 OF 2009 -:11:- 16. The prestigious BMW car purchased in the name of the petitioner for Rs. 38,00,000/- 17. A Civic Car with Reg. No. KLO 5X007 was purchased for Rs. 9,30,000/- in the petitioner's name. 18. Another Innova car with Reg. No. KL01 AT 171 was purchased by the petitioner for Rs. 12,00,000/- and registered in the name of another accused Hemalatha. The car was in the possession of another prime accused Dr. Remani. 19. Another old model car by name Ford Anglier was purchased for Rs. 70,000/- from Salem. The investigation conducted by the Crime Branch Police has revealed that the petitioner had entered into agreements for purchase of landed properties paying huge amounts by way of advance utilising the money which the unsuspecting public had deposited with him after reposing implicit faith and confidence in him. The following are the details of those properties:- i) For taking over the company named Consumer Credit and B.A. Nos. 1029 AND 1031 OF 2009 -:12:- Hire purchase Limited the petitioner made an agreement with one M.A. Mathi of Koyencherry for Rs. 39,00,000/- in which Rs. 20,00,000/- was deposited at Dhanalekshmi Bank, Vazhuthacaud as fixed deposit and holded 91 % share of the said company. ii) The petitioner made agreement for the purchase of a 20 cent landed property at Kazhakuttam Attipra near the Highway and paid an advance of Rs. 30 lakhs. 3. The petitioner made an agreement with one Asharaf for purchasing 12 cents of landed property with a house for Rs. 1 crore 40 lakhs. Cheque amounting to Rs. 66 lakhs was paid. 4. The petitioner Sabarinath has given Rs. 85 lakhs as loan to one Sreekantan who was the NRUI Manager of Vazhuthacaud Dhanalekshmi Bank. 5. The petitioner Sabarinath has purchased another property with a house at Thiruvananthapuram Kalladi paying Rs. 28 lakhs. 6. The petitioner Sabarinath has given Rs. 23 lakhs to one Biju of Mavelikkara by closing an FD account in Vazhuthacaud Dhanalekshmi Bank and by transferring the same to Federal Bank and also gave to Biju gold worth Rs. 10 lakhs. The goild was received back and gave to Shyam. 7. The petitioner ventured to real estate by deceiving and B.A. Nos. 1029 AND 1031 OF 2009 -:13:- using the money of the people who has deposited in his fake financial institution. For one of the costly purchase of a landed property of 4 ½ acres in the name of his binami one Udayakumar. An agreement was made with the owner of the said property one Rajkumar for Rs. 4 ½ crore and advance of Rs. 63 lakhs was paid by the petitioner. The petitioner was proposing to construct flats in that property and sell it. 8. For purchasing another costly property of 7 acres 84 cents at Pidaram near Thirumala, an agreement was made for Rs. 3 crore 95 lakhs between the petitioner and the owner of the said property one D.N. Nair. An advance of Rs. 1 crore 10 lakhs was paid as advance by the petitioner. The construction works of villas including a Tourism club and a car club was estimated at Rs. 1 crore 13 lakhs. Investigation has revealed that construction works were progressing before reporting of the case. 9. The petitioner made another agreement for the purchase of a 9 cent land along with a house for Rs. 1 crore 40 lakhs in Thiruvananthapuram Vattiyoorkavu junction and for the same he paid Rs. 72 lakhs as advance. 10. Alleppey Kuttanadu was another destination where the petitioner spend the money of them illegally and choose to purcahse and take over a resort by name Senic Villa in a 1 acre 25 cent land from an NRI with regard to the purchase he made an agreement for Rs. 1 crore 80 lakhs and paid an advance of 50 lakhs. B.A. Nos. 1029 AND 1031 OF 2009 -:14:- 11. The petitioner Sabarinath has given Rs. 46 lakhs as loan during February 2008 to one Shammer owner of Velocity Travels at Sasthamangalam. It is also revealed that the petitioner bought a flat for Rs. 30 crores in Thiruvananthapuram Kowdiar, Queens Way Point. He had also taken another flat on rent from Marine Plaza Abad Building at Marine Drive, Kochi paying an advance of Rs. 1,20,000/-. The names and other particulars of the innumerable depositors who have been duped are yet to be collected by the investigating agency. Besides Met Life Insurance, it is believed that there could be policy holders of the petitioner in other institutions like Sharewealth and Sharekhan. Custodial interrogation of the petitioner is not complete with regard to many of the other crimes registered against him. There is also a chance of the petitioner making himself scarce if released on bail and thereby fleeing from justice. He is a person who had undertaken foreign tours at this young age of twenty years. The fact that his passport is in the custody of the Court is no guarantee that he will not go abroad. When the details of the assets which have been B.A. Nos. 1029 AND 1031 OF 2009 -:15:- committed to the custody of the Court Receiver by the Sub Court, Thiruvananthapuram are not known, It may not be safe to presume that all the ill-gotten assets of the petitioner are custodia legis. Two of the female accused are still absconding. I am, therefore, not inclined to grant bail to the petitioner. These applications are, accordingly, dismissed. Dated, this the 31st day of March, 2009. Sd/- V. RAMKUMAR, JUDGE. ani/ /true copy/