High Court of KeralaSingle Judge2023-06-27Dismissed

CRL.M.C No.6888 of 2022

Case / Petition Number:CRL.M.C No.6888 of 2022

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: Raja Vijayaraghavan V.
Judgment Date: 2023-06-27
Court Decision / Holding: This petition is dismissed; the impugned order cancelling bail stands. The court clarifies that the petitioners may surrender before the jurisdictional court and apply for regular bail, to be considered on merits, in line with the principles governing bail as reiterated in Deepak Yadav v. State of UP.
Final Disposition: Dismissed

Parties to the Case

Appellants / Petitioners

Jacob Samson
John Jacob
Samuel Jacob

Respondents

The State of Kerala, represented by the Public Prosecutor, High Court of Kerala, Ernakulam
Sajad Karim, aged 37 years, S/O Abdul Karim, Petta P.O., Thiruvananthapuram 695024

Legal Representation & Advocates

Counsels for Petitioners

• S. Sreekumar (Sr.)
• Manjunath Menon
• P. Martin Jose
• P. Prijith
• Thomas P. Kuruvilla
• Ajay Ben Jose

Counsels for Respondents

• Sri. MP Prashanth, PP

Case Synopsis & Summary

This Criminal Miscellaneous Case (Crl.M.C. No.6888 of 2022) before the Kerala High Court challenges an order dated 28 September 2022 passed by the Judicial Magistrate of First Class XI, Thiruvananthapuram, cancelling bail previously granted to accused Nos. 1–3 in Crime No.772 of 2019 (Peroorkada Police Station) under Sections 406 and 420 read with Section 34 IPC. The petitioners are the Chairman, Managing Director and Director of M/s Samson and Sons Builders and Developers Pvt Ltd, who allegedly received Rs.30 lakh by promising a flat but failed to deliver. The bail application had been considered in this Court and mediation was attempted; an undertaking was recorded that a completed flat would be provided in another project on payment of the balance consideration. When the de facto complainant moved to cancel bail, the Magistrate found no bonafide offer and that the explanations were unsatisfactory, cancelling bail on grounds of non‑compliance. The petition contends that the accused face financial difficulties and that Section 14 of the Insolvency and Bankruptcy Code (IBC) should apply to bar proceedings; reliance is placed on Ajay Kumar Radhe shyam Goenka v Tourism Finance Corporation (2023 KHC Online 283) to argue that Section 14 cannot affect criminal proceedings. The High Court, while noting the undertaking and the Magistrate’s findings, declines to interfere, endorsing the standard bail framework (as in Deepak Yadav v. State of UP) and observing that the accused may seek regular bail on merits. The impugned order is sustained.

Provisions of Law Cited

IPC 406IPC 420 read with IPC 34Insolvency and Bankruptcy Code Section 14(1)Insolvency and Bankruptcy Code Section 16S.14(1) of the IBC

Legal Doctrines & Maxims

Principles governing grant of bail (Deepak Yadav v. State of UP) – factors i–viii: prima facie case, nature and gravity of the accusation, severity of punishment, danger of absconding, character and means, likelihood of repetition, risk of witness influence, and danger to the course of justice.
Section 14 does not affect criminal proceedings against natural persons (Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation) — as held by the Apex Court and cited by the Kerala High Court.

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioners submit that they undertook to provide a completed flat in another project to the de facto complainant on payment of balance consideration, and that despite this undertakings and the financial constraints of the company, cancellation of bail should not be the default remedy. They contend insolvency developments and Section 14 (IBC) should not automatically bar bail-related relief, and that they should be allowed to surrender and seek regular bail on merits.

Contentions of Respondents

The State/complainant contends persistent non‑compliance with bail conditions, multiple notices, and evasive conduct by the accused; they rely on established bail criteria and argue that cancellation of bail was warranted.

Cited Precedents (2)

Case Name	Citation	Treatment	Explanation
Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation	2023 KHC Online 283	Positive	Kerala High Court quotes the Apex Court's view that criminal proceedings against natural persons are not affected by Section 14 of the IBC, supporting non-application of Section 14 here.
Deepak Yadav v. State of U.P.	1 (2022) 8 SCC 559	Positive	The judgment relies on the bail framework laid down in Deepak Yadav, enumerating factors to assess bail suitability.

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Extracted Judgment Text

Exact text extracted from official judgment records.

``` INTHEHIGHCOURTOFKERALAATERNAKULAM PRESENT THEHONOURABLEMR.JUSTICERAJAVIJAYARAGHAVANV TUESDAY,THE27[TH]DAYOFJUNE2023/6THASHADHA,1945 ``` ``` CRL.MCNO.6888OF2022 ``` ``` AGAINSTCRL.M.P.NO.500/2022ONTHEFILESOFTHEJUDICIAL - MAGISTRATEOFFIRSTCLASSXI),THIRUVANANTHAPURAM PETITIONERS/ACCUSED1TO3: ``` ``` 1JACOBSAMSON, AGED62YEARS S/O.SAMUELJACOB,KANNIMATTAMVEEDU, T.C.NO.6/8,T.K.DIVAKARANROAD,MUTTADA, - THIRUVANANTHAPURAM695025 PRESENTLYRESIDINGATTC.95/1580(3), NANDANAM,PADINJATTILLANE,MEDICALCOLLEGEP.O., – THIRUVANANTHAPURM,PIN695011 2JOHNJACOB, AGED37YEARS S/O.JACOBSAMSON,KANNIMATTAMVEEDU, T.C.NO.6/8,T.K.DIVAKARANROAD, - MUTTADA,THIRUVANANTHAPURAM695025 PRESENTLYRESIDINGATFLATNO.9A, SAMSON&SONSYELLOWSAPHIREAPARTMENTS, TKDROAD,MUTTADAP.O., – THIRUVANANTHAPURAM,PIN695025 ``` ``` 3SAMUELJACOB, AGED28YEARS S/O.JACOBSAMSON,KANNIMATTAMVEEDU, T.C.NO.6/8,T.K.DIVAKARANROAD,MUTTADA, - THIRUVANANTHAPURAM695025 RESIDINGATTC.95/1580(3),NANDANAM, PADINJATTILLANE,MEDICALCOLLEGEP.O., – THIRUVANANTHAPURM,PIN695011 ``` ``` BYADVS. S.SREEKUMAR(SR.) MANJUNATHMENON P.MARTINJOSE P.PRIJITH THOMASP.KURUVILLA AJAYBENJOSE ``` Crl.M.C No.6888 of 2022 2 ``` SACHINJACOBAMBAT ANNALINDAV.J HARIKRISHNANS. ``` ## **`RESPONDENT/S:`** ``` 1THESTATEOFKERALA, REPRESENTEDBYTHEPUBLICPROSECUTOR, HIGHCOURTOFKERALA,ERNAKULAM, – PIN682031 2SAJADKHARIM, AGED37YEARS S/O.ABDULKHARIM,"PATTAPPALLYHOUSE", KRA-66,AMBALATHUMUKKU,PETTAHP.O., – THIRUVANANTHAPURAM,PIN695024 BYADVM.SREEKUMARM ``` ``` SRI.MPPRASHANTH,PP ``` ``` THISCRIMINALMISC.CASEHAVINGCOMEUPFORADMISSIONON 27.06.2023,THECOURTONTHESAMEDAYPASSEDTHEFOLLOWING: ``` Crl.M.C No.6888 of 2022 3 ## **ORDER** This petition is filed challenging the order dated 28.9.2022 passed in Crl.M.P. No.500 of 2022 on the file of the learned Judicial Magistrate of First Class XI, Thiruvananthapuram. By the aforesaid order, the learned Magistrate has cancelled the bail granted to the petitioners by this Court for violation of conditions imposed at the time of grant of bail. 2. The short facts of the case are as under : a) The petitioners herein are accused Nos.1 to 3 in Crime No.772 of 2019 of the Peroorkada Police station registered for the offences punishable under Sections 406 and 420 read with Section 34 of the IPC. The aforesaid crime was registered based on the information furnished by the party respondent herein. The case of the de facto complainant was that the accused being the Chairman, Managing Director, and Director of a company by the name M/s Samson and Sons Builders and Developers Pvt Ltd. received a sum of Rs.30 lakhs by agreeing to deliver a flat. After receiving a substantial amount, the accused failed to deliver the apartment to the buyer. b) Immediately after registration of the Crime, the accused Crl.M.C No.6888 of 2022 4 approached this Court and filed an application for pre-arrest bail. This Court referred the matter to mediation. However, the disputes could not be settled. c) When the matter came up for consideration before this Court, a submission was made by the learned Senior counsel appearing for the accused that the accused are carrying out construction of other projects, and as the construction of the flat in the present project would take more time, they undertook to hand over a completed flat to the de facto complainant from some other projects of the petitioner’s company at the earliest. This Court, after considering the rival submissions, observed as follows in paragraph No.8 of the order. 8………….The learned Senior Counsel submitted that again the custodial interrogation of the petitioners may not be necessary. Considering the entire facts and circumstances of this case, these Bail Applications can be allowed recording the statement of the Senior Counsel on behalf of the petitioners that in another project, which will be completed at the earliest, the petitioners will give a flat to the defacto complainant on payment of balance consideration, if any. The learned Senior Counsel also submitted that there is financial crisis in the petitioners' Company and they are taking every endeavour to settle this case. ## d) After observing as above, the Bail Application was Crl.M.C No.6888 of 2022 5 ## allowed, and among other conditions, the following ## conditions were also imposed. (vi) The petitioners in B.A.No.4772 of 2019 will hand over a completed flat to the defacto complainant on payment of the balance consideration, if any, at the earliest. (vii) If there is unnecessary delay in handing over the flat, the defacto complainant can approach the lower court with an application to cancel the bail. If such an application is filed, the lower court, after hearing both sides, will pass appropriate orders in accordance with law. 3. Complaining that the accused failed to comply with the directions imposed by this Court, an application was filed by the de facto complainant before the learned Magistrate for cancellation of bail. 4. The learned Magistrate issued notice to the petitioners and heard their objections. A report was also called for from the Investigating Officer. The learned Magistrate, after considering the entire facts and the materials made available, came to the conclusion that the accused had not made a bonafide offer to the de facto complainant. It was also found that the explanation offered by the accused was thoroughly unsatisfactory. Holding so, the bail granted to the accused was cancelled for violation of conditions (vi) and (viii) of the order passed by this Court. 5. The learned counsel appearing for the petitioners submitted that a completed apartment in another project was offered to the complainant, but he Crl.M.C No.6888 of 2022 6 did not accept the same. It is also stated that the de facto complainant failed to pay the balance amounts. Alternatively, it is urged that the NCLT, Kochi Bench has initiated insolvency proceedings and has appointed an interim resolution professional, and therefore the accused are not in a position to complete their project. Reliance is also placed on Section 14 of the Insolvency and Bankruptcy Code, and it is argued that the institution of all proceedings before the court of law or the execution of a judgment or decree is prohibited. 6. In response, the counsel appearing for the de facto complainant submitted that multiple notices were issued requesting the accused to comply with the directions. Except for taking an evasive stand, the accused have not come up with any concrete proposal to abide by the directions issued by this Court in the order granting bail. It is further submitted that Section 14 would have no application in the light of the law laid down in **Ajay Kumar Radheyshyam Goenka v. Tourism Finance Corporation** (2023 KHC Online 283), wherein the Apex Court had held that the criminal proceedings initiated against the natural persons would not be affected by Section 14 of the Act. 7. I have considered the submissions advanced. 8. I find that it is based on the undertaking given by the petitioners that they shall provide an apartment to the de facto complainant that pre-arrest Crl.M.C No.6888 of 2022 7 bail was granted by imposing conditions. This Court had recorded the undertaking and had also permitted the de facto complainant to approach the learned Magistrate to seek cancellation of bail if there was delay or failure in complying with the undertaking. The petitioners have come up with various excuses. However, the learned Magistrate, after carefully considering the contentions, has concluded that no bonafide offer was made, and the petitioners have been trying to evade from complying with the directions by giving one excuse or the other. In that view of the matter, the impugned order does not warrant any interference. However, it is made clear that the above order shall not stand in the way of the petitioners surrendering before the jurisdictional court and seeking regular bail. If any such application is filed, the same shall be considered in the light of the principles governing the grant of bail and as reiterated in **Deepak Yadav v. State of U.P.,[1]** which lays down that the relevant conditions for grant of bail are: - (i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence; - (ii) nature and gravity of the accusation; - (iii) severity of the punishment in the event of conviction; > 1 (2022) 8 SCC 559) Crl.M.C No.6888 of 2022 8 - (iv) danger of the accused absconding or fleeing, if released on bail; - (v) character, behavior, means, position and standing of the accused; - (vi) likelihood of the offense being repeated; - (vii) reasonable apprehension of the witnesses being influenced; and - (viii) danger, of course, of justice being thwarted by grant of bail. Appropriate orders shall be passed on its merits, untrammeled by any of the observations above. This petition is dismissed. Sd/- **RAJA VIJAYARAGHAVAN V, JUDGE** NS Crl.M.C No.6888 of 2022 9 ## **`APPENDIX OF CRL.MC 6888/2022`** ``` PETITIONERANNEXURES: ``` |`Annexure `|`I`|`TRUE COPY OF FIR IN CRIME NO. 772 OF 2019`| |---|---|---| |||`OF PEROORKADA POLICE STATION DATED 4-4-2019`| |`Annexure `|`II`|`TRUE` `COPY` `OF` `ORDER` `DATED` `04-08-2020` `IN`| |||`B.A.NO.4772 OF 2019 OF THIS HON'BLE COURT`| |`Annexure `|`III`|`TRUE` `COPY` `OF` `JUDGMENT` `DATED` `09-01-2020` `IN`| |||`W.P.(C).NO.29597` `OF` `2018` `ALONG` `WITH`| |||`MEDIATION AGREEMENT`| |`Annexure `|`IV`|`TRUE` `COPY` `OF` `ORDER` `DATED` `03-11-2021` `IN`| |||`CP(IB)/05/KOB/2021` `OF` `THE` `NATIONAL` `COMPANY`| |||`LAW TRIBUNAL, KOCHI BENCH,KERALA, ADMITTING`| |||`THE` `APPLICATION AND DECLARED MORATORIUM AS`| |||`ENVISAGED` `UNDER` `S.14(1)` `OF` `THE` `CODE,` `AND`| |||`APPOINTED` `INTERIM` `RESOLUTION` `PROFESSIONAL`| |||`AS PER S.16 OF THE CODE`| |`Annexure `|`V`|`TRUE` `COPY` `OF` `ORDER` `DATED` `16-03-2022` `OF`| |||`NCLT,` `KOCHI` `BENCH,` `IN` `I.A.`| |||`(IBC)NO.14(KOB)/2022` `IN` `CP`| |||`(IB)/05/KOB/2021,` `APPOINTING`| |||`MR.K.PARAMESWARAN` `NAIR` `AS` `THE` `INSOLVENCY`| |||`RESOLUTION PROFESSIONAL`| |`Annexure `|`VI`|`TRUE` `COPY` `OF` `CRL.M.P.NO.500` `OF` `2022` `IN`| |||`ANNEXURE-I` `CRIME BEFORE THE JUDICIAL FIRST`| |||`CLASS` `MAGISTRATE'S` `COURT-XI,`| |||`THIRUVANANTHAPURAM`| |`Annexure `|`VII`|`TRUE` `COPY` `OF` `COUNTER` `IN` `C.M.P.NO.500` `OF`| |||`2022 FILED BY THE COUNSEL FOR THE ACCUSED 1`| |||`TO` `4` `BEFORE` `THE` `JUDICIAL` `FIRST` `CLASS`| |||`MAGISTRATE'S COURT-XI, THIRUVANANTHAPURAM`| |`Annexure `|`VIII`|`CERTIFIED COPY OF ORDER DATED 28-09-2022 IN`| |||`CRL.M.P` `NO.500` `OF` `2022` `PASSED` `BY` `JUDICIAL`| |||`FIRST` `CLASS` `MAGISTRATE` `-XI,`| |||`THIRUVANANTHAPURAM`| |`Annexure `|`IX`|`TRUE COPY OF LAWYER NOTICE DATED 27-08-2021`| |||`ISSUED` `BY` `THE` `2ND` `RESPONDENT` `THROUGH` `HIS`| |||`COUNSEL`| Crl.M.C No.6888 of 2022 10 ``` AnnexureXTRUECOPYOFREPLYDATED21-10-2021ISSUED BYTHEPETITIONERSTHROUGHTHEIRCOUNSEL AnnexureXITRUECOPYOFNOTICEDATED25-10-2021ISSUED BYTHE2NDRESPONDENTTHROUGHHISCOUNSEL AnnexureXIITRUECOPYOFREPLYNOTICEDATED12-12-2021 ISSUEDBYTHEPETITIONERSTHROUGHTHEIR COUNSEL ``` ``` RESPONDENTANNEXURES: ``` ``` Annexure-R2(a)TRUECOPYOFTHELAWYER'SNOTICEDATED 25.08.2021ISSUEDTOTHEPETITIONERS Annexure-R2(b)TRUECOPYOFTHEREPLYNOTICEDATED 21.10.2021ISSUEDBYTHEPETITIONERS Annexure-R2(c)TRUECOPYOFTHELAWYER'SNOTICEDATED 25.10.2021ISSUEDBYTHE2NDRESPONDENTTO THEPETITIONERS Annexure-R2(d)TRUECOPYOFTHEREPLYNOTICEDATED 12.12.2021ISSUEDBYTHEPETITIONERS ```