High Court of KeralaSingle Judge2020-05-05Bail Granted

S.D. Chinna Rao v. State of Kerala

Case / Petition Number:B.A. No. 2579/2020

Neutral Citation:/

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. V. Kunhikrishnan
Judgment Date: 2020-05-05
Court Decision / Holding: The bail application is allowed. The petitioner is to be released on bail on executing a self bond, with conditions including furnishing a bail bond under Section 441 CrPC, providing current address and phone number, reporting to the jurisdictional SHO, co-operating with investigation, and ensuring presence during trial. A bond for Rs.50,000 with two solvent sureties is to be executed within one week; the petitioner must comply with social distancing and other lockdown guidelines; violation permits cancellation of bail.
Final Disposition: Bail Granted

Parties to the Case

Appellants / Petitioners

S. D. Chinna Rao

Respondents

State of Kerala
The Sub Inspector of Police, Peringome Police Station

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Sri Rajit

Counsels for Respondents

• Sri Ajith Murali, PP
• Sri Santhosh Peter, Sr.PP

Case Synopsis & Summary

This is a bail application under Section 439 CrPC by the eighth accused, S. D. Chinna Rao, in C.C. No.1211/2017 of the Chief Judicial Magistrate, Thalassery. The petitioner, alleged to be a director of Nano Excel Corporation, is linked with Nano Excel Power Corporation, a Hyderabad- and Delhi-based entity, accused of “money chain” activities: collecting large sums from customers through false promises and failing to repay. The offences alleged include sections 420 and 120B IPC read with 34 IPC, and sections 4–6 of the Prize Money Chits and Money Circulation Scheme (Banning) Act, 1978. The petitioner contends that 684 cases exist against him; in over half the cases final reports have been filed and many others are in crime-stage; the other accused are on bail; the petitioner seeks bail on the ground that he is a director and not involved in day-to-day operations, and is ready to comply with conditions. The Public Prosecutor opposes unconditional bail and argues that if bail is granted, stringent conditions will be necessary to secure presence and cooperation with investigations. The High Court recalls the general bail principle—bail is the rule, jail the exception—and, in light of the COVID-19 context and related directions, grants bail with conditions: self-bond, sureties, address and phone requirements, reporting, and strict adherence to social-distancing guidelines; violation may lead to cancellation.

Provisions of Law Cited

Section 439 Cr.P.C.Section 420 IPCSection 120B IPCSection 34 IPCSection 4 of Prize Money Chits and Money Circulation Scheme (Banning) Act, 1978Section 5 of Prize Money Chits and Money Circulation Scheme (Banning) Act, 1978Section 6 of Prize Money Chits and Money Circulation Scheme (Banning) Act, 1978Section 441 Cr.P.C.

Legal Doctrines & Maxims

Bail is the rule and jail is the exception.
Fair trial principle (ensuring opportunity of fair trial) as laid down in Chidambaram P v Directorate of Enforcement (2019 SCALE 870).
Re: Contagion of COVID-19 Virus In Prisons (Suo Motu Writ Petition (C) No.1 of 2020) directions on social distancing and reducing prison population.
W.P (C) No. 9400 of 2020 directions on minimizing inmates in prisons.

Submissions & Arguments

Contentions of Appellants / Petitioners

Counsel for the petitioner argued that the accused has numerous cases (684) pending; in 357 cases the final reports have been filed, and 327 cases are in the crime stage. He emphasized that he is only a nominal director and not involved in day-to-day management; other directors and the managing director are already on bail, indicating the scale of operations is being monitored outside prison. He asserted his readiness to comply with any conditions the Court imposes and to report as required, and to cooperate fully with the investigation. He urged the Court to adopt the well-settled bail principle that the liberty of an accused pending trial is the rule rather than the exception, especially given the backdrop of the COVID-19 pandemic and the need to avoid overcrowding. In sum, he requests bail on appropriate terms to secure a fair trial without unduly restricting personal liberty.

Contentions of Respondents

Public Prosecutor submitted that the Court should consider the seriousness of the alleged offences (money-chain scheme, cheating, and money circulation offences) and the possibility of tampering with witnesses. He stated that if bail is granted, stringent conditions must be imposed to ensure presence and cooperation; he noted uncertainty about the bail status of other accused. He argued that the bail conditions should be robust, including frequent reporting, and that release should not hinder ongoing investigations or the prosecution’s ability to gather evidence. The Prosecutor highlighted that, as a director, the petitioner may have access and influence; therefore, risk of recurrence exists requiring careful monitoring. The Court was urged to balance individual liberty with public interest, ensuring fair trial while preserving the integrity of the investigation.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Re: Contagion of COVID-19 Virus In Prisons case	Suo Motu Writ Petition (C) No.1 of 2020	Positive	Cited for directions on social distancing and reducing prison population in the context of COVID-19; supports grant of bail with safeguards.
Chidambaram P v Directorate of Enforcement	2019 (16) SCALE 870	Positive	Cited for foundational bail principle: bail is the rule and detention is exception to ensure fair trial.
W.P (C) No. 9400 of 2020	W.P (C) No. 9400 of 2020	Positive	Full Bench directions on minimizing inmates; cited to justify social distancing-related bail considerations.

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Extracted Judgment Text

Exact text extracted from official judgment records.

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE P.V.KUNHIKRISHNAN TUESDAY, THE 5TH DAY OF MAY, 2020 / 15TH VAISAKHA, 1942 ## B.A. No. 2579 / 2020 (C.C No.1211/2017 of Chief Judicial Magistrate, Thalassery,arising from Crime No. 1856/2011 of Kannur Town Police Station) ## PETITIONER/8th ACCUSED: S.D.Chinna Rao, 35 years,S/o.Venkiteswara Rao, No.179,Alagiri Street, Majestic Colony,Majestic Colony, Valsalavakkam, Chennai. By Adv. Sri Rajit ## RESPONDENT/COMPLAINANT 1. State of Kerala, Represented by the Public Prosecutor, High Court of Kerala, Ernakulam, Kochi-682 031. 2. The Sub Inspector of Police, Peringome Police Station. SRI. AJITH MURALI, PP SRI. SANTHOSH PETER, SR.PP THIS BAIL APPLICATION HAVING COME UP FOR ADMISSION ON 05.05.2020, THE COURT ON THE SAME DAY PASSED THE FOLLOWING B.ANO.2579 OF 2020 2 ## **P.V.KUNHIKRISHNAN, J** -------------------------------- B.A. No.2579 of 2020 ------------------------------- ## Dated this the 5[th] day of May, 2020 **O R D E R** This Bail Application filed under Section 439 of Criminal Procedure Code was heard through Video Conference. 2. Petitioner is the 8[th] accused in C.C.No.1211/2017 of Chief Judicial Magistrate, Thalassery. Petitioner was arrested on 03.02.2020. 3. The prosecution case is that the petitioner who was one of the directors of the company called Nano Excel Corporation and the petitioner along with the co-accused who were the directors and share holders of a Hyderabad and New Delhi based company by name 'Nano Excel Power Corporation' have dishonestly collected huge amounts from customers during various periods by inducing them with false promises and made the customers to deposit money in the accounts of the accused, which were not repaid as promised. Allegedly, the petitioner and the co-accused have conducted money chain B.ANO.2579 OF 2020 3 business. 4. The case is charge sheeted alleging offence punishable under Sections 420, 120B read with 34 IPC and Sections 4, 5, 6 of Prize Money Chits and Money Circulation Scheme (Banning) Act, 1978. 5. The counsel for the petitioner submitted that all over 684 cases registered against the petitioner and other accused with similar allegations. Among this 684 cases, in 357 cases the prosecution already filed the final report and other 327 cases are in the crime stage. The counsel for the petitioner further submitted that the other accused in the case are on bail. He also submitted that in almost all the cases the petitioner is on bail. In such circumstances he may be released on bail. He is ready to abide any conditions imposed by this Court. 6. The learned Public Prosecutor submitted that, he is not aware whether the other accused are on bail. But if this Court is granting bail stringent conditions may be imposed for B.ANO.2579 OF 2020 4 ensuring the presence of the petitioner during the trial. 7. Considering the facts and circumstances of this case and also consider the fact that all other accused are released on bail, I think the petitioner also is entitle bail. It is to be noted that the petitioner is one of the director of the company. The Managing Director of the company is already on bail. The contention of the petitioner is that he is only a name sake director and he is not involved in the day today affairs of the company. Anyway these matters are to be decided at the time of trial. To continue detention of the petitioner may not be necessary at this stage. Hence, the petitioner can be released on bail. 8. Moreover, considering the need to follow social distancing norms inside prisons so as to avert the spread of the novel Corona Virus Pandemic, the Hon'ble Supreme Court in **Re: Contagion of COVID-19 Virus In Prisons case (Suo Motu Writ Petition(C) No.1 of 2020)** and a Full Bench of this Court in **W.P (C) No. 9400 of 2020** issued B.ANO.2579 OF 2020 5 various salutary directions for minimizing the number of inmates inside prisons. 9. Moreover, it is a well accepted principle that the bail is the rule and the jail is the exception. The Hon'ble Supreme Court in **Chidambaram. P v Directorate of Enforcement (2019 (16) SCALE 870),** after considering all the earlier judgments, observed that, the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. 10. Considering the dictum laid down in the above decision and considering the facts and circumstances of this case, this Bail Application is allowed with the following directions: 1. The Superintendent of Jail concerned where the petitioner is incarcerated is directed to release the petitioner on bail on executing a self bond ensuring that he will appear before B.ANO.2579 OF 2020 6 the Court concerned as and when required, if he is not in detention in any other case. It is further directed that the Superintendent of Jail should get the bail bond from the petitioner as stipulated in Section 441 Cr.P.C. 2. The Superintendent of Jail concerned shall also get the phone number and the address at which the petitioner would be residing after his release. 3. The Superintendent of Jail concerned, immediately after release of the petitioner will forthwith forward the bail bond obtained from the petitioner to the jurisdictional Court. 4. The petitioner immediately after release from the prison, report before the Station House Officer of the Jurisdictional Police Station and shall furnish his phone number and the place where he is going to B.ANO.2579 OF 2020 7 reside. The Station House Officer concerned shall keep a vigil on the whereabouts of the petitioner and shall ensure that the petitioner do not violate the terms of the undertaking. 5. The petitioner shall appear before the Investigating Officer as and when required. The petitioner shall co-operate with the investigation and shall not threaten or attempt to influence the witnesses or tamper with the evidence. 6. The petitioner shall within one week from the commencement of the functioning of the jurisdictional court, if the court is not functioning at present, execute a bond for Rs.50,000/- (Rupees Fifty Thousand only) with two solvent sureties each for the like sum to the satisfaction of the jurisdictional Court. 7. The petitioner shall strictly abide by the B.ANO.2579 OF 2020 8 various guidelines issued by the State Government and Central Government with respect to keeping of social distancing and other directions in the wake of declared lockdown. 8. If any of the above conditions are violated by the petitioner, the jurisdictional Court can cancel the bail in accordance with law, even though the bail is granted by this Court. Sd/- **P.V.KUNHIKRISHNAN, JUDGE** VPK