The Kerala High Court on Wednesday ordered the Enforcement Directorate (ED) to probe allegations of fraud against the Kollam-based Edamulackal Co-operative Bank [Rajendran Unnithan v. Registrar of Cooperative Societies and ors].
The case involves allegations that funds worth ₹24.44 crores were misappropriated between 2009 to 2017 from the deposits made by the public with the Edamulackal Service Co-operative Bank.
A Bench of Justices Amit Rawal and KV Jayakumar on December 4 noted that prima facie, the case involved the offences of breach of trust and cheating, which are scheduled offences in the Prevention of Money Laundering Act (PMLA), which meant that the ED could probe the matter.
"We thus direct the Enforcement Director to register an ECIR as provided under the Act against all the persons involved, for misappropriation, breach of trust, cheating as well as offences under the PC Act forthwith," the Court ordered.
In an earlier order passed on December 3, the Court had referred to the case as a classic case of aggrandizement by the cooperative society's committee members who had squandered and played with the money of depositors.
"Out of many depositors, few of them are facing not only the financial hardship but medical difficulties like cancer and other diseases," the Court noted.
Among those who faced such hardships was 71-year-old Rajendran Unnithan S, a cancer patient who approached the Court for relief after he was unable to withdraw his fixed deposit of ₹9.4 lakhs from the bank for medical treatment.
The Court on Wednesday ordered the society to immediately transfer the funds owed to Unnithan to address his urgent medical needs.
"He is in immediate need of money and matured amount according to his calculation is about Rs.9,40,000/- and in Savings Bank Account Rs.56,370/-. Since the Grade IV society has a deposit of minimum Rs.1,50,00,000/-, we direct the Society to immediately either issue a pay order or transfer the amount through RTGS in the account of the petitioner as he is in immediate need to meet the expenses of the treatment," the Court ordered.
Other litigants too, had outstanding amounts due to them, ranging from ₹1.47 lakhs to ₹ 21.60 lakhs, the Court was told. The Court on Wednesday ordered the Co-operative Society to release half of the outstanding amounts to these appellants.
The Court further noted that a first information report (FIR) had been registered in the matter in 2017, citing offences under Sections 406 (cheating), 409 (breach of trust), and 420 (conspiracy) of the Indian Penal Code (IPC). However, this FIR only named a former Secretary as the accused.
On the other hand, the Court noted that there appeared to be at least 14 persons who were facing allegations of having played a role in the bank fraud.
"It is wholly intriguing as to how and in what manner the other surcharge persons have been let off with no criminal case," the Court said.
It proceeded to ask the Home Secretary and the Additional Chief Secretary of Co-operative Societies to explain this lapse by way of an affidavit.
The Court also asked the State and Co-operative Societies Department to file affidavits with information about the progress of proceedings already initiated in the matter, including the 2017 FIR and surcharge proceedings under the Kerala Co-operative Societies Act.
Advocates R Reji, Arun Bose, B Bipin, Jeena AV, MV Thamban, Thara Thamban and Thomas Thomas represented Rajendran Unnithan S (appellant).
Senior Government Pleader TK Vipindas appeared for the Registrar of Cooperative Society and Advocate Santosh Kumar represented the Secertary, Edamulackal Service Co-operative Bank.
Advocate Jaishankar V Nair appeared for the ED.
[Read Order]