‘Threat to economy’: Why Kerala High Court refused bail to former co-operative bank chief in ‘Rs 101 crore scam’
The case arises from a 2024 case registered in Thiruvananthapuram against N Basurangan and 16 others, including former secretaries and board members of the Kandala Service Co-operative Bank, the Kerala High Court noted.
5 min readNew DelhiUpdated: Mar 3, 2026 09:07 AM IST
N Basurangan, who served as the president of the Kandala Service Co-operative Bank for nearly three decades, allegedly conspired with others to divert crores. (Image generated using AI)
Kerala High Court news: Observing that economic offences stand a class apart as they involve deep-rooted conspiracies and huge loss of public funds, the Kerala High Court has refused anticipatory bail to one N Basurangan, the former president of Kandala Service Co-operative Bank, in a case involving alleged misappropriation of over Rs 101 crore.
Justice A Badharudeen dismissed Basurangan’s anticipatory bail plea and said such offences affect the nation’s economy and pose serious threats to its financial health.
“Economic offences constitute a class apart, as they have deep rooted conspiracies involving huge loss of public funds, and therefore such offences need to be viewed seriously. They are considered as grave and serious offences affecting the economy of the country as a whole and thereby posing serious threats to the financial health of the country,” the court said on February 19, referring to a Supreme Court verdict.
Economic offences of this nature are of special significance, and the specific need of the prosecution and the investigating agency to conduct custodial interrogation of the petitioner is significant, as mentioned in the statement filed by the investigating officer.
Most importantly, the facts of this particular case would prima facie show misappropriation of more than a hundred crore, where the petitioner is the prime accused.
If the prime accused involved in a huge scam/economic offence is granted anticipatory bail, effective investigation could not be materialised, as apprehended by the prosecution.
In such a case, the grant of anticipatory bail would definitely hamper the investigation.
This court is not inclined to grant anticipatory bail to the petitioner, since the same would destroy the investigation. Therefore, this petition is liable to fail and is accordingly dismissed.
Justice A Badharudeen said granting anticipatory bail to the accused would hamper the investigation.
Custodial interrogation necessary
The prosecution strongly opposed the plea, arguing that custodial interrogation of the 71-year-old accused was essential to unravel the complete chain of financial transactions.
The court accepted this contention, observing that effective investigation would be hampered if anticipatory bail were granted to the prime accused in a scam of this magnitude.
It noted that while two co-accused had been arrested and later secured bail, several others remain to be apprehended.
Direction to surrender
Dismissing the anticipatory bail application, the court directed Basurangan to surrender before the investigating officer.
In case of failure, the officer has been authorised to proceed in accordance with law to ensure meaningful investigation and successful prosecution.
Massive financial misconduct allegations
The case arises from a case registered in 2024 by the crime branch in Thiruvananthapuram against Basurangan and 16 others, including former secretaries and board members of the Kandala Service Co-operative Bank.
According to the prosecution, Basurangan, who served as the bank’s president for nearly three decades, allegedly conspired with other accused persons.
The accused allegedly conspired to float deposit schemes offering exorbitant interest rates without statutory sanction.
To grant loans to associates and relatives without adequate collateral.
To make unauthorised staff appointments in violation of the registrar’s circulars.
To divert Rs 85 lakh to the Maranalloor Milk Co-operative Society, where he also held the post of president.
To issue multiple loans against single securities.
To default on recovery from loanees and monthly deposit holders.
Audit and statutory enquiries under sections 65 (inquiry by registrar) and 68(1) (surcharge) of the Kerala Co-operative Societies Act revealed widespread corruption, misappropriation, nepotism and diversion of funds.
The prosecution informed the court that as many as 66 cases were registered at the Maranalloor Police Station in 2023 based on complaints by depositors.
The investigation was later transferred to the crime branch CID by orders dated October 9, 2023, and July 4, 2024.
Basurangan had earlier approached the high court for anticipatory bail in six related cases, which were dismissed on December 21, 2023.
He subsequently moved the Supreme Court, which granted anticipatory bail in those six matters on February 25, 2025.
Separately, the Enforcement Directorate (ED) registered a case against him under the Prevention of Money Laundering Act (PMLA), 2002, and arrested him on November 21, 2023.
He was granted bail by the high court on January 16, 2025.
However, in the present case, the court noted that the allegations involve a distinct crime with a specific quantified loss of over Rs 101 crore.
Vineet Upadhyay is an Assistant Editor with The Indian Express, where he leads specialized coverage of the Indian judicial system.
Expertise
Specialized Legal Authority: Vineet has spent the better part of his career analyzing the intricacies of the law. His expertise lies in "demystifying" judgments from the Supreme Court of India, various High Courts, and District Courts. His reporting covers a vast spectrum of legal issues, including:
Constitutional & Civil Rights: Reporting on landmark rulings regarding privacy, equality, and state accountability.
Criminal Justice & Enforcement: Detailed coverage of high-profile cases involving the Enforcement Directorate (ED), NIA, and POCSO matters.
Consumer Rights & Environmental Law: Authoritative pieces on medical negligence compensation, environmental protection (such as the "living person" status of rivers), and labor rights.
Over a Decade of Professional Experience: Prior to joining The Indian Express, he served as a Principal Correspondent/Legal Reporter for The Times of India and held significant roles at The New Indian Express. His tenure has seen him report from critical legal hubs, including Delhi and Uttarakhand. ... Read More
Justice A Badharudeen said granting anticipatory bail to the accused would hamper the investigation.