The Kerala High Court has reaffirmed that the mere pendency of multiple cases and the seriousness of alleged offences cannot justify continued judicial custody when the investigation is substantially complete and no concrete grounds exist to suggest flight risk or evidence tampering. This ruling reinforces the principle that bail is the norm and jail the exception, particularly in non-heinous offences where the accused has no prior record of absconding.
Background & Facts
The Dispute
The applicant, Sivadasan, aged 50, is accused No.3 in Crime No.272/2026 registered at Ernakulam Town North Police Station. The case involves allegations of cheating, criminal breach of trust, forgery, and unlawful collection of deposits under the Banning of Unregulated Deposit Schemes Act, 2019. The prosecution alleges that the accused, along with others, operated a fraudulent cryptocurrency investment scheme through the firm Libertas Blockchain Development and Training Pvt. Ltd., promising returns of 3% to 10% and collecting ₹56,91,000 from the complainant between 05.09.2021 and 04.03.2023. The accused are accused of producing forged government licenses and misrepresenting the firm’s regulatory status.
Key Facts
- The firm, Libertas Blockchain Development and Training Pvt. Ltd. (CIN: U620KL2025PTC094630), was incorporated on 23.05.2025
- The complainant invested ₹56,91,000 between 05.09.2021 and 04.03.2023
- The accused produced annexures including GST registration, ISO certifications, DPIIT recognition, and a rent agreement to substantiate legitimacy
- The FIR was registered on 23.05.2026
- The applicant was arrested and remanded to judicial custody on 25.05.2026
- The applicant is also named in two other cases: Crime No.1412/2023 (Palakkad, registered 09.10.2023) and another pending matter, both registered after this case
- The investigation is reported to be nearly complete
Procedural History
- 23.05.2026: FIR registered at Ernakulam Town North Police Station
- 25.05.2026: Applicant remanded to judicial custody
- 24.06.2026: First bail application (Bail Appl. No.3331/2026) dismissed by Single Judge
- 24.06.2026: Present application (Bail Appl. No.3334/2026) filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023
Relief Sought
The applicant sought regular bail on grounds of lack of evidence linking him to the alleged offences, completion of investigation, and absence of risk of tampering or flight.
The Legal Issue
The central question was whether the continued judicial custody of an accused, whose investigation is nearly complete and who has no history of absconding, can be justified solely on the basis of the gravity of the offences and involvement in unrelated pending cases.
Arguments Presented
For the Petitioner
The learned counsel argued that the applicant has no prior criminal record, the investigation is nearly concluded, and no material on record connects him directly to the fraudulent acts. He emphasized that the applicant’s role, if any, is peripheral and that the prosecution has not demonstrated a likelihood of evidence tampering or flight. Reliance was placed on the principle that bail should be granted unless strong reasons exist to deny it.
For the Respondent
The Public Prosecutor contended that the offences under Sections 406, 420, 409, 468 IPC, Section 111 of BNS, and Section 21(3) of the Banning of Unregulated Deposit Schemes Act are serious and involve large-scale financial fraud. He argued that the applicant’s involvement in three cases indicates a pattern of conduct and that granting bail may impede the investigation.
The Court's Analysis
The Court examined the nature of the allegations and the stage of investigation. It noted that while the offences are serious, the applicant was not the principal accused and no specific evidence tied him to the creation of forged documents or the solicitation of deposits. The Court observed that the investigation had progressed to a stage where the evidence was largely collected and no further custodial interrogation was necessary.
"The applicant has been in custody since 25.05.2026. The investigation is almost over. There is no material to suggest that his release will hamper the probe or that he poses a threat to witnesses. The fact that he is named in two other cases, registered after this one, does not by itself justify continued detention."
The Court distinguished between the gravity of the offence and the necessity of custody, holding that the latter must be grounded in concrete risk, not speculative concerns. It emphasized that the burden lies on the prosecution to demonstrate why bail should be denied, particularly when the accused has no history of non-appearance or interference.
The Verdict
The bail application was allowed. The applicant is directed to be released on bail upon executing a bond of ₹1,00,000 with two solvent sureties of the like amount each, to the satisfaction of the jurisdictional Magistrate. He shall appear before the investigating officer every Saturday between 10.00 a.m. and 11.00 a.m., and as otherwise required. He shall not leave Kerala without court permission, tamper with evidence, or commit any similar offence. Compliance with these conditions is mandatory.
What This Means For Similar Cases
Investigation Completion Trumps Gravity of Offence
- Practitioners may now argue that when investigation is substantially complete, the seriousness of the offence alone cannot override the right to bail
- Courts must assess whether custodial interrogation remains necessary - not whether the crime is grave
- This applies equally to financial fraud, cybercrime, and white-collar offences under BNSS
Multiple Cases Do Not Automatically Justify Denial
- Accused named in subsequent cases cannot be denied bail merely because of pendency of other proceedings
- Each case must be evaluated on its own merits; linkage between cases must be proven, not assumed
- This prevents the misuse of multiple FIRs as a tool to prolong detention without trial
Procedural Compliance in Bail Orders Is Non-Negotiable
- Bail conditions must be specific, reasonable, and enforceable - vague directives like "cooperate fully" are insufficient
- The Court’s requirement of fixed weekly appearances sets a precedent for structured monitoring without incarceration
- Any violation of conditions must be addressed through a separate application, not summary cancellation
