'Calculated Attempt To Exonerate Influential Accused': Kerala High Court Cancels Further Investigation In Misappropriation Case Against Vellappally Natesan

The Kerala High Court on Tuesday paved for trial to proceed against SNDP Yogam General Secretary Vellappally Natesan, in a case alleging misappropriation of funds.

The Single Judge Bench of Justice Ziyad Rahman A.A. set aside the permission granted by a Magistrate Court in Kollam to conduct further investigation. It noted that the request for further investigation was made by a former member of the investigation team, that too after his retirement. Stating that bonafides in making such a request is highly suspicious, the Court was prima facie satisfied that,

"...there is a calculated attempt to exonerate the accused, a very influential person, without even a trial".

The Court thus directed the CJM to conduct trial based on the final report already produced, as expeditiously as possible.

Factual Background

As per the prosecution case, Natesan had been Secretary of the Sree Narayana Trust, Kollam (SN Trust) since 1995, which ran various establishments throughout the State, including various educational institutions. The allegation against him is that he had misappropriated a substantial portion of the amount collected towards celebrating the Golden Jubilee year of Sree Narayana College, Kollam, one of the colleges run by the SN Trust, by diverting the amount to other channels without any authorization, in the year 1997-98.

A private complaint was preferred against Natesan by the de facto complainant before the Magistrate, alleging offences punishable under sections 403, 406, 408 and 420 of IPC. The matter is currently pending trial. 

During this time however, Natesan filed one of the present writ petitions explaining the nature of the above transactions and claiming that the same were not misappropriations warranting any criminal prosecution.

It was averred that the statement of the accountant was incorrectly recorded during the investigation and a complaint had thus been filed before the Additional Director General of Police (ADGP) in that regard. He thus sought a direction to be issued to the ADGP to consider the same before the disposal of the case by the Magistrate. He further sought a direction to be issued to the ADGP and Superintendent of Police to ascertain whether he had encashed the alleged amount. 

Meanwhile, subsequent to filing of the Final Report, a former member of the SIT that conducted the investigation issued a letter to the Superintendent of Police pointing out that Prof. Sathyan had written an article in a souvenir commemorating the 25th anniversary of the tenure of office of the accused as General Secretary of SNDP Yogam and SN Trust, commending him for carrying out the Golden Jubilee Celebrations. In the souvenir, it was written that the accused had made a profit of Rs. 20,00,000/- to the Yogam by conducting the All India Exhibition, contrary to his statement in the final report. The retired officer thus requested a further investigation by invoking section 173(8) Cr.P.C. Based on the same, the ADGP granted permission to take steps for further investigation, without any discussion as to the grounds, after reporting the matter to the court. The prosecution application seeking formal application was also granted by the Chief Judicial Magistrate, Kollam. 

It is in this context that the de facto complainant also filed a writ petition challenging the decision to conduct further investigation and all further proceedings pursuant to it.

Findings of the Court

The Court in this case discerned that there were two important aspects that had to be ascertained:

A. Whether the further investigation now being conducted would be legally sustainable 

The Court in this regard observed that the power of  the investigation officer under Section 173(8) Cr.P.C. is very wide, and can be invoked at any stage of the proceedings. However, the Court was quick to add in this regard that,

"...merely because the investigation officer is clothed with the power to investigate the matter further, such power cannot be invoked at his whims and fancies. It must be supported by reasons justifiable in law, and in cases where such powers were improperly or maliciously or arbitrarily or with malafide intentions exercised, nothing would preclude this Court from interfering with such proceedings by exercising the powers under Article 226 of the Constitution of India. To be precise, this Court cannot be a mute spectator and endorse the exercise of such powers by the investigation agency when it was shown that the said power was invoked arbitrarily to give some undue advantage to one of the parties to the prosecution, either the victim or accused, and thus, an abuse of process of law". 

The Court thus categorically laid down that the exercise of such power ought to be for protecting the interests of the prosecution and for ensuring justice to the concerned parties. 

The Court noted that in this case, the decision to conduct further investigation had been taken on the basis of the communication issued by the former investigaor, which the Court determined to be 'highly suspicious at first instance', since in its view, as a member of the SIT, he would not ordinarily be interested in matters of the investigation once the investigation was complete and the final report was filed. The Court noted that in this case, yet another vital aspect was that the communication had been issued by him after his retirement from service. It added that the purported reason behind the same; ie, the statement of Prof. Sathyan, added more fuel to the fire. 

The Court thus noted at this juncture that the crucial question was whether such a statement would amount to a sufficient cause for invoking the powers of the investigation officer under Section 173(8) Cr.P.C., and found the same in the negative. 

The Court reasoned that as Prof. Sathyan had already given his statement to the police, "if further investigation is ordered whenever the witness takes a stand contrary to the prosecution case through a public statement or otherwise, it would neither be practical to conduct further investigation nor be in the best interest of the prosecution". 

The Court observed that an order of further investigation merely because of the aforementioned reason would pave the way for creating opportunities for the accused to influence the witnesses to persuade them to make contrary statements, get the further investigation ordered, and thereby escape the law, even without facing the trial. 

"Under no circumstances the powers under section 173(8)of the Cr.P.C could be interpreted to create such shortcuts to evade the process of law," the Court ruled. 

It added that the said view was also fortified by certain other aspects, as well. The Court observed that the amount had been handed over by the Exhibition Committee in front of other members as well, apart from Prof. Sathyan. 

"Therefore, conducting a further investigation on the said reason of a contrary statement given by only a single witness would undoubtedly complicate the matter further, and under no circumstances can that be in the best interest of the prosecution," the Court observed. 

However, the Court was conscious of the fact that 'interest of prosecution' could also refer to 'interest of the accused' in certain circumstances. "To be precise, after filing the final report, when the investigation officer comes across evidence that would indicate the innocence of the person made as an accused, and such materials suggest the culpability of some other persons, it could be a good ground for invoking the powers. This is because the interests of prosecution would take within its sweep the necessity of the prosecution of the real culprits and thereby ensure that actual culprits are proceeded against and punished," it observed in this regard. 

The Court further observed that the possibility of another conclusion from the materials collected could not be a reason for invoking the powers under Section 173(8)Cr.P.C. 

It therefore opined that the investigation officer, after evaluation of the materials collected, already formed an opinion as to the culpability of the accused, and a final report implicating him had been filed. It would thus be for the court to decide on the further course of action to be taken thereon. In this case, the Court noted that the competent court had already taken cognizance of the offences. "Therefore the investigation officer cannot be treated as a person competent to decide on the same (that too after cognizance of the same has been taken by the court) by conducting further investigation on the ground that another conclusion was possible," it added. 

It was on consideration of these aspects that the Court held that the decision for further investigation was taken based on matters which were not at all relevant or sufficient for invoking the said powers.

B. Whether the directions sought by the accused to direct the ADGP to consider his statement and conduct a further probe to find out whether the Exhibition Committee maintained a bank account and whether the accused was handed a cheque were to be allowed

The Court was of the firm view that the prayers of the accused could not be granted. 

"The said prayers are of such a nature that it interferes with the investigation conducted by the police," it observed. 

The Court noted that in this case, the investigation officer had arrived at the opinion as to the commission of the offences by the accused after recording statements of 55 witnesses and examining several documentary evidence, and as such, the accused could not compel the investigating officer to go through the said aspects, particularly when the final report, unless the materials on simple examination established a case of false accusation. 

It therefore allowed the petition by the de facto complainant and dismissed the petition by the accused. The Court however clarified that the decision was only with respect to determining the question as to the further investigation into the matter, and could not be treated as observations on the veracity of the allegations against the accused.

"The learned Magistrate shall be empowered to consider all the contentions of the accused, on merits, untrammeled by any of the observations made in this common judgment," the Court added in this regard. 

Case Title: Surendra Babu v. State of Kerala & Ors. and Vellappally Natesan v. State of Kerala & Ors. 

Citation: 2023 LiveLaw (Ker) 183

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