The Kerala High Court has granted regular bail to former MLA M.C. Kamarudheen, who served as the chairman, and his business associate T.K. Pookoya Thangal, the Managing Director of several Fashion Gold-related companies, in a high-profile money laundering case. The case revolves around allegations that over ₹20 crore of investor funds were misused through deposit schemes operated under four companies: Fashion Gold International Pvt. Ltd., Fashion Ornaments Pvt. Ltd., Qamar Fashion Gold Pvt. Ltd., and Nujum Gold Pvt. Ltd.
Justice Bechu Kurian Thomas assessed the bail applications and observed that there was no prima facie material to indicate the commission of offences under the Prevention of Money Laundering Act (PMLA). The court emphasized that a mere business failure—especially amid challenges such as the COVID-19 pandemic—does not establish fraudulent intent, which is a critical ingredient for offences under Section 420 of the Indian Penal Code and for proceeding under the PMLA.
The court noted that the investors in many cases had already received certain returns in the form of dividends, which further weakened assertions of deliberate wrongdoing. Even if the conduct of the accused could trigger an offence under the Banning of Unregulated Deposit Schemes Act (BUDS Act), that statute is not among the scheduled offences under the PMLA. Therefore, the money laundering framework could not validly be applied.
A significant factor in granting bail was the prolonged judicial custody the accused had already endured. They had been detained for approximately 155 days since their arrest under the PMLA and an additional 110 days in connection with predicate offences investigated by the Crime Branch—totaling around 265 days of incarceration. The court held that detaining them indefinitely, especially when the trial is unlikely to commence or conclude in the near future, would constitute an infringement of personal liberty.
Justice Thomas criticized the use of pre-trial detention as a tool by the Enforcement Directorate to keep individuals confined without satisfying the requirements of timely trial and due process. The court reiterated that such extended custody must not become a punitive mechanism in itself.
Granting bail, the court required a bond of ₹50,000 each, backed by two solvent sureties of similar amounts, subject to the satisfaction of the jurisdictional court. This conditional release was grounded in constitutional safeguards that ensure the accused are not deprived of liberty without just cause, particularly when the adjudicatory process remains slow.
In sum, the High Court balanced the absence of prima facie material under the PMLA, the possibility of alternative statutory remedies under the BUDS Act, and the prolonged custody of the petitioners. It concluded that continued incarceration in the absence of imminent trial or compelling grounds for further detention was not appropriate. The court’s decision supports the principle that legal proceedings must proceed with urgency and fairness, and that the right to liberty cannot be overshadowed by procedural inertia.
The detailed order reflects not only a keen awareness of constitutional protections but also judicial vigilance against the misuse of statutory powers in financial crime investigations.
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