Chinese Loan App Scam: Kerala High Court Grants Bail To Third Accused Citing Non-Furnishing Of Grounds Of Arrest To His Relative

The Kerala High Court on Tuesday (September 9) granted regular bail to Anto Paul Prakash, the third accused in the alleged Chinese Loan App scam booked for offences under Prevention of Money Laundering Act.

He was arrested on 30.01.2025 and has been in custody since then.

Justice Bechu Kurian Thomas observed that the grounds of arrest were not communicated to the near relative of the arrestee and therefore, he is entitled to be released on bail.

"In view of the above propositions of law, it is evident that the grounds for arrest ought to have been communicated to the near relative of the arrestee also. Since the grounds for arrest were not communicated to the near relatives of the petitioner soon after his arrest, petitioner is entitled to be released on bail". 

The prosecution allegation is that the accused persons circulated advertisements of various illegal Chinese loan applications on social media platforms and once these mobile applications were downloaded, the users' crucial and personal data, including contacts, photographs, etc. were retrieved and used to extort money from them. These monies were collected using various mule accounts and were later siphoned off. Thus, it was alleged that the offence under Section 420 IPC was committed as well as those under the Prevention of Money Laundering Act (PMLA Act).

Referring to the Supreme Court judgment in Kasireddy Upender Reddy v. State of Andhra Pradesh, the Court observed:

"the legal propositions laid down by the Supreme Court mandates that the grounds for arrest must be communicated not only to the arrestee, but also to the near relatives, as soon as possible. On a perusal of the documents produced by the respondent as well as the petitioner, it is noticed that the respondent failed to communicate the grounds for arrest to any near relative or even a friend of the petitioner. Though it was contended that materials are available to indicate that the arrest was informed to the near relatives, it needs to be borne in mind that there is a difference between intimation of the arrest and communication of the grounds for arrest. There are no materials produced to indicate that the grounds for arresting the petitioner were informed or communicated to a near relative or any friend of the petitioner."

Rejecting the contention of the respondents that the aforesaid decision was rendered by the Supreme Court subsequent to the arrest of the petitioner, the Court remarked that the principles in the judgment would apply here also since a judgment of the Supreme Court will always be retrospective in nature unless the judgment itself specifically states that it will operate only prospectively.

Thus, the Court allowed the bail plea and directed release of the petitioner on conditions.

Case No: Bail Appl. No. 6102 of 2025

Case Title: Anto Paul Prakash v. Directorate of Enforcement

Citation: 2025 LiveLaw (Ker) 554

Counsel for the petitioner: A. Mohameed, K.I. Sageer, Muhammed Yasil

Counsel for the respondent: Jaishankar V. Nair - SC - Enforcement Directorate

Click to Read/Download Judgment