Repayment Of Misappropriated Amount In Corruption Case Doesn't Efface Criminal Prosecution: Kerala High Court

Justice A Badharudeen delivered the judgment while considering a criminal miscellaneous petition to quash proceedings against the petitioners, accused in misappropriation of stock of foreign liquor worth Rs 27,92,523 from Muvattupuzha Beverages outlet under Kerala State Beverages Corporation (KSBC) while working in the outlet.

The prosecution contended that the petitioners misappropriated the amount and converted for their use and hence committed criminal misconduct by corrupt and illegal means and caused wrongful loss to the Government Exchequer and correspondent pecuniary gain to the petitioners.

The counsel for the petitioner submitted that the delay in stock verification and audit of the stock in BEVCO outlets would result in finding the shortage at a later stage and only on finding the shortage, the opportunity to adjust the shortage would come. Therefore, in the instant case, on finding the shortage, the petitioners remitted the amount in tune with the ratio fixed as per Annexure D circular. Therefore, it cannot be safely concluded that the petitioners had the intention to commit the crime.

The court noted that voluminous work and delay in Stock verification in BEVCO outlets cannot be cited as the reason for such discrepancies.

It was observed that when a large portion of the stock was misappropriated, it would not happen without any intentional acts of the accused who were the custodian of the stock.

“Prima facie, it cannot be held that the shortage in stock of the foreign liquor occurred because of some unintentional omissions or oversights. When the shortage of foreign liquor is to the tune of Rs.27,92,523/-, a very gigantic quantity, intentional misappropriation of the same is foreseeable with the active participation of the accused persons.” the court observed

The court further observed that the repayment of the amount without any interest for the same was done at a much belated stage and the accused persons enjoyed the benefits of misappropriation in between the period of misappropriation and the remittance of the value for the same.

“Therefore, quashment of a serious case of this nature, merely on the ground that value for misappropriated foreign liquor was repaid, would not sustain as the matter would require framing of charge and trial of the accused persons.” the court noted.

The Court thus dismissed the petition.

Case Title : P N Suresh Kumar and Others v State of Kerala and Another

Citation: 2025 LiveLaw (Ker) 602

Case No: Crl. M C 3477/ 2025

Counsel for Petitioners: Mathew Kuriakose

Counsel for Respondent: Rajesh A (Spl PP- VACB), Rekha S(Snr, PP), Naveen T (SC- Kerala State Bev. Co. M)