The Kerala High Court on Monday granted bail to two accused in the Angamaly Urban Cooperative Society scam case, which involves the alleged misappropriation of ₹115.8 crore through fake loans.

The petitioners, PC Tomy (5th accused) and Elsy Varghese (12th accused), both board members of the society, are among several persons booked for sanctioning fraudulent loans and renewing them using forged documents in the names of fictitious individuals.

The Crime Branch, Ernakulam, registered the case in 2024, alleging that the accused, all part of the society’s managing committee, abused their official positions to cause undue financial loss to the cooperative.

While noting the seriousness of the allegations, Justice A Badharudeen granted bail after observing that both accused had been in judicial custody since June 24 and 25, 2025, and had no prior criminal records.

“The allegations are serious and require effective investigation. However, given the petitioners’ custody since June and the progress of the investigation, further custody is not necessary,” the Court observed.

Earlier, the High Court had denied their anticipatory bail pleas and criticised the Investigating Officer for failing to arrest the duo despite their earlier bail rejections in October 2024. They were subsequently arrested in June 2025 and remained in custody for nearly two months.

During the bail hearing, the petitioners’ counsel argued that both were elderly and suffered from health issues, and that the investigation had substantially progressed. The Additional Director General of Prosecution (ADGP) opposed the plea, citing the gravity of the allegations and the existence of a prima facie case.

Initially, the alleged scam involved ₹55 crore in misappropriated funds. However, during the investigation, the figure rose to ₹115.8 crore. The accused allegedly issued and renewed fake loans using repeated documentation under false identities.

They face charges under IPC Sections 406 (criminal breach of trust), 408, 417 (cheating), 420, 465, 467, 468, 471, and 34 (common intention), along with Sections 13(1)(a) and 13(2) of the Prevention of Corruption Act, 1988.
(With LiveLaw inputs)