{"id":362039,"date":"2025-09-29T18:00:48","date_gmt":"2025-09-29T12:30:48","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=362039"},"modified":"2025-10-03T10:28:28","modified_gmt":"2025-10-03T04:58:28","slug":"kerala-hc-repayment-no-shield-foreign-liquor-corruption-case","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/09\/29\/kerala-hc-repayment-no-shield-foreign-liquor-corruption-case\/","title":{"rendered":"\u2018Mere repayment of misappropriated amount does not efface criminal prosecution\u2019; Kerala HC refuses to quash foreign liquor corruption case"},"content":{"rendered":"
\n

Kerala High Court:<\/span> The present petition was filed by four out of six accused persons, seeking quashment of proceedings initiated against them in relation to a case for misappropriating stock of foreign liquor amounting to Rs 27,92,523. The accused persons contended that they had already remitted the misappropriated amount and, therefore, the proceedings ought to be quashed.<\/p>\n

A Single Judge Bench of A. Badharudeen,J. while dismissing the petition, held that the misappropriation was complete before the remittance of the money was made and therefore, the prosecution of the accused persons was necessary.<\/p>\n

Background:<\/h3>\n

Accused 1 worked as the Shop-in-Charge while Accused 2 to 6 were employed as staff of Muvattupuzha Beverages outlet under Kerala State Beverages Corporation (‘KSBC’) and as such being public servants, they abused their official position to misappropriate the stock of foreign liquor under their control amounting to Rs 27,92,523 between 01-04-2018 to 30-07-2018. They converted it for their own use, thereby committing criminal misconduct by corrupt and illegal means and caused wrongful loss to the Government Exchequer and the corresponding pecuniary gain to themselves as they had collective responsibilities upon the entrusted stock of foreign liquor. An FIR was registered against them upon the complaint of the Manager, BEVCO.<\/p>\n

During the period of commission of the offence, both the Prevention of Corruption Act, 1988<\/a> (‘PC Act 1988’), and the Prevention of Corruption (Amendment) Act, 2018<\/a> (‘PC Amendment Act, 2018’), were in force but since Accused 6 was relieved from the outlet on 20-05-2018, he could not come under the purview of the PC Amendment Act, 2018. Hence, Accused 1 to 6 were prosecuted under Section 13(1)(c)<\/a> read with Section 13(2)<\/a> of the PC Act 1988<\/a>, and Sections 403<\/a>, 409<\/a>, 420<\/a> and 34<\/a> of the Penal Code, 1860<\/a> (‘IPC’) while Accused 1 to 5 were also prosecuted under Section 13(1)(a)<\/a> of the PC Amendment Act, 2018<\/a>.<\/p>\n

The petitioner’s counsel submitted that upon finding shortage in the stock, the responsible persons, including the accused persons herein, remitted the amount, in accordance with Annexure D circular dated 20-12-2017. It was pointed out that it was very common in KSBC outlets to find discrepancies in the stock or amount due to the voluminous work and the peculiarities in procuring and keeping the stock, sales and accounting, and, due to delayed stock verification and audit. Therefore, KSBC issued the said Circular fixing the proportion in which the amount was to be recovered from the staff.<\/p>\n

It was further alleged by the petitioner’s counsel that they did not commit any offence since they remitted the amount on finding the shortage. The counsel also pointed out that the Circular was no longer in force after it was set aside by the Single Judge and thereafter confirmed by the Division Bench in WA No. 642 of 2025, dated 22-08-2025, and even though the remittance was prior to the judgment, the prosecution against the accused persons would not result in conviction.<\/p>\n

However, the Standing Counsel appearing for Respondent 2 contended that the misappropriation was complete before the remittance of the money was made and thereby, the offences alleged were completed, for which the prosecution of the accused persons was necessary. The Public Prosecutor also submitted that mere repayment of the amount alleged to be misappropriated would not efface the criminal case since the ingredients of the offenses were made out and completed prior to the repayment.<\/p>\n

Analysis and Decision:<\/h3>\n

The Court noted that the question to be decided was whether the repayment of the amount of misappropriation would efface the criminal prosecution. The Court opined that since the accused persons had remitted the amount in tune with the ratio fixed by the Circular as soon as they found the shortage, it could not be concluded that they had the intention to commit the crime.<\/p>\n

The Court further noted that the misappropriated amount showed that the foreign liquor found in shortage was a gigantic quantity and therefore, prima facie<\/span>, it could not be held that the shortage occurred because of some unintentional omissions or oversights. The Court opined that when a large portion of the stock was misappropriated, it would not have happened without any intentional acts of the accused who were the custodian of the stock.<\/p>\n

The Court, while rejecting the contention of the accused persons that such a discrepancy was very common in BEVCO outlets, observed that the repayment of the amount without any interest for the same was done at a much later stage and the accused persons enjoyed the benefits of misappropriation in between the period of misappropriation and the remittance of the value. The Court held that mere repayment of the amount by the accused persons, on finding the huge misappropriation at a belated stage itself, would not efface their criminal prosecution.<\/p>\n

Based on the above analysis, the Court, while dismissing the petition, observed that the quashment sought for would not succeed and the trial must proceed.<\/p>\n

[P.N. Suresh Kumar v. State of Kerala, 2025 SCC OnLine Ker 8852<\/a>, decided on 24-09-2025<\/span>]<\/p>\n\n

Advocates who appeared in this case:<\/p>\n

For the Accused:<\/span> Mathew Kuriakose, Advocate.<\/p>\n

For the Respondents:<\/span> Rajesh. A (Special Public Prosecutor, VACB), Rekha. S (Senior Public Prosecutor, VACB), Naveen. T (Standing Counsel).<\/p>\n

Buy Prevention of Corruption Act, 1988   HERE<\/a><\/h3>\n

\"prevention<\/a><\/p>\n

Buy Penal Code, 1860   HERE<\/a><\/h3>\n

\"penal<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“The misappropriated amount showed that the foreign liquor found in shortage was a gigantic quantity and therefore, prima facie, it could not be held that the shortage occurred because of some unintentional omissions or oversights.”<\/p>\n","protected":false},"author":67011,"featured_media":362056,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[79703,20981,90031,90028,71475,2523,90029,32084,58097,90030,37141],"class_list":["post-362039","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-criminal-misappropriation","tag-criminal-misconduct","tag-foreign-liquor-corruption-case","tag-foreign-liquor-stock","tag-justice-a-badharudeen","tag-Kerala_High_Court","tag-prevention-of-corruption-amendment-act-2018","tag-prevention-of-corruption-act-1988","tag-remittance","tag-section-403-ipc","tag-section-409-ipc"],"yoast_head":"\nMere repayment doesn't nullify prosecution: Kerala HC rejects plea in foreign liquor corruption case | SCC Times<\/title>\n<meta name=\"description\" content=\"Kerala High Court held that repayment of misappropriated funds does not erase criminal liability, refusing to quash proceedings in a Rs. 27.9 lakh foreign liquor corruption case.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.scconline.com\/blog\/post\/2025\/09\/29\/kerala-hc-repayment-no-shield-foreign-liquor-corruption-case\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"\u2018Mere repayment of misappropriated amount does not efface criminal prosecution\u2019; 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