Mere Repayment Does Not Extinguish Criminal Liability In Misappropriation Cases: Kerala High Court Refuses To Quash Prosecution Against BEVCO Employees

The Court was hearing a plea filed by employees of the Kerala State Beverages Corporation (BEVCO) seeking to quash criminal proceedings initiated against them under the Prevention of Corruption Act.

A Bench comprising Justice A. Badharudeen, while dismissing the petition, observed that “in the facts of the case involving misappropriation of huge quantity of foreign liquor, mere repayment of the amount of the misappropriated foreign liquor by the accused persons, on finding the huge misappropriation at a belated stage itself, would not efface their criminal prosecution.”

Senior Advocate Mathew Kuriakose appeared for the petitioners, while Special Public Prosecutor Rajesh A. and Senior Public Prosecutor Rekha S. represented the State.

Background

The Vigilance and Anti-Corruption Bureau (VACB) had registered a case against six BEVCO employees for allegedly misappropriating foreign liquor worth approximately ₹27.92 lakh while managing a retail outlet in Muvattupuzha between April and July 2018.

The employees, all public servants at the time, were charged under the Prevention of Corruption Act, 1988, its 2018 Amendment, and Sections 403, 409, 420, and 34 of the Indian Penal Code.

The petitioners, on approaching the Court, argued that the shortage was discovered much later due to delays in stock verification and audit and that they had voluntarily remitted the amount as per a BEVCO circular issued in 2017 that allowed staff to make good shortages proportionally. They contended that the repayment extinguished their criminal liability.

The prosecution, however, maintained that the misappropriation was deliberate and the repayment occurred only after detection. It argued that the offence was complete once the stock was misappropriated and that subsequent repayment could not undo the crime.

Court’s Observation

The Kerala High Court rejected the petitioners’ contention that discrepancies were common in BEVCO outlets and could arise from routine stock handling. Observing that the shortage amounted to nearly ₹28 lakh, the Bench noted that “the foreign liquor found in shortage is a gigantic quantity, not a lesser quantity. Therefore, prima facie, it cannot be held that the shortage occurred because of unintentional omissions or oversights.”

The High Court further noted that the repayment was made long after the misappropriation was detected and that the accused had enjoyed the benefits of the offence in the interim.

The Bench held that belated restitution could not nullify criminal proceedings, stating 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.”

Concluding that the misappropriation offence stood complete before repayment, the Bench held that “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.”

Conclusion

Accordingly, the Court dismissed the petition and directed that the trial proceed before the Special Court, observing that the gravity of the offence and the public nature of the employees’ positions warranted full adjudication.

Cause Title: P.N. Suresh Kumar & Ors. v. State of Kerala & Anr. (Neutral Citation: 2025:KER:71213)

Appearances

Petitioners: Advocate Mathew Kuriakose

Respondents: Special Public Prosecutor Rajesh A., with Senior Public Prosecutor Rekha S.

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