Prior Notice Mandatory Before Arresting Co-operative Society Directors in Future Financial Default Cases: Kerala HC

To safeguard co-operative society directors from successive arrests arising out of deposit default complaints, the Kerala High Court directed investigating officers to issue prior notice before effecting arrests in future cases.

Justice G. Girish, presiding over the matter, addressed the grievances of directors of the Agri-Tourism Multi-State Co-operative Society Ltd. (ATCOS). The petitioners sought judicial intervention against the threat of continuous arrests in new cases that often surface precisely when they appear in court to execute bail bonds for previously registered crimes.

Legal Necessity of Arrest Under BNSS

During the proceedings, the Court examined the balance between the police's power to arrest and the protection of personal liberty under the newly implemented Bharatiya Nagarik Suraksha Sanhita, 2023. The Court highlighted that while the power to arrest exists for offences punishable with up to seven years, it is not an absolute mandate but a discretionary power that must be exercised with circumspection.

The Court, in its reasoning, observed: "In the light of the aforesaid decision of the Hon’ble Supreme Court, a Police Officer is empowered to effect arrest of a person accused of an offence punishable with imprisonment up to seven years, without prior notice under Section 35(3) of BNSS, upon fulfillment of the mandate of Section 35(1)(b)(i) of the BNSS, along with anyone of the conditions mentioned in Section 35(1)(b)(ii) of the BNSS. Therefore, the petitioners herein cannot claim notice under Section 35(3) of the BNSS as of right since in appropriate cases where the requirements... are fulfilled, there is no requirement to issue such notice."

However, the Court found the petitioners' request for notice to be "just and reasonable" given that they had already been granted pre-arrest bail in multiple cases involving Sections 406 and 415 of the Indian Penal Code, 1860 due to a liquidity crunch in their society.

Guidelines for Police Discretion

Referring to the landmark precedent in Satender Kumar Antil v. Central Bureau of Investigations ( "[2026 SCC OnLine SC 162]": 2026 CaseBase(SC) 170), the Court reiterated that arrest should not be a matter of routine. The Court has the following directions:

"It is hereby directed that the Investigating Officers concerned shall issue notice under Section 35(3) of the BNSS to the petitioners before proceeding with their arrests in connection with any future complaints relating to their failure to return the deposits made by customers in ATCOS."

Background:

The dispute originated from the inability of the Agri-Tourism Multi-State Co-operative Society Ltd. (ATCOS) to return deposits to its members, leading to numerous criminal cases across different districts in Kerala. The petitioners, being directors of the society, faced multiple FIRs under the Indian Penal Code, 1860 for criminal breach of trust and cheating. Although they secured anticipatory bail in several instances, they feared that the police would arrest them in newly registered, similar complaints the moment they secured liberty in existing ones.

The petitioners argued that such a cycle of arrests would lead to indefinite judicial custody and requested a 7-day prior notice before any further arrests. The Court, while acknowledging the statutory powers under the Bharatiya Nagarik Suraksha Sanhita, 2023 and the Constitution of India, balanced the state's investigative needs with the petitioners' rights, ultimately allowing the petition by making the Section 35(3) notice mandatory for future related complaints.

Case Details:
Case No.: WP(CRL.) NO. 55 OF 2026
NeutralCitation: 2026:KER:44662
Case Title: MURALEEDHARAN P R & OTHERS v. STATE OF KERALA & OTHERS
Appearances:
For the Petitioner(s): SMT.ANJALI MENON, SHRI.JIBI JACOB, ADVS.
For the Respondent(s): SRI. SAMEER.S, PUBLIC PROSECUTOR

Source: 2026 CaseBase(KER) 349