Special Correspondent

CHENNAI: The Madras High Court on Monday cancelled the bail granted by a lower court to former MP K.C. Palaniswamy in a case relating to alleged cheating of a company of Rs.78 crore.

In his order cancelling the bail, Justice M. Jeyapaul said while granting bail, the Additional Chief Metropolitan Magistrate, Egmore, had not considered the gravity of the charge, criminal antecedents of the accused and the fact that the amount allegedly misappropriated was yet to be traced.

The complaint is that Cheran Enterprises Private Limited (CEPL) had Rs.78 crore in its bank account in Chennai. Mr. Palaniswamy, it is alleged, siphoned off the entire money by diverting it to the accounts of other accused. He fabricated documents and records and fraudulently misappropriated the complainant’s fund.

He was granted conditional bail by the Additional CMM. Challenging this, the Inspector of Police, Central Crime Branch, Egmore, filed a petition before the High Court. The Judge heard arguments of A. Saravanan, Government Advocate (Criminal Side), Habibullah Basha, senior counsel for CEPL and B. Kumar, senior counsel for the accused.

In his order, Mr. Justice Jeyapaul said the company had established that it had a deposit of Rs.78 crore. The bank account would show that the entire amount was taken away by the accused. There was a serious charge of fabrication of documents for the purpose of misappropriation.

Except one, who was arrested recently and taken into police custody, no other accused had been arrested. They were in one way or the other closely connected with the business transactions of Mr. Palaniswamy. If the accused was enlarged on bail when investigation was at a crucial stage, there was every possibility of tampering with witnesses.