Holding

The Supreme Court upheld the conviction but granted bail to the appellant, subject to his depositing an enhanced fine of Rs.5 crore and complying with the stipulated conditions.

Summary

The appellant, a 68‑year‑old former managing trustee of two charitable trusts, was convicted under the Prevention of Corruption Act, 1988 for criminal misconduct, criminal breach of trust and misappropriation of grant‑in‑aid funds meant for schools for specially‑abled children. The High Court rejected his appeal against conviction and sentence, prompting a special leave petition before this Court. The appellant offered to deposit an enhanced fine of Rs.5 crore, of which Rs.50 lakh had already been paid, and sought release on bail pending the appeal. The Court affirmed the findings of guilt but held that, given the appellant’s age, repentance and willingness to pay the enhanced fine for the benefit of the children, bail could be granted subject to strict conditions. The bail order required the appellant to file an undertaking and deposit the balance Rs.4.5 crore by a specified date, failing which the bail would be cancelled. The fine amount is to be transferred to the Tamil Nadu State Legal Services Authority and invested in an interest‑bearing fixed deposit, with the interest to be used by the Juvenile Justice Committee for childcare institutions.

Issues considered

Whether the appellant is entitled to bail pending appeal on the condition of depositing an enhanced fine.
Whether the quantum of sentence can be modified by imposing an enhanced fine directed for a specific public purpose.
Whether the fine can be directed to be invested and the interest utilized under the Juvenile Justice Act, 2015.

Legislation cited

Indian Penal Code, 1860s. 109, s. 120B, s. 409
Juvenile Justice Act, 2015
Prevention of Corruption Act, 1988s. 13(1)(d), s. 13(2)

Headnote

Issue for Consideration Matter pertains to the quantum of sentence imposed on the appellant and his release on bail on deposit of enhanced amount of fine. Headnotes† Sentence/sentencing – Suspension of sentence – Payment of enhanced fine – Grant of bail – Wife of the who registered two trusts, wherein the appellant and his mother-in-law were appointed as trustees – Appellant, his wife, and the other co-accused misappropriated grant-in-aid funds for their own benefits, which were meant to be used for institutions for specially-abled children

Subjects

bailsuspension of sentenceenhanced finemisappropriation of grant-in-aid fundsminister for social welfareMercy Mother India Charitable TrustBharani Swathi Educational Trustquantum of sentencerelease on bail on deposit of enhanced amount of fineinstitutions for specially-abled childrencriminal misconductcriminal breach of trustbenefit of specially-abled childreninterest‑bearing fixed depositJuvenile Justice Committeechildcare institutions

Judgment

[2025] 3 S.C.R. 926 : 2025 INSC 799

Tr. A. Babu
v.
State of Tamil Nadu
(Criminal Appeal No. 1413 of 2025)
18 March 2025
[Vikram Nath and Sandeep Mehta, JJ.]

Issue for Consideration
Matter pertains to the quantum of sentence imposed on the appellant
and his release on bail on deposit of enhanced amount of fine.

Headnotes†
Sentence/sentencing – Suspension of sentence – Payment
of enhanced fine – Grant of bail – Wife of the appellant was
the Minister for Social Welfare and Nutritious Meals Scheme,
who registered two trusts, wherein the appellant and his
mother-in-law were appointed as trustees – Appellant, his
wife, and the other co-accused misappropriated grant-in-aid
funds for their own benefits, which were meant to be used for
institutions for specially-abled children – Trial court convicted
and sentenced them – Appellant and his wife filed appeal
before the High Court – Appeal of the co-accused wife stood
abated on her death – High Court rejected the appeal of the
appellant – Challenge to:
Held: Findings of the trial court and the appellate court regarding
the charges of criminal misconduct and criminal breach of trust
and misappropriation attributed to co-accused wife have attained
finality – Appellant, now about 68 years old, is repenting and
in order to show his bona fides has volunteered to deposit an
enhanced fine of Rs.5 crores which may be utilised for the benefit
of the specially-abled children – In view thereof, the appellant to
be released on bail subject to terms and conditions – Appellant
to file an undertaking that he would deposit the balance amount
of enhanced fine with the Registry of the Supreme Court and on
failure to do so, the bail would be cancelled automatically – Entire
amount of Rs.5 crores to be transmitted to the account of the
State Legal Services Authority to be invested in an interest-bearing
fixed deposit account in a Nationalised bank – Juvenile Justice
[2025] 3 S.C.R. 927

Tr. A. Babu v. State of Tamil Nadu

Committee of the High Court of Tamil Nadu to utilise the interest
generated from this amount for the benefit of the Government
established/operated childcare institutions in the State – Prevention
of Corruption Act, 1988. [Paras 9, 10, 14-17 ]

List of Acts
Prevention of Corruption Act, 1988; Juvenile Justice Act, 2015.

List of Keywords
Bail; Suspension of sentence; Enhanced fine; Misappropriation of
grant-in-aid funds; Minister for Social Welfare and Nutritious Meals
Scheme; Mercy Mother India Charitable Trust; Bharani Swathi
Educational Trust; Quantum of sentence; Release on bail on deposit
of enhanced amount of fine; Institutions for specially-abled children;
Criminal misconduct; Criminal breach of trust; Misappropriation;
Benefit of the specially-abled children; Invested in interest-bearing
fixed deposit account in a Nationalised bank; Juvenile Justice
Committee of the High Court of Tamil Nadu; Childcare institutions.

Case Arising From
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
1413 of 2025
From the Judgment and Order dated 05.09.2024 of the High Court
of Judicature at Madras in CRLA No. 545 of 2021

Appearances for Parties
Advs. for the Appellant:
S. Nagamuthu, Sr. Adv., P. Krishnan, Ms. Harsha Tripathi, Balaji
Srinivasan.
Adv. for the Respondent:
Sabarish Subramanian.

Judgment / Order of the Supreme Court

Order

1. Heard.
2. Leave granted.
928 [2025] 3 S.C.R.

Supreme Court Reports

3. The appellant1 (A-4) and the co-accused persons2 faced trial before
the Ld. ASJ, Additional Special Court3 for the criminal cases relating
to elected MPs and MLAs, Chennai. They were charged for criminal
misconduct under the Prevention of Corruption Act, 1988,4 criminal
breach of trust and misappropriation of grant-in-aid funds amounting
to Rs.15,45,000/-. These grants were made for running schools for
the welfare of ‘Severely Orthopedically Handicapped Children’ and
‘Deaf’ children. A-2 died during pendency of the trial and thus, the trial
against him stood abated. Vide judgment dated 29th September, 2001,
the trial Court acquitted A-5 and convicted appellant (A-4) and other
co-accused persons(A-1) and (A-3) and sentenced them as below.:-

Accused(s) Sections Sentence
Appellant/Accused-4 Section 120(B)read Sentenced
with Section 409 to undergo 5
IPC read with 13(2) years rigorous
read with 13(1)(d) imprisonment and
of the PC Act to pay a fine of
Rs.10,000/-, in
and
default to undergo
Section 109 read 6 months rigorous
with Section 409 imprisonment.
IPC
and
Section 109 IPC
read with Section
13(2) read with
Section 13(1)(d) of
the PC Act

1 Tr. A. Babu/Accused No. 4. (Hereinafter, referred to as ‘appellant (A-4)’.
2 The other accused namely are, Indirakumari/Accused No.1, wife of appellant herein (A-4); T.K.
Kirubakaran/Accused No.2, Secretary to the Government, Social Welfare and Nutritious Scheme (A-2);
Dr. P. Shanmugam/Accused No.3, Director of Rehabilitation of the Disabled (A-3) and R. Venkatakrishnan/
Accused No.5, junior P.A. to A-1 (A-5).
3 Hereinafter, referred to as ‘trial Court’.
4 Hereinafter, referred to as ‘PC Act’.
[2025] 3 S.C.R. 929

Tr. A. Babu v. State of Tamil Nadu

Indirakumari/ Section 120(B) IPC Sentenced
Accused No.1 read with Section to undergo 5
(wife of the 409 IPC read with years rigorous
appellant) Section 13(2) read imprisonment and
with 13(1)(d) of the to pay a fine of
PC Act Rs.10,000/-, in
default to undergo
and
6 months rigorous
Section 409 IPC imprisonment.
and
Section 13(2) read
with Section 13(1)
(d) of the PC Act
Dr. P. Shanmugam Section 120(B) IPC Sentenced
Accused No. 3 read with Section to undergo 3
409 IPC read with years rigorous
Section 13(2) read imprisonment and
with Section 13(1) to pay a fine of
(d) of the PC Act Rs.10,000/-, in
default to undergo
and
6 months rigorous
Section 409 imprisonment.
and
Section 13(2) read
with Section 13(1)
(d) of the PC Act

4. The appellant and his wife Indirakumari (A-1) preferred a joint Criminal
Appeal No. 545 of 2021 before the High Court to challenge their
conviction and sentences as awarded by the trial Court. During the
pendency of the appeal, Indirakumari (A-1) passed away and thus,
her appeal stood abated. The appeal preferred by the appellant
(A-4) has been rejected by the High Court vide judgment dated
5th September, 2024, and hence, this appeal by special leave.
5. On 14th February, 2025, Shri S. Nagamuthu, learned senior counsel
for the appellant, confined his submissions to the question of sentence
only and urged that, while reducing the sentence, the fine amount
930 [2025] 3 S.C.R.

Supreme Court Reports

may be enhanced, which may be directed to be utilised for the
benefit of the specially-abled children. Accordingly, limited notice
was issued on the aspect of sentence and the prayer for grant of
bail. Further, on the submissions/offer made by Shri S. Nagamuthu
on 14th February, 2025, as an interim measure, an amount of Rs. 50
lakhs was directed to be deposited with the Registry of this Court.
The same has been complied with.
6. Today, the matter has been taken up for consideration of the
application for bail/suspension of sentence filed on behalf of the
appellant.
7. On a perusal of the record, it transpires that the charges against
the appellant (A-4) and the other co-accused persons5 were of
misappropriating the funds, for their own benefits, which were meant
to be used for institutions for specially-abled children. Indirakumari
(A-1), being the wife of the appellant herein (A-4) was the Minister
for Social Welfare and Nutritious Meals Scheme, who registered
two trusts, namely M/s. Mercy Mother India Charitable Trust and
M/s Bharani Swathi Educational Trust, wherein the appellant (A-4)
and the mother of Indirakumari (A-1) were appointed as trustees.
The appellant (A-4) was appointed as a lifelong managing trustee
vested with all the powers and functions of the trusts. A sum of
Rs. 15,45,000/- was sanctioned by way of grant-in-aid to these trusts
by the social welfare department. On a complaint being filed, the
matter was investigated, and it came to light that the grant-in-aid was
sanctioned without conducting proper audit and inspection. A huge
sum of money was bestowed by way of grant-in-aid to schools for
handicapped children which were not even in existence.
8. Shri S. Nagamuthu, learned senior counsel, tried to urge that the
appellant was implicated in this case only on the ground of him being
a managing trustee of the above-mentioned two trusts and that he
had no active role to play in the alleged criminal misconduct and/or
misappropriation. However, he was not in a position to dispute that
the grant-in-aid to the tune of Rs. 15,45,000/- was extended without
entitlement, audit or inspection and that several of the beneficiary
schools purportedly established by the respective trusts were not
even in existence.

5 Supra Note 2.
[2025] 3 S.C.R. 931

Tr. A. Babu v. State of Tamil Nadu

9. We find that so far as the findings of the trial Court and the appellate
Court regarding the charges of criminal misconduct and criminal
breach of trust and misappropriation attributed to Indirakumari (A-1)
are concerned, the same have attained finality because the appeal
against conviction filed on behalf of the said accused has abated.
10. Shri S. Nagamuthu has not challenged the conviction of the appellant
(A-4). His submission was that the appellant (A-4), who is now about
68 years old, is repenting and in order to show his bona fides, he
is ready to pay an enhanced amount of fine which may be used for
restoration/rehabilitation of children in need of care and protection/
children in conflict with law as per the mandate of the Juvenile
Justice Act, 2015.
11. Shri S. Nagamuthu submitted on instructions that the appellant (A-4)
is ready to unconditionally deposit a sum of Rs. 5 crores, including the
amount of Rs. 50 lakhs already deposited for this purpose. However,
his fervent plea was that the appellant (A-4) may be released on
bail during the pendency of the appeal.
12. Learned counsel representing the State opposed the submissions
advanced by the appellant’s counsel.
13. Having heard and considered the submissions raised at Bar and after
going through the material available on record, while affirming the
findings of guilt recorded by the Courts below qua the appellant, we
deem it fit to entertain this appeal limited to the extent of quantum
of sentence only.
14. The appellant is about 68 years of age as on date. The incident took
place between the years 1990-1996 and the trial was drawn out over
more than two decades. In the facts and circumstances noted above
and considering the fact that the appellant by way of repentance has
volunteered to deposit an enhanced fine of Rs. 5 crores, we hereby
direct that the appellant shall be released on bail subject to such
terms and conditions as may be imposed by the trial Court.
15. Shri S. Nagamuthu prays that the accused appellant may be granted
three months’ time to deposit the balance amount of Rs. 4 crores
and 50 lakhs. Thus, it is directed that the appellant shall immediately
and not later than two weeks from today, file an undertaking in this
Court that he shall deposit the balance amount of Rs. 4 crores and
50 lakhs with the Registry of this Court on or before 18th June, 2025.
932 [2025] 3 S.C.R.

Supreme Court Reports

16. In case the appellant (A-4) fails to furnish the undertaking and deposit
the amount in the above terms, the bail granted to him shall stand
cancelled automatically and he shall be taken back into custody to
serve the remaining sentence. However, if the compliance is made,
the entire amount of Rs. 5 crores including the sum of Rs. 50 lakhs
deposited earlier shall be transmitted to the account of the Tamil
Nadu State Legal Services Authority to be invested in an interest-
bearing fixed deposit account in a Nationalised bank.
17. The Juvenile Justice Committee of the High Court of Tamil Nadu shall,
in its own wisdom, be authorised to utilise the interest generated from
this amount for the benefit of the Government established/operated
childcare institutions in the State of Tamil Nadu.
18. List on 14th July, 2025 for reporting compliance.

Result of the case: Matter to be listed for compliance.

†
Headnotes prepared by: Nidhi Jain