The Telangana High Court has granted anticipatory bail to Annam Leela Sundaram, Chartered Accountant accused in a case involving alleged fraudulent transfer of company shares worth 19% stake in a pharmaceutical company.
The bench of Justice K. Sujana observed that the allegations against the auditor were primarily document-based and custodial interrogation was not necessary.
A criminal petition was filed under Section 482 of the Bharatiya Nagarik Suraksha Sanhita, 2023 seeking anticipatory bail in connection with FIR No.54 of 2026 registered by the Central Crime Station Police Station, Hyderabad. The offences alleged included Sections 316(5), 336(3), 340(2), 344 read with Section 61(2) of the Bharatiya Nyaya Sanhita, 2023.
According to the complaint, the de facto complainant along with his wife had established M/s Vannsh Life Sciences Private Limited in 2016 at Visakhapatnam for manufacturing cancer-related medicines. The complainant alleged that a Chartered Accountant serving as statutory auditor and a finance officer were entrusted with handling financial and statutory affairs of the company.
The complaint further stated that after a Japanese company invested in the business and acquired 30% shareholding, the complainant and his wife retained 70% shares. However, during a later verification of shareholding patterns, it was allegedly discovered that their stake had reduced to 51%, while 9.5% shares each had been shown in the names of two individuals without their consent or knowledge.
The complainant alleged that share certificates had been split and transferred on April 20, 2022 without authorization and that certain documents had been authenticated by a company secretary who was not holding office at the relevant time. It was alleged that the transfers were fraudulent, lacked consideration and valid documentation, and amounted to cheating, criminal breach of trust, forgery, falsification of records and criminal conspiracy.
Counsel appearing for the petitioner argued that the Chartered Accountant had no role in the day-to-day financial or administrative affairs of the company and usually visited client companies only for limited professional purposes such as finalization of accounts or GST audits. It was contended that the petitioner neither handled nor controlled the complainant’s funds, assets or financial records and therefore Section 316(5) of the BNS was not attracted.
The petitioner also contended that the remand report against another accused did not contain any specific allegations against him except reference to a due diligence report issued by the company secretary. It was argued that auditors function under norms prescribed by the Income Tax authorities and the Institute of Chartered Accountants of India (ICAI), and not under the framework applicable to company secretaries or the Registrar of Companies.
Opposing the plea, the prosecution argued that the allegations were serious in nature and therefore the petitioner should not be granted anticipatory bail.
While granting relief, the High Court noted that the petitioner was arrayed as Accused No.4 and that the allegations primarily related to alleged alteration and transfer of shares. The Court also observed that another accused had already been arrested and released on bail and that the evidence in the matter was largely documentary in nature.
The Court relied upon its earlier judgment in M. Nagraj v. State of Telangana, wherein it was observed that Chartered Accountants and auditors cannot ordinarily be questioned regarding improper payments or salary structures maintained by companies. The earlier ruling had further held that custodial interrogation of a Chartered Accountant may not be required depending on the nature of allegations.
Taking note of the facts and circumstances, the Court held that the petitioner was entitled to anticipatory bail subject to conditions. The Court directed the petitioner to surrender before the investigating officer within two weeks and ordered his release on bail upon execution of a personal bond of ₹25,000 with two sureties.
The High Court further directed the petitioner to appear before the investigating officer every Monday for eight weeks or till filing of charge sheet, whichever is earlier, and to cooperate with the investigation.
Case Details
Case Title: Annam Leela Sundaram Versus The State of Telangana
Case No.: CRIMINAL PETITION No.6335 OF 2026
Date: 04.05.2026
