Criminal Application No.4220 of 2008

17th February, 2009

Petitioner Counsel: Shri. V. J. DIXIT,Shri. L. V. SANGIT
Respondent Counsel: Shri. N. H. BORADE,Shri. P. P. CHAVAN

Cases Cited:
Adri Dharan Das Vs. State of West Bengal, 2005 ALL MR (Cri) 1097 (S.C.)=2005 AIR SCW 1013 [Para 7]
Balachand Jain Vs. State of Madhya Pradesh, AIR 1977 SC 366 [Para 7]
Narinderjit Singh Sahni Vs. Union of India, 2002 ALL MR (Cri) 430 (S.C.)=AIR 2001 SC 3810 [Para 8]
Himanshu Chandravadan Desai Vs. State of Gujarat, 2006 ALL MR (Cri) 233 (S.C.)=2006 Cri.L.J. 136 [Para 9]
Bihar Legal Support Society Vs. Chief Justice of India, 1986(4) SCC 767 [Para 9]

JUDGMENT

JUDGMENT :- Rule, returnable forthwith.

This application is filed for anticipatory bail in connection with Crime No.259/2008 registered at Chalisgaon Police Station, Dist. Jalgaon for the offences punishable under Sections 406, 408, 409, 420, 465, 468, 471, 120-B, 34 of I.P.C. on 6th December, 2008.

2. The learned Counsel for the applicant submitted that the applicant was arrested in connection with another crime and he was subsequently released on bail. It is further submitted that just to harass the applicant, he is shown as accused in different crimes. It is further submitted that the report of the auditor is the same. However, different crimes are registered. The action is malafide. It is further submitted that the applicant is heart patient. He is from rival political party. Therefore, police are harassing the applicant. In the complaint main allegations are against the directors. It is further submitted that the present applicant has deposited Rs.20 lacs in Crime No.216/2008. It is further submitted that at the most non depositing the amount would attract civil liability. It is further submitted that the alleged offence against the present applicant is only in respect of applying for loan to the Bank. It is further submitted that the Director Board and the Manager of the Bank failed to take necessary steps for recovery of the loan amount and for that, present applicant cannot be held responsible. It is further submitted that all documents are in the custody of the Bank. The custodial interrogation of the applicant is not at all required. It is further submitted that the present applicant is having roots in the society and permanent residence at Chalisgaon. He owns residential house at Chalisgaon and runs Uma Agency at Chalisgaon from years together. It is submitted that the civil remedies under Section 91 as well as 101 of the Maharashtra Co-operative Societies Act are open for the Bank for taking appropriate proceedings against the applicant for recovery of the amount of loan. Therefore, the learned Counsel for the applicant would submit that the interim protection granted by this Court on 12.12.2008 may be made absolute.

3. The learned A.P.P. submitted that the present application is filed directly before this Court. The applicant should have filed application before the Sessions Court. There is no exceptional reason why the present applicant has filed application before this Court directly. It is further submitted that the offence in question is economic offence and registered under various sections of I.P.C. As is revealed from the complaint itself, the total depositors in the Bank are 23,504 and the Bank is supposed to pay them Rs.37 Crores 35 Lacs. The total loan amount which is to be recovered from the various directors and borrowers is Rs.27 Crores 16 lacs. Many irregularities and illegal disbursements have been disclosed in the complaint. Arrest is a part of the process of the investigation intended to secure several purposes and while in custody, there is possibility and circumstances in which the accused may give information leading to material facts.

4. It is further submitted that anticipatory bail may be refused to the applicant on the following grounds:

(a) Dishonest financial transactions have taken place. Undoubtedly, there is sufficient material to indicate that financial irregularities and dishonest and fraudulent loan transactions have taken place in the affairs of the said Bank, for which the board of directors and present borrower, who were in collusion with them are responsible. Requisite security was not obtained, without mortgage, without valuation report, title report, without verifying the stock, license of the shop, annual report of the shop, under the garb of loan amount was advanced to person residing outside the jurisdiction of the Bank. However, forged and fabricated record was created, the exposure limit was four lacs however, loan was sanctioned above four lacs. Fraudulently the fix deposit receipts were not pledged, loan was sanctioned to a person whose capacity, ability to repay the amount was not considered. The applicant hatched the conspiracy with board of directors and manager hence, deliberately and knowingly with malafide intention to defraud the bank they had not taken any action. The police custody is required for custodial interrogation which. There is voluminous record to be examined and confronted, which cannot be done without police custody.

(b) The involvement of the applicant in the alleged offence is clearly made out. There is documentary evidence against the applicant. The overt act of the applicant is manifest and the crime is serious one.

(c) There was designed plan, prima facie to defraud the depositors and member of the bank. The bank is put to loss of approximately 20 crores due to financial bungling, manipulations and money laundering.

(d) The chairman, members of the board of Directors, Manager and the present applicant in furtherance of their common intention committed breach of trust and they have been involved in unlawful disbursement of the said amount under the garb of loan. The said loan was not refunded by the applicant. The loan was disbursed by-passing the rules and regulation.

(e) There was systematic fraud committed due to which bank has suffered great loss.

(f) As per the master circular dated 4th July, 2007, in the point 6.2 - the willful default is defined and in 6.3 - diversion and siphoning of funds elaborately narrated. The penal measures are also narrated in 6.6(b) and in 6.9 - a criminal action is directed to be taken against the borrower by the R.B.I. in the said circular in point No.4.6.3 oral sanction is prohibited.

(g) There is no possibility to receive the huge amount and therefore, there is every possibility that applicant is likely to abscond and will tamper with the prosecution evidence and witnesses and hence, bail may be rejected.

(h) The applicant was in service at Mumbai. However, as a merchant, he has misappropriated the amount under the garb of loan. The amount was advanced on 31.3.2004 and immediately on next day i.e. on 1.4.2004 the applicant resigned from the partnership firm only with a view to defraud the bank. Yet, the applicant has not informed the bank about his resignation. Hence, custodial interrogation is necessary to find out where the amount is diverted and siphoned off.

5. The learned A.P.P. further submitted that there are three offences registered against the present applicant and his family members. He submits that in Crime No.216 of 2008, in which the present applicant is accused, it is alleged that loan amount of Rs.10,00,000/- has been given to Uma Agency without taking any security. The said loan is disbursed. The said loan is disbursed without any security and loan amount is not deposited by the said Uma Agency. The applicant had taken Rs.60,000/- on 17.12.1997 and he has not paid single pai and now total amount due with interest is Rs.2,44,160/-. It is further submitted that from another account the applicant has borrowed Rs.3,40,000/- on 24.9.1997. He did not pay single pai. The said loan was advanced without security. This amount with interest comes to Rs.22,38,558/-. It is further submitted that there is one Ice Factory in the name of the present applicant. Offence is registered for non payment of Rs.97,35,296/-. The total amount of loan of Rs.59,00,000/- was disbursed to the applicant without any security and the applicant has not paid single pai. It is further submitted that in Crime No.254/2008 one Usha Vidyasagar Ghate is accused and the loan amount of Rs.4,00,000/- was advanced on 30th March, 2002 without security. The said accused has not repaid single pai and as on today the total due amount is Rs.8,33,977/- including interest. It is further submitted that one Mr. Milind Vidyasagar Ghate is also an accused in Crime No.254/2008 and the amount of Rs.4,00,000/- was advanced to him on 30th March, 2002. The said loan amount was given to the accused without taking any security. He did not pay single pai in return and now the said total amount comes to Rs.7,39,795/-. The said amount is also disbursed without security.

6. The sum and substance of the argument of the learned A.P.P. is that huge amount is borrowed by the applicant and his family members. The Bank is cheated, no security was given, loan amount is borrowed by the applicant in collusion with the directors of the Bank. It is further submitted that there was systematic plan and conspiracy between the directors and the applicant and as a result of which the applicant and his family members have borrowed huge amount without any security, contrary to the Bye-laws and did not repay the loan amount and the Bank has sustained huge loss and ultimately, the Bank is not able to repay the depositors whose amount is deposited in the Bank.

7. While considering the scope of anticipatory bail under section 438 of Criminal Procedure Code in case of Adri Dharan Das Vs. State of West Bengal reported in 2005 AIR SCW 1013 : [2005 ALL MR (Cri) 1097 (S.C.)], relying on the earlier Constitutional Bench judgment in case of Balachand Jain Vs. State of Madhya Pradesh reported in AIR 1977 SC 366, the Supreme Court in para 7 has observed thus:-

"The power exercisable under Section 438 is somewhat extraordinary in character and it is only in exceptional cases where it appears that the person may be falsely implicated or where there are reasonable grounds for holding that a person accused of an offence is not likely to otherwise misuse his liberty then power is to be exercised under Section 438. The power being of important nature it is entrusted only to the higher echelons of judicial forums i.e. the Court of Session or the High Court. It is the power exercisable in case of an anticipated accusation of non-bailable offence. The object which is sought to be achieved by Section 438 of the Code is that the moment a person is arrested if he has already obtained an order from the Court of Session or High Court, he shall be released immediately on bail without being sent to jail."

8. It would also be relevant to refer to the observations of the Supreme Court in the case of Narinderjit Singh Sahni and another Vs. Union of India and others, reported in AIR 2001 Supreme Court 3810 : [2002 ALL MR (Cri) 430 (S.C.)], wherein the Supreme Court has observed that if accused facing a charge under sections 406, 409, 420 and 120-B is ordinarily not entitled to invoke the provisions of section 438 of the Criminal Procedure Code unless it is established that such criminal accusation is not a bona fide one.

9. The Supreme Court in the case of Himanshu Chandravadan Desai & ors. Vs. State of Gujarat reported in 2006 Cri.L.J. 136 : [2006 ALL MR (Cri) 233 (S.C.)] in para 7 referring to another judgment of Constitution Bench of the Supreme Court in case of Bihar Legal Support Society Vs. Chief Justice of India and another (1986(4) SCC 767) observed:

"Accused a Director of Bank and others involved in Bank Scam - siphoned off funds of Bank worth crores by bogus loans and fictitious letters of credit in name of their friends, relatives etc. - Offence is very serious - Evidence showing their prima facie involvement in offence - Having regard to huge amounts involved there is danger of accused absconding, if released on bail, or attempting to tamper with evidence by pressurizing witnesses - Refusal of bail is proper."

10. After hearing the learned Counsel for the applicant and A.P.P., I am of the considered view that the present application deserves to be rejected, firstly because in normal course the applicant should have approached the appropriate Sessions Court under Section 438 of Cr.P.C. There is no special reason disclosed in the application as to why the application is directly filed in the High Court. The Sessions Court which is situated at local place is always in a better position to seek proper assistance from the complainant or the accused, as the case may be. Secondly, when the present applicant has obtained bail orders in other crimes from the Sessions Court, it would have been appropriate that the applicant should have approached first to the Sessions Court.

11. If the chart submitted by the learned A.P.P. is carefully perused, it is evident that the present applicant and his family members have borrowed loans in various names. There are in all three offences registered against the present applicant and his family members. There are different account numbers in the bank i.e. 177/3307, 177/122, 177/125, 174/8379, 185/8656, 185/8657 and 185/8655. These loan amounts are borrowed from 1997 to 2004 at various stages and more than 6 times. The total amount borrowed from the Bank is Rs.59 lacs. The applicant or his family members did not pay single pai towards repayment of loan amount and as a result, with interest now the applicant and other family members are supposed to pay Rs.1,66,24,909/-. The loan amounts at various stages are borrowed without any security. It is also evident that as per bye-laws of the Bank and relevant regulations, the Bank is supposed to take security and borrowers are supposed to furnish security while obtaining loan. The said procedure has been given go by. According to the chart prepared by the Bank, not a single pai is repaid to the Bank. Viewed from any angle, borrowing huge amount of loan in various stages from 1997 to 2004, that too without following any procedure and without any security, cannot be said to have been obtained without collusion with the Directors and Manager of the Bank. It is apparent that the relevant bye-laws, rules and regulations have been violated. Thousands of depositors have deposited their hard earned money in the said Bank. The said amount of deposit is more than Rs.37 Crores and loan amount is about Rs.27 crores, which is not recovered by the Bank. As a result of the non recovery of the loan amount, the Bank is not able to pay to the depositors against their deposits and as a result more than 23,000 depositors are deprived of their own amount. The offence in question is not only offence against the Bank but thousands of depositors are cheated by the Bank officials, borrowers, directors with systematic plan and crores of rupees are siphoned in collusion with each other.

12. Therefore, in my considered view, the application deserves to be rejected. Interim order dated 12.12.2008 stands vacated. Rule is discharged.

Application dismissed.