Allowed

Vijay Singh v. Central Bureau of Investigation

Himachal Pradesh HC14 May 2025CRMPM/219/2025

Case brief

AI extract

What is this about?

Two petitions for pre-arrest bail were filed by partners of a firm accused of cheating and corruption under a loan recovery FIR. The High Court allowed bail, noting the default was due to COVID-19 lockdown losses, questioning the co-existence of cheating and breach of trust charges, and finding no specific material to substantiate witness tampering apprehensions.

What did the court decide?

Petitions allowed; order dated 10.02.2025 made absolute till disposal of the case.

Vijay Singh Vs Central Bureau of Investigation — Corruption | Himachal Pradesh HC (2025)

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( 2025:HHC:13815 )

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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Cr.MP(M) No.219 & 220 of 2025 Reserved 02.05.2025 Date of Decision: 14.05.2025.

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1. Cr.MP(M) No.219 of 2025
Vijay Singh ....Petitioner Versus
Central Bureau of Investigation ....Respondent
2. Cr.MP(M) No.220 of 2025
Jyoti Chaudhary ....Petitioner Versus
Central Bureau of Investigation ....Respondent
Coram
Hon’ble Mr Justice Rakesh Kainthla, Judge. Whether approved for reporting? No.
For the Petitioner : M/s. Amrinder Singh & Kamlesh Kumari, Advocates, in both the petitions.
For the Respondent/ CBI : Mr. Janesh Mahajan, Advocate, Special Public Prosecutor, in both the petitions.

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Rakesh Kainthla, Judge

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These petitions arise out of the same FIR; therefore,

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they are being taken up together for disposal.

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Whether reporters of the local papers may be allowed to see the judgment? Yes

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2 ( 2025:HHC:13815 ) 2. The petitioners have filed the present petitions

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seeking pre-arrest bail. It has been asserted that the petitioners are accused in RC0962025A0004, dated 13.01.2025, registered at CBI, Shimla (H.P), for the commission of offences punishable under Sections 120-B, 409, 420 of Indian Penal Code (“in short IPC”) & Section 13(2) read with Section 13(1)(A) of Prevention of Corruption Act (PC Act), 1988. The petitioners were falsely implicated. They apprehend their arrest. The petitioners are the partners of M/s. Devang Sales Corporation. They applied for the loan in the year 2019-20, which was sanctioned on 06.03.2020. The world was affected by the COVID-19 pandemic in the year 2020, and a complete lockdown was imposed after March 2020. The business of the petitioners closed, and the petitioners could not pay the loan instalments. Proceedings are also pending before the learned Debt Recovery Tribunal, Chandigarh. A complaint was made regarding the transaction to the CBI. A team of CBI searched the petitioner’s house and the Office, however, nothing incriminating was found. The dispute between the parties is civil and pertains to the recovery of the amount. As per the guidelines framed by the Government, the CBI can investigate a complaint when the loan is above ₹6 Crore. However, in the present case, the loan amount is ₹3 Crore only. The petitioners are innocent, and

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they were falsely implicated. They would abide by the terms and conditions which the Court may impose. Hence, the petition.

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These petitions are opposed by filing a reply asserting that a written complaint was made by the Chief Manager, Punjab National Bank, Circle Office, Shimla, against M/s. Devang Sales Corporation, a registered partnership firm through its partners, i.e. Vijay Singh Chaudhary & Jyoti Chaudhary, unknown public servants and unknown private persons. It was asserted that M/s. Devang Sales Corporation approached the Branch Office of PNB, Kala Amb, for a Cash Credit Limit of ₹300 Lacs. The proposal was sanctioned by PNB, CLPC Parwanoo. M/s. Devang Sales Corporation failed to return the amount, and the loan was classified as a Non-Performing Asset (NPA) on May 2, 2022, effective from March 31, 2022, with an outstanding balance of ₹3.34 Crores. The bank initiated recovery proceedings under the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest (SARFAESI) Act, 2002. The borrower misutilized the bank funds. Several irregularities were discovered during the internal investigation conducted by the bank. It was found that the funds were transferred from the Cash Credit (CC) account of the firm to unrelated parties, followed by subsequent cash withdrawals. The original title deeds were not submitted to the Bank. The Bank was taking regular Departmental

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4 ( 2025:HHC:13815 )

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Action (RDA) against the Officials found accountable in the Staff Accountability Examination. However, the details of the Officers were not provided by the Bank in the complaint. The accused were asked to return the public money, but they did not respond. The addresses given by the borrower were verified, and it was found that the unit premises were vacated. Search warrants were obtained, and searches were conducted on 17.01.2025. It was found that the premises of M/s. Devang Sales Corporation was sealed by the Punjab & Sindh Bank. The investigation is at the initial stage. The petitioners are the main accused in the case. They can influence the witnesses and tamper with the evidence in case of their release on bail. The allegations against the petitioners are serious. Therefore, it was prayed that the present petitions be dismissed.

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Separate rejoinders denying the contents of the replies and affirming those of the petitions were filed.

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I have heard M/s. Amrinder Singh Rana & Kamlesh Kumari, learned counsels for the petitioner and Mr. Janesh Mahajan, learned counsel, Special Public Prosecutor, for the respondent-CBI.

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Mr. Amrinder Singh Rana, learned counsel for the petitioners, submitted that the petitioners are innocent and they were falsely implicated. They borrowed the money in the year

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5 ( 2025:HHC:13815 )

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A lockdown was imposed in the same year, which caused huge losses to the petitioners. They could not repay the money, and proceedings were initiated against them under the SARFAESI Act, 2002. The initiation of Criminal Proceedings for the recovery of the money is not permissible. Therefore, he prayed that the present petitions be allowed and the petitioners be released on pre-arrest bail.

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Mr. Janesh Mahajan, learned counsel, Special Public Prosecutor, for the respondent-CBI, submitted that the investigation is at the initial stage. The petitioners can influence the witnesses in the case of their release on bail. The offences alleged against the petitioners are serious. Therefore, he prayed that the present petitions be dismissed.

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I have given considerable thought to the submissions made at the bar and have gone through the records carefully.

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The parameters for granting bail were considered by the Hon’ble Supreme Court in Ajwar v. Waseem (2024) 10 SCC 768: 2024 SCC OnLine SC 974, wherein it was observed as under page 783: -

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“Relevant parameters for granting bail

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26. While considering as to whether bail ought to be granted in a matter involving a serious criminal offence, the Court must consider relevant factors like the nature of the accusations made against the accused, the manner in which the crime is alleged to

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6 ( 2025:HHC:13815 )

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have been committed, the gravity of the offence, the role attributed to the accused, the criminal antecedents of the accused, the probability of tampering of the witnesses and repeating the offence, if the accused are released on bail, the likelihood of the accused being unavailable in the event bail is granted, the possibility of obstructing the proceedings and evading the courts of justice and the overall desirability of releasing the accused on bail. [Refer: Chaman Lal v. State of U.P. [ Chaman Lal v. State of U.P . , ( 2004) 7 SCC 525: 2004 SCC (Cri) 1974]; Kalyan Chandra Sarkar v. Rajesh Ranjan [Kalyan Chandra Sarkar v. Rajesh Ranjan, (2004) 7 SCC 528: 2004 SCC (Cri) 1977]; Masroor v. State of U.P. [Masroor v. State of U.P., (2009) 14 SCC 286 : (2010) 1 SCC (Cri) 1368]; Prasanta Kumar Sarkar v. Ashis Chatterjee [Prasanta Kumar Sarkar v. Ashis Chatterjee, (2010) 14 SCC 496 : (2011) 3 SCC (Cri) 765]; Neeru Yadav v. State of U.P. [Neeru Yadav v. State of U.P., (2014) 16 SCC 508 : (2015) 3 SCC (Cri) 527]; Anil Kumar Yadav v. State (NCT of Delhi) [Anil Kumar Yadav v. State (NCT of Delhi), (2018) 12 SCC 129 : (2018) 3 SCC (Cri) 425]; Mahipal v. Rajesh Kumar [Mahipal v. Rajesh Kumar, (2020) 2 SCC 118 : (2020) 1 SCC (Cri) 558] . ]

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This position was reiterated in Ramratan v. State of

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M.P., 2024 SCC OnLine SC 3068, wherein it was observed as under:-

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“12. The fundamental purpose of bail is to ensure the accused's presence during the investigation and trial. Any conditions imposed must be reasonable and directly related to this objective. This Court in Parvez Noordin Lokhandwalla v. State of Maharastra (2020) 10 SCC 77 observed that though the competent court is empowered to exercise its discretion to impose “any condition” for the grant of bail under Sections 437(3) and 439(1)(a) CrPC, the discretion of the court has to be guided by the need to facilitate the administration of justice, secure the presence of the accused and ensure that the liberty of the accused is not misused to impede the investigation, overawe the

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witnesses or obstruct the course of justice. The relevant observations are extracted herein below:

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“14. The language of Section 437(3) CrPC, which uses the expression “any condition … otherwise in the interest of justice” has been construed in several decisions of this Court. Though the competent court is empowered to exercise its discretion to impose “any condition” for the grant of bail under Sections 437(3) and 439(1)(a) CrPC, the discretion of the court has to be guided by the need to facilitate the administration of justice, secure the presence of the accused and ensure that the liberty of the accused is not misused to impede the investigation, overawe the witnesses or obstruct the course of justice. Several decisions of this Court have dwelt on the nature of the conditions which can legitimately be imposed both in the context of bail and anticipatory bail.” (Emphasis supplied)

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13. In Sumit Mehta v. State (NCT of Delhi) (2013) 15 SCC 570 , this Court discussed the scope of the discretion of the Court to impose “any condition” on the grant of bail and observed in the following terms:

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“15. The words “any condition” used in the provision should not be regarded as conferring absolute power on a court of law to impose any condition that it chooses to impose. Any condition has to be interpreted as a reasonable condition acceptable in the facts permissible in the circumstance, and effective in the pragmatic sense, and should not defeat the order of grant of bail. We are of the view that the present facts and circumstances of the case do not warrant such an extreme condition to be imposed.” (Emphasis supplied)

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14. This Court, in Dilip Singh v. State of Madhya Pradesh (2021) 2 SCC 779 , laid down the factors to be taken into consideration while deciding the bail application and observed:

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“ 4. It is well settled by a plethora of decisions of this Court that criminal proceedings are not for

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the realisation of disputed dues. It is open to a court to grant or refuse the prayer for anticipatory bail, depending on the facts and circumstances of the particular case. The factors to be taken into consideration while considering an application for bail are the nature of the accusation and the severity of the punishment in the case of conviction and the nature of the materials relied upon by the prosecution; reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses; the reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence; character, behaviour and standing of the accused; and the circumstances which are peculiar or the accused and larger interest of the public or the State and similar other considerations. A criminal court, exercising jurisdiction to grant bail/anticipatory bail, is not expected to act as a recovery agent to realise the dues of the complainant, and that too, without any trial.” (Emphasis supplied)

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This position was reiterated in Shabeen Ahmed versus

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State of U.P., 2025 SCC Online SC 479.

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The present petitions have to be decided as per the parameters laid down by the Hon’ble Supreme Court.

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A perusal of the record shows that the loan was disbursed to the petitioners in March 2020. The lockdown due to COVID-19 was imposed soon thereafter. The petitioners asserted that they sustained a loss due to the COVID-19 pandemic. Therefore, they could not repay the loan amount. This submission has to be prima facie accepted as correct. Admittedly, the loan was taken for business purposes, and when the business was closed

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due to the COVID-19 pandemic, it is difficult to see how the petitioners could have generated the profits to enable them to repay the loan. Further, there is no allegation in the FIR that the intention of the petitioners was dishonest from the beginning, and they never intended to return the loan after taking it. Therefore, prima facie, there is insufficient material to connect the petitioners with the commission of offences punishable under Section 420 of the IPC.

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The CBI has also added Section 409 of the IPC. Prima facie, the offences punishable under Sections 409 & 420 of the IPC cannot co-exist in respect of the same transaction as they require different mens rea . It was laid down by the Hon’ble Supreme Court in Lalit Chaturvedi v. State of U.P., 2024 SCC OnLine SC 171 that the same act of transaction cannot result in an offence of cheating and criminal breach of trust. It was observed: -

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10. The chargesheet also refers to Section 406 of the IP C, but without pointing out how the ingredients of said section are satisf i ed. No details and particulars are mentioned. There are decisions which hold that the same act or transaction cannot result in an of f ence of cheating and criminal breach of trust simultaneously. Wolfgang Reim v. State , 2012 SCC OnLine Del 3341; Mahindra and Mahindra Financial Services Ltd. v. Delta Classic (P.) Ltd., (2011) 6 Gau LR 604; Mukesh Sharma v. State of Himachal Pradesh, 2024: HHC: 35 . For the of f ence of cheating, dishonest intention must exist at the inception of the transaction, whereas, in case of criminal breach of trust there must exist a relationship between the parties whereby one party entrusts another with the property as

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per law, albeit dishonest intention comes later. In this case, entrustment is missing; in fact, it is not even alleged. It is a case of the sale of goods. The chargesheet does refer to Section 506 of the IP C, relying upon the averments in the complaint. However, no details and particulars are given, when and on which date and place the threats were given. Without the said details and particulars, it is apparent to us that these allegations of threats, etc., have been made only with an intent to activate police machinery for the recovery of money.

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This position was reiterated in Delhi Race Club (1940)

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Ltd. v. State of U.P. , (2024) 10 SCC 690, and it was held that an offence of cheating and criminal breach of trust is independent and distinct. They cannot coexist in the same set of facts. It was observed: -

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“43. There is a distinction between criminal breach of trust and cheating. For cheating, the criminal intention is necessary at the time of making a false or misleading representation, i.e. since inception. In a criminal breach of trust, mere proof of entrustment is sufficient. Thus, in case of criminal breach of trust, the offender is lawfully entrusted with the property, and he dishonestly misappropriated the same. Whereas, in the case of cheating, the offender fraudulently or dishonestly induces a person by deceiving him to deliver any property. In such a situation, both offences cannot co-exist simultaneously. xxxxx

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55. It is high time that police officers across the country are imparted proper training in law to understand the fine distinction between the offence of cheating vis-à-vis criminal breach of trust. Both offences are independent and distinct. The two offences cannot coexist simultaneously in the same set of facts. They are antithetical to each other. The two provisions of IPC (now BNS, 2023) are not twins, and they cannot survive without each other.”

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It was submitted in the replies that the petitioners can

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influence the witnesses in case of their release on bail. No material was placed on record to justify this apprehension. This apprehension can be removed by laying down the conditions, and it is not sufficient to deny bail to the petitioners.

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Keeping in view the nature of the allegations against the petitioners, the pre-trial incarceration of the petitioners is not justified. The status report does not show that custodial interrogation of the petitioners is required. Therefore, the present petitions are allowed, and the order dated 10.02.2025 are made absolute till the disposal of the case.

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The observations made hereinabove are regarding the disposal of this petitions and will have no bearing, whatsoever on the merits of the case.

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(Rakesh Kainthla) Judge

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14^th May, 2025 (Shamsh Tabrez)

Vijay Singh v. Central Bureau of Investigation

Case brief

What is this about?

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Vijay Singh v. Central Bureau of Investigation

Case brief

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