In two petitions for pre-arrest bail arising from an FIR alleging cheating and misappropriation of bank funds, the High Court of Punjab and Haryana dismissed one petitioner
Bail application dismissed for Rohit Gupta and Saurabh Gupta; allowed for Madhu Gupta with direction to furnish bonds.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
CRM-M-1395-2014 (O&M)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
Decided on: February 21, 2014.
(1) CRM-M-1395-2014 (O&M).
Madhu Gupta and another
..... Petitioner(s)
Versus
State of Punjab and another
..... Respondent(s)
(2) CRM-M-2049-2014 (O&M).
Rohit Gupta
..... Petitioner(s)
Versus
State of Punjab and another
..... Respondent(s)
CORAM: HON'BLE MR. JUSTICE M.M.S. BEDI PRESENT Mr.Anand Chibber, Sr., Advocate, with Mr.P.S.Chauhan, Advocate, for the petitioners in both the petitions .
Mr.Ankur Jain, AAG., Punjab.
Mr.R.S.Rai, Sr., Advocate, with Mr.Gautam Dutt, Advocate, , for respondent No.2.
M.M.S. BEDI, J.
This order will dispose of the above noted two petitions i.e., CRM-M-1395-2014 filed by Madhu Gupta and Saurabh Gupta and another CRM-M-2049-2014 filed by Rohit Gupta, for the grant of pre-arrest bail in a case bearing FIR No.1 dated 2.1.2014,
1
Raj Kumar Arora 2014.03.04 14:56 I attest to the accuracy and integrity of this document
CRM-M-1395-2014 (O&M)
under Sections 420, 406 & 120-B of the Indian Penal Code, Police Station, Gobindgarh Mandi, District Fatehgarh Sahib, registered at the instance of Lakhvir Singh, Assistant General Manager, Union Bank of India, Branch Office, Mandi Gobindgarh, alleging that the petitioners are partners of M/s Vishnu Steels, Amloh Road, Mandi Gobindgarh and had availed the cash credit limit facility of Rs.10 crores against the mortgage/hypothecation of raw material, stock of finished/semi-finished/unfinished goods, plant and machinery, electrical equipments and other assets which were lying in the Unit. The plant and machinery had allegedly been dismantled and machinery and material etc., were being shifted in five trucks when the present FIR was registered alleging that wrongful loss has been caused to the Bank on account of misappropriation of the hypothecated material.
The matter was enquired into by the police as the petitioners did not return the amount required to be returned to the Bank on 19.7.2013 and a cheque dated 24.7.2013 of Rs.65 lacs issued to the Bank having been dishonoured and the furniture and machinery have been transferred to the other place and sold. It transpired during investigation that the hypothecated goods and machinery have been removed from the premises. After obtaining opinion from the DA (Legal), the above FIR was registered against the petitioners. The petitioner's firm has committed cheating with the complainant bank.
2
Raj Kumar Arora 2014.03.04 14:56 I attest to the accuracy and integrity of this document
CRM-M-1395-2014 (O&M)
The application for pre-arrest bail filed by the petitioners has been dismissed by the learned Additional Sessions Judge. At the time of preliminary hearing, a statement was made by the counsel for the petitioners that petitioner Rohit Gupta was ready to discharge the obligation of his liability subject to any other order passed by the Courts/Tribunals of competent jurisdiction as such, interim direction was issued on 21.1.2014 that the petitioner will join investigation on 1.2.2014 and will deposit a sum of Rs.1 crore with the complainant bank. In case of petitioner Rohit Gupta doing so, he was to be released on interim bail to the satisfaction of the arresting officer. Interim relief was also granted to petitioner Madhu Gupta.
It is not out of place to observe here that an application for withdrawal of the application for pre-arrest bail was filed by Rohit Gupta along with an affidavit dated 17.2.2014, pleading therein that he should be given liberty to file a fresh petition with better particulars and new facts and circumstances of the case which have arisen in the present case. The said application came up for hearing on 19.2.2014 when it was ordered that the application for withdrawal of the main petition will be heard on the date fixed and the interim liberty granted to petitioner Rohit Gupta was withdrawn. However, today the learned counsel for the petitioners opted not to press the said application and to argue the bail application onmerits.
Mr.Anand Chibber, learned Senior counsel for the petitioners has vehemently urged that lodging of FIR in the present
3
Raj Kumar Arora 2014.03.04 14:56 I attest to the accuracy and integrity of this document
CRM-M-1395-2014 (O&M)
case is nothing but an abuse of process of the Court. He also placed strong reliance on the judgment in case Sumit Mehta Vs. State of N.C.T. of Delhi, 2013 (4) RCR (Crl.) 416 , to contend that the condition imposed for the grant of interim bail in the present case is not legally sustainable. In the said case the accused had been granted concession of pre-arrest bail subject to deposit of Rs.10 lacs within a period of six months in the name of the complainant and to keep the FDR with the Investigating Officer as a condition precedent for grant of anticipatory bail. The said condition was set aside by Hon'ble the Apex Court on the ground that any condition mentioned under Section 438 (1) Cr.P.C., has to be read along with Section 438 (2) Cr.P.C., and the object of imposing condition should be to avoid the possibility of the person hampering investigation. It was observed that any condition which has no reference to the fairness or propriety of the investigation or trial cannot be countenanced as permissible under the law. The discretion of the Court while imposing condition was thus, set aside. He submitted that the matter is pending before the DRT under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and that the machinery which was not hypothecated was being taken out of the premises and that no offence is made out from the allegations in the FIR.
I have heard the learned counsel for the petitioners. So far as the nature of the condition to be imposed on an accused
4
Raj Kumar Arora 2014.03.04 14:56 I attest to the accuracy and integrity of this document
CRM-M-1395-2014 (O&M)
while granting relief under Section 438 Cr.P.C. is concerned, it is not disputed controversy that the condition imposed should not be beyond the scope of Section 438 (2) Cr.P.C. Deposit of any amount to secure liberty under Section 438 Cr.P.C., is not permissible. So far as sub section 438 (2) sub clause (iv) Cr.P.C. is concerned, it is apparent that the condition which may be imposed on an accused cannot be beyond the scope of Section 437 (3) Cr.P.C. It was argued that the deposit of money does not fall within the condition of grant of pre-arrest bail under Section 438 (2) (iv) Cr.P.C., read with Section 437 (3) Cr.P.C. The said law is not applicable in the present case as it was the counsel for the petitioners who had volunteered to discharge his part of liability to seek concession of pre-arrest bail by offering to deposit some amount. Taking into consideration the said assurance of the petitioner, the application was entertained giving a direction to petitioner No.1 to pay a sum of Rs.1 crore to the complainant party against the liability of about Rs.10 crores claimed by the bank.
Counsel for the petitioners has also argued that there is report of DSP Khanna, dated 9.1.2014 regarding no police action being required. The said enquiry appears to have been conducted under the directions of Human Rights Commission. Copy of the report prepared by the DSP, Khanna, was also made available in a report of the SSP, Khanna dated 29.1.2014 recommending that no need was there for interference in the proceedings.
5
Raj Kumar Arora 2014.03.04 14:56 I attest to the accuracy and integrity of this document
CRM-M-1395-2014 (O&M)
I have also appreciated the contention of the learned counsel for the petitioners that it is a case of civil liability and that unnecessarily a criminal mask is being put on the preposition to make it sound a case of serious misappropriation.
After hearing the learned counsel for the petitioners and going through the record, it is apparent that all out efforts are being taken by the petitioners to contest the claim of the Bank. In Lee Kun Hee & ors. V/S State of U.P. & ors., 2012 (1) RCR (Crl.)
884 , Hon'ble the Apex Court has observed that a wrong which is a civil wrong can also be a criminal offence and that it is not the sole ground for quashing the proceedings. Besides this, it will be premature to make an assessment of the situation whether the petitioner is liable for only civil liability or it is a case of criminal liability. The intention of the petitioners has to be gathered on the basis of the other circumstances. Prima facie, the petitioners Rohit Gupta and Saurabh Gupta are beneficiary of the loan taken. The act of cheating is also apparent on the record. It is not out of place to mention here that the petitioners had filed CWP No.28335 of 2013 titled M/s Sri Vishnu Steels and another Vs.Union Bank of India and others, decided on 20.12.2013, challenging the proceedings under Sections 13(2) & 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The said petition had been dismissed. No doubt the dismissal of the said petition by a Coordinate Bench will not affect the merits of the case
6
Raj Kumar Arora 2014.03.04 14:56 I attest to the accuracy and integrity of this document
CRM-M-1395-2014 (O&M)
but since there is serious allegation of petitioners having active role to play in the running of the business, they cannot be absolved of the criminal liability solely on the ground that they are not responsible for day to day proceedings of the firm.
In view of above circumstances, no extra ordinary exceptional circumstances exist to grant the concession of pre-arrest bail to petitioners Rohit Gupta and Saurabh Gupta. So far as petitioner Madhu Gupta is concerned, she is a lady who appears to have been arrayed as an accused along with other co-accused whereas there does not appear to be any specific business transaction of the lady with the bankers.
The petition of Rohit Gupta is dismissed. The petition filed qua Saurabh Gupta is also dismissed but it is allowed qua Madhu Gupta as no offence of cheating prima facie is made out against her from the facts of the present case. It is ordered that in case of arrest of petitioner Madhu Gupta, she will be released on bail on her furnishing bail bonds/surety bonds to the satisfaction of the arresting officer.
(M.M.S. BEDI)
February 21, 2014. rka
JUDGE
7
Raj Kumar Arora 2014.03.04 14:56 I attest to the accuracy and integrity of this document
3 issues framed by the court
Whether pre-arrest bail should be granted to petitioners seeking to discharge liability under Section 438 Cr.P.C.
Whether allegations of cheating and misappropriation constitute sufficient ground for criminal liability in a bank loan fraud case
Whether distinct treatment in bail granting is warranted between male and female co-accused in the same FIR
Colour shows how this judgement treated each authority
Sumit Mehta Vs. State of N.C.T. of DelhiReferred¶37
Sumit Mehta Vs. State of N.C.T. of Delhi, 2013 (4) RCR (Crl.) 416
Lee Kun Hee & ors. Vs. State of U.P.Referred¶48
Lee Kun Hee & ors. V/S State of U.P. & ors., 2012 (1) RCR (Crl.) 884
4 provisions across 2 enactments
Madhu Gupta
Rohit Gupta
Saurabh Gupta
State of Punjab
M.M.S. BEDI
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
