2010 (5) TMI 938 - HC - Indian Laws

Accused in a case of defrauding the Industrial Development Bank of India (IDBI) - Petition u/s 439 - Seeking grant of bail u/s 120B r/w Sections 420, 468 and 478 of the IPC - The petitioner was arrested by the CBI on 19th February, 2010 and remained in police custody till 27th February, 2010. The petitioner has been in judicial custody thereafter and has been charge sheeted along with five other co-accused in a case of defrauding the Industrial Development Bank of India (IDBI). HELD THAT - In the instant case the FIR was registered on source information and before registration of the present FIR preliminary enquiry was conducted by the CBI. It has nowhere been disclosed on whose statement the FIR was registered and no one from the bank from which loan was availed came forward alleging that the bank has been cheated by the accused persons. In the order passed by the ACMM at the time of hearing submissions on the aspect of cognizance in the case, it has been observed that the Investigating Officer (IO) has not been able to point out even an iota of evidence in the testimony of the bank witnesses exhibiting that they were deceived by the inducement given by the accused persons. The IO has further not clarified, if, as per the statements given by the bank officials, the machines were working there then how and from where they were procured and if no machine was procured then how the bank officials given their report. Petitioner has been in judicial custody, after initial police custody of one week, for a period over 90 days and has already been charge sheeted. The petitioner is 76 years of age and admittedly is a chronic heart patient suffering from coronary heart disease since 1998. Also, nothing has been urged on behalf of the CBI to raise a reasonable apprehension that the petitioner will tamper with the prosecution evidence if he is released on bail. Further, nothing has been urged to suggest that the CBI has a reasonable apprehension that the petitioner will flee from justice if he is released on bail. From the material placed on record and the conduct of the petitioner in appearing before the CBI when summoned before his arrest, it is clear that the petitioner is an established businessman with roots in the Society. Bail, it has been held in a catena of decisions, is not to be withheld as a punishment. Even assuming that the accused is prima facie guilty of a grave offence, bail cannot be refused in an indirect process of punishing the accused person before he is convicted. Furthermore, there is no justification for classifying offences into different categories such as economic offences and for refusing bail on the ground that the offence involved belongs to a particular category. It cannot, therefore, be said that bail should invariably be refused in cases involving serious economic offences. The charge sheet in the present case has been filed and cognizance taken on 22nd May 2010 and the petitioner is, therefore, not required for any purpose. It is also seen that evidence has already been collected qua the petitioner and the CBI has not thought it appropriate to ask for custodial interrogation of the petitioner during the long period of 90 days when the petitioner was in judicial custody. One more consideration which weighs with the Court is that a scheme of arrangement u/s 391 of the Companies Act, 1956 has been filed by SML Company and is pending finalization before the Hon'ble Allahabad High Court. Under the scheme of arrangement the IDBI and the petitioner were already agreed on the terms and conditions for the repayment of the loan extended to the company at the instance of the petitioner and other co-accused. Having regard to the entire facts and circumstances of the case, I do not find any justification for detaining the petitioner in prison any longer. Therefore, the petitioner who is in custody since 19th February, 2010 should be released on bail on furnishing a personal bond in the sum of ₹ 5,00,000/- (Rupees five lakhs) with two sureties in the like amount to the satisfaction of the trial court and subject to the conditions.

Summary

Issues Involved:
1. Grant of bail under Section 439 of the Code of Criminal Procedure (CrPC).
2. Petitioner's medical condition and its impact on the bail decision.
3. The stage of investigation and its relevance to the bail application.
4. The nature of the alleged offence (economic offence) and its impact on the bail decision.
5. The petitioner's likelihood of tampering with evidence or fleeing from justice.
6. The legal principles governing the grant of bail.

Detailed Analysis:

1. Grant of Bail under Section 439 of CrPC:
The petitioner sought bail under Section 439 of the CrPC for a case registered under Section 120B read with Sections 420, 468, and 478 of the IPC. The petitioner was accused of defrauding the IDBI by submitting false information and forged documents to obtain a Rs. 15 crore loan, which was subsequently siphoned off for purposes other than those for which it was sanctioned.

2. Petitioner's Medical Condition:
The petitioner, aged 76, is a chronic heart patient with severe coronary heart disease and requires regular medical attention. The petitioner's counsel argued that his heart efficiency is merely 25%, and he needs an "Intra Cardiac Defibrillator (ICD)" to manage his condition. The stress of custody was likely to negatively impact his health. The CBI countered that the jail authorities were monitoring the petitioner's medical condition and providing necessary medication.

3. Stage of Investigation:
The petitioner had been in judicial custody for over 90 days after an initial week in police custody. The charge sheet had been filed, and cognizance was taken on 22nd May 2010. The petitioner's counsel argued that since the charge sheet was filed and evidence collected, the petitioner was no longer required for investigation. The CBI argued that the trial court had ordered further investigation, indicating that the investigation was not complete.

4. Nature of the Alleged Offence:
The CBI contended that the nature of the offence, being an economic offence, stood on a different footing and bail should not be granted. They cited precedents highlighting the seriousness of economic offences and their impact on the community. However, the court noted that there is no statutory support for classifying offences into different categories for the purpose of bail and that economic offences should not be treated differently from other non-bailable offences.

5. Likelihood of Tampering with Evidence or Fleeing from Justice:
The court found no reasonable apprehension that the petitioner would tamper with evidence or flee from justice. The petitioner had cooperated with the investigation by appearing before the CBI when summoned. The court emphasized that bail should not be withheld as a punishment and that the petitioner, being an established businessman with roots in society, was unlikely to abscond.

6. Legal Principles Governing Bail:
The court referred to several precedents to outline the principles governing bail:
- Personal liberty is a precious value under Article 21 of the Constitution.
- Bail is the rule and refusal is the exception.
- The object of bail is to secure the attendance of the accused at trial.
- Bail should not be withheld as a punishment.
- The court must exercise discretion judiciously, considering factors like the seriousness of the offence, character of evidence, and likelihood of the accused tampering with evidence or fleeing from justice.
- Economic offences should not be treated differently from other non-bailable offences for the purpose of bail.

Conclusion:
The court concluded that there was no justification for detaining the petitioner any longer. Considering the petitioner's age, medical condition, and the fact that the charge sheet had been filed, the court granted bail. The petitioner was required to furnish a personal bond of Rs. 5,00,000 with two sureties of the same amount, surrender his passport, not leave the country without permission, and not tamper with evidence. The bail application was allowed with these conditions, and the expression of any opinion was not to be treated as an expression on the merits of the case.