2020 (3) TMI 1370 - HC - Indian Laws

Seeking grant of Bail - Rotation of cash-credit funds - diversion of funds for the purchase of immovable assets interest payments and cash withdrawals - HELD THAT - It is correct that the applicants were not arrested during investigation but after the investigation sufficient material has been collected against them. Now number of cases are coming before this Court in which the bank officials sanction the loan to business tycoons without verification of the mortgaged property etc. Without involvement of the bank officials it is not possible for them to syphon the public money for other purposes. The banks are going into losses and some of the banks have been closed down. In the opinion of this Court if the applicants are released on bail a wrong message will go to the public. Since the investigation in other cases is still going on and other accused persons have not been arrested so far therefore at this stage no case for grant of bail is made out. Application dismissed.

Summary

Issues:
Arrest under various sections of the Prevention of Corruption Act and IPC, Bail application under Section 439 Cr.P.C., Allegations of embezzlement and diversion of funds, Cooperation during investigation, Rejection of bail application by Special Judge, CBI, Arguments for and against bail, Conspiracy and involvement of accused, Public money embezzlement, Impact on banking system, Dismissal of bail applications.

Analysis:
The judgment pertains to the dismissal of bail applications under Section 439 Cr.P.C. by two applicants who were arrested by the Police in connection with a case involving offenses under Section 13(2)/13(1)(d) of the Prevention of Corruption Act and various sections of the IPC. The case involved allegations of embezzlement and diversion of funds from Punjab National Bank (PNB) by creating forged documents and misusing cash-credit facilities. The applicants, former bank officials, were accused of conspiring with others to cheat the bank and embezzle public money amounting to ?400 Lakhs through irregularities in sanctioning cash-credit limits and false pre-sanction visits.

The applicants sought bail, arguing that they cooperated during the investigation, and since a charge-sheet had been filed, there was no risk of tampering with evidence or influencing witnesses. Conversely, the CBI opposed bail, highlighting multiple cases against the applicants and their significant role in aiding the diversion of funds. The Court noted the seriousness of the allegations, the impact on the banking system, and the ongoing investigations involving other accused persons. It emphasized that releasing the applicants on bail could send the wrong message to the public, especially considering the continuing losses suffered by banks due to such fraudulent activities.

Ultimately, the Court found that despite not being arrested during the investigation, sufficient evidence had been gathered against the applicants, and their involvement in the conspiracy to embezzle public money was established. Given the gravity of the charges, the potential impact on the banking sector, and the ongoing investigations, the Court concluded that no grounds for granting bail existed at that stage. Consequently, the bail applications were dismissed, and the applicants were not granted relief, emphasizing the need to maintain the integrity of the legal process and prevent further misuse of public funds.