2019 (7) TMI 1895 - HC - Indian Laws

Seeking grant of anticipatory bail - Large scale misappropriation of money of innocent depositors and investors - HELD THAT - The material presently on record does indicate that there has been large scale financial misappropriation leading to serious financial loss to the aforesaid Bank and consequently to the investors and depositors. It is evident that the trouble in the Bank was brewing since the year 2016 when the R.B.I. issued a directive on 15.12.2016 to the Bank to cease its Banking activities. The report of the Special Auditor also shows the details of the large scale misappropriation and consequent loss to the Bank. There is no dispute about the fact that the applicants are Chairman/Directors of the said Bank and that they are husband and wife. As the Chairman of the Bank, the applicant was certainly responsible for the activities of the Bank and ultimately for the aforesaid misappropriation of huge amounts of money, although details of the same and the evidence against him would be a matter for trial. In the case of SUDHIR AND ORS. VERSUS THE STATE OF MAHARASHTRA AND ORS. 2015 (10) TMI 2765 - SUPREME COURT , while considering question of grant of anticipatory bail, in a similar case involving misappropriation of public funds and corruption, the Hon'ble Supreme Court held that anticipatory bail granted by the Sessions Court, was rightly cancelled by the High Court, looking to the gravity of the offences. The documents handed over by the learned APP to this Court which have been unearthed during the investigation do indicate that there has been large scale misappropriation of funds in the said Bank. The applicant/Chairman of the Bank was obviously in the know of the happenings in the Bank from the year 2015 and even earlier, which ultimately led to the R.B.I. directive closing down all banking activities and appointment of Liquidator on the Bank. But, that alone cannot be a reason to conclude that custodial interrogation of the said applicants would be mandatory - But, the material on record to which the learned APP has invited attention of this Court, clearly indicates that the applicant/Chairman of the Bank had actively connived with co-accused persons in causing loss and misappropriation of crores of rupees. This prima facie finding can be rendered on the basis of the material presently on record, only limited to deciding the question as to whether the present application of the Chairman of the Bank can be granted. There is no doubt about the fact that offences alleged against the applicants are of an extremely serious nature because there has been large scale misappropriation of funds of the Bank, which has ultimately caused serious financial loss to innocent depositors and investors. Huge amounts of money in cash were facilitated to be siphoned off in connivance with co-accused persons. In this context, it would be futile to take the view that since investigation in such a case necessarily involves documentary material, the custodial interrogation of the applicants would not be necessary. The money trail in such cases can be unearthed only after proper interrogation and investigation is carried out by the investigating agency - There can be no doubt about the fact that there would be attempts by the accused persons to stall the investigation and to ensure that money trail is lost. This is particularly significant when there is prima facie material to show that large scale manipulations have been undertaken in account books as well as computer data entries at the behest of accused like the applicant/Chairman of the Bank herein. As regards the question of adverse inference drawn by the Sessions Court due to absence of the applicants before the said Court on three dates despite specific orders to remain present, it cannot be said that such an adverse inference was wrongly drawn by the Sessions Court. Section 438 (4) of the Cr.P.C. (Maharashtra State Amendment) clearly provides that the presence of the applicant seeking anticipatory bail shall be obligatory at the time of final hearing of the application and passing of final order by the Court, if on an application made to it by the Public Prosecutor, the Court considers such presence necessary in the interest of justice. In the present case, there is no dispute about the fact that the Sessions Court had directed the applicants to remain present before the Court on a specific application moved by the prosecution - Since the investigation in the present case is still underway and the FIR itself was registered only on 15.05.2019, the material presently on record does indicate that insofar as the applicant in Criminal Application (ABA) No. 476 of 2019 i.e. the Chairman of the Bank is concerned, the prayer for grant of anticipatory bail cannot be accepted. The said applicant is arrested in Crime No. 181 of 2019 registered at Police Station Dhantoli, district Nagpur City, dated 15.05.2019, she shall be released on bail on the conditions imposed - application allowed.

Summary

Issues Involved:
1. Anticipatory bail applications.
2. Allegations of financial misappropriation.
3. Role of applicants in the alleged misappropriation.
4. Custodial interrogation necessity.
5. Influence on witnesses and investigation.
6. Judicial discretion in granting anticipatory bail.

Detailed Analysis:

Anticipatory Bail Applications:
The applicants sought anticipatory bail in connection with an FIR registered for offenses under various sections of the Indian Penal Code, the Maharashtra Protection of Interest of Depositors Act, and the Information Technology Act. The FIR was lodged by a Special Auditor appointed for Navodaya Urban Sahakari Bank Limited.

Allegations of Financial Misappropriation:
The applicants were accused of large-scale misappropriation of funds amounting to approximately ?38.75 crores. The Special Auditor’s report detailed the alleged activities leading to the financial loss, including unauthorized withdrawals and manipulation of account books.

Role of Applicants in the Alleged Misappropriation:
The applicant in Criminal Application (ABA) No. 476 of 2019, being the Chairman of the Bank, was alleged to have actively connived with co-accused persons to misappropriate funds. The applicant in Criminal Application (ABA) No. 475 of 2019, a Director and wife of the Chairman, was primarily accused of facilitating a property mortgage for a loan already mortgaged.

Custodial Interrogation Necessity:
The court emphasized that custodial interrogation was necessary to unearth the money trail and gather crucial information that could be concealed if the applicants were protected by anticipatory bail. The Supreme Court’s view in the case of State represented by the C.B.I. vs. Anil Sharma was cited, highlighting the importance of custodial interrogation in such financial crimes.

Influence on Witnesses and Investigation:
The court noted instances where the Chairman allegedly influenced bank employees and manipulated data, even while enjoying interim protection. This behavior indicated a propensity to misuse bail protection, thereby justifying the need for custodial interrogation to ensure a free and fair investigation.

Judicial Discretion in Granting Anticipatory Bail:
The court referred to several Supreme Court judgments, including Gurbaksh Singh Sibbia vs. State of Punjab and Siddharam Satlingappa Mhetre vs. State of Maharashtra, to elucidate the principles governing anticipatory bail. It stressed the need to balance the rights of the accused with the necessity for an effective investigation.

Judgment:
- The anticipatory bail application of the Chairman (Criminal Application (ABA) No. 476 of 2019) was dismissed due to the serious nature of allegations, the necessity for custodial interrogation, and the potential influence on the investigation.
- The anticipatory bail application of the Director (Criminal Application (ABA) No. 475 of 2019) was allowed with conditions, considering her limited role and lack of evidence showing she influenced the investigation.

Conditions for Bail:
The Director was granted bail on the condition of furnishing a bond, cooperating with the investigation, attending the police station weekly, and not tampering with evidence or influencing witnesses. Violation of these conditions would result in the recall of bail.

Conclusion:
The court’s observations were limited to the question of anticipatory bail and did not prejudge the merits of the case.