2022 (1) TMI 1272 - HC - Indian Laws

Seeking grant of regular bail - declared absconder/proclaimed offender - allegation of cheating of a large-scale of money with total investors surpassing 900 and the amount cheated being Rs. 14 crores - HELD THAT - A perusal of the chargesheet, indicates that both the Petitioners were involved in the multi-person scam involving more than Rs. 200 crores from the inception of the same and that both were instrumental in misleading the public into investing in the scheme with no intention of returning the money. There are more than 900 complaints till date which have been made pertaining to the scam and the investigation has revealed that the Petitioners played an integral role, right from inducing the public to the siphoning off of the cheated money. Further, multiple other FIRs are also pending against both the Petitioners. The gravity of the offences is such that if the Petitioners are subsequently convicted, they will be liable to be sentenced to undergo imprisonment for life. The magnitude of the offence cannot be the only criterion for denial of bail. The object of bail is to secure the presence of the accused at the time of trial; this object is, thus, neither punitive nor preventative, and a person who has not been convicted should only be kept in custody if there are reasons to believe that they might flee from justice or tamper with the evidence or threaten the witnesses. If there is no apprehension of interference in administration of justice in a criminal trial by an accused, then the Court should be circumspect while considering depriving the accused of their personal liberty. Mere vague belief that the accused may thwart the investigation cannot be a ground to prolong the incarceration of the accused. This Court is inclined to grant bail to Petitioner, subject to the conditions imposed - bail application allowed.

Summary

Issues Involved:
1. Regular bail application under FIR No. 89/2019 for offences under Sections 406/420/409/120B of the IPC.
2. Allegations of cheating and fraud by the Company and its Directors/Officials.
3. Previous bail applications and declarations of absconding/proclaimed offenders.
4. Arguments from both Petitioners and the State regarding involvement and evidence.
5. Analysis of chargesheets and supplementary chargesheets.
6. Consideration of the principles for granting bail.

Detailed Analysis:

1. Regular Bail Application:
The Petitioners sought regular bail in FIR No. 89/2019 registered at Police Station Economic Offences Wing for offences under Sections 406/420/409/120B of the IPC.

2. Allegations of Cheating and Fraud:
The complaint was filed by an ex-serviceman alleging that the Company and its Directors/Officials committed cheating and fraud by promising a 200% return on investment within a year. The Complainant and his friends invested substantial amounts but stopped receiving returns after two months. The Company’s accounts were allegedly frozen, and the invested money was not returned.

3. Previous Bail Applications and Declarations of Absconding/Proclaimed Offenders:
- Petitioner in BAIL APPLN. 3750/2021: Anticipatory bail application dismissed, declared absconder/proclaimed offender, arrested, and subsequent bail applications dismissed.
- Petitioner in BAIL APPLN. 3921/2021: Anticipatory bail application dismissed, declared absconder/proclaimed offender, arrested, and subsequent bail applications dismissed.

4. Arguments from Both Petitioners and the State:
- Petitioner in BAIL APPLN. 3750/2021:
- Argued no recovery made from him, no link to the scam, and not associated with the accused Company.
- Contended that early investors, including his relatives, received significant returns, indicating no intention to scam.
- Claimed no evidence of "entrustment" as required under Sections 406 and 409 IPC.
- Highlighted the long duration of trial and lack of allegations of threatening or approaching witnesses.

- State’s Response:
- Emphasized the large-scale cheating involving over 900 investors and Rs. 14 crores.
- Asserted the Petitioner was declared PO, named in witness statements, and a direct recipient of the cheated amount.
- Mentioned other FIRs against the Petitioner and potential detriment to the case if bail is granted.

- Petitioner in BAIL APPLN. 3921/2021:
- Argued no evidence of inducing investors, joined the Company later, and received only Rs. 11 lakhs as remuneration.
- Claimed the Company suffered losses due to other Directors and that accounts were frozen by Yes Bank.
- Highlighted the long duration of trial and being the sole earning member of his family.

- State’s Response:
- Emphasized the multi-victim scam involving over 900 investors and Rs. 240 crores.
- Asserted the Petitioner was the Managing Director, named in witness statements, and had two PAN cards.
- Mentioned other FIRs against the Petitioner and potential detriment to the case if bail is granted.

5. Analysis of Chargesheets and Supplementary Chargesheets:
- Petitioner in BAIL APPLN. 3750/2021:
- Chargesheet revealed active participation in inducement and dishonest intentions from inception.
- Found to be benefitted through family members and declared PO for not joining the investigation.

- Petitioner in BAIL APPLN. 3921/2021:
- Chargesheet revealed conspiracy with other Directors, authorized signatory of bank accounts, and possession of two PAN cards.
- Found to be absconding and declared PO for not joining the investigation.

6. Consideration of the Principles for Granting Bail:
- The Court referenced the Supreme Court's observations in Sanjay Chandra v. CBI, emphasizing that the object of bail is to secure the accused's presence at trial, not to punish or preventively detain them.
- The Court noted that both Petitioners had been in custody for over a year, and all evidence was documentary and in police custody.
- The Court concluded that continued custody was no longer required and granted bail to both Petitioners under specific conditions to ensure they do not tamper with evidence or influence witnesses.

Conclusion:
The Court granted bail to both Petitioners, subject to conditions, emphasizing that the observations made were only for the purpose of granting bail and not to be considered during the trial.