2022 (8) TMI 394 - HC - GST

Seeking grant of anticipatory bail - shell/defunct companies - issuance of invoices without providing any services - offences punishable under Sections 166, 167, 418, 420, 465, 468, 471, 409, 209, 109 read with 120b of the India Penal Code, 1860 (for short IPC ) read with 13(1)(c), read with 13(1)(D) of Prevention of Corruption Act, 1988 - HELD THAT - In P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT 2019 (9) TMI 286 - SUPREME COURT the Hon ble Apex Court made it clear that granting anticipatory bail at the state of investigation will frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the Court and grant of anticipatory bail in economic offences would definitely hamper the effective investigation. A perusal of the report lodged by the Chairman of the Corporation/APSSDC shows that as per the scrutiny of records by ADGGI, it is revealed that training software development including various sub-modules shown as supplied by M/s Skillar to Design Tech were purchased by Skillare from 1) M/s. Allied Computers International (Asia) Ltd. Mumbai (for short ACI ), 2) M/s. Patrick Info Services Private Limited, M/s. I.T. Smith Solutions Private Limited, 3) M/s. Inweb Info Services Private Limited all based at New Delhi, 4) M/s. Arihanth Traders, New Delhi, 5) M/s. G.A. Sales Private Limited, New Delhi. According to the prosecution, out of five, petitioner purchased three shell companies. The prosecution also got information that wife of the petitioner is one of the Directors in two companies out of three companies purchased by the petitioner - Also, the petitioner avoided to appear before investigating officer during crucial period. Though learned counsel for the petitioner contended that no documents were filed by the prosecution regarding the purchase of shell companies referred to supra, by the petitioner, this is not the stage where this Court goes into all those aspects. All these aspects will be considered during the course of trial. Considering the amount involved in this crime is about Rs. 371,00,00,000/- keeping in view the gravity of the crime, it being socio-economic offence, petitioner is not entitled for pre-arrest bail - petition dismissed.

Summary

Issues Involved:
1. Grant of anticipatory bail under Section 438 of Cr.P.C.
2. Allegations of financial scam and misappropriation of funds.
3. Role of the petitioner in the alleged offenses.
4. Applicability of Prevention of Corruption Act, 1988 to the petitioner.
5. Requirement of custodial interrogation.

Detailed Analysis:

1. Grant of anticipatory bail under Section 438 of Cr.P.C.:
The petitioner sought anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973, in connection with Crime No.29 of 2021, registered for various offenses under the IPC and the Prevention of Corruption Act, 1988. The court considered the gravity of the offense and the need for custodial interrogation, ultimately denying the bail application.

2. Allegations of financial scam and misappropriation of funds:
The crime was registered based on a complaint by the Chairman of the Andhra Pradesh State Skill Development Corporation, alleging a financial scam involving crores of rupees. The scam involved the misappropriation of funds meant for establishing SIEMENS Centers of Excellence and Skill Development Centers. The investigation revealed that the funds were siphoned off through fake invoices and shell companies.

3. Role of the petitioner in the alleged offenses:
The petitioner, a Chartered Accountant, was accused of managing shell companies and issuing fake invoices. The prosecution alleged that the petitioner controlled companies like M/s. Patrick Info Services, M/s. IT Smith Solutions, and M/s. Inweb Services Pvt. Ltd., which were used to issue bogus invoices. The petitioner allegedly benefited by receiving commissions and diverting funds derived from the criminal breach of trust.

4. Applicability of Prevention of Corruption Act, 1988 to the petitioner:
The petitioner's counsel argued that the provisions of the Prevention of Corruption Act would not apply to the petitioner as he is a self-employed individual. However, the court did not delve into this argument at this stage, focusing instead on the gravity and nature of the offenses alleged.

5. Requirement of custodial interrogation:
The court emphasized the necessity of custodial interrogation to uncover the full extent of the financial scam and the petitioner's involvement. The prosecution argued that the petitioner avoided appearing before the investigating officer during crucial periods, and much information was within his exclusive knowledge. The court cited the Supreme Court's judgment in P.Chidambaram vs. Directorate of Enforcement, highlighting that granting anticipatory bail in economic offenses could hamper effective investigation.

Conclusion:
Considering the gravity of the crime, involving around Rs.371,00,00,000/-, and the socio-economic impact, the court dismissed the petition for anticipatory bail. The order clarified that the findings were limited to the consideration of bail and would not affect the ongoing investigation or any other proceedings.