2014 (6) TMI 119 - HC - Indian Laws

Cancellation of anticipatory bail - Misappropriation of funds - Amount paid for production of Hindi Film - Execution of agreements with various artists showing inflated amount and expenses incurred while producing the film - Refusal to divulge the details of the financial dealings/payments/expenses incurred out of the funds provided - whether learned ASJ was justified in releasing the respondents Raj Hiremath and Savita Raj Hiremath on anticipatory bail without putting some condition on them in respect of the amount allegedly misappropriated by them which was entrusted by the complainant for production of the film - Held that - Mere audit of the accounts at this stage will not be of much help to the respondents. Learned counsel for the respondents was also questioned as to whether at any point of time in the Memorandum of Understanding, it was disclosed to the complainant that behind the legal entity Usha Kaal Communication Ltd., the real face was that of the respondents who received the money in the name of that company, learned counsel for the respondent submitted that it was not necessary to disclose about the payments received by the respondents on behalf of Usha Kaal Communication Ltd. The respondents Raj Hiremath and Savita Raj Hiremath allegedly cheated the complainant and misappropriated the amount to the extent of Rs. 1 crore provided by the complainant for direction of the film. The respondents are not disputing the finance to the tune of Rs. 2.95 crores by the complainant and their statement of account reflect the manner and the extent to which the amount provided was allegedly misappropriated. Admittedly nothing has been refunded to the petitioners till date nor the respondents are ready to refund even partially to the petitioner. The petitioner, therefore, continues to enjoy the fruits of their crime. Such persons who continue to reap the benefit of their crime after committing the offence of personal gain and preceded by calculated design need to be put under some restriction by imposing a reasonable condition so that it does not send a wrong message to the potential offenders that even after committing the crime, they can continue to enjoy the ill-gotten wealth. The Court may impose conditions as specified under Section 438(2) of Cr. P.C. - This Court is conscious of the fact that criminal Court is not a recovery forum but in the given case, it is the duty of the Court to safeguard the interest of the society as also of the complainant who has been duped of huge amount. If some reasonable condition is imposed on the respondent while letting them enjoy the benefit of anticipatory bail, it would have the effect of avoiding unnecessary adjournment and delay in trial at the behest of respondents who are accused in FIR No. 158/2011, PS EOW. The impugned order needs to be interfered by this Court for the reason that the reasoning given by learned ASJ while enlarging the respondents namely Raj Hiremath and Savita Raj Hiremath on anticipatory bail, is not on sound judicial principles. But at the same time, cancellation of anticipatory bail at this stage would also not be in the interest of justice. - Taking into consideration the peculiar facts and circumstances of the case, the impugned order is modified to the extent that respondents Raj Hiremath and Savita Raj Hiremath are directed to deposit Rs. 25 lacs each with Registrar General of this Court within 10 days from the date of this order, who shall keep the same in the form of FDR initially for a period of one year which shall be renewed from time to time, as a condition for their release on anticipatory bail - Decided in favour of appellant.

Summary

Issues Involved:
1. Cancellation of anticipatory bail.
2. Allegations of misappropriation and cheating.
3. Conditions for granting anticipatory bail.
4. Judicial principles in granting bail.
5. Economic offences and their impact.
6. Imposition of conditions on bail.

Issue-wise Detailed Analysis:

1. Cancellation of Anticipatory Bail:

Trinity Global Enterprises Ltd. (TGEL) filed petitions under Section 439(2) read with Section 482 of Cr. P.C. seeking cancellation of anticipatory bail granted to Raj Hiremath and Savita Raj Hiremath in case FIR No. 158/2011, PS EOW. The primary allegation was that the respondents misappropriated funds provided for the production and marketing of a Hindi film titled "Sharafat Gayi Tel Lene".

2. Allegations of Misappropriation and Cheating:

The complainant, D.K. Jain, Group Chairman of Trinity Group, alleged that Rs. 2.95 Crores were transferred to TFEPL's account, but the respondents misappropriated the amount by inflating expenses and diverting funds for personal use. The investigation revealed various financial irregularities, including self-withdrawals and transfers to personal accounts.

3. Conditions for Granting Anticipatory Bail:

The learned ASJ granted anticipatory bail to Raj Hiremath and Savita Raj Hiremath, observing that the main allegation was a failure to maintain the promise and non-fulfillment of obligations, not a lack of effort towards fulfilling commitments. The respondents were directed to cooperate in the investigation and not tamper with evidence.

4. Judicial Principles in Granting Bail:

The petitioner argued that the anticipatory bail was granted arbitrarily without fully appreciating the facts or considering the status report. The petitioner cited several cases to support the contention that bail should be canceled when there is a clear misuse of funds and personal gain at the expense of the complainant.

5. Economic Offences and Their Impact:

The court recognized that economic offences constitute a class apart and need a different approach in bail matters, as they significantly impact the economy and public trust. The court cited cases emphasizing the gravity of economic offences and the need for judicial measures to safeguard public interest.

6. Imposition of Conditions on Bail:

The court found that the learned ASJ erred in considering the case as merely a failure to maintain a promise. The respondents allegedly misappropriated about Rs. 1 crore. The court modified the impugned order, directing the respondents to deposit Rs. 25 lacs each with the Registrar General of the court as a condition for their release on anticipatory bail. This condition aimed to balance the interests of justice and prevent potential offenders from enjoying ill-gotten wealth.

Conclusion:

The court modified the anticipatory bail conditions, requiring the respondents to deposit a substantial amount to ensure accountability and prevent misuse of funds. The observations made in the order were necessary to address the contentions raised and would not prejudice the trial's outcome.