Appeal against the order releasing the accused on bail by the Hon’ble High Court
2. The present appeal arises from the final judgment and order dated 13.10.20211 (hereinafter referred to as the “Impugned Order”), passed by a learned Single Judge of the High Court of Judicature at Bombay, Nagpur Bench (hereinafter referred to as the “High Court”) in Criminal Application (BA) No.867/2021, whereby and whereunder respondent no.1 was released on bail in connection with Crime No.217/2019 registered with Police Station Kotwali, Nagpur for offences punishable under Sections 409, 420, 467, 468, 471 and 120-B of the Indian Penal Code, 1860 (hereinafter referred to as the “IPC”) and Section 3 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (hereinafter referred to as the “MPID Act”). Be it noted, we have dismissed connected petitions vide common Order dated 07.05.2024 in S.L.P. (Crl.) Nos.3946/2022 and 3938/2022. On even date, judgment was reserved in the instant appeal.
Brief Facts
Allegation is deposit amount of 29 crores not returned to 798 depositors
3. The case of the prosecution is that one accused viz. Khemchand Meharkure is the President of Jai Shriram Urban Credit Co-operative Society Limited (hereinafter referred to as the “Society”) and he, in connivance with the co-accused, misappropriated an amount of ₹79,54,26,963/- (Rupees Seventy Nine Crores Fifty Four Lakhs Twenty Six Thousand Nine Hundred and Sixty Three). Also, it is projected in the charge-sheet that statements of 798 depositors further revealed that their deposits aggregating ₹29,06,18,748/- (Rupees Twenty Nine Crores Six Lakhs Eighteen Thousand Seven Hundred and Forty Eight) were not returned and the amount was misappropriated. The appellants herein are some of the depositors, who purportedly fell victim to the Society. The financial irregularities have been categorized by the prosecution under twenty-three different heads.
Prosecution projects respondent no.1 as mastermind
4. It is the further case of the prosecution that the respondent no.1 is a co-conspirator and a close friend of the alleged mastermind, Khemchand Meharkure. Respondent No.1 deposited an amount of ₹2,38,39,071/- (Rupees Two Crores Thirty Eight Lakhs Thirty Nine Thousand and Seventy One) with the Society in his name and in the names of his family members. As stated in the chargesheet, the respondent no.1 was paid an amount of ₹9,69,28,500/- (Rupees Nine Crores Sixty Nine Lakhs Twenty Eight Thousand Five Hundred) which was withdrawn from the Society and paid to him as financial assistance, upon the directions of the alleged mastermind, Khemchand Meharkure. It is further alleged that the respondent no.1 purchased five immovable properties for approximately ₹10,00,00,000/- (Rupees Ten Crores) in the name of Khemchand Meharkure.
Respondent no.1 was arrested and released by the Hon’ble High Court on bail
5. During investigation, respondent no.1 was arrested on 28.04.2021. The High Court vide the Impugned Order has released him on bail noting that the material on record is not sufficient to establish his complicity.
Analysis reasoning and conclusion
18. Having given our anxious thought to the controversy, we find that the exercise of discretion by the learned Single Judge in the impugned order under Section 439(1) of the Code of Criminal Procedure, 1973 (hereinafter referred to as the “Code”), granting bail to the respondent no.1 cannot be sustained.
Relevant factors to consider while granting bail
19. Courts while granting bail are required to consider relevant factors such as nature of the accusation, role ascribed to the accused concerned, possibilities/chances of tampering with the evidence and/or witnesses, antecedents, flight risk et al. Speaking through Hima Kohli, J., the present coram in Ajwar v Waseem, 2024 SCC OnLine SC 974, apropos relevant parameters for granting bail, observed:
“paras. 26 and 27”
20. In State of Haryana v Dharamraj, 2023 SCC OnLine 1085, speaking through one of us (Ahsanuddin Amanullah, J.), the Court, while setting aside an order of the Punjab and Haryana High Court granting (anticipatory) bail, discussed and reasoned:
“paras. 7 to 12”
21. In Ajwar (supra), this Court also examined the considerations for setting aside bail orders in terms below:
“28. The considerations that weigh with the appellate Court for setting aside the bail order on an application being moved by the aggrieved party include any supervening circumstances that may have occurred after granting relief to the accused, the conduct of the accused while on bail, any attempt on the part of the accused to procrastinate, resulting in delaying the trial, any instance of threats being extended to the witnesses while on bail, any attempt on the part of the accused to tamper with the evidence in any manner. We may add that this list is only illustrative and not exhaustive. However, the court must be cautious that at the stage of granting bail, only a prima facie case needs to be examined and detailed reasons relating to the merits of the case that may cause prejudice to the accused, ought to be avoided. Suffice it is to state that the bail order should reveal the factors that have been considered by the Court for granting relief to the accused.
29. In Jagjeet Singh (supra) [(2022) 9 SCC 321], a three-Judges bench of this Court, has observed that the power to grant bail under Section 439 Cr. P.C. is of wide amplitude and the High Court or a Sessions Court, as the case may be, is bestowed with considerable discretion while deciding an application for bail. But this discretion is not unfettered. The order passed must reflect due application of judicial mind following well established principles of law. In ordinary course, courts would be slow to interfere with the order where bail has been granted by the courts below. But if it is found that such an order is illegal or perverse or based upon utterly irrelevant material, the appellate Court would be well within its power to set aside and cancel the bail. (Also refer: Puran v. Ram Bilas [(2001) 9 SCC 338]; Narendra K. Amin (Dr.) v. State of Gujarat [(2008) 13 SCC 584])” (emphasis supplied)
High Court observed that no materials to establish conspiracy for respondent no.1
22. The learned Single Judge, in the impugned order, has simply proceeded on the premise that there were only allegations made by some persons against the respondent no.1 and he was not a member of the Society which had committed such financial irregularities. Moreover, we find that the learned Single Judge, whilst noting that “no positive finding need be recorded on the sufficiency of the said material to establish conspiracy, which issue will be addressed by the trial Court, after the evidence is adduced”, has without any basis thought it fit to record that in his “prima facie opinion, it is extremely debatable whether such material is sufficient to establish conspiracy.”
Material shows the involvement of respondent no.1
24. We bear in mind the submission that respondent no.1 was a close associate of the President of the Society with regular business/other dealings between the two. Investigation also indicates that out of the monies withdrawn from the Society’s account by the respondent no.1, investments were later made in property in the name of his relatives. Further, the High Court has completely lost sight of the fact that the deposits in/to the Society were made by people having meagre earnings without anything else to fall back upon. Tentatively speaking, it seems that the President of the Society systematically siphoned off these funds, with the aid of other office-bearers as also through respondent no.1. We consciously refrain from elaborately discussing/detailing the evidence or our views thereon following the dicta in Niranjan Singh v Prabhakar Rajaram Kharote, (1980) 2 SCC 559; Vilas Pandurang Pawar v State of Maharashtra, (2012) 8 SCC 795 and Atulbhai Vithalbhai Bhanderi v State of Gujarat, 2023 SCC OnLine SC 560.
In economic offences affecting large number of people court may impose strict and additional conditions for bail and Anticipatory bail
25. In cases where the allegations coupled with the materials brought on record by the investigation and in the nature of economic offence affecting a large number of people reveal the active role of the accused seeking anticipatory or regular bail, it would be fit for the Court granting such bail to impose appropriately strict and additional conditions. In the present case, even that has not been done as the High Court has imposed usual conditions simpliciter:
“8. The applicant be released on bail in connection with Crime 217/2019, registered with Police Station Kotwali, Nagpur, for offences punishable under sections 409, 420, 467, 478, 471, 120-B of Indian Penal Code, Section 3 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, on executing PR bond of Rs. 16,000/- (Rupees Sixteen Thousand) with one solvent surety of the like amount.
9. The applicant shall attend Economic Offences Wing, Nagpur as and when required by the Investigating Officer.
10. The applicant shall not, directly or indirectly, make any attempt to influence the witnesses or otherwise tamper with the evidence.
11. The applicant shall not leave the country without the permission of the trial Court.” (emphasis supplied)
Bail cancelled
27. Accordingly, the appeal succeeds. The impugned order stands set aside. Respondent No.1 is directed to surrender within a period of three weeks from today, failing which the trial Court shall proceed in accordance with law. We clarify that the observations made hereinabove are limited to the aspect of testing the legality of the impugned order. They shall not be treated as definitive/conclusive regarding respondent no.1 or any other accused. The trial Court in seisin shall proceed uninfluenced and in accordance with law. Given the peculiar circumstances, where bail is being cancelled after a period of almost 3 years, it is deemed appropriate to grant liberty to the respondent no.1 to apply for bail at a later period or in the event of a change in circumstances. Needless to state, such application, if and when preferred, shall be considered on its own merits, without being prejudiced by the instant judgment. The authorities concerned are directed to render appropriate care and assistance as regards the medical condition of the respondent no.1.
Party
Manik Madhukar Sarve & Ors. … Appellants versus Vitthal Damuji Meher & Ors. …Respondents – Criminal Appeal No.3573 of 2024 [@ Special Leave Petition (Crl.) No.3945 oF 2022] – AUGUST 28, 2024 – 2024 INSC 636.
Manik Madhukar Sarve & Ors vs. Vitthal Damuji Meher & Ors – 45422022_2024-08-28
