Sriram Srinivasa Rao, vs The State Of Andhra Pradesh,
2021 Latest Caselaw 3922 AP

       THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI

               CRIMINAL PETITION NO.4787 of 2021

ORDER:-

     This petition is filed under Sections 437 and 439 of Code of the

Criminal Procedure, 1973 (for short „Cr.P.C.‟) seeking regular bail to

the petitioner/A-1 in connection with Crime No.167 of 2021 of

Vetapalem   Police Station,   Prakasam    District, for   the offence

punishable under Sections 420, 409 r/w 34 of the Indian Penal

Code, 1860 (for short, "I.P.C"). Later Section 5 of Andhra Pradesh

Protection of depositors and Financial Establishment Act, 1999 &

Section 22 r/w 4 of Banning of Unregulated Deposit Schemes Act,

2019 were added.

2.   The case of prosecution is that the Accused being Secretary,

President, Vice President and Board of Directors of „The Vetapalem

Cooperative Credit Society Limited‟ committed Criminal breach of

trust, cheated gullible public with a common intention and failed to

return the amounts deposited by the customers that occurred prior

to 20.07.2021. Basing on the complaint given by one Gutti Srinivasa

Rao, a case is registered initially under Sections 420, 409 r/w 34 of

the I.P.C. against A-1 and some others without mentioning their

names. Later the section of law is added under Section 5 of Andhra

Pradesh Protection of depositors and Financial Establishment Act,

1999 & Section 22 r/w 4 of Banning of Unregulated Deposit

Schemes Act, 2019 and also the name of A-2 to A-10 to the list of

Accused. A-1, who being a paid Secretary collected deposits from

2000 depositors by way of fixed deposits, recurring deposits, daily

deposit scheme, savings bank accounts by offering decent interest.
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Out of the collected amounts Rs.16.59 lakhs was given as loan to the

members of the society. The balance amount found in the account of

the society with Union Bank of India (Andhra Bank, Vetapalem) is

Rs.42,549/-. It is a case of cheating to a tune of Rs.27 crores. Basing

on the complaint, the present case is registered.

3.    Heard Sri     G. Ramachandra Reddy, learned counsel for the

petitioner   and    learned   Assistant   Public    Prosecutor    for   the

respondent-State.

4. Learned counsel for petitioner submits that the petitioner was

arrested on 29.07.2021 and remanded to judicial custody on

30.07.2021. He is languishing in jail for the last 96 days. He submits

that Section 5 of Andhra Pradesh Protection of depositors and

Financial Establishment Act has no application to the present facts

and circumstances of the case. The police has no jurisdiction to

investigate the case and such power is vested with the District

Co-operative Officer. He submits that the search proceedings are

initiated and properties are attached. The police have also seized

voluminous documents. Therefore, simultaneous prosecution under

the provisions of Andhra Pradesh Protection of depositors and

Financial Establishment Act and Indian Penal Code is not

permissible. Moreover, it is only a mere apprehension that the

petitioner may tamper with evidence or hamper the investigation

process. Hence, his case may be considered for grant of bail.

5. Learned Assistant Public Prosecutor submits that a huge

amount of Rs. 3,20,44,584/- (Rupees Three crores twenty lakhs forty

four thousand five hundred and eighty four only) is misappropriated

by the petitioner and others and as such there is no bar for

simultaneous prosecution under Andhra Pradesh Protection of

depositors and Financial Establishment Act and Indian Penal Code.

So far 394 witnesses are examined and 2000 depositors are yet to be

examined. Therefore, taking into consideration the magnitude of the

offence, the petitioner is not entitled for bail.

6. Heard learned counsel for the petitioner and learned Assistant

Public Prosecutor. Perused the record.

7. Admittedly the petitioner was arrested on 29.07.2021 and

remanded to judicial custody on 30.07.2021. He is languishing in jail

for the last 96 days. So far police failed to complete the investigation

and file charge sheet.

Section 167 (2) of Cr.P.C reads thus:

"(2) The Magistrate to whom an accused person is forwarded under this section may, whether he has or has not jurisdiction to try the case, from time to time, authorize the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers further detention unnecessary, he may order the accused to be forwarded to a Magistrate having such jurisdiction:

Provided that-

(a) the Magistrate may authorize the detention of the accused person, otherwise than in the custody of the police, beyond the period of fifteen days; if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorize the detention of the accused person in custody under this paragraph for a total period exceeding,-

(i) ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years;

(ii) sixty days, where the investigation relates to any other offence, and, on the expiry of the said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish

bail, and every person released on bail under this sub- section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that Chapter;]

(b) no Magistrate shall authorize detention in any custody under this section unless the accused is produced before him;

(c) no Magistrate of the second class, not specially empowered in this behalf by

the High Court, shall authorize detention in the custody of the police. Explanation I.- For the avoidance of doubts, it is hereby declared that, notwithstanding the expiry of the period specified in paragraph (a), the accused shall be detained in custody so long as he does not furnish bail;]. 2 Explanation II.- If any question arises whether an accused person was produced before the Magistrate as required under paragraph (b), the production of the accused person may be proved by his signature on the order authorizing detention."

8. The Hon‟ble Apex Court in the case of Uday Mohanlal

Acharya v.State of Maharashtra1 has observed that personal

liberty is one of cherished objects of the Indian Constitution and

deprivation of the same can only be in accordance with law and in

conformity with the provisions thereof, as stipulated under Article 21

of the Constitution. When the law provides that the Magistrate could

authorize the detention of the accused in custody up to a maximum

period as indicated in the proviso to sub Section (2) of Section 167 of

Cr.P.C, any further detention beyond the period without filing of a

challan by the investigating agency would be a subterfuge and would

not be in accordance with law and inconformity with the provisions

of the Criminal Procedure Code, and as such, it could be violative of

Article 21 of the Constitution of India and the Hon‟ble Apex Court in

recent judgment in S.Kasi v. State2 wherein it was observed that

the indefeasible right to default bail under Section 167 (2) Cr.P.C. is

an integral part of the right to personal liberty under Article 21 of the

(2001)5 SCC 453

2020 SCC OnLine SC 529

Constitution, and the said right to bail cannot be suspended even

during a pandemic situation as is prevailing currently. It was

emphasized that the right of the accused to be set at liberty takes

precedence over the right of the State to carry on the investigation

and submit a charge sheet. Additionally, it is well settled that in case

of any ambiguity in the construction of a penal statute, the Courts

must favour the interpretation which leans towards protecting the

rights of the accused, given the ubiquitous power disparity between

the individual accused and the State machinery. This is applicable

not only in the case of substantive penal statutes but also in the case

of procedure providing for the curtailment of the liberty of the

accused.

9. In view of the foregoing reasons as the charge sheet is not filed

within the statutory period, the petitioner is entitled for statutory

bail, which is an indefeasible right of the accused as laid down by

the Hon‟ble Apex Court in catena of cases.

10. Accordingly, this Criminal Petition is allowed. The petitioner/

A-1 shall be enlarged on bail in connection with Crime No. 167 of

2021 of Vetapalem Police Station, Prakasam District on executing

self bond for Rs.1,00,000/- (Rupees One lakh only) with two sureties

for a like sum each to the satisfaction of the Court of the Junior Civil

Judge, Chirala. On such release, the petitioner shall not leave the

State and he shall appear before the Station House Officer,

Vetapalem Police Station, Prakasam District once in a week i.e. on

every Saturday between 10.00 AM and 1.00 PM, till completion of

trial. The petitioner shall cooperate with the investigation and he

shall not influence the witnesses. In case petitioner fails to cooperate

with the investigation, the prosecution is at liberty to move an

application for cancellation of bail.

Consequently, miscellaneous applications pending, if any, shall

stand closed.

___________________________ LALITHA KANNEGANTI, J

Date: 05.10.2021 EPS

THE HON'BLE SMT. JUSTICE LALITHA KANNEGANTI

(Allowed)

CRIMINAL PETITION No.4787 of 2021

Date: 05.10.2021

EPS