Bombay High Court
Suresh Badrinarayan Somani vs The State Of Maharashtra on 4 February, 2009
Bench: S. S. Shinde
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD.
CRIMINAL APPLICATION NO.4045 OF 2008
Suresh Badrinarayan Somani,
Age 55 yrs., Occu. Business,
R/o. Adva Bazar, Chalisgaon,
Tq. Chalisgaon, Dist. Jalgaon.
..Applicant.
VERSUS
1. The State of Maharashtra
Through Secretary, Home
Department, Mantralaya,
Mumbai.
2. The Superintendent of Police,
Jalgaon, Tq. & Dist. Jalgaon.
..Respondents.
Shri.R.R.Mantri, Advocate for applicant.
Shri.N.H.Borade, A.P.P. for respondent No.1 & 2.
CORAM : S.S.SHINDE, J.
DATED : 4th FEBRUARY, 2009.
JUDGMENT
. Rule. Heard forthwith with the consent of
parties.
2. This application is filed for anticipatory
bail in connection with Crime No. 216/2008 registered
at Chalisgaon Police Station for the offences
punishable under sections 406, 408, 409, 420, 465,
468, 471, 120-B, 201, 34 of Indian Penal Code.
( 2 )
3. It is the case of the applicant that the
applicant and his family members are residing at the
address given in the title clause of the application.
He has deep roots in the society. He has never
involved in any criminal matter except the present
one. He has good reputation and he has held high
esteem in his area. His arrest and detention will
perpetually harm his hard earned reputation and image
would be lowered down.
4.
That, the Chalisgaon Peoples Co-operative Bank
Ltd. is a Co-operative Society, having license to do
business of Banking. That, the affairs of the Bank
are looked after by its Chairman and the staff
including General Manager. That, the Directors are
only police makers and are honorary post holders. It
is the case of the applicant that the affairs of this
Bank are run as per the by-laws framed and duly
approved by the concerned Registrar. The by-law No.
36 under which the rights and duties of the Directors
are stated, no duty is cast on Directors about the
loan and more particularly about documentation etc.
All this is the responsibility of the Chief Executive
Officer under Rule 40. There is also loan committee
( 3 )
for grant of loan.
. So far as the loan on Gold and Securities are
concerned, it was the exclusive province of the
General Manager. The General Manager is the custodian
of all documents etc.
5. The present applicant stopped attending
meetings from 2004 due to his bad health. He resigned
from the Directorship from 31.1.2006.
6. The
Government Auditor on 19.10.2008 lodged
the F.I.R. at Police Station Chalisgaon for the
period from 1991-92 to 2005-06 alleging that there
were financial irregularities in this Bank. The
auditors issued notice to the applicant. The
applicant replied to the said notice.
7. According to the applicant, under the rules,
the relatives of the Directors are not precluded from
taking loan. Any member is entitled to take loan.
The father of the applicant was a business man. He
was having cloth shop, having extensive turn over of
lakhs of rupees and was paying huge income tax. He
borrowed the loan. The father of the applicant had
( 4 )
old hypothecated account with the Bank. Similar
accounts are held by almost every businessman with
this Bank. The Bank concerned, grants loan on the
security of stock in trade. Additional security is
never taken, except at initial stage. The shop and
house of father of the applicant is worth over 80
lakhs and the same is available and in charge of the
Bank. The mortgage deed of the said house is placed
on record. The father of the applicant has taken loan
for furniture. According to the applicant, in all
above
accounts continuous transaction were going
Huge amounts were and are being paid. The property is
on.
under hypothecation i.e. under charge of Bank. The
amount shown as dues is mostly that of interest.
Principal amount has been already paid.
8. According to the applicant, even assuming that
there is wilful default by the defaulter, that cannot
be ground for criminal case that too of relative of
debtor. That is purely a civil dispute. The bank has
already obtained certificate under section 101 of
Maharashtra Co-operative Societies Act, 1960 and has
attached sufficient property. There was one time
settlement with the Bank and accordingly, the amount
has been deposited by the applicant.
( 5 )
9. It is further case of the applicant that the
F.I.R. does not disclose any offence at all. The
applicant is ready to co-operate with the
Investigating Officer, if he is released on bail. The
applicant was never summoned to appear before police
at any time. The applicant is not keeping good
health.
10. The applicant's case is that the Sessions
Court
case,
did
therefore,
not apply his mind to the facts
the applicant has prayed
of
in
this
the
application that in the event of arrest of the
applicant, he shall be directed to be released on
bail.
11. The learned counsel appearing for the
applicant submits that the applicant was Director of
the Chalisgaon Peoples Co-operative Society. He
further submits that merely because his father and
other relatives have borrowed the loan, that itself
cannot be ground for refusing the bail to the
applicant. The loan is borrowed by the father and
another relative of the applicant with honest
intention. There was no intention to defraud while
( 6 )
taking loan. It is further submitted that as one time
settlement, amount was paid to the Bank. The Bank has
also granted permission to mortgage the property and
two sureties are also given. He invited my attention
to page No. 144 of the compilation and states that
there was offer by the Bank for one time settlement,
accordingly, amount of Rs.38,000/- as one time
settlement has been deposited by the present
applicant. He further invited my attention to page
155 of the compilation and states that there was
another
offer by the Bank to pay Rs.2,21,000/- as one
time settlement, the said amount was also deposited by
the applicant. He further submits that the amount of
loan was taken on mortgage of the property and by
giving the sureties.
12. He further submits that the duty of the
Directors is to take policy decisions. Under the
by-laws of the Bank, the directors are not responsible
for the disbursement of the loan amount. He further
submits that the committee was appointed to scrutinize
the proposal of the loan and for disbursement of the
loan. The said committee was supposed to scrutinize
the proposals for the loan and to take the decisions.
( 7 )
He was not the member of the said committee. He
further submits that many borrowers have already
deposited the loan amount which was disbursed to them.
The present case is not the case in which bogus
proposals for loan are sanctioned in the name of
fictitious persons. All the persons, to whom loan was
granted, were genuine. He further invited my
attention to the by-laws of the Society and submitted
that the duties of the Directors are not to see the
disbursement of the loan. According to him, there is
nothing
responsible
in
by-laws
for
to show that the
illegal disbursement of
Directors
loan.
are
The
disbursement of loan or to grant the loan comes under
exclusive powers of Manager of the Bank. It is the
Manager's duty to complete the formalities and process
the proposals for loan and grant the loan. None of
the Directors are responsible, since loan committee
was formed to scrutinize and to take the decision to
grant the loan. It is further submitted that there
was a committee appointed from 2001. The Chairman and
Vice-Chairman of the Bank were the members of the
committee. Managing Director is also the member of
the committee. The present applicant is no way
concerned with the functions of the said committee.
( 8 )
13. He further submitted that there is no
affidavit or efforts by the prosecution to demonstrate
before this Court that why they need the applicant in
jail. He further submitted that the arrest is not
compulsory, no reasons are placed before this Court as
to why the applicant should be arrested. He further
submitted that in most of the meetings, in which
resolutions/decisions are taken for disbursement of
loan, the present applicant was not present. He
further submits that the present applicant has
answered
Every year
all
the
there
queries raised
is audit of the
by the
Bank.
auditors.
In the
respective years, the auditors have not found any
fault with any of the borrowers or Directors. He
invited my attention to the reply given by the present
applicant to the notice issued by the auditors. He
further invited my attention to page 98 to 120 of the
compilation and submitted that applicant was absent on
various meetings.
14. He further submitted that many sections of the
Indian Penal Code are mentioned in the complaint
without application of mind. In his submissions, the
sections 420, 465, 468 are not attracted at all in the
present case. There is no prima facie evidence to
( 9 )
attract those sections in the present case. He
further submitted that even the sections 406, 408 or
409 are not attracted in the present case. He further
submits that there is no material to show that there
was conspiracy among the Directors or between the
Directors and borrowers, therefore, section 120-B of
I.P.C. is not attracted at all. There is no
disappearance of evidence, no dishonest intention,
entire F.I.R. is only on the basis that loans are
illegally disbursed and therefore, in the respectful
submissions
of the counsel for the
applicant deserves to be released on bail.
applicant, the
15. According to the learned counsel for the
applicant, at the most, civil liability is attracted
and no criminal liability is attracted in the present
case.
16. The learned counsel invited my attention to
the judgment of the Supreme Court in the case of
Shri.Gurbaksh Singh Sibbia and others Vs. State of
Punjab and Sarbajit Singh and another Vs. State of
Panjab reported in (1980) 2 Supreme Court Cases 565
and submitted that at the time of considering the bail
application for anticipatory bail, the Court cannot
( 10 )
have third eye to assess the blatantness of corruption
at the preliminary stage. He further submitted that
even the bail can be granted in the serious offences,
if the Court is satisfied at the stage of granting
anticipatory bail that such charges appears to be
false or groundless. He has further invited my
attention to para 26 of the said judgment and
submitted that since denial of bail amounts to
deprivation of personal liberty, the Court should lean
against the imposition of unnecessary restrictions on
the
by
scope of section 438, especially when not imposed
the legislature in the terms of that section.
Section 438 is a procedural provision which is
concerned with the personal liberty of the individual,
who is entitled to the benefit of the presumption of
innocence since he is not, on the date of his
application for anticipatory bail, convicted for the
offence in respect of which he seeks bail. The
learned counsel further invited my attention to the
judgment of full Bench of the Allahabad High Court in
the case of Smt. Amarawati and another Vs. State of
U.P., reported in 2005 CRI.L.J. 755 and submitted
that the arrest of the accused is not a "must". The
sum and substance of the argument of the learned
counsel for the applicant is that the applicant is
( 11 )
innocent, though the loan is borrowed by the father
and one another relative of the applicant, sincere
efforts have been made to repay the amount of loan.
According to him, even the bank has granted permission
to mortgage the property and the remaining amount will
also be paid as and when the property is sold. The
learned counsel submits that though the loan was taken
by his relatives, that was in accordance with the
rules and regulations of the Bank. He further
submitted that there was no question of giving any
security or surety since 50% loan are on hypothecation
and entire goods in business are hypothecated. In the
end, he prayed that the applicant may be released on
bail.
17. The learned A.P.P. assisted by the advocate
for the Bank submitted that the Special Auditor Class
II Co-operative, Chalisgaon, set the criminal law in
motion by submitting criminal complaint in Chalisgaon
Police Station, which came to be registered on
19.10.2008 as Crime No. 216/2008. The total detected
fraud is of Rs. 5,51,23,000/- with interest.
18. The learned A.P.P. submitted that there are
13 F.I.R. came to be registered under sections 406,
( 12 )
408, 409, 420, 465, 468, 471, 120-B r/w. 34 of the
Indian Penal Code. According to the learend A.P.P.,
the total fraud detected is of Rs.20,78,56,325/-. The
various crimes are registered i.e. Crime Nos.
216/2008, 248/2008 to 259/2008.
19. It is further submitted by the learned A.P.P.
that the Special Auditor Class II found the
illegalities, misappropriation, siphoned of money of
the bank, violation of rules and regulations of the
Maharashtra
Regulation
Co-operative Societies Act, 1960, Banking
Act, 1949 and the notification issued by
the R.B.I. from time to time as well as violation of
exposure limit of loan and also found the bogus loan
cases and disbursement of amount under the garb of
laon.
20. According to the learned A.P.P., the arrest is
part of the process of the investigatin intended to
secure several purposes. The accused may have to be
questioned in detail regarding various facets of
motive, preparation, commission and aftermath of the
crime and the connection of other persons, if any, in
the crime. There are possibilities and circumstances
in which the accused may provide information leading
( 13 )
to discovery of material facts.
21. The learned A.P.P. submitted following points
for rejection of bail.
a. There is sufficient material to indicate that
financial irregularities, dishonest and fraudulent
loan transactions have been taken place in the affairs
of the said bank, for which the Board of Directors and
certain borrowers, who were in collusion with them are
responsible.
b. According to the learned A.P.P., the present
applicant was Director of the said bank from 1.4.1991
to 6.9.2006. The involvement of the applicant in the
alleged offence is clearly made out.
c. According to the learned A.P.P., the ground of
parity does not exist, the other persons are released
on bail whose cases are of not that serious nature
like present applicant. Considering the nature and
gravity of the offence, the applicant is not entitled
to be released on anticipatory bail.
d. There is documentary evidence against the
( 14 )
applicant. The overtacts of applicant and others is
manifest. The crime in which the applicant is
involved, is very serious and involving conspiracy to
cheat and defraud public institution in a systematic
manner.
e. In the present crime, involving public
mischief resulting into serious offences involving
huge illegal finance, committed against the bank at
large, in this event it may be keep in view the
potential
threat, which may cause huge financial
back to gullible public i.e. depositors.
set
f. There was designed plan, prima facie to
defraud the depositors and members of the bank. The
bank is put to loss of approximately 20 corror due to
finical bungling, manipulations and money laundering.
The applicant joined hands with other Directors,
intentionally, knowingly and deliberately defrauded
the bank.
g. The Chairman, members of Board of Directors,
Manager in furtherance of their common intention
committed breach of trust and they have involved in
unlawfully disbursement of amount in corror to their
( 15 )
relatives under the garb of loan. The said so-called
loan was not refunded from the borrowers. The loan
was given for the purpose of business to the close
relatives of some of the Directors or Ex-Directors or
Manager. In fact the business for which the loans are
given were never in existence. The loan is disbursed
by passing the provisions of Co-operative Law, by-laws
and Rules and Regulation to their close relatives,
well wishers illegally without obtaining security and
mortgage or proper security from the borrowers. At
the time
documents
of
were
ig obtaining and sanctioning
prepared and on that basis the
loan forged
loans
were granted by the Board of Directors.
h. During the course of investigation,
prima-facie it appears that there is systematic fraud
committed due to which the bank has caused great loss.
i. As per the master circular dated 4th July,
2007, in point No. 6.2 - the wilful default is
defined and in point No. 6.3 - diversion and
siphoning of funds elaborately narrated. The penal
measures are also narrated in 6.6(b) and in point No.
6.9 - a criminal action is directed to be taken
against the borrower by the R.B.I. In the circular in
( 16 )
point No. 4.6.3 oral sanction is prohibited.
j. It is further submitted by the learned A.P.P.
that the total number of directors till 1998 were 13,
till 21.2.2004 the number of directors were 15 and
thereafter, 17 directors were there. The Board of
Directors was dissolved by the learned D.D.R. on
6.9.2006 as there were illegality. There was 6
committees constituted by the Board of Directors. In
each committee near about 5 directors were nominated.
were
Amongst the directors in the 6 committees, each of the
Directors given representation. All Directors
were represented in two or three committees. The
committees were constituted as valuation committee,
supervision committee, scrutiny committee, guarantor
committee, loan sub committee, godown committee. In
the said committees, all the Directors were nominated.
After the report of all committees the loan case has
to be put up before the Board of Directors for
sanctioning the loan. The Directors, who were
represented in the above committees, were again sit as
a Board of Directors to sanction the loan. It means
each of the Director were acted in duel capacity. All
these registers are seized by the I.O. It is also
disclosed in the investigation that though these
( 17 )
committees were there, in fact, they have not
performed their duties. No loan officer was
appointed. Managing Director was also not appointed.
All the work to scrutinize, to value the property, to
verify the goods etc. was with the Board of
Directors.
k. It is further submitted that the earlier
auditors have time and again objected and pointed out
the bogus loan cases, however, the Board of Directors
were
in power till 6.9.2006, therefore, they have not
filed any criminal case because they could have become
accused and that criminal case could be filed against
themselves and therefore, knowing and deliberately
they avoided and ignored the audit report. The
present applicant was also in supervision committee,
guarantor committee, godown committee and valuation
committee.
l. It is further submitted by learned A.P.P.
that as per the resolution dated 13.7.2001 though
again the loan sub committee, audit and inspection
committee, staff sub committee, recovery sub committee
were reconstituted, however, those committees were
never come in existence, those committees were remain
( 18 )
on paper only.
m. It is further submitted that there is no
possibility to recover the huge amount and therefore,
there is every possibility that applicant is likely to
abscond and will tamper with the prosecution evidence
and witnesses and hence, bail may be rejected.
22. I have given anxious consideration to the
rival submissions. Since the present application is
filed
the
for seeking anticipatory bail, it may not be in
interest of either side to comment on the merits
of the matter since investigation is in progress.
Therefore, I proceed to decide this application,
mentioning relevant facts confined to prayer in this
application.
23. At this juncture, it would be relevant to
refer to the observations of the Apex Court while
dealing with the applications for anticipatory bail
and scope of section 438 of Cr.P.C. Section 438 of
Cr.P.C. makes special provision for granting
"anticipatory bail" which was introduced in the
present Code of 1973. As observed in Balchand Jain
Vs. State of M.P., (1976) 4 S.C.C. 572,
( 19 )
"anticipatory bail" means a bail in anticipation of
arrest. The expression "anticipatory bail" is
misnomer inasmuch as it is not as if bail presently
granted in anticipation of arrest. Where a competent
Court grants "anticipatory bail", it makes an order
that in the event of arrest, a person shall be
released on bail. There is no question of release on
bail unless a person is arrested and, therefore, it is
only on arrest that the order granting anticipatory
bail becomes operative.
. It
is also observed in the said judgment that
the the power of granting "anticipatory bail" is
extraordinary in character and only in exceptional
cases where it appears that a person is falsely
implicated or a frivolous case is launched against him
or "there are reasonable grounds for holding that a
persons accused of an offence is not likely to
abscond, or otherwise misuse his liberty while on
bail", that such power may be exercised. Thus, the
power is "unusual in nature" and is entrusted only to
the higher echelons of judicial service i.e. a Court
of Sessions and a High Court.
24. The Apex Court in the case of Gurbaksh Singh
( 20 )
Sibba V. State of Punjab reported in (1980) 2 S.C.C.
565 has made observations regarding scope of section
438 of Cr.P.C. The Supreme Court has observed in para
26 that section 438 is a procedural provision which is
concerned with the personal liberty of the individual,
who is entitled to the benefit of the presumption of
innocence since he is not, on the date of his
application for anticipatory bail, convicted of the
offence in respect of which he seeks bail. It is
further observed in the same paragraph that since
denial
liberty,
of bail
ig amounts to deprivation
the court should lean against the imposition
of personal
of unnecessary restrictions on the scope of Section
438 , especially when not imposed by the legislature.
In para 31, it is further observed that in regard to
anticipatory bail, if the proposed accusation appears
to stem not from motives of furthering the ends of
justice, but from some ulterior motive, the object
being to injure and humiliate the applicant by having
him arrested, a direction for the release of the
applicant on bail in the event of his arrest would
generally be made. On the other hand, if it appears
likely, considering the antecedents of the applicant,
that taking advantage of the orders of anticipatory
bail, he will flee from justice, such an order would
( 21 )
not be made. But, the converse of these propositions
is not necessarily true. In fact, there are numerous
considerations, the combined effect of which must
weigh with the court while granting or rejecting
anticipatory bail. The nature and seriousness of the
proposed charges, the context of the events likely to
lead to the making of the charges, a reasonable
possibility of the applicant's presence not being
secured at the trial, a reasonable apprehension that
witnesses will be tampered with and "the larger
interests
considerations
of the public or the State" are some of the
which the court has to keep in mind
while deciding an application for anticipatory bail.
. In para 40 and 41 the Apex Court has further
observed that a blanket order i.e. an order which
serves as a blanket to cover or to protect any and
every kind of allegedly unlawful activity, in fact any
eventuality, likely or unlikely regarding which, no
concrete information can possibly be had, should not
generally be passed. Such a blanket order is bound to
cause serious interference with the functions of the
police.
. It is further observed in para 36 that if an
( 22 )
application for anticipatory bail is made to the High
Court or the Court of Session, it must apply its own
mind to the question and decide whether a case has
been made out for granting such relief. It cannot
leave the question for the decision of the Magistrate
concerned under Section 437 of the Code, as and when
an occasion arises. It is further observed in para
27, 38 and 39 that the filing of an F.I.R. is not a
condition precedent to the exercise of the power under
section 438. Anticipatory bail can be granted even
after
has
an F.I.R.
not been arrested.
ig is filed, so long as the
But the provisions of section
applicant
438 cannot be invoked after the arrest of the accused.
It is further observed in para 42 that an order of
bail can be passed under Section 438(1) without notice
to the Public Prosecutor. But notice should issue to
the Public Prosecutor or the Government Advocate
forthwith and the question of bail should be
re-examined in the light of the respective contentions
of the parties. The ad-interim order too must conform
to the requirements of the section and suitable
conditions should be imposed on the applicant even at
that stage.
25. In case of State represented by the C.B.I.
( 23 )
Vs. Anil Sharama, (1997) 7 Supreme Court Cases 187,
the Supreme Court in para 6 has observed thus :-
Custodial interrogation is qualitatively more
elicitation-oriented than questioning a
suspect who is well ensconced with a
favourable order under Section 438 of the
Code. In case like this effective
interrogation of a suspected person is of
tremendous advantage in disintering many
useful
would
information
have
and also materials
been cancelled. Success in
which
such
interrogation would elude if the suspected
person knows that he is well protected and
insulated by a pre-arrest bail order during
the time he is interrogated. Very often
interrogation in such a condition would reduce
to a mere ritual. The argument that the
custodial interrogation is fraught with the
danger of the person being subjected to third
decree methods need not be countenanced, for,
such an argument can be advanced by all
accused in all criminal cases. The Court has
to presume that responsible police officers
would conduct themselves in a responsible
( 24 )
manner and that those entrusted with the task
of disintering offences would not conduct
themselves as offenders.
26. The Supreme Court in the case of Narinderjit
Singh Sahni and another V. Union of India and others,
reported in A.I.R. 2001 Supreme Court 3810 has
observed that if accused facing a charge under
sections 406, 409, 420 and 120-B is ordinarily not
entitled to invoke the provisions of section 438 of
the
Criminal Procedure Code unless it is
that such criminal accusation is not a bona fide one.
established
27. In the case of Ram Narain Poply Vs. Central
Bureau of Investigation with Pramod Kumar Monocha Vs.
Central Bureau of Investigation with Vinayak Narayan
Deosthali, reported in A.I.R. 2003 Supreme Court 2748
in para 382 the Supreme Court has observed thus :-
382. The cause of the community deserves
better treatment at the hands of the Court in
the discharge of its judicial functions. The
Community or the State is not a persona non
granta whose cause may be treated with
disdain. The entire community is aggrieved if
( 25 )
economic offenders who ruin the economy of the
State are not brought to book. A murder may
be committed in the heat of moment upon
passions being aroused. An economic offences
is committed with cool calculation and
deliberate design with an eye on personal
profit regardless of the consequence to the
Community. A disregard for the interest of
the community can be manifested only at the
cost of forfeiting the trust and faith of the
community
in an
ig in the system to administer justice
even handed manner without fear of
criticism from the quarters which view white
collar crimes with a permissive eye unmindful
of the damage done to the national Economy and
National Interest, as was aptly stated in
State of Gujrat V. Mahanlal Jitamalji Porwal
and another, (A.I.R. 1987 1321).
28. While considering the scope of anticipatory
bail under section 438 of Criminal Procedure Code in
case of Adri Dharan Das V. State of West Bengal
reported in 2005 A.I.R. S.C.W. 1013, relying on the
earlier Constitutional Bench judgment in case of
Balachand Jain V. State of Madhya Prades reported in
( 26 )
A.I.R. 1977 S.C. 366, the Supreme Court in para 7
has observed thus :-
The power exercisable under Section 438 is
somewhat extraordinary in character and it is
only in exceptional cases where it appears
that the person may be falsely implicated or
where there are resonable grounds for holding
that a person accused of an offence is not
likely to otherwise misuse his liberty then
power
The
is
power
to be exercised under Section
being of important nature it
is
entrusted only to the higher echelons of
judicial forums i.e. the Court of Session or
the High Court. It is the power exercisable
in case of an anticipated accusation of
non-bailable offence. The object which is
sought to be achieved by Section 438 of the
Code is that the moment a person is arrested
if he has already obtained an order from the
Court of Session or High Court, he shall be
released immediately on bail without being
sent to jail.
29. The Supreme Court in the case of Himanshu
( 27 )
Chandravadan Desai & ors. Vs. State of Gujrat
reported in 2006 Cri.L.J. 136 while considering bail
application of the applicants therein has observed
thus :-
Accused a Director of Bank and others involved
in Bank Scam - Siphoned off funds of Bank
worth crores by bogus loans and fictitious
letters of credit in name of their friends,
relatives etc. - Offence is very serious -
Evidence showing their prima facie involvement
in offence - Having regard to huge amounts
involved there is danger of accused
absconding, if released on bail, or attempting
to tamper with evidence by pressurizing
witnesses - Refusal of bail is proper.
30. This Court in the case of State of Maharashtra
V. Pramod Sahebrao Rohankar, reported in 2008 ALL
M.R. (Cri.) 3476 has cancelled the anticipatory bail
granted to the applicants therein with observations in
para 12 that :-
12. In the fact situation of the present
case, there is sufficient material available
( 28 )
to infer that the Directors joined hands with
Chairman Rajendra Wani while sanctioning the
loan cases on a single day, in the four lots
mentioned above, which resulted into huge
financial loss to the Co-operative Credit
Society. Nobody made any attempt to verify
whether the borrowers were eligible, whether
the proper procedure was followed, whether the
sufficient securities were obtained and
whether such huge loans were likely to be
not
recovered.
in
Since some of the borrowers
existence at all and no security
are
is
obtained from many of them, it is obvious that
recovery of the loans under the Maharashtra
Co-operative Societies Act would be difficult.
The learned Additional Sessions judge failed
to consider these aspects of the matter. He
did not record sufficient reasons and vaguely
observed that the respondents were not
directly involved in the financial misdeeds.
Needless to say, the impugned orders are
illegal, perverse and liable to be quashed.
31. In the light of above cited judgments and
observations made therein by the Apex Court and this
( 29 )
Court, I proceed to decide the present application for
anticipatory bail.
32. The present applicant was the Director of the
Bank for the period from 1.4.1991 till 6.9.2006.
During the period in which the present applicant was
Director, he attended 15 meetings and in the said
meetings resolutions were passed to grant loans to
various persons which are around 17 in numbers.
According to the complainant, as disclosed in the said
resolutions,
persons was
ig taking decision to grant loan to various
in contravention of Bank Regulation,
R.B.I. Regulation, By-laws of the concerned Bank, the
provisions of Maharashtra State Co-operative Societies
Act and other relevant regulations issued from time to
time by the Government.
33. In the instant case, it is pertinent to
mention that it is not only that the present applicant
was party for the resolutions which were passed on
various dates from 1.4.1991 till 6.9.2006, but his
father namely Badrinarayan Balmukund Somani and his
brother Kishor Badrinarayan Somani has also taken loan
from the said Bank. There is substance in the
contention of the A.P.P. assisted by the learned
( 30 )
counsel for the bank that not only that the
applicant's relatives i.e. father and brother have
taken huge amount of loan contrary to the permissible
limit and contrary to the various regulations, the
applicant is vicariously liable for all the bogus loan
cases sanctioned during his period. The applicant has
not opposed any of the bogus loan cases during the
meetings. If the arguments of the learned A.P.P. are
carefully perused, the various instances have been
cited by the learned A.P.P. to show that how the
loans
contrary
are
to
advanced to concerned
the by-laws of the Bank,
persons illegally
Regulation of
R.B.I., the provisions of Maharashtra Co-operative
Societies Act and other relevant directions issued by
the Central Government as well as the State
Government. It must be stated that the instances
which are referred by the A.P.P. in support of the
contention of the prosecution that large amounts have
been systematically siphoned off and there is
misappropriation to the tune of more than twenty seven
crores, the Bank is put to loss by hatching systematic
plan/conspiracy by the Directors and borrowers and as
a result, the thousands of depositors who have put
more than thirty seven crores in the bank are not
getting their deposits back due to non recovery of
( 31 )
amount of Rs. twenty seven crores loan disbursed by
the bank.
34. In the case of present applicant, his father
has borrowed the loan of Rs. 20 lakhs and another
loan of Rs. 6 lakhs for purchasing vehicle. The
total amount which was borrowed by the father of the
present applicant was Rs.26 lakhs. According to the
Bank, the said amount is not returned by the father of
the present applicant. So far hypothecation loan is
concerned,
from the
now
ig the total amount due to be
father of the applicant is
recovered
Rs.61,97,687/-.
So far the loan which was taken for vehicle is
concerned, the total due amount due to be recovered is
Rs.12,65,697/-. Now, it is admitted position that the
father of the applicant is died. The brother of the
applicant Kishor Somani has borrowed Rs.10 lakhs as
hypothecation loan and the amount is not repaid and as
a result, now the total outstanding loan amount
towards the said Kishor is Rs.26,45,935/-. The
present case is not only the case in which the present
applicant as a member of Board of Directors in its
meetings participated and signed the proceedings in
which decisions were taken to disburse the loan amount
illegally, contrary to the by-laws of the Bank,
( 32 )
Regulation of R.B.I. and other provisions of
Maharashtra Co-operative Societies Act and
instructions from time to time from Central or State
Government, but, the brother and father of the present
applicant have been granted the loan contrary to the
permissible limit of the Bank and contrary to by-laws
of the Society. It would not have been possible for
the father of the applicant and brother of the
applicant to borrow such huge loans and further not to
repay the same, in absence of position of the present
applicant
till 2006.
as
ig a Director during the period from 1991
35. Since the application is only for the
anticipatory bail though various contentions are
raised by the applicant and the learned A.P.P. in his
detail arguments in reply to the application, it would
not be appropriate to comment in detail about the
merits of the case since the investigation is in
progress. Suffice to say that if the F.I.R./
complaint is perused carefully, prima facie conclusion
can be drawn that there was systematic plan hatched by
the majority of the Directors to grant loan amounts
illegally to various borrowers who are either
relatives of the Directors or the Directors have some
( 33 )
interest shared with them, causing heavy loss to the
Bank and depositors of the Bank.
36. In the case of present applicant, his father
Badrinarayan Balmukunk Somani whose case is shown at
item No. 14 in complaint shows that on 27.2.2001 the
amount of Rs. 20 lakhs has been borrowed without
mortgage / hypothecation. On 23.11.1998 Rs. 6 lakhs
have been borrowed by him. According to the contents
of the F.I.R., the said amount is borrowed and allowed
to
be borrowed in the self-interest of the father
the applicant and there is systematic misappropriation
of
of the said amount. There are no any documents
showing the profit and loss account, income taxes,
stock, the R.C. book of the vehicle or the evidence
of the purchase of the vehicle placed on record by
Lonee. Further, it is stated in the complaint that
there is violation of circular issued by the R.B.I.
The applicant has misused his powers by granting loan
to the father with conspiracy with the then Manager of
the Bank by systematic plan to misappropriate the
amount by cheating the Bank. The said amount has been
used for the benefit of the applicant. The said
amount is not repaid and on 31st March, 2008, the said
amount with interest comes to Rs.61,96,686/-. It is
( 34 )
further stated that by 31st March, 2008 the amount of
Rs.12,65,687/- was supposed to be paid towards vehicle
loan.
37. In complaint, item No. 15 is shows about the
loan of Kishore Badrinarayan Somani. It is stated
that said Kishore Somani is brother of the applicant.
On 27th March, 2000 loan of Rs. 10 lakhs was given to
him without mortgage. The said loan amount was
obtained for own benefit and the same had been
misappropriated.
be
ig No necessary documents, required to
submitted for obtaining loan, has been submitted.
There is violation of R.B.I. guidelines. There is
systematic plan and conspiracy to siphoned off the
Bank amount in systematic manner for the benefit of
the applicant and his relatives.
38. Apart from the specific allegations against
the present applicant as disclosed in the complaint as
Director, the applicant is a signatory to the various
resolutions passed from time to time by which there
was disbursement of loan amount to various persons
contrary to the by-laws of the society, guidelines of
R.B.I. and various rules and provisions of
Maharashtra Co-operative Societies Act. It can not be
( 35 )
forgotten that thousands of depositors have deposited
more than Rs.37 crore in the said Bank and total loan
on the date of filing the complaint was to be
recovered from the borrowers to the extent of around
Rs.28 Crores. If the contents of the complaint and
other documents which are made available, are perused
carefully, same would demonstrate that loans have been
sanctioned by the Society in utter disregard to the
by-laws of the society, inasmuch as the loans have
been granted. The loans have been sanctioned in
also be seen
excess of permissible limit under the by-laws.
that the loans have been
It can
sanctioned
without obtaining requisite security. It could also
be seen from the record that loans have been
sanctioned to close relatives of the Directors
including relatives of some of the nominated directors
in huge amount. It can also be seen that loans have
been sanctioned in utter disregard to the by-laws of
the society, in as much as, the loans have been
granted to persons who are not residing within the
jurisdiction of the area of operation of the said
society. It could be seen that there is a prima facie
evidence of involvement of the present applicant in
granting loans in huge amounts to various persons
including relatives of the some of the Directors. As
( 36 )
such prima facie involvement of the present applicant
is seen from the material collected by the
Investigating agency.
39. In my considered view if the judgments of the
Apex Court and this Court referred hereinabove are
considered in the light of facts of this case, the
present application deserves to be rejected. In my
considered view, the case in hand is clearly covered
by the law laid down by the Apex Court in the case of
Himanshu
Cri.L.J. 136.
Desai V. State of Gujarat, reported in 2006
40. It cannot be forgotten that thousands of
depositors have deposited their hard earned money in
the Bank which are above Rs. 37 crore as stated by
the A.P.P. in his reply. The society has been duped
by the Directors of the society without having any
regard to the security of the society or the interest
of the society. The applicant was Director for a long
time and he is influential person, therefore, the
possibility of influencing the witnesses or tampering
with the evidence cannot be ruled out. In that view
of the matter, no case for grant of anticipatory bail
is made out.
( 37 )
41. As stated earlier in para 27 the observations
of the Supreme Court in para 382 in the case of Ram
Narain Poply V. Central Bureau of Investigation
reported in A.I.R. 2003 Supreme Court 2748, the cause
of the community deserves better treatment at the
hands of the Court in the discharge of its judicial
functions. The Community or the State is not a
persona non granta whose cause may be treated with
disdain. The entire community is aggrieved if
economic
are not brought to book.
offenders who ruin the economy of the
A murder may be committed in
State
the heat of moment upon passions being aroused. An
economic offences is committed with cool calculation
and deliberate design with an eye on personal profit
regardless of the consequence to the Community. A
disregard for the interest of the community can be
manifested only at the cost of forfeiting the trust
and faith of the community in the system to administer
justice in an even handed manner without fear of
criticism from the quarters which view white collar
crimes with a permissive eye unmindful of the damage;
done to the national Economy and National Interest.
42. For all these reasons stated hereinabove, in
( 38 )
my considered view, the application deserves to be
rejected and accordingly same is rejected. Rule
discharged.
[ S.S.SHINDE, J.]
ssc/criapln4045.08
