Bombay High Court
Prashant S/O Jaideo Wasankar vs The State Of Maharashtra, Thr. ... on 19 September, 2016
Bench: S.B. Shukre
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
Criminal Application [BA] No.622 of 2016
with
Criminal Application [APPP] No.1169 of 2016
with
Criminal Application [APPP] No.1238 of 2016
(Prashant s/o Jaideo Wasankar
vs.
State of Maharashtra, through P.S.O., Police Station Ambazari, Nagpur)
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Office notes, Office Memoranda of
Coram, appearances, Court's orders Court's or Judge's Orders
or directions and Registrar's orders.
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Shri D.V. Chauhan, Advocate for the Applicant/Accused.
Shri S.A. Ashirgade with Shri S.S. Doifode, A.P.P. for the Non-Applicant/State.
Shri A.S. Jaiswal, Sr. Advocate with Shri N.A. Padhye, Adv. for the Intervenors.
CORAM : S.B. SHUKRE, J.
DATE : 19 th
SEPTEMBER, 2016.
By this application, the applicant is seeking his
release on bail under Section 439 of the Code of Criminal
Procedure.
02] The allegations against this applicant and others
against whom crime bearing No.156/2014 has been
registered at Police Station Ambazari on the basis of
complaint lodged by one Shri Vivek Ashok Pathak are that
the applicant being the Director of Wasankar Wealth
Management Private Limited (WWMPL for short) and also
in charge of other companies of which he is either the
director or proprietor, by making a false representation
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knowing it to be false, to the gullible investors made them
invest their hard-earned money in the various investment
schemes floated by his companies and did not return the
money so invested in accordance with the promises given
by him and thus committed offences of cheating, criminal
breach of trust and fraudulent defaults punishable under
Sections 420, 406 read with Section 120-B of the Indian
Penal Code and also under Section 3 of the Maharashtra
Protection of Investors' Deposits Act, 2002 (MPID Act for
short). An offence punishable under Section 506 I.P.C. is
also registered against the applicant and his associates as
one of the allegations related to criminally intimidating the
complainant and other investors.
03] The report was investigated into and it was
found that prima facie this applicant and his associates were
involved in commission of the aforesaid offences.
Accordingly, a charge-sheet was filed, which was the first
one in the series of additional charge-sheets filed
subsequently. At that time, a few more offences were also
added. Those offences were the ones punishable under or
as per Section 409 of I.P.C., Section 45(1)(a), Section 45(s)
of the Reserve Bank of India Act, 1949 and Section 24(1)
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and Section 27 of the Securities and Exchange Board of
India Act, 1992. It appears that initially offences were
registered against three persons including the applicant
and later on the list of accused persons swelled. The first
charge-sheet was filed against three accused, which
included the present applicant. Thereafter, two more
supplementary charge-sheets were filed and thus so far, the
charge-sheets have been filed against 11 accused persons.
According to prosecution, there are in all 24 accused
persons and the charge-sheet against some of the accused
persons is yet to be filed, as the investigation is still going
on.
04] I have heard Shri D.V. Chauhan, learned
Counsel for the applicant, Shri S.S. Doifode, learned A.P.P.
for the State and Shri Anand Jaiswal, learned Senior
Counsel, who assisted the prosecution.
05] Shri D.V. Chauhan, learned Counsel for the
applicant submits that the applicant is one of the directors
of the WWMPL and this company has been in the business
of advising and counselling the investors so as to enable
them to manage and operate their investment portfolios by
opening Dmat Accounts for them and acting as a vital link
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between them and the main investment company viz. ISE
Securities and Services Limited (ISE Limited for short), by
being latter's sub-broker. He submits that WWMPL has
never received any payments in its own name and whatever
payments received were by way of cheques drawn in favour
of ISE Limited and thus, there was no question of the
applicant dishonestly inducing any investor or depositor to
deposit moneys with WWMPL. He submits that WWMPL
was also not involved in making any direct payments either
to the depositors or the ISE Limited and what it received
was only its brokerage.
06] The learned Counsel for the applicant further
submits that Wasankar Investments is only a proprietary
concern of which the applicant is a proprietor and if
anything has been received by this concern, at the most the
applicant could be held personally liable for that and not in
the capacity as a director of WWMPL. He further submits
that it is not the case of the complainant that after
depositing or investing various amounts in the concern of
the applicant, the complainant did not receive payments as
per the promises given. He further submits that there is not
a statement of single witness showing that after making
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investments in the concern of the applicant, he did not
receive any amount during the initial periods of the
investments. He submits that it was only due to some
difficulties arising in carrying on the business in its regular
course, owing to some factors not within the control of the
applicant, that the applicant could not make further
payments, for which he sought some time from the
depositors. He also submits that this would only show that
the applicant never had any dishonest intention right from
the beginning of the transactions and, therefore, it would
have to be said that the mens rea, which is so essential for
constituting the offences of cheating, criminal breach of
trust and fraudulent defaults, is absent in this case. He also
submits that there is not a whisper in the statements of
witnesses that the applicant had intended to cheat them
and that the applicant has committed a fraudulent default.
07] The learned Counsel for the applicant further
submits that the figures of the alleged fraud as
mentioned by the prosecution do not match with the
investments and the deposits actually made. He submits
that the law in cases such as the present case has been
crystallized by the Hon'ble Apex Court in the case of
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Sanjay Chandra vs. C.B.I. - (2012)1 SCC 40. He submits
that it is a settled law that the purpose of bail is not to
impose pre-trial punishment as every accused is presumed
to be innocent till he is found guilty.
08] Learned Counsel for the applicant further
submits that alternately the applicant is seeking his release
on temporary bail on the ground that it would enable the
applicant to put into effect the plan which he has already
prepared for refund of the deposits to the depositors in a
phased manner. He submits that this has become all the
more necessary, as the competent authority appointed
under the provisions of the MPID Act is not taking prompt
steps in selling the attached properties and distributing the
proceeds thereof amongst the depositors and the investors.
09] He submits that this is evident from the fact that
the prosecution has filed an application under Section 5(3)
and 7 of the MPID Act seeking confirmation of the order of
attachment and further directions of the Court as late as on
3rd February, 2016. This application, he further submits,
has been filed by the prosecution after a delay of about 299
days requiring it to seek condonation of delay under
Section 5 of the Limitation Act.
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10] The learned Counsel further submits that in any
case, the main offence as alleged against the applicant is of
Section 3 of the MPID Act, for which maximum punishment
is of six years of imprisonment, out of which, the applicant
has already spent time of about 2½ years in jail. So,
according to the him, this is an additional ground on which
the applicant is seeking his release on bail.
11] ig Shri S.S. Doifode, learned A.P.P. for the State
strongly opposing the application submits that this
application is not tenable as the bail application of the
applicant's co-accused has been rejected earlier by this
Court. He further submits that there are several depositors
who have been lured by this applicant and his associates
and the evidence so far collected by the prosecution prima
facie shows that this applicant and others had induced the
innocent depositors into depositing with the companies of
the applicant their hard-earned money, which could be
seen from fact that this applicant had promised return of
the deposits with interest ranging from 30% to 60% per
annum. He submits that the applicant was actively
involved in conducting day-to-day affairs of the companies
and himself used to approach the depositors and lure them
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into the trap laid by him by giving them false promises,
which were known to him to be false. In support, the
learned A.P.P. has invited my attention to the reply filed in
great details by the prosecution, wherein the evidence so
far collected against the applicant and others has been
summarized. The learned A.P.P. submits that the material
available on record discloses that the offences of cheating,
criminal breach of trust and fraudulent defaults are prima
facie made out.
12] The learned A.P.P. further submits that the
enormity of this crime is very high and that the question
involved is not only of the liberty of the applicant, but also
of the larger societal interest which deserves equal
treatment at the hands of the Court in the discharge of its
judicial functions. He submits that once it is found that the
accused is prima facie involved in commission of offences
having high economic magnitude, the community interest
would dis-entitle the applicant from seeking his release on
bail. He further submits that even otherwise there is also a
possibility of the applicant influencing the prosecution
witnesses, if released on bail, and not only that the
possibility of his fleeing from justice also cannot be ruled
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out, considering the fact that the magnitude of the crime is
too high and the offences which are registered against him
are of very serious nature, particularly the offence
punishable under Section 409 of I.P.C.
13] The learned A.P.P. further submits that in the
absence of any concrete proposal being given by the
applicant, there is no need for considering the alternate
prayer for his temporary release on bail. He also submits
that even otherwise the applicant could be called upon to
execute his plan even while remaining under detention and
at the most, the competent authority could be directed to
render its assistance within the parameters of law in
enabling the applicant to return the money to his various
investors. He submits that this would be possible only
when a suitable proposal is made before the trial Court and
that the earlier proposal made by him before the trial Court
in this regard, being vague, was rightly rejected by it.
14] Shri Anand Jaiswal, learned Senior Counsel
appearing for the applicants, who have been granted leave
to assist the prosecution, through the learned A.P.P. also
submits that these applicants would have no objection, if
temporary bail is granted to the applicant as ultimately the
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purpose of the MPID Act is to enable the depositors getting
back their deposits and the applicant deserves to be given a
chance to prove his bona fides.
15] Before dealing with the rival contentions, I find
it necessary to consider the objection taken by the learned
A.P.P. that since the co-accused has been denied bail by this
Court, this application is not maintainable. I find no force
in this contention for the reason that the rule of equality
applies in a positive way for giving benefit and not in a
negative manner for denying a benefit. The learned
Counsel for the applicant relying upon a Division Bench's
judgment of Allahabad High Court in the case of Nanha
vs. State of U.P. - 1993 Cri.L.J. 938 pointed out that a bail
application cannot be rejected on the ground of parity also
for the reason that at the time of prior rejection of the bail
application of the co-accused, the other accused had no
opportunity of being heard and placing material before that
Court which rejected the bail to the co-accused. There can
be no dispute about this principle of law and it squarely
applies to the facts of this case. The contention of the
learned A.P.P. is, therefore, rejected.
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16] So far as the argument relating to absence of
any prima facie case against the applicant is concerned, I do
not find any substance in it. As rightly pointed out by
learned A.P.P. that there has been voluminous material
available on record prima facie indicating that the applicant
canvassed various schemes of his companies, was actively
involved in making the propaganda of the same either
through newspaper or the seminars, functions and
gatherings held for the investors and the depositors. In
these seminars and functions, the applicant explained as to
how the money deposited and invested in the various
schemes of the companies would be reinvested or used in
the share market as well as for trading in bullion and how
the returns with such high percentage of interest rates
would be made to the depositors. These schemes promised
exceptionally high returns, which were in the nature of
doubling or trebling of the investments within such short
periods of time as of 33 months to 48 months, payment of
high interest at the rates ranging from 25% to 75% per
annum and so on and so forth. The promise that the
amounts deposited would be returned with such high rates
of interest being unrealistic, itself is enough to prima facie
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reveal the dishonest intention. A person like the applicant,
who proclaims himself to be an expert in finances and
investments, when gives a promise to do something which
is far removed from realities of world of finances would,
prima facie, know that the promise is elusive but a layman
would not. This is because his expertise in finances would
enable him to know the turbulent upheavals witnessing
sharp rise and fall in prices of shares and bullion that the
share and bullion markets usually pass through and that he
does not hold in his hand any magic wand to double or
treble the deposits in such short periods of time as of 33 to
48 months. This may not be so of the gullible depositors
interested in getting more returns on their deposits. So they
would tend to repose their faith in the words and wisdom
of the promiser believing that the promiser, an expert in
making investments in share and bullion markets and
earning huge profits, would be able to do some such similar
things with their deposits, little knowing about the volatility
of the markets where their deposits are going to be used.
Therefore, even if a person like the applicant, who is an expert
in making investments in the share markets and earning some
profits, cannot, prima facie, assure that the profit that he
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would earn today, would be of the similar volume or even
greater than that tomorrow, rather he would, prima facie,
know that what is earned today would be more than lost
tomorrow. This is what seems to have prima facie
happened in the present case. The result has been that the
applicant committed defaults in returning the deposits as
per the promises given by him. Even though, the applicant
had paid some amounts towards payment of interest
initially, prima facie, that was only for creating a facade and
a trust bridge between his companies and the depositors so
that more and more depositors were tempted to make
investment in his companies. In these circumstances, I find
that there is enough material at this stage indicating prima
facie involvement of the applicant in the offences registered
against him.
17] It is the contention of the learned Counsel for
the applicant that WWMPL was never involved in receiving
payments from the depositors or making payments to them
and whatever it did was as a sub-broker for ISE Limited,
receiving in the process its brokerage. However, I find that
the contention cannot be accepted as many of the receipts
and the promissory notes issued in this case were prima
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facie in the name of the WWMPL . It is also the contention
of the applicant that the demand promissory notes are
forged. This is something which relates to defence of the
applicant and, therefore, it would have to be considered not
at this stage, but at the stage of appreciation of the
evidence, which stage is yet to arrive.
18] About the contention that the main offence is
only under Section 3 of the MPID Act for which the
maximum punishment is of six years of imprisonment and
the applicant is in jail for almost 2½ years, I find that this is
not the only offence in which prima facie involvement of
the applicant has been found. There are other offences,
which are equally or more serious in nature. The offence
punishable under Section 409 of I.P.C. is serious in nature.
It prescribes maximum punishment of imprisonment for
life. Then, there is also a question of the applicant
misusing the liberty, if released on confirmed bail. The fact
that the applicant was prima facie holding various functions
and approaching the distributors in order to allure them to
deposit their money in his various companies, as rightly
pointed out by the learned A.P.P., would create an
impression that the applicant may try to contact the
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depositors once again and influence them to the prejudice
of the interest of the prosecution.
19] In the case of Sanjay Chandra (supra), the
Hon'ble Apex Court has held that the purpose of bail is not
to impose pre-trial punishment as every accused is
presumed to be innocent till he is found guilty. But the
Hon'ble Apex court has also held that while granting bail,
the Court must keep in mind the nature of accusations, the
nature of evidence in support thereof, the severity of the
punishment which will entail on conviction, the character,
behaviour, means and standing of the accused,
circumstances which are peculiar to the accused,
reasonable possibility of securing presence of the accused at
the trial, reasonable apprehension of the witnesses being
tampered with, larger interest of public or State and similar
other considerations. Here, in this case, I have already
found that there is a reasonable possibility of the applicant
tampering with the prosecution witnesses, if released on
confirmed bail. Besides, the crime is also of very serious
nature having its impact on the larger society. Therefore,
as held in the case of the Y.S. Jagan Mohan Reddy vs.
Central Bureau of Investigation - (2013) 7 SCC 439
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referred to me by the learned A.P.P. for the State, which
has been followed by this Court in the case of Sameer
Sudhir Joshi vs. State of Maharashtra - 2015 (3)
Mh.L.J. (Cri.) 97 , the cause of the community, in the
instant case, also deserves equal treatment at the hands of
the Court, which cause could be better served, if bail is
refused to the applicant at this stage and, therefore,
following the law laid down in the case of Sanjay Chandra
(supra), I am of the view that the applicant is not entitled
to be released on bail.
20] The learned Counsel for the applicant has
pointed out to me the order dated 08/10/2015 passed in
Criminal Application [BA] No.634/2015, granting bail to
Rajesh s/o Suresh Joshi by the learned Single Judge of this
Court. He submits that just as in the case of Rajesh Suresh
Joshi, in this case also, there is a question involved as to
whether the applicant had dominion over the property
accepted in the regular course of business of the companies
and so the applicant would be entitled to be released on
bail when the charge-sheet has been filed and investigation
is over. In my humble opinion, the ratio of the case of
Rajesh Suresh Joshi would not be applicable to the facts of
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the present case, as I have already found that there is
sufficient material prima facie showing the applicant taking
active part in alluring the gullible depositors in depositing
their hard earned money in his companies and then
committing defaults in returning their money with
dishonest intention. Besides, the investigation is also not
completely over as supplementary charge-sheet against
some of the accused persons is yet to be filed.
21] Now the question that arises is - Whether the
applicant should be released on temporary bail so as to
enable him to return the deposited amounts to various
investors and depositors in a phased manner. By way of
additional submissions, the applicant has submitted that his
detention in jail for unnecessarily longer period of time has
resulted in his business activities coming to a grinding halt,
because of which the applicant's companies are facing great
difficulty in returning the amounts deposited even though
the applicant and other directors honestly want to repay
their money. The applicant has also annexed a graphical
statement of proposed pay out plan to his additional
submissions. The graph indicates that if the applicant is
temporarily released for a period of 12 months on
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conditional bail, he would be able to make total pay outs of
about Rs.2.00 crores and if his conditional bail is further
extended by six months each, he would be able to make
further pay outs of about Rs.23.00 crores. It is also
submitted by the learned Counsel for the applicant that the
properties worth Rs.40.00 crores to Rs.45.00 crores, gold
ornaments worth about Rs.25.00 lakhs and cars worth
Rs.60.00 lakhs have already been attached. He further
submits that cash amount of Rs.10.00 crores has been
recovered and further cash amount of Rs.5.00 crores has
been placed in Court. According to him, if the applicant is
released on bail, he would be in a position to assist the
competent authority in selling out the attached properties
and applying the sale proceeds for equitable distribution
amongst all the investors. All these submissions, in my
opinion, should have been made in the first instance before
the trial Court as the trial Court is in a better position to
appreciate the submissions with availability of the material
contained in the voluminous charge-sheets (1 main charge-
sheet and 2 supplementary charge-sheets) so far filed
before it, which are stated to be containing several
thousand pages. No doubt, a similar request made earlier
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by the applicant before the trial Court has been rejected.
But it appears that no concrete plan was placed before the
trial Court by the applicant at that time and that was the
reason why the request was turned down. But, I see no
logic in thinking that if a similar request is again made to
the trial Court, backed by a concrete proposal and a specific
time-table, it would meet the same fate. Of course, it
would be the duty of the applicant to submit necessary
details before the trial Court and prove his bona fides.
22] In this view of the matter, I find that it would
not be appropriate for this Court to consider the prayer for
grant of temporary bail at this stage. But, liberty would
have to be given to the applicant to approach the trial Court
with a prayer for grant of temporary bail, supported by all
the necessary details and specific time- table for returning
the deposits and investments as per the promises given by
the applicant and his companies. In the result, I find that
the application deserves to be dismissed.
23] The application stands dismissed. However,
liberty is granted to the applicant to renew his request for
grant of temporary bail, as observed earlier.
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Criminal Application [APPP] No.1169/2016 :
Heard Shri A.S. Jaiswal, learned Senior Counsel
for the applicants/intervenors.
For the reasons stated in the application, the
application is allowed.
Leave to assist the prosecution is granted.
Criminal Application [APPP] No.1238/2016 :
ig Heard Shri Tarun Parmar, learned Counsel for
the applicant/intervenors.
It is seen that these intervenors, who are
claiming to be the victims of fraud, are primararily
interested in opposing the bail application, as it is their
contention that the applicant has suppressed many material
facts and he is trying to mislead this Court by putting
forward concocted stories. This purpose of the present
application, however, is already served by granting by this
Court leave to assist the prosecution by allowing Criminal
Application No.1169/2016. Therefore, the application is
superfluous and is disposed of accordingly.
JUDGE
*sdw
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C E R T I F I C A T E
I certify that this order uploaded is a true and correct
copy of the original signed order.
Uploaded by: S.D. Waghmare Uploaded on : 19/09/2016
P.A. to the Hon'ble Judge.
