Harnish Surendra Chadderwala vs State Of Maharashtra
2023 Latest Caselaw 11192 Bom

2023:BHC-AS:33254
                                                         901-ABA2451-2022.DOC

                                                                                 Santosh

                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                               CRIMINAL APPELLATE JURISDICTION


                    ANTICIPATORY BAIL APPLICATION NO. 2451 OF 2022

               Harnish Surendra Chadderwala                             ...Applicant
                                   Versus
               The State of Maharashtra and anr.                  ...Respondents


               Mr. Raja Thakare, a/w Siddharth Jagushte, for the
                     Applicant.
               Mr. S. H. Yadav, APP for the State.
               Mr. Ashutosh Kulkarni, a/w Ms. Sheetal Sabnis and Rushil
                     Mathur, i/b Kochhar & Co., for Respondent No.2.
               PSI Mahesh Khamkar, Rabodi Police Station, present.


                                               CORAM: N. J. JAMADAR, J.

DATED: 1st NOVEMBER, 2023

ORDER:-

1. This is an application for pre-arrest bail in connection

with CR No.143 of 2022, registered with Rabodi Police

Station, Thane City, for the offences punishable under

Sections 379, 381, 409 and 420 of Indian Penal Code, 1860

("the Penal Code") and Sections 43, 65, 75, 66C and 66E of

the Information Technology Act, 2000.

2. The applicant was working as a Commercial Manager

with Valiant Pacific LLC Ltd. ("Valiant"), based in Dubai. The

applicant had joined the said company in the month of

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March, 2003. The applicant tendered resignation on 1 st

December, 2018. It was accepted on 8th January, 2019.

3. After the applicant resigned from the company, it

allegedly transpired that during the period 2003 to 2018 in

pursuance of a criminal conspiracy the applicant defrauded

Valiant to the tune of Rs.80 Crores. On 13 th January, 2019,

the applicant allegedly had an access to the computer system

of Valiant remotely and had destroyed the data stored in the

desktop, which was being used by the applicant by employing

anti-forensic tools such as "Disk Wipe" and "Eraser". The

books of account would have otherwise revealed the

complicity of the applicant, and were thus destroyed. Valiant

claimed to have obtained forensic audit reports from Pyramid

Cyber Security and Forensic Pvt. Ltd. and PKF Accountants

and Business Advisers in the month of December, 2019 and

April, 2021, respectively.

4. Valiant gave a Power of Attorney to Manoj Sawant, the

first informant. Armed with the said Power of Attorney, the

first informant lodged report against the applicant with the

aforesaid allegations. It was further alleged that the

applicant during the course of employment used to

unlawfully deal in the business of watches without the

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permission of the employer. As there were significant

differences in the inter company balances in the year 2016 -

2017 and 2017 - 2018, the applicant was called upon to

prepare reconciliation statements. Despite repeated requests

the applicant failed to furnish reconciliation statements. In

the wake of the aforesaid, suddenly, the applicant tendered

resignation on 1st December, 2018. It was further alleged that

from the data contained in the old computers used by the

applicant from the year 2003 to 2014 - 2015 it was revealed

that the applicant had made false entries in the account

books and siphoned off huge amount from Valiant. Thus, the

first informant alleged the applicant committed criminal

breach of trust and siphoned off an amount in excess of

Rs.80 Crores from Valiant, over a period of 10 years.

5. Initially after the report came to be lodged, the

applicant was called upon to join in the investigation. The

applicant claimed to have appeared and furnished all the

requisite information and documents. Yet, the Investigating

Officer proceeded to summon the applicant repetitively.

Hence apprehending arrest, the applicant approached the

Court of Session. As the learned Additional Sessions Judge

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declined to exercise the discretion in favour of the applicant,

this application for pre-arrest bail.

6. On 26th September, 2022 this Court was persuaded to

grant interim protection calling upon Investigating Officer to

file an affidavit on the aspect of the jurisdiction to investigate

into the alleged offences as well.

7. The Investigating Officer has filed an affidavit.

Respondent No.2 - the first informant has also filed an

affidavit contesting the claim for pre-arrest bail.

8. I have heard Mr. Raja Thakare, the learned Senior

Advocate for the applicant, Mr. Yadav, the learned APP for the

State and Mr. Kulkarni, the learned Counsel for respondent

No.2/first informant. With the assistance of the Counsel for

the parties, I have perused the material on record.

9. Mr. Thakare submitted that all the alleged offences have

taken place at Dubai. The applicant does not reside within

the local limits of the jurisdiction of Rabodi Police Station.

Yet, on the basis of the FIR lodged by the person has no

concern with Valiant, Rabodi Police has registered the

offences. It was submitted that the first informant has no

personal knowledge of any of the alleged incidents nor access

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to the record of the company. He claims to deal in the

business of sale and purchase of old four wheelers. Therefore,

no semblance of credence can be attached to the allegations

in the FIR. Secondly, Mr. Thakare would urge since the

prosecution alleges the commission of offences punishable

under Information Technology Act, 2000, the applicant

cannot be prosecuted for the offences punishable under

Sections 379, 381, 409 and 420 of the Penal Code on the

strength of the same set of allegations. To buttress this

submission Mr. Thakare placed reliance on a judgment of the

Division Bench of this Court in the case of Gagan Harsh

Sharma and ors. vs. The State of Maharshtra and ors. 1.

Thirdly, Mr. Thakare would urge, the sequence of events and

the time-lag between the date of resignation and the lodging

of FIR unmistakably indicate that the applicant is being

hounded by the former employer. Resignation tendered by

the applicant on 1st December, 2018 was accepted after 39

days on 8th January, 2019, without any demur. The FIR came

to be lodged on 9th August, 2022. This delay itself erodes the

credibility of the prosecution version. Lastly, Mr. Thakare

submitted, the very forensic audit reports on which the

prosecution banks upon indicate that it was impossible to

1 2018 SCC Online Bom 17705.

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access the computer system of Valiant remotely without the

help of a local person. There is no material to indicate that

any investigation has been carried out to identify the

unknown associate of the applicant. Therefore, the applicant

deserves pre-arrest bail.

10. As against this, the learned APP would submit that the

allegations against the applicant are grave. A huge amount of

Rs.80 Crores has allegedly been siphoned off. There is

material to show that the applicant was using the BlackBerry

mobile handset which was employed to remotely access the

computer system of Valiant. The applicant has not

cooperated with the investigation in the sense that he has

feigned ignorance of the said mobile phone handset.

Therefore the custodial interrogation of the applicant is

indispensable.

11. Mr. Kulkarni, the learned Counsel for the first

informant/respondent No.2 heavily banked upon the forensic

audit reports especially that of PKF Accountants and

Business Advisers. Taking the Court through the contents of

the said report, it was submitted that the suspicion against

the applicant is credible and, at this stage, that is sufficient.

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12. Mr. Kulkarni joined the issue of the tenability of the FIR

lodged by the first informant on the strength of Power of

Attorney by submitting that it is well recognised that anybody

can set the criminal law in motion and there is material to

show that the first informant is operating as a commission

agent of Valiant. Reliance was sought to be placed on the

decisions of the Supreme Court in the cases of Shankar

Finance and Investments vs. State of Andhra Pradesh and

ors.2 and Vishwa Mitter of Vijay Bharat Cigarette Stores,

Dalhousie Road, Pathankot vs. O. P. Poddar and ors.3.

13. Mr. Kulkarni also contested the position sought to be

canvassed on behalf of the applicant that after invocation of

the offences punishable under Information Technology Act,

2000, the applicant cannot be charged for commission of the

offences punishable under Penal Code by placing reliance on

the decisions of the Supreme Court in the cases State of

Arunachal Pradesh vs. Ramchandra Rabidas alias Ratan

Rabidas and another4 and State of Uttar Pradesh vs. Aman

Mittal and another5.

2      (2008) 8 Supreme Court Cases 536.
3      (1983) 4 Supreme Court Cases 701.
4      (2019) 10 Supreme Court Cases 75.
5      (2019) 19 Supreme Court Cases 740.




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14. Mr. Kulkarni would submit that without the custodial

interrogation of the applicant the huge fraud committed by

the applicant cannot be unearthed.

15. I have given careful consideration to the aforesaid

submissions. So far as the challenge to the jurisdiction of

Rabodi Police to investigate into the offences which were

allegedly committed at Dubai, it would be suffice to note that

the position that the applicant is an Indian citizen is not

disputed. In view of the provisions contained in Section 188

of the Code of Criminal Procedure if an Indian citizen, who

has allegedly committed offence beyond India, is found

anywhere in India, the offence can be enquired into and tried

by any Court that may be approached by the victim. The

decision of the Supreme Court in the case of Om Hemrajani

vs. State of UP and anr.6 sets the controversy at rest.

16. It is true the FIR is lodged by a person, who claimed to

be the Power of Attorney of the Valiant. In the FIR, the first

informant has not disclosed the fact that he is connected

with the affairs of the company. However that should not

detain the Court any more. In the Power of Attorney the first

informant is described as a person, who is operating as a

6 2005 Cri. LJ 665.

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commission agent of the company. At this stage, I am not

persuaded to delve deep into this aspect of the matter as it

would be a matter of appreciation at the trial.

17. The ground of impermissibility of prosecution for the

offences punishable under Sections 379, 381, 409 and 420 of

the Penal Code when the applicant is facing prosecution, for

the offence punishable under Section 43, 65, 75, 66C and

66E of the Information Technology Act, 2000, however

deserves to be briefly dealt with.

18. In the case of Gagan Sharma (supra) the Division

Bench of this Court held that if a special enactment like the

Information Technology Act, 2000, contains a special

mechanism to deal with the offences falling within the

purview of the Information Technology Act, 2000, namely

Sections 43 and 66, then the invocation and application of

the provisions contained in Sections 379, 420 and 408 of the

Penal Code in the same set of facts is totally uncalled for. It

was observed that the ingredients of the offences punishable

under Sections 420, 408 and 379 of the Penal Code are

covered by Section by 66 of the Information Technology Act,

2000 and prosecuting the petitioners under both Penal Code

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and Information Technology Act would be brazen violation of

protection against double jeopardy.

19. It would be contextually relevant to note that in the

case of Ramchandra Rabidas (supra) the Supreme Court

considered the justifiability of the direction by the Gauhati

High Court that road traffic offences shall be dealt with only

under the provisions of Motor Vehicles Act, 1988 and that in

cases of road traffic or motor vehicle offences, prosecution

under the provisions of the Penal Code is without sanction of

law, and recourse to the provisions of the Penal Code would

be unsustainable in law.

20. Disagreeing with the aforesaid directions of the Gauhati

High Court, the Supreme Court, after referring to the

provisions contained in Section 26 of the General Clauses

Act, 1897, which envisages the consequences where an act

and omission constitutes an offence under two or more

enactments, held that it is well settled that an act or

omission can constitute an offence under Penal Code and, at

the same time, be an offence under any other law. The

finding of the High Court that the prosecution of offenders

under two statutes i.e. the MV Act and Penal Code, is

unsustainable and contrary to law, was, therefore, set aside.

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In the said case, the Supreme Court referred to its decision in

the cases of T. S. Baliah vs. T. S. Rangachari 7 and State of

Maharashtra vs. Sayyed Hassan8. It was thereafter

enunciated that if a prosecution, if otherwise maintainable,

would lie both under Penal Code and MV Act, since both the

statues operate with full vigour, in their own independent

spheres. Even assuming that some of the provisions of the

MV Act and Penal Code are overlapping, it cannot be said

that the offences under both the statutes are incompatible.

21. The decision of the Supreme Court in the case of Aman

Mittal (supra) arose in the context of the prosecution under

the provisions of the Legal Metrology Act, 2009 and Penal

Code, in the same set of facts. The Supreme Court referred

to its decision in the case of Sharat Babu Digumarti vs. State

(NCT of Delhi)9 and the decision of the Division Bench in the

case of Gagan Sharma (supra) and thereafter observed:

"25. That the Bombay High Court in Gagan Harsh Sharma has found that even a dishonest and fraudulent act falls within the scope of Section 66 of the IT Act. We are not called upon in the present appeals to examine whether an accused can be tried for an offence under IPC in view of Section 66 of the IT Act. Such question can be raised and decided in appropriate case."

7      (1969) 3 SCR 65.
8      (2019) 18 SCC 145.
9      (2017) 2 SCC 18.




                                                        901-ABA2451-2022.DOC

22. The aforesaid observations of the Supreme Court

indicate that the Supreme Court considered it appropriate

not to pronounce on the correctness of the decision in Gagan

Sharma (surpa) and left the said question to be raised and

decided in an appropriate case.

23. In the case at hand, it is imperative to note that apart

from the allegations that the applicant had without

permission of the Valiant accessed the computer system of

Valiant and destroyed the information residing in a computer

resource within the meaning of Section 43(a)(i) of the

Information Technology Act, 2000 and the said access to

computer system and destruction of the data therein was

dishonest or fraudulent, punishable under Section 66 of the

Information Technology Act, 2000, there are allegations that

the applicant had committed criminal breach of trust and

siphoned off huge amount by falsification of the record.

Therefore, prima facie, the pronouncement in the case of

Gagan Sharma (supra) does not govern the facts of the

instant case with full force.

24. This takes me to the merits of the matter.

Incontrovertibly, the applicant served with Valiant from 2003

till the acceptance of his resignation. The applicant tendered

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resignation on 1st December, 2018. Valiant accepted the

resignation on 8th January, 2019. Evidently, there was an

interval of time in the acceptance of the resignation. It does

not appear that when the resignation was accepted Valiant

took any umbrage or reserved right to initiate any action.

Prima facie, the interval of time assumes significance as it

provided Valiant with the opportunity to examine the affairs

of the applicant qua the company.

25. This also assumes significance as in the FIR and the

affidavit-in-reply on behalf of respondent No.2 an endeavour

was made to allege that in the month of June 2018 the

applicant was called upon to prepare a reconciliation

statement as there were significant differences in the inter-

company balances for the year 2016 - 2017 and 2017 - 2018

and the applicant failed to furnish the reconciliation

statement despite repeated requests and soon tendered

resignation.

26. This would, prima facie, imply that Valiant had an

inkling about the alleged misfeasance, in the least, on the

part of the applicant. Thus the said prelude ought to have,

normally, put Valiant on guard. It is imperative to note that

the allegations are of falsification of accounts for about 10

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years preceding the cessation of employment. Therefore,

acceptance of severance of the employer - employee

relationship without any demur after about 39 days of the

resignation cannot be brushed aside as inconsequential.

27. Secondly, the allegation is that on 15th January, 2019,

Valiant learnt about the destruction of data in the desktop

which was being used by the applicant. The lodging of the

report on 9th August, 2022 in wake of the alleged discovery on

15th January, 2019, prima facie suffers from the vice of

inordinate delay. The submission that the fraud could be

unearthed after Valiant had the forensic audit deserves to be

appreciated in the light of the fact that the first forensic audit

report by Pyramid Cyber Security was submitted on 16 th

December, 2019, which was substantially same as was given

by PKF Accountants and Business Advisers in the month of

April, 2021, that Valiant's desktop was accessed remotely by

unknown user (possibly Harnish), the applicant, on 13 th

January, 2021 using Disk Wipe software. Valiant also claimed

to have learnt about the falsification of the record during the

period of employment by the applicant upon accessing old

computers. Yet, the FIR was lodged on 9th August, 2022.

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28. The gravamen of indictment against the applicant of

access to the desktop at Dubai remotely on 13 th January,

2019 hinges upon a rider given by the forensic auditors that

it could not have been accessed remotely without a local

agent. In fact, the PKF Accountants and Business Advisers,

in their report, under the caption, "Way forward to

Management", clearly opined that VPL system could be

accessed by an outsider on 13 th January, 2019 only with the

help of someone in the office. And for that purpose, Valiant

must secure the support of local investigating agency. From

the perusal of the FIR it does not appear that the Valiant had

carried out any such exercise.

29. It is true, at this stage, the case of the applicant that he

was using a different BlackBerry mobile phone handset, a

receipt of which was tendered before the Investigating Officer,

is a matter of defence and cannot be delved into. However, at

the same time, the forensic report also deserves to be

considered with the rider with which the auditors opined that

it was possibly the applicant who had remotely accessed the

desktop on 13th January, 2019.

30. On the core of the accusation of criminal breach of

trust of the huge amount of Rs.80 Crores, over a period of 10

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years, prima facie, the FIR does not contain any particulars.

Indeed, FIR is not an encyclopedia. However, the fact that

FIR came to be lodged after a considerable period of the

alleged discovery of the fraud, may bear upon the absence of

particulars. Thus, the endeavour on the part of respondent

No.2 to furnish the statements of particulars of the alleged

falsification of the accounts (page Nos.156 to 168 of the

affidavit-in-reply) does not merit acceptance unreservedly.

31. In the circumstance of the case, whether an offence

punishable under Section 409 of the Penal Code is made out

appears to be debatable. None of the rest of the offences

entails punishment exceeding seven years. The applicant has

been on interim protection since 26 th September, 2022. The

applicant has appeared before the Investigating Officer. The

applicant also appears to have roots in society. Possibility of

fleeing away from justice appears to be remote. Likewise,

Valiant being in the custody of the entire record, the

possibility of tampering with evidence also appears remote.

Even otherwise, appropriate conditions can be imposed to

take care of apprehension on these counts.

32. For the foregoing reasons, I am persuaded to exercise

the discretion in favour of the applicant.

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33. Hence the following order:

:ORDER:

(i) In the event of arrest of the applicant in CR No.143 of

2022, registered with Rabodi Police Station, Thane

City, the applicant be released on bail on furnishing a

PR Bond in the sum of Rs.30,000/- with one or two

sureties in the like amount.

(ii) The applicant shall cooperate with the investigation

and attend Rabodi Police Station on 9 th and 10th

November, 2023 in between 10.00 am. to 1.00 pm. and,

thereafter, as and when directed.

(iii) The applicant shall not tamper with the prosecution

evidence and/or give threat or inducement to the first

informant or any of the persons acquainted with the

facts of the case.

(iv) The applicant shall hand over the instruments and

documents, which are in his custody, as may be

directed by the Investigating Officer.

(v) The applicant shall not leave India without the prior

permission of the jurisdictional Magistrate.

(vi) The applicant shall regularly attend the proceedings

before the Jurisdictional Court.

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(vii) It is clarified that these prima facie observations are

confined to determine entitlement to pre-arrest bail

only.

Application stands disposed.

[N. J. JAMADAR, J.]