Harish Jain And Ors. vs State And Ors.
1994 Latest Caselaw 605 Del

JUDGMENT

Arun Kumar, J.

(1) This is a petition tinder Section 438 of the Code of Criminal Procedure for grant of bail to the petitioners in anticipation of arrest. According to the first information report the petitioners Along with some senior officers of the erstwhile New Bank of India,Tolstoy Marg, New Delhi (now merged with the Punjab National Bank) and the Corporation Bank, Connaught Circus, New Delhi entered into criminal conspiracy to cheat New Bank of India. The incident relates to the year 1983. Some of the relevant portions of the Fir run as under:-

(2) In pursuance of the aforesaid criminal conspiracy ten bills of exchange for Rs-26,83,206.80 were drawn on a fictitious firm M/s Pneumatic Hydraulic Industries, 11 Jaya Mahal, A Road, Churchgate, Bombay which was concern of S/Shri A.C. Jain, S.C.Jain and Harish Jain. In all these bills of exchange with dishonest intention after the word Churchgate, Bombay the words 'a Unit of Hindustan Monark Pvt. .Ltd.' was added which was dishonestly certified by Shri B.D. Dhawan although no such addition exists in the office copies of those bills of exchange. These additions were made to get the credit in the account of M/s.Hindustan Monark Pvt.Ltd. which was having a account with Corporation Bank, Connaught Circus, New Delhi.

(3) Similarly another 10 bills of exchange for Rs-37,85,8886.17 were drawn in favor of M/s Eastern Machinery Corpn. of Bombay. However, additions were made ' a unit of Hindustan Monark Pvt.Ltd.' This was again done with a view to get credit of this amount to the account of M/s Hindustan Monark (P) Ltd. in Connaught Circus Branch of Corporation Bank, New Delhi.

(4) Another 38 bills of exchange were drawn on M/a Ash Impex Corpn. by giving a fictitious address as Narsapur Road Hydrabad and ultimately the credit of these bills were also obtained in the account of M/s Hindustan Monark (P) Ltd. in Corporation Bank, Connaught Circus, New Delhi.

(5) All the above three firms (1) Pneumatic Hydraulic Industries (2) M/s Eastern Machinery Corporation and (3) M/s Ash Impex Corporation on whom the bills of exchange were drawn are learnt to be non existent and or not traceable at the given addresses. Shri M.V.Nair, the then Branch Manager, Corporation Bank knowing fully well that these firms had no sanction bill discounting limit and that no material had been supplied by them, dishonestly and fraudulently discounted these bills of exchange under the limits available to M/s Hindustan Monark (P) Ltd.

(6) On account of aforesaid criminal acts of willful commission and omission on the part of accused persons the aforesaid bank has been caused wrongful pecuniary loss of Rs.l-95 crores approximately and corresponding wrongful gain to the accused persons.

(7) The above facts prima facie disclose commission of offences of criminal conspiracy, cheating, forgery falsification of valuable security and criminal misconduct which are punishable under Section 120B read with 420, 468, 471 Indian Penal Code . and Sec.5(2) read with Sec.5(1)(d) of P.C. Act 1947.

(8) Apart from denying their involvement in any criminal conspiracy, the petitioners submit that the matter in issue is in fact a civil matter and civil suits have already been filed by the New Bank of India against them which are pending in civil courts. The petitioners have also pleaded medical grounds in support of their prayer for anticipatory bail.

(9) Both parties have relied on the judgment of the Supreme Court in Gurbaksh Singh Sibbia etc. vs. The State of Punjab, . The said judgment contains a detailed discussion on the subject of anticipatory bail. It traces the history of the provision and how it came to be enacted in the shape of Section 438 Cr.P.C. It also considers the powers of the Courts regarding grant or refusal of anticipatory bail.

(10) The Law Commission of India in its 41st Report dated September 24, 1969 pointed out the necessity of introducing a provision in the Code enabling the High Court and the Court of Session to grant anticipatory bail.

(11) It was noticed in para 39.9 of the Report that - "THE suggestion for directing the release of a person on bail prior to his arrest(commonly known as "anticipatory bail")) was carefully considered by us. Though there is a conflict of judicial opinion about the power of a Court to grant anticipatory bail, the majority view is that there is no such power under the existing provisions of the Code. The necessity for granting anticipatory bail arises mainly because sometimes influential persons try to implicate their rivals in false cases for the purpose of disgracing them or for other purposes by getting them detained in jail for some days. In recent times, with the accentuation of political rivalry, this tendency is showing signs of steady increase. Apart from false cases, where there are reasonable grounds for holding that a person accused "of an offence is not likely to abscond, or otherwise misuse his liberty while on bail, there seems no justification to require him first to submit to custody, remain in prison for some days and then apply for bail. We recommend the acceptance of this suggestion. We are further of the view that this special power should be conferred only on the High Court and the Court of Sessions, and that the order should take effect at the time of arrest or thereafter. We considered carefully the question of laying down in the statute certain conditions under which alone anticipatory bail could be granted. But we found that it may not be practicable to exhaustively enumerate those conditions; and moreover, the laying down of such conditions may be construed as prejudging (partially at any rate) the whole case. Hence.we would leave it to the discretion of the court and prefer not to fetter such discretion in the statutory provision itself. Superior Courts will, undoubtedly, exercise their discretion properly, and not make any observations in the order granting anticipatory bail which will have a tendency to prejudice the fair trial of the accused.

(12) The draft bill of the Criminal Procedure Code 1970 contained clause 447 which was a provision for anticipatory bail. On this the Law Commission in its 48th Report (1972) had this to say in para 31 "the Bill introduces a provision for the grant of anticipatory bail. This is substantially in accordance with the recommendation made by the previous Commission. We agree that this would be a useful addition, though we must add that it is in very exceptional cases that such a power should be exercised". Clause 447 of the Draft Bill of 1970 was enacted with certain modifications and became Section 438 of the Criminal Procedure Code 1973.

(13) Section 438 Cr.P.C. provides:- "SECTION 438. Direction for grant of bail to person apprehending arrest :- (1) When any person has reason to believe that he may be arrested on an accusation of having committed a non-bailable offence, he may apply to the High Court or the Court of Session for a direction under this section; and that Court may, if it thinks fit, direct that in the event of such arrest, he shall be released on bail. (2) When the High Court or the Court of Session makes a direction under sub- section(l), it may include such conditions in such directions in the light of the facts of the particular case, as it may think fit, including:- (i) a condition that the person shall make himself available for interrogation by a police officer as and when required; (ii) a condition that the person shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to any police officer; (iii) a condition that the person shall not leave India without the previous permission of the Court; (iv) such other condition as may be imposed under sub-section(3) of Section 437, as if the bail were granted under that section. (3) If such person is thereafter arrested without warrant by an officer in charge of a police station on such accusation, and is prepared either at the time of arrest or at any time while in the custody of such officer to give bail, he shall be released on bail; and if a Magistrate taking cognizance of such offence decides that a warrant should issue in the first instance against the person, he shall issue a bailable warrant in conformity with the direction of the Court under sub-section (1)."

(14) Now that the power has been conferred by the statute on the High Court and the Court of Session to grant anticipatory bail, the question arises about the considerations for its exercise as also the conditions to be imposed if the power is exercised in favor of the applicant. On the power of the High Court and the Court of Session in this behalf, the Supreme Court in the aforesaid judgment concluded as under:- "WE would, therefore, prefer to leave the High Court and the Court of Session to exercise their jurisdiction under S.438 by a wise and careful use of their discretion which, by their long training and experience, they are ideally suited to do. The ends of justice will be better served by trusting these courts to act objectively and in consonance with principles governing the grant of bail which are recognised over the years, than by divesting them of their discretion which the legislature has conferred upon them, by laying down inflexible rules of general application. It is customary, almost chronic, to take a statute as one finds it on the ground that, after all, "the legislature in its wisdom" has thought it fit to use a particular expression. A convention may usefully grow whereby the High Court and the Court of Session may be trusted to exercise their discretionary powers in their wisdom, especially when the discretion is entrusted to their care by the legislature in its wisdom. If they err, they are liable to be corrected." "The above conclusion was reached after a careful consideration of all the pros and cons. It was observed at one stage "the question whether to grant bail or not depends for its answer upon a variety of circumstances, the cumulative effect of which must enter into the judicial verdict. Any one single circumstance cannot be treated as of universal validity or as necessarily justifying the grant of refusal of bail". The likelihood of the applicant fleeing from justice in the event of grant of anticipatory bail is also a very relevant consideration. However, from this it does not follow that anticipatory bail must be granted if there is no fear that the applicant will abscond. "There are several other, considerations, too numerous to enumerate, 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 opportunity of the applicant's presence not being secured at the trial, a reasonable apprehension that witnesses will be tampered with and the larger interests of the public or the State are some of the considerations which the Court has to keep in mind while deciding an application for anticipatory bail". Public interest comes in to ensure that public does not lose faith in the administration of justice on account of persons involved in heinous crimes being set a't large. It follows that no hard and fast rule can be laid down in these mdatters.

(15) Learned counsel for the petitioners also cited certain other judgments which I do not consider it necessary to enumerate or discuss because the. law as laid down in Gurbaksh Singh Sibbia's case (supra) holds the field. None of the judgments lays down any proposition different from the one that it is ultimately left to the discretion of the Judge concerned to grant or refuse bail in a given case. Of course the Judge is supposed to exercise discretion in a judicious manner and the order should not be based on whims or fancy. The quotations from the Report of the Law Commission show that it was considered to lay down various considerations or guidelines for grant or refusal of anticipatory bail but ultimately it was thought best not to lay any such fetters. Thereafter in Gurbaksh Singh Sibbia (supra) the Supreme Court considered the same aspect and finally came to the conclusion that the matter should be left open to the discretion of the Judge concerned. In fact the Court did not approve of even the approach of the Full Bench of the Punjab & Haryana High Court against whose judgment the appeal in Gurbaksh Singh Sibbia's case arose and some of the propositions formulated by the High Court in its judgment were overruled.

(16) With this background of the law it is to be considered whether the petitioners in the present case are entitled to anticipatory bail.

(17) According to the learned counsel for the petitioners the petitioners had sought facilities from the banks which were duly granted to them. The petitioners due to some unfortunate circumstances failed to meet their obligations to the banks. Therefore, the bank filed civil suits against them. The suits are pending. Therefore, it is submitted that no "criminality" is involved.

(18) On the other hand the learned counsel for the C.B.I., i.e. Investigating Agency, relies on the F.I.R. to canvass that the matter involves criminal conspiracy to cheat and defraud the bank to the tune of about Rs.two crore. It is a nationalised bank and the money involved is public money. Certain senior officers of the bank are part of the conspiracy. Bills raised in the name of fictitious and no nexistant firms were discounted from the banks and money was siphoned off for personal use by the petitioners.

(19) Learned counsel further submits that unless the petitioners are allowed to be taken in custody the evidence and the facts cannot be unearthed. If the petitioners are on bail they will not give correct answers. They may continue to get advice and give cooked and manipulated answers. Truth will not come out. He further submits that though the liberty of an individual is important, social interest in unraveling the truth is equally important. These are crimes against the society, against the economy of the State. It is of utmost importance that truth must come out and the guilty must be punished.

(20) I have given my careful consideration to the rival contentions on behalf of the parties. The incident relates to the year 1983. The petitioners have pleaded that earlier the investigation agency had felt that the matter need not be pursued. It has been reopened now at the instance of the Punjab National Bank. This averment has remained uncontroverter. In view of the long period which has already elapsed I do not consider it necessary that the petitioners must surrender their liberty. Moreover, the petitioners have pleaded medical reasons for being permitted to remain outside the jail. Keeping all the facts in view it is ordered that in the event of their arrest the petitioners be released on bail by the I.O./A.O., subject to their furnishing a personal bond in the sum of Rs.one lac each with two sureties in the like amount to the satisfaction of the I.O./A.O. This is subject to the petitioners joining the investigation and fully co-operating with the investigating agency. The petitioners will not leave the country without permission of the Court.

(21) The petition is disposed of.