Sandeep Chaudhary And Anr. vs State And Ors.
2007 Latest Caselaw 347 Del

JUDGMENT

A.K. Sikri, J.

1. Petitioners had business dealings with the respondents No. 2 to 4, who are the partners of M/s. Jain Art Jewels (hereinafter referred to as the 'Complainants'). According to the complainants, while dealing with them, the petitioners committed fraud and cheating. Accordingly, FIR No. 283/05 has been lodged with the Police Station Connaught Place, New Delhi under Sections 420/406/467/468/471/120B IPC. Though it is not necessary to go into the details of the allegations regarding the said fraud and cheating in this petition, suffice it to mention that the petitioners were working as commission agents for the complainants. They were obtaining orders from Dubai for stainless steel utensils, which used to be executed by the complainants and the petitioners were getting commission thereon. As per the allegations, after gaining confidence of the complainants in this manner, both the petitioners, who are brothers, represented in January, 2004 that they had got a very huge order for which they needed advance payment from the complainants to be given to M/s. Prima Enterprises, Wazirpur Industrial Area, Delhi. Various cheques were thus issued in favor of M/s. Prime Enterprises for a total amount of Rs. 77 lacs, but no utensils were received from M/s. Prime Enterprises. When the complainants met the petitioners, they informed that since the utensils were not manufactured/finished as per the requirement, the same were rejected and they had asked M/s. Prime Enterprises to return the money. From May, 2004 to July, 2004 only Rs. 35,61,500/- were returned and balance amount of Rs. 41,38,500/- still remained. However, afterwards the complainants came to know from M/s. Prime Enterprises that they had never received the payment as aforesaid nor any order from the complainants was received for fabricating utensils nor was the consignment ever rejected. Since cheques were issued in the name of M/s. Prime Enterprises by the complainants, the complainants approached their bankers and found out that the petitioner No. 2 had opened an account in the name of M/s. Prime Enterprises, which was introduced by the petitioner No. 1 in Model Town Branch of Federal Bank in the name of proprietorship firm and got the money in question from the complainants. In the FIR dated 18.5.2005, the petitioners were arrested on the same date. On 22.5.2005, bail was granted to the petitioners when they represented that they would settle the accounts of the complainants and two months' time was given for this purpose. However, thereafter the respondent No. 2 moved application for cancellation of bail before the learned AJS, which was allowed and bail of the petitioners was cancelled and consequently, the petitioners surrendered on 7.6.2005. The petitioner No. 1 was granted interim bail subsequently on 28.8.2005. On 10.9.2005, the petitioner No. 2 was also granted interim bail. A Memorandum of Understanding (MOU) was entered into by the petitioners with the respondents No. 2 to 4 (complainants) agreeing to make payment of Rs. 97.80 lacs. Out of this, from time to time a sum of Rs. 48.50 lacs was paid. Since interim bail was granted to the petitioners to settle the matter with the respondents, on 23.3.2006 this bail was extended by another six months. However, as during this period no payment was made, on 14.9.2006 the learned ASJ declined to extend the time for payment and also declined to extend the interim bail. The petitioners approached this Court and moved Crl.M.C. No. 5987-88/2006 seeking extension of time for payment of Installment money. In these petitions order dated 19.9.2006 was passed extending the interim bail till 16.10.2006. During the interim protection, present petition was filed challenging the orders of the ASJ and the legal ground taken is that for violation of the terms of the MOU bail cannot be rejected. In support learned Counsel for the petitioners relied upon the judgment of the Supreme Court in the case of Biman Chatterjee v. Sanchita Chatterjee and Anr. and while issuing notice, interim bail was extended. Since the petitioners wanted to press this petition on the aforesaid legal grounds, earlier petition filed, namely, Crl.M.C. No. 5987-88/2006 was withdrawn by the petitioners and the same was dismissed as withdrawn on 16.10.2006. Mr. Mittal, learned senior counsel appearing for the petitioners, referred to various orders passed by the learned ASJ from time to time as mentioned above and submitted that interim bail was given to settle the matter, which was extended from time to time. Ultimately, settlement was arrived at. Even if there was some default in making payment in terms of the said settlement, though some amount was paid, bail now could not be denied only on this ground, namely, failure to adhere to the said settlement by the petitioners. He also submitted that investigation had been concluded, charge-sheet had been filed and the case was fixed for arguments on charge. The petitioners had remained in custody for about three months. When they remained in custody for this period, under duress and compulsion they agreed to enter into settlement with the complainants on the terms and conditions dictated by them and the total amount of Rs. 48.50 lacs was paid. He also submitted that due to sudden depletion of working capital the petitioner could not generate the returns from the business as expected and because of that they could not make monthly payment of Rs. 3.50 lacs after July, 2006. They had even approached the complainants pleading their difficulty but not only their bona fide request was refused by the complainants, the complainants were also threatening them that they would not co-operate in the quashing of the FIR/judicial proceedings even when the entire payment is made. He submitted that in this backdrop judgment of the Supreme Court in Biman Chatterjee (supra) was applicable where the Court held that non-adherence to terms of compromise could not be the basis for cancelling the bail. That was a case where the complainant was the wife, who had filed complaint under Section 498A of the IPC. The husband/accused was arrested and he sought the grant of bail. On hearing both the sides and noticing the fact that there was a possibility of compromise between the parties, the accused was released on bail by the Magistrate. Thereafter, application for cancellation of bail was preferred by the complainant alleging that the accused was not co-operating in the compromise talks. Bail was cancelled on this ground and revision petition filed by the accused was also rejected by the High Court of Judicature at Patna. The accused, in these circumstances, challenged the said order in the Supreme Court and reversing the order of the High Court and holding that it was not proper to cancel the bail in these circumstances, the Court made the following observations:

7. Having heard the learned Counsel for the parties, we are of the opinion that the High Court was not justified in cancelling the bail on the ground that the appellant had violated the terms of compromise. Though in the original order granting bail there is a reference to an agreement of the parties to have a talk of compromise though the media of well-wishers, there is no submission made to the court that there will be a compromise or that the appellant would take back his wife. Be that as it may, in our opinion, the courts below could not have cancelled the bail solely on the ground that the appellant had failed to keep up his promise made to the court. Hre we hasten to observe, first of all from the material on record, we do not find that there was any compromise arrived at between the parties at all, hence, question of fulfillling the terms of the compromise cannot be the basis of granting or cancelling a bail. The grant of bail under the Criminal Procedure Code is governed by the provisions of Chapter xxxviii of the Code and the provision therein does ;not contemplate either granting of a bail on the basis of an assurance of a compromise or cancellation of a bail for violation of the terms of such compromise. What the court has to bear in mind while granting bail is what is provided for in Section 437 of the said Code. In our opinion, having granted the bail under the said provision of law, it is not open to the trial court or the High Court to cancel the same on a ground alien to the grounds mentioned for cancellation of bail in the said provision of law.

2. Learned Counsel for the respondent, on the other hand, submitted that after the petitioners stopped the payment, they even entered into another MOU pursuant whereto the properties given in security earlier by the petitioner were released. On the one hand they were not making the payment, on the other hand, they started disposing off their assets. He further submitted that there was no agreement regarding quashing even if the payment is made fully and, therefore, there was no question of the complainants agreeing for this course of action. In the case of Narayanan v. State of Delhi 2002 (VIII) AD (Delhi) 768, a Division Bench of this Court took note of three judgments of the Single Judges of this Court as it was argued that there was some conflict of opinion taken in these judgments. Whereas in one case interim bail was granted when the petitioners had voluntarily undertaken to deposit the amount and on failure to deposit the said amount bail was rejected, in other case condition imposed by the Magistrate being a condition precedent for confirmation of bail was held to be contrary to law, the Division Bench held that there was no conflict between the three cases, which were decided on their facts. The relevant portion is contained in the following paras:

10. It would be thus seen that the three decisions aforementioned by three learned Single Judges of this Court proceeded on the facts peculiar to each case. In vansh Bahgdur's case (supra) before the court could consider the question as to whether bail should or should not be granted voluntarily the petitioner came forward and undertook to deposit the amount, which was the subject matter of the FIR. He had voluntarily undertaken to deposit the amount due to which he had been granted some interim indulgence. He had declined to honour his undertaking. His application for bail was rejected solely on the ground that the petitioner had tried to over reach the court.

11. In Rajeshwari Verma's case (supra) there was no offer or undertaking by the accused to pay or deposit the amount, being subject matter of the FIR. The Additional Sessions Judge had of his own imposed the condition being a condition precedent for confirmation of bail. Such a condition was held to be contrary to the law being onerous, harsh and making the order of bail illusory.

12. In Sarkar Saheb's case (supra) the condition of depositing the amount, equivalent to the amount of istridhan was held to be a reasonable and just condition for grant of bail.

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18. In the light of the position of law aforementioned, a view expressed by the learned Single Judge in Sarkar Saheb's case (supra) is not in conflict with the decision rendered in Rajeshwari Varma's case (supra) since in Sarkar Saheb's case the court considered the condition to be just, fair and reasonable, in the facts and circumstances of the case and not a harsh condition. However, in Sarkar Saheb's case the court did not examine the question as to whether the object of imposing condition was the one which is provided in Sub-section (2) of Section 438 of Cr.P.C. The learned Single Judge in Rajeshwari Verma's case found the condition imposed to be in consonance with the purposes laid down in Sub-section (2) of Section 438 or Sub-section (3) of Section 437 of Cr.P.C. In Vansh Bahadur Singh's case (supra) learned Single Judge adopted the same approach as was adopted by the Supreme Court in M. Sreenivasulu Reddy's case that when an accused has undertaken to deposit the amount and acting on that undertaking an interim order of bail was granted, the order did not require any interference thereafter since the accused was bound to pay and since the balance amount which he had undertaken to pay and since the balance amount was not paid, rightly the court had declined to grant indulgence to the accused.

3. It is clear from the reading of para 18 that the Division Bench referred to the judgment in the case of M. Sreenivasulu Reddy v. State of Tamil Nadu 2001 (2) CRIMES 230 (SC) and the dicta of the said judgment was explained by them in the following terms:

16. The questions which have been referred by learned Single Judge in the light of the aforementioned provisions of the Act will not need any further elaboration since the same can be said to have been squarely answered by Supreme Court in M. Sreenivasulu Reddy v. State of Tamil Nadu 2001 (2) Crimes 230 (SC). The appellants before the Supreme Court was an accused against whom offences under Section 420 and 409 IPC read with Section 120B IPC had been alleged. He had moved an application for grant of anticipatory bail and the High Court from time to time had exercised discretion in granting anticipatory bail but subject to certain terms and conditions. By order dated 31.1.2000 after taking into consideration all relevant facts as well as the undertaking of the accused, anticipatory bail was granted subject to his depositing Rs. 20 crores on or before 15.2.2000. This order stood modified by order dated 30.3.2000 when several other conditions were imposed. Accused approached the Supreme Court. By that date out of Rs. fifty ;crores a sum of Rs. thirty five crore had already been paid. The Supreme Court stayed the operation of the order. Before Supreme Court on behalf of accused appellant it was urged that when the High Court exercised its discretion under Section 438 Cr.P.C. granting anticipatory bail, it was entitled to put conditions but such conditions must be reasonable and judicious and should not be arbitrary. It was thus urged that the conditions imposed were arbitrary. Learned Solicitor General contended that bearing in mind the nature of accusations no anticipatory bail should have been granted but the same having been granted the terms and conditions imposed should not be interfered with by the Supreme Court under Article 136 of the Constitution of India. Supreme Court in the light of the aforementioned background and the submissions made before it held that the court while exercising jurisdiction under Section 438 Cr.P.C. must bear in mind and be satisfied that the accused will not abscond or otherwise misuse liberty and this can be ascertained from several factors like conduct of the accused in the past, his assets in the country and so on. While granting such anticipatory bail though the court may impose such conditions, as it thinks fit, but the object of putting conditions should be to avoid the possibility of the person hampering investigation. The discretion of the court while putting conditions should be an exercise of judicial discretion. In case for offence under Section 409 and 420 IPC the court will certainly not proceed to recover the alleged amount as a condition of grant of bail. After lying down this law that any offence, may be under Section 409 and 420 IPC or such other offence, the court certainly will not go into and recover the amount as a condition of grant of bail, the Supreme Court declined to modify the order of the High Court observing that the high court had directed payment of the amount on the basis of the undertaking given by the accused. Therefore, the accused would be required to pay the balance amount.

4. The Division Bench also held that the doctrine of estoppel would apply in such a case as approved by the Supreme Court in Sajan K. Varghese and Ors. v. State of Kerala and Ors. 1989 SCC (Crl.) 339 wherein it was held that when the Court was persuaded to accept the terms of compromise for grant of bail, it is not permissible for the parties to resile from those terms and conditions.

5. In the present case, bail application of the petitioners was never decided on merits. The petitioners were arrested and were in custody when their bail applications were considered. On 25.8.2005, interim bail was granted for a period of one month on the submission of the parties to enable them to arrive at amicable settlement. This interim bail was extended from time to time in subsequent orders after taking note of the fact that the petitioners had entered into separate MOU with all the three respondents. Thus, de hors the talks of settlement, there was no consideration by the trial court as to whether the petitioners were entitled to bail or not and only interim bail was granted when the petitioners expressed their desire to settle the matter and thereafter to make the payment in accordance with the said settlement. The judgment in the case of Biman Chatterjee (supra) shall have no application where regular bail was granted and the question was as to whether such a bail could be cancelled if the accused was not co-operating in the compromise talks. The Court subsequently observed that though in the original order granting bail there was a reference to an agreement of the parties to have a talk of compromise, there was no submission made to the Court that there would a compromise or that the accused would take back his wife. In the present case as mentioned above, the petitioners wanted sojourn for some time to enable them to settle the matter and in view of this, the Court granted the petitioners a breather. The petitioners cannot take advantage of such an interim protection and thereafter breach the agreement and still say that the interim protection should be confirmed. If the petitioners are not in a position to make the payment, as alleged by them, it would be proper for the trial court to consider the bail application of the petitioners on merits and to decide as to whether the petitioners have backed out, for whatever reason. They cannot continue to enjoy such an interim protection. Therefore, while dismissing this petition and upholding the order of the trial court, matter is remanded back to the learned ASJ to consider the bail application of the petitioners on merits de hors the MOU or breach thereof. Since the petitioners have been granted interim protection, that shall remain operative for a period of two weeks during which period the petitioners shall apply for regular bail before the trial court and the said bail application shall be considered on its own merits without being influenced by the MOU or breach thereof. The petition is disposed of in the aforesaid terms.