Gujarat High Court

Nipul @ Vipul Manubhai Ghevaria vs State Of Gujarat on 11 March, 2022

Bench: Ashutosh J. Shastri

      R/CR.MA/15872/2020                       ORDER DATED: 11/03/2022




          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD


            R/CRIMINAL MISC.APPLICATION NO. 15872 of 2020

=============================================
                  NIPUL @ VIPUL MANUBHAI GHEVARIA
                                Versus
                           STATE OF GUJARAT
=============================================
Appearance:
DHRUVIK K PATEL(7769) for the Applicant(s) No. 1
MR ZUBIN F BHARDA(159) for the Applicant(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 2
MR.J.K.SHAH, APP for the Respondent(s) No. 1
=============================================

 CORAM:HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI

                           Date : 11/03/2022

                             ORAL ORDER

[1] By way of this application under Section 438 of the

Code of Criminal Procedure the applicant has prayed for

grant of anticipatory bail in connection with Criminal Case

No.1382 of 2020 lodged on 08.01.2020 for the offences

punishable under Sections 69, 132 (1) (B) (C) (F) (J) (K) (L)

of the Goods and Services Act, 2017 and Central Goods

and Services Act, 2017 read with Section 120-B of the

Indian Penal Code.

[2] It is the say of the applicant that in the original

complaint i.e. criminal case referred to above he is not

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arraigned as an accused person but the applicant

apprehending his arrest, has filed the present application.

He further submitted that original complaint was lodged

against one Jitubhai Bhikhabhai Vasani who indulged

himself in bogus billing scam and thereby caused huge

and serious financial loss to the state exchequer. It is also

alleged in the complaint that he opened up several firms

in the bogus names, in the name of his employees, name

of his driver and other persons and got issued bills running

into crores of rupees and obtained undue tax credit and

thereby huge amount running into crores is suffered by

the state exchequer.

[2.1] In the said complaint as per the say of the applicant

without making physical supply of goods to such firms

which are opened up fictitiously and by passing wrong tax

credit, huge tax evasion fatal to the economy is made. In

view of this assertion on the complaint since the applicant

apprehending arrest has earlier submitted Criminal Misc.

Application No. 4548 of 2019 under Section 438 of the

Cr.P.C. for seeking anticipatory bail in which the

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investigating officer has filed the detailed affidavit and

accordingly the application was not entertained and the

same was rejected on 07.10.2020.

[2.2] It is the say of the applicant that though the

complaint is exhaustive running into several pages but no

concrete material is available against the accused and as

such he preferred a petition for quashing the said

complaint qua him but the said petition for quashing was

withdrawn vide order dated 02.09.2020 permitting the

applicant to make an appropriate application before the

appropriate authority with proper material. Then applicant

filed an application before the trial court which having not

been entertained.

[2.3] The applicant has preferred this application raising

multipule grounds and thereby sought a relief for granting

anticipatory bail.

[3] It appears from the record that on this application, on

26.10.2020, Rule was issued, making it returnable on

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27.11.2020 and thereafter vide order dated 21.01.2021,

upon submission of learned APP that the Assistant State

Tax Commissioner (1), Surat having not been joined, a

draft amendment was permitted to be moved. Later on,

vide order dated 09.02.2021 in videoconferencing hearing

since direct service affidavit was not submitted though

according to the applicant's advocate it was submitted on

a previous day but then while adjourning the matter on

24.03.2021 it was found that dispute pertains to account

and payment of GST, the issue requires consideration and

as such the protection was extended for the first time by

indicating that in the meantime, no coercive steps shall be

taken against the applicant and investigation may go on.

The said order reads as under:-

"Heard learned advocates for the respective parties through videoconferencing.

Mr.Dhruvik Patel, learned advocate for the applicant submits that DS Affidavit has been filed yesterday before the registry. The DS Affidavit is not on record. Registry is directed to place on record DS Affidavit on the next date.

As the dispute pertains to account or payment of GST, the issue requires consideration and hence the applicant is required to be protected.

Stand over to 24.03.2021. In the meantime, no coercive steps shall be taken against the applicant.

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The investigation may go on. The applicant is directed to co-operate the Investigating Officer during the course of investigation."

and it appears that later on the matter was adjourned

from time to time and having once placed before the co-

ordinate bench when it was noticed that this is a

successive anticipatory bail hence, by virtue of order

dated 06.07.2021 passed by the co-ordinate bench the

matter is placed by office upon verification before this

Court in which Mr. Zubin F. Bharda, learned advocate has

appeared on behalf of the applicant whereas Mr. J. K. Shah,

learned APP has represented the respondent State.

[4] With aforesaid background, the present application

under Section 438 of the Cr.P.C. is taken up for hearing.

[5] Mr.Zubin F. Bharda, learned advocate with Mr.

Dhruvik K. Patel, learned advocate appearing on behalf of

the applicant has submitted that a false and frivolous

complaint is lodged in which applicant is tried to be

dragged in for no fault on his part. The applicant is an

innocent person and is not connected with the main

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offence which is alleged basically against the main

accused i.e. Jitubhai Bhikhabhai Vasani. It has further

been submitted that the applicant has co-operated with

the investigation and on two or three occasions the

statements have also been recorded and has also

produced the material and as such his arrest is thoroughly

uncalled for and as such protection deserves to be

granted. For the purpose of substantiating this

submission, Mr. Bharda, learned advocate has made an

attempt to draw the attention of this Court to some of the

documents attached to the application and thereby

contended that no attempt is made by present applicant

to get any undue benefit nor has committed any offence.

It has further been submitted that there are several other

accused persons also but they are yet to be arrested

rather not arrested and as such during passage of time

since the applicant has cooperated with investigation, the

protection be extended to the applicant since now nothing

further to be discovered or recovered. While contending

this, Mr. Zubin Bharda, learned advocate has submitted

that though there are several accounts opened up and

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there may be an alleged huge tax evasion but in the

absence of any material against the applicant there is

hardly any justification for authority to arrest and as such

also the protection be given.

[5.1] Mr. Bharda, learned advocate at this stage has

candidly submitted that petition for quashing came to be

disposed of, permitted to be withdrawn with a view to

approach the appropriate authority but has reiterated that

material placed on record of this application would

indicate that the applicant is an innocent person and by

submitting this in brief the learned advocate has

reiterated his request to grant the protection. No other

submissions have been made.

[6] As against this, Mr. J. K. Shah, learned APP appearing

on behalf of the respondent State has vehemently

opposed this application by contending that there is no

concept of successive anticipatory bail under Section 438

of the Cr.P.C., once having exhaustively argued and having

withdrawn the same in the absence of any material

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change of circumstance there is hardly any justification in

bringing this application for the second time and apart

from this, learned APP has submitted that this a

systematic organized activity of economic offence in which

to great extent the state exchequer is put to loss. This

offences related to GST Act are as a part of systematic

design and cannot be a one man show and since there is

enough material against the applicant, no protection

against the arrest be given. In fact the allegations ex facie

are very serious in nature wherein tax evasion of crores of

rupees is involved on the basis of fictitious opening of

firms, raising of frivolous bills without any physical

exchange / supply of goods and this factum of opening of

bogus firms cannot be ignored especially when this

organized activity at large scale has been detected by the

state machinery and as such when the applicant is

involved in a very serious economic offence no

anticipatory bail protection be given.

[6.1] Learned APP has further vehemently contended that

the present applicant all throughout has seen to it that

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under one pretext or the other he may not be arrested and

on earlier occasion also through another learned advocate

an attempt was made to secure the anticipatory bail but

having failed, this successive application is again

presented under Section 438 of Cr.P.C. It has been

contended that even the submissions which are made

have been made in the petition for quashing but the

applicant has miserably failed in getting any protection

and therefore after withdrawal of the same this present

application is made to seek anticipatory bail protection

which, in no circumstance, be encouraged.

[6.2] Mr. Shah, learned APP has submitted that time and

again the Hon'ble Apex Court has deprecated or rather

warned the courts not to exercise discretion so lightly

especially when economic offences are alleged and here

the entire tenor of the complaint in detail has clearly

indicated that a systematic organized activity is going on

with the aid and assistance of the main accused. The

applicant, therefore, cannot plead his innocence at this

stage. There are serious apprehensions that if the

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accused persons like the applicant, who are involved in

huge scam are enlarged they are likely to tamper with the

process and frustrate the investigation which may

ultimately to be concluded and therefore this is not a

stage where the applicant to seek anticipatory bail looking

to the serious allegations which are mentioned in the

criminal complaint. For the purpose of substantiating his

stand the learned APP has referred to and relied upon the

decision of Hon'ble Apex Court reported in (1997) 7 SCC

187 (para 6).

[6.3] Lastly, the learned APP has submitted that no new

grounds are available with the applicant nor raised and

the offence is of a complex in nature and hence, in routine

manner applicant cannot seek anticipatory bail and as

such has requested the court to dismiss the application.

[7] Having heard learned advocates appearing for the

respective parties and having gone through the material

on record and the reasons which are assigned by the court

below, few circumstances are not possible to be ignored

by the Court.

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[8] The allegations which are leveled in the main criminal

case are very serious in nature involving not only the main

accused persons but several other accused persons and

without their connivance this organized crime might not

have taken place. The allegations which are leveled are

related to economic offence and as such without opining

clearly on these allegations which is not called for at this

stage, this Court is of the considered opinion that offence

is serious in nature in which to some extent a finger is

clearly pointed out against the applicant and as such the

Court is not inclined to exercise the discretion.

[9] While examining the record it has been found from

page 142 that on earlier occasion Criminal Misc.

Application No.7364 of 2020 was filed under Section 438

of the Cr.P.C. for securing anticipatory bail through another

learned advocate by this very applicant and after arguing

for some time the learned advocate had withdrawn the

application accordingly said application came to be

disposed of on 26.06.2020.

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[10] Yet another order dated 02.09.2020 passed in

Criminal Misc. Application No.12408 of 2020 also may not

be ignored by the Court in which after making some

submissions the said proceedings also came to be

withdrawn with a view to file an appropriate application

before appropriate authority with all materials which have

been produced in this matter and the said application also

came to be disposed of as such vide order dated

02.09.2020.

[11] At this stage the Court is mindful of the situation that

Court is not expected to undertake exercise critical

analysis of any material in anticipatory bail application but

then when the petition for quashing after arguing was

withdrawn almost on similar submissions and earlier

application for anticipatory bail application was also

withdrawn, this Court is not inclined to allow the applicant

to re-agitate the very same kind of submissions that

applicant is an innocent person or there is no material

connecting the applicant with commission of crime since

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all these points have already been agitated in earlier

round of application.

[12] However, at this stage even apart from aforesaid

situation, Court has noticed that even while examining

further anticipatory bail, the concerned trial court i.e.

learned 12th Additional Sessions Judge, Surat while dealing

with Criminal Misc. (Anticipatory Bail) Application No.4548

of 2020 has, based upon material before him and the

detailed affidavit of investigating officer rejected the same

by a reasoned order dated 07.10.2020. The Court deems

it proper to quote hereunder the observations which have

been made in paragraph No.6 of the said order which

reads as under:

"6. From the material on record, it is observed that, a Criminal Case No.1382 of 2020 is pending against the accused persons before the court of Chief Judicial Magistrate, Surat. It is further observed from the record that, previous application of this applicant for obtaining anticipatory bail was rejected by this court. It is also observed from the record that, the applicant has not shown any plausible reasons for withdrawal of application filed before the Hon'ble High Court of Gujarat. So far the case of co-accused who has been released on regular bail is concerned, it has been observed by this court that investigation against the said accused it concluded, however, thereafter during the course of investigation, involvement of some other persons in the said scam

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was detected and they were implicated as accused in this offence. The documentary evidence produced on record are the bills etc. which may not form the part of billing scam. Allegation in the complaint lodged by the complainant are in regard to billing scam involving other bogus firms raised by the applicant on paper without making any physical supply of goods to such firms, and thereby, alleged to have committed offence of tax evasion. So far the case of present applicant is concerned, it seems from Affidavit-in- reply filed on behalf of complainant vide Exh.5 in this case that, the applicant is not rendering co-operation with the Investigating Agency and he is on run, not remaining present inspite of service of summons on more than on occasion. As per the affidavit in reply filed by the Investigating Officer vide Exh.5, it appears that the present applicant is the owner of one of the companies which is involved in the activity of bogus bill scam. Hence, involvement of the present applicant in the said scam is primafacie made out. It primafacie appears that the present applicant along with co-accused, in collusion with each other, have committed the scam in question which runs into crores of rupees and thereby, has caused loss to the State Exchequer. As stated hereinbefore, application for anticipatory bail of the present applicant was rejected by this court. Now, the applicant has again approached this court by filing this application for obtaining anticipatory bail. It has to be noted that, application preferred before the Hon'ble High Court of Gujarat was withdrawn. There does not appear any change of facts or circumstances which existed at the time of deciding previous application for anticipatory bail of this applicant. Investigation qua the present applicant is still in progress, hence, at this stage if anticipatory bail is granted to the applicant, then it will hamper investigation, and there cannot be free and fair investigation in this offence. Keeping in view all the above considerations, this is not the fit case to exercise discretion in favour of the present applicant. Hence, following final order is passed."

[13] From aforesaid circumstances, this Court is of the

clear opinion that no case is made out at all of anticipatory

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bail particularly when it was clearly found not by once but

on more than one occasion that the applicant is a part of

this organized crime of economic offence and has been

found to be not co-operating with the investigating officer

though might have remained present for some occasion

but it was clearly found from the reply affidavit of

investigating officer that this very applicant is the owner

of one of the companies which is involved in activity of

bogus bills scam. Therefore, when the applicant is found

to have indulged himself in such economic offence this

Court is not at all inclined to exercise the discretion and

that too in the absence of any other change of

circumstance though this change of circumstance concept

may not be in anticipatory bail, as has been conveyed by

the Hon'ble Apex Court in its order dated 28.01.2021 in

the case of G. R. Ananda Babu versus The State of

Tamil Nadu and Another while rejecting the concerned

applicants second anticipatory bail. Following are the

observations which are not possible to be ignored by this

Court even as a part of judicial discipline. Hence, the

Court deem it proper to reproduce hereunder:

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"Leave granted.

Heard learned counsel for the parties.

This appeal takes exception to the judgment and order dated 24.11.2020 passed by the High Court of Judicature at Madras in Crl. O.P. No. 18412 of 2020, granting anticipatory bail to respondent No.2 in connection with FIR No. 153 of 2019 for the offences punishable under Sections 143, 436, 302, 307, 149 and 120B of Indian Penal Code.

The incident in question has occurred on 11.11.2019. Respondent No. 2 applied for anticipatory bail before the High Court first vide Crl. O.P. No. 32759 of 2019, which came to be rejected by a speaking order dated 20.12.2019. Despite rejection of anticipatory bail by the High Court, respondent No.2 after some gap moved another application for anticipatory bail being Crl. O.P. No. 8023 of 2020 which for reasons, cannot be discerned from the record, was heard by another judge. Nevertheless, it was rejected vide a speaking order dated 29.05.2020 and more importantly taking note of the fact that there was no change in circumstances and the investigation was still incomplete. Respondent No. 2 then moved a third anticipatory bail application being Crl. O.P. No. 18412 of 2020, which has been allowed by the impugned judgment by the same Judge, who had rejected the second anticipatory bail application, referred to above, vide order dated 24.11.2020 (impugned order).

On this occasion, the learned Judge recorded following reasons for acceding to the request for grant of anticipatory bail to respondent No.2. The same read thus:

"(i) The date of occurrence is 11.11.2019.

(ii) Other 13 accused were arrested and surrendered, their confessional statements were recorded and they were released on bail.

(iii) 127 private witnesses were examined and their statements were recorded.

(iv) 12 months is over from the date of occurrence.

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(v) Six months have passed from the date of dismissal of earlier anticipatory bail application.

(vi) The petitioner is aged 69 years alleged to be suffering from age related ailments and he is willing to co-operate with the investigation."

We have perused the status report submitted by the Investigating Officer before the High Court for consideration along with case diary, clearly indicating that custodial interrogation of respondent No. 2 is essential and the investigation is still incomplete. Nevertheless, on the third occasion, the learned Judge acceded to the request of respondent No. 2 and granted anticipatory bail, without referring to the said status report. None of the reasons cited by the learned Judge, in our opinion, can be said to be just basis to show indulgence to respondent No. 2.

As a matter of fact, successive anticipatory bail applications ought not to be entertained and more so, when the case diary and the status report, clearly indicated that the accused (respondent No. 2) is absconding and not cooperating with the investigation. The specious reason of change in circumstances cannot be invoked for successive anticipatory bail applications, once it is rejected by a speaking order and that too by the same Judge.

To observe sobriety, we refrain from making any further observation, except to observe, that the impugned order, to say the least, is perverse; and also because no prejudice should be caused to respondent No.2 and affect the trial against him.

Accordingly, the impugned judgment and order is set aside. The Investigating Officer is free to take respondent No. 2 into custody forthwith.

The appeal is allowed in the above terms.

Pending applications, if any, stand disposed of."

[14] Yet another decision which has convinced the Court

not to entertain this application is that way back in 1997

also the Hon'ble Apex Court has clearly opined not to

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leniently deal with or exercise discretion in economic

offence as the same offences are organized activity in the

society. Paragraph 6 of the decision in the case of State

Rep. By the C.B.I. versus Anil Sharma reported in (1997) 7

SCC 187 is reproduced hereunder:

"We find force in the submission of the CBI that custodial interrogation is qualitatively more elicitation oriented than questioning a suspect who is well ensconded with a favorable order under Section 438 if the code. In a case like this effective interrogation of suspected person is of tremendous advantage in disintering many useful informations and also materials which would have been concealed. Succession such interrogation would elude if the suspected person knows that he is well protected and insulted by a pre-arrest bail during the time he interrogated. Very often interrogation in such a condition would reduce to a mere ritual. The argument that the oustodial interrogation is fraught with the danger of the person being subjected to third degree 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 task of disintering offences would not conduct themselves as offenders."

[15] Further even in the recent past the Hon'ble Court

while dealing with application under Section 438 of Cr.P.C.

has clearly observed that investigating machinery /

agency must be given sufficient freedom in the process of

investigation and the observations which are made in few

paragraphs in the decision of the Hon'ble Apex Court in

the case of P. Chindambaram versus Directorate of

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Enforcement reported in (2019) 9 SCC 24, the Court

deems it proper to reproduce hereunder:

"69. Ordinarily, arrest is a part of procedure of the investigation to secure not only the presence of the accused but several other purposes.

Power under Section 438 Cr.P.C. is an extraordinary power and the same has to be exercised sparingly. The privilege of the pre-arrest bail should be granted only in exceptional cases. The judicial discretion conferred upon the court has to be properly exercised after application of mind as to the nature and gravity of the accusation; possibility of applicant fleeing justice and other factors to decide whether it is a fit case for grant of anticipatory bail. Grant of anticipatory bail to some extent interferes in the sphere of investigation of an offence and hence, the court must be circumspect while exercising such power for grant of anticipatory bail. Anticipatory bail is not to be granted as a matter of rule and it has to be granted only when the court is convinced that exceptional circumstances exist to resort to that extraordinary remedy.

72. We are conscious of the fact that the legislative intent behind the introduction of Section 438 Cr.P.C. is to safeguard the individual's personal liberty and to protect him from the possibility of being humiliated and from being subjected to unnecessary police custody. However, the court must also keep in view that a criminal offence is not just an offence against an individual, rather the larger societal interest is at stake. Therefore, a delicate balance is required to be established between the two rights - safeguarding the personal liberty of an individual and the societal interest. It cannot be said that refusal to grant anticipatory bail would amount to denial of the rights conferred upon the appellant under Article 21 of the Constitution of India.

74. Ordinarily, arrest is a part of the process of the investigation intended to secure several purposes. There may be circumstances in which the accused may provide information leading to discovery of material facts and relevant information.

Grant of anticipatory bail may hamper the investigation. Pre-arrest bail is to strike a balance between the individual's right to personal freedom

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and the right of the investigating agency to interrogate the accused as to the material so far collected and to collect more information which may lead to recovery of relevant information. In State Rep. By The CBI v. Anil Sharma (1997) 7 SCC 187, the Supreme Court held as under:-

"6. We find force in the submission of the CBI that 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 a case like this effective interrogation of a suspected person is of tremendous advantage in disinterring many useful informations and also materials which would have been concealed. Success in 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-degree 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 manner and that those entrusted with the task of disinterring offences would not conduct themselves as offenders."

81. Observing that economic offences constitute a class apart and need to be visited with different approach in the matter of bail, in Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439, the Supreme Court held as under:-

"34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country.

35. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable

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possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations." (emphasis supplied)

84. In a case of money-laundering where it involves many stages of "placement", "layering i.e. funds moved to other institutions to conceal origin" and "interrogation i.e. funds used to acquire various assets", it requires systematic and analysed investigation which would be of great advantage. As held in Anil Sharma, success in such interrogation would elude if the accused knows that he is protected by a pre-arrest bail order. Section 438 Cr.P.C. is to be invoked only in exceptional cases where the case alleged is frivolous or groundless. In the case in hand, there are allegations of laundering the proceeds of the crime. The Enforcement Directorate claims to have certain specific inputs from various sources, including overseas banks. Letter rogatory is also said to have been issued and some response have been received by the department. Having regard to the nature of allegations and the stage of the investigation, in our view, the investigating agency has to be given sufficient freedom in the process of investigation. Though we do not endorse the approach of the learned Single Judge in extracting the note produced by the Enforcement Directorate, we do not find any ground warranting interference with the impugned order. Considering the facts and circumstances of the case, in our view, grant of anticipatory bail to the appellant will hamper the investigation and this is not a fit case for exercise of discretion to grant anticipatory bail to the appellant."

[16] From the aforesaid observations and coupled with

overall analysis of material on record, Court deems it

proper not to exercise the discretion in favour of the

applicant since no exceptional circumstance is pointed,

which may persuade the Court to exercise the discretion in

his favour. In considered opinion of this Court the

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applicant has miserably failed in making out a case for

anticipatory bail. Accordingly, present application stands

rejected. Rule is discharged. Interim relief if operative

stands vacated forthwith.

[17] While parting with this order, Mr.Zubin F. Bharda,