Sri. K. Madal Virupakshappa vs The State Of Karnataka
2023 Latest Caselaw 2011 Kant

                            1


      IN THE HIGH COURT OF KARNATAKA AT BENGALURU

          DATED THIS THE 27TH DAY OF MARCH, 2023

                          BEFORE

           THE HON'BLE MR. JUSTICE K.NATARAJAN

            CRIMINAL PETITION NO.1976 OF 2023

BETWEEN

SRI. K. MADAL VIRUPAKSHAPPA
S/O LATE MALLAPA
AGED ABOUT 74 YEARS,
R/AT CHANNESHPURA VILLAGE,
CHANNAGIRI TALUK
DAVANGERE DISTRICT
DAVANGERE - 577 221
                                           ... PETITIONER
(BY SRI K. SUMAN, SENIOR ADVOCATE
 FOR SRI SANDEEP S. PATIL, ADVOCATE)

AND

THE STATE OF KARNATAKA
BY KARNATAKA LOKAYUKTA POLICE,
BENGALURU DIVISION
THROUGH ITS SPECIAL PUBLIC PROSECUTOR,
HIGH COURT OF KARNATAKA
BENGALURU - 560 001
                                          ... RESPONDENT
(BY SRI ASHOK HARANAHALLI, SR. ADVOCATE
 FOR SRI. B.B. PATIL, SPECIAL COUNSEL)

     THIS CRIMINAL PETITION IS FILED UNDER SECTION 438
OF THE CODE OF CRIMINAL PROCEDURE, PRAYING TO
ENLARGE THE PETITIONER ON BAIL IN THE EVENT OF HIS
ARREST IN CR.NO.13/2023 REGISTERED BY KARNATAKA
LOKAYUKTA POLICE, BENGALURU FOR THE OFFENCES
PUNISHABLE UNDER SECTIONS 7(a)(b), 7(A), 8, 9 AND 10 OF
PREVENTION OF CORRUPTION ACT, PENDING ON THE FILE OF
LXXXI ADDITIONAL CITY CIVIL AND SESSIONS JUDGE AND
                               2


SPECIAL COURT EXCLUSIVELY TO DEAL WITH CRIMINAL CASES
RELATED TO ELECTED MPs/MLAs IN THE STATE OF KARNATAKA,
BENGALURU (CCH-82).

     THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 17.3.2023, THIS DAY, THE COURT
MADE THE FOLLOWING:

                          ORDER

This petition is filed by the petitioner-accused No.1

under Section 438 of Cr.P.C., for granting anticipatory bail

in Crime No.13/2023 of Lokayukta Police, Bengaluru and

for the offences punishable under Sections 7(a)(b), 7(A),

8, 9 and 10 of Prevention of Corruption Act.

2. Heard the arguments of learned Senior counsel

for the petitioner and learned Senior Counsel appearing for

respondent.

3. The case of prosecution is that on the

complaint of one Shreyas Kashyap, S/o. B.S. Gururaj, the

police have registered FIR against accused No.1-the

present petitioner and his son-accused No.2 and others. It

is alleged by the defacto complainant, in his complaint,

that he is the partner of the company called Chemixil

Corporation and his known person T.A.S. Murthy, who is

said to be running a partnership firm in the name of M.S.

Delicia Chemicals. They participated in the tender

proceedings for procurement of chemical oil to be supplied

to Karnataka Soaps And Detergent Limited (hereinafter

referred to as 'KSDL') and they are the successful bidders.

For the smooth supply of chemicals and chemical oils, they

received procurement of raw materials. The accused said

to have demanded Rs.81.00 lakhs as bribe and the

petitioner-accused No.1 said to be informed the

complainant to contact his son-accused No.2. The

complainant, not willing to pay bribe amount, lodged a

complaint to Lokayukta police. In turn, the said Lokayukta

police set up trap and sent Rs.40.00 lakhs with the

complainant. At the time of accepting the bribe amount,

accused No.2 was caught red hand and trapped by the

Lokayukta police and they seized the bribe amount and

arrested accused No.2 and arrested accused No.2. It is

also alleged in the complaint that, at the time of incident,

some other persons were also present. The police seized

Rs.45.00 lakhs each from accused Nos.3 and 4 under trap

panchanama in the presence of panchas. Accused No.2

and other accused persons were arrested and they were

remanded to judicial custody. The name of the petitioner-

accused No.1 has been appeared in the FIR. Hence, he had

apprehension of arrest in the hands of police. Therefore,

he approached this Court for the grant of anticipatory bail

and he also filed an interim application under Section

438(1) of Cr.P.C., where this Court granted interim

anticipatory bail on 07.03.2023 until disposal of this

petition and this Court called for statement objections and

documents from the Lokayukta police. Accordingly, they

have produced the case diary before the Court in a sealed

cover.

4. Learned Senior Counsel for the petitioner has

contended that there is no demand and acceptance of

bribe by the petitioner-accused No.1 for demanding any

bribe from the complainant. There is no allegation against

him even for abetment to pay any bribe. None of the

offences are alleged against the petitioner in the FIR and

the remand application will attract against the petitioner.

The learned Senior Counsel further contended that

Lokayukta police have trapped accused No.2 and

recovered some amount and there is no connection

between the trap of accused No.2 and this petitioner-

accused No.1. There is no work entrustment pending with

the petitioner and there is no demand prior to accepting

the tender or placing the procurement order. The learned

Senior Counsel for the petitioner further submitted that

there was no date mentioned as to on what date the

petitioner-accused No.1 demanded bribe. Even in the trap

panchanama, the investigation officer has stated that there

is no material evidence against the petitioner.

Immediately, after registering the FIR, the petitioner

resigned from the post of Chairman of KSDL.

5. The learned Senor Counsel for the petitioner

further contended that there is a separate Committee

which has floated and accepted the tender and there is no

role played the petitioner-accused No.1 in this regard. The

petitioner is a sitting MLA and he is already to co-operated

with the investigation officer and absolutely, there is no

material to connect the petitioner with this crime. The

case is registered politically, motivated by the opposite

political parties. If the petitioner is arrested, kept in jail,

his reputation will be come down. The arrest of the

petitioner is only an empty formality. The incriminating

evidence is already collected by the Lokayukta police. The

petitioner is ready to abide by any condition. Hence,

prayed for granting anticipatory bail.

6. Per contra, the respondent-Lokayukta filed

statement of objections and the learned Senior counsel

appearing for the respondent has contended that the

petitioner is the Chairman of the KSDL and the

complainant is the successful bidder for supplying the

chemical oils to the KSDL. The petitioner-accused No.1

and his son-accused No.2 having indulged in rigging of the

tender process, have demanded bribe amount of Rs.81.00

lakhs. The complainant contacted him at the request of

accused No.1, then, accused No.2 also had discussion and

for sanction of the tender, release of bills and supply of

goods, accused No.2 demanded Rs.1.20 crores from both

the companies and after negotiation, accused No.2 has

agreed to receive Rs.81.00 lakhs. Since, the complainant

was not willing to pay the bribe, filed the complaint to the

Lokayukta. The learned Senior Counsel for respondent

further submitted that, thereafter, the respondent-

Lokayukta prepared a pre-trap panchanama and requested

the complainant to hand over the bribe and accordingly, on

02.03.2023, when the complainant went to the office of

accused No.2 and while paying the amount, accused No.2

was trapped and during the trap panchanama, some other

accused persons were also present. The respondent-

Lokayukta seized Rs.60.00 lakhs from accused No.2 and

Rs.90.00 lakhs (i.e., Rs.45.00 lakhs each) from two

persons i.e., Albert Nicholas and Gangadhar. The total

amount that were seized under the panchanama is

Rs.1,62,00,000/- (i.e., Rs.60.00 lakhs + Rs.12.00 lakhs +

Rs.90.00 lakhs). Sbsequently, the Lokayukta also raided

the house of accused No.2 and also the office of accused

No.1 and seized Rs.6,10,30,000/-. The learned Senior

Counsel further contended that, the investigation is under

progress. If the accused is released on bail, he will hamper

the investigation. Even though this Court has granted

interim anticipatory bail, but accused No.1 is not giving

proper answer, he is giving evasive answer and not

properly co-operating with the Investigating Officer.

Therefore, it is contended that the petitioner-accused No.1

is required for custodial interrogation. The police may get

better information from accused No.1. There is serious

allegation against him. The entire tender process has been

followed by accused No.2 who is the son of the petitioner.

The Managing Director of KSDL one Mahesh has given his

statement under Sections 161 as well as 164 of Cr.P.C.

where it clearly reveals the active participation of accused

No.2 in the tender process at the instance of accused No.1.

Accused No.2 is not connected to the KSDL and he is

working in BWSSB, but he has received bribe amount in

respect of the KSDL. Therefore, prayed for dismissing the

petition. The learned Senior counsel for the respondent

also contended that Rs.6.10 crores has been seized from

the bed room of this petitioner-accused No.1 and

therefore, prayed for dismissing the petition

7. In support of his arguments, the learned Sernior

Counsel has relied upon the judgment of the Hon'ble

Supreme Court in the case of P.CHIDAMBARAM vs.

DIRECTORATE OF ENFORCEMENT reported in (2019) 9

SCC 24.

8. In reply, the learned Senior Counsel for the

petitioner has contended that there is no material against

the petitioner for having demanded any bribe and the

petitioner is not having bed room in the house of accused

No.2. The said house belongs to other sons who are

running a company and therefore, the petitioner is not

required for any custodial interrogation. Hence, prayed for

allowing the petition. In support of his arguments, the

learned Senior Counsel has relied upon various judgments

of the Supreme Court including the case of SHRI

GURBAKSH SINGH SIBBIA AND OTHERS Vs. STATE

OF PUNJAB reported in (1980) 2 SCC 565.

9. Having heard the arguments of learned Senior

counsel for parties and on perusal of the records, the

allegation against the petitioner is that the petitioner being

an MLA and the Chairman of the KSDL, has demanded

Rs.1.20 Crores as bribe for accepting the tender and also

for smooth payment on the procurement of raw materials

for the purpose of the KSDL and after bargain, agreed for

Rs.81.00 lakhs. The respondent No.2 is the successful

bidder in the tender floated by the KSDL through its

Committee constituted for floating the tender and

accepting the tender. It is seen from the records that the

KSDL placed an order for procurement of chemical oils for

the purpose of KSDL. As per the allegation in the FIR, the

complainant, for the purpose of smooth delivery of the

goods and payment, has approached the present petitioner

and he is said to be demanded Rs.1.20 Crores as bribe and

later, the petitioner has instructed the complainant to

approach his son Prashanth Madal (accused No.2).

Accordingly, one Sri.TVS Murthy and the complainant

approached accused No.2 on 12.01.2023 in the private

office of accused No.2, who is said to have demanded

Rs.60.00 lakhs each as commission from both the

companies for smooth procurement and payment. After

bargain, accused No.2 agreed to receive Rs.33.00 lakhs

from Chemixil Corporation and Rs.48.00 lakhs from M.S.

Delicia Chemicals. Totally, Rs.81.00 lakhs was demanded

for the supply of 29,520 kgs of chemicals and 50 kgs of

Abbalide/musk at the rate of Rs.4349/- per kg. Accused

No.2 demanded Rs.81.00 lakhs and later, the purchase

order has been placed on 28.01.2023 and on 30.01.2023.

Subsequently on 08.02.2023, accused No.2 contacted the

complainant through whats-app call and asked to come to

the office. Though the complainant went to the office and

tried to record the conversation, but the date and time was

not recorded. Subsequently, on 28.02.2023, accused No.2

called the complainant through phone, but the complainant

did not lift the phone. Again on, 01.03.2023, accused

No.2 called the complainant through the whatsapp and

asked to meet him. Thereafter, the complaint came to be

lodged and accordingly, trap was set up and while handing

over Rs.40.00 lakhs to accused No.2, he has been trapped.

10. It is also seen from the trap Panchanama that

Rs.40.00 lakhs has been seized at the time of trap from

accused No.2. The police also arrested accused Nos.3 and

4 and seized Rs.45.00 lakhs each from them who came to

office of accused No.2 and the police also seized Rs.12.00

lakhs from accused Nos.5 and 6 under the panchanama.

11. Though as per the trap panchanama, the

aforesaid amounts were seized by the police,

subsequently, the police also raided the house of the

accused No.2, where in the bed room of this petitioner,

they found Rs.6,10,30,000/- and they seized the same

under the panchanama. In the panchanama, it is stated

that the house belongs to accused No.2 and the daughter-

in-law of petitioner-accused No.1 was present and she has

stated that the said room belongs to this petitioner.

However, the investigation officer, while producing the

accused No.2 before the Court, at inner page No.92 of trap

panchanama, has stated that there is no evidence found as

against accused no.1 and they will collect the documents

during the investigation. Considering the said observation

made by the investigating officer in the trap panchanama,

this Court granted interim anticipatory bail to this

petitioner on 07.03.2023.

12. Subsequently, the learned Senior counsel for

respondent, during the course of final argument, has

brought to the notice of this court that there was

telephonic conversation between the accused No.2 and the

complainant prior to the trap. It is also an admitted fact

that the petitioner was the Chairman of the KSDL, but

accused No.2 nothing to do with the KSDL. In fact,

accused No.2 is an accountant working at BWSSB and he

has no business to make any demand and acceptance for

himself except on behalf of the petitioner-accused No.1.

13. This Court, while granting interim anticipatory

bail, imposed some conditions to the petitioner-accused

No.1 to cooperate with the investigating officer. In the

FIR, there is no direct evidence against this petitioner, but

it was found during the investigation. The materials

collected by the investigating officer and the case diary

reveals the statement of one Mahesh, who is the Managing

Director of KSDL, recorded under Section 164 of Cr.P.C.

The said Mahesh, Managing Director of KSDL has

categorically stated that there was frequent instructions

given by this petitioner-accused No.1 through accused

No.2 in tender floating activities and also at the instance of

instruction of this petitioner, the tender has been finalized.

The accused No.2 has actively given all the instructions to

the complainant on behalf of the petitioner-accused No.1.

There were whatsapp messages and telephone instructions

given by this petitioner to one said Mahesh, the Managing

Director of KSDL, which clearly reveals, that at the

instance of this petitioner-accused No.1 and on behalf of

the petitioner-accused No.1, accused No.2 almost acted on

for tender process, procurement process and demand and

acceptance of the alleged bribe amount, pertaining to

KSDL.

14. Learned Senior Counsel for the petitioner has

relied upon the judgment of Hon'ble Supreme Court in the

case of SHRI GURBAKSH SINGH SIBBIA AND OTHERS

Vs. STATE OF PUNJAB reported in (1980) 2 SCC 565

in respect of granting anticipatory bail and the principles

laid down by the Hon'ble Supreme Court. I am aware

about the principles laid down by the Hon'ble Supreme

Court and based upon the principles laid down in the said

judgment, this Court has granted interim anticipatory bail

to this petitioner when he rushed to the Court on

07.03.2023.

15. On the other hand, lhe learned Senior Counsel

for the respondent has relied upon the judgment of

Hon'ble Supreme Court in the case of P.Chidambaram

(supra) and contended that the petitioner is required for

custodial interrogation. The Hon'ble Supreme Court, in the

case of P.Chidambaram (supra), at paragraphs 64, 65,

69, 72 and 74 has held as follows:

64. Investigation into crimes is the prerogative of the police and excepting in rare cases, the judiciary should keep out all the areas of investigation. In State of Bihar v. P.P. Sharma [State of Bihar v. P.P. Sharma, 1992 Supp (1) SCC 222 : 1992 SCC (Cri) 192] , it was held that : (SCC p. 258, para 47) "47. ... The investigating officer is an arm of the law and plays a pivotal role in the dispensation of criminal justice and maintenance of law and order. ... Enough power is therefore given to the police officer in the area of investigating process and granting them the court latitude to exercise its discretionary power to make a successful investigation...."

65. In Dukhishyam Benupani v. Arun Kumar Bajoria [Dukhishyam Benupani v. Arun Kumar Bajoria, (1998) 1 SCC 52 : 1998 SCC (Cri) 261] , this Court held that :

"7. ... It is not the function of the court to monitor investigation processes so long as such investigation does not transgress any provision of law. It must be left to the investigating agency to decide the venue, the timings and the questions and the manner of putting such questions to persons involved in such offences. A blanket order fully insulating a person from arrest would make his interrogation a mere ritual...."

Grant of anticipatory bail in exceptional cases

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 CrPC 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 the 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 CrPC 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 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 v. Anil Sharma [State v. Anil Sharma, (1997) 7 SCC 187 : 1997 SCC (Cri) 1039] , the Supreme Court held as under : (SCC p. 189, para 6)

"6. We find force in the submission of 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."

16. Learned Senior Counsel for the respondent has

contended that the petitioner is not co-operating with the

investigation officer, he is not giving any proper answer to

the queries made by the respondent and that, he is giving

evasive answers. Since the petitioner is not co-operating

with the investigation officer and he is not giving proper

answers, he is required for custodial interrogation,

otherwise, it would not possible for the Lokayukta police to

conduct proper investigation.

17. As held by the Hon'ble Supreme Court in

Chidambaram's case, (supra), the Hon'ble Supreme

Court has held that the police is required to investigate the

matter for custodial interrogation in economic offences.

Though the alleged offence is not directly on the economic

offence against the State, but the KSDL is a public limited

company belongs to the State Government, it has floated

the tender process for purchasing the chemicals or raw

materials for production of Mysore Sandal Soaps. If the

company pays more than crores of rupees as commission

or bribe, one cannot expect the good quality of raw

materials will be supplied by the said company and the

very tender process followed by the tender accepting

Committee and accepting the lowest price and good quality

of raw materials will be frustrated. The public auction

process through online would remain as an empty

formality and eye wash to the public as they are following

the KTPP Act and they are giving the tender to a person

who is bribing the Committee or the head of the

Committee who is holding the higher position in the tender

procuring process. If at all respondent No.2 and his

company has legally participated in the tender process

activities, the question of paying the bribe does not arise.

However, it is the matter of investigation by the police and

further action will be taken by the KSDL for reconsidering

the tender process and accepting the tender from

respondent No.2 is doubtful about following the KTPP Act.

18. The fact remains that the complainant himself

says that, for the purpose of tender, procurement and

smooth payment, he approached the petitioner-accused

No.1 and therefore, without the instruction of the

petitioner-accused No.1, the question of accused No.2

consulting the complainant, demanding bribe and

accepting the bribe does not arise. The police are yet to

collect the statement of so many witnesses from the KSDL

and the other officials without any hindrance. The

statement of the family members of petitioner-accused

No.1 has been recorded by the investigation officer and the

amount has been seized from the bedroom of this

petitioner. The investigation officer was not able to collect

the call records, whatsapp messages from the mobile of

the petitioner. Therefore, the matter requires detailed

investigation and without the custodial interrogation, it is

not possible for the police to collect the proper evidence

against the petitioner. If the petitioner is on bail, there is

every possibility of apprehension by the witnesses and

they may not come forward to give evidence or statement

against him without fear.

19. Therefore, I am of the view that the custodial

interrogation of the petitioner-accused No.1 is very much

necessary for the Lokayukta police. Though this Court

granted the interim anticipatory bail until disposal of the

case, because there was no material found in FIR at that

time, but now, there is sufficient evidence to show the

involvement of the petitioner in the commission of offence

as per the case diary of the police and statement of Mohan

under Section 164 of Cr.P.C. Therefore, the custody of the

petitioner is imminent for the Lokayukta police to

interrogate him in the matter. Therefore, at this stage,

this Court feels that the interim anticipatory bail, requires

to be cancelled as the petitioner-accused No.1 has not

properly co-operated with the investigation officer. The

Hon'ble Supreme Court in the case of SUNITA DEVI AND

ANOTHER Vs STATE OF HARYANA reported in (2023) 1

SCC 178 has held that if the accused refused to co-

operate with the investigation agency, the State can file an

application for cancellation of bail. Therefore, considering

the facts and circumstances of the case, I am of the view

that the petitioner-accused No.1 is not entitled for

anticipatory bail as he is required for custodial

interrogation.

20. The interim anticipatory bail granted by this

Court on 07.03.2023 is hereby cancelled.

Accordingly, this petition for anticipatory bail filed

under Section 438 of Cr.P.C., by the petitioner-accused

No.1 is hereby dismissed.

Pending I.As., if any, do not survive for

consideration. They are accordingly disposed of.

Sd/-

JUDGE

CS/AKV/GBB