Table of Content:-

• Background of the case
• Issues Raised
• Statutory provision Involved
• Submissions of the Parties
• Judgment Analysis
• Conclusion
• Case Laws:
  • Dolat Ram Vs. State of Haryana [n (1995) 1 SCC 349]  
  • State of Gujarat Vs. Mohanlal Jitamalji Porwal and another [(1987) 2 SCC 364]
  • Prakash Kadam and others Vs. Ramprasad Vishwanath Gupta and another [(2011) 6 SCC 189]

Murthy V.K. vs The State by the Inspector of Police [Crl. O.P. No. 22782 of 2017]

Background of the case

In the present case, a surprise inspection of jewelry preserved under the jewelry loan was conducted by the vigilant department of the bank of Anna Nagar West Extension Branch in August 2016 and it had been founded that the jewelry pledged by the respondent no. 2 and 3 was not the real one. Immediately after having the information about the fraud, all the officials including the petitioner verified all the jewelry pledged against the loan. The officials of the bank and the petitioner came to know that the jewelry pledged against the 325 loans was also fake.

After such verification, a detailed enquiry has been conducted. In the enquiry it was revealed that the 325 jewel loan were taken by the 180 borrowers and all of them was introduced by the respondent no 2 and 3. Respondents No. 2 and 3 obtained the gold jewel loans from the former branch managers one of them is already absconding.

The petitioner reveals that respondent no. 2 was the real mastermind. All the accounts are vested in the gold and silver jewelry under the name of ‘Sri Laxmi Thanga Maligai’ which is run by respondent no. 2 who is also engaged in real estate business and promoting lands under the name of ‘M/s. Sri Lakshmi Promoters’.

Respondent no. 2 is the customer of the concerned bank from the year 2010 and since 2010 he was availing various loans in his and his family member’s name and respondent no. 3 and former bank manager had helped him.

After knowing the fact the petitioner without any delay lodged the complainant before the respondent police and the case was registered.

Issues raised

Whether the bail granted to the respondents liable to be canceled?

Statutory Provisions Involved

• Section 408 of the Indian Penal Code, 1860

“Criminal breach of trust by clerk or servant

Whoever, being a clerk or servant or employed as a clerk or servant, and being in any manner entrusted in such capacity with property, or with any dominion over property, commits criminal breach of trust in respect of that property, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”

• Section 420 of the Indian Penal Code, 1860

“Cheating and dishonestly inducing delivery of property

Whoever cheats and thereby dishonestly induces the person deceived to deliver any property to any person, or to make, alter or destroy the whole or any part of a valuable security, or anything which is signed or sealed, and which is capable of being converted into a valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine.”

• Section 120 B of the Indian Penal Code, 1860

“Punishment of criminal conspiracy

(1) Whoever is a party to a criminal conspiracy to commit an offence punishable with death, 2[imprisonment for life] or rigorous imprisonment for a term of two years or upwards, shall, where no express provision is made in this Code for the punishment of such a conspiracy, be punished in the same manner as if he had abetted such offence.

(2) Whoever is a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as aforesaid shall be punished with imprisonment of either description for a term not exceeding six months, or with fine or with both.]”

• Section 439 (2) of the Code of Criminal Procedure, 1973

“Special powers of High Court or Court of Session regarding bail

A High Court or Court of Session may direct that any person who has been released on bail under this Chapter be arrested and commit him to custody.”

Submissions of the Parties

The contentions of the petitioner

1. It was submitted that respondents no. 2 and 3 initially applied for bail before the metropolitan magistrate court but on 19th September 2017, the court had rejected the bail application.
2. Thereafter the respondents filed the petition for bail before the session court and the learned principal session judge also rejected the petition of the respondents seeking bail. The respondents again filed the petition seeking bail before the session court and this time the learned session judge granted them bail on the contention that they will settle the amount while they were on the bail.
3. It was submitted that even after 11 months from releasing on bail the respondents didn’t settle the amount. The total amount that needs to be pay by them was Rs. 20.55 crores.
4. It was prayed that the bail granted to the respondents must be canceled by the court.
5. It was further submitted that the property pledged by the respondents was already attached by the bank for the non-payment of the loan and the matter regarding this was already pending before the DRT.
6. It was submitted that respondent no. 3 had resided in the felicitous bungalow and also enjoying other properties.   

The contentions of the respondents 

1. It was submitted that apart from this loan the respondents had taken a property loan of Rs. 3 crores from the petitioner bank against which the respondents had pledged a property document worth Rs. 34 crores.
2. Further, it was submitted that the respondents never gave any undertaking in the lower court in respect of the settlement of the loan.
3. It was submitted that the respondent’s financial condition is not that they can pay the conditional amount and they have no other property.
4. It was further added that if the respondents were on bail they would be made preparation to settle the amount but if the bail was canceled then in such case petitioner would recover nothing.
5. It was further submitted that respondents had not violated any of the conditions imposed upon them by the lower court and therefore the lower court also relaxed the conditions.

Judgment Analysis

The court takes the order by the principal judge of the session court into consideration which reads as follow:

“A careful consideration of the arguments, Admittedly, title deed worth about RS.2,70,00,000/- for the property belonged to the 1ST petitioner was with the bank and also the learned counsel for petitioner argued that the title deed worth about Rs.34 crores pertaining to 1ST petitioner’s family was also with the bank. The petitioner obtain several loans in his name and also the family members. According to the intervener, the 1ST petitioner has given a undertaking letter on 1.10.2016 assuring that on or before 6.10.2016 he will repay RS.2 crores and the remaining entire balance of jewel loans within the next 15 working days and will close all the loan accounts, but he had not settled the amount and the same was mentioned in the FIR. Intervener also submitted that some of the persons were introduced by A1 and A2 and also received the cheque for the jewel loan. The learned counsel for petitioners stated that the bank or the investigating agency has not produced any document that the jewels are fake. Neither, the intervener nor the investigating agency has not reply in that context. The learned counsel for the petitioners also submitted that the petitioners also submitted that the petitioners are ready to settle the amount if they are released on bail on any condition. The petitioners have been in custody for the past 32 days. Already the period for taking custodial interrogation is over and major part of the investigation might have been completed by this time. Further, all the documents are available with the investigating agency as well as with the bank. There is no question of tempering the evidence.”

The court observed even after the passage of the 11 months time the respondents didn’t pay a single penny to the petitioner’s bank in lieu of the settlement of the loan amount. The court added that in the normal sense this court doesn’t interfere in the bail matters of the lower court unless there are any supervening circumstances that arise.

The court observed that unless the bail granted had been canceled a proper investigation is carried out and the public money that is granted to the respondents by the way of loan cannot be recovered.

In this respect, the court firstly relied upon the decision of the Dolat Ram Vs. State of Haryana [n (1995) 1 SCC 349] the relevant portion of which is reads as follow:-

“Rejection of bail in a non-bailable case at the initial stage and the cancellation of bail so granted, have to be considered and dealt with on different basis. Very cogent and overwhelming circumstances are necessary for an order directing the cancellation of the bail, already granted. Generally speaking, the grounds for cancellation of bail, broadly (illustrative and not exhaustive) are: interference or attempt to interfere with the due course of administration of Justice or evasion or attempt to evade the due course of justice or abuse of the concession granted to the accused in any manner. The satisfaction of the court, on the basis of material placed on the record of the possibility of the accused absconding is yet another reason justifying the cancellation of bail. However, bail once granted should not be cancelled in a mechanical manner without considering whether any supervening circumstances have rendered it no longer conducive to a fair trial to allow the accused to retain his freedom by enjoying the concession of bail during the trial. These principles, it appears, were lost sight of by the High Court when it decided to cancel the bail, already granted. The High Court it appears to us overlooked the distinction of the factors relevant for rejecting bail in a nonbailable case in the first instance and the cancellation of bail already granted.”

Further, the court relied upon the State of Gujarat Vs. Mohanlal Jitamalji Porwal and another [(1987) 2 SCC 364] the relevant portion of which reads as follow:-

“The next question which arises is as regards the request made by the learned Assistant Public Prosecutor for adducing additional evidence in order to prove letter Ex. 26 received from the Mint Master certifying that the article in question was made of gold of the purity of 99.60. The request was made in order to invoke the powers of the Court under Section 391 of the CrPC, 1973, which inter alia provides that in dealing with any appeal under Chapter XXIX the appeal court, if it thinks additional evidence to be necessary, shall record its reasons and may either take such evidence itself or ask it to be taken by a Magistrate. The High Court rejected the prayer on the ground that it did not consider it “expedient in the interests of justice to open a new vista of evidence” in view of the fact that the offence had taken place six years back. The mere fact that six years had elapsed, for which time-lag the prosecution was in no way responsible, was no good ground for refusing to act in order to promote the interests of justice in an age when delays in the Court have become a part of life and the order of the day. Apart from the fact that the alleged lacuna was a technical lacuna in the sense that while the opinion of the Mint Master had admittedly been placed on record it had not been formally proved the report completely supported the case of the prosecution that the gold was of the specified purity. To deny the opportunity to remove the formal defect was to abort a case against an alleged economic offender. Ends of justice are not satisfied only when the accused in a criminal case is acquitted. The Community acting through the State and the Public Prosecutor is also entitled to justice. The cause of the Community deserves equal treatment at the hands of the court in the discharge of its judicial functions. The Community or the State is not a person-non-grata whose cause may be treated with disdain. The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest. The High Court was therefore altogether unjustified in rejecting the application made by the learned Assistant Public Prosecutor invoking the powers of the Court under Section 391 of the CrPC. We are of the opinion that the application should have been granted in the facts and circumstances of the case with the end in view to do full and true justice. The application made by the learned Assistant Public Prosecutor is therefore granted. The High Court will issue appropriate directions for the recording of the evidence to prove the report of the Mint Master under Section 391 Cr.P.C. when the matter goes back to High Court and is listed for directions. The appeal is therefore allowed. The order of acquittal is set aside. The matter is remitted to the High Court for proceeding further in accordance with law in the light of the abovesaid directions.”

Further, the court relied upon Prakash Kadam and others Vs. Ramprasad Vishwanath Gupta and another [(2011) 6 SCC 189] court observed that if an offence committed by the accused is of serious nature then the bail granted can be revoked even though the accused didn’t misuse the bail granted. But this principle applied only when the court which granted the bail approached for the cancellation of such bail but if the appellate court has been approached for this purpose then this principle wouldn’t be applied.

Conclusion

The court directed the Deputy Commissioner of Police to provide police protection to the petitioner bank officials to recover the loan amount by searching and attaching property. 

The court allowed the present petition and canceled the bail granted to the respondents.