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Judgment
M. Karpagavinayagam, J.—Petitioner Mr. A.R. Rajasekaran, has filed these two applications Crl.O.P. Nos. 14827 and 14828 of 1997, seeking to enlarge him on bail in the event of his arrest in Crime No. R.C. 3(E)/97/CBI/BS & FC/BLR of 1997 and Crime No. RC2(E) 97/CBI/BS and FC/BLR of 97 registered for the offences under Ss.l20-B read with Section 420 I.P.C. and Section 12(2) r/w Section 13 (1)(d) of the Prevention of Corruption Act 1988 and Sections 420, 467, 468 and 471 of the Indian Penal Code, by the Respondent.
These two cases have been registered against him on the allegations that the Petitioners along with the bank officials, cheated the Indian Overseas Bank, Salem Main Branch to the tune of Rs.35 lakhs and the Bank of India, Purasawalkam Branch, Madras, to the tune of Rs.1.25 Crores.
According to the complaint given by Indian Overseas Bank, Salem Branch, the Petitioner Rajasekaran, Proprietor of M/S. Valley Exports, Salem in pursuance of the conspiracy with the Chief Manager of Indian Overseas Bank, obtained a loan of Rs. 35 lakhs, on the basis of the purported purchase order placed by M/S. Toyo Trading Company Limited Japan, for purchase of 500 CBM of various granites valuing U.S. $.5,50,000/-, by falsely projecting to the bank as if he had taken over the lease of quarries located at Pagadupattu, Chinnakalrayan Hills, Arthur. Petitioner intimated the bank that the buyers i.e. M/s. Toyo Trading Company Limited, Japan were banking with the Bank of Tokyo, Mitsubishi Bank, Dai Echi Kangyo Bank. When it was verified with Bank of Tokyo, the said bank replied that they were not able to locate the party in their record. The Mitsubishi Bank through telex informed that Mr. Fuji whose signature was found in the purchase order was not the President of M/S. Toyo Trading Company Limited, Japan. Thus, it was found out that the purchase order was a false and fabricated one, and used for obtaining huge amount of loan from the bank with the connivance of other bank officials, who sanctioned the loan exceeding the limit.
In pursuance of the complaint, the house of the Petitioner was searched and some blank purchase order purporting to have been signed by the party in Japan, numbering about 16, in the form of pad was seized-
According to the complaint given by the Bank of India, Purasawakkam Branch, Madras, by operating similar modus operandi, by using false and fabriciated purchase orders, with the connivance of the bank officials, he obtained Rs. 125 lakhs from the bank. The total outstanding to the bank including interest as on 21.3.1997 is Rs. 2.37 crores. Investigation in this case, disclosed as in the other case, that the Bank Manager, Branch Manager, sanctioned the loan without following the procedure. With reference to this loan also, Petitioners used false purchase orders purported to have been issued by M/S. Toyo Trading Company Limited, Japan.
Counsel for the Petitioner submitted that the purchase orders are not bogus orders. According to him, Toyo Trading Company is very much in existence in Japan and since the granites which were ready for export were found to be of inferior quality, it could not be exported and so they could not get the money from the buyer in time and as such, the loan was not discharged within the stipulated time.
In both these applications, counter has been filed by the learned Special Public Prosecutor, contending that heavy loss to the banks has been caused by the Petitioner in pursuance of the well orchestrated conspiracy hatched with the bank officials. It is also contended by the Special Public Prosecutor that the value of the property which was given as collateral security has been highly inflated through a private valuer.
These petitions are strongly opposed by the Special Public Prosecutor on the ground that the same modus operandi has been adopted not only in the instant cases but also for cheating several other banks. According to him, the Petitioner has been blacklisted by the Export Credit Corporation of India, for not paying the loans taken from other banks.
Counsel for the Petitioner has produced some letters said to have been received by the Petitioner from M/S. Toyo Trading Company dated 26.11.1997, stating that some blank purchase orders were left with the Petitioners premises.
The Special Public Prosecutor, per contra, would submit, that the investigation so far conducted would disclose that the said company is not in existence in Japan and one Fujii, who signed in those letters or purchase orders was not the President as per their intimation through talex message from Mitsubishi Bank.
In the light of the materials collected by the investigating agency, the Special Public Prosecutor opposes these applications on the ground that the investigation is at the initial stage and the Petitioner has to be interrogated in custody, to find out as to how he came to be in possession of blank letter heads of the buyers, certificate of inspection and blank purchase orders and the end use of the money, which he obtained as loan from these banks.
In the reply to the rejoinder, the Respondent submitted that if anticipatory bail is granted to the Petitioner, the prospect of unerthing all the ramifications involved in the conspiracy and public interest also will suffer, apart from the fact that such characters as that of the Petitioners make easy money by forging documents and using them and cheating the public institutions and enriching himself by fraudulent means.
In State of Andhra Pradesh Vs. Bimal Krishna Kundu and another, Supreme Court has held as follows:
"We are strongly of the opinion that this is not a case for exercising the discretion u/s 438 in favour of granting anticipatory bail to the respondents. It is disquieting that implications of arming Respondents, when they are pitted against this sort of allegations involving well orchestrated conspiracy, with a pre-arrest bail order, though subject to some conditions, have not been taken into account by the learned single Judge, We have absolutely no doubt that if Respondents are equipped with such an order before they are interrogated by the police, it would greatly harm the investigation and would impede the prospects of unearthing all the ramifications involved in the conspiracy. Public interest also would suffer as a consequence."
In State Rep. by the C.B.I. Vs. Anil Sharma, , the Apex Court, has observed as follows:
"We find force in the submission of the CBI that custodial interrogation is qualitatively more elicitation oriented that questioning a suspect who is well ensconced with a favourable order u/s 438 of the Code. In a case like this effective interrogation of 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 subjects 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."
In Director of Enforcement and another Vs. P.V. Prabhakar Rao, , Supreme Court, had the occasion to observe as follows:
"Legal position concerning the grant of anticipatory bail requires no repetition particularly in view of the decision of the Constitution Bench of this Court in Shri Gurbaksh Singh Sibbia and Others Vs. State of Punjab, which has settled the position well neigh. Nonetheless, we remind ourselves that one order contemplated u/s 438 of the Code is to be granted or refused by the High Court or a Court of Sessions, after exercising its judicial discretion wisely.........."
"When the learned Single Judge himself felt, after going through the records in this case, that the materials already collected were capable of stretching accusing finger towards the Respondent, it was not at all a proper exercise of the discretion by favouring him with an order of anticipatory bail u/s 438 of the Code."
The Law Commission recommended for the introduction of the provision for granting the relief of anticipatory bail mainly because sometimes influential persons tried to implicate their rivals in false cases for the purpose of disgracing them or for other purposes like getting them detained in jail for some days. In this case, the accusation levelled against the Petitioner cannot be said, in my view, to stem from some ulterior motive and it could not also be said that the object of the registration of the cases against the Petitioner and the bank officials is to injure and humiliate them by having them arrested.
In this context, the observation of the Supreme Court in Pokar Ram Vs. State of Rajasthan and Others, is relevant.
"Let it be made distinctively clear that status in life, affluence or otherwise, are hardly relevant considerations while examining the request for granting anticipatory bail. Anticipatory bail to some extent intrudes in the sphere of investigation of crime and the Court must be cautious and circumspect in exercising such power of a discretionary nature."
In the light of the serious allegations made against the Petitioner, involving the swindling of several crores of rupees by cheating several banks, the public interest lies in giving the Respondent a full and proper opportunity to question the Petitioner under custodial interrogation so that it will be better for the Respondent to make the accused concentrate on the issues and put pointed questions to him and extract relevant information. Liberty of the citizen of course is desirable but also desirable is that need to detect, investigate and prosecute those guilty of any offence.
Having regard to the magnitude of the offence, gravity of the allegations and the genuine request made by the Respondent for custodial interrogation, I am of the view, that it is not desirable to grant anticipatory bail to the Petitioner as he is not entitled to. Accordingly, petitions are dismissed.