Gopal Prasad Gupta vs State Of Madhya Pradesh

This is fourth application under Section 439 of CrPC for grant of bail. The first application was dismissed on merits by order dated 11.08.2017 passed in MCRC No.6978/2017. Second application was dismissed as withdrawn by order dated 03.11.2017 passed in MCRC No.10272/2017 and third application was dismissed by order dated 19.01.2018 passed in MCRC No.26143/2017, holding that merely because some witnesses have turned hostile and not supported the prosecution case, it cannot be a ground to grant bail to the applicant because some more prosecution witnesses are yet to be examined.

The applicant is in jail from 07.06.2017 in connection with Crime No.154/2011 registered by Police Station University District Gwalior for the offence punishable under Sections 420, 467, 468, 120-B of IPC, Sections 3(4) & 6 of the M.P. Nikshepako Ke Hito Ka Sarakshan Adhiniyam, 2000, Sections 45 1A, 45-S/58-B (5-A) of the RBI, Act and Sections 3 & 6 of Inami Chit Aur Dhan Parichalan Scheme (Pawandi) Adhiniyam, 1978.

This Court by order dated 09.03.2018 had directed the Public Prosecutor to seek instructions as to whether entire prosecution witnesses have been examined or not and to place on record the status report. The State has placed the status report and has submitted that 18 prosecution witnesses have been examined and 11 prosecution witnesses are yet to be examined so far.

It is submitted by the counsel for the applicant that some of the beneficiaries have been examined and they have not supported the prosecution case and only formal witnesses have remained to be examined. It is further submitted by counsel for the applicant that the applicant is in jail from 07.06.2017 and all other co-accused persons have been granted bail by this Court.

Per contra, it is submitted by the counsel for the State that it is incorrect to say that only formal witnesses have remained to be examined. The evidence, which has come on record, clearly shows that the applicant is the Director of M/s KMJ Land Developers India Ltd. and by making false promise and misrepresentation, they had persuaded the innocent depositors to invest their money in the company, whereas the company was not authorized to carry out any kind of banking activities because it was not registered with the Reserve Bank of India. It is further submitted that the company was also not registered with the Security Exchange Board of India (in short “SEBI”). During the investigation, an information was sought from the SEBI, who by its letter dated 02.12.2013 has informed as under:-

(a) Central Bureau of Investigation (CBI), EOU-VII, New Delhi in their report dated January 18, 2012 shared with SEBI had noted that prima - facie the company was committing the offences.

(b) The Hon'ble Sessions Court, Jabalpur in its order dated July 26, 2011 (copy provided by the company) that observed that company took money from investors for development of land. The said matter emerged from case filed by the police station Madan Mahal, Jabalpur, Madhya Pradesh against the company.

(c) from the online search, it was found that CID police of the State of Andhra Pradesh had filed a criminal case No.5 of 2011 against this company for indulging in money circulation scheme in name of real state (http://coproratefraudswatch.blogspot.in/2011/02 /CID-policeof-ap-file-criminal-case.html)

(d) As per the newspaper report published in Hindustan newspaper dated November 17, 2013 (Patna edition) that Patna Police had conducted raid on the premises of this company situated in Patna and arrested three persons allegedly collecting money on behalf of the company.

From these reports it is apparent that M/s KMJ Land Developers India Ltd. has spread its tentacles in various parts of the country by defrauding investing public.

It is further submitted by the counsel for the State that so far as the other co-accused persons are concerned, the case of the present applicant cannot be said to be at par with them because the offence was committed in the year 2011 and the other accused persons were arrested immediately thereafter, whereas the present applicant remained absconding and with great difficulties, he could be arrested on 07.06.2017. By referring to the evidence of Smt. Mala Sharma, whose evidence has been recorded before the Trial Court, it is further submitted that this witness has specifically stated that she is working on the post of Assistant General Manager, Reserve Bank of India, and SHO, Police Station University District Gwalior by its letter dated 12.06.2013 had sought information, with regard to the fact that whether M/s KMJ Land Developers India Ltd. is registered with the Reserve Bank of India or not and after verifying from the record of Reserve Bank of India, it was replied that M/s KMJ Land Developers India Ltd. is not registered with the Reserve Bank of India. Thus, it is submitted that it is clear that M/s KMJ Land Developers India Ltd. was carrying out banking activities and was accepting the deposits from the various innocent beneficiaries in the name of providing plots on a cheaper rate or the company had promised to return double of the amount in a short interval. The applicant was the Director of the company and, therefore, he cannot say that he is not responsible for the activities of the company which was floated contrary to the law of the land and which was made operational without getting it registered with SEBI or with the Reserve Bank of India. It is further submitted that Ashok Adhikari is yet to be examined who has stated that his brother-in-law had deposited the amount with the company and who was also cheated by the company. It is further submitted that the Tahsildar and other witnesses had searched the office of the company and had found various discrepancies and, therefore, it cannot be said that those witnesses are merely formal witnesses but in fact, their evidence is important which shall determine the guilt of the applicant because not only the company was floated contrary to law of the land but they accepted the deposits from the innocent beneficiaries without getting its registered with the Reserve Bank of India or with the SEBI.

In reply, it is submitted by the counsel for the application that the Allahabad High Court in the case of Nanha S/o Habhan Kha Vs. State of U.P. reported in 1993 CRI.L.J. 938, it is held that where the co-accused has been granted bail then the other co-accused persons, whose cases are similar to the accused who has been granted bail, are also entitled to be released on bail as consistency and equity is desirable. Counsel for the applicant has further relied upon the judgment passed by the Andhra Pradesh High Court in the case of Kudasu Rajanna Vs. State of A.P. reported in 2005 CRI.L.J. 190 and submitted that merely because the Investigating Officer and other formal witnesses have remained to be examined and since some of the beneficiaries have turned hostile and they have not supported the prosecution case, then the applicant cannot be convicted on the basis of the evidence of the police witness. Thus, the contention of the applicant is that the case of the present applicant is similarly situated with that of other co-accused persons and most of the beneficiaries have turned hostile.

The Supreme Court in the case of Virupakshappa Gouda and another Vs. State of Karnataka and another reported in (2017) 5 SCC 406, has held as under:-

“15. The court has to keep in mind what has been stated in Chaman Lal v. State of U.P. The requisite factors are: (i) the nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence; (ii) reasonable apprehension of tampering with the witness or apprehension of threat to the complainant; and (iii) prima facie satisfaction of the court in support of the charge. In Prasanta Kumar Sarkar v. Ashis Chatterjee, it has been opined that while exercising the power for grant of bail, the court has to keep in mind certain circumstances and factors. We may usefully reproduce the said passage: (SCC p. 499, para 9) “9. … among other circumstances, the factors which are to be borne in mind while considering an application for bail are:

(i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence; (ii) nature and gravity of the accusation; (iii) severity of the punishment in the event of conviction;

(iv) danger of the accused absconding or fleeing, if released on bail;

(v) character, behaviour, means, position and standing of the accused;

(vi) likelihood of the offence being repeated;

(vii) reasonable apprehension of the witnesses being influenced; and

(viii) danger, of course, of justice being thwarted by grant of bail.”

In CBI v. V. Vijay Sai Reddy, the Court had reiterated the principle by observing thus: (SCC p. 465, para 34) “34. While granting bail, the court has to keep in mind the nature of accusation, 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 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. It has also to be kept in mind that for the purpose of granting bail, the legislature has used the words “reasonable grounds for believing” instead of “the evidence” which means the court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt.”

(emphasis in original)

From the aforesaid principles, it is quite clear that an order of bail cannot be granted in an arbitrary or fanciful manner. In this context, we may, with profit, reproduce a passage from Neeru Yadav v. State of U.P., wherein the Court setting aside an order granting bail observed: (SCC pp. 514- 15, para 16) “16. The issue that is presented before us is whether this Court can annul the order passed by the High Court and curtail the liberty of the second respondent? We are not oblivious of the fact that the liberty is a priceless treasure for a human being. It is founded on the bedrock of the constitutional right and accentuated further on human rights principle. It is basically a natural right. In fact, some regard it as the grammar of life. No one would like to lose his liberty or barter it for all the wealth of the world. People from centuries have fought for liberty, for absence of liberty causes sense of emptiness. The sanctity of liberty is the fulcrum of any civilised society. It is a cardinal value on which the civilisation rests. It cannot be allowed to be paralysed and immobilised. Deprivation of liberty of a person has enormous impact on his mind as well as body. A democratic body polity which is wedded to rule of law, anxiously guards liberty. But, a pregnant and significant one, the liberty of an individual is not absolute. [The] society by its collective wisdom through process of law can withdraw the liberty that it has sanctioned to an individual when an individual becomes a danger to the collective and to the societal order. Accent on individual liberty cannot be pyramided to that extent which would bring chaos and anarchy to a society.

A society expects responsibility and accountability from its members, and it desires that the citizens should obey the law, respecting it as a cherished social norm. No individual can make an attempt to create a concavity in the stem of social stream. It is impermissible. Therefore, when an individual behaves in a disharmonious manner ushering in disorderly things which the society disapproves, the legal consequences are bound to follow. At that stage, the court has a duty. It cannot abandon its sacrosanct obligation and pass an order at its own whim or caprice. It has to be guided by the established parameters of law.”

In this context what has been stated by a three-Judge Bench in Dinesh M.N. v. State of Gujarat is quite instructive. In the said case, the Court has held that where the Court admits the accused to bail by taking into consideration irrelevant materials and keeping out of consideration the relevant materials the order becomes vulnerable and such vulnerability warrants annulment of the order.

In the instant case, as is demonstrable, the learned trial Judge has not been guided by the established parameters for grant of bail. He has not kept himself alive to the fact that twice the bail applications had been rejected and the matter had travelled to this Court. Once this Court has declined to enlarge the appellants on bail, endeavours to project same factual score should not have been allowed. It is absolute impropriety and that impropriety calls for axing of the order.”

Thus, while deciding the bail application of the accused, apart from the other aspects, the seriousness of the allegations and impact of the act of the accused on the society are also relevant consideration.

In the present case, the allegations are that the applicant along with the other co-accused persons floated M/s KMJ Land Developers India Ltd. and accepted the deposits from the beneficiaries on the false pretexts that either they would give plots at comparatively cheaper price or they would get double of the amount. It is also clear that the Reserve Bank of India had never registered this company and even this company was not registered with the SEBI. Thus, it is clear that the applicant, who is one of the Director. M/s KMJ Land Developers India Ltd., had not only floated the company but also made it operational without following due process of law and without getting it registered with the Reserve Bank of India or SEBI.

Apart from the parity in the allegations against the accused persons, the conduct of each and every accused has to be taken into consideration. In the present case, the offence was registered in the year 2011. The co-accused persons were arrested in the year 2014, whereas the applicant has remained absconding and he could be arrested with great difficulties on 07.06.2017, therefore, the conduct of the applicant makes its case distinguishable from that of the other co-accused persons.

Considering the totality of the facts and circumstances of the case and the allegations made against the applicant, this Court does not find it to be a fit case for grant of bail. It is, accordingly, dismissed.