High Court

Legal Reasoning

1 ABA-890,691,859-24.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADANTICIPATORY BAIL APPLICATION NO.890 OF 2024Shripal s/o. Devkaran Kawadiya,Age 41 years, Occu. Business,R/o. Plot No.545, CIDCO, Waluj,Mahanagar-1, Aurangabad.. ApplicantVersus1.The State of Maharashtra2.The Commissioner of Police,Police Commissioner Office,Mill Corner, Aurangabad3.The Police Station Incharge,M.I.D.C. Waluj Police Station,Aurangabad.. Respondents...Mr. Shaikh Sohail Subhedar, Advocate for Applicant;Mr. S. P. Sonpawale, A.P.P. for Respondentd/State…WITHANTICIPATORY BAIL APPLICATION NO.859 OF 2024Kushal s/o. Devkaran Kavdiya,Age 34 years, Occu. Business,R/o. Plot No.545, Cidco Mahanagar,Waluj, Chhatrapati Sambhajinagar.. ApplicantVersus1.The State of MaharashtraThrough Investigation Officer,Police Station, MIDC Waluj,Chhatrapati Sambhajinagar2.Atul Mohan Bhandari,Age 51 years, Occu. Business,R/o. Flat No.301, Signature Building,Bansilal Nagar, Chh.Sambhajinagar..Respondents 2 ABA-890,691,859-24.odtMr. Vikram S. Kadam, Advocate for Applicant;Mr. S. P. Sonpawale, A.P.P. for Respondent No.1;Mr. R. P. Mote, Advocate for Respondent No.2/Assisting the A.P.P....WITHANTICIPATORY BAIL APPLICATION NO.691 OF 2024Bharat s/o. Machhindra Khedkar,Age 33 years, Occu. Worker,R/o. Pawan Nagar, Rajangaon, MIDC,Waluj, Chh. Sambhajinagar..ApplicantVersus1.The State of MaharashtraThrough:- M.I.D.C., Waluj Police Station,Chh. Sambhajinagar2.The Commissioner of Police,Chh. Sambhajinagar3.The Superintendent of Police,(Aurangabad) Chh.Sambhajinagar.. Respondents...Mr. Avinash B. Katkar, Advocate for Applicant;Mr. S. P. Sonpawale, A.P.P. for Respondentd/StateMr. R. P. Mote, Advocate for Assisting the A.P.P....CORAM :S. G. MEHARE, J.Reserved on : 23.09.2024Pronounced on : 16.10.2024PER COURT :-1.Heard the learned counsels for the applicants, the learnedA.P.P. for the respondents and the learned counsel assisting theA.P.P.2.The applicants are claiming pre-arrest bail in C.R.No.160 of2024 registered with Police Station, MIDC Waluj, Chhatrapati 3 ABA-890,691,859-24.odtSambhajinagar, for the offences punishable under Sections 406,408, 420, 465, 467, 468, 471, 477A read with Section 34 of theIndian Penal Code.3.Applicant – Kushal Devkaran Kawadiya, in A.B.A.No.859 of2024, has a case that he runs Kushal Agencies, a proprietary firmat CIDCO, Waluj. He started a partnership firm at Cidco in thename of “Guru Labddhi Enterprises”. Applicant – Shripal DevkaranKawadiya, in A.B.A.No.890 of 2024, has a case that he has twofirms, namely, “M/s. Shubham Industries” and “M/s. AmarIndustries”. Shubham Industries is the proprietary firm, whereas,M/s. Amar Industries is a partnership firm with his wife. Applicant –Bharat Machhindra Khedkar, in A.B.A.No.691 of 2024, has a casethat he was a workman-cum-machine operator and employee ofthe first informant.4.The prosecution has a case that the complainant runs M/s.Shubham Industries and M/s. Amar Industries and engaged inmanufacturing automobile parts. M/s. Shubham Industries is hisproprietary firm and M/s. Amar Industries is his partnership firmand his wife is partner in M/s. Amar Industries. In 2018, he starteda new plant in the State of Gujarat. Therefore, he could not payproper attention to his above-named business. He alleged thatsince he could not pay attention to his business at Waluj MIDC, hisemployees in conspiracy with the other two co-accused have 4 ABA-890,691,859-24.odtcheated him financially. The payments received to his abovenamed firms, from Luminaz Safety Glass Pvt. Ltd. and PerfectDynamics, were shown received from applicants – Shripal andKushal and his staff took the false entries in the account book.They took false and fabricated entries to the ledger. They sentfalse and fabricated credit notes to the company. They alsoshowed the balancesheet was correct. They had prepared false jobwork invoices for the firms of applicants – Shripal and Kush. Theyhave to pay a huge money to his firms, He audited his accounts ofhis firms by Chartered Accountant - Mr. Dilip Jain. Since hisemployees were making false entries in the accounts, he could notrealize that thye were playing fraud with him. However, in 2021,he suspected that something wrong happened in his firm.Therefore, he made inquiries with the employees concerning theaccounts. They resigned one by one from the firm. Thereafter, hereviewed the audit of the accounts from CharteredAccountant/Auditor Shri. Suryanarayan Shastri. In his audit report,he find misappropriations in the transactions. He also learnt thatthe employees from his account section had received the benefitfrom the firm in whose name false entries were taken. He lodgedthe report against the employees.5.Applicants – Kushal and Shripal claimed that they have thefirms manufacturing and processing automobile spare parts inMIDC Waluj. Applicant- Kushal runs a Proprietary Firm, namely, 5 ABA-890,691,859-24.odtKushal Agencies. He was in the business of trading, selling andpurchasing automobiles spares and materials. It has registrationunder the Goods and Service Tax as per provisions of the CentralGoods and Service Tax Act and Rules thereunder. He is partnerwith Shripad Kavadiya, who started Shree Guru Labdhi Enterprises.Shree Guru Labdhi Enterprises has the business of manufacturingvarious automobile products and job works for various vendorsand automobile industries. It is also registered under the Goodsand Service Tax as per provisions of the Central Goods and ServiceTax Act and Rules thereunder. In 2017, the said firms werepurchasing the raw and scrap materials from Shubham Industriesand Amar Industries and supplying various automobile parts to it.Both companies of the complainant were supplying him withyearly ledger accounts, and up to 2020 there was no dispute withrespect to the transactions and accounts between them. After theCovid-19 pandemic, the industries of the complainant stoppedsupplying raw and scrap materials and also stopped giving jobwork. The applicant persuaded the complainant for job work andscrap material. However, he raised the dispute over the settlementof accounts. At the time of purchasing the raw material andscrap , the complainant had taken various blank cheques from theapplicant- Kushal as security. However, he misused the said blankcheques and without there being any legally enforceable debtsagainst them he filed 14 private complaints against the applicant 6 ABA-890,691,859-24.odtand his partner under Section 138 of the Negotiable InstrumentsAct, 1881. Thereafter, he lodged the first information reportagainst them. From time to time, the applicant made the paymentfor the raw material and scrap purchased from the complainant.From 2017 onwards, from time to time, the complainant raisedinvoices of the job works, and also raised the invoices of the jobwork carried out for the firms of the complainant and, accordingly,payment was made for the job works as per the invoices of thefirms of the complainant. He also paid the Goods and Service taxas per the invoices generated by their firms after the payment wasmade by the complainant’s firms. However, the complainant againclaimed and or taken set off of the Goods and Service Tax paid bythe applicant. The accounts, from 2017 onwards till 2020, weresettled. GST was paid and reclaimed or set off was taken by thecomplainant. The complainant never raised any dispute about thesame. He has falsely stated that he did not know about thosetransactions. The complainant was preparing a yearly balancesheet and auditing the accounts. The accounts between themwere already settled as per the ledger issued by the complainanthimself. The entire record of the accounts and the finances of thefirms of the complainant was in his custody, which was allegedlyforged or manipulated. The applicants have no concern withcomplainant's accounts and employees. Nothing is to be recoveredfrom the applicants. 7 ABA-890,691,859-24.odt6.During the pendency of the applications, various orders werepassed. The applicants attended the police station. Their counselshave a case that whatever documents the Investigating Officerhad demanded from them, were supplied. However, thecomplainant and their counsel have created a mess by raisingvoice in the Court that the applicants are hiding certain accountsand documents deliberately. They have referred to the documentssupplied to the Investigating Officer. Whatever the documents theywere in possession of the transactions with the complainant firms,those have been supplied long back to the Investigating Officer.However, the complainant is not satisfied. Therefore, he wasintervening in the smooth investigation and creating hurdles inthe matter. It is also their argument that since the applicants wereattending the Court from May 2024, the evidence against theapplicants has been collected. They cannot be forced to produce adocument which is not in existence. It is a matter of account,which was maintained by his employees and shown to be correct.There is no prima facie evidence to show that the applicants havereceived benefits due to the alleged fraud played by theemployees of the complainant. They are reputed businessmenhaving no antecedents to their discredit. The complainant wantedto grab GST and avoid the income tax. Therefore, he created thescene that the applicant and his employees in conspiracy withthem misappropriated a huge amount and put him to the loss. 8 ABA-890,691,859-24.odtThe custodial interrogation of the applicants would serve nopurpose, simply for the reason that nothing is to be recovered fromthem. They have submitted the detailed charts of the relevantpapers to support their contention that their custodialinterrogation is not essential.7.The learned counsel for the applicant/employee – Bharatstates that he has been falsely implicated in the crime. He was theworkman-cum-operator of the informant’s firm. He was never theplant head. He from a long time was demanding for wage hike andother benefits from the complainant. However, he denied to hikethe salary. Therefore, he quit the job and started his own groceryshop at Waluj. He was never in the accounts department. He wasnot acquainted with the co-accused. He does know about theirregularities in the informant’s firms. The complainant wasinsisting him not to quit the job because the complainant had anapprehension that if the applicant revealed his irregularities thenhe might lose his key business. The complainant suppressed thematerial facts because he was having more than eight firms in hisname and his family member’s name. There is nothing to berecovered from the applicant. The investigating agency is aidingthe informant to cover up the real facts by implicating theapplicant in the false crime. The papers of investigation do notshow his involvement in the crime. He is a poor man. Hence, hemay be granted pre-arrest bail. 9 ABA-890,691,859-24.odt8.The learned A.P.P. has opposed the applications. He arguedthat the applicants did not cooperate with the Investigating Officerabout the entries in the ledger book. The accused did not ssupplyaccount information which was sought. There must be anassessment order of the GST. However, it is also not produced.They are not obeying the instructions and supplying thedocuments to the Investigating Officer. They never purchased theraw materials. They are not entitled to bail.9.Per contra, the learned counsel for the first informant hasvehemently argued that though interim protection was granted tothe applicants, they did not support the prosecution. Therefore, tounearth the truth and find out the involvement of the applicants inthe crime, their custodial interrogation is essential. He pointed outeach and every stage of the investigation. He further argued thatthe employees of the complainant and the applicants were incollusion. There was no contract for job work. They were onlypurchasing the scraps. The ledgers were sent by the employees.The applicants were the beneficiaries of the fraud playedcollusively. He further argued that the applicants were notcooperating with the investigation and deliberately had notsupplied the documents sought. The prima facie material isavailable against them that they played fraud with thecomplainant. 10 ABA-890,691,859-24.odt10.To counter the allegations of the learned counsel for the firstinformant and the learned A.P.P., the learned counsel for theapplicants placed on record a bunch of documents explaining thatwhatever the documents, the Investigating Officer had sought,have been supplied to him. They submitted that they were alwaysproviding him with the documents demanded. Therefore, it cannotbe said that they are not cooperating with the InvestigatingOfficer. The Police Inspector also filed some documents with thereport of the Chartered Accountant on the financial fraud. Hecontended that no separate documents like cash vouchers wereprovided with the ledger of Kawadiya brothers. No cash paymentswere made during 2016-2020. The ledger supplied to theInvestigating Officer was in contravention of Section 14(1) of theIncome Tax Act. The applicants issued G.S.T. labour charges billsfrom Sadashiv Industries to Shubham Industries of the applicantfor January to March 1990, but the GST registration was cancelledwith effect from 2017-2018.11.On this report, the learned A.P.P. has further argued that theapplicants have siphoned the money of the complainant. However,the question is, whether the applicants could be forced to supplythe documents which are not in existence. If it is not, they wouldnot be forced to supply the same. The overall facts of the casereveal that it is purely an accounting matter. A detailed 11 ABA-890,691,859-24.odtinvestigation has been done. Necessary ledgers of the applicantsas well as the complainant have been recovered and assistance ofthe Chartered Accountant has also been taken. It may be anattempt of the complainant to recover money from this criminalcase only. However, criminal law does not provide for recoveringmoney through criminal proceedings. Besides, the complainanthas filed cases against the Kawadiya Brothers under Section 138of the N.I. Act before lodging the report and legally enforceabledebt would be a matter of facts and the evidence of the case.12.Considering the cooperation extended by the applicantsduring the interim protection, the Court is of the view that sendingthe applicants to custodial interrogation would serve no purpose.13.As far as the allegations against applicant – BharatMachhindra Khedkar are concerned, he resigned long back.Whether he committed fraud of such huge money would bedetermined by appreciating the evidence. The relevant bankaccount has been recovered. Nothing has remained to berecovered from him. He also cooperated with the InvestigatingOfficer. Whether he was the plant head is also question of fact.14.For the above reasons, this Court is of the view that custodialinterrogation of the applicants is not essential. Hence, theydeserve anticipatory bail. Hence, the order:- 12 ABA-890,691,859-24.odtORDERi)The applications are allowed.ii)The orders granting interim protection to the applicants inA.B.A.Nos.890 and 859 of 2024, dated 29.05.2024 and27.05.2024, stand confirmed.iii)In the event of arrest, the applicant – Bharat MachhindraKhedkar in A.B.A.No.691 of 2024, be released on bail onfurnishing P.B. and S.B. of Rs.50,000/- with one solvent suretyin the like amount, in the above crime for the aforesaidoffences, on the conditions that,(a) He should not tamper with the prosecution witnesses,(b) He should attend the Police Station as and when calledon written notice by the Investigating Officer till filingthe chargesheet. ( S. G. MEHARE ) JUDGErrd