High Court
Facts
1824.2025BA+.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADANTICIPATORY BAIL APPLICATION NO. 824 OF 2025Jayashree Santosh JadhavM/s. Sanveda Cotton Industries (Proprietor)Age :- 30 years, Occ. Business,R/o Sarala, Tq. Shrirampur,Dist. Ahmednagar...APPLICANT-VERSUS-1.The State of MaharashtraPolice Station Officer,Rahata Police Station,Tq. Rahata, Dist. Ahmednagar.2.The Superintendent of Police,Ahmednagar, Dist. Ahmednagar...RESPONDENTSWITHANTICIPATORY BAIL APPLICATION NO. 821 OF 2025Santosh Vasantrao JadhavAge :- 40 years, Occ. Agri.,R/o Sarala, Tq. Shrirampur,Dist. Ahmednagar...APPLICANT-VERSUS-1.The State of MaharashtraPolice Station Officer,Rahata Police Station,Tq. Rahata, Dist. Ahmednagar.2.The Superintendent of Police,Ahmednagar, Dist. Ahmednagar...RESPONDENTS
Legal Reasoning
16824.2025BA+.odtRs.2,61,85,000/- from Puntamba branch by adoptingaforesaid modus-opeandi. He contends that intention toobtain loan and not to repay the same from the very inceptionof the transaction is prima facie apparent on the face ofrecord. He contends that the offence is fiscal offence whichneeds to be viewed differently from the regular offences. Hestates that custodial interrogation of the persons is extremelyessential in the cases like the present matters. As regards therole of Santosh, he contends that although Jayshree andAkshay are proprietors of the business undertakings, Santoshis actively involved in both the businesses and is equallyresponsible for the offences punishable.20.It cannot be disputed that as of now the cottonbales are certainly of a very poor grade. The quality of theproduct is such that two laboratories have expressed inabilityto process the samples for analysis. Perusal of the order passedby the learned Magistrate indicates that NSL CottonCorporation has stated in its letter that the samples of cottonbales forwarded for testing could not be tested as it comprisedonly of dust and garbage. This prima facie throws light on theintent of the applicants in depositing consignments with CWC 17824.2025BA+.odtPuntamba and obtaining loan against the eNWRs. The saidmaterial is prima facie sufficient to indicate some foul play onthe part of the applicants. It needs to be stated that theapplicants, Jayashree and Santosh have history of taking loanand defaulting in making the repayment of the same. Thematerial on record indicates that earlier also a loan ofRs.80,00,000/- was taken by the said applicants and they havedefaulted in repayment of the same. In the present transactionloan of Rs.2,61,85,000/- and Rs.1,44,60,000/- is obtainedagainst eNWRs issued purportedly for cotton bales and thesamples drawn indicates that the consignment comprised ofdust and garbage.21.As regards the role of Santosh, although he is notproprietor of Sanveda and Akshay Agro, it is undisputed thathis wife Jayshree is proprietor of Sanveda and he is closerelative of proprietor of Akshay Agro. It appears from therecord that the stamp papers for the loan case of Sanvedawere purchased in the name of Santosh. The learned SessionsCourt while rejecting the application for grant of anticipatorybail has recorded that there are multiple entries of transfer ofhuge amounts from account of Jayshree and Akshay to the 18824.2025BA+.odtaccount of Santosh. Likewise, the factory for pressing ofcotton stands int he name of Santosh. Santosh has obviouslytaken active part in the business of Sanveda and Akshay Agro.It is also found that Santosh was operating account of AkshayAgro Ltd., which indicates that he was also actively involvedin the business of Akshay Agro Ltd. 22.It is also observed by the learned Sessions Judgethat Santosh has created bills showing sale of cotton bales bySanveda Cotton Industries to Akshay Agro Ltd. These twofactors are also relevant for two purposes, firstly, it showsinvolvement of Akshay in the business of Sanveda andsecondly, the GST account number mentioned in the bills wasclosed long before issuance of the bills. 23.All these facts will indicate that there is muchmore than what meets the eye in the present matter. It is wellknown that fiscal offences stand apart from regular offences.Penal offences are entrenched in deep routed and well soughtout conspiracies. Plans which are chalked out in detail areexecuted and implemented by co-conspirators. Therefore, 19824.2025BA+.odtwhen it comes to investigation of fiscal offences, custodialinterrogation of the accused becomes extremely important andessential to enable investigating agency to unearth the factsinvolved in commission of offence.24.It is well settled that the Courts should beextremely slow in allowing the applications for anticipatorybail in crimes relating to financial matters.This Hon'ble Courtin the matter of Vishwanath S/o Vasudev Yadnik Vs. The Stateof Maharashtra and anr (ABA No.21/2020), has held thateconomic offences stand as a different class as they affect theeconomic fabric of the society. Referring to the severaljudgments of the Hon'ble Supreme Court on the point, it isobserved that an economic offence is committed in a coolcalculated manner with deliberate design to profitable at thecost of society at large. It is further held that grant ofanticipatory bail is not a matter of right and particularly ineconomic offences, Investigating Agency must be givenopportunity of custodial interrogation of the accused. It willbe profitable to reproduce paragraph no.83 of the judgment inthe context of the present matter, which reads as under :- 20824.2025BA+.odt“83. …..Grant of anticipatory bail at the stage ofinvestigation may frustrate the investigating agencyin interrogating the accused and in collecting theuseful information and also the materials whichmight have been concealed. Success in suchinterrogation would elude if the accused knows thathe is protected by the order of the court. Grant ofanticipatory bail, particularly in economic offenceswould definitely hamper the effective investigation.Having regard to the materials said to have beencollected by the respondent-EnforcementDirectorate and considering the stage of theinvestigation, we are of the view that it is not a fitcase to grant anticipatory bail."25.As regards the provisions of Warehousing Act,Section 43(5) only provides for punishment in case where adepositor declares value of goods delivered by him for storage,which he does not believe to be proper value. The bar underSection 45 is attracted only for cognizance of offencepunishable under Warehousing Act. It cannot be invoked incases where IPC sections are also involved.26.Apart from Sections 43 and 45, Mr. Karpe,learned Advocate for the applicants has also placed reliance 21824.2025BA+.odton Section 53 of the Warehousing Act to contend that the saidAct has overriding effect over all laws, and therefore,provisions of the IPC will not be attracted since the provisionsof Warehousing Act are complete Code in itself. This Courtunable to agree with the contention raised by Mr. Karpe.Perusal of Section 43(5) will indicate that it does not includethe ingredients of offence of cheating, criminal breach of trust,forgery, falsification of documents, etc. Apart from this, it iswell settled that offence of criminal conspiracy punishableunder Section 120-B of the IPC is an offence by itself. It iscontention of the applicants that the offence could not havebeen committed without connivance and collusion ofconcerned persons from CWC, Puntamba as also informant-bank. The offence is also registered under Section 120-B. It iswell settled that in cases where wrongful act/s gives rise tooffence under special law as also under the provisions of IPC,offence can be registered under the special law as well asgeneral provisions of the IPC.The Hon'ble Supreme Courthas taken a consistent view that same set of facts may give riseto different offences under separate enactments. It is held thatin such cases, separate prosecution can be initiated forpunishment under both the enactments. It has further held 22824.2025BA+.odtthat unless the provisions of the special enactments arematerially the same as the provisions of IPC, prosecutionunder both the enactments will be permissible. In the matterof State of Uttar Pradesh Vs. Aman Mittal and anotherreported in 2019(19) SCC 740, a contention was raised onbehalf of the accused that in view of Sections 3, 5 and 51 ofthe Legal Metrology Act, prosecution under the provisions ofSections 264, 267 and 415, 467, 468, 471 read with 34 and120-B of the IPC was not maintainable. The Hon'ble SupremeCourt has held that the provisions of the Legal Metrology Actand that of Sections 264 to 267 of the IPC bear closeresemblance, and therefore, prosecution with respect to thesaid provisions could not be continued. It is, however, heldthat for other sections of IPC mentioned above, it wasperfectly legal to continue with the prosecution along with theprovisions of the Legal Metrology Act. The Hon'ble SupremeCourt has considered earlier decisions on the point whilereiterating the said legal position. 27.In view of the aforesaid, this Court is of theconsidered opinion that Section 43(5) read with Section 45and Section 53 of the Warehousing Act will not exclude 23824.2025BA+.odtapplicability of the provisions of the IPC. The contention ofMr. Karpe, with respect to applicability of provisions of IPC isliable to be rejected.28.Having regard to the nature of the offence andpeculiar facts, this Court is also of opinion that the applicantshave failed to make out a case for grant of anticipatory bail.The applications, are therefore rejected. [ROHIT W. JOSHI, J.] sga/2025
Arguments
2824.2025BA+.odtWITHANTICIPATORY BAIL APPLICATION NO. 823 OF 2025Santosh Vasantrao JadhavAge :- 40 years, Occ. Agri.,R/o Sarala, Tq. Shrirampur,Dist. Ahmednagar...APPLICANT-VERSUS-1.The State of MaharashtraPolice Station Officer,Rahata Police Station,Tq. Rahata, Dist. Ahmednagar.2.The Superintendent of Police,Ahmednagar, Dist. Ahmednagar...RESPONDENTSWITHANTICIPATORY BAIL APPLICATION NO. 822 OF 2025Akshay Uttam ThoratMs. Akshay Agro Industries (Proprietor)Age : 28 years, Occ : Business,R/o Murshadpur, Tq. Vaijapur,Dist. Sambhajinagar...APPLICANT-VERSUS-1.The State of MaharashtraPolice Station Officer,Rahata Police Station,Tq. Rahata, Dist. Ahmednagar.2.The Superintendent of Police,Ahmednagar, Dist. Ahmednagar...RESPONDENTS...Mr. R.R. Karpe, Advocate for ApplicantsMr. K.K. Naik, APP for Respondents-StateMr. V.D. Hon, Senior Advocate h/f Advocate Mr.A.V. Hon,learned counsel for assist to P.P.… 3824.2025BA+.odtCORAM :ROHIT W. JOSHI, J.(Vacation Court)DATE :30th MAY, 2025Per Court : The applicant in ABA No.824/2025, Jayshree iswife of applicant in ABA No.821/2025 Santosh. Theapplicants will be referred by their names hereinafter andtogether as applicants.2.The applicants in A.B.A. No.824/2025 and A.B.A.No.821/2025 are arrayed as accused nos.2 and 3 in F.I.R.No.0546/2024 registered with Rahata Police Station,Tq.Rahata, Dist.Ahmednagar on 26.11.2024, for the offencespunishable under Sections 420, 120-B, 408, 409, 467, 468,471, 474 read with 34 of the Indian Penal Code (IPC).3.The applicants in A.B.A. No.822/2025 and A.B.A.No.823/2025 are arrayed as accused nos.1 and 3 in F.I.R.No.0547/2024 registered with Rahata Police Station,Tq.Rahata, Dist.Ahmednagar on 26.11.2024, for the offencespunishable under Sections 420, 120-B, 408, 409, 467, 468,471, 474 read with 34 of the Indian Penal Code (IPC). 4824.2025BA+.odt4.The informant - Umesh is Branch Manager ofKopargaon Peoples Co-operative Bank Ltd., Kopargaon,Puntamba branch (Hereinafter referred to as "informant -bank"). The informant - bank has filed an application seekingpermission to assist prosecution, which came to be allowedvide order dated 20th March, 2025.5.Jayshree is a proprietor of a business undertaking,named, Sanveda Cotton Industries, which is engaged inbusiness of ginning and pressing of cotton. The saidundertaking had taken loan of Rs.2,61,85,000/- from theinformant-bank. This loan amount was disbursed by theinformant-bank to Sanveda under eleven separate loan cases.The loan was disbursed against security of cotton bales keptby Sanveda in Warehouse of Central Warehousing Corporationat Puntamba ("hereinafter referred to "CWC, Puntamba")between 02.05.2022 to 05.05.2022. The security was createdon the basis of electronic Negotiable Warehouse Receipts(eNWRS) issued by CWC, Puntamba. The informant- bankstates that since the loan was not repaid for an inordinateperiod, the informant-bank took samples of the cotton bales 5824.2025BA+.odtdeposited by Sanveda with the said Warehouse and sent it fortesting to laboratories at Aurangabad and Mumbai. It is statedthat both the laboratories stated that the samples were noteven worth testing. In this backdrop, the informant-bankstates that it had approached respondent no.1 - police stationwith a complaint regarding offence of cheating, criminalbreach of trust and fabrication of documents, however,respondent no.1 did not register offence in response to thecomplaint lodged by the informant-bank. It is stated thatthereafter the informant had also issued letter to theSuperintendent of Police/respondent no.2 for registration ofoffence, however, even thereafter the offence was notregistered. In such circumstances, the informant-bank filed anapplication under Section 156(3) of the Code of CriminalProcedure in the Court of Judicial Magistrate, First Class,Rahata. The said application came to be registered as CriminalMisc. Application No.217/2024. The learned Magistrateallowed the said application vide order dated 14.11.2024,inter alia, directing respondent no.1 - police station to registerF.I.R. and investigate the matter in accordance with law.Pursuant to the said order dated 14.11.2024, the above FIRscame to be registered on 26.11.2024. 6824.2025BA+.odt6.Applicant - Akshay in ABA No.822/2025 is soleproprietor of a business concern named, Akshay AgroIndustries. He is arrayed as accused along with applicantSantosh in FIR No.0547/2024. Akshay is close relative ofSantosh. Akshay Agro Industries has taken loan to the tune ofRs.1,44,60,000/- from the informant bank from 27.04.2022 to23.05.2022. This loan amount is taken under four separateloan cases against security of cotton bales deposited withCWC, Puntamba, the security being created on the basis ofeNWRs. In this matter also the bank has drawn samples andhas forwarded the same for analysis and the samples arereturned by both laboratories for the same reason i.e. thesamples are not even worth testing. In this case too therespondent no.1 refused to take cognizance of offence despitecomplaint being lodged and letter sent to Superintendent ofPolice also did not yield positive result, as a consequence ofwhich the bank filed application under Section 156(3) ofCr.P.C., being Criminal Misc. Application No.216/2024, whichcame to be allowed vide order dated 14.11.2024, pursuant towhich above F.I.R. No.547/2024 came to be registered. 7824.2025BA+.odt7.In both these matters, the borrowers have notpaid even single payee back to the informant. 8.In both these FIRs, the informant-bank hasalleged that the applicants had deposited cotton of extremelyinferior quality with the CWC and on the basis of depositreceipt issued by CWC obtained loan from it with an intentionnot to repay the same and thus, they have committed offenceas aforesaid. As regards the officials/employees of CWC, it isstated that it was duty the concerned Officers/employees tocheck the quality and quantity of material deposited and thento issue deposit receipt. It is alleged that the concernedOfficers/Employees have acted in collusion with the applicantsand have issued false receipts. As regards Santosh, it is allegedthat although Jayshree is proprietor of Sanveda, Santosh, herhusband was actively involved in the business activities ofSanveda.9.At this juncture, it is necessary to refer toprovisions of the Warehousing (Development and Regulation)Act, 2007 (Hereinafter referred to as "Warehousing Act"). Theact provides for development and regulation of warehouses as 8824.2025BA+.odtalso negotiability of warehouse receipts and establishment ofauthority named Warehousing Development and RegulatoryAuthority. In common parlance Warehouses are big Godowns,where goods are deposited. Section 2(s) of Warehousing Actprovides the definition of the term "Warehouse". As per thedefinition, Warehouse means any premises wherein awarehouseman takes custody of goods deposited fromdepositors of the goods. The term "Warehouseman" is definedin Section 2(v) of the Act, which means any person to whomcertificate of registration with respect to warehouse/s isgranted by the authority under the Act. While goods aredeposited in a warehouse, a receipt is issued to the depositors,which is referred as "warehouse receipt". The term "warehousereceipt" is defined in Section 2(u) of the Act. It means aacknowledgement in writing or electronic form issued by awarehouseman or his authorized representativeacknowledging receipt of goods for storage. It needs to bementioned that warehousing receipts are of two types, viz:-negotiable and non-negotiable. The goods deposited in thenegotiable warehouse receipts can be delivered on demandeither to the depositor or at his instance to any person inwhose favour endorsement for the purpose of negotiation of 9824.2025BA+.odtgoods has made. The person, who deposits the goods with awarehouse is called as "depositor" and the said term is definedunder Section 2(d) of the Act. Warehouse Receipts mustenumerate the ingredients specified under Section 11 of theAct. The provision contemplates that warehouse receipts mustbe issued by specifying particulars with respect to quantityand quality or its grade along with its shelf life and marketvalue. The warehouse receipts are issued by theWarehouseman. 10.The allegation of informant - bank is that in viewof section 11 of the Warehousing Act, it believed that thecontents of warehouse receipt issued by the CWC, Puntambawith respect to cotton bales deposited by Sanveda and AkshayAgro were correct and relying upon the contents of the saidreceipts, loans were advanced by it to Sanveda and AkshayAgro for amount equal to 50% of the declared value of thecotton bales. The informant states that it is routine practicethat loans are advanced to person against warehouse receiptsfor an amount equal to 50% of the declared value of the goodsdeposited with CWC. The informant states that believing uponthe contents of the receipt regarding quality/grade of cotton 10824.2025BA+.odtbales, it had advanced loan of Rs.2,61,85,000/- to Sanvedaand Rs.1,44,60,000/- to Akshay Agro.11.As stated above, since Sanveda and Akshay Agrodid not repay the loan amount, the informant - bank tooksamples of the cotton bales deposited by them with CWC,Puntamba and forwarded the same for testing to laboratoriesat Mumbai and Aurangabad. The laboratories expressed thatthe samples were of extremely inferior quality and as such, thecontents of samples could not be tested. The allegation ofinformant is that knowing fully well that the quality of cottonis extremely poor, the applicants deposited the same withCWC, Puntamba and the Officers/Employees at CWC,Puntamba also acting in collusion with the applicants issuedfalse warehouse receipts recording incorrect standard withrespect to quality/grade of cotton bales.12.It will be pertinent to mention that informant-bank has alleged that initially Sanveda had obtained loan ofRs.80,00,000/- from the main branch of the informant-bank.It is stated that the said loan was not paid and thereafter theloan of Rs.2,61,85,000/- was taken from Puntamba branch. It 11824.2025BA+.odtis alleged that the loan was taken with an intention not torepay the same, and therefore, receipts recording incorrectcontents were obtained from CWC, Puntamba.13.Mr. Karpe appearing for the applicants in theabove matters contends that offence under the provisions ofthe Indian Penal Code could not have been registered againstthe applicants. His contention is that provisions ofWarehousing Act are a complete Code, and therefore,provisions of the IPC cannot be invoked for any action whichis an offence under the said Act. Mr. Karpe has referred toSections 43 and 45 of the Warehousing Act. He contends thatthe allegation of the informant - bank, in sum and substance,is that the declared value of goods delivered by applicantswith CWC, Puntamba was incorrect, which is an offence underSection 43(5) of the Warehousing Act. He then contends thatcognizance of offence punishable under Section 43 can betaken only on a complaint made by the authority under theAct or by any officer authorized in this regard by the authority.He, therefore, contends that taking cognizance of offence andregistration of FIR is barred having regard to the provisions ofthe Warehousing Act. He further elaborates that special 12824.2025BA+.odtprovisions of Warehousing Act will exclude applicability ofIPC, which is a general law.14.As regards merits of the matter, Mr. Karpecontends that declared self life of the cotton bales was threemonths only. The cotton bales were deposited with CWC inbetween March, 2022 to May, 2022 and the samples were sentfor testing after expiry of self life. He, therefore, contends thatthe reliance cannot be placed on the laboratories test report tocontend that cotton bales were not of the desiredquality/grade when the same were deposited by Sanveda andAkshay Agro with CWC, Puntamba. He states that cotton balesis a perishable commodity and degradation of the same withpassage of time is very natural and also obvious. 15.In the alternate, he contends that it is improbablethat the alleged offence was committed without connivance orof knowledge of the Officers of the CWC and informant-bank.He argues that the applicants cannot be singled out and heldresponsible for the entire alleged wrong done. He states thatthe prosecution has not registered any offence against anyofficer/employee either of the CWC or the bank. 13824.2025BA+.odt16.He lastly contends that Sanveda and Akshay Agroare proprietorship concerns of Jayshree and Akshay. Santosh,who is husband of Jayshree and a close relative of Akshay hasno concern with the said businesses. He argues that merelybecause Santosh happens to be husband of Jayshree andrelative of Akshay, he cannot be held responsible for thealleged offence.17.He sums up the submissions contending that nooffence is made out in the facts of the case; dispute betweenthe parties is a civil dispute; offence, if any, is made out onlyunder Section 43 of the Warehousing Act and cognizance ofthe same by FIR is barred in view of Section 45 of the saidAct; and lastly that custodial interrogation of the applicants isnot necessary since all the documents pertaining to allegedoffence, such as, bank statements, loan agreements,warehouse receipts etc., are already available with theinformant and the prosecution. As stated above, as regardsSantosh he contends that he has absolutely no connectionwith the business of Sanveda or Akshay Agro and this isadditional reason for allowing the application for anticipatory 14824.2025BA+.odtbail filed by him.18.Per-contra, the learned APP contends that there isdeep routed conspiracy involved in the matter. He states thatwith a clear mens rea of cheating the bank, the applicantshave deposited material of sub-standard quality in order toobtain loan from the bank with a clear intention not to repaythe same. He contends that foul intention not to repay theloan is existed since inception while depositing the material ofinferior quality and obtaining loan against eNWRs for the saidmaterial. He states that the provisions of IPC are squarelyapplicable and are clearly attracted in the facts of the case andinvolvement of the applicants is also apparent. He contendsthat custodial interrogation of the applicants is necessaryhaving regard to the nature of the offence.19.Mr. Hon, learned Senior Advocate appearing forthe informant states that the provisions of Warehousing Actwill not oust the applicability of IPC Sections. He contendsthat Section 43(5) only provides for punishment in a casewhere depositors declares value of goods which is not propervalue according to him. He contends that offence of cheating, 15824.2025BA+.odtcriminal breach of trust, falsifying documents, etc., areindependent offences, for which there is no correspondingprovision under Warehousing Act. He also contends that in thepresent matter, Section 120B is also invoked which is anoffence by itself. Mr. Hon states that it is a general practicethat bank offer loans to borrowers against warehouse receipts.This according to him is also legally permissible. He contendsthat people engaging in business of cotton bales and ginningand pressing had adopted modus operandi of dumpingmaterial of extremely inferior quality and obtainingwarehouse receipts recording that product is of superiorquality/grade resulting in enormous enhancement of rate ofgoods and based on false declaration loan is obtained from thebanks and financial institutions against deposit of eNWR. Hecontends that the cotton bales deposited by the applicantswith CWC, Puntamba were of extremely inferior quality somuch so that the laboratories were not even in a position toprocess the same for testing. He states that the applicantsJayashree, and Santosh are habitual and willful defaulters. Hestates that on earlier occasion also the said applicants hadobtained loan of Rs.80,00,000/- from main branch and didnot repay the same. Thereafter, they obtained further loan of