The Inspector of Police,Central Crime Branch, Team 1,Egmore, Chennai. (Crime No.87/2008) v. Cheran Enterprises (P) Ltd., rep by Power of Attorney Holder

IN THE HIGH COURT OF JUDICATURE AT MADRASDATE: 24.3.2008CORAMTHE HON'BLE MR.JUSTICE M.JEYAPAULCrl.O.P.No.5500 of 2008andM.P.No.1 of 2008The Inspector of Police,Central Crime Branch, Team 1,Egmore, Chennai. (Crime No.87/2008) Petitioner/Respondentvs. 1. Cheran Enterprises (P) Ltd., rep by Power of Attorney Holder Respondent/De facto Complainant R.Ravichandran2. K.C.Palanisamy Respondent AccusedCriminal Original Petition filed seeking to cancel the bailgranted to the respondent/accused by the learned Additional ChiefMetropolitan Magistrate, Egmore, Chennai in Crl.M.P.No.611 of 2008dated 10.3.2008.For petitioner : Mr.A.Saravanan, Govt. Advocate (Crl. Side)For R1: Mr.Habibullah Basha, Senior Counsel for Mr.ArunFor R2: Mr.B.Kumar, Senior Counsel for Mr.MadhavanORDERThe petition is filed by the investigating officer invoking theprovision under section 439(2) of the Code of Criminal Procedureseeking to cancel the bail granted to the first accused in a case inC.C.B. X.Crime No.87/2008 registered for offences punishable under https://hcservices.ecourts.gov.in/hcservices/ sections 403, 406, 420, 466, 468, 471, 474, 477-A 506(1) and 120B ofthe Indian Penal Code on the file of the Inspector of Police, CentralCrime Branch Team I, Egmore, Chennai. 2. The allegation in the complaint is that the Company by nameCheran Enterprises Private Limited kept in its account a sum ofRs.78 crores in its bank account in ABN Amro Bank, Chennai. Thefirst accused siphoned off the entire money by diverting the same tothe accounts of the other accused. The first accused is supposed toutilise the funds of Cheran Enterprises Private Limited only as perthe terms of the agreement dated 30.1.2004. The said agreementpostulates that the first accused cannot withdraw more than a sum ofRs.40,00,000/= from the said account without the consent ofMr.Chandran Rathnasami, one of its Directors. The first accused alsofabricated documents and records and fraudulently misappropriated thefunds of the complainant. The de facto complainant company had beenstripped off its entire capital in the form of liquid cash. He hadcaused wrongful loss to the Company and wrongful enrichment tohimself. Therefore, the first accused is guilty of misappropriationof property, criminal breach of trust, forgery, falsification ofaccounts and other related offences. 3. The first accused moved an application seeking bail before theAdditional Chief Metropolitan Magistrate, Egmore, Chennai. He hasgranted bail to the first accused with the following observations:-The first accused had already been taken police custody for aboutthree days for interrogation. During interrogation, his specimensignatures and statements were also obtained. Though the firstaccused was taken into police custody for the purpose of taking himto Coimbatore, Erode and other places to unearth the details oftransaction the first accused had with various banks, for reasonsbest known, the investigating officer had not taken the first accusedeither to Coimbatore or to Erode or to other places. The amount hadbeen allegedly diverted from the de facto complainant company anddeposited in a company by name SPIL. Even in connection with twoother cases, the petitioner was subjected to police custody and hisspecimen signature and statement were already obtained in connectiontherewith. The first accused had been in custody in connection withyet another case from 31.1.2008 and in connection with the presentcase from 25.2.2008. The first accused is an Ex.M.P and Ex.M.L.A.He is a respectable person in the Society. After all, the case isbased on the documentary evidence. Hence, the question of tamperingthe evidence would not arise. 4. Learned Government Advocate (Criminal Side) appearing for theState would submit that a serious allegation of misappropriation of awhopping sum of Rs.78 crores has been alleged in this case. Thecomplainant also has come out with fabrication of records and forgeryof documents. The first accused never co-operated even during https://hcservices.ecourts.gov.in/hcservices/ interrogation under police custody. The other accused are at large.The investigating agency is groping in the dark without any co-operation from any of the accused. There is every possibility forthe first accused misusing his status he has acquired as Ex.M.P andEx.M.L.A not only to tamper with the evidence but also to prevailupon the material witnesses in this case. A sum of Rs.78 croreswhich was diverted from the complainant company could not be tracedby the investigating agency. If the first accused is released onbail, there is every possibility for him to completely hide the saidamount. He may also abscond from justice as a case of this magnitudehas been booked as against him. 5. Learned Senior Counsel appearing for the de facto complainantwould vehemently submit that the Trial Court had not chosen toconsider the relevant points for grant of bail. The duration ofcustody cannot at all be a criterion for releasing an accused onbail more especially when the accused is facing such a seriouscharge. The criminal antecedents of the first accused had not beentaken into consideration by the Trial Court. The accused had been incustody just for about 22 days. But, quite unfortunately, evenduring the pendency of the material part of the investigation, thelearned Additional Chief Metropolitan Magistrate, Egmore, Chennai waspleased to enlarge the first accused on bail. If the core accused inthis case is released on bail, the investigating agency may not be ina position to detect the whopping amount of Rs.78 crores divertedagainst the agreement entered into between the parties. Therefore,he would submit that the bail granted to the first accused will haveto be cancelled to enable the investigating agency to thoroughlyinvestigate the case and track down the sum of Rs.78 crores siphonedoff by the first accused. 6. Learned Senior Counsel appearing for the accused who wasgranted bail by the Additional Chief Metropolitan Magistrate, Egmore,Chennai would contend that the material aspects necessary forgranting bail have been thoroughly discussed by the learnedAdditional Chief Metropolitan Magistrate. This is not a case ofsiphoning off the amount, but, it is a case of diversion of funds tosome other company against the terms of the agreement. TheAdditional Chief Metropolitan Magistrate has rightly considered theduration of custody of the first accused and the investigationembarked upon by the investigating officer by taking the firstaccused into police custody. The accused had also made a fixeddeposit in the name of the complainant company. At any rate, thiscourt, under section 439(2) of the Code of Criminal Procedure cannotdecide whether it is a fit case for grant of bail. At the most, thiscourt can set aside the order of the Additional Chief MetropolitanMagistrate if there is any supervening event which goes against theaccused. 7. The Supreme Court in NIRANJAN SINGH v. PRABHAKAR (AIR 1980 SC https://hcservices.ecourts.gov.in/hcservices/ 785) has held as follows:-"Detailed examination of the evidence and elaboratedocumentation of the merits of the case should beavoided while passing orders on bail applications.No party should have the impression that his case hasbeen prejudiced."8. The ratio laid down by the Supreme Court in STATE OF U.P. v.AMARMANI TRIPATHI ((2005) 8 SCC 21) reads as follows:-"It is well settled that the matters to beconsidered in an application for bail are (i)whether there is any prima facie or reasonableground to believe that the accused had committedthe offence; (ii)nature and gravity of the charge;(iii)severity of the punishment in the event ofconviction; (iv)danger of the accused absconding orfleeing, if released on bail; (v)character,behaviour, means, position and standing of theaccused; (vi)likelihood of the offence beingrepeated; (vii)reasonable apprehension of thewitnesses being tampered with; and (viii)danger, ofcourse, of justice being thwarted by grant ofbail."In a graver nature of charge alleged against the accused, the court,which takes up an application for bail, shall consider theapplication in the aforesaid angles stipulated by the Supreme Court. 9. The Supreme Court in RAJESH RANJAN YADAV v. CBI (AIR 2007 SC451) has observed that there is no absolute rule that bail must begranted on account of the long incarceration of the accused.10. The Supreme Court in PURAN v. RAMBILAS (2001 SCC (Cri) 1124)has authoritatively rejected the plea of the accused that the HighCourt could not sit in appeal or revision over a Sessions Court'sorder under section 439(2) of the Code of Criminal Procedure. TheHigh Court has got powers to go into the merits and demerits of theplea for bail in the light of the order passed by the court below. 10A. Coming to the gravity of the offence alleged as against thefirst accused, it is found that the de facto complainant has come outwith a case of rank cheating, misappropriation of Rs.78 crores,breach of trust, forgery and fabrication of records. The court findsthat the punishments contemplated for these offences are reallysevere. The joint venture agreement produced before this court wouldcontemplate development of two properties of 6th accused CheranProperties Limited and 7th accused Vasantha Mills Limited. The saidagreement further reads that any expenditure more than Rs.40,00,000/= https://hcservices.ecourts.gov.in/hcservices/ can be incurred only by way of Board Resolution and also with theapproval of ORE representative. The de facto complainant hasestablished that the de facto complainant company had a deposit ofRs.78 crores. The bank account would disclose that the entire amounthad been withdrawn or taken away by the first accused. There is aserious charge of fabrication of the documents for the purpose ofmisappropriating the said funds by the first accused. 11. It is found that the first accused is an Ex.M.P and Ex.M.L.A.The investigating agency has come out with a revelation that thefirst accused, though acquired some status, was involved in many acriminal case. In fact, the petitioner was remanded to judicialcustody with regard to this is a case when he was in judicial custodyrelating to some other case. 12. Except another accused, who was recently arrested and takento police custody for the ongoing investigation, no other coreaccused was arrested by the investigating agency. All of them are atlarge. All those accused are, in one way or other, closely connectedwith the business transactions of the first accused. If the firstaccused is enlarged on bail at the stage where the investigation isat a crucial stage, there is every possibility, as apprehended by theinvestigating officer, for tampering with those witnesses. Theinvestigating agency has come out with a case that the first accusednever co-operated during the course of interrogation in policecustody. Therefore, there had been no occasion for the investigatingagency to take the accused either to Coimbatore or to Erode or to anyother place where the amount misappropriated had been deposited. Theinvestigating agency has to zero in on the destination of thewhopping amount of Rs.78 cores allegedly siphoned off by the firstaccused. 13. The obtention of specimen signature and the specimen writingof the first accused do not complete the process of investigation,more especially when the first accused has failed to co-operate forthe purpose of investigation. It has been demonstrated before thecourt that only a small portion of the amount was diverted anddeposited in a company by name SPIL and in fixed deposit for a shortwhile. The Supreme Court has laid down that the duration of custodyof an accused cannot be a material ground for releasing an accusedwhen he has been alleged of graver offence. It is found that theantecedents of the first accused was not taken note of by theAdditional Chief Metropolitan Magistrate, Egmore, Chennai. The majorpart of the case would hinge on documentary proof. But, it is seenthat material documents could not be retrieved from the first accusedwhile he was in police custody during the course of investigation.14. The investigating agency is virtually groping in the dark inthe absence of co-operation from any of the accused. In a case ofsuch magnitude, if the accused is released on bail, as rightly https://hcservices.ecourts.gov.in/hcservices/ contended by the investigating agency, there is also everypossibility for the first accused to flee from justice. The criminalantecedents projected by the investigating agency and the de factocomplainant cannot be ignored by this court. The first accused hadbeen in judicial custody only for about 22 days at the time when thebail was granted by the Additional Chief Metropolitan Magistrate.Considering the amount involved in this case, a lot of materials tobe collected by the investigating agency and the abscondence of otheraccused in this case, the court finds that the investigating agencywill definitely take some more time for completion of theinvestigation. The release of the first accused at this crucialstage will definitely deal a deathblow to the investigation embarkedupon by the investigating agency. The Additional Chief MetropolitanMagistrate has not considered the gravity of charge, criminalantecedents of the first accused, the fact that the amount alleged tohave been misappropriated is yet zeroed in on and the pendency of theinvestigation beforeever considering positively the plea for bailemanated from the first accused. In view of the above, the courtfinds that it is a fit case where the order of bail granted by theAdditional Chief Metropolitan Magistrate, will have to be cancelled. 15. Therefore, the order passed by the Additional ChiefMetropolitan Magistrate in Crl.M.P.No.611 of 2008 granting bail tothe first accused stands cancelled. The connected MiscellaneousPetition stands closed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.ssk. To1. The Additional Chief Metropolitan Magistrate, Egmore, Chennai.2. The Public Prosecutor High Court, Madras. + 1 CC to Mr. Arun Anbumani Advocate SR NO.16231+ 1 CC to Mr. V.Madhavan Advocate SR NO.5493P.D. ORDER IN Crl.O.P.No.5500/2008 https://hcservices.ecourts.gov.in/hcservices/ VSV(CO)JJM(27/03/08)