2020 (9) TMI 77 - HC - Indian Laws

Anticipatory Bail Denied: Fund Discrepancies, Lack of Documentation

Neeraj Versus State of Madhya Pradesh

The court rejected the anticipatory bail application under Section 438 of the Criminal Procedure Code due to discrepancies in fund utilization, lack of ... Grant of anticipatory bail - investment in the company by way of fraud - Dishonor of Cheque - Non-disclosure agreement or not - HELD THAT:- The Company has spent majorly on traveling and food expenses as also on liaisoning expenses but it gives no indication regarding the investment in the business and other details of business including the manner in which the amount given by complainant was used. It is an admitted fact that the amount spent by the complainant was sought to be returned by giving two cheques which have stood dishonoured - For further purpose of appropriate investigation, custodial interrogation of the applicant is necessary. There are no valid grounds in this application for giving the benefit of anticipatory bail to the applicant. Application dismissed. Issues:1. Anticipatory bail application under Section 438 of the Code of Criminal Procedure, 1973.2. Implication in Crime No. 239/2020 under Sections 420, 406, 409, and 34 of the Indian Penal Code, 1860.3. Allegations of fraud and cheating against the applicant involving a company.4. Dispute over investment returns and non-disclosure agreements.5. Lack of clarity on fund utilization and audit reports.6. Rejection of anticipatory bail application.Anticipatory Bail Application:The judgment involves the consideration of an anticipatory bail application filed under Section 438 of the Code of Criminal Procedure, 1973. The applicant was implicated in Crime No. 239/2020 registered at Police-Station Annapurna, District Indore (MP) for offenses under Sections 420, 406, 409, and 34 of the Indian Penal Code, 1860. The prosecution alleged that the applicant, along with another individual, induced the complainant to invest a substantial amount in a company by misrepresenting ties with major corporations and promising high returns.Fraud Allegations and Dispute:The prosecution's case detailed how the complainant was misled into investing a significant sum in the applicant's company based on false promises and forged documents. The complainant, upon discovering discrepancies, sought a refund, leading to dishonored cheques and a subsequent complaint under the Negotiable Instruments Act, 1881. The defense argued that the company was legitimate, had proper documentation, and the complainant's resignation was not valid as it required board approval.Non-Disclosure Agreements and Fund Utilization:The defense presented purported agreements with major companies to support their claims of a legitimate business relationship. However, the complainant's counsel contended that these were non-disclosure agreements and not binding contracts. There were disputes over fund utilization, with the defense citing profit and loss accounts to justify expenses but failing to provide clear details on the investment's actual use and the absence of complete audit reports.Rejection of Anticipatory Bail:The court, after evaluating the arguments and evidence presented, found no valid grounds to grant anticipatory bail to the applicant. It emphasized the need for custodial interrogation for further investigation due to discrepancies in fund utilization, lack of proper documentation, and dishonored cheques. Consequently, the anticipatory bail application under Section 438 of the Criminal Procedure Code was rejected.This detailed analysis of the judgment highlights the complex legal issues surrounding the anticipatory bail application, fraud allegations, dispute over investment returns, non-disclosure agreements, fund utilization, and the ultimate rejection of the bail application by the court.