2020 (10) TMI 531 - HC - Indian Laws

High Court denies bail in financial fraud case citing lack of evidence & need for custodial interrogation.

The High Court of Madhya Pradesh denied the bail application under Section 439 of the Cr.P.C. in a case involving alleged offenses under Section 420, 406, ... Grant of Bail - Dishonor of Cheque - applicant in his application has submitted that the applicant although is the director of the company Auby Satellite Pvt. Ltd, he did not indulge in any financial dealings and all financial matters were looked after by the co-accused Neeraj Shukla only - HELD THAT:- It has been admitted by the counsel for the applicant that the cheques were indeed given to the complainant. However, it has been submitted that application is pending under Section 138 of N.I. Act and that applicant has appropriate explanation which shall be divulged while defending his case under Section 138 of N.I. Act. It has been stated that the aforesaid cheques were given only for security purposes of the transaction. Despite these arguments the fact remains that applicant admits to have given the cheque to the complainant which could not be encashed. During the submissions it came to light that the applicant is barely an undergraduate whereas in Annexure A/3, which is a permission letter to visit Lakshdweep by ADM Union Territory of Lakshdweep, the applicant is shown to be an engineer with the organization BSNL whereas neither the applicant is an engineer nor he works in BSNL organization. This Court does not feel inspired to allow the bail application of the applicant. Although it appears that there is a transaction of ₹ 7.00 lacs depicted in statements of account, but the fact remains that the applicant company had given two cheques to the complainant total amount of which was ₹ 24,84,000/-. The delay in lodging the FIR has been appropriately explained by the prosecution. The applicant is although in custody since 28.6.2020, however, that in itself is not sufficient ground for the applicant to be released on bail. No case is made out for grant of regular bail under Section 439 of Cr.P.C to the applicant - Bail application rejected. Issues: Bail application under Section 439 of Cr.P.C. for alleged offences under Section 420, 406, and 409/34 of IPC.In this judgment, the High Court of Madhya Pradesh considered a bail application filed under Section 439 of the Criminal Procedure Code in relation to a case registered at police station Anapurna, Indore. The prosecution alleged that the applicant and a co-accused obtained a substantial amount from the complainant under false pretenses regarding their company's business dealings with international entities. The complainant invested a significant sum in the company based on fraudulent representations. However, suspicions arose when the company failed to deliver on its promises, leading to the complainant demanding a refund, which was not honored. The applicant claimed innocence, attributing financial matters to the co-accused, and cited delays in business operations due to the COVID-19 pandemic. The defense highlighted permissions obtained for business activities and technical issues faced by the company. The applicant surrendered voluntarily to the police, emphasizing his cooperation. The defense also raised concerns about the delay in filing the FIR and presented documents to support their contentions.The objections to the bail application were vehemently opposed by the prosecution and the complainant's counsel. They argued that the delay in lodging the FIR was justified, pointing to earlier demands for refund and the dishonor of cheques as reasons for suspicion. They contended that the company was fraudulent, lacking necessary licenses, and accused the applicant of misleading representations. The prosecution highlighted discrepancies in the applicant's claims, such as his educational qualifications and professional affiliations, casting doubt on his credibility. The defense countered by presenting GST documents and contractual agreements to support the legitimacy of the company's operations.The Court noted discrepancies in the applicant's claims, including the absence of concrete evidence supporting the business transactions and the non-execution of agreements with international companies as claimed. The Court referred to a previous order regarding the co-accused, which debunked the existence of the alleged agreements. Despite the applicant's explanations regarding the cheques issued, the Court found his involvement in financial transactions undeniable. The Court also questioned the applicant's responsibilities as a director of the company, emphasizing his accountability for financial matters. The presence of another victim with similar allegations further strengthened the prosecution's case against the applicant.Ultimately, the Court denied the bail application, citing the substantial amount involved, the dishonor of cheques, and the need for further investigation, especially in the absence of the apprehension of another co-accused. The Court emphasized the importance of custodial interrogation to uncover the truth and deemed the applicant's custody not a sufficient ground for bail. Therefore, the bail application under Section 439 of the Cr.P.C. was rejected at this stage.