2021 (2) TMI 244 - HC - Indian Laws

Denial of Bail Due to Financial Fraud Allegations

The court denied the petitioner's bail application under Section 439 of the CrPC due to the ongoing investigation into allegations of financial fraud and ... Grant of bail - Sections 4, 5, 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (for short ‘1978 Act’) and Section 3(2) of the Haryana Protection of Interest of Depositors (in Financial Establishment) Act, 2013 - purchase of agricultural land by way of two separate registered sale deeds in his native village without disclosing any other source of income - HELD THAT:- It is noteworthy that as per statement of revenue Patwari of village of the petitioner, there was no land existing in his name up to the year 2015, but all of a sudden after joining the Company, he purchased agricultural land by way of two separate registered sale deeds for sale consideration of ₹ 40 Lakh and ₹ 80 Lakh in his native village without disclosing any other source of income - Still further, police have recovered ID No. FM110621 to substantiate that petitioner was working as Planner as well as chief ID promoter of the Company and played vital role in conspiracy with other co-accused while defrauding the public at large for receiving his booty under the garb of commission. As on today, investigation is pending with the SIT, which is headed by an IPS Officer and out of total 31 accused, 21 have been arrested so far. During the course of hearing, this Court was apprised that despite repeated non-bailable warrants, remaining 10 co-accused are evading the arrest, but again their warrants of arrest have been issued for 25-9-2020 and Investigating Agency is making best efforts to apprehend them amidst Covid-19 pandemic - Since investigation in the matter is being delayed by the co-accused and that is the prime reason that charges could not be framed in the matter, thus, prosecution is not blameworthy for the delay, if any and the petitioner cannot take any benefit of the same. Consequently, the argument that incarceration of the petitioner is being unnecessarily prolonged by the prosecution is without any basis and liable to be rejected. Police-papers reveal that petitioner received an amount of more than ₹ 1.25 Crores from the Company through different bank accounts and purchased immovable properties, thus, played an active role as planner as well as chief ID promoter for this financial fraud and as such, the contention that he has no role in the commission of offence is also liable to be rejected - It is shocking that within a period of three years of incorporation of the Company with mere share capital of ₹ 10 Lakh, accused have accumulated the amount of more than ₹ 2956 Crores through illegal means under the garb of selling non-existent products and as such, thorough investigation is required so that every wrongdoer is brought to justice. Investigation is still going on and out of total 31 accused, 10 are yet to be arrested and they are openly in league with the petitioner as well as other co-accused, who are in custody, while circulating the misleading information through social media including Whatsapp group to the effect that all are going to be released from custody very soon upon getting clean chit from the Court and as such, misguiding the victims with a calculated move so that the depositors may not co-operate the ongoing investigation - No doubt, present case is triable by the Magistrate, but at the same time, it is relevant to take note of the fact that apart from the present case, there are other 27 FIRs pending in different parts of the country against the Company as well as other accused and petitioner is deeply involved with the syndicate for running the affairs of the Company leading to alleged fraud of more than ₹ 2956 crores, thus, by no stretch of imagination, he could be termed as a victim; rather petitioner is a beneficiary. This Court is satisfied that release of the petitioner on bail at this stage would be detrimental to the pending investigation and likely to cause serious prejudice to the case of prosecution - taking into consideration the huge financial bungling as well as pendency of investigation against remaining 10 co-accused and to safeguard the interest of large number of victims, this Court is not inclined to grant the concession of bail to the petitioner - Petition dismissed. Issues Involved:1. Grant of bail under Section 439 of the Code of Criminal Procedure.2. Allegations of financial fraud and conspiracy under multiple sections of IPC and special acts.3. Petitioner’s role and complicity in the alleged scam.4. Ongoing investigation and its impact on the bail decision.5. Financial implications and public interest considerations.Detailed Analysis:1. Grant of Bail under Section 439 of the Code of Criminal Procedure:The petitioner sought bail pending trial under Section 439 of the CrPC. The court noted that the petitioner had been in custody since 30-3-2019, and despite the investigation being completed and the challan presented, charges had not yet been framed. The petitioner argued that he was merely an investor and not a promoter or director of the company, claiming victimization by the prosecution.2. Allegations of Financial Fraud and Conspiracy:The allegations against the petitioner involved duping a large number of people through a chit fund scheme run by Future Maker Life Care Pvt. Ltd., amounting to over Rs. 2956 crores. The FIR included charges under Sections 420, 406, 467, 468, 471, 120B of the IPC, Sections 4, 5, 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, and Section 3(2) of the Haryana Protection of Interest of Depositors (in Financial Establishment) Act, 2013.3. Petitioner’s Role and Complicity in the Alleged Scam:The prosecution and the complainant contended that the petitioner was a chief promoter and planner of the company, actively involved in inducing the public to deposit money without proper licenses. Evidence included statements, bank records, and the petitioner's disclosure about purchasing properties with ill-gotten money. The court found substantial material indicating the petitioner’s active role in the conspiracy.4. Ongoing Investigation and Its Impact on the Bail Decision:The court observed that the investigation was still ongoing, with 10 out of 31 accused evading arrest. The prosecution argued that releasing the petitioner could hamper the investigation, especially as the petitioner and co-accused were allegedly misleading the public through social media.5. Financial Implications and Public Interest Considerations:The court highlighted the significant financial fraud involved, noting that the company had accumulated over Rs. 2956 crores within three years of its incorporation with a share capital of Rs. 10 lakh. The court emphasized the need for thorough investigation to bring all wrongdoers to justice and protect the interests of a large number of victims.Conclusion:The court concluded that granting bail to the petitioner would be detrimental to the ongoing investigation and could prejudice the prosecution’s case. Given the magnitude of the financial fraud and the petitioner’s alleged involvement, the court dismissed the bail petition to safeguard public interest and ensure justice for the victims.