2016 (6) TMI 1508 - HC - Indian Laws

Bail denied where re-registered FIR and charge sheet filed; T.T. Antony principle inapplicable amid large-scale prize-chit fraud investigation

HC refused bail. Court found no prohibited second FIR; the original FIR was reregistered as EOW, Bhubaneswar P.S. Case No. 23/2015 after the HC directed ... Rejection of bail application - prohibited second FIR - offences u/s 420/467/468/471/ 406/120-B of the Indian Penal Code and section 6 of the Odisha Protection of Interests of Depositors (in Financial Establishments) Act, 2011 and sections 4, 5 and 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 - HELD THAT:- In the present case no second or successive FIR was lodged but when direction was given to the Crime Branch, Economic Offence Wing, Bhubaneswar by this Court in CRLMP No. 1060 of 2015 to investigate the case in relation to which Olatpur P.S. Case No. 26 of 2015 was instituted and under investigation, the very same FIR was reregistered as EOW, Bhubaneswar P.S. Case No. 23 of 2015 on 23.11.2015. The Inspector of Police, EOW, Crime Branch, Bhubaneswar took charge of investigation as per the office order no. 190/EOW dated 23.11.2015 and submitted charge sheet. Therefore, the principle laid down in case of T.T. Antony [2001 (7) TMI 1322 - SUPREME COURT] is not applicable to the present case. Adverting to the contentions raised by the learned counsels for the respective parties, looking at the oral as well as documentary evidence available on record against the petitioner relating to the commission of the offences under which charge sheet has been submitted, nature and gravity of accusation, the manner in which innocent persons have been cheated of their hard earned money and particularly taking into account the fact that further investigation is under progress and there is likelihood of tampering with the evidence, at this stage, it is not inclined to release the petitioner on bail. The bail application sans merit and hence stands rejected. ISSUES PRESENTED AND CONSIDERED 1. Whether the re-registration of the same First Information Report by the Economic Offences Wing (Crime Branch) at the direction of the High Court amounts to a prohibited 'second FIR' under the scheme of Cr.P.C. 2. Whether the material on record-oral testimony, seized documents, bank records and registers-discloses a prima facie case under sections of the Penal Code and under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and the Odisha Protection of Interests of Depositors Act, 2011 sufficient to deny bail. 3. Whether the existence of ongoing investigation, risk of tampering with evidence, and the gravity and nature of alleged offences justify refusal of bail despite the accused's custody period and submissions regarding absence of prima facie culpability. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Re-registration by EOW: Legal framework Legal framework: Sections 154-173 Cr.P.C. govern registration and investigation of cognizable offences; the principle against a 'second FIR' prevents successive registrations on subsequent information in respect of the same transaction once an FIR has been lodged and investigation is underway. Precedent Treatment: The petitioner relied on the legal principle in T.T. Antony concerning the impermissibility of second or successive FIRs; the Court considered that authority but did not apply it to invalidate the present re-registration. Interpretation and reasoning: The Court distinguished T.T. Antony on facts: rather than an independent second FIR being lodged by a different informant to initiate fresh investigation, the re-registration occurred pursuant to this Court's direction to the Crime Branch (EOW) to assume investigation of the matter already under inquiry by local police. The same occurrence/FIR was re-registered under the office order effectuating transfer of investigative responsibility; therefore it was not a fresh/independent FIR in the disallowed sense. Ratio vs. Obiter: Ratio - where a higher authority directs transfer of investigation from local police to a specialized agency and the agency re-registers the same FIR for lawful assumption of charge, such re-registration is not a prohibited 'second FIR.' This distinction is central to the decision. Observations about the procedural route and respect for Court directions are ratio, not obiter. Conclusions: The re-registration by EOW pursuant to Court direction is legally permissible and the principle against second FIRs (as in T.T. Antony) is not attracted. Issue 2 - Prima facie case based on materials seized and recorded Legal framework: Bail considerations require assessment of prima facie materials against the accused, nature and gravity of offences (including sections for cheating, forgery, criminal breach of trust, criminal conspiracy and statutory offences under anti-money-circulation and depositor protection laws), and whether statutory ingredients appear to be made out for continued detention pending trial/investigation. Precedent Treatment: The Court applied settled principles that at the bail stage the Court examines available material to see if a prima facie case exists; reliance on oral and documentary evidence for this limited but significant inquiry is consistent with established approach to bail in serious economic offences. Interpretation and reasoning: The investigative material includes examination of informant and witnesses, seizure of incriminating documents, passbooks, money receipt slips, registers of directors, ROC verification showing directorial positions, and bank records indicating collection in excess of crores. Investigative findings indicate: (a) accused acted in managerial/executive capacity and signed bonds/certificates; (b) companies were not authorized by RBI and not listed on stock exchanges; (c) branch and head offices were closed and directors absconded; (d) payment of interest to old depositors from new depositors' funds indicating money-circulation scheme; and (e) default in returning principal and interest. These facts collectively disclose prima facie commission of offences under the Penal Code and relevant Acts and justify continuation of prosecution. Ratio vs. Obiter: Ratio - where documentary and oral evidence point to managerial control, unauthorized deposit-taking, operation of a Ponzi-like scheme and disappearance of offices/directors, a prima facie case for statutory and penal offences is made out at the bail stage. Ancillary comments on particulars of documents and bank records are supportive reasoning but the core holding is the sufficiency of prima facie materials. Conclusions: The Court finds a prima facie case against the accused under the charged provisions; this warrants refusal of bail at this stage. Issue 3 - Ongoing investigation, risk of tampering, and bail refusal Legal framework: Bail may be refused where further investigation is pending and there is reasonable apprehension of tampering with evidence or absconding; courts weigh nature/gravity of accusations, potential prejudice to victims and the public interest in effective investigation of economic offences. Precedent Treatment: The Court followed established bail jurisprudence that the existence of ongoing investigation and credible risk factors (tampering, destruction of material, absconding) justify declining bail, especially in serious economic and mass-deposit cases. Interpretation and reasoning: Given the gravity (large sums collected from numerous depositors), the manner of the alleged deception (closure of offices, directors absconding, threats to agents), and the investigation still being open (including arrest of other directors, examination of many duped investors, seizure of property), there exists a real likelihood of tampering with evidence and prejudice to the investigation if the accused is released. The Court gave weight to public interest and protection of depositor rights in deciding bail. Ratio vs. Obiter: Ratio - continuing investigation coupled with substantial documentary evidence and credible risk of tampering/obstruction constitute valid grounds to deny bail. Observations about the presumptive impact on depositors and public confidence are explanatory but support the legal conclusion. Conclusions: Bail is not appropriate where ongoing investigation and real risk factors exist; the bail application is rejected on these grounds. Cross-References and Integrated Conclusion Cross-reference: Issues 1-3 are interrelated - lawful re-registration of the FIR (Issue 1) validated the EOW's continued investigation and seizure activities that produced prima facie evidence (Issue 2), which in turn, combined with the ongoing nature of the probe and realistic concerns of tampering/absconding (Issue 3), justified refusal of bail. Final conclusion: The Court held that (a) the re-registration by the Crime Branch pursuant to Court direction does not amount to an unlawful second FIR; (b) available oral and documentary material discloses a prima facie case under the charged offences; and (c) in view of the gravity of allegations and ongoing investigation with risk of tampering, bail must be refused. The bail application is dismissed.