1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY NAGPUR BENCH, NAGPUR Criminal Application No. 784 of 2010 State of Maharashtra, through Supdt. Of Police, CID (Crimes), Amravati ..VERSUS.. Anil Madhukar Rode Office Notes, Office Memoranda of Coram, Appearances, Courts orders or directions Court’s or Judge’s orders and Registrar’s orders. Mr. A.S.Parihar, A.P.P. For applicant/State. Mr. P.S.Wathore, Advocate for the respondent/non-applicant. CORAM : Prasanna B. Varale, J. Order reserved on : 07th December, 2010 Order Pronounced on : 23rd December, 2010 By the present application under Section 439 (2) of the Code of Criminal Procedure, the applicant/Sate is seeking challenge to the order dated 02/3/2010 passed by the learned Sessions Court, Amravati in Criminal Application No.08/2010 filed by the non- applicant for grant of anticipatory bail in connection with Crime No. 278/2006, registered with Police Station, Gadge Nagar, Amravati for the offences punishable under Sections 166, 167, 420, 409, 467, 468, 471, 120-B R/w Sec. 34 of I.P.C., thereby granted bail to the present non-applicant. The non-applicant namely Anil Rode entered in the service of Zilla Parishad as a Accountant and was Chief Accountant and Finance Advisor (hereinafter referred to as ‘CAFO’) for the intervening period i.e. from 16/8/1994 to 11/7/1995, 27/12/1995 to 07/1/1997 and from 01/12/1997 to 17/6/1998. At present he is Chief Accountant in Vidarbha Patbandhare Vikas Mahamandal, Nagpur. A report was lodged in respect of defalcation in the Zilla 2 Parishad, Amravati. Initially the Revenue Commissioner directed to conduct an audit for the period from 1999 to 2000 and it was found that there is defalcation of an amount of Rs.4,48,00,000/-. This fact was brought to the notice of State Government by the Revenue Commissioner. The State Government directed a special audit through a special auditor for the period from 1994-95 to 2001-02. The Special Auditor and his team conducted the audit in respect of the transactions in Minor Irrigation Division, Zilla Parishad, Amravati for the period from 994-95 to 2001-02 and in the preliminary audit for the year 1999 to 2000, a large sum defalcation was found. Accordingly, one Ramesh Nandanwar, the then Executive Engineer, Irrigation Department, Zilla Parishad, Amravati, lodged a report on 26/6/2006 with Gadge Nagar Police Station, Amravati. On the said report, Crime No. 278/2006 was registered for the offences under section 166, 167, 420, 409, 467, 468,471, 120-B r/w Section 34 of IPC and under Section 7, 13 (a) (d) (i) (ii) (iii) of Prevention of Corruption Act. Initially in the said First Information Report, four accused namely Jawahar Dube, Bhaurao Dudhe, Parshuram Nandeshwar and Devrao Kothalkar were involved. It was alleged in the FIR that these 4 accused, who were holding the responsible post in the Zilla Parishad misappropriated the government money to the tune of Rs.4,43,30,512/-. Initially the investigation was carried out by the local police and thereafter the same was transferred to the C.I.D. (Crimes), Amravati. In the subsequent investigation, the compass of enquiry was expanded and it was found by the investigating agency that there were as many as 62 accused involved including 29 government officials working in the various divisions like irrigation division and, Accountant of accounts division of Zilla Parishad, Amravati, whereas other 33 accused persons are the proprietors of bogus companies. As per the investigating agency, one Jawahar 3 Dubey is the mastermind of the whole scam. He floated various bogus companies and with the help of these companies caused loss to the public exchequer. As per enquiry report, there is major withdrawal of money for water pumping, vehicle repairing and maintenance and for fuel and this amount comes to the tune of Rs.20,17,65,203/- . The non-applicant was posted as CAFO for the period from 16/8/1994 to 07/1/1997 and from 01/12/1997 to 17/6/1998 and during his tenure, the non-applicant with ulterior motive, without scrutinizing and complying with the formalities passed the bills for Rs. 1,26,35,886/-. It is the case of the prosecution agency that though the bills were prepared and passed towards supply of goods, but actually no goods were supplied to the Zilla Parishad. The non- applicant apprehending his arrest by the police, presented Criminal Application No. 08/2010 for pre-arrest bail. The learned Additional Sessions Judge, Amravati, by order dated 02/3/2010 allowed the application on certain conditions. The State Government being aggrieved by the said order has approached this Court by present application for cancellation of the bail. Learned APP Mr. Parihar, has vehemently argued that the impugned order dated02/3/200 is erroneous and requires to be quashed and set aside by this Court. Learned APP has raised the following grounds to challenge the impugned order. 1] The offence is serious as huge government money is defalcated. 2] The non-applicant was holding responsible post as CAFO and it was his duty to supervise and check the financial affairs of Zilla Parishad, but the non-applicant has utterly failed to discharge his duty and the act of the non-applicant is not mere an irregularity, but an illegality. 3] While allowing the application, the court below has not 4 considered the record. 4] The non-applicant has sanctioned the bills without verifying whether there is actual supply of the material to the Zilla Parishad. Though, learned APP has referred in detail the special audit report, instead of referring to all those details, the broad features of the report are capsulized as follows : 1] Expenses of the vehicles : In the report, it is stated that by the auditor that there is large expenditure on the vehicles. Out of the vehicles on which the expenses were shown to be incurred only some of vehicles were owned by Zilla Parishad, whereas other vehicles are neither owned by Zilla Parishad nor they are hired by Zilla Parishad. The expenses towards maintenance and repairs as well as towards fuel were shown against these vehicles. 2] Certain expenses were shown to be done on Zilla Parishad works. It was shown that work was undertaken at certain villages and in the enquiry it was found that those villages are neither in the Amravati Division nor in Amravati Municipal Corporation area. 3] The expenses were shown over and above the estimated costs. Learned APP has referred to specific bills, such as bills of Harsha Electrical Company, which is a company floated by the prime accused Jawahar Dubey. . He submitted that the bills are sham and bogus and they are not signed by the proprietor. The bills of such bogus companies were prepared and they were hurriedly passed which show the ill motive and the non-applicant was the Accounts Officer at the relevant time. Learned APP submitted that the non- applicant, who was holding the post of CAFO was duty bound to check and verify the financial matters. He further submitted that if the non-applicant would have objected for sanctioning the bills, there 5 would not have been such defalcation. Learned APP submitted that the applicant is in possession of certain bills and in furtherance of the investigation the said bills are necessary for which the custodial interrogation of the non-applicant is must. Learned APP submitted that as per his instructions, the non-applicant is not cooperating with the investigating officer. To support his arguments, learned APP has placed reliance on the following judgments. 1] 2010 (1) SCC 679, (HDFC Bank Ltd..vs. J.J.Mannah alias J.M. John Paul and another.) 2] (1985) 2 SCC 597, (Pokar Ram .vs. State of Rajasthan and another.) 3] (2001) 4 SCC 638, (Murlidharn .vs. State of Kerala) 4] (2001) 6 SCC 338, (Puran .vs. Rambilas and another.) 5] (2008) 13 SCC 594, (State of Gujrat .vs. Narendra K. Amin.) 6] (1997) 7 SCC 187, (State rep. By C.B.I., .vs. Anil Sharma.) Per contra, Mr. Wathore, learned Advocate for the non- applicant has submitted that the present application is not only a belated attempt, but an misconceived attempt of the fear psychosis of the investigating agency. Learned Advocate submitted that the investigating agency is trying to paint the non-applicant as the main accused in the offence. He submitted that the non-applicant was in- charge CAFO for certain intervening period i.e. 16/8/1994 to 11/7/1995, 27/12/1995 to 07/1/1997 and from 01/12/1997 to 17/6/1998. He further submitted that he was on leave for a period of more than 5 months from 12/7/995 to 26/12/1995. The non- applicant, who was serving Zilla Parishad with utmost sincerity had pointed out the irregularities to his superiors, not only orally, but also in writing and also communicated his grievances, but unfortunately, the senior officers instead of paying any hid to the objections, compelled the non-applicant to proceed on compulsory leave and he 6 was made a scape goat. Learned Advocate further submitted that the non-applicant was sent on compulsory leave for a period of 12 months from 08/1/1997 to 30/11/1997 and ultimately the leave was cancelled under the orders of the Commissioner. Mr. Wathore, learned Advocate submitted that perusal of the audit report, on which learned APP has placed heavy reliance would show that the Special Auditor has not held the non-applicant responsible, but held that the irregularity is committed by the non- applicant. Learned Advocate invited my attention to the Special Audit Report, particularly in reference to the heads namely exorbitant expenses in purchase of pump and pumping machinery, arrived at the conclusion that for the said exorbitant expenses (to the tune of Rs. 5,76,86,801/-), Assistant Engineer (Mech. Divn.) and Executive Engineer, Irrigation Divn., are responsible. He, therefore, submitted that in view of these observations, the non-applicant cannot be held responsible for the expenses under those heads. Learned Advocate further invited my attention to the observation in the special audit report, wherein it is observed that the CAFO has raised serious objections while making various purchases under the water supply schemes. Those objections reads thus : 1] No details were given about the Administrative sanction, technical sanction. 2] No sanction from the concerned Division for the proposed purchase. 3] No details about prior permission from the Government was obtained. Learned Advocate has further referred to the portion of the report, which reads thus : 7 “foRr foHkkx ft-i- o eq-ys- o fo-vf/kdkjh ;kauh [kjsnh izLrkokoj ?ksrysY;k xaHkhj vk{ksikdMs nqyZ{k d:u] [kjsnh ckcrpk izLrko eq-dk- vf/kdkjh ;kauh eatqj dj.ks o rn~uarj loZlk/kkj.k lHkk (ft-i-) fn-30@12@1997 ps Bjko dz- 29 izek.ks [kjsnhl vafre eatqjh iznku dj.ks ;k loZ ckch la’k;kLin vkgsr- egkjk”Vª ft-i ia-l- ys[klafgrk 1968 ps ifjf’k”V&1 M ps mYya?ku >kys vlqu eq[; ys[kk o foRr vf/kdkjh gs ftYgkifj”knsps foRrh; lYykxkj vlqu lq/nk R;kapk lYyk Mkoy.;kr vkyk- foRr foHkkxkP;k vk{ksikaps vuqikyu >kkys vlrs rj izR;{kkr [kjsnh fdrh vko’;d vkgs ;kpk lqLi”V [kqyklk gkowu iq<hy vuko’;d [kjsnh VGyh vlrh o i;kZ;kus vigkjkl oko feGkyk ulrk ;kdfjrk rRdkyhu eq[; dk;Zikyu vf/kdjh] dk;Zdkjh vfHk;ark flapu foHkkx o lgk;~;d ys[kkf/kdkjh] flapu foHkkx o lgk;~;d vfHk;ark ;ka=hdh gs tckcnkj vkgsr-” (It is observed that by neglecting the serious objections raised by the CAFO, the final sanction was granted by the Chief Officer and for the said defalcation, the then Chief Executive Officer, Executive Engineer (Irrigation Deptt.), Assistant Accountant (Irrigation Deptt.), Assistant Engineer (Statistics) are responsible. ) Learned Advocate further submitted that even objections raised by the investigating agency that the non-applicant with ulterior motive sanctioned the bills, is contrary to the record. Learned Advocate by inviting my attention to the observations in the Audit Report submitted that inspite of the objections raised by the non- applicant, the Executive Engineer has accepted the tender documents and opened them on the same say and as such the fault lies with the Executive Engineer. Learned Advocate further submitted that an attempt was made by the investigating agency to fasten the liability 8 on the non-applicant. He further submitted that in Zilla Parishad, there are various departments. The financial matters of those departments are being audited by the Accountant/auditor of the concerned department. It is not the case that all the departments forward their bills to the CAFO. Learned Advocate further submitted that the nature of duties of the non-applicant are (1) advise on financial matters (2) sanctioning the bills (3) internal auditing. He submitted that in the working of various divisions, there are many authorities involved such as Head of the Department/Division, Executive Engineer, Assistant Engineers etc. The need and requirement of goods in that particular department is to be crystallized by these authorities and the non-applicant is in no way concerned with those activities. In the resolutions for such purchases, the non-applicant is never a party and these resolutions were passed by those authorities. When the bills came up before the non-applicant and when it was found that there is irregularity, the non-applicant raised the objections and inspite of his objections, the Chief Executive Officer has finalized the bills and issued pay orders. Therefore, the non-applicant cannot be held responsible for the sanctioning of bills by the final authority i.e. C.E.O. Learned Advocate further submitted that it is the case of the investigating agency that one Jawahar Dubey is the main accused and the master mind behind the financial scam. At the initial stage, there was no allegation against the applicant. Even in the audit report of the Special Auditor, no illegality is alleged against the non-applicant. The audit report refers to the objections raised by the non-applicant i.e. letter dated 23/9/2004 and as such, it can be seen that the non-applicant was discharging his duty with due care and caution. The learned Advocate for the non-applicant has heavily attacked the approach of the investigating agency. He submitted that 9 the other accused persons including the higher officials, except main accused Jawahar Dubey, are granted anticipatory bail by this Court by order dated 22/8/2006. The investigating agency till date has not moved any application for cancellation of bail granted to those accused persons, which shows the approach of pick and choose policy of the investigating agency. The reason given by the applicant for not moving such application is that an action is taken against the erring investigating officer, which is of no consequence and failure in duty by one officer of the investigating agency is no ground to cancel the bail granted to the non-applicant. The other ground raised by the applicant/State that custodial interrogation of the non-applicant is necessary, is also devoid of any merit. Learned Advocate submitted that all the documents are in the custody of the investigating agency. Now, the non-applicant is not serving with Zilla Parishad and he is at present working as Chief Accountant of Vidarbha Patbandhare Vikas Mahamandal and as such no record of Zilla Parishad, Amravati is available with the non-applicant. As per the instructions from the non-applicant, in view of the directions of the court below vide order dated 02/3/2010, the non-applicant is visiting the I.O. once in a week on the scheduled date and cooperating with him. The I.O. has not called upon him and as such there is no merit in the submissions that the non-applicant is not cooperating with the investigating agency. Learned Advocate for the non-applicant therefore, prayed for rejection of the application. I have heard learned APP for the applicant/State and learned Advocate for the non-applicant at length. I have gone through the audit report placed before me. Perusal of the audit report shows that in the audit conducted by the Special Auditor and his team, several serous irregularities were found, which caused loss to the public exchequer. It further shows that the heads which were 10 considered, were the pumping machinery, maintenance and repairs of the vehicles and expenses on fuel. It is not necessary to give all the details of the audit report. The sum and substance of the audit report is that, there was large irregularity under these heads. At the same time, the report makes it clear that the non-applicant had raised objections at various stages and inspite of the objections, the higher authorities i.e. C.E.O., sanctioned the bills and the payments were made. The said audit report was considered by the learned Sessions Judge, Amravati while dealing with the Criminal Application No. 08/2010. It is observed that the prime accused is one Jawarhar Dubey. It is further observed that the other accused persons were granted anticipatory bail under the orders of this Court. Insofar as the judgments referred by the learned APP to support his submissions, there cannot be any doubt in principle that if the material is not considered by the Court while granting bail or if the material is considered in casual manner, they are good grounds to cancel the bail granted in favour of the accused. In my opinion, this is not the case in the present application. The material on which learned APP has placed strong reliance, was the material placed before the trial Court. The material in the form of audit report, various resolutions, is also perused by me. Perusal of the material shows that the non-applicant was discharging his duty as a CAFO for the intervening period, the non-applicant had raised objections before the high authorities before sanctioning the bills and the conditions imposed on non-applicant while granting bail, are being followed by the non-applicant. It will be useful to refer the judgments of the Apex Court in various cases. In the case of Devender Kumar and another .v. State of Haryana and others, reported in (2010) 3 Supreme Court Cases (Cri.) 223 while considering the ground that the police wanted 11 custody of the accused for recovery of certain articles, the Apex Court has observed that the reason given by the High Court for cancellation of the orders, granting bail and directing the arrest of the appellants on the ground that disclosures have been made by the appellants and that their police custody was necessary for recovery of the same, is in in our view, not sufficient for the purpose of cancellation of bail granted earlier. In the case of Subodh Kumar Yadav .v. State of Bihar and another, reported in (2009) 14 Supreme Court Cases 638, the Apex Court has observed, particularly at para 16, that “infact it is now well settled that if a superior Court finds that the court granting bail had acted on irrelevant material, or if there was non-application of mine or failure to take note of any statutory bar to grant bail, or if there was manifest impropriety as for example failure to hear the Public Prosecutor/ complainant where required, an order for cancellation of bail can in fact be made. However, while cancelling bail, the superior court would be justified in considering the question whether irrelevant materials were taken into consideration by the court granting ”. It may be said that these are the broad factors to be considered while cancellation of bail is sought. In my opinion, in the present application, no such lapse or any ground as expressed by the Apex Court is coming forward. In the case of Savitri Agrawal and others .v. State of Maharashtra and another, reported in (2009) 8 Supreme Court Cases 325, the Apex Court has observed that very cogent and overwhelming circumstances are necessary for an order directing the cancellation of the bail already granted. But, no such cogent and overwhelming circumstances are brought by the investigating agency nor the record suggests that the apprehension of the authority that the non-applicant is not available for interrogation, is established, 12 particularly in the backdrop of the condition imposed upon the accused by the learned Sessions Court to attend the investigating agency every week till filing of the charge sheet. Taking overall view of the matter and perusal of the record and considering the material, I am of the opinion that no case is made out by the applicant/State for cancellation of bail granted to the non- applicant. In the result, the application is rejected. JUDGE Diwale