* 1 * ABA.571& 568.2011 20.7.2011 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICITON ANTICIPATORY BAIL APPLICATION NO. 568 OF 2011 Sanjay Shamrao Patil ....Applicant/Orig.Accd : VERSUS : The State of Maharashtra ....Respondent ALONGWITH ANTICIPATORY BAIL APPLICATION NO. 571 OF 2011 1. Shamrao Krishnarao Patil 2. Chandrakant Appa Patil 3. Mrs. Aruna Sarjerao Patil 4. Kiran Shankar Naikwadi ....Applicants/Orig.Accd : VERSUS : The State of Maharashtra ....Respondent ****** Mr. A.A. Kumbhakoni, Senior Counsel i/by. Mr. V.V. Purwant, Advocate for applicant in ABA. 568/2011. Mr. S.A. Ingawale, Advocate for the applicant in ABA. 571/2011. Mr. Aniket V. Nikam, Advocate for the complainant. Mrs. G.P. Mulekar, APP for the State. CORAM :- Smt. R.P. SondurBaldota, J. 20th July, 2011. P.C. :- 1. The applicants in these two applications for anticipatory bail apprehend their arrest in C.R. No. 117 of 2011 registered with Shahupuri Police Station, Kolhapur for the offences punishable under Sections 420, 468, 471 read with Section 34 Indian Penal * 2 * ABA.571& 568.2011 20.7.2011 Code at the instance of Kolhapur District Central Co-operative Bank Ltd (hereinafter referred to as KDCC Bank”) in connection “ with loan of Rs.2,50,00,000/- given to Shetimal Sahakari Prakriya Sanstha Ltd (hereinafter referred to as Shetimal Sanstha”). The “ applicant in the first application, Sanjay is a former Director of Shetimal Sanstha. Applicants no.2 and 3 in the second application are the present directors of Shetimal Sanstha. Applicant no.1 in the second application is Shyamrao, the father of the applicant in the first application. He is also alleged to be associated with Shetimal Sanstha since the year 1993 till date. Applicant no.4 in the second application is Kiran, an employee of Shetimal Sanstha working with it as an Manager. The other accused in the complaint are some other directors of Shetimal Sanstha and officers of KDCC Bank. The complainant in C.R. 117 of 2011 is deputy manager of KDCC bank who has filed the complaint under the directions of the Administrator appointed for the bank after it came into serious financial difficulties. 2. The society of Shetimal Sanstha was formed for production of ethynol as at the relevant time the Government was encouraging production of ethynol. By way of a byproduct of ethynol project, * 3 * ABA.571& 568.2011 20.7.2011 Shetimal Sanstha decided to start bio-composting unit. For erection of this unit, it had on 15th March, 2007 applied for loan of Rs.2,50,00,000/- to KDCC Bank. The loan was approved subject to fulfillment of 19 conditions. However, even before the conditions were fulfilled, the loan came to be sanctioned on 29th March, 2007 and the amount disbursed on 30th March, 2007. At that time, Sanjay was a director in both, the KDCC bank as well as Shetimal Sanstha. On the same day as disbursement of the amount, he resigned as director of Shetimal Sanstha but not before withdrawal of the entire amount of loan. On that day, as the Chairman of Shetimal Sanstha, he issued a cheque in the sum of Rs. 1,40,00,000/- in favour of Shetkari Sahakari Tambaku Kharedi Vikri Sangh Ltd (hereinafter referred to as Tambaku Kharedi “ Vikri Sangh”) of which his father-Shamrao is the Chairman. This amount then was immediately transferred to one of the bank accounts of Tambaku Kharedi Vikri Sangh which had been treated as Non-Performing Account” (NPA) by the concerned bank. On “ the same day, Sanjay signed an account payee cheque in the sum of Rs.50,00,000/- in the name of Shetimal Sanstha. Later, the cheque was converted into a bearer cheque and the amount of Rs. * 4 * ABA.571& 568.2011 20.7.2011 50,00,000/- withdrawn by him. After his resignation, he withdrew further amounts of Rs.4,95,000/- and Rs.10,00,000/- on 5th April, 2007 and 10th April, 2007 respectively by similarly converting the account payee cheques to bearer cheques. Thus, almost the entire amount of loan received by Shetimal Sanstha was diverted partly to Tambaku Kharedi Vikri Sangh and partly to Sanjay himself. 3. After appointment of the administrator of KDCC bank, when scrutiny was undertaken of all the transactions of the bank including the loan given to Shetimal Sanstha, various illegalities were noticed. It was found that, as already mentioned above, the conditions set by the bank for sanction of the loan were not fulfilled. Certain properties had been given as primary securities and certain other properties as second securities. Part of personal property of Sanjay were also given as security for repayment of the loan. One of the properties mortgaged to the bank was found to have been sold to Karan Sugars Private limited, Nasik on 31st March, 2008. The meeting in which the resolution for sale of the land was passed, was attended by applicants no.1 to 3 in the second application. When the officers of KDCC bank visited the site of ethynol and bio-composting project, it was found that the project * 5 * ABA.571& 568.2011 20.7.2011 had not even been started. There was no construction carried out for the project nor any machinery installed. Part of the property hypothecated to KDCC bank was found to have been already hypothecated to Union Bank of India as first charge. Therefore, C.R. No. 117 of 2011 for the offences punishable under Sections 420, 468, 471 read with Section 34 Indian Penal Code came to be filed at the instance of the administrator. 4. All the applicants contend that they have been falsely implicated in the complaint. It is also their common contention that their custodial interrogation is not necessary and that they will abide by the conditions that may be imposed by the Court for grant of anticipatory bail. It may be noted at this place that the first application for anticipatory bail of all the five applicants has been dismissed by the Sessions Court by its order dated 27th June, 2011. Applicant no.1 in the second application is a senior citizen and claims special concession on that count. He also claims to have nothing to do transaction of loan between KDCC bank and Shetimal Sanstha. Applicant no.4 in the second application, contends that, he is an mere employee of Shetimal Sanstha working as Manager at the petrol pump run by the Sanstha. At the relevant time, he was * 6 * ABA.571& 568.2011 20.7.2011 required to act as an in-charge manager since the regular manager was on leave and he had to sign documents on the direction of his superiors. It has been specifically pointed on behalf of the applicant in the first application, that his innocence and bonafide becomes evident from the fact that his personal property has been hypothecated to KDCC bank for repayment of the loan to Shetimal Sanstha. 5. Mr. Kumbhakoni, the learned counsel for the applicants, strongly urges that all the applicants deserve to be granted anticipatory bail as they are not actually concerned with the various illegalities alleged in the complaint. He refers to the deeds of mortgage for the purpose. He also submits that the documents executed between KDCC bank and Shetimal Sanstha specify that part of the properties mortgaged were by way of first charge and part as the second charge. Therefore, creation of second charge over some of the properties can hardly be said to be any irregularity in sanction of the loan. As regards the allegation that the project of bio-composting and also the ethynol project was never started, he seeks to rely upon some documents which according to him establish that though the project had started it had run into * 7 * ABA.571& 568.2011 20.7.2011 difficulties. The applicant in the first application alleges at paragraph-5 of his application that though the loan of Rs. 2,50,00,000/- was sanctioned to Shetimal Sanstha the amount of Rs.1,50,00,000/- was given to the Sanstha and therefore the project of bio-composting remained incomplete and therefore the Sanstha suffered irreparable loss. This claim made is palpably false since it is admitted position that on disbursement of the loan, Sanjay himself had signed the cheque in favour of Tamabku Kharedi Vikri Sangh in the sum of Rs.1,40,00,000/-. Besides, further amounts of Rs.50,00,000/-, Rs.10,00,000/- and Rs.4,95,000/- were undisputedly withdrawn from the loan account by him. 6. Admittedly, at the material time Sanjay was a director in both KDCC bank and Shetimal Sanstha. This fact becomes relevant in view of the manner in which a substantial amount of loan came to be sanctioned in favour of Shetimal Sanstha within a short duration of 2 weeks without completion of formalities. Therefore, the allegation in the complaint that he had used his official positions with the two organizations to get the loan sanctioned in an irregular manner cannot be said to be without substance. Though the applicants dispute that the ethynol project and bio-composting * 8 * ABA.571& 568.2011 20.7.2011 project have not been set up it is not their case that these projects have been commissioned and working. Therefore, at this prima-facie stage of the matter the material collected by the police so far indicates that the amount of loan is not utilised for the project for which it was sanctioned and that it has been diverted elsewhere. The applicants offer no explanation for sale of one of the properties mortgaged to the bank except claiming that they are not parties to the transaction of sale. The fact that applicants no.2 and 3 in the second application were part of the board passing resolution permitting the Shetimal Sanstha to sell the land to Karan Sugars Private Limited indicates that they have played role in commission of offence. Shyamrao, the father of the applicants though not officially connected either to KDCC bank or Shetimal Sanstha, has benefited from the crime, since the amount of the loan stands diverted to his institution. The prosecution also contends that though he is presently not officially connected to Shetimal Sanstha, he is its founding member and is actively associated with its functioning till date. As regards Kiran, applicant no.4 to the second application, he is a signatory to the three cheques which had been initially drawn as account payee cheques and later converted * 9 * ABA.571& 568.2011 20.7.2011 to bearer cheques for withdrawal of large amount from the amount of loan. 7. Thus the facts revealed during investigation indicate that each applicant has performed some specific role in applying for, sanctioning, disbursing, accepting and utilisation of the loan amount. All the applicants are educated persons having good position in the society and enjoying a high social status. The offence they have been accused off, involves large amount of public money. It is the money belonging to several small investors and depositors with the Bank who have to suffer for no fault of theirs. Therefore, such crimes are required to be investigated thoroughly. A white collar crime is invariably hard to investigate. For that reason, the police must get full opportunity of investigation. 8. The applications for anticipatory bail are therefore dismissed. Mr. Kumbhakoni, the learned counsel for the applicants, prays for continuation of the interim order. The order is continued for a period of 2 weeks from today. [SMT. R.P. SONDURBALDOTA, J]