(1) CRI. APLN. 4598.2010+gr IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD CRIMINAL APPLICATION NO. 4598 OF 2010 Narayan Motiram Kabare .. Applicant VERSUS The State of Maharashtra .. Respondent WITH CRIMINAL APPLICATION NO. 4085 OF 2010 1. Shaligram Arjun Gaikwad 2. Shenpadu Pundlik Walde 3. Murlidhar Manik Sonar 4. Keshav Natthu Wani 5. Sunanda Suresh Pawar (6) Balkishan Pitambar Zawar [Dismissed due to Default ] 7. Vijay Jaydev Zawar 8. Suresh Raghunath Narkhede APPLICANTS VERSUS The State of Maharashtra RESPONDENT WITH CRIMINAL APPLICATION NO. 4109 OF 2010 1. Vilas Sundarlal Porwal 2. Anil Kisanlal Birla 3. Subhas Bhaulal Maloo .. Applicants VERSUS The State of Maharashtra .. Respondent WITH CRIMINAL APPLICATION NO. 4172 OF 2010 Vimal Narayan Kabare .. Applicant VERSUS The State of Maharashtra .. Respondent WITH CRIMINAL APPLICATION NO. 4181 OF 2010 1. Dinesh Shriram Lakhote 2. Mahesh S/o. Dagdu Devre 3. Mohamad Faruk Sk. Munsi .. Applicants VERSUS The State of Maharashtra and anr. .. Respondents (2) CRI. APLN. 4598.2010+gr WITH CRIMINAL APPLICATION NO. 4185 OF 2010 Ajay Shaligram Biyani .. Applicant VERSUS The State of Maharashtra .. Respondent WITH CRIMINAL APPLICATION NO. 4193 OF 2010 1. Madhukar Kashinath Ahire 2. Shri Anil S/o Kedarnath Zawar .. Applicants VERSUS The State of Maharashtra and anr. .. Respondents WITH CRIMINAL APPLICATION NO. 4209 OF 2010 Vinay Narayan Kabare .. Applicant VERSUS The State of Maharashtra .. Respondent WITH CRIMINAL APPLICATION NO. 4231 OF 2010 Rajmal Pitambar Somni .. Applicant VERSUS The State of Maharashtra .. Respondent WITH CRIMINAL APPLICATION NO. 4270 OF 2010 Purushottam Kashinath Kulkarni .. Applicant VERSUS The State of Maharashtra .. Respondent WITH CRIMINAL APPLICATION NO. 4283 OF 2010 Jivan Paulad Patil .. Applicant VERSUS The State of Maharashtra .. Respondent AND CRIMINAL APPLICATION NO. 4284 OF 2010 Pratap Supdu Patil .. Applicant VERSUS The State of Maharashtra and anr. .. Respondents (3) CRI. APLN. 4598.2010+gr --- Advocate for the Applicants / Criminal Application nos. Mr. Joydeep Chatterji, Advocate /4085.2010 Mr. Vijay Sharma, Advocate h/f. Mr. R.B. Bagul, Advocate / 4598.2010 Mr. R.R. Mantri / 4109.2010 Mr. R.N. Dhorde, Advocate h/f. Mr. S.B. Jadhav/ 4172.2010 Mrs. Sadhana S. Jadhav, Advocate /4181.2010 Mr. R.F. Totala, Advocate / 4185.2010 Mr. S.B. Yawalkar, Advocate / 4193.2010 Mr. P.R. Katneshwarkar, Advocate h/f. Mr. P.P. Chavan / 4209.2010 Mr. A.B. Kale, Advocate / 4231.2010 Mr. S.B. Joshi, Advocate / 4270.2010 Mr. P.B. Patil, Advocate / 4283.2010 and 4284.2010 Mr. B.J. Sonawane, A.P.P. for the respondent-State ... CORAM : V.R. KINGAONKAR, J. DATED : 1ST DECEMBER, 2010 ORAL ORDER:- 1. All these Applications for anticipatory bail are being disposed of together. They were clubbed together for common hearing. These are Applications filed by the Chairman, Directors and employees who are concerned with a co-operative financial institution styled as "Dr. N.M. Kabre Nagari Sahakari Bank Ltd., Erandol." The applicants apprehend their arrests in connection with crime no. 90 of 2010 registered at Erandol Police Station for offences punishable under section 420, 406, 408, 409, 465, 467, 468, 471 and 477 of the Indian Penal Code. (4) CRI. APLN. 4598.2010+gr 2. The audit inspection of the said Co- operative bank was conducted by one Jayesh Pravinchand Joshi, Chartered Accountant, between 1st April 2008 to 31st March, 2009. The auditor submitted the audit report blaming the Chairman, the Directors and staff members of preparing forged and fabricated record about the loan proposals, granting of excessive rebate without following the regular norms, granting of loans without taking appropriate securities and thereby causing heavy losses to the co-operative bank. The auditor reported that the Chairman and the concerned directors as well as the staff members were hand in glove with each other while fraudulently preparing the record about the loan proposals, granting of the arbitrary loans and at a times granting of loans outside the jurisdictional authority. The auditor noticed various financial lapses, misdeeds and bunglings which ultimately caused heavy loss of Rs.24-25 Crores to the Bank. The Chairman, Directors and the staff members of the bank were blamed in the audit report for such huge misappropriation of the funds and the (5) CRI. APLN. 4598.2010+gr losses caused to the Bank. On basis of such audit report, crime no. 90 of 2010 came to be registered. The Chairman, the Directors, the staff members and all concerned thereafter made hectic efforts to get directions under section 438 of the Cr.P.C. from Court of Sessions. Since their applications were turned down by the Court of Sessions, they have filed such applications separately in this Court. 3. The learned Advocates appearing for the applicants would submit that involvement of the applicants is based on assumptive prevarication of the perception of the auditor. They would submit further that the applicants are likely to be humiliated due to the arrests. They contended that the applicants are not prima facie guilty of any misappropriation of the funds of the co-opreative bank and their arrest is not necessary for purpose of any effective investigation. They submitted that the offence is registered on basis of report of auditor which is culmination of the examination of the record that is already available with the Investigating Officer and, therefore, now the applicants may not be (6) CRI. APLN. 4598.2010+gr required to be kept under detention for the purpose of recovery of the record or any other steps to be taken by the Investigating Officer. It is argued on behalf of some of the applicants viz. the Chairman and some of the old aged directors that they should be given liberty due to the old age. It is contended that the Chairman, namely, Dr. N.M. Kabre is old aged person and is physically unfit and therefore his arrest is not necessary for the purpose of investigation. Similar argument is advanced in the context of few of the applicants who are above 60 years of age. It is also argued that the audit report is outcome of bias due to business rivalry. 4. The learned A.P.P. however would submit that the applicants have eluded the arrest though it is necessary to take them in Police custody in order to unravel the modus operandi and the manner in which such huge financial embezzlement, misappropriation or misdeeds have been committed by them. The learned A.P.P. therefore strongly opposes all the Applications. (7) CRI. APLN. 4598.2010+gr 5. For grant of anticipatory bail the legal criterion to be applied is to examine whether the applicant/s is/are likely to be arrested without there being tangible material to infer complicity of his/theirs. The grant of anticipatory bail is extra- ordinary power available under section 438 of the Code of Criminal Procedure with a view to avoid unnecessary humiliation of an innocent person. So if there is material to show innocence of the applicants, then only the anticipatory bail can be claimed. The extra-ordinary relief cannot be granted just for asking and only for the reason that some of the applicants are old aged persons. The role played by the applicants or either of them in the alleged commission of the huge misappropriation and financial bunglings in relation to the funds of the co- operative bank is required to be appropriately examined. The chief observation made by the auditor is that the co-operative bank was brought to the lowest financial ebb and was shown "Dooms Day" due to the irregularities and financial misdeeds of the applicants. (8) CRI. APLN. 4598.2010+gr 6. The question is who are the responsible persons for such huge misappropriation of the funds of the co-operative bank? It is but natural that when bad time comes, most of the concerned have tendency to get one or other way of seeking route to the escape. The report of the auditor shows that huge funds of the co-operative banks were siphoned for personal benefits of the Chairman and some of the directors and staff members. It is obvious that those all the applicants who are prima facie shown to be concerned with such misappropriation of the funds of the co-operative bank or have nexus with the financial irregularities, will not be entitled to get the benefit of the extra-ordinary provision under section 438 of the Cr.P.C. 7. Now, I shall advert to the role played by the applicants. So far as the Application (Cri. Application no.4109 of 2010) of Vilas Porwal and others is concerned, it may be gathered that the said applicants were in the opposite group. It prima facie appears that they had protested the writing of the proceedings book of the board directors. They (9) CRI. APLN. 4598.2010+gr objected to the acts of Chairman Dr. N.M. Kabare and the Manager. It appears that the applicants Vilas and Anil made it clear that the financial condition of the co-operative bank became weak due to the huge fraudulent acts of the Chairman and others. They pointed out that the resolutions were being manipulated. Thus, it is prima facie clear that the said applicants were not having any direct nexus with the acts committed by Chairman and other directors or the staff members. In this view of the matter, the applicants i.e. Vilas Porwal, Anil Birla and Subhas Maloo deserve the liberty available under section 438 of the Criminal Procedure. 8. Similarly, the applicants of Criminal Application no. 4181 of 2010 appear to be the Ex- Directors who were co-opted members. They were not the elected directors and had no direct role to play in taking policy decisions of the bank. It appears prima facie that they were on the Board of Directors as expert directors and one of them i.e. Mohamad Faruk was made director by virtue of his employment in the bank as a Peon because one of such post of (10) CRI. APLN. 4598.2010+gr director was available for representative of the Class-IV employees. It is obvious, therefore, that the said applicants i.e. Dinesh Lakhote, Mahesh Devre and Mohamad Faruk are not directly concerned with the policy decisions of the bank nor there is any material to show that they were benefited on account of the fraudulent transaction or granting of loans without following due procedure. 9. It may be mentioned here that only one of them i.e. applicant Dinesh Lakhote had recommended a loan proposal of one of the borrower by name Devram Kapade. Still, however, his involvement in getting the loan sanctioned is not clear from the record nor he had any particular authority to get approval for the loan proposal. He was not the member of the loan committee. It is nobody's case that because of his influence, irregular loan was granted and that he was personally benefited due to granting of such loan to said Devram Kapade. Another allegation against him is that loans were given to his relatives i.e. real brothers to the tune of Rs.11 Lakhs and Rs. 5 Lakhs. It may be a true fact. Even so, how the applicant (11) CRI. APLN. 4598.2010+gr Dinesh Lakhote is instrumental in granting of such loans is not made clear. The learned Advocate for the applicants make a statement that the loans of the brothers of applicant-Dinesh Lakohte have been repaid and therefore such a transaction does not show any ill motive on his part. The learned Advocate for the applicants submit that there is receipt issued by the Bank about such repayments by brothers of the applicant-Dinesh Lakhote which are placed on the record. Considering these aspects, applicant-Dinesh Lakhote, Mahesh Devre and Mohamad Faruk are entitled to seek liberty as available under section 438 of the Code of Criminal Procedure. Their Application (Criminal Application no. 4181 of 2010) will have to be therefore granted. 10. This takes me to Criminal Application no. 4185 of 2010 filed by Ajay Biyani. In the context of this Application, it may be stated that the applicant was director during the relevant period. He however is not directly concerned with any dubious transaction of the loans which were disbursed. He was not member of the loan committee. (12) CRI. APLN. 4598.2010+gr He had not obtained any loan amount. There are general allegations appearing against him in the audit report, founded on joint responsibility of the directors, in view of section 73 of the Maharashtra Co-operative Societies Act, 1960. His arrest is also not essential for the purpose of effective investigation. Needless to say he is entitled to seen anticipatory bail. It is argued however that rebates were granted to the Utran branch and entries were taken regarding reversal of interest though such transactions were impermissible. It is however not clear as to how the present applicant i.e. Ajay Biyani is concerned with such entries. He is a Medical Practitioner and it is obvious therefore that he may not have direct linkage with the transactions conducted in the Utran branch notwithstanding the fact that he was director of the said co-operative bank. In this fact situation of the matter, Criminal Application no. 4185 of 2010 will have to be granted. 11. The Applications filed by the then Chairman Dr. M.N. Kabare, his son Vinay Kabare and wife Sow. Vimal Kabare (Criminal Application nos. 4598 of 2010, (13) CRI. APLN. 4598.2010+gr 4209 of 2010 and 4172 of 2010) appear to be destitute of substance. In fact, there are serious allegations against the then Chairman i.e. applicant-N.M. Kabare regarding preparation of bogus record and effecting transfers of the amounts in various loan accounts. It appears prima facie that he granted huge loan by himself without there being any approval of the loan committee and the other directors. It prima facie appears that he arbitrarily acted like a sole proprietor of the Bank. Without the connivance of these three applicants, prima facie, such huge financial misdeeds might not have taken place. 12. At this juncture, the observations of the Apex Court in case of "HDFC Bank Ltd. V. J.J. Mannan @ J.M. John Paul and anr. 2010 CRI.L.J. 2293" may be taken into account. The Apex Court observed that where the accused in collusion with others had defrauded the bank to the tune of over 2 crores, he was not entitled to anticipatory bail under section 438 of the Code of Criminal Procedure. In the given case, the Apex Court deprecated the practice of passing blanket orders in such a case. The Apex (14) CRI. APLN. 4598.2010+gr Court succinctly clarified the object of section 438 of the Cr.P.C. It is observed: "15. The object of Section 438 Cr.P.C. has been repeatedly explained by this Court and the High Courts to mean that a person should not be harassed or humiliated in order to satisfy the grudge or personal vendetta of the complainant. But at the same time the provisions of section 438 Cr.P.C. cannot also be invoked to exempt the accused from surrendering to the Court after the investigation is complete and if charge- sheet is filed against him. 13. Coming to the Criminal Application no. 4193 of 2010 filed by applicants Madhukar Ahire and another, it may be gathered that they are the employees of the bank. One of them was attached to Kasoda branch and another was attached to Paldhi branch. They are apprehending their arrest though, according to them, there is no specific allegations against them in the F.I.R. and the audit report. As regards these two accused persons, it emerges from the record that applicant-Madhukar Ahire recorded one entry of Rs.6.32 Lakhs in his own account so as to (15) CRI. APLN. 4598.2010+gr make a show that his debt was written off. Though he is a senior bank Officer, he got manipulated reverse entries in respect of interest to the extent of Rs. 2.18 Lakhs and caused loss of such amount to the bank. In other words there is a prima facie evidence to infer that he manipulated certain record of the bank for his personal benefits. Consequently, the extra-ordinary relief available under section 438 of the Cr.P.C. is un-available to him. As regards applicant no.2-Anil Zawar, it prima facie appears that he is responsible for certain dubious entries in respect of transaction of Rs.86.43 Lakhs in his account and the amounts of borrowers. He himself had obtained loan of Rs.8,25,000/- and substantial amount was found due against him. There is a prima facie evidence therefore to infer that he is involved in causing suspicious and dubious entries. It appears that the modus operandi was to transfer the amount in the account of the employees and therefore to siphon the money to the Chairman and the other directors or to some extent by the employees themselves. In this view of the matter, Criminal Application no. 4193 of 2010 deserves to be dismissed. (16) CRI. APLN. 4598.2010+gr 14. On consideration of the record, I find that the remaining Applications are not merit-worthy. The other applicants are directors and employees of the bank. The applicant-Purushottam Kulkarni of Criminal Application no. 4270 of 2010 is Manager of the bank. It does not stand to reason that without his active participation and support such huge fraud could have been committed and loss of the large magnitude of Rs.24-25 crore could be caused to the bank. It does not require mincing of words to infer that the directors and the employees of the bank have been in gainful position due to such financial bunglings and fraudulent transactions. The loss caused to the bank and the depositors is gain received by the said applicants. It is not necessary to elaborately set out the individual roles of these applicants. It is conspicuous therefore that they do not deserve any sympathy and therefore their Applications will have to be dismissed. 15. It may not be out of place to mention here that Mr. Patil P.B. submitted that applicant Jivan Patil is ready and willing to deposit the entire (17) CRI. APLN. 4598.2010+gr amount. However, such amount has not been yet deposited. It is the contention of Mr. Kale A.B., learned Advocate appearing for applicant-Rajmal Somni in Criminal Application no.4231 of 2010 that applicant Rajmal Somni is not concerned with the dubious transactions. It is argued that he has resigned on 23.3.2010. It is further pointed that his resignation is approved by the Board of Directors. The mere fact that he resigned does not absolve him of the responsibility. Moreover, the allegations of the resignation are required to be duly ascertained. He points out that the audit report pertains to the period after April. It may be so, yet such resignation by itself is of not much avail. Besides, it prima facie appears that some of the illegal loan transactions pertain to period prior to April, 2008 and there were no effective steps taken to ensure the recoveries. Therefore, the applicant cannot prima facie disown his joint/coextensive responsibility with other directors. 16. The Apex Court in "AIR 2006 S.C. 179 (18) CRI. APLN. 4598.2010+gr Himanshu Chandravadan Desai and ors. Vs. State of Gujarat" held that having regard to the huge amounts involved the abscondance of the accused was the danger, if released on bail, or attempting to tamper with the evidence by pressurizing the witnesses and as such regular bail Application was rejected. In the present matter, one has to deal with the Applications under section 438 of Cr.P.C., wherein the yardstick is somewhat hard as compared to the yardstick applied to the regular bail Application under section 439 of the Cr.P.C. The provision of anticipatory bail is not the shield given to those who are prima facie involved in the commission of the crime but is a protection given to those who are prima facie innocent and likely to be humiliated due to the arrest. The provision under section 438 of Cr.P.C. stands in between liberty of an innocent person and the apprehended action of the arrest. 17. Taking overall view of the matter, Applications of the applicants bearing Criminal Application nos. 4598 of 2010, 4209 of 2010, 4172 of 2010, 4193 of 2010, 4085 of 2010, 4231 of 2010, 4270 (19) CRI. APLN. 4598.2010+gr of 2010, 4283 of 2010 and 4284 of 2010 are hereby dismissed. 18. The Applications of the applicants in Criminal Application no. 4185 of 2010, 4109 of 2010 and 4181 of 2010 are allowed. The applicants in the context of these Applications shall be released on bail in the event of their arrest on furnishing of the bail bonds in sum of Rs.15,000/- (Rs. Fifteen Thousand) each with a surety bond each in the like sum, which may be furnished before the Arresting Officer and on condition that they shall attend the concerned Police Station on each Sunday between 10.00 am. to 2.00 pm. and shall actively co-operate during the course of investigation and shall produce any record, if so required by the I.O. and shall make no attempt to tamper with the evidence of the prosecution. 19. The learned Advocates for the applicants seek continuation of the ad-interim protection for two weeks. The applicants, whose Applications are dismissed have eluded the arrests for long period and their presence is secured in this Court today. No (20) CRI. APLN. 4598.2010+gr further extension of the interim relief is warranted. Under the circumstances, the request is therefore rejected. The ad-interim relief is vacated in respect of those applicants whose Applications are rejected. Sd/- [V. R. KINGAONKAR, J.] arp