--:: 1 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 IN THE HIGH COURT OF JUDICATURE OF BOMBAY, BENCH AT AURANGABAD CRIMINAL APPLICATION NO.5083 OF 2011 Digambar s/o Sakharam Pawar ... APPLICANT VERSUS The State of Maharashtra ... RESPONDENT ..... Shri V.D. Salunke, Advocate for applicant Shri B.V. Wagh,A.P.P. for respondents, assisted by Shri S.S. Jadhavar, Advocate for original complainant ..... W I T H CRIMINAL APPLICATION NO.5084 OF 2011 Ramprasad s/o Wamanrao Kadam (Bordikar) ... APPLICANT VERSUS The State of Maharashtra & anr. ... RESPONDENTS ..... Shri R.N. Dhorde, Advocate holding for Shri S.B. Jadhav, Advocate for applicant Shri B.V. Wagh,A.P.P. for respondents, assisted by Shri S.S. Jadhavar, Advocate for original complainant ..... --:: 2 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 CORAM : U.D. SALVI, J. DATED : 20th & 21st December, 2011. PER COURT : 1. Heard. Perused. These are applications under Section 438 of the Code of Criminal Procedure for anticipatory bail in the case registered at C.R. No.217/2011 under Sections 420, 468, 471 120-B read with Section 34 of the Indian Penal Code against the applicants Digambar Sakharam Pawar and Ramprasad Wamanrao Kadam (Bordikar), and co-accused Kunjbihari Agrawal with New Mondha Police Station, Parbhani on 5.11.2011. 2. Crime against the applicants and other was registered following the directions to make investigation and submit a report under Section 156(3) of the Code of Criminal Procedre, passed by the learned Judicial Magistrate, First Class, Court No.3, Parbhani on the complaint R.C.C. No.754/2011, lodged by one Saurajsingh Shivpalsingh Parihar. 3. According to the complainant, he is an agriculturist from village Zari, Taluka and District Parbhani and also elected member of Board of Directors of Parbhani District Central Cooperative Bank and the applicant in Criminal Application No. 5084/2011 is elected Chairman of the Board of Directors of the --:: 3 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 Parbhani District Central Cooperative Bank, Parbhani and the applicant in Criminal Application No.5083/2011 is Managing Director of the said Bank. It is not disputed that the Parbhani District Central Cooperative Bank carries on business for the development and upliftment of farmers, and extends loan to farmers, and implements beneficial schemes for farming sector. The complaint lodged alleges that in the meeting of the Board of Directors of the said Bank held on 27.9.2010, a proposal for general insurance of the farmer members of the Bank from the risk of accidental or natural death at yearly premium of Rs.135/- each received from Future Generali India Insurance Company was considered in light of legal advice and it was unanimously resolved to enter into an agreement of insurance with Future General Insurance Company in order to obtain insurance cover to loanee farmer members from the risk of accidental and natural death; and the proposal of Future Generali Insurance Company was favourably considered as their premium rates were comparatively lower than those of other Companies. 4. The complainant further alleged that in the meeting of the Board of Directors dated 18.2.2011, it was declared by the applicants that 9694 members of Employees Credit Societies were insured for Rs.1,00,000/- or Rs.2,00,000/- at the premium rates of --:: 4 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 Rs.300/- or Rs.600/- respectively for each of the members per year with Aayu Care Insurance & Multi Solution Company Pvt. Ltd., Aurangabad, a company run by the accused Kunjbihari Agrawal and the benefit given to the employees/ salaried members was to be extended to farmer members. The complainant further alleged that an amount of Rs.66,83,100/- was paid by the applicant Digambar Sakharam Pawar to the co-accused Kunjbihari Agrawal, Chairman, Managing Director of Aayu Care Insurance & Multi Solution Company Pvt. Ltd. without the approval of the Board of Directors and this payment was made to the co-accused Agrawal by applicant accused Digambar Sakharam Pawar in collusion with the applicant/ accused Ramprasad Wamanrao Kadam. The complainant further alleged that the applicants and the co-accused Agrawal hatched a plot to siphon off the funds hurriedly under the garb of obtaining insurance cover to the farmer members from the risk of accidental and natural death from Aayu Care Insurance & Multi Solution Company Pvt. Ltd. According to the complainant, the issue of drawing the policies for insurance cover from Aayu Care Insurance & Multi Solution Company Pvt. Ltd. was never put before the Board of Directors in the meeting held on 27.9.2010 and 27.12.2010 and a bogus agreement for the insurance cover was prepared by the applicants and the co-accused Agrawal on --:: 5 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 14.2.2011. It is the case of the complainant that, by suppression of the material facts regarding insurance cover to the members of the Bank, both farmer and non farmers, the applicants and the co- accused Agrawal in collusion with each other, cheated the Bank and siphoned off huge funds firstly towards the insurance premium of salaried employees amounting to Rs.66,83,100/- and secondly Rs.6,75,00,000/- towards the premium of insurance cover to over one lakh farmers. 5. On the other hand, the applicants contend that they have not committed any offence and all the decisions taken for engaging the services of Aayu Care Insurance & Multi Solution Company Pvt. Ltd. (hereinafter referred to as Aayu Care for short) conducted by the accused Kunjbihari Agrawal were collective decisions to which the complainant was party, and the present complaint has been lodged out of political strife as the applicant Ramprasad Kadam is Standing M.L.A. of the Indian National Congress Party and the complainant Parihar is a member of Nationalist Congress Party the rival camps in political field. 6. For the purposes of demonstrating that the engagement of the services of Aayu Care were the result of collective decision taken by the Board of Directors of the Parbhani --:: 6 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 District Central Cooperative Bank, Mr. Dhorde, learned Advocate for the applicant in Criminal Application No.5084/2011 took the Court through the record comprising of the correspondence, the office notes and minutes of the meetings of the Board of Directors held from time to time. He relied on the judgment of the Hon’ble Apex Court delivered in Siddharam Satlingappa Mehetre’s case (Siddharam Satlingappa Mehetre Vs. State of Maharashtra and others [ (2011) 1 Supreme court Cases 694 ] to advance an argument that the remedy of anticipatory bail under Section 438 of the Criminal Procedure Code is not extraordinary in the sense that it should be invoked only in exceptional or rare cases, but is a remedy in protection of rights to personal liberty particularly resorted to protect an individual from a great ignomity, humiliation and disgrace attached to arrest, and the Courts considering the bail application should try to maintain fine balance between societal interest vis-a-vis personal liberty. 7. Mr. Salunke, learned Advocate for the applicant in Criminal Application No.5083/2011 submitted that the applicant Pawar acted merely as a Managing Director and Chief Executive Officer of Parbhani District Central Co-operative Bank (hereinafter referred to as the PDCC Bank for short) as per bye-law No.49 of --:: 7 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 the Bank inasmuch as he executed the directions/ resolutions of the Board of Directors and the executive committee and independently had no role to play in the crime. He, therefore, urged for the grant of anticipatory bail to the applicant Digambar Pawar on such terms as stipulated by this Court. 8. Learned A.P.P. for the State, besides taking this Court through the events in the present case, submitted that the fraudulent intentions of the applicants and their collusive involvement in the present case is evinced from the fact that they ignored the note put up by the official of the Bank, Mr. Kurundkar, pointing out lack of certificate from IRDA in favour of Aayu Care, despite the proposal of Future Generali India Insurance Company, being accepted in the meeting dated 27.9.2010. He further submitted that the investigations have revealed suppression of the material contents of the letter dated 6.1.2011 specifying in clear terms the availability of insurance cover to the age group between 18 and 55 years; and the co-accused Agrawal in order to practice deception, had presented a copy of this letter to the PDCC Bank sans the specific term of age from Life Insurance Corporation stipulated therein by the Life Insurance Corporation. He further pointed out from the statement of one Mr. Satish Patil, employee of --:: 8 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 the Bank how the sympathizers of the co-accused Kunjbihari Agrawal were helping him to push through his communication for getting early disbursement of huge premium of Rs.6,75,00,000/- in his favour and the things were being pushed through by the applicant No.2 Digambar Pawar for promoting the interest of co- accused Kunjbihari Agrawal. He further pointed out that Aayu Care was registered as a Private Limited Company on 18.8.2010 around the time when proposal of Future Generali India Insurance Company for extending insurance cover to the farmers was being considered. According to him, this had ominous significance in the present case wherein huge events were siphoned off in favour of Aayu Care in the name of securing the interest of the farmers. As regards the role of the applicant/ accused Kadam, he submitted that Aayu Care was making correspondence through him and not directly with the Bank, and the applicant/ accused Kadam had turned blind eye to the fact that Aayu Care was not registered with IRDA. 9. Learned Advocate for the complainant supported the prosecution and cited judgments reported in 2011 SAR (Cri) 476 C.B.I., Hyderabad Vs. (Subramani Gopalkrishnan & anr. and 2011 SAR (Cri) 526 (Sushil Suri Vs. C.B.I. & anr. to advance his --:: 9 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 argument that repayment of the dues does not exonerate a person from criminal liability and magnitude of the scam needs to be read in matter of granting bail to the accused involved therein adversely. 10. Admittedly, the following amounts have been paid by the PDCC Bank to Aayu Care towards Insurance premium: Sr. No. Particulars Amount paid 1. Towards insurance premium for insuring 9694 salaried employees 66,83,100/- 2. Towards insurance premium for insuring 104000 farmer members 6,75,00,000/- 11. It is also not in dispute that amount of Rs.4,50,00,000/- has been refunded by Aayu Care to the Bank. Learned Advocate for the applicant Kadam pointed out from the letter dated 3.11.2011, received from Aayu Care that Aayu Care has terminated the deal of insurance from 8.11.2011 and has undertaken to refund the balance premium amount due from 8.11.2011 onwards and to remain bound to the obligations arising out of the contract till 8.11.2011. According to learned Advocate for the applicant/ accused, the letter dated 3.11.2011 evinces the Civil character of the deal and promises no loss to the Bank or to the farmers. Be --:: 10 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 that as it may. What is important in the cases of such kind is the act of deception leading to wrongful gain or wrongful loss by delivery of property or by act or by omission causing or likely to cause damage or harm to a person at the material time. Subsequent recompense for it would in no way wipe out criminality. 12. Likewise, who makes a complaint regarding the commission of the crime, is also of lesser significance than what the complaint pointed at. It may be that the applicant/ accused Kadam and the complainant Parihar are political rivals and both are bound to say that what they are doing or they did was a public service, however, this is not a place to debate over a issue as to whether what they were doing or they did was a politics or public service. The present matter calls for cold evaluation of what is revealed in the present case. 13. In the instant case, letter dated 23.7.2010 of Future Generali India Insurance Company addressed to the Managing Director, PDCC Bank reveals that the said insurance company showed interest in insuring the farmers from risk of accidental calamity at the rate of Rs.110/- per farmer per year for the sum assured to Rs.1 Lakh. In the meeting of the Board of Directors --:: 11 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 held on 14.8.2010, the said proposal of Future Generali India Insurance Company Ltd. was discussed and it was decided that there should be negotiations with the said Company regarding the total insurance cover covering the risk of death for any reason and to get a clarification from the Company as to whether a member would be entitled to get the benefit of his own policy as well as the new policy obtained from the Company, and after obtaining written consent of the Company to such arrangement premium be paid directly to the Insurance Company vide copy of the resolution No.7, dated 14.8.2010. A copy of the Resolution No.18 of the meeting of the Board of Directors of the executive committee dated 27.9.2010 reveals that the Chief Executive Officer had explained the request made by Future Generali India Insurance Company for extending group insurance policy covering the risk of accidental death or natural death on payment of Rs.135/- per year as premium to loanee farmer members as well as non loanee members. Significantly, it also reveals unanimity amongst the members of the executive committee to enter into an agrement of insurance with Future Generali India Insurance Company for getting insurance cover to the loanee members in respect of accidental and natural death and the Chairman was given necessary authorities and powers for executing such an agreement. Note put up by the --:: 12 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 Administration regarding Subject No.8 on the agenda of the meeting of the Board of Directors dated 27.12.2010 reveals that ICICI Ltd., Reliance General Insurance, United India Insurance Company besides Future Generali India Insurance Company had shown interest in extending insurance cover particularly covering the accidental death, to the farmers and other account holders of the Bank. Terms of agreement of insurance extending insurance cover to the persons up to the age of 90 years were discussed in the meeting of the Board of Directors of the Bank held on 27.12.2010. It was for the first time disclosed that none of the insurance company was prepared to extend insurance cover for the premium of Rs.135/-. However, it needs to be noted that the copy of the resolution No.8, dated 27.12.2010 makes no reference to any correspondence between the Company and the Bank in that regard. It appears that, the Chairman/ applicant/ accused Kadam was conferred with the rights to discuss the issue with the Company again for getting insurance cover as envisaged for a premium up to Rs.300/-. This resolution also discloses a fact that the applicant/ accused Kadam was made a key figure in the entire deal. --:: 13 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 14. Letter dated 4.1.2011 from Aayu Care at Exhibit E to the Criminal Application No.5084/2011 reveals following representations made by Aayu Care to the Bank through applicant/ accused Ramprasad Kadam With respect to the proposal of crop insurance it is to intimate that :- (1) Aayu Care Insurance and Multi Solution Pvt. Ltd. is a Corporate Agency affiliated to LIC and Oriental Insurance Co. (Govt. of India undertaking). (2) We have accepted your agreement of Group Insurance MOU drafts. (3) Insurance policy will cover Natural as well as accidental death. (4) The sum assured under this policy will be Rs. 1,00,000/- per head on account of death only. (5) The nominee for the policy holders will be the firm/bank as desired by you. (6) The age limit of the policy holder will be ranging from 18 yrs. To 70 yrs. --:: 14 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 (7) If the Insurance Policy adopted for Rs.1,00,000/- the premium will be Rs.350/- for 1 year, Rs.685/- for 2 years and Rs.970/- for 3 years policy. (8) If the Insurance Policy adopted for Rs.2,00,000/- the premium will be Rs.685/- for 1 year. (9) This period of insurance covered can be extended another next years on mutual understanding. (10) The members and non-members who are listed by the bank or society only will be covered under the insurance. (11) The claims will be settled as per the norms set up by the Insurance Co. and Bank proposal. 15. In this context, the letter dated 6.1.2011 of Life Insurance Corporation addressed to Aayu Care, annexed to the Criminal Application No.5084/2011 at Page 76 is of importance. It purportedly reveals the following conditions : 1) We cover members on any kind of death/ Natural/Accident. 2) In case of death claim you have to submit claim form along with original death certificate. --:: 15 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 3) We will not consider Natural death within first 45 Days. 4) We will issue One Master Policy in favour of your Company. 16. It is revealed in the investigation that the fifth condition spelling out the age group for which the Life Insurance Corporation was prepared to extend life cover, was suppressed. This condition has a following text : ”Will cover all members from age group 18 to 55.” 17. Office note dated 4.1.2011 of the administrative section of the PDCC Bank strikes a note of caution inviting the attention of the Chief Executive Officer to the fact that the Aayu Care was not recognised by IRDA and only after production and approval from IRDA, further action in respect of the insurance cover was possible. It appears from the notings below said office note that the applicant No.2/ accused Digambar Pawar, Chief Executive Officer merely acted as a Mailbox and forwarded the office note for approval to the applicant/accused Ramprasad Kadam, Chairman of the Bank A glance at Bye-law 49 is sufficient to reveal that as a Chief --:: 16 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 Executive Officer, applicant/accused Pawar remained duty bound to scrutinize the said note and record his candid opinion. However, he did not do so and connived at the approval granted by the applicant/accused Ramprasad Kadam ignoring the note of caution regarding Aayu Care thereafter. Perusal of the statement of Satish Y. Patil, dated 16.11.2011 recorded in course of the investigation reveals that the letter dated 25.4.2011 purportedly issued by Aayu Care for placing request for payment of Rs.6,75,00,000/- before the Chief Executive Officer, PDCC Bank was actually typed in the office of the PDCC Bank by him on instructions received by him from the cabin of Mr. Kurundkar and at that time, Managing Director and Chief Executive Officer Mr. D.S. Pawar and others were sitting with Mr. Kurundkar in the cabin. These facts reveal the interest Mr. D.S. Pawar, the applicant/accused No.2 was taking in the matter of Aayu Care. 18. Adverting to Siddharam Satlingappa Mehetre’s case, one can find the factors and parameters required to be taken into consideration while dealing with the anticipatory bail at para No.112 of the judgment as follows : --:: 17 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 “(i) The nature and gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made. (ii) The antecedents of the applicant including the fact as to whether the accused has previously undergone imprisonment on conviction by a court in respect of any cognizable offence; (iii) The possibility of the applicant to flee from justice; (iv) The possibility of the accused’s likelihood to repeat similar or other offences; (v) Where the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her; (vi) Impact of grant of anticipatory bail particularly in cases of large magnitude affecting a very large number of people; (vii) The courts must evaluate the entire available material against the accused very carefully. The court must also clearly comprehend the exact role of the accused in the case. The cases in which the accused is implicated with the help of Sections 34 and 149 of the Penal Code, 1860 the court should consider with even greater care and caution because overimplication in the cases is a matter of common knowledge and concern; (viii) While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors, namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused; (ix) The court to consider reasonable apprehension of tampering of the witness or apprehension of threat to the complainant; --:: 18 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 (x) Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as to the genuineness of the prosecution, in the normal course of events, the accused is entitled to an order of bail.” 19. Obviously, in the instant case huge funds have been siphoned off to the pocket of the accused No.3 Kunjbihari Agrawal, Managing Director of Aayu Care on the pretext of obtaining blanket insurance cover to the farmer members of PDCC Bank and the co- accused Kunjbihari Agrawal, despite knowing the limitations on availability of the insurance cover, had executed an agrement of Group Insurance, dated 14.2.2011 with the PDCC Bank, thereby professing to extend the insurance cover to the persons ranging in the age group from 18 years to 70 years, and to prompt flow of the funds to his coffers. Revelations made through the documents do suggest that there are no empty allegations and, therefore, it cannot be said that the accusations have been made only with the object of injuring or humiliating the applicants by arresting them. 20. Magic of craft of cheating lies in the techniques adopted for deception. Very often the masters of this craft resort to window dressing or white washing for concealing their real intents. However, truth has uncanny ways of surfacing and in the instant --:: 19 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 case, letter dated 6.1.2011 addressed to Aayu Care by Life Insurance Corporation has revealed what the Aayu Care had suppressed in the instant case. The minutes of the resolutions in the meetings are cleverly cryptic and do not reveal what exactly had happened and what was placed before the Board of Directors for keeping away the proposal of Future Generali India Insurance Co. Ltd. and to arm the applicant/ accused Kadam with powers to deal with the Company. It is also seen in the present case that the applicants/accused had shown interest in forwarding the proposals for payment of monies to Aayu Care expeditiously. All this needs to be thoroughly investigated and complete truth revealed. 21. It has been submitted on behalf of the State that, custody of the applicants/ accused is required for reasons : 1) It needs to be find that where the amount of Rs. 6.75 Cr. Traveled during 05/05/2011 to 03/11/2011. 2) The accused persons are not co-operating in investigation. 3) Almost all the witnesses are employees of Bank and the possibility that they will be pressurized can not be ruled out. 4) The documents purported to have been issued from the different insurance companies from Branches established at Satara, Jalgaon, Ahmednagar, needs to be scrutinized and it needs to be verified that where --:: 20 ::-- Cri. Appln. No.5083/2011 with Cri. Appln. No.5084/2011 these documents have came to be fabricated and with whose aid? 5) Huge public fund appears to have been grabbed by accused persons out of whom accused 1 is sitting MLA and Chairman of PDCC and A 2 is CEO thereof. 6) Specimen signatures and handwriting of accused persons needs to be obtained