1 CA3919/11with 15CAs IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD CRIMINAL APPLICATION NO. 3919 OF 2011 WITH CRIMINAL APPLICATION NO. 3916 OF 2011 WITH CRIMINAL APPLICATION NO. 3915 OF 2011 WITH CRIMINAL APPLICATION NO. 4386 OF 2011 Vilas s/o Rajaream Badge Applicant V E R S U S The State of Maharashtra Respondent Shri V.D. Salunke, Advocate for the applicant WITH CRIMINAL APPLICATION NO. 4092 OF 2011 WITH CRIMINAL APPLICATION NO. 4094 OF 2011 WITH CRIMINAL APPLICATION NO. 4095 OF 2011 WITH CRIMINAL APPLICATION NO. 4580 OF 2011 Latabai Vasantrao Sanap Applicant V E R S U S The State of Maharashtra Respondent Shri R.N.Dhorde, Advocate for the applicant WITH 2 CA3919/11with 15CAs CRIMINAL APPLICATION NO. 4258 OF 2011 WITH CRIMINAL APPLICATION NO. 4532 OF 2011 WITH CRIMINAL APPLICATION NO. 4632 OF 2011 WITH CRIMINAL APPLICATION NO. 4648 OF 2011 Mangala @ Prerna Sundarrao More Applicant V E R S U S The State of Maharashtra Respondent Smt. S.S. Jadhav, Advocate for the applicant WITH CRIMINAL APPLICATION NO. 4072 OF 2011 WITH CRIMINAL APPLICATION NO. 4073 OF 2011 WITH CRIMINAL APPLICATION NO. 4075 OF 2011 WITH CRIMINAL APPLICATION NO. 4525 OF 2011 Vijaykumar Dattatraya Gandele Applicant V E R S U S The State of Maharashtra Respondent Shri S.L. Kulkarni, Advocate for the applicant Shri S.V. Kurundkar, Public Prosecutor in all Criminal Applications CORAM : R.Y. GANOO, J. DATED : 28th November, 2011 PER COURT : 3 CA3919/11with 15CAs 1. Criminal Application Nos. 3919 of 2011, 4092 of 2011, 4258 of 2011 and 4072 of 2011 pertain to Crime No. 50 of 2011 of Dindrud Police Station, Taluka Majalgaon. Criminal Application Nos. 3916 of 2011, 4094 of 2011, 4532 of 2011 and 4073 of 2011 pertain to Crime No. 56 of 2011 of Dharur Police Station, Taluka Dharur. Criminal Application Nos. 3915 of 2011, 4095 of 2011, 4632 of 2011 and 4075 of 2011 pertain to Crime No. 57 of 2011 of Dharur Police Station, Taluka Dharur. Criminal Application Nos. 4386 of 2011, 4580 of 2011, 4648 of 2011 and 4525 of 2011 pertain to Crime No. 91 of 2011 of Ambajogai Police Station, Taluka Ambajogai. A perusal of the record would go to show that Mr. Vilas Rajaram Badge, Smt. Latabai Vasantrao Sanap, Smt. Mangala @ Prerna Sundarrao More, Mr. Vijaykumar Dattatraya Gandele apprehend arrest in each of the aforesaid Crimes and have filed four respective applications for anticipatory bail. 2. Each of the applicant, as aforesaid, is a director of Beed District Central Co-operative Bank. 3. Government audit was conducted in respect of Sindhapana Sheti Mall Vitaran Panan Co-op. Society, Devdahiphal, Taluka Dharur, Shestkari Sahakari Tel Biya Krishi Prakriya Sanshta Ltd. Gathnandur, Taluka 4 CA3919/11with 15CAs Ambejogai, Jagdamba Sheti Mall Vitaran Panan Co-op. Society, Chondi, Taluka Dharur and Jyotiba Sheti Mall Purvatha Vitran Va Panan Co-op. Society Ltd., Gaondara, Taluka Dharur. (The name of all societies, hereinafter, referred to as Jagdamba, Jyotiba, Shetkari and Sindphana). The audits were carried out by Mr. Ganesh S. Kshirsagar as well as Mr. Ravindra Gedam. It is noticed that one Mr. Sanap had initially conducted audit, however, orders were issued for re-audit and that is how Mr. Ravindra Gedam and Mr. Ganesh Kshirsagar carried out audit for the above four co-operative societies. In the course of audit, various irregularities were found. It was also noticed that a loan was granted by the Beed District Central Co-operative Bank (hereinafter referred as the ‘said Bank’) to aforesaid four societies in complete violation of the rules as regards grant of loan, more particularly stated in the respective first information reports. The first information reports also indicate that the loans were sanctioned by the said Bank to the aforesaid four societies in violation of the norms. All the societies are non-agricultural societies and the said Bank could not have sanctioned loan to such non-agricultural societies. 4. It would be necessary to mention certain facts which cannot be disputed by any of the party. The applications for loan were made by the 5 CA3919/11with 15CAs aforesaid four societies by 7th July, 2009. A meeting of Loan Sanctioning Committee was held on 8th July, 2009, and as per the record of the said Bank, loan came to be sanctioned to all these aforesaid four societies by resolution dated 8th July, 2009. It is noticed that the loan to the tune of Rs. 280 Lacs was sanctioned to Jagdamba society, loan to the tune of Rs. 275 Lacs was sanctioned to Jyotiba society, Shetkari society was sanctioned loan to the tune of Rs.290 Lacs and Sindphana society was sanctioned loan to the tune of Rs.190 Lacs. The disbursement of the loan took place on 10th July, 2009. On the resolution by which the loan was sanctioned, signatures of all the aforesaid four applicants are found. 5. The fact that the loan has been granted to the various societies is not seriously disputed by the aforesaid four applicants. 6. The learned Advocate Mr. R.N. Dhorde appearing on behalf of Smt. Latabai Sanap had advanced arguments. The learned Advocate Smt. S.S. Jadhav, Mr. S.L. Kulkarni and Mr. V.D. Salunke had in principle supported the arguments of Mr. R.N. Dhorde, learned Advocate and had advanced additional submissions by way of special submissions in regard to their respective client. The learned Public Prosecutor Mr. S.V. Kurundkar 6 CA3919/11with 15CAs had opposed the anticipatory bail applications. 7. The learned Advocates for the applicants had submitted that it is true that all the applicants are directors of the said Bank. It is also contended that in the meeting which was held on 8th July, 2009, all of them were present and their signatures were obtained an attendance sheet. However, no subject in the nature of grant of loan to the aforesaid four non- agricultural societies came up for discussion, and that, according to them, after the meeting was over, at the instance of the President Mr. Rajabhau Mundhe, a resolution was inserted in the other resolutions dated 8th July, 2009, which were passed thereby showing on record that the loans have been sanctioned to the aforesaid four societies. The learned Advocates for the applicants had therefore submitted that the applicants were not knowing anything about grant of loans and they were not party to the grant of loans, and that is how they should not be involved in the respective crimes and that they are entitled to anticipatory bail. It was also suggested that the investigating agency had issued notices to the applicants and the applicants had responded to the said notices and that is how the applicants had showed their bonafides. It was also suggested that by order dated 11th November, 2011, passed by the Co-operative Department, an Administrator 7 CA3919/11with 15CAs had been appointed, and as of today, the Administrator has taken charge and all the record pertaining to the said Bank is in the custody of the Administrator, and therefore, the police would be able to approach the Administrator to get all the record and investigate into the allegations and that is how it was submitted that the custodial interrogation of the present applicants is not warranted. 8. It was also submitted on behalf of the learned Advocates for the applicants that first information report is filed in respect of the four societies and in the respective first information reports, names of the present applicants are not mentioned, and, that would clearly go to show that the applicants are innocent and that the police are trying to rope the present applicants in respect of the said first information reports. Without any basis, the learned Advocate Smt. S.S.Jadhav, on behalf of the applicant Mangala More had submitted that the said applicant has been suffering from tuberculosis, and therefore, it was impossible for said Mangala More to participate in the said proceedings. A file containing medical papers in regard to said Mangala More was made available to the Court and it was submitted that as said Mangala More is suffering from tuberculosis, her custodial interrogation can conveniently be avoided as she is prepared to 8 CA3919/11with 15CAs face interrogation at the relevant police station as and when called for. It was also submitted on behalf of all the applicants that the said Bank has instituted proceedings against aforesaid four societies for recovery of amount and some of them have already deposited the amounts in the Court. It was sought to be submitted that due process of law for recovery of loans is being followed by the said Bank. 9. The learned Advocate Mr. V.D. Salunke appearing on behalf of the applicant Mr.Vilas Badge had drawn my attention to the letter dated 14th December, 2009 addressed to the Chief Executive Officer of the said Bank, whereby said applicant Mr. Vilas Badge had lodged protest as regards grant of loan to aforesaid four societies. According to learned Advocate Mr. V.D. Salunke, the protest was launched as per the provisions of Section 73 (1 AB) of the Maharashtra Co-operative Societies Act (for short, ‘said Act’) and that is how applicant Mr. Vilas Badge has complied with the provisions. He had submitted that the said Bank had addressed a letter to applicant Mr. Vilas Badge bearing letter dated 31st December, 2009, assuring that the protest lodged by Mr. Vilas Badge through letter dated 14th December, 2009 would be placed before the meeting for the purposes of its acceptance. The learned Advocate Mr. V.D. Salunke had also drawn my attention to the 9 CA3919/11with 15CAs minutes of the meeting of the Board of Directors which had taken place on 27th January, 2010, wherein the protest letter dated 14th December, 2009 was placed and the said protest was taken on record, and in the said meeting, resolution dated 8th July, 2009 had come up for confirmation. The learned Advocate appearing for Mr. Vilas Badge had submitted that Mr. Vilas Badge on coming to know about grant of loan in an illegal manner had lodged this protest, and therefore, Mr. Vilas Badge had done everything which was within his power and as such innocence of Mr. Vilas Badge is made out and that is how he is entitled for anticipatory bail. 10. Learned PP Mr. S.V. Kurundkar appearing for the State had opposed the above submissions. The learned P.P. had submitted that though the first information reports are filed in regard to the administration of aforesaid four societies, the grant of loan to the aforesaid four societies is also a factor which is involved in the said first information reports and the said grant of loan has link with the said Bank and the management of the said Bank. According to the learned P.P., the very grant of loan to the aforesaid four societies being non-agricultural societies, itself is illegal, and that, applicants are responsible for the same. The learned P.P. had submitted that the fact that the applicants had remained present for the said 10 CA3919/11with 15CAs meeting, clearly goes to show that they were party to the said resolution and that is how they would be responsible for grant of said loans. 11. The learned P.P. had further submitted that the creation of these four societies itself was in doubt in as much as various persons whose names were shown as members were non-existing persons and a serious doubt is required to be raised about existence of four societies. The learned P.P. had submitted that these four societies have been granted loans much in excess of their repaying capacity and that is how a serious doubt is required to be raised about grant of loans by the said Bank to the four societies. The aspect of credit worthiness was not considered by the said Bank for the purpose of grant of loan. He had further submitted that the statements recorded by the police in the course of investigation do show that cash payments were made to Mr. Rajabhau Mundhe and others though the cheques were for an amount of Rs.20,000/-. According to him, when the payment was made in the bank on 10th October, 2009, this aspect was not considered by the persons who were then working in the said Bank and payment in cash for an amount more than Rs.20,000/- speaks volumes about the manner in which the bank was functioning and to that extent the directors of the Bank will be answerable. It was also pointed out that the 11 CA3919/11with 15CAs said cash payment was made beyond the banking hours i. e. at about 08.00 p.m. He had drawn my attention to the statements of various persons in regard to the Sindphana Society who have come forward to say that they had no connection whatsoever with the said society, and, on record, their names are shown as members and bogus receipts are prepared for having paid membership and various other documents have been executed behind their back by somebody else to create a record that those persons are members of the society. For the sake of secrecy, their names are not disclosed in this order. 12. In so far as the withdrawal of the cash is concerned, learned P.P. had produced the substantial material on record. Mr. Khade, the sub- branch Manager of the said Bank has narrated the incident of 10th October, 2009. According to said Mr. Khade, Mr. Rajabhau Mundhe and Mr. Bhujang Mundhe had come to the bank and compelled them to open account on the basis of loan sanction order on the spot and monies were withdrawn on the strength of the cheques purported to have been signed by the respective office bearers of the respective societies drawn in the name of individuals being bearer cheques. Mr. Babri Rajabhau Mundhe also joined Mr. Rajabhau Mundhe in the matter of withdrawal of cash. Mr. Vitthal Govind 12 CA3919/11with 15CAs Jadhav, a Cashier, has also rendered statement and he speaks about withdrawal of monies in the late evening. He has specifically stated that on the cheques, came to be tendered for payment, account number was not mentioned. Two peons by name Mr. Madan Chate and Mr. Balu Swami have also supported the statements made by Mr. Khade and Mr. Jadhav as regards withdrawal of the monies. The learned P.P. had shown this record to indicate the manner in which the irregularities were carried out in regard to functioning of the said Bank. 13. Mr. Arun Kulkarni is an employee of the said Bank. He has rendered statement that the resolution to pass loans to the aforesaid four societies was not discussed in the meeting which took place on 8th July, 2009 and that he was asked to insert that resolution by Mr. Rajabhau Mundhe as the signatures of various directors were already obtained on the attendance-sheet. He has however narrated that he had informed all the directors about incorporation of passing of resolution in the meeting dated 8th July, 2009. This stand of Mr. Arun Kulkarni is duly supported by the statements of two directors i. e. Mr. Dilip Hambarde and Mr. Vilas Sonwane who have rendered statements to say that they were made known about the resolution as regards grant of loans on 8th July, 2009 by 12th July, 2009 and 13 CA3919/11with 15CAs that they had recorded their protest. Learned P.P. had further placed before the Court a report given by the concerned officer of the said Bank. By said note, specific reasons were given as to why the loan should not be granted to the aforesaid four societies. 14. The learned P.P. had drawn my attention to the provisions of Section 73 (1 AB) of the said Act. He submitted that the members of the committee shall be jointly and severally responsible for all the decisions taken by the said Bank during its term relating to the business of the society. He had also drawn my attention to the proviso to said sub-section 1 AB of Section 73 and had pointed out that if a resolution is passed and if a member of said committee is not inclined to accept the said resolution, he has to record his protest within seven days from the date of the said resolution or decision. According to learned P.P., none of the directors placed their protest-note within a period of seven days from the date when the meeting took place. He had submitted that it may be true that Mr. Vilas Badge had placed protest-note by a letter dated 14th December, 2009, however, it is clear that said note was not put within a period of seven days. He had therefore submitted that placing the protest-note by 14th December, 2009 was not in conformity with the provisions of law and said protest-note 14 CA3919/11with 15CAs cannot be acted upon. 15. The learned P.P. had therefore submitted that as of today the investigation carried out by the investigating agency clearly shows the manner in which the said Bank had advanced loans to the aforesaid four societies in an illegal manner. He had submitted that the investigation is still in progress and that the custodial interrogation of all the four applicants is necessary, as at the relevant time they were directors and they alone who would be able to say something if the proper interrogation done in a proper atmosphere. He had, therefore, submitted that the applications for anticipatory bail shall be rejected. 16. I have considered the rival submissions. For the reasons to follow, I am inclined to reject all the anticipatory bail applications. 17. The fact that the four applicants were the directors of the said Bank at the relevant time i. e. on or about 8th July, 2011 cannot be disputed. The fact that all the four directors were present at the meeting held on 8th July, 2009, also cannot be disputed as their signatures do appear on the attendance-sheet. By the resolution dated 8th July 2009, loans have been 15 CA3919/11with 15CAs sanctioned to the various persons including aforesaid four societies, and I have already indicated that the loans sanctioned are in terms of Lacs of rupees. In my view, it would be just difficult to accept that this important business would pass without discussion. It is true that Mr. Arun N. Kulkarni has stated in his statement that no discussion taken place as regards the grant of loan to the aforesaid four societies on 8th July, 2009, and on account of pressure put on him by Mr. Rajabhau Mundhe and per the directions of Mr. Rajabhau Mundhe the resolution to sanction loan came to be inserted in a post-facto manner. This word of Mr. Arun N. Kulkarni though stated in the course of recording of his statement cannot be accepted as a gospel truth. Proper investigation in regard to the same is required to be done as one does not know whether this statement of Mr. Arun N. Kulkarni is coming forth to protect the aforesaid applicants. 18. Mr. Vilas Sonwane, a director, had rendered a statement on 8th August, 2011. He has stated in his statement that on 12th July, 2009, he had been to the said Bank and he had asked said Arun N. Kulkarni to produce the proceeding register, however, he did not make the said register available. He admits that, Mr. Arun Kulkarni then informed him that the resolution to pass loans to Sindphana Society and other 3 to 4 societies has 16 CA3919/11with 15CAs been incorporated. He further states that he thereafter lodged his protest, and that, his letter was also duly attended by the said Bank. A similar statement is made by Mr. Dilip Hambarde. These statements by themselves will clearly show that the directors were aware of the fact by 12th July, 2009 that a resolution came to be passed about grant of loans to the aforesaid four societies in or about 12th July, 2009. The fact that the loans for heavy amounts came to be sanctioned to the non-agricultural societies was certainly a matter of concern for all the directors. The present applicants claim that they were not knowing anything about the grant of loans to the aforesaid four societies. This stand of applicants cannot be accepted. 19. The applicant Mr. Vilas Badge claims that he had sent a protest letter dated 14th December, 2009. It is pertinent to note that Mr. Vilas Badge in his letter dated 14th December, 2009 has not mentioned the date on which he came to know about passing of the resolution. This speaks volumes. If at all Mr. Vilas Badge had learnt about passing of the resolution very close to 14th December, 2009, surely nothing prevented Mr. Vilas Badge to state in the said letter dated 14th December, 2009 that he learnt about the news about passing of resolution to grant loans to the aforesaid four societies on a particular date. Absence of the relevant particulars as to when Mr. Vilas 17 CA3919/11with 15CAs Badge came to know about passing of the said resolution clearly indicates that this letter dated 14th December, 2009 was sent by Mr. Vilas Badge only to create a record and try to see that a defence is created in his favour. In my view, though Mr. Vilas Badge had sent a letter dated 14th December, 2009, the non-furnishing of necessary particulars as to when he came to know about passing of the said resolution, is a factor which goes against him. The response of the said Bank to the letter dated 14th December, 2009 by dated 31st December, 2009 is a routine response in as much as said Bank has stated that the letter dated 14th December, 2009 would be placed before the relevant meeting. It is noticed that the meeting was conveyed on 27th January, 2010 for the purposes of approval of the resolution dated 8th July, 2009. That is the time taken to approve the resolution dated 8th July, 2009 by way of a formal meeting was about six months. This also speaks volumes about the manner in which the said Bank was functioning. If this was so, it was necessary for the directors to question the concerned officers as regards confirmation of the minutes of the meeting which had taken place on 8th July, 2009. In my view, the meeting had taken place on 8th July, 2009. The directors of the Bank i. e. the present applicants should have questioned the administration within a reasonable time as to when the minutes of the meeting held on 8th July, 2009, are going to be placed before 18 CA3919/11with 15CAs the relevant committee for its approval. To allow the minutes, not to be approved for a substantial long time, is a factor which goes against the interest of present applicants. It is true that the resolution passed on 27th January, 2010 goes to record the protest of Mr. Vilas Badge. At the same time, the question is, whether the protest lodged on 14th December, 2009 was within the permissible period ? The answer is in the negative. If Mr. Dilip Hambarde and Mr. Vilas Sonwane could know about the resolution, dated 8th July, 2009, by 12th July, 2009, surely this news about grant of loan to various non-agricultural societies in terms of lacs of rupees and without there being any formal discussion, must be a matter of concern for other directors, and therefore, it will have to be taken that all the directors who are applicants, were aware about the resolution dated 8th July, 2009 and they did not lodge their protest within a period of seven days from the date of passing of the resolution. Surely this sensitive news about grant of loans to four societies could not have remained a matter of secret. In my view, for aforesaid reasons, knowledge will have to be imputed to all applicants about what transpired regarding grant of loan to four societies. For the aforesaid reasons, it is apparent that all applicants exhibited negligence in the administration of bank. Surely, as directors of the said Bank, they are responsible of