{1} IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD CRIMINAL APPLICATION NO. 4147 OF 2009 1. Sunil Jaswant Seth, Age-Adult, Occ-Business 2. Dr.Shashank Jagannath Joshi Age-Adult, Occ-Doctor 3. Dr.Sharad Govardhandas Bhatiya Age-Adult, Occ-Doctor 4. Dr.Tulsidar Dhanaji Chavan Age-Adult, Occ-Business 5. Chandrashekhar Manakchand Upadhye, Age-Adult, Occ-Business 6. Sahebrao Vasantrao Pawar Age-Adult, Occ-Business All R/o New Plot, Amalner, Tq-Amalner, Dist-Jalgaon APPLICANTS VERSUS The State of Maharashtra Through Police Inspector, Gandhalipura Police Station, Amalner, Dist-Jalgaon RESPONDENT WITH CRIMINAL APPLICATION NO. 4148 OF 2009 1. Prakash s/o Multanmal Jain, Age-Adult, Occ-Business {2} 2. Natvarlal Devsibai Nande Age-Adult, Occ-Doctor Both R/o Amalner, Tq-Amalner, Dist-Jalgaon APPLICANTS VERSUS The State of Maharashtra Through Police Inspector, Gandhalipura Police Station, Amalner, Dist-Jalgaon RESPONDENT ....... Mr.S.V.Gangapurwala, Advocate for applicants Mr.B.J.Sonawane, APP for respondent State ....... [CORAM : A.V.POTDAR, J.] RESERVED ON : 10.02.2010 PRONOUNCED ON : 17.02.2010 ORDER: 1. By these applications, the applicants have prayed to release them on anticipatory bail in the event of their arrest in connection with CR No.188/2009 registered with Gandhilpura police station Amalner for an offence punishable u/s 408, 409, 420, 464, 467, 468, 471, 477 (a) r/w 34 of the Indian Penal Code as the applications preferred by the applicants are rejected by the Sessions Court, Amalner. {3} 2. It appears that interim protection is granted to the applicants by this Court vide order dated 27.11.2009. 3. Heard learned counsel for the applicants followed by the submissions of learned APP. Perused the papers of investigation carried out till today. 4. It appears that the offence is registered with Gandhilipura police station Amalner on 13.11.2009 on the complaint of one Purushottam Bhavsar, Special Auditor, Class-I, against the Board of Directors, Defaulter borrowers and employees of “Shriraj Nagari Sahakari Patsanstha Ltd., Amalner”. It is alleged that the complainant has carried out audit of the said Cooperative Credit Society of the period 01.04.2007 and 31.03.2008 and it is noticed that the Board of Directors of the said society has sanctioned loans to their relatives out of way and in violation of the legal provisions, granted loans to the staff members which is not repaid, no action is taken against the defaulter borrowers for recovery of the loan, funds of the society were invested in another cooperative societies and not taken bank, they have also prepared false minutes of the meetings and thus, they have caused loss to the said society to the tune of Rs.1,19,08,097/- and hence he lodged the complaint on the basis of the audit conducted by him. 5. It is not disputed that the applicants in Criminal Application No.4147/2009 are the office bearers of the said society {4} i.e. applicant No.1 was the Chairman during the period 11.01.2001 to 20.01.2002 is still is the Director of the said Society, applicant No.2 was the Chairman during the period 31.07.1992 to 30.12.1996 and Vice Chairman during the period 16.081999 to 10.01.2001, applicant No.3 was the Director of the said society during the period 31.07.1992 to 31.03.2008, applicant No.4 was the vice chairman of the said society during the period 10.04.2006 to 31.03.2008, applicant No.5 was the vice chairman of the said society for the period 21.10.2002 to 21.04.2003 and applicant No.6 was the director of the said society during the period 10.04.2006 to 31.03.2008. So also it is not disputed that applicants in criminal application No.4148/2009 are the office bearers of the said society i.e. applicant No.1 was the vice chairman of the said society for the period 20.12.1995 to 30.12.1996 and from 22.04.2003 to 19.05.2005 and applicant No.2 was the vice chairman of the said society for the period 11.01.2001 to 20.01.2002 and is the director from 31.07.1992 till date. 6. Before considering the rival submissions, it is necessary to note that from the minute perusal of the complaint and record of investigation, it is clear that allegations against applicant Sunil, Shashank, Prakash and Natvar are specific i.e. specific role is attributed them whereas allegations against the remaining applicants are omnibus and sweeping in nature. 7. It appears that the allegations against the applicants {5} are under 10 different heads viz, investment in violation of law and rules in other credit cooperative societies worth Rs.53,35,709/- i.e. fixed deposit in 6 different credit cooperative societies including Rs. 50,000/- in the SBI mutual fund and Rs.5,17,291/- deposited in savings account. To this allegation, learned counsel for applicant has submitted that the said amount was invested in the said societies with consultation and as per the advice received from the Assistant / Additional Registrar, Cooperative Societies and hence it cannot be said that the said investments were in violation of law and rules. It is to be noted that apart from investment in SBI mutual fund and investment in Priyadarshini cooperative society, though the said amount was due, yet was not recovered. 8. Under the second head, it is alleged that unauthorized reserve fund of Rs.1,74,402/- has been deducted by applicants Shashank and Sunil. According to learned counsel for applicants, the same is an error in accounting for which the applicants cannot be held responsible. 9. Under the third head, rebate relaxation, it is alleged that rebate of Rs.24,896/- was offered to the defaulter borrowers at the instance of applicant Shashank. To this allegation, it is the contention of the learned counsel for applicants, that this rebate was subsequently recovered from the concerned borrowers. 10. Under the fourth head, it is alleged that at the instance {6} of applicant Shashank, payment of internal audit fee to the tune of Rs.21,000/- was paid to one auditor. To this allegation, it is the contention of the applicants that out of Rs.21,000/-, Rs.16,000/- are repaid by the said auditor. It is to be noted that receipt of the return of amount is not on record. It is further contended on behalf of the applicants that remaining Rs.5,000/- have retained by the auditor as his fees towards audit. 11. Under the 5th head it is alleged that there is difference in the loan accounts in the sum of Rs.1,74,083/-. To this it is the contention of the applicants that this is an error in maintaining the accounts. It is to be noted that this difference has resulted into increase in amount at the credit side instead of debit side. 12. Under items 6 and 7 it is alleged that the applicants have prepared false proceeding books in absence of full coram and names of the persons are shown as proposers and supporters of the resolutions, however there are no signatures of the said persons in the proceeding books. In the complaint instances are quoted to that effect. To this allegation it is contended on behalf of the applicants that though the said members were present at the time of said meetings, yet they declined to sign the minutes of the meeting and thereafter they have given written explanation to the auditors to that effect. It is also submitted that during the said meetings neither any policy decision was taken nor any loan was sanctioned. {7} 13. Under 8th head, it is alleged that loans were sanctioned to the relatives of the board of directors in violation of legal provisions and without verifying any document. There are specific allegations in this respect against both the applicants in criminal application No.4148/2009. According to learned counsel for the applicants, the said loans were granted under the bye law No.11 (6A) and there is no violation of bye law No.11 (6B) in respect of eligibility of those relatives to whom loans were sanctioned. 14. Under heads No.9 and 10 it is alleged that loans disbursed to the employees are not recovered. To which it is the contention of the applicants that loans were recovered under the last head. It is alleged that loans were granted to number of persons in violation of rules and legal provisions for which space is found kept blank against the names of borrowers to whom loan was shown as paid. According to learned counsel for applicant, this is an error on their part. 15. According to learned counsel for applicant, steps are taken against the defaulter borrowers and hence it cannot be said that the present applicants are responsible for not taking any steps for recovery of loan advanced. Lastly, it is submitted that now as the entire record is seized and hence custodial interrogation of the applicants is not necessary and, therefore, it is requested to release the applicants on anticipatory bail. {8} 16. It is also the submission on behalf of the applicants that as the wife of complainant, Special Auditor, is the director of Pryadarshini Credit Cooperative Society, where huge amount was invested by the present society and the said Pryadarshini society is interested to take over the present society, the directors of the said society are pressurizing the present society at the hands of present complainant and hence it is requested to allow both the applications. 17. While opposing both the applications, it is urged by learned APP that considering the evidence against the present applicants, who are the directors of the said society, it prima faice appears to be a systematic siphoning of crores of rupees in utter disregard not only to the inbuilt checks but also to the provisions of law. The funds entrusted to the applicants for purpose of legitimate business of banking appears to have been engulfed by the applicants by using their office. In support of this submissions, reliance is placed on the observations of this Court in the judgment reported in 2008 ALL MR (Cri) 3467 in the matter of “Dr.Dattatraya Jaikrishna Gotmare V/s State of Maharashtra”. It is urged that considering the evidence against the applicants in application No.4148/2009, that by using their posts, loans were advanced by them to their relatives without verifying eligibility of the borrowers and in violation of Rule 11 (6B) of the bye laws of the said society and also some relaxation is given to the directors to {9} advance or sanction loan in favour of their relatives. It is also urged that for the transactions at the hands of applicant No.2 in application No.4147/2009, though objections were raised by the Manager and the office bearers of the society yet loans were advanced so also this applicant is guilty of making entries in unauthorized reserved funds as well as there are allegations of difference of loan amount in the accounts of the borrowers. It is also urged that at the instance of applicant No.1 in criminal application No.4147/2009 loan was sanctioned way back to the relatives of applicant No.1 in criminal application No.4148/2009. 18. Considering the rival submissions, it is clear that the role alleged against applicants No.1 and 2 in criminal application No.4147/2009 is very specific in respect of disbursement of loan to undeserving persons that too without verifying documents and adjusting entries in the books of accounts, which are tried to be projected as errors in accounting. So also the role alleged against both the applicants in criminal application No.4148/2009 in respect of sanctioning of loans to their relatives is apparent that without verifying their eligibility and in contravention of bye law No. 11 (6B), loans were advanced so also, at their instance investment is made in other cooperative credit societies in violation of the rules and thus lost the hope of recovery of the amount. In the premise, there appears prima facie case against these applicants and the same cannot be termed as politically motivated and a false compliant to implicate the applicant. If this is so then to unearth {10} the truth, custodial interrogation of the said accused is must. 19. So far as applicants No.3 to 6 in criminal application No.4147/2009 are concerned, it is urged that they were party to the meetings conducted by other directors wherein some record was prepared and certain resolutions were passed. However, the complaint does not support that those resolutions were in respect of policy decision and any loan was sanctioned to any one in the said meetings. In the premise, so far as applicants No.3 to 6 in criminal application No.4147/2009 are concerned, case is made to enlarge them on anticipatory bail in the event of their arrest. 20. In the result, both the applications are disposed of with the following directions. ORDER i) Criminal application No.4147/2009 is partly allowed. ii) Interim protection granted to applicants No.3 to 6 is hereby confirmed and to remain in force till filing of the charge sheet. Iii) Application No.4147/2009 so far as it relates to applicants No.1 and 2 is rejected. iv) Criminal Application No.4148/2009 is also rejected. v) Interim protection granted in favour of applicants No.1 and 2 in criminal application No.4147/2009 and to both the applicants in criminal application No. {11} 4148/2009 stands vacated. vi) Applicants No.3 to 6 in criminal application No. 4147/2009 are directed to attend the concerned police station whenever required on written requisition by the IO concerned. vii) Both the criminal applications stand disposed of accordingly. [A.V.POTDAR, J.] drp/A10/criapln4147-09