1 CR.APL NO.5407-10 (group) IN THE HIGH COURT OF JUDICATURE OF BOMBAY BENCH AT AURANGABAD CRIMINAL APPLN/5407/2010 PRABHAKAR SUDHAKAR JADHAV ...APPLICANT V/S THE STATE OF MAHARASHTRA AND ANR ...RESPONDENTS ... Mr.A.B.Girase, Adv., for the applicant. Mr. V.H.Dighe, APP for State. ... WITH CRIMINAL APPLN/5404/2010 VASANTRAO UTTAMRAO PATIL ...APPLICANT V/S THE STATE OF MAHARASHTRA ...RESPONDENTS ... Mr.Joydeep Chatterji, Adv., for the applicant. Mr.V.H.Dighe, APP for State. ... WITH CRIMINAL APPLN/5434/2010 ANANDA VITTHAL PATIL AND ORS ...APPLICANTS V/S 2 CR.APL NO.5407-10 (group) THE STATE OF MAHARASHTRA AND ANR ...RESPONDENTS ... Mr.V.D.Salunke and Mr.P.B.Patil, Adv., for the applicants. Mr.V.H.Dighe, APP for State. ... WITH CRIMINAL APPLN/5429/2010 AVINASH DAULAT SURYAWANSHI ...APPLICANT V/S THE STATE OF MAH AND ANR ...RESPONDENTS ... Mr. A.I.Deshmukh, Adv., for the applicant. Mr. V.H.Dighe, APP for State. ... WITH CRIMINAL APPLN/10/2011 BHAYYASAHEB BAJIRAO PATIL AND ORS ...APPLICANTS V/S THE SUPERINTENDENT OF POLICE JALGAON AND ANR ...RESPONDENTS 3 CR.APL NO.5407-10 (group) ... Mr.D.B.Thoke, Adv., for the applicant. Mr. V.H.Dighe, APP for State. ... WITH CRIMINAL APPLN/5439/2010 CHITRASEN YASHWANTRAO PATIL AND ORS ...APPLICANTS V/S THE STATE OF MAHARASHTRA AND ANR ...RESPONDENTS ... Mr.Mr. L.V.Sangit, Adv., for the applicant. Mr.V.H.Dighe, APP for State. ... CORAM: K.U.CHANDIWAL, J. DATE:14/2/2011 *** PER COURT : 1. The applicants seek discretion in terms of Section 438 Cr.P.C. in Crime No.313/2010, registered at Chalisgaon Police Station, dist. Jalgaon, for an offense under Sections 406, 408, 409 of IPC. The applicant in Criminal Application No.5407/2010 and the applicants in Criminal Application No.5434/2010 Ananda Vithal Patil and six others claim to be from rival group. They have prima facie informed, by correspondence at all the stages, they have opposed the illegal activities of the 14 Board of 4 CR.APL NO.5407-10 (group) Directors of Chairman's group who are in majority and eight Directors (applicants) referred above are in minority group. Applicant Avinash in Application No.5429/2010 is also one of the Director. He informs, he has even filed report against the Directors/Management of the Sugar Factory with Chalisgaon Police Station. He has raised objection before financial institution of sugar factory i.e. Jalgaon District Central Cooperative Bank, Jalgaon. In every meeting he has raised objection regarding the irregularities committed by the managing body. He reiterates, the Chairman and Vice Chairman have not properly managed the management of the sugar factory which caused heavy loss to the sugar factory. 2. Application No.5439/2010 is moved by Chitrasen Yashwantrao Patil, Chairman, Ravindra s/o Kedarsingh Patil, Vice Chairman, Sanjay Shivram Patil, Director and Rajani s/o Vasantrao Patil, Director. Applicant in Application No. 5404/2010, is a Managing Director of Belganga Sugar Factory, Chalisgaon ( factory). Criminal Application No.10/2011 is moved by Directors of (Chairman's group) the said sugar factory from 2006 for a period of five years. 3. The matter revolves to Belganga Cooperative Sugar Factory situate at Chalisgaon ( for short, "factory"). Since there was 5 CR.APL NO.5407-10 (group) mismanagement and heavy losses the sugar factory was closed for a period of 4-5 years. Elections were held in 2006 for fresh body in which the above referred applicants came to be elected. The Directors allegedly raised funds to start and run the factory. 4. The affairs of the factory were taken charge by District Central Cooperative Bank ( for short "DCC Bank") as its huge liabilities remained unpaid due to mismanagement. The applicants approached the administrator, managing director and the office bearers of DCC Bank with a proposal to activate the sugar factory by availing financial assistance from other sources and, consequently, by virtue of Section 13 (2) and (4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 , (for short, 'Securitisation Act') proceedings were kept in abeyance without prejudice to the rights of the Bank and agreement was entered between the DCC Bank and Board of Directors with the terms specified therein. 5. The applicants from Chairman's group have a grievance, in order to avoid credit to the smooth administration of the sugar factory and, to settle political scores with the applicants, chairman and vice chairman, the rival political group has misused the power and 6 CR.APL NO.5407-10 (group) Police are acting at the advice of such rival group to malign the reputation of the applicants, resulting in registration of the crime vide Crime No.313/2010 dt.25.10.2010 based on audit report of the complainant. 6. The predominant allegations in the FIR against the applicants are: (a) Sugar was sold at a lower rate without inviting tenders by causing proper publication of the advertisement and the permission obtained from Hon'ble High Court to dispose of the sugar is without disclosing facts and number of sugar bags prevailing at the material time. The sale of 7500 bags of sugar sought from Hon'ble High Court was misused resulting in loss of Rs. 31,70,851/-. The record illustrates that 17,500 quintal sugar was sold by the Chairman/Director and their group. (b) Export of sugar: The sugar was sold at the rate of Rs.1,000/- per quintal, without any permission of export as the exporter was said to be M/s Dambaoiwala Suppliers, Badodara, and it is not clear as to destination of the sugar. No subsidy application was moved to the competent authorities while exporting sugar at the rate of Rs.1025/- per bag whereas the rate of the sugar factory was fixed at Rs.1000/- per bag. 7 CR.APL NO.5407-10 (group) Consequently, factory suffered the loss of Rs. 2,60,000/-. (c) Sale of scrap material: Cotriple Body Nos.3 and 4 brass tubes located in the boiling house were sold at the rate of Rs.17,000/- per M.T. totalling to 32.99 M.T. without mentioning details of the scrap, and from the same purchaser another material was purchased by paying cost of Rs.41,86,144/- while the scrap was sold at Rs. 26,59,389/-, thereby factory suffered loss of Rs. 15,26,775/-. 7. Learned Counsel submits that before filing FIR in terms of statutory arrangement, the Board of Directors/Chairman could have been called to explain, and after carrying rectification to the audit report then only action should have been taken. No action in terms of Section 88 of Maharashtra Cooperative Societies Act about the power of the Registrar to assess the damages was contemplated. It was also informed, powers under Section 146 of Maharashtra Cooperative Societies Act were to be adhered as the auditor had to obtain sanction from the office of the Registrar by virtue of power created under Section 142(3) of the Maharashtra Cooperative Societies Act. 8 CR.APL NO.5407-10 (group) 8. The Counsel also submits, provisions of Sections 406, 408, 409 read with Section 34 of IPC will not be applicable as the acts complained of are not within the bracket of infraction. 9. The fact remains, the rival group directors ( Application No.5407/2010, 5429/2010 and 5434/2010) are from minority group. Mr. Salunke, learned Counsel, pointed several applications made by the applicants to the competent authorities, informing that the Chairman and the majority group are coordinating the affairs of the factory to their personal gains thereby factory is put to losses, instances of misappropriation, dereliction in normal discharge of obligations were pointed. These were not signatory to several Resolutions. Their grievances were tried to be addressed for which meetings were held. It was based on their grievances action of conducting audit is commenced. On perusal of the record, I find that these Directors on the available occasion have protested about mismanagement in the factory by the Chairman, his group. Even if learned A.P.P. repeatedly harps that in terms of Section 73(1) (AB) of Maharashtra Cooperative Societies Act there is joint and several liability of those directors, however, considering no role being played by these Directors in above referred 3/4 activities carried by the sugar factory, 9 CR.APL NO.5407-10 (group) custodial interrogation of these Directors not warranted. 10. So far as other group is concerned, even if Mr.Thoke, learned Counsel, Mr. Chatterji, learned Counsel, points several provisions of law, however, at this preliminary stage, role of the accused/applicants in misappropriation, and mismanagement of selling the sugar at lower price, obtaining permission from High Court, without disclosing correct figure of stock, selling brass tubes as scrap and purchasing virtually same material from same dealer, generate an impression of involvement of the Chairman/Managing Director and other directors of his group. There are no details at what rate the middleman has sold sugar. Everything was kept in wrapper. Consequently, it is imperative, they will have to explain with documentary support to justify their high handed action. No proper resolutions are taken to carry the activities, it is more so, the minority directors were protesting all throughout. The nexus of the Chairman, Vice Chairman, Managing Director with the purchaser in manufacturing the documents, preparing documents, without panchnama of worth of the brass tubes, certainly calls for in-depth investigation. 10 CR.APL NO.5407-10 (group) 11. In the result, the Chairman and the rival group - Managing Director does not deserve pre-arrest bail. Hence order: ORDER (a) Application No.5407/2010 (Prabhakar Sudhakar Jadhav), 5434/2010 (Applicants No.1 Ananda s/o Vitthal Patil, No.2 Abasaheb s/o Pandharinath Nikam, No.3 Yashvant s/o Bankat Patil, No.4 Barikrao s/o Rama Wagh, No.5. Jayvantrao s/o Krushna Patil, No.6 Tanhiram s/o Pralhad Patil, No.7 Rohidas s/o Lala Patil) and 5429/2010 (Avinash Daulat Suryawanshi), are allowed. In the event of arrest of these accused/applicants, each one of them be released on furnishing P.R. bond and surety in the sum of Rs.50,000/- (Rs. fifty thousand). The accused/applicants shall attend the investigator and also the auditor whenever specifically informed. The accused/applicants shall not leave jurisdiction of Jalgaon district without permission of the Court till conclusion of the trial. The applicants shall not influence the witnesses. 11 CR.APL NO.5407-10 (group) (b) Criminal Application Nos. 5404/2010 (Vasantrao Uttamrao Patil), 5439/2010 (Chitrasen s/o Yashwantrao Patil, Ravindra s/o Kedarsingh Patil, Sanjay s/o Shivram Patil, Rajani w/o Vasantrao Patil), 10/2011 (Applicants Nos. (1) Bhayyasaheb Bajirao Patil, (2) Balasaheb @ Bhalchandra Gajmal Borse Patil, (3) Thansing s/o Hilal @ Bhila Bhosale, (4) Sau.Vimalbai w/o Arvind Patil, (5) Changdev Tulshiram Patil/Rathod, (6) Deepak s/o Devram Patil, (7) Chhagan s/o Pita Rathod and (8) Gulabrao s/o Sakharam Patil/Daund) are rejected. These applicants to surrender before the investigator on 22nd Feb.,2011. (K.U.CHANDIWAL) JUDGE agp/5407-11craplgr