Magnitude of the offence cannot be the only criterion for denial of bail: High Court of Delhi

IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 17th January 2022 IN THE MATTER OF: BAIL APPLN. 3750 2021 SUNDER SINGH BHATI ..... Petitioner Through Mr. Pradeep Singh Rana Mr.Ankit Rana Mr.Abhishek Rana Mr.Nitish Pande Advocates THE STATE ..... Respondent Through Mr. Amit Chadha APP for the State with SI Shiv Dev P S EOW BAIL APPLN. 3921 2021 RAJESH MAHTO ..... Petitioner Through Mr. Kumar Piyush Pushkar Advocate STATE..... Respondent Through Mr. Amit Chadha APP for the State with SI Shiv Dev EOW HON BLE MR. JUSTICE SUBRAMONIUM PRASAD SUBRAMONIUM PRASAD J. The Petitioners seek regular bail in FIR No. 89 2019 dated 01.06.2019 registered at Police Station Economic Offences Wing for offences under Sections 406 420 409 120B of the Indian Penal Code 1860 hereinafter “the Company”) and its Directors Officials Dr. Saroj Mahapatra Mr. Rajesh Mahto Ms. Daisy Vijay Menon Mr. Sunder Singh Bhati and other unknown persons had committed cheating and fraud. It is stated that the Complainant had received a message and an email from the Company stating that if he invested his money they would give him a 200% return within 1 year. The Directors Dr. Saroj Mahapatra and Rajesh Mahto called the Complainant and invited him to Netaji Subhash Place where they told him about the Company and explained their plans to expand it on the lines of Uber Ola. They told the Complainant that the Company was registered with RBI and SEBI. They further made the Complainant meet one Mrs. Daisy Vijay Menon who showed the Complainant the plan of the Company. It is stated that after much insistence the Complainant invested Rs. 9 00 000 . Further the Complainant‟s friends namely Rajesh Kumar Rajender Singh Yogender Singh Umed Singh Ajay Sunil also invested Rs. 15 to 20 lakhs. It is stated that on the 10th of every month instalment would be sent to the account of the investors however after the first two months no instalment was made. On speaking with Harish Bhati and Rajesh Mahto the Complainant was informed that he would get BAIL APPLN. 3750 2021 & Anr. the third instalment by 15th of the month i.e. 15th March however the third instalment was still not made. On calling the Company Saroj Mahapatra showed the Complainant a clip from social media showcasing that the Company‟s accounts had been frozen. It is stated that the Complainant‟s money has not been returned till date and that the accused do not pick up the calls of the Complainant. Stating that the Complainant and many others have been defrauded of their money the complaint was filed on the basis of which the instant FIR was registered. The Petitioner in BAIL APPLN. 3750 2021 filed an anticipatory bail application before the Ld. Trial Court which was dismissed vide Order dated 03.08.2019. The Petitioner in BAIL APPLN. 3750 2021 was declared absconder proclaimed offender on 17.02.2020 and was arrested on 09.12.2020. Anticipatory bail application before this Court was dismissed as infructuous vide Order dated 16.08.2021. Bail application under Section 437 Cr.P.C. of Petitioner in BAIL APPLN. 3750 2021 was dismissed vide Order dated 05.07.2021. Bail application under Section 439 Cr.P.C. of Petitioner in BAIL APPLN. 3750 2021 was dismissed by the Sessions Court vide Order dated 23.09.2021. An anticipatory bail application was filed by the Petitioner in BAIL APPLN. 3921 2021 which was dismissed by the Ld. Trial Court vide Order dated 19.09.2019. The Petitioner in BAIL APPLN. 3921 2021 was declared absconder proclaimed BAIL APPLN. 3750 2021 & Anr. offender on 17.02.2020 and was arrested on 22.08.2020. Bail applications before the Ld. CMM and the Ld. ASJ Rohini were dismissed vide Orders dated 11.09.2020 and 24.09.2020 respectively. After filing of chargesheet yet again bail application before the Ld. CMM was dismissed vide Order dated 10.05.2021. 3. Mr. Pradeep Singh Rana learned Counsel for Petitioner in BAIL APPLN. 3750 2021 submits that the Petitioner has been languishing in jail since 09.12.2020. He submits that no recovery has been made from the Petitioner or at the instance of the Petitioner and that therefore there is no link tying the Petitioner to the alleged scam. He brings to the attention of this Court that the Petitioner is neither an authorized signatory nor a director of the accused Company and that there is nothing to suggest that the Petitioner was associated with the accused Company. 4. Mr. Rana submits that the Ld. Trial Court erred in observing that the only investors who had gained from the scheme were relatives of the Petitioner. He states that several of the alleged victims received up to 40 50% of their invested amount within a month which buttressed the fact that early investors had received significant returns from the accused Company. Mr. Rana argues that it is not rational to assume that the Petitioner would induce his own relatives to invest in a scheme if he possessed the intention to scam people. 5. Mr. Rana submits that there is not an iota of evidence against the Petitioner in BAIL APPLN. 3750 2021. He further relies on Sadhupati Nageswara Rao v. State of Andhra Pradesh 8 SCC 547 A to submit that the essential ingredient for invoking both Sections 406 and 409 IPC is BAIL APPLN. 3750 2021 & Anr. „entrustment‟ and there is no evidence which suggests that the Petitioner had ever been entrusted with any money or property. He further argues that the FIR in the present case was registered two years ago and that till date the investigation is nowhere near completion. Mr. Rana submits that the declaration of PO is misconceived as the Petitioner had no intention to evade the law and was merely exercising his legal remedy of seeking anticipatory 6. Mr. Pradeep Singh Rana learned Counsel for the Petitioner in BAIL APPLN. 3750 2021 further submits that there is hardly any complaint which ascribes a distinct role to the Petitioner. He states that the trial is likely to take a long while and that there is no allegation against the Petitioner that he has threatened or approached the Complainant or any of the witnesses. He therefore submits that the Petitioner is liable to be granted regular bail. Per contra Ms. Meenakshi Chauhan learned APP appearing for the State in BAIL APPLN. 3750 2021 submits that the instant case involves the cheating of a large scale of money with total investors surpassing 900 and the amount cheated being Rs. 14 crores. She vehemently opposes the instant bail application stating that the Petitioner in BAIL APPLN. 3750 2021 had previously been declared PO and never joined investigation despite several notices being issued to him. She submits that there are many statements of witnesses complainants under Section 161 Cr.P.C. that specifically name the Petitioner and state that he took active part in the meetings representations for inducement. 8. Ms. Chauhan submits that the Petitioner is a direct recipient of the cheated amount through his relatives and that Rs. 1.59 crores approximately BAIL APPLN. 3750 2021 & Anr. were transferred from the account of the accused Company to the accounts of some known persons and then to the account of his son Nitin Bhati as well as directly from the account of the accused Company to his nephew brothers and brother in law. She submits that there are other FIRs which have also been registered against the Petitioner and that as charges are yet to be framed it would be detrimental to the case to grant the Petitioner bail. 9. Mr. Kumar Piyush Pushkar learned Counsel appearing for Petitioner in BAIL APPLN. 3921 2021 submits that there is no evidence to indicate that the Petitioner had induced the investors and concocted lies about RBI authorization. He submits that the accused Company was incorporated in 2015 and was named Ayurvedic India and that the Petitioner only joined the accused Company on 26.06.2018 after the ownership and name was changed and handed over to the promoters of SMP Impex Pvt. Ltd.1 SCC 40 the Supreme Court had observed as under: 21. In bail applications generally it has been laid down from the earliest times that the object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Deprivation of liberty must be considered a punishment unless it is required to ensure that an accused person will stand his trial when called upon. The courts owe more than verbal respect to the principle that punishment begins after conviction and that every man is deemed to be innocent until duly tried and duly found guilty. 22. From the earliest times it was appreciated that detention in custody pending completion of trial could be a cause of great hardship. From time to time necessity demands that some unconvicted persons should be held in custody pending trial to secure their attendance at the trial but in such cases “necessity” is the operative test. In this country it would be quite contrary to the concept of personal liberty enshrined in the Constitution that any person should be punished in respect of any matter upon which he has not been convicted or that in any circumstances he should be deprived of his liberty upon only the belief that he will tamper with the witnesses if left at liberty save in the most extraordinary circumstances. 23. Apart from the question of prevention being the BAIL APPLN. 3750 2021 & Anr. finger of accusation” against object of refusal of bail one must not lose sight of the fact that any imprisonment before conviction has a substantial punitive content and it would be improper for any court to refuse bail as a mark of disapproval of the accused has been former conduct whether convicted for it or not or to refuse bail to an unconvicted person for the purpose of giving him a taste of imprisonment as a lesson. 24. In the instant case we have already noticed that the “pointing appellants is “the seriousness of the charge”. The offences alleged are economic offences which have resulted in loss to the State exchequer. Though they contend that there is a possibility of the appellants tampering with the witnesses they have not placed any material in support of the allegation. In our view seriousness of the charge is no doubt one of the considering bail applications but that is not the only test or the factor : the other factor that also requires to be taken note of is the punishment that could be imposed after trial and conviction both under the Penal Code and the Prevention of Corruption Act. Otherwise if the former is the only test we would not be balancing the constitutional rights but rather “recalibrating the scales of justice”. 25. The provisions of CrPC confer discretionary jurisdiction on criminal courts to grant bail to the accused pending trial or in appeal against convictions since the jurisdiction is discretionary it has to be exercised with great care and caution by balancing the valuable right of liberty of an individual and the interest of the society in general. In our view the reasoning adopted by the learned District Judge which is affirmed by the High Court in our opinion is a denial of the whole basis of our system of law and considerations while BAIL APPLN. 3750 2021 & Anr. normal rule of bail system. It transcends respect for the requirement that a man shall be considered innocent until he is found guilty. If such power is recognised then it may lead to chaotic situation and would jeopardise the personal liberty of an individual. 46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged if proved may jeopardise the economy of the country. At the same time we cannot lose sight of the investigating agency has already completed investigation and the charge sheet is already filed before the Special Judge CBI New Delhi. Therefore their presence in the custody may not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI." emphasis supplied) 19. Therefore the magnitude of the offence cannot be the only criterion for denial of bail. The object of bail is to secure the presence of the accused at the time of trial this object is thus neither punitive nor preventative and a person who has not been convicted should only be kept in custody if there are reasons to believe that they might flee from justice or tamper with the evidence or threaten the witnesses. If there is no apprehension of interference in administration of justice in a criminal trial by an accused then the Court should be circumspect while considering depriving the accused of their personal liberty. Mere vague belief that the accused may thwart the investigation cannot be a ground to prolong the incarceration of BAIL APPLN. 3750 2021 & Anr. the accused. 20. Most importantly while the Petitioner in BAIL APPLN. 3750 2021 was arrested on 09.12.2020 the Petitioner in BAIL APPLN. 3921 2021 was arrested on 22.08.2020. Both the Petitioners have been in custody for over a year now. Chargesheet as well as supplementary chargesheet have been filed and all the evidence available is documentary in nature and in custody of the investigating agency. Whether or not the cheated money was entrusted to the Petitioners is a matter of trial and cannot be taken into consideration at this juncture. This Court is therefore of the opinion that continued custody of the Petitioners is no longer required and that both the Petitioners should be enlarged on bail. In light of the above observations this Court is inclined to grant bail to Petitioner in BAIL APPLN. 3750 2021 and Petitioner in BAIL APPLN. 3921 2021 subject to the following conditions: Each petitioner shall furnish a personal bond in the sum of Rs.1 50 000 with two sureties of the like amount one of them should be a relative of the petitioner to the satisfaction of the Trial Court The Memo of Parties shows that the petitioner in BAIL APPLN.3750 2021 is a resident of E 3 Road No.06 Gazipur Dairy Farms Gazipur Delhi 110092 and the petitioner in BAIL APPLN.3921 2021 is a resident of Flat No.125 Rose Apartment Sector 18B Dwarka New Delhi. The petitioners are directed to reside at their respective address till further orders The petitioners are directed to report to the concerned Police Stations thrice in a week i.e. on every Monday Wednesday and BAIL APPLN. 3750 2021 & Anr. trial. Friday at 10:30 AM and they shall be released by 11:00 AM after completing all the formalities The petitioners are directed to give all their mobile numbers to the Investigating Officer and keep them operational at all times The petitioners shall not directly or indirectly tamper with evidence or try to influence the witnesses in any manner In case it is established that the petitioners have tried to influence the witnesses or tamper with the evidence the bail granted to the petitioners shall stand cancelled forthwith. It is made clear that the observations made in this Order are only for the purpose of grant of bail and cannot be taken into consideration during the 23. Accordingly both the bail applications are disposed of along with pending application(s) if any. SUBRAMONIUM PRASAD J. JANUARY 17 2022 BAIL APPLN. 3750 2021 & Anr. 

Summary: The object of bail is to secure the presence of the accused at the time of trial. A person who has never been convicted should only be kept in custody if there are reasons to believe that he might flee from justice or tamper with the evidence or threaten the witnesses. If there is no apprehension of interference in administration of justice then the Court should be circumspect while considering depriving the accused of their personal liberty. Mere vague belief that the accused may thwart the investigation cannot be a ground to prolong the incarceration of the accused. These were stated by High Court of Delhi, consisting Justice Subramonium Prasad in the case of Sunder Singh Bhati vs. The State [BAIL APPLN. 3750/2021] on 17.01.2022. Facts of the case are that the Complainant had received a message and an email from the Company (SMP IMPEX Pvt. Ltd.) stating that if he invested his money, they would give him a 200% return within 1 year. The Directors, Dr. Saroj Mahapatra and Rajesh Mahto called the Complainant and told him about the Company explaining their plans to expand it on the lines of Uber/Ola. They told the Complainant that the Company was registered with RBI and SEBI. It is stated that after much insistence, the Complainant invested Rs. 9,00,000. Further, the Complainant’s friends, namely Rajesh Kumar, Rajender Singh, Yogender Singh, Umed Singh, Ajay, Sunil also invested Rs. 15 to 20 lakhs. It was stated that on the 10th of every month they would receive instalment, however, after the first two months, no instalment was made. The Complainant was informed that he would get the third instalment by 15th of the month, i.e. 15th March, however, the third instalment was not made. On calling the Company, a clip was showed to Complainant from social media showcasing that the Company’s accounts have been frozen. The Complainant and many others were defrauded of their money so a complaint was filed on the basis of which the instant FIR was registered. The Petitioner in BAIL APPLN. was declared absconder/proclaimed offender and was arrested. Anticipatory bail application was dismissed under Section 437 Cr.P.C. as infructuous. The learned Counsel for Petitioner submitted that the Petitioner was languishing in jail since 09.12.2020. He submitted that no recovery was made from the Petitioner or at the instance of the Petitioner, and that, therefore, there is no link tying the Petitioner to the alleged scam. The Petitioner is neither an authorized signatory nor a director of the accused Company, and that there is nothing to suggest that the Petitioner was associated with the accused Company. He stated that several of the alleged victims received up to 40- 50% of their invested amount within a month which buttressed the fact that early investors had received significant returns from the accused Company. He argued that it is not rational to assume that Petitioner would induce his own relatives to invest in a scheme if he possessed the intention to scam people. It was submitted that the essential ingredient for invoking both Sections 406 and 409 IPC is entrustment and there is no evidence which suggests that the Petitioner had ever been entrusted with any money or property. He further submitted that there is hardly any complaint which ascribes a distinct role to the Petitioner, therefore, the Petitioner is liable to be granted regular bail. The learned Counsel for respondent submitted that the instant case involves the cheating of a large-scale of money with total investors surpassing 900 and the amount cheated being Rs. 14 crores. She vehemently opposes the instant bail application, stating that the Petitioner in BAIL.  It was further submitted that the Petitioner was a direct recipient of the cheated amount through his relatives and that Rs. 1.59 crores approximately and had previously been declared PO and never joined investigation despite several notices being issued to him. She submitted that there are many statements of witnesses/complainants under Section 161 Cr.P.C. that specifically name the Petitioner and state that he took active part in the meetings/representations for inducement. She submitted that there is no evidence to indicate that the Petitioner had induced the investors and concocted lies about RBI authorization. Further, the Counsel submitted that the Petitioner was merely a non-executive director and that he only received Rs. 11 lakhs, which was his remuneration, out of the alleged cheated amount of Rs. 250 crores. The Petitioner was the beneficiary of the cheated amount, and that a perusal of the bank replies indicates that he was also the authorized signatory of the bank accounts of the accused Company and took active part in the dayto-day affairs of the accused Company.