Source: http://onelawstreet.com/gujarat-high-court-judgment-rejecting-anticipatory-bail-to-teesta-setalvad/
Timestamp: 2019-04-25 10:38:24+00:00

Document:
Since all the three applications with a prayer for anticipatory bail arise from a selfsame FIR, those were heard analogously and are being disposed of by this common judgment and order.
The Criminal Misc. Application No.4677 of 2014 is treated as the lead matter.
This motion for anticipatory bail has been made on behalf of the applicants (husband and wife) and relates to an FIR registered with the D.C.B. Crime Police Station, Ahmedabad, vide I-CR No.1 of 2014 of the offence punishable under Sections 420, 406, 468, 120B of the Indian Penal Code and Section 72(A) of the Information and Technology Act.
The State of Gujarat witnessed one of the worst communal riots in the year 2002. During the period of riots, a residential society in the name of Gulbarg Society, situated in Ahmedabad, was ransacked and set on fire. Many people residing in the said society lost their lives, which includes aged women and children. In all 69 people lost their lives.
The applicants herein are running two trusts in the form of Non-Governmental Organizations, viz. “Citizens for Justice and Peace” (CJP) and “Sabrang Trust”. The applicants who are husband and wife are the trustees of the Trusts along with few other persons.
A complaint in writing dated 12th March 2013 was addressed by 11 inhabitants of the Gulbarg Society, which includes one Mr.Firozkhan Saeedkhan Pathan, to the Joint Commissioner of Police, Crime Branch, Ahmedabad city, stating that every year the members of the NGOs have been organizing a function in the memory of those who lost their lives in the riot. It is alleged that during such functions, various schemes for the rehabilitation of the riot victims, financial support and support for the reconstruction of the houses were announced by the applicant no.1, viz. Teesta Setalvad, under the banner of her two NGOs.
It is alleged that over a period of time, the applicant established a close rapport with the riot affected victims. In the month of December 2007, the applicant no.1 put forward an idea of purchasing the entire Gulbarg Society at the then market price and thereafter convert the same into the “Gulbarg Society Museum of Resistance”. It is alleged that she promised to make good the payment within a month if the members of the society were ready and willing to sell their respective residential units. It is alleged that she also requested the unfortunate inhabitants of the society to cooperate and help her in raising funds through publications, interviews, programmes, etc. The formal proposal in that regard was submitted by the Sabrang Trust in January 2008.
dated 29th June 2008 was also passed by the society.
It is alleged that although such representations were made by the accused persons, no financial support was extended for the reconstruction of the houses to the inhabitants of the society nor any amount towards the reimbursement of the rent was paid to them. It is alleged that the society was also not converted into a museum even after a period of more than 4 years from the date of passing of the resolution. It is the case of the first informant that the members of the society, therefore, addressed a letter dated 21st February 2013 to the applicant no.1, requesting her to furnish the details of the amounts collected as donations for the reconstruction of their houses and for conversion of the society into a museum. The said letter was never replied at any point of time. It is the case of the first informant that the applicants herein kept on projecting the victims of the riots as the unfortunate human-beings before the whole world and the media, and thereby, the applicants kept on seeking sympathy and received huge amount of donations.
Ultimately, a memorandum was submitted by 15 members of the society to the Commissioner of Police with a request to prohibit the outsiders from entering the Gulbarg Society. Such memorandum is dated 28th February 2013. The said application referred to the advertisement published in a magazine called “Communalism Combat” and its website fervently requesting the people at large to generously donate to help develop a memorial for the victims of the communal violence, viz. “Gulbarg Society Museum of Resistance”. The “Communalism Combat” is a magazine owned by the applicants, wherein both the applicants are the Editors.
Form-3 submitted by the CJP, foreign donations to the tune of Rs.63 lac were received between 2009 and 2011 and were credited in the IDBI Bank Account No.014104000204204736 of the CJP and donations to the tune of Rs.88 lac were received during the period between 2008 and 2011 and were credited in the Union Bank of India Account No.369102010802885 of the Sabrang Trust.
The Commissioner of Police took cognizance of the said complaint lodged in writing, and having found more than a prima facie case, ordered registration of the FIR, which came to be registered with the D.C.B. Crime, Ahmedabad, on 4th January 2014.
It appears from the materials on record that the applicants herein are permanent residents of Mumbai. The two Trusts referred to above are also registered at Mumbai. Therefore, apprehending arrest at the hands of the police in connection with the present FIR, the applicants first approached the High Court of Bombay by filing anticipatory bail application No.14 of 2014. The High Court of Bombay, vide its order dated 10th January 2014, granted interim protection to the applicants. The matter was thereafter heard by a learned Single Judge of the Bombay High Court and the application for anticipatory bail was ordered to be rejected on 31st January 2014 substantially on the ground of territorial jurisdiction of the High Court of Bombay. However, the High Court of Bombay granted a transit bail for a period of four weeks to enable the applicants to file an appropriate application before the appropriate forum in the State of Gujarat.
Bombay High Court vide impugned order dated 31st January, 2014 allowed the petitioners to move before appropriate Court in Gujarat for said relief and granted Transit Bail for four weeks so as to enable the petitioner to approach before the appropriate Court at Gujarat. Having heard the learned Counsel for the petitioners, we are not inclined to interfere with the impugned order.
After the disposal of the SLP, the applicants herein preferred Criminal Misc. Application No.761 of 2014 before the City Sessions Court, Ahmedabad, and prayed for anticipatory bail. The anticipatory bail application came to be rejected vide order dated 25th March 2014 passed by the learned Additional Sessions Judge, City Sessions Court No.15, Ahmedabad.
Being dissatisfied with the order passed by the City Sessions Court, the applicants have come up with this application, praying for anticipatory bail.
It appears from the various orders recorded uptil now that on 28th March 2014 rule was issued in this application, making it returnable on 4th April 2014. In the course of hearing of this application, I was informed by both the sides that on that particular date i.e. on 28th March 2014, an oral statement was made on behalf of the State that till the conclusion of the application, the applicants would not arrested. It appears that thereafter on one ground or the other, the matter was being adjourned from time to time. Ultimately, the same was notified before this Court on 12th January 2015. The arguments of both the sides were concluded on 6th February 2015 at around 5:00 p.m. and the judgment was kept reserved.
Mr.Mihir Thakore, the learned senior advocate appearing on behalf of the applicants, vehemently, submitted that the FIR lodged against the applicants is nothing but an abuse of process of law. He submitted that the same is politically motivated. The principal argument of Mr.Thakore, while making good his case for anticipatory bail is, the malafides alleged against the State Government. Mr.Thakore submits that his clients have fought very hard from day one against the State Government as, according to the applicants, it is only the State Government who was responsible for the Godhra carnage and the riots which flared up thereafter in the entire State of Gujarat.
Mr.Thakore submits that his clients, through the two Trusts, have thoroughly exposed the State Government so far as their dubious role in the riots is concerned. Mr.Thakore submits that his clients are instrumental in securing many convictions of those persons who have been found guilty of murder during the period of riots.
Mr.Thakore submits that with a view to seek revenge, a false case has been framed against the applicants, and on the basis of such a false case, they are now sought to be arrested. Mr.Thakore submits that his clients are Journalists by profession and are highly reputed persons in the society. They have been striving hard for serving the cause of justice by helping the innocent victims of political vendetta.
Mr.Thakore submitted that the allegations of misappropriation are totally false and baseless. No such amount has been misappropriated by the applicants for their personal use. According to Mr.Thakore, the documents speak for themselves. Mr.Thakore submitted that his clients are ready and willing to extend full cooperation for effective investigation but no case for custodial interrogation is made out having regard to the nature of the allegations.
Mr.Thakore submitted that the entire matter relates to accounts. It is for the Investigating Officer to look into the accounts with the help of any expert and find out whether any amount has been misappropriated or not. For that purpose, arrest of the applicants and custodial interrogation is not necessary.
Mr.Thakore submitted that the other trustees of the two Trusts are people with great reputation. One of those is a noted Poet and a Lyricist and one another is a well-known Architect who had designed the New Taj Intercontinental at Mumbai. He has submitted that the accounts of the Trusts are being regularly audited, and even the reports of the Auditor make the picture clear that nothing has gone in the pockets of the applicants.
In such circumstances referred to above, Mr.Thakore prays that the application merits consideration and the applicants be ordered to be released on anticipatory bail in the event of their arrest by the police.
On the other hand, this application has been vehemently opposed by Mr.Mahesh Jethmalani, the learned Special Public Prosecutor appearing for the State. Mr.Jethmalani submitted that no case worth the name is made out for anticipatory bail. He submits that the allegations are very serious. He submits that huge amounts have been converted by the applicants for their personal use through their credit cards. The amount which was received by way of donations was meant for the poor and the needy i.e. the riot victims. By creating sympathy for the riot affected victims, the applicants were successful in obtaining huge amount by way of donations. The documentary evidence on record would suggest that they have not been able to satisfactorily account for the same. Huge amounts were transferred from the Trusts’ accounts to the personal accounts of the husband and the wife, which are 10 in number. He has submitted that there are huge cash withdrawals with no corresponding vouchers in that regard. He submitted that huge amounts have been paid towards their personal expenditure on credit cards. Mr.Jethmalani pointed out that for years together the accounts were not audited so far as the two Trusts are concerned and then all of a sudden one fine day they got the accounts of past couple of years audited through the two Auditors. The principal argument of Mr.Jethmalani is that there has been total non-cooperation at the end of the applicants so far as the investigation is concerned. He submits that the money which was meant for the poor and the needy have been misappropriated by the applicants for their own materialistic pleasure and comfort. Huge amount has been used for the purchase of items like wine, shoes, holiday resorts, air-tickets, etc. Mr.Jethmalani pointed out that although it is the case of the applicants that they have spent the money for their own personal use from their own income, yet they did not even furnish their income tax returns before the Investigating Officer.
Mr.Jethmalani submitted that by merely producing few documents, the need for custodial interrogation cannot be done away with. It is only the applicants who are in know of the matter and the facts which are within their personal knowledge. Mr.Jethmalani pointed out that the applicants are also guilty of tampering with the witnesses, more particularly, they have restrained the Auditors from furnishing the necessary details and data to the Investigating Officer. According to Mr.Jethmalani, this itself is a ground on which the application deserves to be rejected.
Mr.Jethmalani submits that the two Trusts are being run and managed by the applicants on their own. The other trustees are just for the name sake. They have no idea about the management of the affairs of the Trusts. He submitted that being trustees, they are also drawing salary, which is otherwise not permissible in law and is an offence.
Mr.Jethmalani submitted that the applicants are guilty of making false representations before the people and they are guilty of duping not only the donors but even those who have been deprived of the financial help meant for them.
In such circumstances referred to above, Mr.Jethmalani prays that there being no merit worth the name in this application, the same deserves to be rejected.
Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for my consideration in this application is, whether any case is made out for grant of anticipatory bail.
At this stage, I need to point out that the arguments were concluded on 6th February 2015. The judgment was kept reserved. On 13th February 2015, Mr.Thakore mentioned the matter submitting that his clients have furnished all the vouchers and other documents including the income tax returns to the Investigating Officer. Mr.Thakore wanted to place few documents in that regard, however, since the arguments were already concluded and the judgment was kept reserved, I did not deem fit to take such documents on record. The other side also vehemently opposed such mentioning of the matter after the arguments were concluded.
“The concerned IO addressed the second communication dated 8.5.2013, seeking information as sought for vide communication dated 18.3.2013, calling upon the petitioners to co-operate with the investigation and furnish necessary details. Vide letter dated 20.5.2013, the petitioners informed the IO that they had received Rs. 4,60,000/- towards the proposed “Dream Museum”, their “accounts were audited and submitted to the relevant authorities and investigating into the matter reflects the vindictive attitude of the forces trying to subvert the process of justice”. However, no details sought for by the IO were furnished.
The I.O addressed communications to the Ministry of Home Affairs (MHA), seeking details of the permission granted to CJP and Sabrang Trust, enabling receipt of foreign donations under Foreign Contribution (Regulation) Act (FCRA). The MHA intimated the IO that CJP and Sabrang Trust obtained FCRA registration on 21.11.2007 bearing registration no. 083781099 and no.
083781100 under the category of “Educational, Social” and “Economic Educational” respectively. MHA also furnished copies of Form FC-6, mandatorily required to be submitted by every NGO annually declaring details of the foreign funds received. Condition no. 3 of the FCRA registration specifically stipulates that the association cannot bring out any publication (registered under PRB Act, 1867) or act as correspondent, columnist, editor, printer or publisher of a registered newspaper or engage in the production or broadcast of audio news or audio visual news or current affairs programs through electronic mode or any other electronic form or any other mode of mass communication at a later stage thereby attracting provisions of the Section 3(1)(g) and (h) of the FC(R) Act, 2010. In addition thereto, the association is forbidden from getting involved in any activity of political nature. Details of accounts of CJP and Sabrang trust were received from the IDBI Bank and the Union Bank of India.
It is noteworthy that when the Petitioners failed to provide even the copies of audited balance sheets and books of accounts of CJP and Sabrang Trust, the IO, addressed a communication to the Charity Commissioner, Mumbai for providing the same. The Office of the Charity Commissioner, Mumbai, has furnished some of the audit reports of Sabrang Trust and CJP which are clearly in variance with the bank statements received. A bare scrutiny of the accounts have revealed huge discrepancies.
Audit reports of the following years i.e 2008-09, 2009-10, 201011, 2011-12 and 2012-13 have been received.
Audit reports of 6 years i.e 2002-03, 2003-04, 2004-05, 2005-06, 2006-07 and 2007-08 have not been filed with the Charity Commissioner.
2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13 have been received from office of the Charity Commissioner.
As against receipt of Rs.3,63,58,622 which reflected in the Bank statement, in the audited reports only Rs.58,95,456 has been shown. A huge discrepancy of Rs.3,04,63,166 is noticed in just above five years. Since for the rest of the years audit reports are not available, further investigation has not been possible.
58,72,500 is not reflecting in the Income & Expenditure Account for the year ending 31st March- 2011. Such a huge sum received from Govt. of India is found missing from the books of account and the Auditors too have found no reason to examine this.
NOTE: The above analysis is based on only 2 accounts of CJP with IDBI Bank i.e. SB A/c N0-014104000105705 and FCRA A/C No-014104000204736.
(i) It is humbly submitted that as in case of Sabrang Trust referred above, the donations received as reflected in the Audit reports of CJP are far less as against the amounts reflected in the bank statement. For example, during the years 2008-09 upto 2012-13 the total donation amount shown in the audit reports of CJP above is Rs.29,48,2,490 however as per the bank statement the amount of donation is Rs.3,25,85,572 i.e. discrepancy of an amount of Rs.31,03,082 in just three years.
ParticularsTeesta Setalvad FCRA A/c * In Rs. HRD A/c** In Rs. SB-Gen A/c*** In Rs.
a) Amount as per bank account statementb) Amount as per statement provided by D.M.Sathe, auditor ofSabrang Trust 22,49,95615,58,000 8,59,435No information provided by C.A. 4,97,762No information provided by C.A.
Amount transferred from three accounts of SABRANG TRUST to Sabrang Communication & Publishing Pvt Ltd.
April 2014, for the following 6 years i.e 2002-03, 200304, 2004-05, 2005-06, 2006-07 and 2007-08 which is mandatory requirement.
Non submission of audited accounts to the Charity Commissioner continuously for 6 years automatically demolishes the argument of the Petitioner’s that “Their Accounts were audited and submitted to the relevant authorities”. It appears that for this very reason the Petitioners have refused to share any information with the authorities as regards to the working of the 2 NGOs.
Trust has received Rs.26,66,570 in the Financial year 2012-13 and Rs.54,20,848 in the Financial year 2013-14 as grants from the Ministry of HRD, Govt of India, New Delhi by way of an RTGS transfer.
It is also note worthy that the Auditor D M Sathe, in their reply to the IO, have given payments details of financial years 2007-08 to 2011-12 only, the years of which auditors have submitted audited copies to the Charity Commissioner Office. They have not given any payment details of the Petitioners for the years 20022008, i.e. the 6 years for which audit reports were not submitted to the Charity Commissioner. This deliberate attempt by the auditors to conceal the facts from investigating authorities is a subject mater of investigation.
It is humbly submitted that similarly an analysis of reply sent by M/s Haribhakti & Company, the Chartered Accountants of Citizens For Justice & Peace (CJP) the following discrepancies were noticed.
The aggregate amount mentioned by them towards credit card payment of the Petitioners was shown as Rs 13,26,960 however as per the bank statements this amount is Rs 20,04,817.
It is note worthy that the Petitioners in their various replies/pleadings have admitted to having made expenditure of very personal nature including purchase of wines, branded shoes, grocery, clothes etc through Credit Cards from the accounts of the Trust CJP, however the Chartered Accountant in their reply has claimed that “none of such personal expenses have been debited in the books of accounts of CJP”. These contradictory statements are subject matter of investigation.
Chartered Accountant M/s Haribhakti & Company in their reply also categorically stated that “We have not noticed that the funds of CJP were used by its Trustees for the purpose other than its objects”, however they seem to have missed noticing that trustees have transferred Rs 82.35 lacks from the Trust account to their own company i.e. Sabrang Communication & Publishing Pvt Ltd.
The Chartered Accountant has also not commented on 50 cheques issued from the accounts of the CJP by the Petitioners towards Credit Card payments. The Chartered accountants has not given any justification on huge cash withdrawal by the petitioners from these accounts also.
It is note worthy that the IO informed the CA that “both the accused persons in their reply in the session court have claimed that they were authorized by the board of trustees to make such expenses” i.e. (Personal expenses) information was sought for from the CA to provide the copies of all such resolutions. In response to this specific question, the CA of CJP instead of providing copies of those specific resolutions, has provided copies of resolutions which were related to adoption of financial statements for the year 2008-9, 2009-10, 2010-11 and 2011-12, It is apparent that the Petitioners were not authorized by the board of Trustees to make such personal expenses from the Trust accounts.
C) HRD A/c No 369102010806781 with UBI.
B) SB A/c No .
“It is humbly submitted that on the Analysis of the Personal Account of Teesta Setalvad and Javed Anand following facts have emerged.
Note 1: Analysis of above SB accounts of Petitioners accused no 1 & 2, it was found that they are receiving huge amount in their personal account from Citi Bank N.A. On inquiry from Citi Bank about these credit entries, the bank has informed that an amount of Rs 29,20,000 has been received in the account of Accused no-1, from Ashoka Foundation, Arlington, USA. It appears that the Petitioners have directly accepted the foreign donation in their SB accounts which requires thorough investigation.
Accused no 1, it was also noticed that an amount of Rs 6,05,442 was credited on 13.11.2003 in this account. On inquiry from UBI, it was informed that it was a foreign remittance ( Apprx $ 13500) received in the SB account of Ms Setalvad. It appears that the Petitioner no-1 has directly accepted the foreign remittance in her SB account which is also a subject matter of investigation. Note 3: The analysis of the 2 accounts of CJP and the 3 accounts of Sabrang Trust and 1 account of Sabrang Communication & Publication Pvt Ltd, has revealed that the Petitioners Teesta Setalvad and Javed Anand, are drawing salary /reimbursement regularly from all the 6 accounts simultaneously which requires thorough investigation.
“It is respectfully submitted that in so far as the allegation of Petitioners no 1 & 2 for obtaining personal Credit Card details by the Police is concerned, it is submitted that on scrutiny of account statement of CJP and Sabrang Trust, it was noticed that substantial amount has been paid from these accounts towards the Credit card bill payments, hence it was found necessary to investigate the nature of payments made from the accounts of Trusts for these Credit cards. After receiving the Credit cards payment details it was noticed that the payment of purely personal nature have been undertaken by the Petitioners from the Trust Accounts.
From the scrutiny of credit card payments the most shocking revelation came from the payment made towards wine and liquor purchases from Chincholi Wines Mumbai and Duty Free Shops of Mumbai Airport, Movie Tickets, regular hair salon and grocery expenses.
Expenditure on purchase of branded shoes, beauty products, Purchase of clothes from branded show rooms in India, Islamabad and Rome, online shopping from Flipkart, Amazon and Google storage in US Dollars, purchases of electronic goods, music systems, dinning expenses at five star hotels, purchases of jewellery, watches, suitcases, health equipments, articles from emporiums, Art Galleries Islamabad, payment to JK Tourism, Online payments in foreign currency towards SAT/college board entrance exams in US, UK Universities for admissions.
Copies of relevant pages of CWP No-173/2014 are annexed herewith as ANNEXURE C.
Copies of relevant pages of CWP No-293/2014 are annexed herewith as ANNEXURE D.
Copies of relevant pages of CWP No-761/2014 are annexed herewith as ANNEXURE E.
Copy of relevant pages of CWP No-4677/2014 is annexed herewith as ANNEXURE F.
Commissioner has raised no query regarding their accounts till date.
Copy of Affidavit dated 05.01.2012 filed by Petitioner No2 is annexed herewith as ANNEXURE H.
It is pertinent to note that the Petitioners in their additional Affidavit in rejoinder dated 23.07.2014 (served in the Court on 26.08.2014) running into 44 pages, have not even once mentioned that audited reports of CJP were also not submitted on time by the Petitioners and that they have sought 7 years condonation of delay from the Charity Commissioner in January 2012.
Copy of Affidavit dated 19.02.2014 submitted by Petitioner No-2 on 26.03.2014 i.e. after more than one month, in the office of the Charity Commissioner is annexed herewith as ANNEXURE I.
The Petitioners in their additional Affidavit in rejoinder dated 23.07.2014 have admitted to have submitted 5 years Audited Reports of Sabrang Trust in one go on March, 26th, 2014 i.e. after filing of the present FIR. Affidavit dated 19.02.2014 by Petitioner no-2, along with audited reports of Sabrang Trust, was actually filed in the office of the Charity on 26.03.2014 i.e. after a lapse of 5 weeks. When the accounts were yearly prepared and audited, as repeatedly claimed by the Petitioners, why petitioner took more than 5 weeks to actually submit the audited reports in the office of the Charity Commissioner is subject matter of investigation.
c) It is pertinent to note that the Petitioner no-2 in his affidavit dated 05.01.2012 to the Charity Commissioner for condonation of 7 years delay in the case of CJP and Affidavit dated 19.02.2014 for condonation of 5 years delay in the case of Sabrang Trust made identical pleas.
In the case of CJP, 7 years delay in submitting the audited accounts for the years APRIL 2003- 31st MARCH 2010 was noticed by the Petitioners in the year 2012 and 7 years accounts were filed simultaneously seeking condonation of delay in January 2012. The grounds for this gross lapse and irregularity in accounting for public funds running into crores of rupees meant for the charitable purposes is very casually explained away by the Petitioners as “a communication gap between the Auditor and the Trustees” The culpability of the petitioners/accused is apparent from the fact that in the case of Sabrang Trust, 5 years audited annual accounts from APRIL 2003 To 31st MARCH 2008 were filed in the year 2014, i.e. after the filing of the present FIR in January 2014, raising an identical plea of “miscommunication with the Auditors”.
It is pertinent to note that when the Petitioners noticed 7 years delay in submission of audited annual accounts & reports of CJP in January 2012, it is beyond all reasonable comprehension, that as managing trustees receiving crores of rupees as funding, they did not check into the filing of the audited annual accounts of their another NGO Sabrang Trust till February 2014. From the available records and admission, it is evidently clear that, it is only when the FIR came to be filed in January 2014 for embezzlement of funds, that the petitioners apprehended the likelihood of their accounts being scrutinized and they rushed to get them prepared & filed in March 2014.
761/2014 filed on 21.02.2014 before the Sessions Court, Ahmedabad and whilst stating on oath that they have annually submitted regular audited accounts, whereas in fact till 26th MARCH 2014, annual accounts for the period APRIL 2003 to 31st MARCH 2008 i.e continuously of 5 years, were not even filed before the Charity Commission.
Tax department has not furnished any information to the IO, it is not known whether the Petitioners are similarly lying about their regularly filing I T Returns to the Income Tax Department.
Thus, from the above, it is evident that the accounts were also not audited for a long period of time, and it is only when the FIR was registered wherein serious allegations of misappropriation of lacs of rupees have been alleged that all of a sudden the accounts from April, 2003 to March, 2008 were got audited in the year 2014.
(a)From the accounts of the Sabrang Trust and CJP, a total amount of Rs.1,69,84,669=00 have been transferred to the Sabrang Communication & Publishing Pvt Ltd, a company owned by the petitioners.
(b)From the accounts of the Sabrang Trust and of CJP, an amount of Rs.46,91,250=00 and Rs.28,34,804=00 were transferred to the personal accounts of the petitioner nos. 1 & 2 respectively.
(c)From the accounts of the Sabrang Trust and CJP, the petitioners have withdrawn Rs.1,08,73,782=00 as cash.
(d)From the accounts of the Sabrang Trust and CJP, the petitioners have paid Rs.29,66,121=00 towards Credit Card payments.
(e)The petitioners have endeavored to explain the credit card payment running into lakhs of rupees by stating that all such personal expenditure were repaid to the NGO accounts. This employment of public donations to personal use needs to be investigated. The petitioners have not submitted any debit/ credit vouchers and/or cheques details to prove their statement.
30.04.2005. The FCRA permission from MHA for CJP and Sabrang Trust was granted in November, 2007. Proposal to purchase the Gulbarg Society was mooted by petitioner no.1 orally in December, 2007 and formally in January, 2008, Resolution was passed by the society accepting her proposal in June, 2008 and thereafter the advertisements commenced and monies started pouring in. Further no substantial income of any nature, except from the CJP and Sabrang Trust, is noticed in both the above mentioned personal accounts of the petitioners, which were further invested in fixed deposits, shares and mutual funds such as ICICI Prudential, Reliance Capital, Kotak Mahindra, Franklin Templeton etc.
(g)The donations received by the Sabrang Trust and CJP are utilized for personal purposes.
Ms.Setalvad and Rs.6,05,442=00 as foreign remittance in Ms.Setalvad’s personal account.
The case of the prosecution is based on cogent documentary evidence received from the Charity Commissioner, Mumbai, Ministry of Home Affairs, New Delhi, various Banks, etc. Financial details received from these authorities require detailed investigation.
The petitioners have never remained present before any investigating agency and have employed every means to avoid the due process of law. The petitioners seek to avoid custodial interrogation by the investigating authorities by dismissing cogent documentary evidence as accounting jugglery. Approximately 44% of the total donations received in the Sabrang Trust and approximately 35% of the total donations received in the CJP, were transferred to their personal accounts.
Cash withdrawal running into over Rs 1.09 crore need to be further scrutinized and examined wherein Rs.50,000=00 to Rs.5,00,000=00 have been withdrawn as cash on a single day.
Credit card details received from the UBI and Citi Bank revealed expenditure of purely personal nature running into lacs of rupees being serviced from the CJP and Sabrang Trust accounts through cheques signed by the petitioners.
Investigation has also revealed frequent foreign trips to Pakistan, Abu Dhabi, Kuwait, Switzerland, U.A.E. etc. Investigation is merited into the nature of these visits and the expenses incurred thereon.
The petitioners have sought to dismiss cash withdrawals, bank transfers and credit card payments on the specious plea of having their accounts audited. Investigation has already proved that there are major discrepancies in the Audits Reports. The nature of expenditure as revealed from the data received from the Citi Bank shows that substantial amount is spent on entertainment, shopping, domestic requirements and other expenses of purely personal nature. Online payment of hundreds of U.S. Dollars, Pounds, Canadian Dollars towards college board entrance exams in colleges in U.S, UK, from the NGO Trust accounts raises doubts about the nature of social work undertaken by these NGOs.
Whether the Board of Trustees of the Sabrang Trust and CJP have ever authorized the accused nos. 1 and 2 to incur such purely personal expenditure and whether the same is permissible in law, is the subject matter of investigation. It needs to be examined as to how the Chartered Accountants who have audited the accounts of these two Trusts have missed examining the use of the funds by the Trustees for the purposes other than charitable.
The statements of the 13 witnesses recorded till date clearly indicate that not a single rupee is received by them towards financial aid or rehabilitation or construction of Museum. Investigation has revealed that it is only after the publication of interviews, photographs, articles relating to the Gujarat riots and more particularly after the massive campaign in 2008 onwards for collecting funds for establishment of the “Museum of Resistance” for the Gulbarg Society that funds started flowing into the two NGOs in crores, 44% of which in the Sabrang Trust and 35% of the CJP have been transferred to their personal accounts.
The CJP and Sabrang Trust respectively opened the FCRA accounts in I.D.B.I. and Union Bank of India. In December, 2007, the accused placed a proposal before the residents of the Gulbarg Society, to purchase the entire land and building of the Gulbarg Society at the current market price and further reimburse them for the rent which they had paid for all these years. Lucrative as the proposal sounded, it was unanimously accepted by all the residents and members of the Gulbarg Society, Ahmedabad, in June, 2008.
The manner in which the petitioners have dealt with the public funds needs to be investigated, considering that whilst on the one hand, as stated by several witnesses, not a single rupee of financial aid has ever been received by any of the riots victims, crores of rupees received for the upliftment/ rehabilitation of the riots victims and for construction of a unique “Museum of Resistance” has been transferred to their personal accounts, credit card payments and expenses of purely personal nature. Whilst financial condition of the victims remained unchanged over the years, the accused, who, till February 2003, had not even deposited Rs.10,000=00 in their accounts, in the short time, have amassed crores of rupees of funds.
The matter involves commission of a grave economic offence as the petitioners are managing trustees of the two NGOs.
Since a lot has been argued by both the sides so far as the scope and ambit of Section 438 is concerned, I deem it necessary to consider the position of law.
“We have already stated that S. 438 of the Code does not contain the conditions on which the order for anticipatory bail could be passed. As S. 438 immediately follows S. 437 which is the main provision for bail in respect of nonbailable offence it is manifest that the conditions imposed by S.437(1) are implicitly contained in S. 438 of the Code. Otherwise the result would be that a person who is accused of murder can get away under S. 438 by obtaining an order for anticipatory bail without the necessity of proving that there were reasonable grounds for believing that he was not guilty of offence punishable with death or imprisonment for life. Such a course would render the provisions of S. 437 nugatory and will give a free licence to the accused persons charged with nonbailable offences to get easy bail by approaching the Court under S. 438 and by-passing S. 437 of the Code.
Balchand Jain (supra) laid down the following proposition for the grant of anticipatory bail.
The broad canvas against which the significant question aforesaid has to be examined cannot be better spelled out than in the memorable words of Lord Porter in Emperor v.
There is thus the authority of the Privy Council itself which has been re-affirmed by their Lordships of the Supreme Court times out of number for the proposition that the Code confers a statutory right on the police to investigate into cognizable crime without the sanction of any judicial authority. Therefore, it is unnecessary to elaborate on this aspect and the briefest reference to Chapter XII of the Code regarding the information of cognizable offences to the police and their powers to investigate therein would suffice. Section 154 requires that information regarding the commission of cognizable offence shall be reduced in writing and prescribes the procedure for recording the same. Section 156 in the clearest terms lays down that the Officer-in-charge of a police station may without the order of a Magistrate investigate forthwith into such a cognizable case. The succeeding Section 157 whilst providing for the procedure for investigation in terms empowers the police to take measures for the discovery and arrest of the offender.
(2) The Magistrate to whom an accused person is forwarded under this section may, whether he has or has not jurisdiction to try the case, from time to time, authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers further detention unnecessary he may order the accused to be forwarded to a Magistrate having such jurisdiction.
Now reading the relevant provisions together, it is plain that in a serious cognizable offence, the Code authorises the arrest and detention in custody of the offender for the first twenty-four hours without the interposition of the Magistracy and further police custody up to a period of 15 days with the authority of the Magistrate. It is clear, therefore, that the arrest and interrogation in police custody for cognizable crime is not only visualised but expressly authorised by the Code. On behalf of the respondent-State, indeed the stand is that this is not merely a right of the police but a duty enjoined upon them and is the life blood of any effective investigation into a serious crime. It is contended on their behalf that if the power under Section 438, Cr.P.C., is used indiscriminately and as a routine it would denude and render nugatory the provisions of Section 167 of the Code even in those cases where the investigative agency can lay legitimate claim to the effective interrogation and offender in their custody.
The law on the subject is thus very clear and this Court’s powers to grant anticipatory bail are unfettered. That, however, does not solve the issue which is essentially of exercise of discretion and, which discretion has to be exercised judicially in the light of facts and circumstances of each and every case.
Balchand Jain (supra) and Gurbaksh Singh (supra) later on came to be considered by the Supreme Court in Siddharam Satlingappa Mhetre (supra), wherein the Supreme Court explained in detail the scope and ambit of anticipatory bail.
A good deal of misunderstanding with regard to the ambit and scope of section 438 Cr.P.C. could have been avoided in case the Constitution Bench decision of this court in Sibbia’s case (supra) was correctly understood, appreciated and applied.
Section 438(1) is to be interpreted in light of Article 21 of the Constitution of India.
Filing of FIR is not a condition precedent to exercise of power under section 438.
Order under section 438 would not affect the right of police to conduct investigation.
Although the power to release on anticipatory bail can be described as of an “extraordinary” character this would “not justify the conclusion that the power must be exercised in exceptional cases only.” Powers are discretionary to be exercised in light of the circumstances of each case.
Initial order can be passed without notice to the Public Prosecutor. Thereafter, notice must be issued forthwith and question ought to be re- examined after hearing. Such ad interim order must conform to requirements of the section and suitable conditions should be imposed on the applicant.
The Law Commission in July 2002 has severely criticized the police of our country for the arbitrary use of power of arrest which, the Commission said, is the result of the vast discretionary powers conferred upon them by this Code. The Commission expressed concern that there is no internal mechanism within the police department to prevent misuse of law in this manner and the stark reality that complaint lodged in this regard does not bring any result. The Commission intends to suggest amendments in the Criminal Procedure Code and has invited suggestions from various quarters. Reference is made in this Article to the 41st Report of the Law Commission wherein the Commission saw `no justification’ to require a person to submit to custody, remain in prison for some days and then apply for bail even when there are reasonable grounds for holding that the person accused of an offence is not likely to abscond or otherwise misuse his liberty. Discretionary power to order anticipatory bail is required to be exercised keeping in mind these sentiments and spirit of the judgments of this court in Sibbia’s case (supra) and Joginder Kumar v. State of U.P. and Others (1994) 4 SCC 260.
No inflexible guidelines or straitjacket formula can be provided for grant or refusal of anticipatory bail. We are clearly of the view that no attempt should be made to provide rigid and inflexible guidelines in this respect because all circumstances and situations of future cannot be clearly visualized for the grant or refusal of anticipatory bail. In consonance with the legislative intention the grant or refusal of anticipatory bail should necessarily depend on facts and circumstances of each case. As aptly observed in the Constitution Bench decision in Sibbia’s case (supra) that the High Court or the Court of Sessions to exercise their jurisdiction under section 438 Cr.P.C. by a wise and careful use of their discretion which by their long training and experience they are ideally suited to do. In any event, this is the legislative mandate which we are bound to respect and honour.
The arrest should be the last option and it should be restricted to those exceptional cases where arresting the accused is imperative in the facts and circumstances of that case.
The court must carefully examine the entire available record and particularly the allegations which have been directly attributed to the accused and these allegations are corroborated by other material and circumstances on record.
These are some of the factors which should betaken into consideration while deciding the anticipatory bail applications. These factors are by no means exhaustive but they are only illustrative in nature because it is difficult to clearly visualize all situations and circumstances in which a person may pray for anticipatory bail. If a wise discretion is exercised by the concerned judge, after consideration of entire material on record then most of the grievances in favour of grant of or refusal of bail will be taken care of. The legislature in its wisdom has entrusted the power to exercise this jurisdiction only to the judges of the superior courts. In consonance with the legislative intention we should accept the fact that the discretion would be properly exercised. In any event, the option of approaching the superior court against the court of Sessions or the High Court is always available.
Irrational and Indiscriminate arrest are gross violation of human rights. In Joginder Kumar’s case (supra), a three Judge Bench of this Court has referred to the 3rd report of the National Police Commission, in which it is mentioned that the quality of arrests by the Police in India mentioned power of arrest as one of the chief sources of corruption in the police. The report suggested that, by and large, nearly 60% of the arrests were either unnecessary or unjustified and that such unjustified police action accounted for 43.2% of the expenditure of the jails.
Thus, considering Balchand Jain (supra), Gurbaksh Singh (supra) and Siddharam Satlingappa Mhetre (supra), it is clear that a balance must be struck between the two factors, namely, no prejudice should be caused to the investigation, and at the same time, the Court should also ensure that there is no undue harassment and humiliation to the accused. Beside this, the nature and gravity of the accusation and the exact role of the accused is also necessary to be looked into after evaluating the entire material against the accused. In short, what has been laid down by the Supreme Court in Siddharam Satlingappa Mhetre (supra) is that the arrest should be a last option and should be restricted to those exceptional cases where arresting the accused is imperative. I may add here that custodial interrogation is one of the most important factors which the Court should consider while considering the plea of the accused for anticipatory bail.
“30. It is pertinent to explain that there may be imminent need to grant protection against pre-arrest. The object of this provision is to relieve a person from being disgraced by trumped up charges so that liberty of the subject is not put in jeopardy on frivolous grounds at the instance of the unscrupulous or irresponsible persons who may be in charge of the prosecution. An order of anticipatory bail does not in any way, directly or indirectly, take away for the police their right to investigate into charges made or to be made against the person released on bail.
I am not impressed by the submissions of Mr.Thakore that the applicants deserve to be released on anticipatory bail because they have levelled serious allegations of malafides against the State Government. The malafides must be specifically alleged and required to be proved by the applicants. By merely hurling allegations of malafides, the accused who is otherwise prima facie involved in a crime is not automatically entitled to anticipatory bail. The extraordinary power conferred upon the Courts of Justice under Section 438 of the Code of Criminal Procedure needs to be exercised very guardedly and with a little care and circumspection.
Having gone through the materials on record, I have noticed something very shocking, and at the same time, extremely sad. There are serious allegations against the applicants of misuse and misappropriation of huge amount received by them through various donors. The money which should have gone to the poor and the needy appears to have been prima facie misused for their personal pleasure and comfort. Although in the course of lengthy arguments it was vehemently submitted that the applicants are ready and willing to cooperate with the investigation, yet I have noticed that there is no cooperation worth the name. It is only after the arguments were concluded that the applicants thought fit to part with their income tax returns and vouchers.
To very few specific questions as regards purchase of air tickets, holiday resorts bills, fees paid in dollars so far as the education of children is concerned, credit card payments, expensive shoes, clothes, beauty parlour bills, etc., the stock reply was, “Please give me in writing, we will give you reply for the same”.
To few other questions, the only reply was, “At present I do not remember it. Sir, if you will give me in writing, I will provide information of the same later on”.
If everything is in the affidavit filed before this Court, and if everything is to be looked into by the Investigating Officer and understand from the affidavit, then that hardly can be a ground for grant of anticipatory bail.
The above is suggestive of the fact that there is no cooperation at all. At any cost, the applicants want to evade the interrogation and are not ready and willing to disclose the true facts. If such are the answers given by the applicants to the questions put by the Investigating Officer at a stage when they are under the umbrella of an oral interim protection, I wonder what would be the position when they appear before the Investigating Officer armed with a full-fledged anticipatory bail order.
It is at that stage and in such circumstances that the custodial interrogation becomes a very important factor.
Custodial interrogation is qualitatively more elicitation oriented than questioning a suspect who is well ensconced with a favorable order under Section 438 of the Code. In a case like this effective interrogation of suspected person is of tremendous advantage in disinterring many useful informations and also materials which would have been concealed. Success in such interrogation would elude if the suspected person knows that he is well protected and insulated by a pre-arrest bail during the time he interrogated. Very often interrogation in such a condition would reduce to a mere ritual. The argument that the custodial interrogation is fraught with the danger of the person being subjected to thirddegree methods need not be countenanced, for, such an argument can be advanced by all accused in all criminal cases. The court has to presume that responsible Police Officers would conduct themselves in a responsible manner and that those entrusted with the task of disinterring offences would not conduct themselves as offenders. (see State Rep. by the C.B.I. v. Anil Sharma, (1997)7 SCC 187.
The case on hand, in my opinion, is one of custodial interrogation in public interest taking into consideration the fact that money meant for the poor and those being largely affected by riots is alleged to have been embezzled. Day-in and day-out we are witnessing with regret and sorrow that our political executives and bureaucracy are being involved in corruption cases. Now, even the NGOs who claim to work for the upliftment of the poor and the downtrodden of the society have started to involve themselves in such acts. The materialistic race is going on in every section of the society and this disease of corruption has eaten the very roots of our system. If the custodial interrogation of an accused is necessary in public interest and that the gravity of the allegation is such that the custody of the accused should be handed over to the police for fair and impartial interrogation, the provision of Section 438 of the Code should not be invoked in favour of such an accused.
“3. Shri R.K. Jain, learned senior counsel for the petitioner relying upon the decision of this Court in Joginder Kumar vs. State of U.P. & Ors. 1994(4) SCC. 260, Shri Gurbaksh Singh Sibbia & Ors. vs. State of Punjab 1980 (2) SCC 565. Nandini Satpathy vs. P.L. Dani & Anr. 1978 (2) SCC 424, and Babu Singh & Ors. vs. State of U.P. 1978. (1) SCC 579, submitted that the matter will have to be examined from the constitutional angle bearing in mind the scope of Articles 20(2) and 21 of the Constitution. He contended that though an accused person could be arrested, it may not be appropriate to detain him in custody in every case and when there is presumption of innocence in his favour until the charge against him is established, it would not at ll be consistent with the philosophy of the Constitution that such a person should be subjected to interrogation by application of psychological or ambient pressures much less physical torture. And he very vehemently stressed that this Court has a duty to protect a citizen against such inroads of these fundamental right. He relied upon the decisions in : (i) 1994 (4) SCC 260 (ii) 1980 (2) SCC 565 (iii) 1978 (2) SCC 424 and (iv) 1978 (1) SCC 579 to contend that in law an accused person could be arrested and if arrested, is entitled to bail unless detention in needed in public interest.
Shri Arun Jaitley and Sri Gopal Subramaniam, learned Senior Advocates for the respondents, brought to our notice that there were several special features in this case which clearly indicate that retaining the petitioner in custody till the investigation is over is absolutely necessary and is in public interest, which far outweighs the interest of the petitioner.
I should be conscious of the fact that I am not dealing with an application for grant of regular bail after arrest. The principal “bail and not jail” would be more germane while considering the application for post arrest bail.
The consideration which should weigh with the Court while dealing with a request for anticipatory bail in these type of cases need not be the same as for an application to release on bail after arrest.
By merely pleading malafides, the applicants cannot escape from their liability. I should not shut my eyes to the other aspects of the matter, more particularly, the serious allegations of misappropriation to the tune of lacs of rupees by merely accepting the submission of malafides. Malafides is something which definitely should be considered, but if there is other materials on record to prima facie indicate the complicity and involvement of the accused, then only on the ground of malafides anticipatory bail should not be granted. On account of malafides, some times, the Court may find some exaggeration, but that does not mean that the entire case put forward by the prosecution is false or baseless.
It also appears from the materials on record that on account of some pressure or influence that might have been exerted by the applicants, the Auditors who are stationed at Mumbai have also not cooperated with the investigation.
As observed earlier, the facts of this case are quite shocking and disturbing. How can one seek materialistic pleasure and happiness at the expense of the poor and needy persons. How can one even use five paise which is meant for the poor and the needy. The facts of this case reflect the sorry state of affairs of the NGOs. People from all corners of the world are ready to help them. There are people who may not be able to directly help and, therefore, they use the NGOs to help the poor and the needy. The donations are made with lot of trust and hope that ultimately the money would reach to the poor and the needy. However, here is a case where, in the name of the poor, needy and unfortunate riot affected victims, lacs of rupees was received and embezzled.
A person who considers the happiness and the pain of others as those of his own, is, in my opinion, the real social worker.
Whilst giving freedom to the civil society to function with flexibility is positive, too much freedom can lead to abuses by certain groups or individuals calling themselves an ‘NGO’, thus giving civil society a bad name. Situations like these have a negative impact on the many honest NGOs and create a situation of low trust in the NGOs. This, in turn, leads to a situation where funding is not easily obtained and where the public is less ready to contribute to the sector. Ultimately, it is only the poor and the needy who are the sufferers. It is, therefore, very important to have strict laws regulating accountability and monitoring of the NGOs so as to maintain a high trust level and good functioning.
Proper registration, genuine board composition, compliance with procedures, and well laid-out policies relating to activities and resource mobilisation are the basic attributes of the well-governed organisations. Broadening and deepening the regulatory process, as well as enhancing the capacity of the department to carry it out, would be the best government response to this controversy.
A lot was argued regarding the reputation of the two applicants. My attention has been drawn to the various awards received by the two Trusts. It was also sought to be argued that the trustees are well-renowned persons of great repute. Well, by only looking towards the awards and the medals the hard reality should not be ignored. So far as the well-renowned persons being the trustees are concerned, I may only say that the two Trusts appear to be a one-woman and one-man show. The other trustees, I doubt, whether have any idea as regards the affairs of the Trusts. They may have lended their names unmindful that they may also lend up some day in difficulty.
After bestowing my anxious consideration, including the perusal of the case-diary referred to above, I have reached to the conclusion that no case is made out for exercise of the discretionary power under Section 438 of the Code of Criminal Procedure.
For the foregoing reasons, the Criminal Misc. Application No.4677 of 2014 fails and is hereby rejected.
It goes without saying that any observations touching the merits of the case are purely for the purpose of deciding the question of grant of anticipatory bail and shall not be construed as an expression of the final opinion in the main matter.
So far as the other two applications are concerned, i.e. Criminal Misc. Application Nos.4679 of 2014 and 4680 of 2014, it is submitted very fairly by Mr.Jethmalani that no custodial interrogation is required of the applicants. He submitted that, therefore, the State has no objection if the anticipatory bail is granted to the applicants of the other two applications.
Despite this order, it would be open for the Investigating Agency to apply to the competent Magistrate for police remand of the applicants. The applicants shall remain present before the learned Magistrate on the first date of hearing of such application and on all subsequent occasions as may be directed by the learned Magistrate. This would be sufficient to treat the accused in the judicial custody for the purpose of entertaining application of the prosecution for police remand. This is, however, without prejudice to the rights of the accused to seek stay against an order of remand if, ultimately, granted, and the powers of the learned Magistrate to consider such a request in accordance with law.
It is clarified that the applicants, even if, remanded to the police custody, upon completion of such period of police remand, shall be set free immediately, subject to the other conditions of this anticipatory bail order.
At the trial, the trial Court shall not be influenced by the prima facie observations made by this Court while enlarging the applicants on bail. Rule is made absolute to the aforesaid extent. Direct service is permitted.
After the order is pronounced, Mr.Thakore, the learned senior advocate appearing on behalf of the applicants of the Criminal Misc. Application No.4677 of 2014, prays for extension of the oral interim protection granted to the applicants.
In view of what has been stated above, the prayer is rejected.

References: Application No.4677
 application No.14
 Application No.761
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 Application No.4677
 Application No.4677