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.

The members of the society were also assured of full reimbursement towards the rent borne by them over a period of time while occupying the rental premises since their individual houses were destroyed. The consent of all the members of the society was obtained in June 2008 and a resolution to that effect 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 28 th February 2013. The Page 4 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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.

It is alleged that the CJP and Sabrang Turst run and managed by the applicants are guilty of collecting huge foreign funds as donations from various international organizations in the name of providing financial assistance, legal assistance, etc. to the 2002 Gujarat Riot victims. The applicants also referred to the details furnished by the Ministry of Home Affairs, Government of India, stating that according to the FC 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 4 th January 2014.

It appears from the materials on record that the applicants herein are permanent residents of Mumbai. The two Page 5 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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 31 st 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.

It appears that the order of the Bombay High Court dated 31st January 2014 rejecting the anticipatory bail application was challenged before the Supreme Court by filing SLP. The SLP (Cri) No.1770 of 2014 was disposed of by the Supreme Court vide order dated 24th February 2014, which reads as under :

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.

II. Submissions on behalf of the Applicants :

III. Submissions on behalf of the Respondent - State :

083781100 under the category of "Educational, Social"

(iv) It is humbly submitted that in the audit report of Sabrang Trust for the financial year 2011-2012, no income as interest received is reflected in the books of accounts however, scrutiny of the accounts of Sabrang trust reveals that during the financial year 2011-12, the trust has earned interest income of Rs.1,13,973. These details too seem to have missed the Auditor's scrutiny.

B. CITIZENS FOR JUSTICE & PEACE:

A bare scrutiny of above table reveals that the accused in connivance with the auditors, have manipulated their accounts as well as the audit reports submitted before statutory authorities. It will not be out of place to mention here that IO has also addressed letters to the concerned Auditors of Sabrang trust and CJP, to provide information related to their audit reports."

However, the auditors have choose to provide payment details with regards to only one account, concealing the fact that the petitioners have withdrawn huge cash amounts, transferred large sums to their personal/individual accounts as well as in the accounts of their privately owned companies, from 2 other accounts of Sabrang Trust during the same period as per the details given below:

Javed Anand

a) Amount as 19,18,676 7,58,320 34,743 27,11,538 per bank account statement

b) Amount as 13,87,650 No No 13,87,650 per statement information information provided by provided by provided by D.M.Sathe, C.A. C.A. auditor of Sabrang Trust Amount transferred from three accounts of SABRANG TRUST to Sabrang Communication & Publishing Pvt Ltd.

Amount transferred from three accounts of SABRANG TRUST Particulars FCRA A/c * HRD A/c** SB-Gen Total In Rs. In Rs. A/c*** Cash In Rs.

a) Amount as 12,75,000 11,02,000 18,93,925 42,70,000 per bank account statement

b) Amount as 10,00,000 No No 10,00,000 per statement information information provided by provided by provided by D.M.Sathe, C.A. C.A. auditor of Sabrang Trust * FCRA A/c No.369102010802885 with UBI ** HRD A/c No 369102010806781 with UBI.

*** SB-General A/c No 369102010037953 with UBI

b) As per the information gathered from the office of the Charity commissioner, Mumbai, the Petitioners have not submitted Audited Copies of the "Balance Sheet" and "Income & Expenditure Account" of Sabrang Trust till April 2014, for the following 6 years i.e 2002-03, 2003- 04, 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 Page 19 of 63 R/CR.MA/4677/2014 CAV JUDGMENT Petitioners have refused to share any information with the authorities as regards to the working of the 2 NGOs.

c) It humbly submitted and also note worthy that the auditor D M Sathe in their reply to the IO, have given a certificate clearly stating that " No grants were received (by Sabrang Trust) in the Financial year 2012-13 and 2013-14" but the Bank statements reflect that Sabrang 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.

d) 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 2002- 2008, 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.

B) Citizens for Justice & Peace (CJP)

a) 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.

b) 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.

c) 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.

d) 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.

e) 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.

f) 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.

From the scrutiny of replies received from Chartered Accountants of Sabrang Trust and CJP, prima facie it is established that it is not only a serious case of embezzlements of public funds received by the Petitioners for charitable purposes is also a case of grave negligence on the part of auditors also."

The investigation of accounts revealed the following facts:

Copies of relevant pages of CWP No-173/2014 are annexed herewith as ANNEXURE C. B) The Petitioners in Criminal Writ Petition No 293/2014 filed in the Bombay High Court on 24.01.2014 for de- ceasing the accounts of Sabrang Trust & CJP etc, at page no Q115 para (h) of the Petition stated that:

Copies of relevant pages of CWP No-293/2014 are annexed herewith as ANNEXURE D. C) The Petitioners in Misc Criminal Application No 761/2014 filed before the Sessions Court, Ahmedabad on 21.02.2014, in Affidavit-in-rejoinder of the Applicants dated 10.03.2014 for grant of anticipatory bail, at page no 4 para (6) of the Affidavit-in-rejoinder stated that:

Copies of relevant pages of CWP No-761/2014 are annexed herewith as ANNEXURE E. D) The Petitioners in Misc Criminal Application No 4677/2014 filed before this Hon'ble Court on 27.03.2014 for grant of anticipatory bail and quashing judgment and order dated 25.03.14 passed by the Ld City Session Judge, Ahmedabad in MCA No 761/2014, at page no 24 para (cc) of the Petition stated that:

Copy of relevant pages of CWP No-4677/2014 is annexed herewith as ANNEXURE F. E) The Petitioners in Special Criminal Application No 2710/2014 filed before this Hon'ble Gujarat High Court on 07.07.2014 for de-freezing of accounts of Sabrang Trust, CJP etc, at page no 10 para (h) )of the Petition stated that:

The Petitioners at para (j) again repeated the same statement as under:-

Some of the facts which are admitted by the applicants have also been highlighted. Those are as under :

The entire thrust of the Petitioner's defence all throughout has been that as NGOs, they have been registered under the Public Trust Act and their accounts are duly audited and submitted to the Charity Commissioner, Mumbai, every year and the Charity Commissioner has raised no query regarding their accounts till date.

Investigation has revealed that the Petitioners have not been filing their annual Audited Reports and statements of Accounts to the Charity Commissioner, every year, as repeatedly claimed by them and proved from the following alarming facts emerged during the investigation:

b) Sabrang Trust:

(ii) 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.

(iii) As Managing Trustees of SABRANG TRUST, the Petitioners have made incorrect statements on oath in 2 petitions before the Hon'ble High Court of Bombay (WP No- 173/2014 filed on 15.01.2014, CWP No-293/2014 filed on 24.01.2014), SLP No 1770/2014 filed on 20.02.2014 in the Hon'ble Supreme Court and MCA No 761/2014 filed on 21.02.2014 before the Sessions Court, Page 32 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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.

(iv) These two Affidavits filed by the Petitioners in the office of the Charity Commissioner for condonation of delay, eastablishes beyond reasonable doubt, that the Petitioners were not filing their Annual Audited Report and Statement of Accounts of both the trusts in the office of the Charity Commissioner regularly every year, which is a mandatory requirement for every registered Trust, and that they have repeatedly lied on oath before various Courts as per details mentioned above. Since, the Income 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.

This conduct of the accused also speaks volumes about their style of functioning, their faith in the Judicial System of the Country. It is humbly submitted that this Hon'ble court would take a serious note of series of mis- conduct/mis-representation by the Petitioners who choose to mislead the Hon'ble court to secure favourable orders by stating falsehoods."

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.

It appears from the affidavit-in-reply filed by the State and the submissions of Mr.Jethmalani, the learned advocate appearing on behalf of the State, that detailed investigation of the following transactions is necessary :

(h) Receipt of donations to the tune of Rs.29,20,000=00 from Ashoka Foundation, Arlington, USA, in the personal accounts of Ms.Setalvad and Rs.6,05,442=00 as foreign remittance in Ms.Setalvad's personal account.

(i) Monthly withdrawal of salary by both the accused from all the six accounts of CJP, Sabrang Trust and Sabrang Communications.

It also appears that the custodial interrogation is necessary for the following reasons :

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 Page 36 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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.

7. 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.

8. 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.

9. The CJP and the Sabrang Trust were granted registration under the Foreign Contribution Regulation Act (FCRA) by the Ministry of Home Affairs in November, 2007. The CJP and Sabrang Trust respectively opened the Page 37 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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.

10. 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.

11. 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 Page 38 of 63 R/CR.MA/4677/2014 CAV JUDGMENT necessary to consider the position of law.

I may begin with the decision of the Supreme Court in the case of Balchand Jain v. State of M.P. , AIR 1977 SC 366. Fazal Ali, J. observed in no uncertain terms as follows :

Balchand Jain (supra) was a case, wherein the primary question before Their Lordships was, whether anticipatory bail can be granted with regard to an offence under rule 184 of the Defence and Internal Security of India Rules. His Lordship Bhagwati, J. in his concurring judgment first observed as to the nature of this power as follows :

The exceptional nature of this power was further highlighted by Fazal Ali, J. who prepared the main judgment in the following words:--

As regards the guidelines and the limitations on the exercise of the power under Section 438, the Supreme Court laid them down in the following terms (at p. 377 of AIR):--

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. Khwaja Nazir Ahmad , AIR 1945 PC 18(at p. 22):

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.

In this context, it is worthwhile to recall that by virtue of S. 57 of the Code, a police officer would be entitled to detain in custody such a person for twenty-four hours exclusive of the time necessary for the journey from the place of arrest to the Magistrate's Court without seeking the sanction of any Court or Magistrate. This right of the police indeed seems to have constitutional sanction by virtue of Article 22(2) of the Constitution of India which is almost in similar terms. However, if the investigation cannot be completed with the period of 24 hours aforesaid, the Code makes express provision therefor by Page 42 of 63 R/CR.MA/4677/2014 CAV JUDGMENT Section 167 and sub-section (2) of the same is pertinent and the relevant part thereof may be set down here for facility of reference:--

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 Page 43 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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.

After Balchand, the Supreme Court delivered the decision in the case of Gurbaksh Singh Sibia (supra). In Gurbaksh Singh Sibia (supra), the Supreme Court examined the various facets of this provision. The Supreme Court has observed in regard to the legislative intent of the provision :

While examining the amplitude of judicial discretion given by Section 438, the Supreme Court observed :

While repelling the contention that the anticipatory bail cannot be granted unless it is shown that proposed allegation is mala fide, the Supreme Court observed :

In regard to the scope and ambit of Section 438, the Supreme Court observed :

The Supreme Court also examined the fact as to whether the discretion vested in the Court under Section 438 can be exercised in relation to the offences punishable with death or life imprisonment unless the Court is satisfied that such a charge appears to be false or groundless and observed as under :

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.

120. 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. Relevant consideration for exercise of the power

121. No inflexible guidelines or straitjacket formula can be provided for grant or refusal of anticipatory bail. We Page 47 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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.

122. The following factors and parameters can be taken into consideration while dealing with the anticipatory bail:

123. 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.

124. 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.

125. These are some of the factors which should be Page 49 of 63 R/CR.MA/4677/2014 CAV JUDGMENT taken 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.

126. 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.

127. Personal liberty is a very precious fundamental right and it should be curtailed only when it becomes imperative according to the peculiar facts and circumstances of the case."

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 Page 50 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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.

My attention has been drawn by Mr.Thakore, the learned senior advocate appearing for the applicants, to a very recent pronouncement of the Supreme Court in the case of Hema Mishra v. State of Uttar Pradesh and others , (2014)4 SCC 453, wherein His Lordship Dr.A.K.Sikri, J. in a concurring but a separate judgment made the following observations in paragraphs 30 and 31 :

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.

The applicants did appear before the Investigating Officer once or twice and they were put number of questions for the purpose of effective investigation. Mr.Jethmalani, in the course of hearing of these applications, made available for my perusal the case-diary, wherein number of questions were put to the applicants and the stock reply which I find is necessary to be quoted :

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".

To a specific question as regards the personal expenses incurred using the credit cards from the bank accounts of the CJP and the Sabrang Trust, the reply was, "I state that we have submitted the detailed reply regarding use of Credit Card in Page No(s). 606 to 613 and Page No(s).617 to 659, in "Annexure-A (Colly) of Affidavit Dated 18/06/2014 to our Miscellaneous Criminal Application No.4677/2014 filed before the Honourable High Court of Gujarat. We have also informed in Audit Report of Shri D.M.Shathe and Haribhakti that we have Page 53 of 63 R/CR.MA/4677/2014 CAV JUDGMENT not incurred any personal expenses from Trust Bank Account

(s). This information is asked for only to harass and defame us. You have not produced any documentary proof regarding your allegation in the matter."

To a specific question regarding vouchers, the reply was, "if we are asked in writing to submit vouchers of particular time and expenses, thereafter, we will provide you the same. As per the legal advice, we have obtained, it is neither necessary nor desirable to submit the same for the present investigation."

To a specific question regarding the income tax returns, the reply was, "You have demanded copies of I.T.Returns for the years from 2004-05 to 2012-13, but we are not bound to produce the same (before you)."

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 third- degree 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 Page 55 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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.

So far as the aspect of custodial interrogation in public interest is concerned, I am supported by a decision of the Supreme Court in the case of Er.K.K.Jerath v. Union Territory, Chandigarh and others , 1998 Cri.L.J. 2555, wherein the Court observed in paragraphs 3, 4 and 5 as under :

4. 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.

5. We do not wish to enter into any detailed discussion on these legal aspects raised by the learned counsel for the respondents as this Court in the several decision referred to by the learned counsel for the petitioner has explained the scope of the provisions of Articles 20(2) and 21 of the Constitution and Section 486 of the Code of Criminal Procedure and their inter-relationship. We may only state in considering a petition for grant of bail necessarily if public interest requires detention of citizen in custody for purposes of investigation could be considered and rejected as otherwise there could be hurdles in the investigation even resulting in tempering of evidence. This very aspect has been borne in mind by the High Court . On the facts and in the circumstances of the case, we do not think there is any god reason to interfere with the order made by the High Court in refusing bail at this state of the proceedings. The special leave petition is, therefore, dismissed."

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 Page 57 of 63 R/CR.MA/4677/2014 CAV JUDGMENT on bail after arrest.

I may quote with profit a decision of the Supreme Court in the case of Pokar Ram v. State of Rajasthan and others , 1985 SC 969, wherein in para 5 the following observations were made :

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, Page 59 of 63 R/CR.MA/4677/2014 CAV JUDGMENT 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.

In view of such stance of the State, the two applications being Criminal Misc. Application Nos.4679 of 2014 and 4680 of 2014 are hereby allowed, by directing that in the event of arrest of the applicants of the Criminal Misc. Application Nos.4679 of 2014 and 4680 of 2014 in connection with the FIR registered with the D.C.B. Crime Police Station, Ahmedabad, the applicants shall be released on bail on their furnishing a personal bond of Rs.10,000/- (Rupees ten thousand only) each with one surety of the like amount on the following conditions that they shall:

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.

(J.B.PARDIWALA, J.) 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.

(J.B.PARDIWALA, J.) MOIN Page 63 of 63