Sanjay Dhar JUDGMENT
Sanjay Dhar, J.
1. As per the FIR (FIR No. 04/2020 of P/S Anti-corruption Bureau, Srinagar), accused Mohammad Shafi Dar, the then Chairman, J&K State Cooperative Bank Limited, fraudulently sanctioned loan of Rs. 250.00 crores in favour of a non-existent Cooperative Society, namely, River Jhelum Cooperative House Building Society Ltd. The loan was sanctioned to the aforesaid Cooperative Society for the purpose of construction of a Satellite Township at Shivpora, Srinagar. An amount of Rs. 223 crores out of sanctioned loan was released in favour of the Chairman of the Cooperative Society and on 01.05.2019, the said amount was credited to the account of the Chairman of the Cooperative Society, who happens to be the petitioner herein. Prior to sanction of the loan, on 10.01.2018, the petitioner had approached the Jammu and Kashmir Cooperative Department for grant of financial assistance to the tune of Rs. 300 crores for the purpose of construction of Satellite Township on 300 kanals of proprietary land located in the outskirts of Srinagar City. The application of the petitioner was endorsed by the then Secretary to the Government, Co-operative Department to the Registrar Co-operative Societies, J&K, for taking up the matter with the concerned bank. Thereafter the application along with the recommendation, in terms of letter dated 26.03.2019, was forwarded by Registrar, Co-operative Societies, J&K, to the Managing Director, J&K State Co-operative Bank Ltd. (JKSCBL) enclosing therewith a photocopy of the certificate of registration of River Jhelum House Building Co-operative Society Ltd. The JKSCBL sanctioned a loan in the amount of Rs. 250 crores without obtaining field report, balance sheet, profit and loss statement, PAN Number, income tax returns, constitution of the Society including its byelaws and Board resolution etc. and also without securing the loan amount by way of taking sufficient collateral security. Thus, as per the FIR, the Chairman of JKSCBL in conspiracy with the petitioner herein, sanctioned and released the loan amount by flouting all the rules and regulations of the Bank including the one whereby the Bank could sanction cash credit to an individual in one go only up to the limit of rupees one crore. The FIR disclosed commission of offences under Section 5(1)(d) r/w Section 5(2) of Jammu & Kashmir Prevention of Corruption Act, 2006 and offences under Section 465, 467, 468, 471 r/w 120-B RPC.
2. After conducting investigation of the case, the Investigating Agency has come to the conclusion that the accused Mohammad Shafi Dar, the then Chairman of JKSCBL, in conspiracy with accused Hilal Ahmad Mir (petitioner herein), the Chairman of non-existent River Jhelum Co-operative House Building Society, and accused Abdul Hameed Hajam, the Secretary of the aforesaid non-existent Society, entered into a conspiracy with each other and along with other persons, defrauded the Jammu and Kashmir Co-operative Bank Ltd. on the basis of false and forged documents and succeeded in causing loss to the tune of Rs. 223 crores plus interest to the Government exchequer and to the Jammu and Kashmir Co-operative Bank, as the said Bank has sanctioned and released the aforesaid amount of loan by violating the banking rules and regulations. It is further stated in the charge sheet that investigation regarding roles of Mohammad Mujib-ur-Rehman Gassi, the then Registrar, Co-operative Societies, Ashiq Hussain, the then Deputy Registrar of Co-operative Societies and others is still in progress and report in terms of Section 173(8) of Cr.P.C. would be submitted before the Court upon completion of further investigation of the case.
3. It appears from the record of the case that first bail application of the petitioner was rejected by the learned trial court (Special Judge, Anti-corruption, Kashmir, Srinagar) vide its order dated 05.06.2020 and his second bail application came to be rejected by the same Court in terms of order dated 18.07.2020. Feeling aggrieved of the aforesaid orders of the learned trial court, the petitioner has filed the instant application before this Court for grant of bail in his favour.
4. It has been contended that the petitioner has not committed any offence whatsoever neither has he violated any rule or regulation, inasmuch as the whole process of sanctioning of loan in favour of the Society, of which the petitioner is the Chairman, has been conducted in accordance with the law and rules; that the allegation that petitioner's Society is fake is not borne out from the record and the investigating agency has not collected any material to support the said allegation; that there is no allegation in the FIR or for that matter in the charge sheet that any money has exchanged hands and, as such, offences under the provisions of Prevention of Corruption Act are not made out; that the loan was sanctioned by JKSCBL in favour of the petitioner's Society after following all the norms with the approval of its Board of Directors and there is no misappropriation of loan amount involved in the instant case as the amount of loan has been credited to the accounts of the land owners with lien of the JKSCBL having been marked on the land on which the Township is proposed to come up; that the petitioner is presumed to be innocent until proved guilty, therefore, the pre-trial detention of the petitioner violates his fundamental right to liberty guaranteed under Article 21 of the Constitution of India; that the investigation of the case is already complete and the petitioner is ready to abide by all the conditions that may be imposed by the Court while granting bail in his favour.
5. The respondents have resisted the bail petition by filing objections thereto. In their objections, respondents have reiterated the allegations contained in the charge sheet against the petitioner. While defending the orders of refusal of bail to the petitioner passed by the learned trial court, the respondents have contended that without any change of circumstances since the rejection of last bail application of the petitioner, it is not open to the petitioner to approach this Court. It has been further contended that the investigation pertaining to role of some other accused persons, namely, Mohammad Mujib-ur-Rehman Gassi, the then Registrar, Co-operative Societies, Ashiq Hussain, the then Deputy Registrar of Co-operative Societies and several others is still in progress and, as such, it will be premature to enlarge the petitioner on bail. Apart from this, it has been contended that the petitioner is alleged to have committed heinous economic offences which are to be treated as a class apart and, as such, no leniency or concession can be given to the petitioner. The respondents have expressed their apprehension that in case petitioner is admitted to bail, there is likelihood that he may abscond and thwart the course of investigation.
6. I have heard learned counsel for the parties and perused the record of the case.
7. As already noted, in the instant case, the learned Special Judge, Anti-corruption, Kashmir, Srinagar, has rejected the earlier bail applications of the petitioner on two occasions. The question that arises for consideration is whether or not successive bail applications will lie before this Court. The law on this issue is very clear that if an earlier application was rejected by an inferior court, the superior court can always entertain the successive bail application. In this behalf, it will be profitable to quote the following observations of the Supreme Court in the case titled Gurcharan Singh & Ors. vs. State (Delhi Administration), MANU/SC/0420/1978 : AIR 1978 SC 179
"It is significant to note that under Section 397, Cr.P.C. of the new Code while the High Court and the Sessions Judge have the concurrent powers of revision, it is expressly provided under sub-section (3) of that section that when an application under that section has been made by any person to the High Court or to the Sessions Judge, no further application by the same person shall be entertained by the other of them. This is the position explicitly made clear under the new Code with regard to revision when the authorities have concurrent powers. Similar was the position under Section 435(4), Cr.P.C. of the old Code with regard to concurrent revision powers of the Sessions Judge and the District Magistrate. Although, under Section 435(1) Cr.P.C. of the old Code the High Court, a Sessions Judge or a District Magistrate had concurrent powers of revision, the High Court's jurisdiction in revision was left untouched. There is no provision in the new Code excluding the jurisdiction of the High Court in dealing with an application under Section 439(2), Cr.P.C. to cancel bail after the Sessions Judge had been moved and an order had been passed by him granting bail. The High Court has undoubtedly jurisdiction to entertain the application under Section 439(2), Cr.P.C. for cancellation of bail notwithstanding that the Sessions Judge had earlier admitted the appellants to bail. There is, therefore, no force in the submission of Mr. Mukherjee to the contrary.
8. Relying upon the aforesaid observations of the Supreme Court, the High Court of Bombay in the case titled Devi Das Raghu Nath Naik v. State (Crimes Volume 3 1987 363), has observed as under:
"The above view of the learned Single Judge of the Kerala High Court appears to me to be correct. In fact, it is now well-settled that there is no bar whatsoever for a party to approach either the High Court or the Sessions Court with an application for an ordinary bail made under Section 439 Cr.P.C. The power given by Section 439 to the High Court or to the Sessions Court is an independent power and thus, when the High Court acts in the exercise of such power it does not exercise any revisional jurisdiction, but its original special jurisdiction to grant bail. This being so, it becomes obvious that although under section 439 Cr.P.C. concurrent jurisdiction is given to the High Court and Sessions Court, the fact, that the Sessions Court has refused a bail under Section 439 does not operate as a bar for the High Court entertaining a similar application under Section 439 on the same facts and for the same offence. However, if the choice was made by the party to move first the High Court and the High Court has dismissed the application, then the decorum and the hierarchy of the Courts require that if the Sessions Court is moved with a similar application on the same fact, the said application be dismissed. This can be inferred also from the decision of the Supreme Court in Gurcharan Singh's case (above)."
9. From the aforesaid discussion of law on the subject, it is manifest that the rejection of a bail application by Sessions Court does not operate as a bar for the High Court in entertaining a similar application under Section 439 Cr.P.C. on the same facts and for the same offence. The contention of the respondents in this behalf is, therefore, without any merit and the instant bail application is held to be maintainable.
10. On merits, at the outset, learned counsel for the petitioner has argued that while sanctioning and releasing loan amount in favour of the petitioner's Co-operative Society, all norms were followed by the loan sanctioning authority. He has further contended that the petitioner's Co-operative Society is duly registered and that there has been no misappropriation of released loan amount, inasmuch as the amount stands credited to the accounts of land owners. He has also submitted that it is a case where amount of loan is duly secured as the land on which the proposed township was to come up stands liened in favour of the loan sanctioning Bank i.e. JKSCBL. Thus, according to learned counsel, there has been no misappropriation or fraud in the transaction which is the subject matter of the case and, as such, petitioner deserves to be enlarged on bail. To support his contentions, learned counsel for the petitioner has referred to the judgments of the Supreme Court in the cases of:
(a) Sanjay Chandra v. Central Bureau of Investigation, MANU/SC/1375/2011 : (2012) 1 SCC 40,
(b) C.K. Jaffer Sharief v. State through CBI, MANU/SC/0960/2012 : (2013) 1 SCC 205,
(c) P. Chidambaram v. Directorate of Enforcement, MANU/SC/1670/2019 : AIR 2020 SC 1699,
(d) Sushil Sethi and another v. State of Arunachal Pradesh and others, MANU/SC/0119/2020 : AIR 2020 SC 768.
11. On the other hand, learned counsel for the respondents has submitted that the petitioner's Co-operative Society is fake. In this regard, the learned counsel has relied upon the record of the Registrar, Co-operative Societies, J&K and Additional Registrar, Co-operative Societies, Kashmir, to show that the petitioner's Co-operative Society was not registered and that the registration certificate attached with the application for grant of loan was fake. Regarding contention of the petitioner that all norms were followed by the bank while sanctioning loan amount in favour of the petitioner's Society, it has been contended by learned counsel for the respondents that no proper documentation was made while sanctioning the loan and the same was sanctioned in violation of laid down credit policy of the bank, inasmuch as no attempt was made to verify the genuineness or existence of the society, the activities being undertaken by the society, verification of balance sheets etc. and to ascertain the past performance of the society. It has been further contended that as per the policy of the bank, the loan is to be sanctioned in favour of economically weaker sections of the society but in this case financial grant has been sanctioned for a purpose other than the objective of the Co-operative Bank with a view to misappropriate the funds. Learned counsel has referred to the byelaws of the Bank to support his contention. In response to the contention of the learned counsel for the petitioner that the loan advanced by the Bank is duly secured by creation of lien in respect of the land on which township was proposed to come up in favour of the Bank, it has been contended by learned counsel for the respondents that the land in question has not been duly mortgaged by way of a registered mortgage deed in favour of the Bank and no collateral security has been obtained from the borrower. It has also been contended that non-encumbrance certificate of the land in question has not been obtained. The learned counsel has referred to the Loan Manual of the bank to show that the maximum limit to be sanctioned under Cash Credit to an individual is Rs. 1.00 crore and maximum limit of the State Co-operative Bank to finance a Co-operative Society is Rs. 19.68 crores only and that too against proper security and by following other norms but in this case an amount of Rs. 223 crores has been released in favour of society of the petitioner without even following the norms. On the strength of these contentions, the learned counsel has argued that the petitioner does not deserve the concession of bail. In support of his contention, learned counsel for the respondents has referred to the judgment of the Patna High Court in the case of Amit Kumar @ Bachcha Roy v. The State of Bihar (Criminal Miscellaneous No. 28879 of 2018 arising out of PS case No. 270 Year-2016 Thana Kotwali District).
12. Before considering the rival contentions of the parties, let us discuss the legal position governing the matters pertaining to grant or refusal of bail. It is a settled position of law that grant of bail is a rule whereas its refusal is an exception. The question whether bail should be granted in a case has to be determined on the basis of the facts and circumstances of that particular case. There can be no strait jacket formula or settled rules for exercise of discretion but the discretion to grant bail in the case of a non-bailable offence has to be exercised in accordance with the rules and principles laid down by the Code of Criminal Procedure and various judicial precedents. The principles governing grant of bail, which the Court has to take into consideration, are enumerated, though not exhaustively, as under:
a. The gravity of the offence and the nature of the accusation including severity of punishment in the case of conviction;
b. The position and status of the accused vis-à-vis the victims/witnesses;
c. The likelihood of the accused fleeing from justice;
d. The possibility of the accused tampering with the evidence and/or witnesses and obstructing the course of justice;
e. The possibility of repetition of the offence;
f. The prima facie satisfaction of the Court in support of the charge including frivolity of the charge;
g. Stage of the investigation;
h. Larger interest of the public or the State.
13. As already stated, there cannot be a set formula for considering the plea of bail of an accused. It all depends upon the facts and circumstances relevant to the case. The Supreme Court in the case of Nimmagadda Prasad v. Central Bureau of Investigation, MANU/SC/0485/2013 : (2013) 7 SCC 466, while laying down the principles for grant of bail, has, in para 24 of the said judgment, observed as under:
"24. While granting bail, the court has to keep in mind the nature of accusation, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt."
14. In the light of the afore-stated legal position, let us now advert to the facts of the instant case. The allegations against the petitioners are very serious in nature and some of the offences disclosed against the petitioner carry punishment of imprisonment up to 10 years. If the prosecution case is to be believed, he along with Mohammad Shafi Dar, the then Chairman of the Bank, are the kingpins of the alleged conspiracy. It is the case of the prosecution that the petitioner along with other co-conspirators have defrauded the JKSCBL by a huge amount of Rs. 223 crores and at this stage it cannot be stated that the allegations against the petitioner are without any substance. It is a settled law that at the time of consideration of bail application, it is neither necessary nor desirable to have an in-depth analysis of the material on record. Therefore, I would desist from expressing my opinion on the merits of the allegations made in the charge sheet against the petitioner lest it may prejudice his case before the trial court at the time of framing of charge or during any other proceedings. The material on record, however, does show that there is a genuine case against the petitioner and that the prosecution will be able to produce prima facie evidence in support of the charge.
15. Having observed as above, the question arises as to whether the petitioner can be denied the concession of bail, particularly when he is yet to be proved guilty and the trial is yet to commence. So far as the instant case is concerned, it is clearly stated in the challan that investigation into the case has not culminated as yet. In fact, it is stated in the challan that roles of Mohammad Mujib-ur-Rehman Gassi, the then Registrar, Co-operative Societies, Ashiq Hussain, the then Deputy Registrar of Co-operative Societies and some other persons are being looked into and a further challan in terms of Section 173(8) of Cr.P.C. will be filed before the trial court. Thus, it cannot be said that the investigation of the case has been completed. As such, this Court cannot lose sight of the fact that the investigating agency is going to file an additional charge sheet. Therefore, petitioner's presence in the custody may be necessary for further investigation.
16. Even otherwise, petitioner is alleged to be involved in economic offences. As per observations of the Supreme Court in Nimmagadda Prasad's case (supra), the economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The Court has observed that the economic offence having deep rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to financial health of the country. The Supreme Court in the case of State Of Gujarat vs. Mohanlal Jitamalji Porwal, MANU/SC/0288/1987 : (1987) 2 SCC 364, has described the seriousness of economic offence in the following terms:
"......The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to books. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest.
From the foregoing observations of the Supreme Court, it is clear that economic offences are required to be dealt with strictly especially in the matters relating to grant of bail. The grant of bail in such cases, particularly when the whole conspiracy is still under investigation, would be detrimental to the public interest as well as to the interest of the State.
17. The Court has to strike a balance between the rights of the accused to his liberty and the interest of the society. Having regard to the facts and circumstances peculiar to the instant case as have been analyzed hereinbefore, it would not only be premature but it would also be inappropriate to grant the concession of bail to the petitioner keeping in view the seriousness of allegations against him and the public interest
18. The judgments referred by the learned counsel for the petitioner in support of his case, as noted hereinbefore, do not apply to the facts of the instant case, inasmuch as the said judgments are distinguishable on facts.
19. In P. Chidambaram v. Directorate of Enforcement (MANU/SC/1670/2019 : AIR 2020 SC 1699), the Supreme Court had granted bail to the petitioner on the ground that the co-accused in that case had already been granted bail and the petitioner was suffering from various ailments.
20. In Sushil Sethi and another v. State of Arunachal Pradesh and others (MANU/SC/0119/2020 : AIR 2020 SC 765), the Supreme Court was not considering the question of grant of bail but was considering the matter regarding quashing of proceedings. Similar is the case with C.K. Jaffer Sharief v. State through CBI {MANU/SC/0960/2012 : (2013) 1 SCC 205}. The principles laid down by the Supreme Court in these two cases cannot be made applicable to the petitioner's case at this stage because we cannot undertake in-depth analyses of the prosecution case as the same is impermissible while considering a bail application.
21. In Sanjay Chandra v. Central Bureau of Investigation, MANU/SC/1375/2011 : (2012) 1 SCC 40, the investigation was complete and the charge sheet had already been laid before the trial Court but in the instant case although the charge sheet has been filed before the trial court yet the investigation of the case is still in progress as is clear from the contents of the charge sheet. Thus, the ratio laid down in the judgments referred by the learned counsel for the petitioner in support of his case is not applicable to the facts of the instant case.
22. Having regard to the aforesaid analysis, without expressing any opinion on the merits of the case, I am of the opinion that the petitioner cannot be released on bail at this stage. The Anti-Corruption Bureau is, however, directed to complete the investigation and file the supplementary charge sheet as early as possible, preferably within a period of one month from today. Thereafter petitioner shall be at liberty to move the trial court and if any such application is filed, the trial court is free to consider the application independently on its own merits without being influenced by dismissal of this petition.
23. With the above observations, the petition is dismissed. Copy of this order be sent to the learned trial Court.
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