Judgment
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS TUESDAY, THE 20TH DAY OF FEBRUARY 2024 / 1ST PHALGUNA, 1945 BAIL APPL. NO. 11351 OF 2023 CRIME NO.827/2023 OF KANNAVAM POLICE STATION, KANNUR PETITIONERS/ACCUSED 1 TO 3:
1 M.M. THOMAS, AGED 58 YEARS S/O JOSEPH, MADATHINAMATTATHIL HOUSE, CHITTARIPARAMBA, KANNAVAM, KANNUR, PIN - 670650 2 EMILY CHACKO, AGED 57 YEARS W/O. M.M. THOMAS, MADATHINAMATTATHIL HOUSE, CHITTARIPARAMBA, KANNAVAM, KANNUR, PIN - 670650 3 JAINE MARIYA, AGED 20 YEARS D/O. M.M.THOMAS, MADATHINAMATTATHIL HOUSE, CHITTARIPARAMBA, KANNAVAM, KANNUR, PIN - 670650 BY ADVS.
BEJOY JOSEPH P.J.
GOVIND G. NAIR BALU TOM BONNY BENNY M.RAMESH CHANDER (SR.)
RESPONDENT
S :
1 STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR,HIGH COURT OF KERALA, PIN - 682031 2 K.MUHAMMED HAJI , AGED 73 YEARS S/O.MOIDEEN KUTTY, RESIDING AT M.P.K.MANZIL, KEEZHALLUR AMSOM, THERUR DESOM, P.O.EDAYANNUR, THALASSERY TALUK, KANNUR DISTRICT, PIN - 670595 ADDITIONAL SECOND RESPONDENT IS IMPLEADED AS AN INTERVENR AS PER ORDER DTD 9-1-24 IN CRL.M.A.
NO.1/24
2 BAIL APPL. NO. 11351 OF 2023 BY ADVS.
SMT. SHYNIMOL V.O. - PUBLIC PROSECUTOR S.RAJEEV V.VINAY M.S.ANEER PRERITH PHILIP JOSEPH ANILKUMAR C.R.
K.S.KIRAN KRISHNAN THIS BAIL APPLICATION HAVING COME UP FOR ADMISSION ON 20.02.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
3 BAIL APPL. NO. 11351 OF 2023 C.S.DIAS, J.
-------------------------------------------------------- B.A. No. 11351 OF 2023 ------------------------------------------------------- Dated this the 20th day of February, 2024 O R D E R The application is filed under Section 438 of the Code of Criminal Procedure, 1973 (in short, ‘Code’), for an order of pre-arrest bail.
2. The petitioners are the accused 1 to 3 in Crime No.827/2023 of the Kannavam Police Station, Kannur registered against them for allegedly committing the offences punishable under Sections 406, 420, 468, 471, 120-B and 465 read with Section 34 of the Indian Penal Code, 1860.
3. The crux of the prosecution case is that: the first accused and the defacto complainant are the Co- managing Directors of the private limited company
4 BAIL APPL. NO. 11351 OF 2023 named Malabar Construction Materials Private Limited(‘company’ for short). The second accused is a director of the company and the third accused is the daughter of accused 1 and 2. The accused 1 and 2 without the sanction or permission of the company fraudulently transferred the company's property, on the strength of a fabricated resolution, in favour of the third accused. Thus, the accused have committed the above offences.
4. Heard; Sri. Ramesh Chander M. the learned Senior Counsel for the petitioners, Smt. Shynimol V. O., the learned Public Prosecutor and Sri. S. Rajeev, the learned counsel appearing for the defacto complainant/ intervenor.
5. The learned Senior Counsel vehemently argued that the petitioners have been falsely implicated in the
5 BAIL APPL. NO. 11351 OF 2023 crime on the influence of the defacto complainant, as an arm-twisting tactic to settle the civil disputes pending between the parties. In fact, the defacto complainant has filed C.S. No.3/2023 before the Commercial Court, Thalassery, inter alia, for a decree of injunction. Along with the suit he had also filed I.A. No.3/2023 for an order of temporary injunction. The said application was dismissed as untenable. Even though the order was challenged in C.M.A. No.12/2023 before the Commercial Appellate Court, Thalassery, the same was also dismissed at the threshold. Thereafter, the defacto complainant has approached NCLT (National Company Law Tribunal), Chennai Bench, and filed an application for liquidation of the company alleging mismanagement and oppression. The petitioners are contesting the proceedings before the NCLT. However, the defacto complainant has not been able to secure any favourable
6 BAIL APPL. NO. 11351 OF 2023 order. Then, he filed W.P.(C) No.9283/2023 before this Court for an order of police protection. By Annexure A-8 judgment, this Court rejected the writ petition. Now, as a last ditch attempt, to harass the petitioners, the defacto complainant has filed the present frivolous complaint. The above sequence of events by itself establish the falsity in the crime. Actually, the company had received a notice from the Income Tax Department demanding a tax liability of Rs.6/- Crore. The company, by Annexure A2 resolution dated 09.01.2023, resolved to sell its landed properties to clear the tax liability.
Accordingly, the properties were sold to the third petitioner for a consideration of Rs.1,00,97,500/- (Rupees one crore ninety seven thousand and five hundred only). The entire sale proceeds were deposited with the Income Tax Department as evidenced by Annexures A4 to A6. It is much later, to wreak
7 BAIL APPL. NO. 11351 OF 2023 vengenence on the petitioners, the defacto complainant has turned around and has alleged that Annexure A2 resolution is a fabricated and forged document. The defacto complainant’s intention is to cheat the petitioners of their hard earned money. The allegation in the complaint and FIR are purely civil in nature. The dispute is subjudice before the jurisdictional Tribunal and Civil Court. The defacto complainant had misused the GST Registration of the company and had fraudulently carried out several transactions. Later, by Annexure A10 letter he has in unequivocal terms admitted to his illegal action. The petitioners 2 and 3 are ladies. The third petitioner is only a student. At any rate, the petitioners’ custodial interrogation is not necessary and no recovery is to be effected. The genuineness and veracity of resolution can easily be decided in the litigation pending before the Civil Court
8 BAIL APPL. NO. 11351 OF 2023 in the right royal manner. The present endeavour of the defacto complainant may not be permitted because it is a sheer abuse of the process of law. Therefore, the petitioners may be granted an order of pre-arrest bail.
6. The learned Public Prosecutor opposed the application. She submitted that the case has been registered on the basis of the complaint lodged by the defacto complainant, inter alia, that Annexure A2 resolution has been forged. The first petitioner has criminal antecedents since he is involved in three other crimes namely, Crime Nos.216/2022, 144/2023 and 650/2023 of the same Police Station. The petitioners' custodial interrogation is necessary and recovery is to be effected. If the petitioners are granted an order of pre-arrest bail, it would hamper with the investigation.
Hence, the application may be dismissed.
7. The learned counsel for the defacto
9 BAIL APPL. NO. 11351 OF 2023 complainant/intervenor also opposed the application.
The defacto complainant/intervenor has filed a counter affidavit, inter alia, contending that the petitioners have clandestinely fabricated Annexure A2 resolution. It is only in the counter affidavit that was filed before the NCLT, Annexure A2 resolution was revealed for the first time. Only then the defacto complainant became aware of the said resolution. Immediately, he has lodged the complaint before the Police and the FIR was registered.
The petitioners have fraudulently transferred the company properties to the third petitioner for a song.
The third accused is only a student and does not have the resources to purchase the property. It is mysterious how the third petitioner could raise Rs.1,00,97,500/- for the sale consideration. The black hands of the petitioners 1 and 2 are quite apparent in the farce transaction. All the above aspects prove the mensrea of
10 BAIL APPL. NO. 11351 OF 2023 the accused. If the petitioners are granted an order of pre-arrest bail, they would sabotage the fair and proper investigation of the crime. Considering the gravity of the offence, the investigation has been transferred to the Crime Branch. The Registering Authorities are also hand in glove with the petitioners. Therefore, the petitioners may not be granted an order of pre-arrest bail.
8. The prosecution allegation is that the petitioners 1 and 2 had fraudulently fabricated Annexure A2 resolution of the company and then transferred the company’s properties in favour of their daughter-the third petitioner.
9. On an overall appreciation of the materials placed on record it is seen that the Annexure A2 resolution was allegedly passed on 09.01.2023. Even prior to the above resolution, the defacto complainant
11 BAIL APPL. NO. 11351 OF 2023 had filed C.S. No.3/2023 before the Commercial Court, Thalassery, against the petitioners 1 and 2, inter alia, for a decree of permanent injunction. Along with the suit, he had also filed an application for an order of ad- interim injunction. But, the said application was dismissed, which order was challenged before the Commercial Appellate Court as C.M.A. No.12/2023. The said appeal was also rejected. Subsequently, the de facto complainant has approached the NCLT and has sought for the liquidation of the company on the alleged grounds of mismanagement and oppression committed by the petitioners 1 and 2. It is in the said proceedings that the petitioners 1 and 2 are said to have produced Annexure A2 resolution and revealed about the transfer of the company's property in favour of the third petitioner.
10. Indisputably, during pendancy of the above
12 BAIL APPL. NO. 11351 OF 2023 proceedings the defacto complainant had approached this Court and filed W.P.(C) No.9283/2023 for an order of police protection, alleging that there is large scale mismanagement and irregularities being committed by the petitioners 1 and 2. By Annexure A8 judgment, this Court dismissed the Writ Petition on the finding that the matter is subjudice before the jurisdictional Court/ Tribunal.
11. Annexure A10 letter submitted by the defacto complainant to the Deputy Commissioner of the State Goods and Services Tax, Kannur, also shows that the de facto complainant had conceded to have used the GST registration of the company for his personal needs.
12. Admittedly, the petitioners 1 and 2, and the defacto complainant are the Directors of the company.
The third petitioner has no role in the affairs of the company, other than being the daughter of the
13 BAIL APPL. NO. 11351 OF 2023 petitioners 1 and 2. There are allegations and counter allegations
made
by
both
sides
regarding mismanagement in the company. The crux of the present dispute pertains to Annexure A2 resolution and the subsequent transfer of the company property. The de facto complainant alleges that Annexure A2 has been forged and petitioners state that it was a unanimous resolution passed by the Board of Company and signed by all the Directors. On the strength of the resolution, the property was transferred to the third petitioner and the entire sale proceeds were deposited with the Income Tax Department, as evidenced by Annexures A4 to A6 receipts, towards the liabilities of the company.
13. The parameters to grant an order of pre-arrest bail have been succinctly laid down by the Hon’ble Supreme Court in Siddharam Satlingappa Mhetre v.
State of Maharashtra [(2011) 1 SCC 694] in the
14 BAIL APPL. NO. 11351 OF 2023 following lines:
111. 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 visualised 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 the facts and circumstances of each case. As aptly observed in Satishchandra Ratanlal the Constitution Bench decision in Sibbia case [(1980) 2 SCC 565 : 1980 SCC (Cri) 465] that the High Court or the Court of Session has to exercise their jurisdiction under Section 438 CrPC 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.
112. The following factors and parameters can be taken into consideration while dealing with the anticipatory bail: (i) The nature and gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made;
(ii) The antecedents of the applicant including the fact as to whether the accused has previously undergone imprisonment on
15 BAIL APPL. NO. 11351 OF 2023 conviction by a court in respect of any cognizable offence;
(iii) The possibility of the applicant to flee from justice;
(iv) The possibility of the accused's likelihood to repeat similar or other offences;
(v) Where the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her;
(vi) Impact of grant of anticipatory bail particularly in cases of large magnitude affecting a very large number of people;
(vii) The courts must evaluate the entire available material against the accused very carefully. The court must also clearly comprehend the exact role of the accused in the case. The cases in which the accused is implicated with the help of Sections 34 and 149 of the Penal Code, 1860 the court should consider with even greater care and caution because overimplication in the cases is a matter of common knowledge and concern;
(viii) While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors, namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused;
(ix) The court to consider reasonable apprehension of tampering of the witness or
16 BAIL APPL. NO. 11351 OF 2023 apprehension of threat to the complainant;
(x) Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as to the genuineness of the prosecution, in the normal course of events, the accused is entitled to an order of bail.
126. We deem it appropriate to reiterate and assert that discretion vested in the court in all matters should be exercised with care and circumspection depending upon the facts and circumstances justifying its exercise. Similarly, the discretion vested with the court under Section 438 CrPC should also be exercised with caution and prudence. It is unnecessary to travel beyond it and subject the wide power and discretion conferred by the legislature to a rigorous code of self-imposed limitations.
14. After bestowing my anxious consideration, to the facts, the rival submissions made across the Bar, the materials placed on record especially on comprehending the allegations and counter allegations made by the parties as against each other, that the dispute is
17 BAIL APPL. NO. 11351 OF 2023 subjudice before the jurisdictional NCLT and Civil Court, that the sale proceeds of the alleged transaction have been deposited before the Income Tax Authority, and the disputed question whether Annexure-A2 resolution is concocted or not is a matter of forensic examination and to be decided after trial rather than in a custodial interrogation, I am of the definite view that the petitioners’ custodial interrogation is not necessary.
15. In the above conspectus, I am satisfied and convinced to exercise the extra-ordinary discretionary powers of this Court under Section 438 of the Code by granding the petitioners an order of pre-arrest bail, subject to the condition that they would co-operate with the Investigating Officer and subject themselves to interrogation, which would do complete justice both sides.
In the result, the application is allowed subject to
18 BAIL APPL. NO. 11351 OF 2023 the following conditions:
i. The petitioners are directed to surrender before the Investigating Officer within one week from the date of receipt of a copy of the order;
ii. In the event of the petitioners’ arrest, the Investigating Officer shall produce them before the jurisdictional court on the date of surrender itself;
iii.
On such production, the jurisdictional court shall release the petitioners on bail on them executing a bond for Rs.1,00,000/- (Rupees One Lakh only) each with two solvent sureties for the like amount each, to the satisfaction of the jurisdictional court;
iv.
The petitioners shall co-operate with the investigation and make themselves available for interrogation and for the purpose of investigation as and when the Investigating Officer directs;
19 BAIL APPL. NO. 11351 OF 2023 v. The petitioners shall not intimidate the witnesses, tamper with the evidence or interfere with the investigation in any manner;
vi.
The petitioners shall not get involved in any other offence while on bail;
vii.
In case of violation of any of the conditions mentioned above, the jurisdictional court shall be empowered to consider the application for cancellation of bail, if any filed, and pass orders on the same, in accordance with law;
viii.
Needless to mention, it would be well within the powers of the Investigating Officer to investigate the matter and, if necessary, to effect recoveries on the information, if any, given by the petitioners even while the petitioners are on bail as laid down by the Hon'ble Supreme Court in Sushila Aggarwal v. State (NCT of Delhi) and another
20 BAIL APPL. NO. 11351 OF 2023 [2020 (1) KHC 663];
ix.
Needless to say, any observations made in this order is only for the purpose of deciding the application and the same shall not be construed as an expression on the merits of the case to be decided by the Courts.
Sd/- C.S. DIAS JUDGE BR
21 BAIL APPL. NO. 11351 OF 2023 APPENDIX OF BAIL APPL. 11351/2023 PETITIONER’S ANNEXURES Annexure A1 PHOTOSTAT COPY OF THE FIR IN CRIME NO.827/2023 OF THE KANNAVAM POLICE STATION DATED 16.12.2023 Annexure A2 PHOTOSTAT COPY OF THE RESOLUTION OF THE COMPANY DATED 09.01.2023 Annexure A3 PHOTOSTAT COPY OF THE PLAINT FILED BEFORE THE COMMERCIAL COURT IN CS 3/2023 DATED 13.03.2023 Annexure A4 PHOTOSTAT COPY OF THE CHALLAN RECEIPT ISSUED BY THE INCOME TAX DEPARTMENT Annexure A5 PHOTOSTAT COPY OF THE CHALLAN RECEIPT ISSUED BY THE INCOME TAX DEPARTMENT Annexure A6 PHOTOSTAT COPY OF THE CHALLAN RECEIPT ISSUED BY THE INCOME TAX DEPARTMENT Annexure A7 PHOTOSTAT COPY OF THE REPRESENTATION FILED BY THE FIRST PETITIONER TO THE DISTRICT POLICE CHIEF, KANNUR WITHOUT THE LIST OF DOCUMENTS DATED 02.12.2023 Annexure A8 PHOTOSTAT COPY OF THE JUDGMENT IN WPC 9283/2023 DATED 05.04.2023 Annexure A9 PHOTOSTAT COPY OF THE SAID REPRESENTATION GIVEN BY THE 1ST PETITIONER TO THE DIG OF POLICE, KANNUR RANGE DATED 21.11.2022 Annexure A10 PHOTOSTAT COPY OF THE COMMUNICATION GIVEN BY THE DEFACTO COMPLAINANT TO THE DEPUTY COMMISSIONER, TAX DEPARTMENT DATED 22.11.2022 Annexure A11 PHOTOSTAT COPY OF THE FIR IN CRIME NO.143/23 OF KANNAVAM POLICE STATION DATED 23.03.2023 RESPONDENT’S ANNEXURES Annexure R2(a) A TRUE COPY OF THE COMPLAINT DATED 10-12-2023 FILED BY THIS DEPONENT BEFORE THE ADGP (LAW AND ORDER)
22 BAIL APPL. NO. 11351 OF 2023 Annexure R2(b) A TRUE COPY OF THE WRITTEN STATEMENT FILED BY THE ACCUSED NOS.1 AND 2 IN C.S.NO.3/2023 BEFORE THE PRINCIPAL SUB COURT THALASSERY Annexure R2(c) A TRUE COPY OF THE COMPLAINT FILED BY THIS DEPONENT BEFORE THE REGISTRATION I.G. DATED 08-12-2023 Annexure R2(d) A TRUE COPY OF THE FIR IN CRIME NO.1546/2021 OF KANNUR TOWN POLICE STATION DATED 21-09-2021