Arshad Subhanallah Khan vs. State Of Maharashtra

Facts

This matter concerns an application for pre-arrest bail filed by Arshad Subhanallah Khan (the Applicant) in connection with C.R. No. 339 of 2023, registered for offences under Section 406 of the Indian Penal Code, 1860. The FIR alleged that the Applicant received raw material worth Rs. 1,96,98,819/- from the first informant and returned finished products/services. However, raw material worth Rs. 33,33,686/- remained with the Applicant. Upon demand, only Rs. 2,95,795/- worth of raw material was returned, leading to an alleged misappropriation of Rs. 30,37,891/-. The Applicant had previously been granted interim bail by the High Court on December 11, 2023. The Applicant claimed to have cooperated with the investigation and sought to tender bill counterfoils. The State argued that these bills lacked GST numbers, unlike previous transactions. The first informant resisted the bail application, alleging the Applicant sold the property and that a raid was conducted.

Held

The Court held that the Applicant was entitled to pre-arrest bail. The Court noted that the allegations in the FIR indicated a series of transactions between the parties since 2019. The question of whether the Applicant had dishonestly misappropriated the raw material was a matter for adjudication at the trial. The Court observed that even in cases involving an alleged offence under Section 420 of the Indian Penal Code, the punishment might extend to seven years. Therefore, the Court found it justified to exercise its discretion to make the order of interim bail absolute. The Court allowed the application, made the interim bail order absolute on the previously incorporated terms and conditions, and added a condition that the Applicant must regularly attend proceedings before the jurisdictional Court. The Court clarified that these observations were prima facie and confined to determining the entitlement to pre-arrest bail only.

Key Issues

1. Whether the Applicant is entitled to pre-arrest bail under Section 438 of the Code of Criminal Procedure, 1973, considering the allegations of criminal breach of trust under Section 406 of the Indian Penal Code, 1860? The Applicant argued that they had appeared before the Investigating Officer and cooperated with the investigation. They also sought to rely on bill counterfoils as evidence of their transactions. The State, represented by the learned APP, contended that the bill counterfoils relied upon by the Applicant did not merit consideration because previous transactions between the parties were evidenced by proper bills with GST numbers. The First Informant resisted the prayer for pre-arrest bail, alleging that the Applicant had sold the property in question to his brother and that a raid had been conducted at BT Enterprises where articles were seized, drawing attention to the averments in their affidavit in reply.