Sunil Kumar Garg vs. The State Of Maharashtra And Ors

Held

The Court rejected the applicant's plea for anticipatory bail. Regarding the issues, the Court found that purchase orders numbered 170 and 172 were prima facie in the name of doubtful entities lacking GST registration, with the GST number of Hari Om Udyog being used. Invoices were submitted by Hari Om Udyog, and the applicant, as Managing Director, approved payments for these orders. The Court noted that material on record prima facie indicated substantial payments received by the applicant, his wife, son, and family-member firms, totaling over Rs.20 crore, which were allegedly towards fake purchase orders. The Court found no material to suggest these payments were for rent or consultancy services, and the lack of uniformity in payments suggested unexplained receipts. The gate entry register was also considered doubtful. The Court observed that the charge-sheet filed appeared to be against arrested accused, not the applicant. A supplementary statement indicated the applicant attempted to persuade a witness not to cooperate, raising the possibility of influencing witnesses. The applicant's departure to the USA before the FIR, the issuance of a Look Out Circular, and his return only after this Court's interim order suggested a likelihood of fleeing justice. Therefore, custodial interrogation was deemed necessary. The bail application was rejected, but interim relief was extended for one week.

Facts

The applicant, Sunil Kumar Garg, sought anticipatory bail in connection with a criminal case registered for offences including cheating and criminal breach of trust. The prosecution alleged that while serving as Managing Director of HUF India Pvt. Ltd., an Indian unit of a German automobile parts manufacturer, the applicant colluded with co-accused to cause wrongful loss of Rs.139 crore to the company. This was allegedly done through a computerized system (SAP) by generating bogus purchase orders and releasing payments for goods never received, with misappropriation occurring through false labour payments, donations, and payments to jewellers. Kickbacks were allegedly received by co-accused and their relatives from company vendors. The alleged fraud spanned from 2010 to 2021. An internal audit in January 2020 and a special audit in August 2021 led to the complaint and FIR. Three co-accused were arrested, but the applicant remained at large. The applicant's prior anticipatory bail application was rejected by the Additional Sessions Judge.

Key Issues

1. Whether the applicant is entitled to anticipatory bail under Section 438 of the Criminal Procedure Code, 1973, considering the nature and gravity of the alleged offences, the applicant's role, and the evidence presented by both sides? Petitioner's arguments: The applicant's counsel argued that the First Information Report (FIR) was based on a Forensic Audit Report whose findings were prima facie false and that key documents were not considered. They contended that internal and external auditors did not find fraud between 2011 and 2020. It was also argued that the company had taken input tax credit (ITC) on materials received under alleged fraudulent purchase orders, making it inconsistent to later claim the invoices were fraudulent. Income received by the applicant from a vendor was disclosed in tax returns. The applicant's counsel also pointed out that a co-accused was granted bail and that a charge-sheet had been filed, suggesting custodial interrogation was unnecessary. Revenue/State's arguments: The prosecution argued that the applicant and co-accused created fictitious purchase orders (Nos. 170 and 172) for goods never delivered, misappropriating funds into their accounts. They highlighted that regular purchase order series ended at 169, and fake numbers were used for non-existent entities lacking GST registration. The GST number of Hari Om Udyog was used for fake orders, and corresponding invoices were submitted by Hari Om Udyog. The applicant, as Managing Director, approved payments for these fake orders. Witness statements and the gate entry register indicated fabrication. Illegitimate payments to the applicant and his family members were detailed. The applicant allegedly absconded to the USA for nine months before the FIR and attempted to tamper with a witness.