Sri Rajasab S/O Badruen Shaikh vs. State Of Karnataka

Facts

The petitioners, accused Nos. 2 and 3, are private individuals accused of hatching a conspiracy with Accused No. 1, an Accountant at Karnataka Niravari Nigam Ltd. The prosecution alleges that Accused No. 1 found unutilized funds and, in conspiracy with the petitioners, created false vouchers. The petitioners allegedly posed as civil contractors, prepared bills for road construction work (some of which was already contracted), and received payments totaling Rs. 1,53,37,530/- and Rs. 1,44,16,000/- respectively. Accused No. 1 allegedly released these amounts after deducting GST, and the petitioners transferred the funds to their accounts, retaining 20% as commission and transferring the rest to Accused No. 1 and third parties. The petitioners were arrested, and a charge sheet has been filed. Their bail petition was rejected by the Sessions Judge, leading them to approach the High Court.

Held

The Court held that while the petitioners are not public servants, their involvement with Accused No. 1, a public servant, was crucial in committing the alleged offense and misappropriating state government funds. The Court noted that the amount of Rs. 2,89,89,000/- was released, and the petitioners received it in their bank accounts, returning 20% as commission. Cash and gold ornaments were seized from the petitioners during the investigation. The Court also noted that the matter has been referred to the CID for further investigation. Considering the prima facie material indicating the petitioners' involvement in cheating the State Government, and the ongoing investigation by the CID, the Court found them not entitled to bail. The Court's reasoning was that without the petitioners' assistance, Accused No. 1 could not have committed the offense. Therefore, the bail petition was dismissed.

Key Issues

1. Whether the petitioners, as private individuals, are entitled to bail under Section 439 of Cr.P.C. given their alleged involvement in a conspiracy with a public servant (Accused No. 1) to misappropriate state funds? Petitioner's Arguments: The petitioners argued that they are private laborers, not public servants. They contended that Accused No. 1 primarily created the false documents and released payments. Their role was limited to receiving 20% commission. They highlighted that the investigation is complete, charge sheet filed, and they have been in custody for over six months. Respondent's (State) Arguments: The State argued that the petitioners impersonated contractors, created fake GST invoices in a fictitious company name, and received over Rs. 2,89,89,000/- without performing any work. They contended that further investigation is pending for collecting bank documents and statements, which are being sent for FSL examination. The State feared that granting bail would lead to tampering with witnesses and hampering the investigation.