Sanjay Chawla vs. State Of Haryana

Facts

Eight petitions were filed under Section 438 Cr.P.C. seeking pre-arrest bail. The FIR alleged a criminal conspiracy involving vendors and former/serving employees of Phillips India Ltd. to prepare fake invoices for services not rendered, causing a wrongful loss of approximately Rs. 8 crores for the period 2019-20 and prior. The modus operandi involved preparing false Purchase Orders, generating fraudulent invoices, and clearing payments in collusion. The petitioners, who are former and serving employees of Phillips, are alleged to have facilitated this fraud by misusing procurement processes, sharing VPN credentials, and receiving kick-backs. Investigations revealed WhatsApp messages and admissions of illegal activities, including returning misappropriated funds.

Held

The Court held that the petitioners are not entitled to anticipatory bail. The reasoning was based on the material on record, which indicated a conspiracy to cheat and defraud Phillips India Ltd. There was no material to demonstrate that services were actually rendered for the allegedly fraudulent invoices. Furthermore, there was no explanation for the money transactions between vendor companies, ex-employees, and entities in which they had interests. WhatsApp messages clearly indicated money being received as consideration for payments made against purchase orders and invoices. The Court emphasized that the complete modus operandi, the number of people involved, the identities of unknown co-conspirators, and the trail of money siphoned off needed to be unearthed. Therefore, considering the stage of investigation, it was not a fit case to grant anticipatory bail.

Key Issues

1. Whether the petitioners are entitled to pre-arrest bail in FIR No. 267 dated 28.09.2020 under Sections 406, 408, 420, 467, 468, 471, 506 and 120-B IPC, Police Station DLF Phase-II, Gurugram, considering the nature and gravity of the allegations. Petitioner's arguments: The petitioners contended that the case is based solely on documentary evidence, that alleged fake invoices have been unearthed, and that the determination of their authenticity and whether services were rendered is pending. They argued that they have long-standing associations with the company, are willing to cooperate, and there is no apprehension of them fleeing. They also argued that custodial interrogation is not justified. Revenue/State's arguments: The State and the complainant argued that, given the serious allegations of conspiracy to cheat and defraud, the petitioners are not entitled to anticipatory bail. They asserted that custodial interrogation is necessary to unravel the conspiracy, identify unknown co-conspirators, trace the money trail, and make recoveries.