Sandeep Gulati vs. State Th.S.S.P.Crime Branch Jammu

Held

The High Court allowed the bail applications, granting interim bail for 20 days to the petitioners on furnishing bail bonds of Rs. 2,00,000/- each with two sureties of the like sum. The interim bail would become absolute if each petitioner deposits Rs. 2 crores with the trial court within 20 days of release. The deposited amount is to be kept in a Fixed Deposit Receipt (FDR) for six months. The Court acknowledged the seriousness of the economic offence involving Rs. 12.90 crores, noting that the object of criminal prosecution in such cases is to protect investors and aid recovery. While economic offences can jeopardize the economy, the Court found that the completion of investigation and filing of charge sheet meant the accused's custody might not be necessary. The Court emphasized the need to balance the rights of the accused with the interests of society. The Court also noted that all accused, including those previously absconding, had been apprehended, which was a significant change from the grounds for previous bail rejections. The trial court was cautioned not to be influenced by the observations made in the bail order during the trial.

Facts

The petitioners, Shalinder Gulhati and Sandeep Gulhati, are facing charges under Sections 420 and 120-B of the Ranbir Penal Code for allegedly cheating Navneet Mahajan and his late father. The petitioners agreed to sell a 29 Kanal land for Rs. 26 crores and received Rs. 12.90 crores as advance payment. However, they failed to hand over possession of the land or obtain a No Objection Certificate from the bank where the property was mortgaged. Instead, they allegedly diverted the received funds to liquidate other liabilities. This is the petitioners' fifth bail application, with previous applications being dismissed by various courts, including the High Court, due to the gravity of the offence and the substantial amount involved. The State contended that successive bail applications without changed circumstances are not maintainable. The investigation revealed significant liabilities against the petitioners' firm, including bank loans, employee dues, sales tax, income tax, and GST.

Key Issues

1. Whether the petitioners are entitled to be released on bail, considering the nature and gravity of the alleged economic offence involving Rs. 12.90 crores, and the fact that the charge sheet has been filed. Petitioner's Arguments: The petitioners argued that they have numerous business concerns and properties, and entered into an MOU for land development. They contended that the dispute is essentially civil in nature, arising from a breach of contract, and that the criminal proceedings are being used to recover the amount. They also highlighted that the investigation is complete, the charge sheet has been filed, and all accused, including those previously absconding, have been apprehended. They relied on the principle that detention pending trial should not be continued unless imperative, citing State v. Jaspal Singh Gill. Respondent-State's Arguments: The State argued that successive bail applications without a change in circumstances are not maintainable. They insisted that the allegations of cheating and fraud against the petitioners are prima facie proved by witness statements, and that the petitioners intentionally concealed the mortgaged status of the property and diverted the funds. The State also pointed to substantial outstanding liabilities of the firm, including unpaid GST, as evidence of financial distress and potential motive for the alleged fraud. They relied on the Supreme Court's observation in Virupakshappa Gouda and anr vs. State of Karnatka and anr that filing of charge sheet cannot be treated as a change in circumstances.