Shri Bhushan Shukla vs. The State Of Madhya Pradesh

Held

The Court rejected the application for anticipatory bail. The Court considered the facts and circumstances of the case, the enormity of the fraud, and the prima facie involvement of the applicant in the crime. The Court noted that the investigation was ongoing and that the custodial interrogation of the applicant was deemed necessary. The reasoning for rejecting the bail application was based on the prosecution's evidence suggesting the applicant's role in facilitating the embezzlement. This included the discrepancy in the value and model of the machines, irregularities in the loan sanctioning process, and the applicant's alleged failure to follow proper banking procedures. The Court found that the applicant's actions, as alleged by the prosecution, directly contributed to the fraudulent diversion of loan funds. The ratio decidendi is that when there is prima facie evidence of an applicant's involvement in a significant financial fraud and ongoing investigation requiring custodial interrogation, anticipatory bail may be denied.

Facts

The applicant, Bhushan Shukla, a retired Chief Manager of Bank of Maharashtra, sought anticipatory bail in a case registered for offences including cheating, forgery, and corruption. The case involves a loan of Rs. 56.25 Lakhs sanctioned to M/s Alia Creation for setting up a textile industry. The proprietor, Deepti William, submitted a quotation from M/s Ahmed Enterprises for sewing machines. The applicant, after verifying documents and inspecting the site, sanctioned the loan. Funds were disbursed to M/s Ahmed Enterprises. Later, it was discovered that the machines installed were of a much lower value than those quoted, and the quotation itself was fake. The applicant allegedly provided a wrong verification report regarding machine installation and facilitated the embezzlement of loan amounts, causing a loss of Rs. 95,95,000/- to the bank. The investigation revealed a complex web of fake documents and fraudulent transfers involving several co-accused.

Key Issues

1. Whether the applicant, as the Branch Manager, is liable for the alleged embezzlement of loan amounts due to his verification report and loan sanction, despite the subsequent actions of co-accused? Petitioner's Arguments: The applicant contends he is innocent and falsely implicated. He claims to have sanctioned the loan based on committee reports and bank norms, after inspecting the factory where machines were indeed fitted. He argues that co-accused later changed the machines, for which he is not at fault. He also states the bank did not file any report against him and that his custodial interrogation is not required as he is cooperating with the investigation. Respondent's (EOW) Arguments: The respondent argues that the applicant facilitated the embezzlement. They point to discrepancies between the quoted machine model (F-5, 2100-B, costing Rs. 2,15,000/- each) and the installed machines (Jack F4 model, worth Rs. 15,000/- each). The inquiry committee found irregularities in loan sanctioning, including the absence of a CIBIL report, incorrect GST number, and improper beneficiary account details. The respondent further highlights that the applicant did not mention the machine make in his verification report and allowed frequent cash withdrawals, and disbursements were made without NOCs for existing loans, indicating the applicant's involvement.