Gujarat High Court
Bharatbhai vs State on 29 December, 2011
Author: Z.K.Saiyed
Bench: Z.K.Saiyed
Gujarat High Court Case Information System
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CR.MA/15602/2011 13/ 13 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL
MISC.APPLICATION No. 15602 of 2011
For
Approval and Signature:
HONOURABLE
MR.JUSTICE Z.K.SAIYED
=========================================
BHARATBHAI
MANGALDAS KAPADIA & 1 - Applicant(s)
Versus
STATE
OF GUJARAT - Respondent(s)
=========================================
Appearance :
MR
ND NANAVATY WITH MR TARAK DAMANI
for Applicant(s) : 1 -
2.
MR HL JANI, LD. ADDL. PUBLIC PROSECUTOR for Respondent(s) :
1,
=========================================
CORAM
:
HONOURABLE
MR.JUSTICE Z.K.SAIYED
Date
: 29/12/2011
CAV
ORDER
By way of present successive bail application, filed under Section 439 of the Code of Criminal Procedure, 1973, the applicants have prayed to release them on regular bail in connection with offence registered at CR No.I-78 of 2011 registered with Manjalpur Police Station, Vadodara for the offence punishable under Sections 406, 409 and 114 of the Indian Penal Code.
As per the case of the prosecution, Office of the Commercial Tax Commissioner, Sales Tax Bhavan, Ashram Road, Ahmedabad, received information that M/s.Biotor Industries Limited is involved in evasion of tax. Accordingly, investigation was carried out. As per investigation, inventory of goods worth Rs.02,10,43,36,921/- was taken in presence of panchas and concenred books of accounts were seized. During the investigation, it was found that Company has committed evasion of tax worth Rs.70.00 crores. Therefore, on 11th December, 2009 order came to be passed under Sections 45 and 45(1) of the Sales Tax Act to seize the goods worth Rs.70.00 Crores out of the stock. Thereafter, goods were seized and handed over to Mr.P.V. Rajkumar, General Manager (Finance) of the Company for maintaining status quo and he had given undertaking to that effect.
It is further the case of the prosecution that after scrutiny of the seized books of accounts, total assessment of Rs.08,56,02,28,341/- was outstanding. Therefore, when the complainant, as a part of his duty to recover the same, had visited the plant of the Company on 29th May, 2005, and taken inventory and compared the goods / stock that was available, it was found that stock worth Rs.66,76,81,798/- was missing. Thus, though assurance was given by the Company to maintain status quo with regard to the seized goods, the Company had disposed of the same and thereby has violated the order and committed contempt of the order date 11th December, 2009. Hence, the present complaint.
Heard Mr.N.D. Nanavaty, learned senior counsel with Mr.Tarak Damani, learned counsel for the applicants and Mr.H.L. Jani, learned Additional Public Prosecutor for respondent-State.
Mr.Nanavaty, learned senior counsel for the applicants, contended that applicant No.1 is the Chairman and applicant No.2 is the Managing Director of the Company. The applicants have been falsely impleaded in the case and denies that they have ever committed any offence as alleged and have not committed any offence. He has contended that without considering the facts, present complaint has been filed against the present applicants. The applicants came to know about the difference in stock in the Company only after the show cause notice dated 30th December, 2009 came to be issued by the Sales Tax Department. Thereafter, independent Auditor came to be appointed by the Company and after the report of the Auditor, the Company, through one of its employee under the instructions of present applicants, filed complaint against its employees, which was registered in the month of April, 2010 as C.R. No.14 of 2010 with D.C.B. Police Station, Vadodara. Thus, employees of the Company were involved in the said offence and prima-facie involvement of the employees of the Company is proved. He has further contended that at the time of offence and at the time of registration of F.I.R. against the applicants, they were at Mumbai. The applicants were stationed at Mumbai and carrying on their business at Mumbai. At no point of time the applicants were in knowledge about the missing stock prior to issuance of Show Cause Notice by the Sales Tax Department. He has further contended that so far as ingredients of provision of Section 405 of the Indian Penal Code - criminal breach of trust is concerned, prima-facie, the said ingredients are not established against the present applicants. Criminal breach of trust cannot said to be vicarious liability. The seized goods were handed over to Shri P.V. Rajkumar, employee of the Company, to maintain and the assurance was given by him to maintain the said seized goods as it is. Thus, it is the liability of the said employee and not the liability of the applicants or the Company. The said employee has misappropriated the seized goods and for that, the said employee can be held guilty. For the act done by the employee without the consent, knowledge and authority of the applicants and/or Company, the applicants and/or Company cannot be held guilty. It is the primary liability of the said employee and it is not the vicarious liability of the applicants. The applicants have already filed complaint against said Shri Rajkumar and other employees for missing stocks. Therefore, the present applicants may kindly be enlarged on bail. Mr.Nanavaty has further contended that when the order was passed to maintain status quo of the seized goods worth Rs.70.00 crores, it was passed without physically verifying the stock and without verifying the value of the stock that was in existence.
Mr.Nanavaty has further read Section 45 and 45(1) of the Sales Tax Act and contended that provisional attachment shall ceased to have after the expiry of a period of one year. In this case, order of attachment was passed on 11th December, 2009, so the order of attachment dated 11th December, 2009 shall cease after a period of one year, i.e. on 10th December, 2010. The present complaint is filed on 27th April, 2011. Thus, the complaint is filed after expiry of one period as prescribed under Section 45(1) of the Act. Therefore, by no stretch of imagination it can be said that there is a breach of order dated 11th December, 2009, for which the complaint is filed against the present applicants. Thus, there is a gross delay in filing the complaint. Thus, on this ground also, the present applicants is required to be enlarged on bail.
Mr.Nanavaty has also relied upon the latest decision rendered by the Apex Court in case of Sanjay Chandra Vs CBI, reported in 2011 (13) SCALE 107 and contended that the Apex Court has observed that:
"in determining whether to grant bail, both the seriousness of the charge and the severity of the punishment should be taken into consideration. The grant or refusal to grant bail lies within the discretion of the Court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the Court, whether before or after conviction, to assure that he will submit to the jurisdiction of the Court and be in attendance thereon whenever his presence is required."
He, therefore, contended that looking to the observations made by the Apex Court in this judgment, present applicants are required to be released on bail.
Mr.Nanavaty has further contended that the applicants were arrested on 18th August, 2011. Thus,they are in custody since last four months. He has contended that the case is triable by the Court of Magistrate and looking to the pendency of the cases as well as looking to the facts of the present case, there is no possibility that the trial will be completed in near future. Charge-sheet is already filed in the present case and the case rests upon documentary evidences. Thus, there is no chances that applicants can tamper with the documentary evidence. He has further contended that the applicants have deep root in the society. The Commercial Tax Department has already attached the property including immovable property along with plants and machineries and land worth Rs.400 Crores and thereby, as on date, much more properties than Rs.70.00 Crores, which is required to be maintained by the Company, are attached. Thus, presence of the applicants are very much secured by way of attachment of the properties worth Rs.400 Crores. He has further contended that bail is constitutional right of the applicants. He, therefore, contended that looking to the overall facts and circumstances of the case, and the fact that applicants have deep root in the society and properties worth crores of rupees are attached, present applicants may kindly be enlarged on bail.
As against this, Mr.H.L. Jani, learned Additional Public Prosecutor for the respondent-State, has vehemently opposed the present application. He has contended that the Company is a private company and therefore, the applicants are liable. He has contended that on information received by the office of the Commercial Tax Commissioner, Ahmedabad, investigation was carried out and it was found that the Company had committed evasion of tax worth Rs.70.00 Crores. Therefore, on 11th December, 2009 order was passed under Section 45 and 45(1) of the Sales Tax to seize the goods worth Rs.70.00 Crores from total stock of Rs.02,10,40,36,921/-. The said order was served upon the Company. Therefore, the contention taken by learned counsel for the applicants that the applicants were stationed at Bombay and had no knowledge about the same, is not believeable. The applicants, being Chairman and Managing Director of the Company, must have knowledge about the order of seizing of goods worth Rs.70.00 crores. He has also contended that the said seized goods were handed over to Shri P.V. Rajkumar, General Manager (Finance) and Shri Rajkumar had given assurance to maintain the said goods as it is. The said assurance was given by him as an employee of the Company and not in his personal capacity. Therefore, assurance given by Shri Rajkumar is binding to the present applicants. Mr.Jani has contended that the investigation was in progress and when the Commercial Tax Department came to know that the amount outstanding is much more, as a part of their duty, on 29th May, 2010 when they visited the place where the seized goods were placed, they came to know that goods worth about Rs.67 Crores were missing and therefore, the present complaint is filed. Thus, within a period of one year from the date of attachment order dated 11th December, 2009, it came to the notice that goods were missing. Thereafter, necessary investigation has been carried out, show cause notice was also issued in the month of December, 2009 and further investigation was also carried out in the matter and after completion of investigation, complaint came to be filed on 27th April, 2011. Thus, it cannot be said that there is delay in filing the complaint. Thus, the contention taken by the learned counsel for the applicants that theres is gross delay in filing the complaint is wrong. Thus, the period of one year as prescribed under Section 45(1) of the Sales Tax Act cannot be said to be over on 10th December, 2010. The investigation was going on and on completion of the investigation, the complaint is filed in the month of April, 2011.
Mr.Jani has further contended that Mr.Rajkumar, General Manager (Finance) has given his assurance as an employee of the Company and not in his personal capacity. Thus, the assurance given by Mr.Rajkumar is binding on the Company and the present applicants. Therefore, it is the primary liability of the present applicants and not the vicarious liability of the present applicants. Thus, the applicants are directly involved in the offence in question. He has further contended that if the say of the present applicants that the goods were missing and/or misappropriated at the instance of employees of the Company and not at the instance of the applicants be assumed, then also, it is the liability of the applicants to maintain the seized goods as per the order of the attachment because they are the Chairman and Managing Director of the Company.
Mr.Jani has further contended that the contention of the learned counsel for the applicants that only after the show cause notice issued to the applicants, they came to know about the missing of seized goods and thereafter, they appointed independent Auditor and upon receipt of the Report of the Auditor, immediately complaint is filed by the one of the employee, under the instruction and direction, against the concerned employees cannot be believed. The said complaint is filed by the applicants just to protect their skin. At the first point of time they have disposed of the seized goods and thereafter just to protect their skin, the applicants have lodged absolutely bogus complaint alleging false allegations against their employees. The applicants were well aware about the facts of the case. Mr.Jani has read provision of Section 405 of the Indian Penal Code and contended that the seized goods were handed over to Mr.Rajkumar, employee of the Company to maintain the said goods as it is and when assurance was given by Mr.Rajkumar to maintain the said goods as it is, entrustment and dominion over the property is fulfilled. Mr.Rajkumar has given assurance as an employee of the Company and not in his personal capacity. Therefore, the applicants can be held liable for breach of provision of Section 405. It is the primary liability of the applicants and not the vicarious liability. The employees of the Company has acted as per the order and direction and therefore, it cannot be said that it is the primary liability of the employees.
He, therefore, contended that looking to the facts of the case and seriousness of the offence, present application deserves to be dismissed.
Heard learned counsel for the respective parties and also gone through the papers produced before me. So far as question regarding entrustment and dominion of property is concerned, prima-facie, it is established that the property, i.e. seized goods in this case, is entrusted to the applicants through Shri P.V. Rajkumar, General Manager (Finance). The said goods were handed over to Shri Rajkumar as an employee of the Company and not in his personal capacity. Thus, the seized goods were entrusted upon the applicants through Shri Rajkumar. Therefore, ingredients of provision of Sections 406 and 409 of the Indian Penal Code are, prima-facie, established against the present applicants. The assurance given by Shri Rajkumar is in the capacity of General Manager (Finance) of the Company and not in his personal capacity. Thus, for the act of employee, applicants, who are Chairman and Managing Director of the Company, can be said to be liable. Thus, it is a primary liability of the applicants and not the vicarious liability. It is the case of the applicants that they came to know about the missing goods only after show cause notice issued to them and thereafter, upon inquiry, they filed the complainant in the year April, 2010 against concerned employees, but it clearly appears that it is filed just to save their skin. They know that at any point of time the fact of missing goods would come on surface and therefore, just to create defence in their favour, they have filed complaint against their employees. The said complaint is filed just to protect their skin and to create defence.
So far as question regarding gross delay in filing the complaint is concerned, it clearly transpires that when on 29th May, 2010 the plant of the Company was inspected, on that day itself, it came to the notice that goods were missing. Thereafter, investigation was carried out by the investigating branch and after completion of investigation, the complaint was filed in the month of April, 2011. Thus, as such, there is no delay in filing the complaint. After 29th May, 2010, the day on which it came to the notice that goods were missing, necessary investigation was going on and even show cause notice was also issued to the applicants. So far as question raised by the applicants that the order dated 11th December, 2009, i.e. the order by which the goods were seized under Section 45 and 45(1) of the Sales Tax Act, was to remain in force for a period of one year is concerned, it is very clear that inspection was carried out on 29th May, 2010 and on that day itself, it came to the notice that goods were seized. Thus, before the expiry of one year as prescribed under Section 45(1) of the Sales Tax Act, the mis-deeds committed by the applicants surfaced. Therefore, it cannot be said that the order passed under Section 45 and 45(1) of the Act would be expired on 12th December, 2009.
I have also perused the judgment in case of Sanjay Chandra (supra), on which reliance has been placed by the learned counsel for the applicants. The facts of that case is different than the facts of the present case. In the case of Sanjay Chandra, statement of witness runs into several hundred pages and the documents, on which reliance is placed by the prosecution, is voluminous. Whereas in the present case, total 12 witnesses are cited; out of which two are police officers, two are panchas and others are the officers of the Sales Tax Department, i.e. members of raiding party. All the witnesses are easily available for evidence and therefore, question of delay in trial will not arise. Even applicants have remedy to approach the trial Court under Section 309 of the Code of Criminal Procedure for speedy trial.
In the present case, huge amount is involved. The applicants are involved in evasion of huge amount of tax, which affects the economy of the State exchequer. The applicants are based at Bombay and therefore, their presence creates some doubt at the time of trial. The applicants are involved in serious allegations and when serious allegations are made against any accused, then bail cannot be granted and even if bail can be granted to such accused, then wrong signal goes to the society.
In view of above observations, present application deserves to be dismissed and is, hereby dismissed. Rule is discharged.
(Z. K. Saiyed, J) Anup Top