Gujarat High Court
Sonu Bhagwati Dhing vs State Of Gujarat on 25 August, 2022
Author: Nikhil S. Kariel
Bench: Nikhil S. Kariel
R/CR.MA/11981/2022 ORDER DATED: 25/08/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION NO. 11981 of 2022
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SONU BHAGWATI DHING
Versus
STATE OF GUJARAT
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Appearance:
MR ASIM PANDYA, SENIOR ADVOCATE WITH MR.VISHAL J DAVE(6515)
for the Applicant(s) No. 1
MR RONAK RAVAL, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE NIKHIL S. KARIEL
Date : 25/08/2022
ORAL ORDER
1. Heard Mr. Asim Pandya, the learned senior advocate appearing with Mr. Vishal J. Dave, the learned advocate for the applicant and Mr. Ronak Raval, the learned APP appearing for the respondent - State.
2. The applicant apprehending his arrest in connection with the F.I.R. being C.R. No.11216008220235 of 2022 registered with Sector-7 Police Station, District - Gandhinagar has preferred this application praying for being enlarged on anticipatory bail.
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R/CR.MA/11981/2022 ORDER DATED: 25/08/2022
3. Mr. Asim Pandya, the learned senior advocate for the applicant would contend that the present applicant was the internal auditor of the company in question where the alleged fraud had been committed and whereas it is submitted that during the period in question, inspite of the best efforts of the present applicant, the persons who had committed the alleged fraud were the same persons who were supposed to co- operate to the present applicant in supplying bank books etc., and had not done so, which had resulted in the present applicant not being able to detect the fraud, and whereas it is on account of this non-detection that the present applicant is sought to be arraigned as an accused. Learned Senior Advocate Mr. Pandya would further submit that the said submission notwithstanding the fact that the present applicant as internal auditor, was not required to detect the fraud, more particularly, the learned senior advocate referring to the standard of internal audit, which has been published by the Institute of Chartered Accountants to substantiate the said argument. Learned Senior Advocate would further take this Court to the allegations made in the FIR and would submit that the allegations more or less relate to the acts of Page 2 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 commission or omission by the other accused whereas in so far as the present applicant is concerned it has been mentioned that the present applicant was negligent in preparing the internal audit. Learned Senior Advocate would further submit that the present applicant would be dealt with appropriately as per the procedure in case of negligence and whereas since the present applicant is not involved in the fraud in question, the present applicant may not be required to undergo the rigmarole of custodial interrogation. Learned Senior Advocate would further submit that the present applicant had infact submitted E-mails to the officers of the companies in question requesting them to submit appropriate documents and whereas since either there was lack of cooperation by the other co-accused or false documents or bank books have been provided, that had resulted in the internal audit not reflecting the fraud in question. In any case, the learned Senior Advocate would submit that it is not as if that even in internal audit report, the present applicant had given clean chit to the company. Learned Senior Advocate would refer to the internal audit report for the period between January 2020 to March 2020 and submit that large number of Page 3 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 observations have been made by the present applicant, which would clearly shows that it is not as if that the present applicant had in any way connived with the other co-accused and had participated in the fraud. Learned Senior Advocate would further submit that the fraud in question had taken place during the covid pandemic situation and whereas coupled with the non-cooperation of the officers of the company at the best what could be alleged is negligence and no criminality would be attached to the applicant. Learned Senior Advocate would further submit that as such there is no material to show that the present applicant was in any manner involved in the fraud in question and merely on account of statement of co-accused, the present applicant may not be required to undergo custodial interrogation more particularly, the present applicant having cooperated with the investigating officer, more particularly, after being protected by this Court. Learned Senior Advocate therefore submits that this Court may be pleased to enlarge the present applicant on anticipatory bail.
4. As against such submissions, the learned APP Mr. Ronak Page 4 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 Raval has vehemently opposed the present application. Learned APP would submit that the present applicant being highly educated person, more particularly, being a Chartered Accountant and knowing the entire proceedings, had cleverly ensured that the tracks of the present applicant are completely covered and that nowhere, the involvement of the present applicant would be revealed. Learned APP would submit that the present applicant was not the statutory auditor only for the period between 2019-2020, rather, according to learned APP, the investigation has revealed that as such while three different firms were appointed as internal auditors from 2015 to the year 2021 and whereas, the present applicant remained common as an internal auditor, while the firms had changed. Learned APP would therefore submit that from 2015 to the year 2020, the present applicant was clearly aware about the accounting situation of the company in question and present applicant would now not be heard to state that appropriate cooperation was not being accorded by the officers of the company. Learned APP would further submit that as such one of the co-accused has revealed in her statement that the present applicant, had been 'taken care of' Page 5 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 by other accused, more particularly, the present applicant being paid his share of the fraud in cash by the other co- accused, more particularly, seniors of the accused whose statement is being relied upon. Learned APP would also rely upon the forensic audit conducted by the company in question and would submit that the fraud carried out was approximately to the tune of 40 crores of rupees and the present applicant being internal auditor for almost three years, when the fraud had taken placed, cannot now be heard to state that appropriate cooperation was not accorded by the officers of the company. Learned APP would further submit that none of the documents submitted by the applicant, more particularly, E-mails as sought to be relied upon, would reflect that the present applicant was not accorded enough cooperation. Learned APP would submit that in case the present applicant was not accorded with cooperation by the officers concerned, it was always open for the applicant to have informed higher officials and whereas, such an initiative does not appear to have been taken. Learned APP relying upon the report of forensic auditor would submit that the report of the bank statements of bank account of the company Page 6 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 had revealed that total 56 transactions were made, whereby amounts were paid to the companies, who did not have transaction or relation with the company in question. It is submitted that normally payments are made by the complainant company i.e.G.I.L. to companies to whom some tenders or bids are awarded and whereas in the case of these 56 transactions, while an amount of approximately Rs.20 crores have been transferred to such companies, who never had any relation with the G.I.L. and whereas, no tenders were awarded to the company in question. Learned APP would submit that such fact escaping the attention of the present applicant as the internal auditor, more particularly, considering the fact that the present applicant was an internal auditor for almost three years when the fraud had taken place and coupled with the statement of the co-accused, at this stage, would be enough material for this Court to conclude prima-facie conclusion as regards the role of the present applicant. Learned APP would therefore submit that this Court may not exercise its discretion in favour of the applicant.
5. Heard Learned advocates appearing for the respective Page 7 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 parties. While this Court does not intend to discuss the issues in details, and whereas, further it is to state that the following relevant aspects are taken into consideration.
(1) The present applicant was an auditor of the company, from the year 2015-2021 and whereas, it appears that the major part of the fraud had taken place in the year 2021. It also appears that while the firm appointed by the company in question i.e.G.I.L., as internal auditors had changed from the year 2015-2021 and whereas, the present applicant remained constant. (2) It also appears that the present applicant, while it is attempted to be submitted that there was no cooperation or the present applicant had not been supplied with proper material for conducting the audit, prima-facie, the said aspect does not appeal to be evident since none of the E-mails reached by the applicant, reflect any clear stand taken by the applicant as regards the non-cooperation by the officers of the company in question.
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R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 (3) It also appears that the amount in question which was siphoned off, was paid through bank accounts and whereas, while it is being contended that the bank books were either not provided or false books were provided, but the fact remains that all the transactions remained on ledger of the bank, which could have very well been verified by the present applicant.
(4) That an amount of approximately Rs.20 crores being paid to the companies, which had no transactions with the G.I.L. and to which, the Government had not awarded any contracts or tenders, could not prima- facie be an aspect, which could have been missed by the internal auditor, who would have done internal audit.
(5) It does not also appear that in the internal audit report, from period between January 2020 to March 2020 wherein the present applicant according to Page 9 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 himself had raised number of objections, would reflect in any manner with regard to any of the transaction in question rather the alleged objection was with regard to negative balances etc. and whereas, the aspect of fraudulent transaction had not been touched upon by the present applicant.
(6) It also appears that the present applicant, was by the very fact of being the internal auditor for around six years, was very well aware about the accounting method of the company in question and whereas, after the fraud has taken place, the petitioner - applicant cannot be heard to state that the officers of the company were not cooperative.
(7) Further since it appears that a co-accused has mentioned about the involvement, it also appears that the allegation of non-cooperation was a mere afterthought.
(8) This Court has also taken into consideration the statement of a co-accused. One Mrs. Ruchi Bhavsar, Page 10 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 who states that the applicant was aware and also a part of the conspiracy.
(9) This Court also cannot at this stage lose right of the fact that public money to the tune of Rs.40 crores approximately are alleged to have been siphoned off by the accused and whereas, the method of the accused being to make payment to companies, who were not awarded any tender or bid by the Government. Considering the nature of the offence and also, considering that the applicant was the internal auditor of the company in question for many years and also taking into consideration at this stage, about the statement of a co-accused, who clearly indicates that the applicant was a part of the conspiracy, therefore, in the considered opinion of this Court, custodial interrogation by the Investigating Officer must not be thwarted by granting anticipatory bail to the applicant. (10) In so far as the standards of Internal Auditing relied upon by the applicant, it requires to be observed Page 11 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 that the said standards are only re-commendatory guidelines. Furthermore, the said guidelines do not in any manner state that an Internal Auditor could not be held criminality liable. Such an observation notwithstanding the fact that the allegation against the applicant is not limited to negligence in conducting internal audit. Rather the allegation against the applicant being that the applicant had conspired with the other accused and had facilitated commission of the fraud by ensuring that the internal audit does not in any manner state about the fraud.
6. This Court having observed herein above, as regards the prima-facie material available against the present applicant, it is required to be mentioned that the company in question where the fraud has taken place is a Government company and an amount is public money. In the considered opinion of this Court, since there being prima-facie material, to show that involvement of the present applicant and seriousness of the allegations being such that an amount of Rs.40 crores, which is public money, which is siphoned of by the employees Page 12 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022 R/CR.MA/11981/2022 ORDER DATED: 25/08/2022 of the company in question and the present applicant, there being enough material to show that the present applicant was prima-facie involved with the employees/co-accused in question, in the considered opinion of this Court, a clear case for custodial interrogation is made out. Hence, in the present application, no discretion could be exercised in favour of the present applicant by this Court. Hence, the present application stands rejected. Notice is discharged.
Interim relief granted earlier stands vacated.
(NIKHIL S. KARIEL,J) A. B. VAGHELA Page 13 of 13 Downloaded on : Sun Dec 25 00:15:46 IST 2022