Karnataka High Court
Shri Anand Balakrishna Appugol vs Directorate Of Enforcement on 24 June, 2022
Author: H.P. Sandesh
Bench: H.P. Sandesh
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 24TH DAY OF JUNE, 2022
BEFORE
THE HON'BLE MR. JUSTICE H.P. SANDESH
CRIMINAL PETITION NO.3338/2022
BETWEEN:
SHRI ANAND BALAKRISHNA APPUGOL
S/O LATE BALAKRISHNALAXMANRAO APPUGOL
AGED ABOUT 56 YEARS
OCC: AGRICULTURE AND BUSINESS
(PERMANENT ADDRESS PLOT-2, I MAIN
II STAGE, HANUMAN NAGAR, BELAGAVI)
C/O SHRI MANOHAR BALAKRISHNA APPUGOL
PLOT NO.320, CTS NO.505
HANUMAN NAGAR, BELAGAVI-590019. ... PETITIONER
(BY SRI ASHOK R. KALYANASHETTY, ADVOCATE)
AND:
DIRECTORATE OF ENFORCEMENT
BY ITS INVESTING OFFICER
ASSISTANT DIRECTOR, DEPT OF REVENUE
MINISTRY O FINANCE, GOVT. OF INDIA
REPRESENTED BY THE SPECIAL PUBLIC PROSECUTOR
PREMISES OF HIGH COURT BUILDING
BENGALURU-560001. ... RESPONDENT
(BY SRI MADHUKAR DESHPANDE, SENIOR CGSC)
THIS CRIMINAL PETITION IS FILED UNDER SECTION 439
OF CR.P.C PRAYING TO ENLARGE THE PETITIONER ON BAIL ON
SUCH TERMS AND CONDITIONS AS DEEMED FIT AND PROPER
IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN CASE
NO.ECIR/BGZO/22/2020 INITIATED BY THE RESPONDENT
2
HEREIN FOR THE OFFENCE OF MONEY LAUNDERING UNDER
SECTION 3 OF PREVENTION OF MONEY LAUNDERING ACT P/U/S
4 OF THE SAID ACT NOW PENDING ON THE FILE OF THE PRL.
CITY CIVIL AND SESSIONS JUDGE AND SPECIAL JUDGE,
BENGALURU (CCH-1).
THIS CRIMINAL PETITION HAVING BEEN HEARD AND
RESERVED FOR ORDERS ON 14.06.2022 THIS DAY, THE COURT
PRONOUNCED THE FOLLOWING:
ORDER
This petition is filed under Section 439 of Cr.P.C. seeking regular bail of the petitioner in Crime No.185/2017 of Khadebazar Police Station, Belagavi for the offences punishable under Sections 406, 408, 420 of IPC and Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (herein after referred as 'PML Act) .
2. Heard the learned counsel for the petitioner and the learned High Court Government Pleader appearing for the respondent-State.
3. The factual matrix of the case is that this petitioner was the Chairman of Krantiveera Sangolli Rayanna Urban Credit Society (KSRUCS) situated at Belagavi. That on 01.09.2017, the 3 Assistant Registrar of Co-operative Society, Sub-Division, Belagavi filed a complaint to the Khadebazar police station, Belagavi and on the basis of the said complaint, a case was registered in Cr.No.185/2017 for the offences punishable under Sections 406, 408, 420 of IPC and after completion of the investigation, charge-sheet has been filed and case number also given in C.C.No.1/2020 which is pending on the file of Principal District and Sessions Judge, Belagavi. The petitioner was earlier arrested and enlarged on bail by this Court at Dharwad Bench in Crl.P.No.102337/2017. It is also the contention that respondent filed an application under Section 167 of Cr.P.C and he was remanded to the custody and now, this petitioner is in judicial custody and hence, he has approached the Trial Court in Crl.Misc.No.695/2022 and the same was rejected. Hence, the present petition is filed.
4. The learned counsel appearing for the petitioner would vehemently contend that the material placed before the Court does not suggest that the petitioner is guilty of the offence of money laundering under Sections 3 and 4 of PML Act. This 4 petitioner was booked in Cr.No.185/2017, arrested and detained in prison for the offences punishable under Section 420 of IPC and this High Court granted bail and detention and deprivation of his liberty again for the said scheduled offence leading to offence under Section 3 of PML Act does not seem to be justified. The counsel also vehemently contend that the provisional order of attachment of the property of the petitioner is confirmed by the adjudicating authority vide order dated 09.02.2021 and his passport is also impounded and investigation has been completed in Cr.No.185/2017 and charge-sheet also filed and this petitioner was also subjected to enquiry by the respondent on different dates and he is in judicial custody from 14.01.2022. The petitioner was in custody from 05.11.2018 to 07.02.2021 and again arrested on 05.01.2022 and his total detention is more than 2½ years and he is aged about 56 years and not keeping good health and an allegation against this petitioner is that he being the Chairman of the co-operative society, he used the depositors money but he made sincere efforts to refund the deposits and his efforts resulted in refund of Rs.35 lakh to the depositors and some of the complaints before the Consumer 5 Forum are withdrawn hence, the rejection of the bail petition under Section 439 of Cr.P.C. is bad in law and he is cooperating for investigation. The counsel further submits that the very observation of the Trial Court that presumption arises under Sections 22 and 24 of PML Act, investigation is in infancy and incorrect and contrary to records. The counsel submits that when passport of the petitioner is seized, the question of flee away from the investigation does not arise. The petitioner is a businessman and an agriculturist and he owns movable and immovable properties and his family is depending upon this petitioner and the presence of this petitioner is not required. Hence, he may be enlarged on bail.
5. The learned counsel for the petitioner in support of his arguments relied upon the judgment of the High Court of Hyderabad passed in Crl.P.Nos.3786, 4127 and 4137 of 2022 wherein quashed the extending the remand of accused and also given liberty to file a fresh bail application under Section 167(2) of Cr.P.C before the Metropolitan Sessions Judge and directed to consider the said application in coming to the 6 conclusion that the Court performs a judicial function while deciding an application for remand filed under Section 167(2) of Cr.P.C and while exercising the powers, bound to pass a judicial order by applying its mind and the learned counsel for the petitioner referring the said judgment vehemently contend that this petitioner is entitled for statutory bail under Section 167(2) of Cr.P.C.
6. The learned counsel for the petitioner also relied upon the judgment of the Apex Court dated 25.05.2021 in the case of KRISHNA MOHAN TRIPATHI vs STATE and the counsel brought to notice of this Court to paragraphs 8 and 12 wherein an observation is made that driving the parties to another round of bail plea in the Trial Court or in the High Court does not appear serving the cause of justice and we see no reason to deny the personal liberty to the appellant now at this stage, particularly when his properties otherwise remain attached and it is also pointed out that his passport is already deposited with the CBI. The counsel referring to this judgment vehemently contend that in this case also, the property of the 7 petitioner was attached and passport also impounded. The learned counsel for the petitioner also relied upon the judgment of this Court passed in Crl.P.No.1189/2022 dated 30.03.2022 wherein this Court observed that once an accused granted bail by a judicial Magistrate or the Session Court as the case may be in respect of the predicated offences ipso facto is entitled for grant of bail in respect of the offences under the Act.
7. Per contra, the learned counsel appearing for the respondent would submit that there was a misappropriation of the amount by this petitioner and others to the tune of Rs.281.14 crores and there were more than 26,000 depositors and their money has not been refunded. The properties attached is only to the tune of Rs.31 crore and hence, when the misappropriation is to the tune of Rs.281.14 crore, mere attachment of Rs.31 crore cannot be a ground to enlarge the petitioner on bail. The counsel also vehemently contend that the statement of this petitioner was also recorded and complaint was also filed and the offences are cognizable and non-bailable and the petitioner himself categorically admits that around 250 crore 8 of principal amounts are yet to be refunded to the depositors of the co-operative society and till date, he could not make any tangible effort to repay the said amount. The counsel also vehemently contend that the depositors amount has been invested for the purpose of purchase of the property in his name and his family members i.e., the petitioner herein has purchased a bungalow at Belagavi for a consideration of Rs.1.50 crore and has availed a loan of Rs.1 crore from Canara Bank and the petitioner also purchased Land Rover Discovery SUV car in the year 2016 for Rs.1.25 crores and despite purchasing the said properties and vehicles worth crores of rupees, the petitioner herein did not produce any income tax return to substantiate his source of income. The petitioner was non-cooperative and has not provided satisfactory reply in the statements recorded under Section 50(3) of PML Act hence, his judicial custody is necessary and the petitioner has raised certain grounds in support of his petition seeking bail but he has not made out any grounds for granting bail. The onus to discharge the burden of proof is on the petitioner under Section 24 of PML Act and if the petitioner released on bail, the petitioner may dispose off the proceeds of 9 crime, thus leading to frustration of the objectives of PML Act and very investment made by him for purchasing the property in his name as well as his family members, driver of the car and other staff of the bank is clear that he had committed the aforesaid offences.
8. The learned counsel for the respondent in his statement of objections, relied upon the judgment of the Apex Court reported in (2019) 9 SCC 24 in the case of P.CHIDAMBARAM vs DIRECTORATE OF ENFORCEMENT and brought to the notice of this Court to paragraph 38 and so also the judgment reported in 2020 SCC ONLINE ORI 544 in the case of MOHD. ARIF vs GOVT. OF INDIA wherein the Orissa High Court in paragraph 23 held that while deciding a bail application, the provisions of Section 45 read with Section 24 which reverses the burden of proof and creates presumption of guilt required to be dislodged by the accused, will mandatorily apply. The counsel also relied upon the judgment between ROHIT TANDON vs DIRECTORATE OF ENFORCEMENT in the said judgment also a similar view has been held. 10
9. The learned counsel for the respondent in support of his argument relied upon the judgment of the Apex Court reported in (2020) 14 SCC 396 in the case of CENTRAL BUREAU OF INVESTIGATION vs RAMENDU CHATTOPADHYAY wherein, it is held that the Court is conscious of the need to view such economic offences having a deep-rooted conspiracy and involving a huge loss of investors' money seriously. Though further investigation is going on, as of now, the investigation discloses that the respondent played a key role in the promotion of the chit fund scam described supra, thereby cheating a large number of innocent depositors and misappropriating their hard-earned money and cancelled the bail. The counsel also brought to notice of this Court that the facts and circumstances of the case is aptly applicable to the case on hand and Apex Court taken note of the material on record and observed that since there is a huge amount of money belonging to the investors has been siphoned off, the High Court committed an error in granting bail in favour of the respondent. 11
10. Having heard the respective counsel appearing for the parties and also on perusal of the material available on record, admittedly, earlier, the case has been registered against this petitioner in Cr.No.185/2017 for the offences punishable under Section 406, 408, 420 of IPC by the KSRUCS and the same has been investigated and charge-sheet also filed and bail was granted. It is also important to note that an application is filed under Section 167 of Cr.P.C before the Trial Court and he was remanded to the custody and he has been in custody from January, 2022. It is also important to note that invoked the offence punishable under PML Act wherein an allegation is made that this petitioner being the Chairman of the KSRUCS, misappropriated the amount of Rs.250 to 255 crore. It is also important to note that the statement of the petitioner was also recorded and admitted the fact that he had purchased the bungalow and car and also it is the case of the prosecution that he had indulged in siphoning off the amount of the depositors money. In the contents of the complaint, a specific allegation is made that immovable properties are listed out in paragraph 6 and movable properties also shown as schedule-B and apart 12 from that properties were attached to the tune of Rs.31 crore only as mentioned in paragraph 6 of the complaint. The brief summary of result of investigation under Section 50(3) of PML Act is also mentioned in paragraph 8 acquiring the properties in the name of his family members i.e., wife, son and also in the name of the car driver and also his friend and so also in the name of the Manager of KSRUCS and had indulged in transferring the property in the name of Ramathulla.
11. No doubt, the Apex Court in the judgment referred supra in KRISHNA MOHAN TRIPATHI's case observed that when the properties has been attached and passport is impounded, granted bail but in the case on hand, properties are attached only to the tune of Rs.31 crore and the investors invested the money to the tune of Rs.250 crore and the said amount has not been refunded and the judgment of the Apex Court in RAMENDU CHATTOPADHYAY's case taken note of the fact that the Court is conscious of the need to view such economic offences having a deep-rooted conspiracy and involving a huge loss of investors' money seriously and it is also 13 observed that though further investigation is going on, as of now, the investigation discloses that the respondent played a key role in the promotion of the chit fund scam described supra, thereby cheating a large number of innocent depositors and misappropriating their hard-earned money. In the case on hand also the specific allegation is made that this petitioner had misappropriated the investors' money to the tune of Rs.250 crore and the same has not been refunded and admittedly, only Rs.35 lakh was refunded and only Rs.31 crore properties were attached but the amount involved in misappropriation and siphoning off the amount is more than Rs.250 crore. It is also evident from the records that the properties were attached in the name of his family members and other office staff including the driver of the car and Manager and the same has been came out during the course of partial investigation and Apex Court also observed that if the respondent continues on bail, there is little chance of realizing any amount by selling the properties of the Tower Group of companies, since he may use unlawful tactics to keep prospective buyers away and also taken note of the fact that huge amount of money belonging to the investors has been 14 siphoned off, under such circumstances, High Court should not have released the respondent on bail. In the case on hand also huge amount of money belonging to the innocent investors has been siphoned off by this petitioner along with other Directors of the bank. When such being the material on record, and investigation also discloses the siphoning off the huge amount of Rs.250 crore and Trial Court also while considering the bail petition taken note of Section 24 of PML Act and apart from that taken note of the gravity of the offences and accusation made against this petitioner and the prima facie investigation material discloses about indulging in committing an offence of fraud on the innocent investors who have deposited the amount with the petitioner's bank and when such huge amount is involved in the fraud and also observed that there is a chance of absconding and attempting to tamper with the prosecution evidences and the Apex Court also observed the same in the judgment referred supra in RAMENDU CHATTOPADHYAY's case. Hence, it is not a fit case to exercise the discretion in favour of the petitioner and the petitioner has not made out any ground to enlarge him on bail. Admittedly, the complaint is also filed wherein several 15 allegations are made against this petitioner and further investigation is also going on.
12. The other contention of the counsel for the petitioner is that the petitioner is entitled for bail since the complaint was filed on 07.02.2022 and 60 days has been lapsed cannot be accepted at this juncture when the investigation is still going on and the specific allegations are made that further investigation is pending and hence, the question of invoking Section 167(2) of Cr.P.C. as observed by the High Court of Hyderabad at this stage cannot be looked into and no such application is filed before the Trial Court and for the first time, raised said ground before this Court and hence, the petitioner is not entitled for the bail on the said ground and the High Court of Hyderabad remanded the matter for consideration when an application is filed under Section 167 of Cr.P.C and the same is not a scenario herein and no specific date is found in the complaint. Except mentioning the date as 07.02.2022, there is no acknowledgment in the complaint stating that on what date the complaint was filed at Mangaluru and process continued thereafter and hence, Section 16 167(2) of Cr.P.C cannot be invoked at this juncture and on the said ground, the petitioner can approach the trial Court.
13. In view of the discussions made above, I pass the following:
ORDER The bail petition is rejected.
Sd/-
JUDGE SN