Bombay High Court
Avinash S/O. Late Ramesh Bhute (In Jail) vs State Of Maharashtra Thr. ... on 20 September, 2019
Author: Pushpa V. Ganediwala
Bench: Z.A. Haq, Pushpa V. Ganediwala
25crim.apeal821.18.odt
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
NAGPUR BENCH, NAGPUR.
CRIMINAL APPEAL NO. 821/2018
Avinash S/o late Ramesh Bhute
Aged about 52 yrs., Occ. : Business,
R/o. 29, Samarth Nagar,
Hindustan Colony, Nagpur
(Presently lodged at Central Prison, Nagpur)
...APPELLANT
VERSUS
State of Maharashtra,
Represented through the Investigating
Officer of the Economic Offences Wing,
Administrative Building, Civil Lines,
Nagpur
... RESPONDENT
_______________________________________________________________
Shri Manohar, Senior Advocate assisted by
Shri D.V. Chauhan, Advocate for the appellant.
Shri S.S. Doifode, A.P.P. for respondent / State.
Shri S.B. Tiwari, Adv. for one of the depositors
_______________________________________________________________
CORAM:- Z.A. HAQ AND
PUSHPA V. GANEDIWALA, JJ.
DATED :- 20/09/2019
ORAL JUDGMENT (Per Pushpa V. Ganediwala, J.) :
Heard Shri Manohar, learned Sr. Counsel for the appellant and Shri Doifode, learned Additional Public Prosecutor for the respondent / State and Shri S.B. Tiwari, learned Counsel for one of the depositors.
ADMIT.
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2. This is an appeal under Section 11 of the Maharashtra Protection of Interests of Depositors (In Financial Establishments) Act, 1999 (hereinafter referred to as "M.P.I.D. Act, 1999") challenging the order of framing of charge dated 11/12/2018 against the present appellant.
3. The present appellant-Avinash Ramesh Bhute is shown as accused No. 20 in the charge-sheet which is filed against 30 accused persons which include Directors, Managers, CEO, Business Associates, Members, Employees, Representatives of the financial establishment and persons responsible for the management of or conducting of the business or affairs of M/s. Wasankar Wealth Management Private Limited, for the offences punishable under Sections 420, 406, 409, 506 read with Section 109, read with Section 120 and read with Section 34 of the Indian Penal Code and Section 3 of the M.P.I.D. Act, 1999 and Section 58 of the Reserve Bank of India Act.
4. Against the present appellant the charge framed at clause 'Six' is relevant which reads thus :
" 6. Sixthly - That you accused No. 20 during the said period, time and place and in furtherance of common intention of you all abetted the other accused persons in committing the above offences and helped them to dispose off/transferred the amounts of investors with intention not to recover the same and also helped the other accused persons by threatening the depositors for not to lodge the reports against other accused persons and thereby you have committed an offence punishable u/sec.::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 :::
25crim.apeal821.18.odt 3 109 r/w sec. 120-B r/w sec. 34 of the I.P. Code. "
5. Before examining the involvement of the present appellant in the impugned crime, it would be appropriate to cite here the prosecution case in nutshell :
The First Information Report bearing No. 156/2014 dated 09/05/2014 was registered at Police Station Ambazari on the complaint of one Vivek Pathak against the Directors and Managers of M/s. Wasankar Wealth Management Private Limited and Wasankar Investments. Prior to registering the said crime, an inquiry against the accused persons and their financial establishments was conducted during the period between March, 2013 to May, 2014. The prosecution filed first charge-sheet on 24/09/2014 which is followed by five supplementary charge-sheets. The last charge-sheet came to be filed on 09/10/2017 before the Special M.P.I.D. Court.
6. In the impugned charge-sheets, it is alleged that the aforementioned accused persons, during the period between 2008 to 2014 entered into conspiracy and in furtherance of their common intention started various attractive deposit schemes in their Company by assuring higher unrealistic interest rate on their deposits, thereby allured the investors to invest their hard earned savings in their said financial establishments. In this way, the accused have collected large amount of deposits from small investors including the informant on the assurance that they will pay attractive interest on their invested amount, and thereafter fraudulently defaulted the repayment of the said deposits on maturity alongwith the interest accrued as promised.
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7. Learned Special Judge while framing charge against the accused persons, in the impugned order observed that it is apparent that the accused acted in conspiracy and in furtherance of their common intention accepted deposits by floating various financial schemes which are commercially not viable and practically impossible in order to allure the depositors. It is also observed that a perusal of the financial schemes which were floated by the accused, apparently would reflect that at the very inception the accused were knowing that the promises could not be fulfilled.
8. The role attributed to the present appellant - Avinash Bhute in the impugned charge is that he abetted the other accused persons in committing the offence punishable under Sections 420, 406, 409 read with Sections 109, 120-B and 34 of the Indian Penal Code. It is alleged that the present appellant helped the other accused to dispose off the deposits of the investors with intention not to recover the same and thereby committed an offence punishable under Section 109 read with Section 120-B, read with Section 34 of the Indian Penal Code.
9. The impugned order of framing of charge is assailed in this appeal. Learned Senior Counsel Shri Manohar submits that the learned Special Judge had no material before him to form any opinion much less prima facie to hold that the appellant is liable to be tried for the aforesaid offences. The appellant is engaged in the business of selling four wheelers and two wheelers through various business entities like Tajshree Motors Pvt. Ltd., Tajshree Auto Enterprises, etc. The appellant had never in any way communicated with the management or had control of M/s. Wasankar Wealth Management Private Limited.
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10. It is stated that in the month of February, 2015 police served summons upon the appellant calling upon him to explain receipt of total amount of Rs. 9,19,85,000/- from Mr. Prashant Wasankar and his financial establishment in his account and his business entities.
11. The appellant appeared before the Investigating Officer with all relevant papers and explained that he was one of the investors and invested Rs. 3.20 Crores in the financial establishment and the amount received by him was towards the premature return of his investment. The bank accounts of the appellant and his business entities were frozen and his immovable properties were attached. He was also arrested and later on released on bail on deposit of some amount. It is further submitted that since February, 2015 the appellant is running pillar to post to show his innocence, but in vain. The application under Section 482 of the Code of Criminal Procedure filed by the appellant before this Court was withdrawn with the liberty to file discharge application before the Special Court, after filing of charge-sheet.
12. As the learned Designated Judge found prima facie material to proceed against the present appellant, he framed charge against the appellant for the abettment of the offences charged against main accused persons and for the offences punishable under Section 109 r/w Section 120-B, r/w Section 34 of the Indian Penal Code.
13. Learned Senior Counsel also brought to the notice of this Court, various provisions in the M.P.I.D. Act, 1999 especially Section 8 and contended that the appellant is not liable for prosecution as property worth Rs. 15.00 Crores has already been attached by the prosecution and Rs. 5.00 Crores has already been deposited by the ::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 ::: 25crim.apeal821.18.odt 6 appellant.
14. It is further submitted that in the entire charge-sheet, there is no material against the present appellant as alleged, except that he has received Rs. 9,19,85,000/- from the main accused and the interest calculated on it is Rs. 14,,26,36,300/-
15. It is further submitted that the learned Special Judge has completely misread the material in the charge-sheet. A perusal of the material dose not disclose even remotely any offence as alleged against the appellant. The impugned order of framing of charge against the present appellant, therefore, is totally perverse and it is not supported by the material on record.
16. As regards charge for the offence under Section 109 of the Indian Penal Code is concerned, the learned Senior Counsel submitted that Section 109 of the Indian Penal Code cannot act in isolation. There is no express provision in the Penal Code for the punishment for the offence of abetment under Section 109. The abetter is punished with the punishment provided for the main offence with the help of Section 109 of the Indian Penal Code.
17. As regards the offence punishable under Section 120-B of the Indian Penal Code for which the charge is framed against the appellant, it is submitted that, it has never been the case of the prosecution that the appellant was part of the conspiracy. No material is placed by the prosecution which remotely suggests that there was meeting of mind, the basic requirement to attract the offence of conspiracy as defined under Section 120-A and punishable under Section 120-B of the Indian ::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 ::: 25crim.apeal821.18.odt 7 Penal Code. In conclusion, learned Senior Counsel submitted that even if, during the ongoing trial, in case, any material is found against the present appellant, the power under Section 319 of the Code of Criminal Procedure is available with the trial Court. Learned Counsel prays for quashing and setting aside the impugned order of framing of charge against the appellant.
18. Learned Additional Public Prosecutor Shri Doifode, strongly opposed the submissions on behalf of the appellant and while supporting the order of framing of charge against the appellant submitted that the present appellant directly assisted the main accused in disposing off the deposits of the small investors by diverting the said deposits for his business purposes.
19. Learned Additional Public Prosecutor further submitted that an amount to the tune of Rs. 9,19,85,000/- was found to have been received by the appellant and his business concern from M/s. Wasankar Wealth Management Private Limited and its Directors. Learned Additional Public Prosecutor also placed on record the chart showing the receipt of said amount which has been siphoned of from account of main accused to the account of the appellant and his financial concern.
20. Learned Additional Public Prosecutor further submitted that till today, Investigating Officer recorded statements of 852 depositors, who have deposited amount with the said financial establishment and that amount comes to Rs. 230,66,06,238/-.
21. It is further submitted that the application by the appellant before this Court for quashing of First Information Report was ::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 ::: 25crim.apeal821.18.odt 8 withdrawn as prima facie case was found against the appellant. Therefore, the ground that there is no material against the present appellant is misconceived. The appellant has not only assisted, but also abetted the commission of crime by the co-accused persons and fraudulently accepted the money by luring the depositors. The act of the appellant makes him not only the beneficiary but also an associate in the said crime.
22. It is further submitted that the appellant himself has filed an application under Section 8 of the M.P.I.D. Act, 1999 on affidavit and had accepted to have received the amount from the co-accused persons and further shown his willingness to redeposit the same. Under such circumstances, it cannot be said that the appellant has no role to play. Ld. APP in conclusion submitted that the prosecution should be afforded an opportunity for proving its case on merits by leading cogent evidence in support of the charge framed, which is not baseless and hence, the appeal filed by the appellant is liable to be dismissed.
23. Learned Counsel Shri Tiwari who is assisting the prosecution relied on the judgment of the Hon'ble Apex court in the case of Om Wati (Smt.) and another Vs. State, through Delhi Admn. And others reported in (2001) 4 SCC 333 and submitted that while framing of charge, the Court has only to see whether prima facie, there is sufficient ground for proceeding against the accused and it cannot appreciate the evidence to arrive at a conclusion in the matter.
24. We have considered the submissions made on behalf of the parties.
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25. At the outset, it has to be mentioned that the appellant is charged with the offences punishable under Section 109 read with Section 120-B, read with Section 34 of the Indian Penal Code for assisting the main accused in committing the offence punishable under Sections 420, 406 and 409 of the Indian Penal Code.
26. The role attributed to the present appellant in the entire charge-sheet is that he and his business concern received total Rs. 9,19,85,000/- from M/s. Wasankar Wealth Management Private Limited and its Directors during the period from 16/03/2013 to 30/11/2013. On the contrary, in the impugned charge the period of commission of the offence by the main accused is shown as between 2008 till May, 2014. The First Information Report by Vivek Pathak came to be lodged on 09/05/2014. Prior to lodging of F.I.R., it is stated that the inquiry in this matter was started in March 2013. It is alleged that during inquiry it is found that the appellant received the said amount of Rs. 9,19,85,000/-.
27. The main accused persons are charged with Sections 420, 406 and 409 of the Indian Penal Code and Section 3 of the M.P.I.D. Act, 1999. Admittedly, the appellant is not charged with Section 3 of the M.P.I.D. Act, 1999, he, being not a financial establishment nor a person responsible for the management of or conducting of the business or affairs of such financial establishment i.e. M/s. Wasankar Wealth Management Private Limited. So also he has not received the deposits from the investors directly. As such, so far as offence under the M.P.I.D. Act, 1999 is concerned, no role has been attributed to the present appellant.
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28. As aforesaid, the allegations against the present appellant are that he assisted the main accused in committing offences punishable under Sections 420, 406 and 409 of the Indian Penal Code.
29. Now we examine whether the alleged act of receiving Rs. 9,19,85,000/- at a belated stage comes within the purview of these sections of the Indian Penal Code.
30. As far as offence punishable under Section 420 of the Indian Penal Code is concerned, the sine-qua-non for this offence is presence of fraudulent or dishonest intention at the time of making the promise with an intention to retain the property.
31. As far as offence punishable under Section 406 of the Indian Penal Code is concerned, the sine-qua-non for this offence is entrustment of property with a person.
32. As far as offence punishable Section 409 of the Indian Penal Code is concerned, the sine-qua-non for this offence is that the person to whom the property is entrusted, receives it either in the capacity of a public servant or in any way of his business as a banker, merchant, factor, broker, attorney or agent.
33. For all the above referred offences, in view of their very nature, privity of transaction between the offender and the victim is required. In the instance case, admittedly, in the entire charge-sheet there is nothing, even remotely, to show any dealing of the present appellant with the depositors in order to fraudulently induce them to part with any amount or to entrust any property with the appellant. The ::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 ::: 25crim.apeal821.18.odt 11 appellant, admittedly is also not a banker, merchant, public servant, etc. so as to bring him within the purview of the offence punishable under section 409 of IPC. There is no manner of doubt that at the relevant time of floating of schemes and accepting of deposits, the present appellant was not in picture at all. So, it cannot be said even remotely that he abetted the main accused in floating the schemes, luring the depositors and receiving the deposits. There is neither privity of contract between the depositors and the present appellant nor he received any property from them in a fiduciary character.
34. As stated above, the role attributed to the appellant is only of abettor and conspirator alongwith the main accused with common object. For the offence of conspiracy, it must be shown that there was an agreement between the main accused and the appellant to commit an illegal act. The act of receiving Rs. 9,19,85,000/- from the main accused is attributed to the appellant, which the appellant himself admits and he is ready to refund the same. The alleged act of the appellant neither falls within the purview of the offences under sections 420, 406 and 409 of the Indian Penal Code nor for the offence under the M.P.I.D. Act, 1999.
35. As per prosecution case, the appellant received the alleged amount in March, 2013. The allegations against the main accused are that he collected the amount during the period from 2008 to May, 2014, as reflected in the charge-sheet. The offence of conspiracy to commit an offence always precedes the commission of the main offence. The alleged act of receiving the property by the appellant is not an offence under the M.P.I.D. Act. In this view of the matter, the appellant can not be charged with the offence of conspiracy.
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36. As regards the M.P.I.D. Act, 1999, the same was promulgated to curb the unscrupulous activities of the financial establishment whose sole object is of grabbing money received as deposits from public, and to protect the interests of depositors in the State of Maharashtra.
37. Section 8 of the M.P.I.D. Act, 1999 takes care of malafide transfer of the property by the financial establishment in order to avoid refund of deposits, by order of attachment of the property of malafide transferee.
38. For ready reference, Section 8 of the M.P.I.D. Act, 1999 is reproduced as under :
"8. Attachment of property of mala fide transferee :
(1) Where the assets available for attachment of a Financial Establishment or other person referred to in Section 4 are found to be less than the amount or value which such Financial Establishment is required to re-pay to the depositors and where the Designated Court is satisfied by affidavit or otherwise, that there is reasonable cause for believing that the said Financial Establishment has transferred (whether before or after the commencement of this Act) any of the property otherwise than in good faith and for consideration, the Designated Court may, by notice, required any transferee of such property (whether or not he received the property directly from the said Financial Establishment) to appear on a date to be specified in ::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 ::: 25crim.apeal821.18.odt 13 the notice and show cause why so much of the transferee's property as is equivalent to the proper value of the property transferred should not be attached.
(2) Where the said transferee does not appear and show cause on the specified date, or where after investigation in the manner provided in sub-section (5) of section 7, the Designated Court is satisfied that the transfer of the property to the said transferee was not in good faith and for consideration, the Designated Court shall order the attachment of so much of the said transferee's property as is in the opinion of the Designated Court equivalent to the proper value of the property transferred.
39. As per this Section, if the designated Court is satisfied that there is reasonable cause for believing that the said Financial Establishment has transferred any of the property otherwise than in good faith and for consideration, the Designated Court may, by notice, require any transferee of such property to show cause why so much of the transferee's property as is equivalent to the proper value of the property transferred should not be attached.
40. Learned Senior Counsel appearing for the appellant has made a categorical submission that the amount of Rs. 5.00 Crores deposited by the appellant and the property of the appellant worth Rs. 15.00 Crores which is attached, can be continued under attachment till the culmination of the proceedings. It is submitted that ::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 ::: 25crim.apeal821.18.odt 14 the appellant will not make any claim for the withdrawal of the amount or for release of the property from attachment, till the conclusion of the proceedings.
41. No separate offence is contemplated in the Act of 1999 against the malafide transferee. Even the transferee is not required to show that he has purchased or he has received the amount in good faith. However, in the present case the appellant is being prosecuted under the M.P.I.D. Act, 1999.
42. The record shows that the present appellant showed his willingness to deposit the entire amount which the appellant had received from M/s. Wasankar Wealth Management Private Limited and its Directors. The appellant, as stated earlier, undisputedly, has already deposited Rs. 5.00 Crores and property of the appellant worth Rs. 15.00 Crores is already attached by the Court.
43. As far as offence under Section 120-B of the Indian Penal Code is concerned, as Section 420, 406 and 409 are not attracted, as discussed above, the charge of conspiracy for these offences would also not get attracted. In view of the very nature of the allegations against the appellant as there is absolutely no privity of transactions between the depositors and the appellant even remotly and therefore charge of abetment or conspiracy is totally absurd.
44. Furthermore, in the impugned charge, the appellant is charged with Section 109 r/w Section 120-B of the Indian Penal Code. The Apex court in the case of Kehar Singh and others Vs. State (Delhi Administration) reported in (1988) SCC 609 observed that the charge ::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 ::: 25crim.apeal821.18.odt 15 under Section 109 read with Section 120-B of the Indian Penal Code is unnecessary and inappropriate. The relevant para 260 of the said judgment reads thus:
"There is vital difference between the two crimes; (i) abetment in any conspiracy, and (ii) criminal conspiracy. The former is defined under the second clause of Section 107 and the latter is under Section 120-A of the Indian Penal Code. The gist of the offence of criminal conspiracy created under s. 120-A is a bare agreement to commit an offence. It has been made punishable under Section 120-B. The offence of abetment created under the second clause of Section 107 requires that there must be something more than a mere conspiracy.. There must be some act or illegal omission in pursuance of that conspiracy. That would be evident by the wordings of Section 107 (Secondly): "engages in any conspiracy omission takes place in pursuance of that conspiracy ....." The punishments for these two categories of crimes are also quite different. Section 109 IPC is concerned only with the punishment of abetments for which no express provision is made under the Indian Penal Code; A charge under Section 109 should, therefore, be along with some other substantive offence committed in consequence of abetment. The offence of criminal conspiracy is, on the other hand, an independent offence. It is made punishable under Section 120-B for which a Charge under Section 109 IPC is unnecessary and indeed inappropriate.::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 :::
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45. The material in the charge-sheet does not reflect that the appellant was involved in collection of deposits by making any misrepresentation. Even the appellant is not attributed with the knowledge or intention or motives of the crime committed by the main accused.
46. Learned Senior Counsel Shri Manohar has rightly submitted that the learned Special Judge, while framing the charge of abetment and conspiracy against the appellant, failed to consider the fact that the prosecution never alleged any canvasing of deposits by the appellant and the depositors had not invested money through the appellant.
47. In the light of the aforesaid observations we are of the considered view that the prosecution has not produced sufficient material for proceeding against the present appellant. The impugned order of framing of charge against the appellant needs to be quashed and set aside and the same is accordingly set aside. We pass the following Order:
Operative part
i) The appeal is allowed and the impugned order by which charge is framed against the present appellant, is quashed.
ii) The present appellant is discharged from the aforesaid crime. The amount which is already deposited i.e. Rs. 5.00 Crores and the property which is already ::: Uploaded on - 14/11/2019 ::: Downloaded on - 19/04/2020 13:36:23 ::: 25crim.apeal821.18.odt 17 attached shall remain deposited and attached until the conclusion / culmination of the proceedings and the trial Court may deal with such amount and the property as per the procedure established by law, pending trial.
iii) The prosecution would be at liberty to move an application under Section 319 of the Code of Criminal Procedure against the present appellant before the Designated court, if found necessary during the trial.
iv) No costs.
JUDGE JUDGE
D.S.Baldwa
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