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2019 Supreme(Kar) 131
IN THE HIGH COURT OF KARNATAKA
B.A. PATIL, J.
T. Kanna Rao - Appellant
Versus
Central Bureau of Investigation, Bengaluru - Respondent
Criminal Petition No. 8112 of 2018
Decided On : 25-02-2019
L. Ravichander, Adv., N. Kumar, Adv., P. Prasanna Kumar, Adv.
The seriousness of economic offences and the need for a different approach in bail considerations for economic offence cases, emphasizing the impact on the economy and public interest.
Headnote:
anticipatory bail - Economic Offences - Sections 420, 120B of IPC and Sections 13(2) r/w. Section 13(1)(d) of Prevention of Corruption Act of 1988 - [Sections 420, 120B of IPC, Sections 13(2) r/w. Section 13(1)(d) of Prevention of Corruption Act of 1988] - The court discussed the nature and gravity of the accusations, the conduct of the accused, and the impact on the economy of the country. The court emphasized the seriousness of economic offences and the need for a different approach in bail considerations for such cases. The court also highlighted the importance of public interest and the financial health of the country in economic offence cases. The decision was influenced by the accused's involvement in an economic offence with deep-rooted conspiracies and huge loss of public funds, as well as the accused's conduct during the investigation.
Fact of the Case:
The accused, in an economic offence case, obtained a loan by offering inflated valuation of properties as collateral security. The accused did not repay the loan, leading to its classification as a Non-Performing Asset (NPA). The accused's conduct during the investigation raised doubts about their intention and credibility.
Finding of the Court:
The court found that the accused's involvement in an economic offence with deep-rooted conspiracies and huge loss of public funds required a serious consideration of bail. The court emphasized the need for a different approach in bail considerations for economic offences, considering the impact on the economy and public interest.
Issues: The primary issue was whether the accused, involved in an economic offence, should be granted anticipatory bail, considering the nature and gravity of the accusations, the conduct of the accused, and the impact on the economy of the country.
Ratio Decidendi: The court's decision was influenced by the seriousness of economic offences, the need for a different approach in bail considerations for such cases, and the importance of public interest and the financial health of the country in economic offence cases. The accused's conduct during the investigation also played a significant role in the court's decision.
Final Decision: The petition for anticipatory bail was dismissed, with the liberty given to the petitioner to file a regular bail application if apprehended, to be considered by the trial court in accordance with the law.
B.A.PATIL, J.
1. This petition is filed by accused No.2 under Section 438 of Cr.P.C. to release him on anticipatory bail in Crime No.RC-1/E2018-CBI/BS&FC/BLR for the offences punishable under Sections 420, 120B of IPC and also under Sections 13(2) r/w. Section 13(1)(d) of Prevention of Corruption Act of 1988.
2. I have heard the learned Senior Counsel Sri L. Ravichander on behalf of the petitioner and Sri P.Prasanna Kumar, learned Standing Counsel for respondent-CBI.
3. Before going to consider the submissions made by the learned counsel for the parties, it is necessary to state the genesis of the case of the prosecution that complainant-Company is a financial institution, a Government of India undertaking. Accused No.1- Company is a Private Limited Company registered under the Companies Act, 1956 engaged in the business of procession and trading of agricultural commodities. Accused No.2 being the Managing Director and accused No.3 a Director of accused No.1-Company were in charge of the affairs of the said Company. It is alleged that accused Nos.2 and 3 on behalf of accused No.1-Company approached the complainant-Company for a term loan and offered 16 properties for mortgage at a distress sale value of 2.5 times of the loan having tentative market value of Rs.330.88 Crores for a loan of Rs.150 Crores. The said loan application was processed and the complainant-Company entrusted the work of evaluation of the properties to Andhra Pradesh Industrial and Technical, Consultancy Organisation Limited (APITCO) and MITCON. They evaluated the said 16 properties given by accused No.1-Company and they valued the market valuation at Rs.257.88 Crores and distress value of Rs.206.30 Crores by APITCO. So also, the MITCON has valued the said properties at a market value of Rs.253.82 Crores and distress sale value at Rs.203.06 Crores. Basing upon the valuation of accused No.1- Company, the complainant-Company sanctioned Rs.80 Crores on 23.1.2015 to accused No.1-Company which is represented by accused Nos.2 and 3. In the first instance, Rs.40 Crores was disbursed on 27.3.2015 and thereafter Rs.40 Crores was disbursed on 31.12.2015 payable in 16 equal quarterly instalments commencing from 27th month from the date of first disbursement, for the purpose of construction of storage facilities for processing, grading, standardization and storage of agricultural commodities. After sanction of the said loan, accused No.1-Company purchased three agricultural lands. These three parcels of land along with three properties out of 16 properties initially offered for mortgage were mortgaged worth security cover of 2.5 times of the loan amount. Thereafter, accused No.1- Company committed default in repayment of the said loan and as such the said loan was classified as Non- Performing Assets (NPA) by the complainant-Company. After converting and classifying the loan as NPA, the complainant-Company got valued the properties which were given as distress sale value offered as security through M/s.Spoorthi Consultancy and M/s.Lopa Verma & Associates. The first Company valued the market value at Rs.14.37 Crores and distress sale value at Rs.11.05 Crores and second Company valued the said properties at the market value of Rs.28.21 Crores and distress sale value at Rs.23.98 Crores. After coming to know the said discrepancies in the valuation of the properties by accused No.4 and 5, the complainant-Company came to know that accused Nos.1 to 3 conspiring with accused Nos.4 and 5 have made artificial inflation of the said valuation of the said properties offered as securities and got loan of Rs.80 Crores by cheating and playing fraud. On the basis of the said complaint, a case has been registered.
4. It is the submission of the learned Senior Counsel Sri L.Ravichander for the petitioner that no notice has been served on accused No.2 either for the purpose of investigation or interrogation and as such he has not gone away from the enquiry. He further submitted that
