Back
IN THE HIGH COURT OF KARNATAKA
K. Natarajan, J.
Nagavalli & Ors. - Appellants
Versus
State of Karnataka - Respondent
Criminal Petition No. 5576 of 2022
Decided On : 26-08-2022
Anticipatory Bail - Financial Fraud - IPC 506, 504, 406, 420, 34 - Summary: The court granted anticipatory bail to the accused in a financial fraud case where they were alleged to have cheated investors. The court considered the prima facie case against the accused and the stay on further proceedings in the case, and released the accused on interim bail with certain conditions.
Fact of the Case:
The petitioners sought anticipatory bail in a case where they were accused of running a financial business and cheating investors. The complainant alleged that the petitioners did not repay the invested amount and threatened dire consequences when approached.
Finding of the Court:
The court found that there was a prima facie case against the accused for cheating the complainant and other investors. The court also noted that the Co-ordinate Bench had stayed the further proceedings in the case, leading to the decision to grant interim bail to the petitioners.
Issues: The main issue was whether the petitioners should be granted anticipatory bail in a case involving financial fraud and cheating of investors.
Ratio Decidendi: The court decided to grant interim bail to the petitioners based on the prima facie case against them, the stay on further proceedings in the case, and the potential detention without due process of law if they were kept in custody.
Final Decision: The court allowed the petition in part and directed the Trial Court to release the petitioners on interim bail with certain conditions until the disposal of the petition under Section 482 of Cr.P.C. by the Co-ordinate Bench.
JUDGMENT
1. This petition is filed by the petitioners-accused Nos.1 and 2 under Section 439 of Cr.P.C. seeking anticipatory bail in Crime No.139/2022 registered by Kumaraswamy Layout Police Station, Bengaluru for the offences punishable under Sections 506, 504, 406, 420 read with Section 34 of IPC.
2. Heard the arguments of learned Senior Counsel for the petitioners and learned High Court Government Pleader for the respondent-State.
3. The case of the prosecution is that the complainant-Sampangi Ramaiah had filed a complaint to the Police on 24.04.2022, alleging that the petitioners are said to be running financial business in the name of Siri Vaibhava Souharda Pattina Sahakari Niyamitha (hereinafter referred to as 'Society') and the petitioners induced the complainant that they will pay 14% interest on the fixed deposit in their Society. Therefore, the complainant said to be invested crores of rupees in the said Society and in spite of maturing the FD, the petitioners-Society did not pay the amount invested by the complainant. The petitioners-Society said to have been collected and cheated more than Rs.5.00 crores and when the complainant approached the petitioners, the petitioners said to be threatened with dire consequences. Therefore, the complaint came to be filed. After registering the case, the Police arrested the petitioners-accused Nos.1 and 2, they have been remanded to the judicial custody. Subsequent to their arrest, the petitioners approached the Co-ordinate Bench of this Court by filing Crl.P.No.4631/2022 under Section 482 of Cr.P.C., wherein, the Co-ordinate Bench has stayed the further proceedings in present FIR i.e., in Crime No.139/2022 and hence, the petitioners prayed the Court to grant regular bail.
4. Per contra, learned High Court Government Pleader seriously objected the bail petition and contended that the petitioners have cheated more than Rs.5.00 crores from the complainant and also cheated various investors. The Co-ordinate Bench has stayed only in respect of the KPID Act, but, there were number of cases registered against him. The accused lent loan more than Rs.64.00 crores without any security and in view of staying the investigation, the police are unable to proceed further. Hence, prayed for dismissing the petition.
5. Having heard the arguments of learned Senior counsel for the petitioners, learned High Court Government Pleader for the respondent-State and on perusal of the records, it is alleged that the complainant has invested Rs.5.00 crores in the Society belongs to the petitioners and they have not refunded the same though they assured to give interest more than 10 to 14%. Of course, the Police have also said to be registered some more cases against the petitioners in other Police Station limits especially at Rajarajeshwari Nagar Police Station in Crime No.200/2022 and the another case in Subramanyapura Police Station in Crime No.187/2022 for the similar offences. In those two crimes, the petitioners have cheated more than Rs.19.00 lakhs and Rs.28.00 lakhs respectively and it also appears the further various investors were coming forward to file complaint against the petitioners-Society. It reveals that the petitioners have cheated various investors by receiving the investment from the various general public and did not repay the same. The Co-ordinate Bench of this Court has already stayed the further investigation of this case in Crime No.139/2022 of Kumaraswamy Layout Police Station and it is further clarified that at the request of the learned counsel for the petitioners, the Court has only stayed the further proceedings in this case and there is no hurdle in considering the bail petition of the petitioners.
6. Once the Co-ordinate Bench stayed the further proceedings and investigation in the same crime number, keeping the petitioners in custody in this case will amount to a detention without due process of law. Therefore, this Court have no other option to release the petitioners on bail in
AI
The main legal point established in the judgment is the consideration of a prima facie case, the stay on further proceedings, and the potential detention without due process of law in granting antici....
Criminal breach of trust and cheating – To attract offences under Sections 420 and 406 of IPC there should be intention to cheat from beginning itself.
The need for exceptional circumstances to grant anticipatory bail, the protection of personal liberty, and the presumption of innocence.
Anticipatory bail in cases of grave socioeconomic offenses, such as large-scale financial misappropriation, is not permissible when custodial interrogation is essential for investigation and no subst....
The judgment establishes that the grant of anticipatory bail in economic offences is an extraordinary remedy and should be considered only in exceptional cases, balancing the rights of the accused wi....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
