In cases involving conspiracy to defraud public funds, anticipatory bail should not be granted as it would impede the investigation and harm the public interest.

( 1 ) THIS is an application for anticipatory bail under Section 438 of the Code of Criminal Procedure (for short "the Code") filed by Smt. Sudarshan Kochar and Shri Naresh Kumar, wife and son respectively of late Shri C. L. Kochar. Their similar application was rejected by the learned Additional Sessions Judge.

( 2 ) ON the basis of source information that Shri S. J. S. Chawla, Branch Manager, Punjab and Sind Bank, Chandni Chowk, Delhi in conspiracy with Smt. Sudarshan Kochar and Naresh Kochar proprietor of M/s. Narain Dass Agency had caused loss to the Bank to the extent of Rs. 22 lakhs by fraudulent means, a case No. RC-DA-1-1998-A-0017 under Section 120-B read with Sections 467, 468, 471 of the Indian Penal Code and Sections 13 (1) (b) read with Section 13 (2) of the Prevention of Corruption Act was registered and investigation taken up.

( 3 ) DURING investigtion made it has been noticed that late Shri C. L. Kochar, husband and father respectively of petitioners No. 1 and 2 was doing business under the name and style of "m/s. Narain Dass Agency" and had current account No. 140 with Punjab and Sind Bank, Chandni Chowk Branch, Delhi and in that account he was availing cash credit facility to the extent of Rs. 10 lakhs. The said Shri C. L. Kochar died on 9. 2. 1992 and on the request of his wife Smt. Sudershan Kochar, petitioner, the said bank limit and his liabilities therein were transferred in her name on 9. 2. 1993. Smt. Kochar had also opened current account No. 1042 with the said bank.

( 4 ) TOWARDS the end of the year 1994 Smt. Kochar as proprietor of Narain Dass Agency had an outstanding credit liability to the extent of Rs. 12,82,850. 00 as against the sanctioned limit of Rs. 10 lakhs. Thereafter Shri. S. J. S. Chawla, the then Senior Manager and other officers of that Bank had discounted following thirteen cheques and thereby further allowed her to withdraw the amounts in excess of the sanctioned credit facility.

( 5 ) THESE cheques were discounted and the credit against these cheques was allowed to her in excess of the permissible limit and ignoring that the cheques on being presented to the drawee banks were dishonoured, 11 of the cheques were dishonoured on account of "insufficient funds" and two on account of "title differ". In this manner the officers had accommodated the petitioner by purchasing these cheques and thereby availing further cash credit of Rs. 23,59,300. 00 apparently by misusing their official position and unauthorisedly.

( 6 ) IT is alleged that this has been done as a result of conspiracy between S. J. S. Chawla and other staff of the bank, the account holder and the drawers of these bogus cheques and thereby they have defrauded the bank and wrongful benefit was given to the petitioner-account holder. Drawers of these cheques are relations of the petitioners or issued at their instance. They knew that they had no funds to honour these cheques.

( 7 ) LEARNED counsel for the petitioners has contended that the petitioners had furnished valuable and adequate security in consideration of the credit facilities availed by her. The petitioners have paid more than Rs. 8 lakhs during these proceedings, there is no intention not to pay nor there was any intention to cheat and defraud the bank; also that this is a civil liability and the bank has already instituted proceedings for recovery of their dues; that the petitioners have already been interrogated and they will further join the investigation as and when required and as such their releas on bail will cause no prejudice to the investigation.

( 8 ) LEARNED counsel for the CBI has strongly opposed the bail application. He has contended that prima facie there is material to show that the petitioners in conspiracy with several other persons and bank staff have defrauded the bank of huge amounts over Rs. 23 lakhs, 13 bogus cheques were drawn and thereby siphoned off bank funds. These cheques were drawn on the bank accounts where there were