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IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
RAJENDRA PRAKASH SONI, J.
Kamla Devi Agarwal, W/o. Shri Prem Kumar and Anr. – Petitioners
Versus
State of Rajasthan through PP. – Respondent
S.B. Criminal Misc. Bail Application No. 5928 Of 2023, S.B. Criminal Misc. Bail Application No. 5929 Of 2023, S.B. Criminal Misc. Bail Application No. 7241 Of 2023
Decided On : 20-08-2024
ANTICIPATORY BAIL - CRIMINAL OFFENCES UNDER IPC AND FORWARD CONTRACTS ACT - IPC Sections 420, 406, 120B; Forward Contracts (Regulations) Act Section 23 - The court discussed the applicability of IPC sections related to cheating and criminal breach of trust, emphasizing the elements of fraud and the obligations of the parties involved in commodity trading. The court interpreted the provisions to establish that the petitioners' actions constituted cheating and fraud, influencing the decision to deny anticipatory bail based on the seriousness of the allegations and the potential for tampering with evidence.
Fact of the Case:
The petitioners, part of the same family, opened multiple commodity trading accounts with the complainant, a brokerage firm. They incurred significant losses in trading castor seed commodities and failed to maintain required margin money, leading to the complainant's financial losses and damage to his business. The complainant alleged that the petitioners fraudulently disposed of their properties to evade liability and threatened him, prompting the filing of an FIR for cheating and related offences.
Finding of the Court:
The court found that the petitioners were bound by the terms of their trading contracts and had knowledge of their trading positions. The arguments presented by the petitioners were deemed unconvincing, and the court noted that the allegations of fraud and cheating were substantiated by the evidence, including the petitioners' own admissions in prior communications.
Issues: Whether the petitioners were entitled to anticipatory bail given the allegations of cheating and fraud, and whether the dispute was purely civil in nature or involved criminal liability.
Ratio Decidendi: The court held that the existence of a civil dispute does not preclude criminal proceedings if the elements of a criminal offence are established. The court emphasized that the petitioners' actions, including the failure to maintain margin money and the alleged fraudulent disposal of properties, constituted prima facie evidence of cheating under IPC.
Final Decision: The anticipatory bail applications were dismissed, with the court concluding that granting bail would hinder the ongoing investigation and that the petitioners were involved in serious criminal conduct.
ORDER :
(Rajendra Prakash Soni, J.) :
1. These are anticipatory bail petitions moved on behalf of the petitioners in relation to FIR No. 631/2019 registered at Police Station Jawahar Nagar District Sri Ganga Nagar for the offences punishable under section(s) 420, 406 and 120B of the IPC and Section 23 of the Forward Contracts (Regulations) Act.
2. I may briefly refer to relevant aspects of the case as emerging from F.I.R. lodged on 22.12.2019, which inter alia are that complainant M/s. Ganpati Multi Commodities Business (India) Pvt. Ltd. is engaged in business of commodity brokerage with memberships in NCDEX and MCX. Dr. Jitendra Mittal is director of the company. The company facilitates exchange-related services as a broker to its customers. NCDEX and MCX provide online trading platforms for commodity contracts, where any buyer or seller can place their orders through a broker and these orders are executed on the exchange's system. The exchange deposits an upfront margin in advance from clients through its broker prior to placement of orders and also collects additional margin money on a daily basis through the broker. Since its inception, the complainant company has maintained a high reputation in market with a turnover of approximately Rs. 12,556 crores in the financial year 2018-19.
3. It is stated that all the six petitioners as detailed in the FIR, belong to same family. They opened six commodity trading accounts with complainant in their individual names as well as in the name of their firms. The specific details of these accounts are also mentioned in the FIR. It is alleged that from the very beginning, intention of petitioners was to make profits only and not to make-up losses. In last week of September 2019, there was a significant fluctuation in prices of castor seed commodity on the exchange. The prices of castor seed contracts were consistently hitting lower circuit since 25.09.2019, which continued for more than a week. Due to decline in prices, petitioners were incurring daily losses in their trading accounts. On 25.09.2019, there were transactions worth Rs. 700 crores on the exchange for trading of castor seed, out of which the petitioners had taken a buying position of Rs. 150 crores. The petitioners were repeatedly asked by the complainant to deposit the required margin money. Due to continuous losses incurred by the petitioners in trading of castor seed as well as failure to maintain/deposit required margin in their trading accounts, the Exchange squared of all trading transactions of the petitioners to cover up losses and adjusted/forfeited the losses incurred by petitioners from margin money of complainant and its other 120 clients. As on 30.09.2019 complainant, on his behalf had maintained a huge amount of margin money to the Exchange from his own sources as well from sources of his 120 other clients. The petitioners have dishonestly and fraudulently cheated the complainant and his clients amounting to approximately Rs 40.04 crore by 15.10.2019, causing the complainant's entire business to come to a halt and resulting in significant damage to the complainant's goodwill as well as ruining of clients of complainant. When petitioners were asked to deposit or settle the liability, they refused and started threatening the complainant.
4. It is further stated that the petitioners, with a view to wriggle out their liability, have also disposed of their immovable properties to their near relatives so as to frustrate and defeat any Court/Arbitrator order, which might entitle the complainant to recover said amount from the properties of the accused. Accused have committed offences punishable under Sections 420, 406 and 120B of the IPC. Accused have also threatened to commit suicide and leave a suicide note against the complainant. On the basis of aforesaid report, a formal FIR was registered against the petitioners and matter is under investigation by Special Operation Group of Rajasthan Police.
5. To begin at the be
The need for exceptional circumstances to grant anticipatory bail, the protection of personal liberty, and the presumption of innocence.
Civil disputes can escalate into criminal offences if evidence of dishonest intention or misrepresentation is present; mere non-payment does not absolve criminal liability.
The court denied anticipatory bail due to serious allegations of cheating, emphasizing the need for custodial interrogation in economic offences to protect societal interest and ensure effective inve....
Point of law: While laying down cast-iron rules in a matter like granting anticipatory bail, it is apt to be overlooked that even judges can have but an imperfect awareness of the needs of new situat....
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