Hdfc Bank Limited v. J.J Mannan Alias J.M John Paul And Another

Altamas Kabir, J.— Leave granted. This appeal has been filed by HDFC Bank Ltd. (hereinafter referred to as “the Bank”) against the judgment and order dated 3-7-2006, passed by the Madras High Court in Crl. MP No. 3784 of 2006 and Crl. OP No. 15217 of 2006, allowing the application filed by Respondent 1 under Section 438 of the Code of Criminal Procedure (CrPC) for grant of anticipatory bail to him.

2. According to the Bank, Respondent 1 in his capacity as the Managing Director of the Mannan Construction Corporation Private Limited (hereinafter referred to as “the Company”), a company engaged in the execution of highway contracts and contracts of the Public Works Department, along with one M/s Immanuel Projects Private Ltd. applied for a loan of Rs 2,03,40,000 (Rupees two crores three lakhs and forty thousand only), for purchase of 6 Krishna electronic sensor paver finishers from one M/s Krishna Engineering Works in Ahmedabad. The said loan was duly sanctioned and after signing of necessary agreements and other documents, six cheques for the loan amount of Rs 2,03,40,000, drawn in the name of M/s Krishna Engineering Works, were handed over to Respondent 1 on 9-3-2006.

3. Subsequently, by a letter dated 24-5-2006, the Bank informed M/s Krishna Engineering Works in Ahmedabad that a sum of Rs 2,03,40,000 had been disbursed to them on account of Respondent 1 and requested them to confirm receipt of the same.

4. M/s Krishna Engineering Works wrote back to the Bank stating that it had not received any payment on account of Mr J.M John Paul. The Bank thereupon caused enquiries to be made and came to learn that no machineries had, in fact, been purchased by Respondent 1, and that Respondent 1 had colluded with M/s Immanuel Projects Private Limited and their Directors and one Mr R.I Jambert Mathuram with the intention of cheating the Bank and in the process had committed offences punishable under Sections 420, 467, 468, 471 and 120-B of the Penal Code, 1860.

5. The Bank filed a complaint with the Commissioner of Police, Egmore, Chennai 600008 on 27-5-2006, setting out the facts relating to sanction of the loan and the handing over of the six banker's cheques in the name of M/s Krishna Engineering Works. The complaint also contained the manner in which Respondent 1 had opened a fictitious account with ICICI Bank, Tuticorin Branch, in the name of M/s Krishna Engineering Works and deposited the cheques meant for supply of road construction equipment by M/s Krishna Engineering Works of Ahmedabad. Thereafter, the said amount was encashed and transferred to M/s Matrix Enterprises having its office at No. 41, CGE Colony, 5th Street, Tuticorin 628003, which was holding an account in Tuticorin Branch of ICICI Bank. The said amounts were again transferred to the account of M/s Delta Enterprises, also having its office at No. 41, CGE Colony, 5th Street, Tuticorin, with Tuticorin Branch of ICICI Bank.

6. After the aforesaid transactions, the monies were finally credited to the account of Respondent 1 in the same branch of ICICI Bank. It was also found on enquiry that the addresses of all the abovementioned companies were that of the residence of Respondent 1, Mr J.M John Paul.

7. FIR No. 157 of 2006 dated 12-6-2006, was drawn up on the basis of the aforesaid complaint against Respondent 1 and others by the Central Crime Branch, Chennai, under Sections 419, 420, 468, 473 read with Section 120-B of the Penal Code.

8. Respondent 1 thereupon filed an application in the Madras High Court under Section 438 CrPC for grant of anticipatory bail and the learned Single Judge of the said High Court, by his order dated 3-7-2006, allowed the same upon holding that since the investigating agency had already seized all relevant and vital documents and had recorded the statements of all the important witnesses, the custodial interrogation of Respondent 1 was not required. The present appeal has been filed by the Bank for cancellation of the anticipatory bail granted to Respondent 1.

9. On behalf of the Union of India it was contended that in the facts of the case, the High Court had erred in allowing Respondent 1's application under Section 438 CrPC since he had allegedly masterminded the fraud and having regard to the gravity of the offence alleged, the anticipatory bail granted to him was liable to be cancelled.

10. Mr Lalit submitted that Respondent 1 had misappropriated what was meant to be paid to the supplier of the road construction equipment, in a planned manner and the whereabouts of the monies were yet to be ascertained.

11. Mr Lalit submitted that the provisions of Section 438 CrPC had been misapplied by the High Court in this case, since there was sufficient material on record to prima facie indicate that the respondent was a direct player in the fraudulent episode, and, in any event, the High Court could not have granted a blanket order of anticipatory bail up to the end of the trial. Mr Lalit submitted that in view of the impugned order, Respondent 1 had never appeared in court even once, at any stage of the case, and had not even surrendered and obtained regular bail.

12. Mr Lalit referred to the decision of this Court in Adri Dharan Das v. State of W.B (2005) 4 SCC 303, wherein it was categorically indicated that anticipatory bail had to be given for a limited duration so as to enable the accused to move for regular bail under Section 437 CrPC. Reference was also made to the decision of this Court in Salauddin Abdulsamad Shaikh v. State of Maharashtra (1996) 1 SCC 667 where the same essentials have been reiterated.

13. Appearing for Respondent 1, Mr Rajiv Dutta, learned Senior Advocate, submitted that except for wild allegations made against Respondent 1, nothing incriminating had been found against him. Mr Dutta urged that Respondent 1 had been granted anticipatory bail as far back as on 3-7-2006, and he had never misused the privilege and had cooperated with the investigating agencies all through. Furthermore, the trial had already commenced and several witnesses had been examined and there could, therefore, be no justification for cancelling the anticipatory bail granted to him by the High Court more than three years ago.

14. Referring to the decision of the Constitution Bench in Gurbaksh Singh Sibbia v. State of Punjab (1980) 2 SCC 565, wherein the application of Section 438 CrPC had been considered in detail, Mr Dutta submitted that the said provision had been interpreted to be a beneficent provision relating to personal liberty guaranteed under Section 21 of the Constitution. Mr Dutta submitted that the Constitution Bench had observed that since denial of bail amounts to deprivation of personal liberty, the court should lean against the imposition of unnecessary restrictions on the scope of Section 438 CrPC.

15. Reference was also made to the decision of this Court in Savitri Agarwal v. State of Maharashtra (2009) 8 SCC 325, JT (2009) 9 SC 460, where the various decisions in this regard, with special emphasis on Sibbia case (1980) 2 SCC 565 as also Adri Dharan Das case (2005) 4 SCC 303, were referred to. Their Lordships took note of the fact that the provisions of Section 438, as amended, had not yet been notified and that as a result the old provision continued to be in force. Hence, the earlier decisions would continue to be relevant to the facts of this case.

16. Mr Dutta submitted that having regard to the views expressed by this Court in no uncertain terms, prayer for anticipatory bail should not be refused and, in any event, in this case anticipatory bail had already been granted more than three years ago and hence the submissions now being made as to when anticipatory bail should be granted have become irrelevant.

17. Having carefully considered the submissions made on behalf of the respective parties and the decisions referred to in support of their respective cases, we are of the view that the role of Respondent 1 in the entire episode did not entitle him to the relief of anticipatory bail, much less a blanket order of bail. However, that is now a closed chapter. But what is of relevance is whether the High Court should have worded its order in such a way that it could be interpreted to mean, as has been done by all concerned, that Respondent 1 was not required to even appear and surrender before the court during the entire investigation stage and the trial. Taking advantage of the same, Respondent 1 has successfully avoided the court from the very initial stage of investigation and even the trial. Such kind of an order is not contemplated under Section 438 CrPC as has been repeatedly explained by this Court. The said position has been clearly enunciated in Adri Dharan Das case (2005) 4 SCC 303.

18. Furthermore, it has also been consistently indicated that no blanket order could be passed under Section 438 CrPC to prevent the accused from being arrested at all in connection with the case. To avoid such an eventuality it was observed in Adri Dharan Das case (2005) 4 SCC 303 that anticipatory bail is given for a limited duration to enable the accused to surrender and to obtain regular bail. The same view was reiterated in Salauddin case (1996) 1 SCC 667 wherein it was, inter alia, observed that anticipatory bail should be of limited duration only and primarily on the expiry of that duration or extended duration, the court granting anticipatory bail should leave it to the regular court to deal with the matter on an appreciation of evidence placed before it after the investigation has made progress or the charge-sheet is submitted.

19. The object of Section 438 CrPC has been repeatedly explained by this Court and the High Courts to mean that a person should not be harassed or humiliated in order to satisfy the grudge or personal vendetta of the complainant. But at the same time the provisions of Section 438 CrPC cannot also be invoked to exempt the accused from surrendering to the court after the investigation is complete and if charge-sheet is filed against him. Such an interpretation would amount to violence to the provisions of Section 438 CrPC, since even though a charge-sheet may be filed against an accused and charge is framed against him, he may still not appear before the court at all even during the trial.

20. Section 438 CrPC contemplates arrest at the stage of investigation and provides a mechanism for an accused to be released on bail should he be arrested during the period of investigation. Once the investigation makes out a case against him and he is included as an accused in the charge-sheet, the accused has to surrender to the custody of the court and pray for regular bail. On the strength of an order granting anticipatory bail, an accused against whom charge has been framed, cannot avoid appearing before the trial court.

21. If what has been submitted on behalf of the appellant that Respondent 1 has never appeared before the trial court is to be accepted, it will lead to the absurd situation that charge was framed against the accused in his absence, which would defeat the very purpose of sub-section (2) of Section 240 CrPC.

22. Having regard to the above, the order of the High Court dated 3-7-2006 is modified to the extent that Respondent 1 shall surrender before the trial court forthwith and pray for regular bail and the trial court shall dispose of the same on merits, in accordance with law, before proceeding further with the trial.

23. The appeal is allowed to the above extent.