Case Law Details

Case Name : Sanjay Kumar Bhuwalka Vs Union of India (Calcutta High Court)
Appeal Number : CRAN 2698 of 2018
Date of Judgement/Order : 09/10/2018
Related Assessment Year :

Sanjay Kumar Bhuwalka Vs UOI (Calcutta High Court)

Calcutta High Court granted bail to the Alleged GST defaulters for alleged GST evasion by issuing  fake invoices.

Mr. Moitra submits with regard to the statutory right of the petitioners to be released on bail with reference to provisions of Section 167 of the Code of Criminal Procedure and points out that the petitioners though have been admitted on bail but they could not meet the stringent conditions imposed on them and also submitted that the GST Authority/ Investigating Officer has not yet submitted Charge Sheet.

In rebuttal Mr. Maity refers to a decision in the case of State of Bihar & Anr v. Amit Kumar @ Bachcha Rai, reported in (2017) 13 SCC 751 to content that where the economic offence is committed, the petitioners are required to be put behind the bar and to hold the trial.

Held by Hon’ble High Court

I am unable to accept such contention in view of the fact that GST Authority and their Investigating Officer has failed to submit charge sheet against the petitioners and even no extension of time to complete the investigation has been sought for by them.

In respectful consideration of the principles laid down in the cited decisions and further in view of latest decision of the Hon’ble Apex Court that the courts cannot extend investigation period under Section 167 of the Code of Criminal Procedure, this Court is pleased to relax the conditions of bail imposed by this Court’s order dated July 12, 2018 so as to enable their release on bail as they have statutory right to be released and further bearing in mind the principles as to presumption of innocence and the right of liberty guaranteed under Article 21 of the Constitution of India and accordingly the petitioners be released on furnishing personal bond of Rs. 50,00,000/- each to the satisfaction of learned Additional Chief Judicial Magistrate, Sealdah.

FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT

This is the third round of prayer made for relaxation and/or modification and/or waiver of the conditions of the bail granted on July 9, 2018 and subsequently modified on July 12, 2018 in CRAN 1800 of 2018 whereby this Court granted the petitioners bail in connection with Case No. C 216 of 2018 under Section 131(1)(a)(b)(c) of the Central Goods and Services Tax Act, 2017 on condition of furnishing a bail bond of Rs.50,00,000/- and on further condition to deposit Rs. 39 crore to the Government Exchequer through the Competent Authority with a further direction to appear before the Investigating Officer/Authority holding investigation to assist the investigating machinery as and when called upon and to appear before the authority concerned till the final  investigation or till the offence is compounded under the provision subject to the satisfaction of the learned Additional Chief Judicial Magistrate, Sealdah and the said order was further modified by order dated July 12, 2018 to the extent that the petitioners be enlarged on bail by furnishing personal recognition bond of Rs. 10 lakh each and on further condition to deposit of the evaded amount respectively. The petitioners were arrested on May 12, 2018 and are still in custody and they have not been able to be released on bail by furnishing bond with the conditions as imposed by the order dated July 12, 2018.

Learned advocate for the petitioners has sought for relaxation of conditions of bail pursuant to the order passed by the Hon’ble Apex Court in Special Leave to Appeal (Crl.) No(s). 6269-6270 of 2018 dated September 12, 2018 whereby the petitioners were granted permission to withdraw the Special Leave Petitions, without prejudice to the liberty available to the petitioner(s) to take recourse to appropriate remedy before an appropriate forum.

Mr. Sudipto Moitra, learned advocate for the petitioners has invited my attention to the order dated August 8, 2018 passed in Criminal Misc. Case No. 4063 of 2018 before the learned Sessions Judge, South 24-Parganas, Alipore wherefrom it is revealed that a co-accused namely, Binod Kumar Kedia @ Vinod Kedia was admitted on anticipatory bail of Rs. 20,000/- with two sureties of Rs. 10,000/- each subject to the compliance of the provisions of Section 438(2) Cr.P.C.

My attention is also invited to an order of bail passed by the Hon’ble High Court of Jharkhand at Ranchi dated September 25, 2018 in B.A. No. 6909 of 2018 whereby the accused was admitted in connection with similar type offence committed under Section 132(1)( c) read with Section 132(5) of the Central Goods & Services Act, 2017 to argue that the present petitioners be released on bail on furnishing bail bond because he is languishing in jail beyond the statutory period. Mr. Moitra also relied on a decision of Delhi High Court in the case of Raj Kumar Aggarwal v. Director General, Central Excise, reported in 147(2008) DLT 1 to argue that on the similar circumstances the petitioner could not get release and my attention is invited to the observation in paragraph 17 which reads thus:-

the use of these words inter alia under Section 437(3) and 438(1)(b)(2) of the Cr.P.C, that is no reason to make a distinction between the word conditions of bail or terms of bail either in the context of Section 167(2) or Chapter-XXXIII. They have been employed as synonymous of each other.

In Sreenivasulu Reddy v. State of Tamil Nadu VII (2000) CCR 96 the accused had already deposited a sum of Rupees 35 crore out of the Rupees 50 crore imposed in the Bail Order. Their Lordships had emphasized that while exercising jurisdiction under Section 438(2) of t he Cr.P.C, the Court ought only to impose such conditions/terms for enlarging an accused on bail as would ensure that the accused does not abscond. These conditions should not be intended or calculated to carry out and effect recoveries from the accused.

In Sandeep Jain v. State of Delhi I(2000) SLT 368 a direction to deposit Rs. 2 lacs apart from furnishing of a bond of Rs. 50,000/- with two solvent sureties was held to be unreasonable.

In Sheikh Ayub v. State of M.P. (2004) 13 SCC 457 the Supreme Court deleted the direction to deposit a sum of Rs. 2,50,000/-, which was the amount allegedly misappropriated by the accused.

In Shyam Singh v. State (2006) 9 SCC 169 the condition that the accused should make a payment of Rs.1,00,000/- per month after his release on bail was found by the Apex Court not to be justified. It is observed that while it is open to a Court to grant or refuse bail it was impermissible for it to assume that an offence has been committed even at the stage of grant of bail and to direct repayment of any amount is both onerous and unwarranted.

In Amarjit Singh v. State ( NCT of Delhi) 2002(61) DRJ 67, after adverting to Sandeep Jain, the Supreme Court had recorded that ? We have no hesitation in coming to the conclusion that the imposition of condition to deposit the sum of Rs. 15,00,000/- in the form of an FDR in the Trial Court is an unreasonable condition.

In M.R. Narayanan v. State 103(2003) DLT 434, applying the ratio in Sreenivasulu Reddy is was concluded that “conditions akin to deposit of money ought not to be imposed as a ground for grant of bail; that conditions/terms are imposed solely to ensure the presence of the accused at the time of trial. The only situation where money may be deposited in fact arises from the volition of the accused. This is where the required person by any Court to execute a bond instead elects, under Section 145 of the Cr.P.C. to seek permission from the Court to deposit a sum of money or Government promissory notes in lieu of executing a bond. This is so because a mere deposit of money may in some cases prove to defeat the purpose behind sureties being made available since the source of the monetary deposit is untraceable and an accused can abscond if he finds the deposit to be trivially incommensurate to his freedom.”

Mr. Moitra submits with regard to the statutory right of the petitioners to be released on bail with reference to provisions of Section 167 of the Code of Criminal Procedure and points out that the petitioners though have been admitted on bail but they could not meet the stringent conditions imposed on them and also submitted that the GST Authority/ Investigating Officer has not yet submitted Charge Sheet.

To justify his argument, Mr. Moitra submits with regard to the statutory reReference is also made to a decision in Hitendra Vishnu Thakur & Ors. v. State of Maharastra & Ors., reported in (1994)4 SCC 602 to the observation made in paragraph 21 which is to the following effect quoted:-

Thus, we find that once the period for filing the charge-sheet has expired and either no extension under Clause (bb) has been granted by the Designated Court or the period of extension has also expired, the accused person would be entitled to move an application for being admitted to bail under sub-section (4) of Section 20 TADA read with Section 167 of the Code and the Designated Court shall release him on bail. We are not impressed with the argument of the learned counsel for the appellant that on the expiry of the period during which investigation is required to be completed under Section 20(4) TADA read with Section 167 of the Code, the court must release the accused on bail on its own motion even without any application from an accused person on his offering to furnish bail. In our opinion an accused is required to make an application if he wishes to be released on bail on account o f the ‘default’ of the investigating/prosecuting agency and once such an application is made, the court should issue a notice to the public prosecutor who may either show that the prosecution has obtained the order for extension for completion of investigation from the Court under clause (bb) or that the challan has been filed in the Designated Court before the expiry of the prescribed period or even that the prescribed period has actually not expired and thus resist the grant of bail on the alleged ground of ‘default’. The issuance of notice would avoid the possibility of an accused obtaining an order of bail under ‘default’ clause by either deliberately or inadvertently concealing certain facts and would avoid multiplicity of proceedings. It would, therefore, serve the ends of justice if both sides are heard on a petition for grant of bail on account of the prosecution’s ‘ default’. Similarly, when a report is submitted by the public prosecutor to the Designated Court for grant of extension under clause (bb), its notice should be issued to the accused before granting such an extension so that an accused may have an opportunity to oppose the extension on all legitimate and legal grounds available to him. It is true that neither clause(b) nor clause (bb) of sub-section (4) of Section 20 TADA specifically provide for the issuance of such a notice but in our opinion the issuance of such a notice must be read into these provisions both in the interest of the accused and the prosecution as well as for doing complete justice between the parties. This is a requirement of the principles of natural justice and the issuance of notice to the accused or the public prosecutor, as the case may be, would accord with fair play in action, which the courts have always encouraged and even insisted upon. It would also strike a just balance between the interest of the liberty of an accused on the other hand. There is no prohibition to the issuance of such a notice to the accused or the public prosecutor in the scheme of the Act and no prejudice whatsoever can be caused by the issuance of such a notice to any party. We must as already noticed reiterate that the objection to the grant of bail to an accused on account of the ‘default’ of the prosecution to complete the investigation and file the challan within the maximum period prescribed under clause (b) of sub-section (4) of Section 20 TADA or within the extended period as envisaged by clause (bb) has to be limited to cases where either the factual basis for invoking the ‘ default’ clause is not available or the period for completion of investigation has been extended under clause (bb) and the like. No other condition like the gravity of the case, seriousness of the offence or character of the offender etc. can weigh with the Court at that stage to refuse the grant of bail to an accused under sub-section (4) of Section 20 TADA on account of the ‘default’ of the prosecution.”

In case of State of Maharashtra v. Bharati Chandmal Verma (Mrs) Alias Ayesha Khan; reported in (2002) 2 SCC 121, reference is made to the following effect:-

For the application of the proviso to Section 167(2) of the Code there is no necessity to consider when the investigation could regally have commenced. That proviso is intended only for keeping an arrested person under detention fr the purpose of investigation and the legislature has provided a maximum period for such detention. On the expiry of the said period the further custody becomes unauthorized and hence it is mandated that the arrested person shall be released on bail if he is prepared to and does furnish bail. It may be a different position if the same accused was found to have been involved in some other offence disconnected from the offence for which he was arrested. In such an eventuality the officer investigating such second offence can exercise the power of arresting him in connection with the second case. But if the investigation associated therewith, any further investigation would continue to relate to the same arrest and hence the period envisaged in the proviso to Section 167(2) would remain unextendable.”

In the case of Union of India through C.B.I. v. Nirala Yadav @ Raja Ram Yadav @ Deepak Yadav, reported in AIR 2014 SC 3036 my attention is prayed to the observation made in paragraph 21 of the decision which reads thus:-

Elaborating further, the Court held that if the charge sheet is filed subsequent to the availing of the indefeasible right by the accused then that right would not stand frustrated or extinguished and, therefore, if an accused is entitled to be released on bail by application of the proviso to sub-section (2) of Section 167 Cr.P.C., makes the application before the Magistrate, but the Magistrate erroneously refuses the same and rejects the application and then the accused moves the higher forum and while the mater remains pending before the higher forum for consideration a charge sheet is filed, the so-called indefeasible right of the accused would not stand extinguished thereby, and on the other hand, the accused has to be released on bail. The Court further proceeded to say that such an accused, thus is entitled to be released on bail in enforcement of his indefeasible right will, however, have to be produced before the Magistrate on a charge-sheet being filed in accordance with Section 209 and the Magistrate must deal with him in the matter of remand to custody subject to the provisions of the Code relating to and subject to the provisions of cancellation of bail, already granted in accordance with law laid down by the Court in case of Mohd. Iqbal(supra).”

In the case of Rajnikant Jivanlal & Anr. v. Intelligence Officer, Narcotic Control Bureau, New Delhi, reported in (1989) 3 SCC 532 my attention is invited to paragraph 13 of the cited decision which reads thus:-

“ an order for release on bail under proviso (a) to Section 167(2) may appropriately be termed as an order-on-default. Indeed, it is a release on bail on the default of the prosecution in filing charge-sheet within the prescribed period. The right to bail under Section 167(2) proviso (a) thereto is absolute. It is a legislative command and not Court’s discretion. If the investigating agency fails to file charge-sheet before the expiry of 90/60 days, as the case may be, the accused in custody should be released on bail. But at that stage, Magistrate has no power to remand a person beyond the stipulated period of 90/60 days. He must pass an order of bail and communicate the same to the accused to furnish the requisite bail bonds.”

In rebuttal Mr. Maity refers to a decision in the case of State of Bihar & Anr v. Amit Kumar @ Bachcha Rai, reported in (2017) 13 SCC 751 to content that where the economic offence is committed, the petitioners are required to be put behind the bar and to hold the trial.

I am unable to accept such contention in view of the fact that GST Authority and their Investigating Officer has failed to submit charge sheet against the petitioners and even no extension of time to complete the investigation has been sought for by them.

In respectful consideration of the principles laid down in the cited decisions and further in view of latest decision of the Hon’ble Apex Court that the courts cannot extend investigation period under Section 167 of the Code of Criminal Procedure, this Court is pleased to relax the conditions of bail imposed by this Court’s order dated July 12, 2018 so as to enable their release on bail as they have statutory right to be released and further bearing in mind the principles as to presumption of innocence and the right of liberty guaranteed under Article 21 of the Constitution of India and accordingly the petitioners be released on furnishing personal bond of Rs. 50,00,000/- each to the satisfaction of learned Additional Chief Judicial Magistrate, Sealdah.

Thus, CRAN 2698 of 2018 and CRAN 2700 of 2018 are disposed of.

Urgent xerox certified copy of this order, if applied for, be given to the parties after completion of all legal formalities.

Source- Sanjay Kumar Bhuwalka Vs Union of India (Calcutta High Court); CRAN 2698 of 2018; 09/10/2018

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