Sessions Court-Bail Application

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IN THE COURT OF SESSIONS AT BOMBAY

BAIL APPLICATION NO. OF 2018

IN THE MATTER OF BAIL APPLICATION U/S 439 OF


CODE OF CRIMINAL PROCEDURE IN CONNECTION
WITH FIR NO.78/2017 REGISTERED WITH _____
POLICE STATION UNDER SECTIONS 420, 408 & 409
OF I.P.C.

1. ABC )
___________________, )
___________________, )
___________________, )
___________________, )
Mumbai 4000__ ) …Applicant

V/s.

The State of Maharashtra )


(through _______ Police Station) ) …Respondent

THE HUMBLE APPLICATION OF THE

APPLICANT ABOVENAMED

MOST RESPECTFULLY SHEWETH:


1. The Applicant above-named is a law abiding and peace-loving citizen of India and
residing at the above address mentioned in the cause title, along with his family members.
The Applicant belongs to a respectable family having deep roots in the society having no
criminal antecedents’ or involving in acts which would attract any legal action.

2. The Applicant is alleged to have committed an offence U/s. 408, 420 and 34 of Indian
Penal Code. The F.I.R came to be registered by the Respondent on 26.05.2017 at the
instance of one SRM, against the Applicant and others U/s. 408,420 and 34 of the IPC.
Hereto annexed and marked as “Exhibit-A” is the copy of the FIR dated 26.05.2017.

3. The brief facts of the allegations against the Applicant as per the statement of the
Complainant are as follows:

a. SRM has been doing business in the name and style of Mashru since 2004 and has
been doing business in Maharashtra, Punjab and Rajasthan. One DP and LP used
to earlier look after the out-station business, however from October 2009 till
November 2015, ABC and from April 2011 till January 2017, XZ would look
after the Delhi operations for SRM.

b. It is alleged that in October, 2009 BMC introduced his son i.e. ABC to SRM and
asked him to teach ABC about the jewellery business. Further, it is alleged that
BMC told SRM, that there shall be good profit if the business was done in
northern part of India and persuaded SRM to start business in northern India.
Thereafter, in order to expand the business, SRM took a shop on rent in
___________, New Delhi.

c. Thereafter, it is alleged that ABC would take order of customers from New Delhi,
and the said jewellery after being made in Mumbai, would be either taken by
ABC to New Delhi/Punjab/Rajasthan or was to be sent via the medium of courier
from Mumbai.

d. In April 2011, ABC informed SRM about the requirement of one another person
for the business in New Delhi and introduced his friend XZ and requested SRM to
take him for the said job. Since SRM trusted ABC, he appointed XZ and made
payments to him on cash basis. From July 2011 till March 2013, SRM would
make jewellery as per the orders placed by ABC, which were taken by ABC to
New Delhi and sold there.

e. In the need of expanding business, ABC, his wife and others would take the take
jewellery of various types and weight to New Delhi and if the same were sold, the
amount was deposited in the current account of the Complainant; otherwise, the
unsold jewellery ornaments would be brought back to Mumbai within 8-10 days.
Such business transaction continued from April 2013 till March 2015 and SRM
never expressed any displeasure regarding the business transaction.

f. From March 2015, SRM permitted that the unsold stock of gold jewellery be kept
in the New Delhi office and SRM would be telephonically informed about the
data of sold and unsold stock of gold jewellery. It is alleged that ABC reduced his
visits to Mumbai from April, 2015 on account of traders visiting the New Delhi
office.

g. It is alleged that since April 2015 till November 2016 total 16,879.6 gm of gold
jewellery was sent to New Delhi, and out of that only 2935.58 gm of gold
jewellery was sold. Of the unsold stock, 13,650 gm of gold jewellery was given
“on approval basis” to some traders and 70 gm gold was with ABC. It is alleged
that such practice of giving gold “on approval basis” was never approved and
earlier followed. After the aforesaid, SRM asked for the names of the traders to
whom such gold was given and thereafter, it is alleged that ABC provided a hand
written list of names of such traders and sent the same via WhatsApp to SRM. It
was observed by SRM that the names of total 21 traders were given to whom the
said gold was given on approval basis, however, it is alleged that no voucher for
the said transactions were sent to SRM.

h. It is alleged that out of 21 traders, telephone numbers of only 4-5 traders were
provided and after one of the said traders were confronted, he denied having any
transaction with ABC for the past two years and it is alleged that thereafter, in
December, 2016, SRM suspected ABC and others regarding misappropriation.

i. Pursuant thereto, in December 2016, ABC deposited 69.35 gm of gold jewellery


in the office of SRM. Thereafter, a meeting was called of ABC, BMC and other
accused and it is alleged that the BMC confessed of selling certain jewellery
through his business, giving personal gifts and selling some portion to one jeweler
in Ratnagiri. Further, it is alleged that ABC signed an undertaking stating that he
has cheated SRM and that he shall make good the loss till June, 2017. Since the
first installment was not given by ABC on 31.12.2016, he sought extension of
time for repayment and executed the earlier undertaking on stamp paper.

j. Therefore, SRM has alleged that the Applicant and others have misappropriated
13319.679 gm of gold worth Rs. 3.85 crores and hence the FIR.

4. The Applicant is praying for bail amongst the following grounds:

a. The Applicant have not committed the offences as alleged in the F.I.R. and the
subsequent remand application and have been falsely implicated.

b. The Complainant in the statement recorded before the Respondent has merely
baldly alleged that the Applicant induced the Complainant to invest huge sums
mentioning the figures therein. However, the Complainant has failed to provide
particulars in support of the allegation to show as to where were the said funds
used and/or siphoned off by the Applicant and not used by the Applicant in the
course of regular business.

c. As per the first remand dated __________ and the subsequent remands, the case
of the complainant was restricted to the 2 amounts namely USD 1.5 million i.e.
9.3 crores and USD 4,42,184.00 equal to Rs. 3 crores thus total of 12.30 crores.
As far as these amounts are concerned it was specifically pointed out to his
Hon’ble Court and even otherwise it is never disputed by the prosecution that all
the transactions were done either by RTGS or cheque payments. They were
supported by various invoices/bills and this fact was known to all the Directors.
The invoices/bills together with the relevant books of accounts wherein these
aspects are mentioned were audited from time to time. Thereafter, all these
aspects were put up before the Directors to examine them and thereafter
Director’s report was prepared. The said report is inter alia signed by the
complainant WYM who is the main complainant along with XYM. Thus the
transactions were to their knowledge. Moreover, at subsequent stage they
appointed Roadie Consulting who audited and examined all the accounts and even
when the accused resigned as Directors in December 2016 no claim was made
challenging the said transactions. Moreover, various emails exchanged do not
show that there was any grievance on said transactions. In fact, the company
suffered losses (which was in the normal course of business). The remaining
Directors i.e. the complainants were ready to purchase the shares of the accused at
cheaper rate (in fact ready to buy out the Applicant Nos. 1 and 2 at USD 1500
each) as can be seen from Exhibits A to D which are emails and it can be seen that
even at that time they did not make any grievance about any of these transactions.
It is only after they took over shares of the accused whereby they were denied to
have the access to all the documents after a week they were arrested though FIR
was filed as far back as on 17.1.2017 whereas the arrest was on 27.3.2017. This is
a purely civil transaction and hence there is no question of committing criminal
breach of trust as alleged in the FIR in respect of total of Rs. 12.30 crores.
Subsequently after the accused were remanded to the police custody i.e. from
27.3.2017 to 5.4.2017 the prosecution has come out with following specific
allegations. Even at that time they have not denied the facts in respect of all the
transactions in respect of which bills/invoices were raised the payments have been
made either by RTGS/NEFT/Cheques (Only in respect 2 cash vouchers namely of
Rs.15,850 and Rs.17,950 paid to CD and PD respectively).

d. The Respondent has alleged that the manifesto does not tally with the
invoices/bills. As far as the same is concerned there is a difference of
Rs.1,16,79,784/. There are 2 types of manifestos namely interim manifestos
which are prepared to show the transportation up to a particular destination.
Second type of manifestos are final manifestos which would show the full
transportation and the amounts which are spent. Deliberately these final
manifestos are not produced by the Complainant as these amounts were in fact
paid or utilized as per the invoices/bills. If there was a difference the same would
have been found out by the auditors and they would not have given their reports
which were ultimately accepted by the Board of Directors and such reports were
finally signed by 2 Directors including WYM who is the main Complainant. The
final reports of the years ending 31.3.2013 are hereto annexed and marked as
Exhibit B. This clearly shows that this is a false attempt made by the prosecution
to show that there is a discrepancy in the manifesto (which is obviously interim)
and bill/invoices. As stated above if final manifestos were produced, they would
have tallied with invoices/bills and there would not have been a difference of any
amount far apart Rs.1,16,79,784 as alleged.

e. The prosecution has come with a story that the invoices which were issued by the
transporters namely:

1) M/s Sumi transport agency

2) M/.s Ramu cargo movers

3) M/s Hitesh transport services

4) M/s Aman bulk carrriers

f. For the amounts paid to them of Rs.4,13,100, Rs.9,09,340, Rs.13,96,587 and


Rs.14,57,279 which were paid by RTGS/NEFT dated 21.3.2011 and 24.3.2011
were false invoices. It is submitted that these are the transactions of March, 2011
obviously therefore in the Director’s report which followed auditor’s report would
have shown the discrepancies. These amounts therefore have been credited to the
accounts of these 4 transporters. No discrepancy has been found by the auditors. It
is also not been disputed by the prosecution that the amount has gone to the
accounts of the said 4 transporters. They have now come with a story that on these
4 transporters being contacted they stated that no doubt they had issued the
invoices/bills but the same was allegedly done at the instance of the wanted
accused GS and also allegedly by accused by the Accused No. 1 HS. If these 4
transporters had done so at the instance of any of these 2 accused and accepted the
monies surely they were bound to account for it. The prosecution therefore
appears to have threatened them in-order to save their own skin as they have come
out with a story that the said amounts were repaid in cash to those 2 accused i.e.
GS and HS. There is no explanation whether the full amount was repaid or part of
it. There is no explanation as to why these 4 transporters should act in this
manner. Obviously therefore they are threatened to be made accused and in order
to save their skin they have falsely given the names of these 2 accused. This
submission is on the premises that these transactions were not genuine. It is our
case that these were genuine transaction, they submitted their bills/invoices and
accordingly they were paid by RTGS/NEFT as stated hereinabove and the same
has been accepted by the Auditors and also ultimately by the Directors and that is
how the Director’s report of 31.3.2011 was prepared.

g. The Respondent has also come out with a case that the Complainant has produced
invoices of M/s HIJ transport and crane services and M/s CSE transport & crane
services alleging that both the aforesaid firms in the year 2009 were closed and
hence these are bogus invoices and hence according to the Respondent it is now
shown that the arrested accused and their accomplices had printed fake invoices
and had opened fake bank accounts in the name of the said firms and
misappropriated the funds of the company. It is submitted that if these were bogus
invoices as alleged by the prosecution one fails to understand why they were not
produced earlier. Moreover, admittedly the payments have been made either by
RTGS/Cheques to these firms. Has the prosecution checked their accounts if the
cheques have been honored whereby they are credited in their accounts and
consequently debited in company’s accounts only then the auditors would accept
that. If therefore the amounts have gone in the accounts of these 2 firms the
prosecution ought to have made further inquiries as to what happened to those
amounts. Very cleverly the prosecution does not give the details of these
invoices/bills namely 1) How many such bills are there, 2) What are the amounts
paid against such bills/invoices, 3) Whether these amounts are mentioned in the
books of accounts, 4) Whether these amounts have been credited in the accounts
of these 2 firms and last but not the least 5) Whether the auditors have raised any
objections to the same. This creates a grave suspicion and/or doubt about the
genuineness of the case in respect of these 2 firms.

h. It is further alleged by the prosecution that on making inquiries with DF Bank


they suspected that firms namely M/s Sumi transport agencies, Thane, M/s Ramu
cargo movers, Thane, M/s Hitesh transport services, Thane and M/s Aman bulk
carriers, Thane were fake entities holding their accounts and further that one VS
and ES had opened 15 such bank accounts and they appear to be dubious.
According to the prosecution the addresses mentioned on certain invoices
produced by the complainant were visited when it was revealed that the addresses
were non existing. As stated hereinabove the invoices are produced by the
Complainant and it is not clear whether these invoices were reflected in the books
of accounts or not. It is also not clear whether in pursuance of these invoices,
amounts have been paid to these transport companies. One thing which is not
disputed is that the amounts against these invoices could never have been paid
except by RTGS/Cheque. Obviously therefore if these invoices existed and there
is a corresponding payment by Cheques/RTGS auditors would have accepted it.
Even if we assume that such audited accounts are there the question which
prosecution must prima facie show is whether these amounts are credited in YES
bank Thane branch in the names of these companies. Moreover, it is not the case
of the prosecution made out that the accused had anything to do with VS and ES.
They do not say that any amounts have been paid to any of the accused as kick
back.

Realizing the above difficulties, the prosecution has falsely come out with the
alleged confessions of the above accused. According to the prosecution they
stated thus:

“The arrested accused were confronted with the persons summoned for the
purpose of investigation after sustained interrogation the arrested accused broke
down and admitted that their accomplice GS working as accountant of the
company had raised certain invoices and had received cash from the persons who
were issued cheques of the company. They further stated that one AMS, a
practicing Chartered Accountant, who had informed that he had his office and
residence at Mulund, Mumbai is known to them. The said AMS had arranged the
invoices of various transport firms and they had issued cheques in the name of the
said entities. They further informed that they had received cash from the said
AMS and the cash was paid as rebate to the representatives of shippers, exporters
and C.H.A.’s. They also informed that the cash so obtained by deceit was also
paid to various employees of M/s _________.”

It is submitted that the so-called confession/statement of the accused is not at all


admissible. Moreover, accused totally deny the same.

i. One more type of transaction namely 2 vouchers allegedly for travelling


expenditure for Rs.15850 and Rs.17950 is paid to ________ and _________. As
far as this transaction is concerned it is submitted that firstly the total amount
would be around 33,000. If according to the prosecution accused have committed
criminal breach of trust to the tune of 12.30 crores would they create such bogus
cash vouchers. It is highly improbable that vouchers would have been prepared by
the Applicant for such small amounts. Moreover, they are not in the handwriting
of any of the Applicant. The alleged forged signatures of ________ and
_________ are also not in the handwriting of any of the Applicant. It may be
noted that the Applicant were the Directors and were not concerned with
preparing the cash vouchers and/or disbursing.

j. The Complainant in the various emails exchanged between the Complainant and
the Applicant have admitted that the Company viz. _______ was running into
losses and in fact the Complainant was even contemplating to close down the
business due to the said losses. The relevant emails in this regard are annexed
hereto as Exhibit C;

k. The Applicant had already resigned from ________ and were negotiating with the
Complainant for their dues in respect of their share capital, salary and gratuity
since December 2013 till March 2016. The Applicant had been time and again
requesting the Complainant to settle their aforesaid dues as also the dues of the
various staff members who had already resigned from ________. The
Complainant even made an offer to the Applicant on 29.1.2015 and 30.1.2015 to
buy the Applicant for USD 1500 each towards full and final settlement or then the
Complainant will have no option but to let the company go into bankruptcy. The
Complainant in fact in one of the emails on 21.2.2015 mentioned that the
Complainant was contemplating to close down the business and start a new
business. The relevant emails in this regard are annexed hereto as Exhibit D. It is
submitted that it is an admitted position by the Complainant that ____________
was running into losses in regular course of its business and required a closure.

l. The Complainant on 24.2.2015 has admitted that the share capital and gratuities to
be paid by the Complainant to the Applicant were the main issues to be agreed
upon and if the same is not settled that would tie up the funds of the Applicant.
The relevant emails in this regard are annexed hereto as Exhibit E.

m. The Applicant on 18.3.2015 had written via email to the Complainant and marked
the person i.e. ___________ at whose behest the said Complaint has been filed,
informing the Complainant that they would like to transfer the shares and settle
the outstanding of gratuity and share capital at one go. The Complainant on
18.3.2015 itself had replied to the Applicant email that everything should be
settled at the same time. Thereafter, the Applicant on 19.3.2015 wrote to the
Complainant seeking to know the final figure that they would receive from the
Complainant towards their share capital and gratuity which was replied by the
Complainant on 19.3.2015 itself mentioning the amounts that the Applicant would
be receiving after surrendering the original share certificates and necessary paper
work being done. The relevant emails in this regard are annexed hereto as Exhibit
F.

n. The Complainants finally settled the outstanding dues of the Applicant by issuing
cheques to them dated 19.3.2015 and 20.3.2015 based on which the Applicant
surrendered the shares of __________ to the Complainant. The Applicant submits
that after finally settling the dues on 20.3.2015 that too which the Complainant
owed to the Applicant, the Applicant were arrested just in a weeks’ time i.e. on
27.3.2015 by the Respondents on the basis of the FIR that was lodged in January
2015.

o. The balance sheet of _________ as on ___________ shows that the company has
been facing a huge liquidity crunch in terms of the amounts blocked in
investments in fixed assets, advance tax and service tax amounts lying with the
government and the loss in the business due to reasons mentioned aforesaid which
was to the knowledge of the Complainant. An analysis of the balance sheet as on
__________ has been prepared and is annexed hereto as Exhibit G.

p. The Applicant submits that in the aforesaid emails as can be seen the Complainant
and the Applicant have only been negotiating to clear the dues with respect to
share capital and gratuity of the Applicant and not even once written or mentioned
any amount that the Applicant owed to Complainant. Further, in the emails
exchanged the Complainant has no where mentioned that the Applicant had
misappropriated or siphoned off the funds or induced the Complainant to provide
monies or had cheated the Complainant as has been baldly alleged in the
Complaint. This only shows that the said Complaint has been frivolously filed by
the Complainant to harass the Applicant.

q. The FIR is lodged by the Complainant on 17.1.2017 and as can be seen from the
emails above there have been correspondence between the Complainant and the
Applicant thereafter negotiating for the dues of the Applicant by the Complainant
towards their share capital and gratuity and in none of the emails above which are
subsequent to the lodging of the FIR by the Complainant has the Complainant
made a mention or even a passing reference for that matter about the alleged
cheating or misappropriation or inducement by the Applicant of the funds of
___________ or that the Applicant owed the Complainant a sum of Rs. 12.30
crores as falsely alleged.

r. The FIR was lodged on 17.1.2014 and the Applicant were arrested on 27.3.2017
i.e. after nearly two and half months of filing of the FIR and took the Applicant by
surprise. The Respondent also failed to comply with the requirements of notice as
contemplated under Section 41A of the Criminal Procedure Code, which has
made the arrest illegal.

s. The Applicant were granted Judicial Custody on 5th April, 2017 and still in
judicial custody. There is nothing to be recovered from the Applicant, and as per
the judgments passed by the Hon’ble Supreme Court it has been held that bail is
the rule and not jail.

t. The Applicant are ready to co-operate with the Respondent in their investigation
and prima-facie from the above-mentioned facts, keeping them in Judicial
Custody is causing grave injustice to the Applicant, as the Applicant are innocent
and keeping them behind bars is violating the basic principle of criminal
jurisprudence of holding the Applicant as guilty.

u. The Applicant will not tamper with the prosecution witness(s)

v. The Applicant are the sole earner of their families.

w. The Applicant do not have any previous criminal antecedents.

5. That, it is submitted that in the facts and circumstances of the case it is clear that no
prima facie case is made out. It is most respectfully submitted that it is well settled law
that even where prima facie case is established, the approach of the Court in the matter of
bail is not that the Accused person should be detained by way of punishment but whether
the presence of the Accused would be readily available for trial or they are likely to abuse
the discretion granted in their favour by tampering with the evidence. It is submitted that
the discretion given to this Hon’ble Court u/s 439 of the Code is very wide and an appeal
to the judicial conscience of the Hon’ble Court is to be exercised in accordance with the
established principles of law. It is submitted that for exercise of such discretion,
allegations made against the Applicant by the prosecution has to be considered by the
Hon’ble Court, keeping oneself in a dispassionate mood and not get swayed away by
emotion or by the sections applied for in the instant matter or what heat the matter has
generated outside the Court.

6. In view of the aforesaid submissions and to put it in a nut shell all transactions which
took place vis-a-vis invoices and bills payments have been made by
RTGS/Cheques/NEFT and they were scrutinized by the auditors and ultimately the
Directors accepted them. It appears that in order to implicate the accused, prosecution
have threatened various transporters who were paid by RTGS/Cheques that they would
be approved unless they say that they have repaid the amounts to the absconding accused
and the Accused No. 1 except the bare words of these transporters there is nothing to
show that the Accused No. 1 received any cash back or that any amount was
subsequently paid to the Accused No. 2. Therefore, there is no prima facie case made out
of criminal breach of trust. There is no case of cheating as this is relating to business
transaction of the company of which Accused No. 2 was managing director and Accused
No. 1 was a Director.

7. That the totality of the above circumstances it would be in the interest of justice to release
the Applicant on bail on such terms and condition as may be deemed fit by the Hon’ble
Court. The Applicant submit that they are ready to abide by all the terms and conditions
scrupulously whichever may be imposed by this Hon’ble Court for their release.
Moreover, there is no legal impediment in releasing the Applicant. As such it is prayed
that the Hon’ble Court may kindly be pleased to release the Applicant on bail, in the
interest of justice.

8. It is therefore prayed that


a) The Applicant may be released on bail in F.I.R No.78 of 2017, on such terms and
conditions as this Hon’ble Court deems fit and proper.

b) Cash Bail may be allowed in lieu of Surety.

c) Such further and other reliefs in the nature and circumstances of the case as this

Hon’ble Court may deem fit and proper.

And for this act of kindness the Applicant shall duty bound ever pray.

DATE: _____April, 2017 Advocate for Applicant

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