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2012 DIGILAW 463 (ORI)

Prasanta Kumar Dash v. State of Orissa

2012-10-17

S.C.PARIJA

body2012
ORDER 17.10.2012 - Heard learned counsel for the parties. This is an application under Section 438 Cr.P.C. for grant of anticipatory bail. The case of the prosecution, as detailed in the First Information Report ('F.I.R' for short) is that the petitioner and other Directors of M/s. Seashore Group of Companies are collecting deposits to the tune of crores of rupees from the members of general public by alluring them with high interest rate and promising to pay them heavy return. It is alleged in the said F.I.R. that though interest was shown in the account of the company as dividend and paid to the depositors, inquiry reveals that the amount paid to the depositors was part of the deposits made by them and that the company had no commensurate business to make payment of huge interest and therefore the company was running a money circulation scheme, which is prohibited under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. In the said F.I.R. it is further alleged that the company has defaulted in making payment to the depositors and has thus cheated many members of the general public. It is also alleged that the company, i.e. M/s. Seashore Securities Ltd. was accepting deposits and issuing preferential shares with guaranteed monthly dividend of 2% for a period of 6 years along with one life insurance policy from Tata AIG Life and one accidental insurance policy from Oriental Insurance Company, though the said company is not registered with the Reserve Bank of India as a Non-Banking Financial Company (NBFC) and the shares of the company are also not listed on the National Stock Exchange of India. Accordingly, it is alleged that the activities of the petitioner and other Directors of Seashore Group of Companies constitute offences under Sections 420/120-B IPC read with Sections 4, 5, and 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978: Learned counsel for the petitioner submitted that the FIR has been lodged by the Deputy Superintendent of Police, Crime Branch, on false and baseless allegations., for extraneous considerations, in as much as, the company i.e., M/s. Seashore Company Ltd. has been duly incorporated under the Companies Act, 1956, and is authorized to issue redeemable preferential shares as provided under the Articles of Association of the said company. It is submitted that the company carries on its business activities strictly in accordance with the provisions of Companies Act, 1956 and the preferential shares issued by the company are redeemable after 6 years from the date of its issue/allotment, which carry a dividend @ 24% per annum. It is further submitted that the company, M/s. Seashore Company Ltd. is not a Non-Banking Financial Company, as it never lends money as one of its principal business and therefore it does not require any registration with the Reserve Bank of India. Further, the company being a public limited company, which issues preferential shares, such a company need not be listed with the National Stock Exchange. It is submitted by learned counsel for the petitioner that the petitioner's company had been making payment of dividend to the share holders regularly and it is only recently, after lodging of the present FIR, there has been some delay in making such payments, due to the seizure of the documents and freezing of the bank accounts of the company by the Investigating Officer, it is submitted that such occasional delay or default in payment of monthly dividend may amount to a breach of contract but the same does not constitute an offence of cheating under Section 420 IPC. It is further submitted that the business activities carried on by the petitioner's company, as detailed above, does not amount to a money circulation scheme as has been defined under Section 2 (c) of the Prize Chits and Money Circulation Scheh1es (Banning) Act, 1978 and therefore the provisions of the said Act has no application to the facts of the present case, as has been held by the Apex Court in State of West Bengal and others v. Swapan Kumar Guha and others, AIR 1982 SC 949 . It is further submitted that pursuant to the direction of this Court, the petitioner has appeared before the Investigating Officer on different dates and has given his reply in writing to the questionnaire served on him along with photocopies of all documents asked for. As desired by the Investigating Officer, the petitioner has also deputed responsible officers of the company, who have appeared before Investigating Officer and provided necessary clarification in respect of the documents filed. As desired by the Investigating Officer, the petitioner has also deputed responsible officers of the company, who have appeared before Investigating Officer and provided necessary clarification in respect of the documents filed. It is accordingly submitted by the learned counsel for the petitioner that as the allegations made in the FIR relates to the business' activities of the petitioner's company, the same are based on documentary evidence which can be verified" from the records of the company, most of which has already been furnished to the Investigating Officer and also from the balance-sheet and other records filed before the Registrar of Companies. It is further submitted that the petitioner is ready and willing to appear before the Investigating officer as and when required and co-operate in the investigation and therefore, the petitioner be protected by an order of anticipatory bail, as otherwise, he would suffer immense humiliation and disgrace, if he is arrested. In this regard, learned counsel for the petitioner relies upon the decision of the Apex Court in Siddharam Satlingappa Mhetre v. State of Maharashtra and others, AIR 2011 SC 312 . Learned counsel for the State submitted that as the petitioner had been protected by the interim orders of this Court, he has not co-operated in the investigation fully and fairly. It is further submitted that as the allegations against the petitioner is with regard to collection of huge amount of money from the general public by alluring them of high return, by giving false assurances, custodial interrogation of the petitioner will be necessary to elicit useful and material informations. In this regard, learned counsel for the State has relied upon the decision of the Apex Court in State rep. by the CBI v. Anil Sharma, AIR 1997 SC 3806 . On a perusal of the case diary, it is seen that pursuant to the direction of this Court, petitioner has appeared before the Investigating Officer and has furnished his written reply to the questionnaire prepared by the Investigating Officer and has also submitted photocopies of several documents pertaining to the business transaction of the company. As the allegations are with regard to collection of money from the general public, the same can be verified from the records of the company and also the records available with the Registrar of Companies. As the allegations are with regard to collection of money from the general public, the same can be verified from the records of the company and also the records available with the Registrar of Companies. No material has been produced to justify the necessity of custodial interrogation of the petitioner, especially when the case hinges on documentary evidence. No arrest should be made because it is lawful for the police officer to do so. The existence of power to arrest is one thing and the justification for the exercise of it is quite another. The police officer must be able to justify the necessity for such arrest apart from his power to do so. Considering the materials on record and keeping in view the nature and gravity of the offences alleged against the petitioner, it is directed that in the event of arrest of the petitioner in Cuttack CID, CB P.S. Case No. 39 (EOW) of 2012, corresponding to G.R. Case No. 2498 of 2012, pending in the Court of learned S.D.J.M., Bhubaneswar, he shall be released on bail by the arresting officer on such terms and conditions as the arresting officer may deem just and proper. It is made clear that the petitioner shall appear before the Investigating Officer as and when required and co-operate in the investigation. The BLAPL is accordingly disposed of. Issue urgent certified copy as per rules. BLAPL disposed of