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2017 DIGILAW 2972 (ALL)

ASHISH KUMAR v. STATE OF UTTAR PRADESH

2017-12-18

DILIP B.BHOSALE, MANOJ KUMAR GUPTA

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JUDGMENT : Dilip B. Bhosale, CJ. Heard learned counsel for the petitioner and learned A.G.A. for the State respondents. 2. The petitioners, who are Accountant and Assistant Finance Comptroller of Sam Higginbottom University of Agriculture, Technology and Science, Naini, Allahabad, have filed the instant criminal misc. writ petition under Article 226 of the Constitution of India for quashing of First Information Report dated 5.5.2017 registered as Case Crime No.295 of 2017, under Section-409, 418, 420, 421, 463, 467, 471, 477, 201, 120-B I.P.C., Police Station-Civil Lines, District-Allahabad and for a mandamus commanding the respondents not to arrest them in pursuance of the said case. 3. It appears that misappropriation of a huge amount of money from the bank account of Sam Higginbottom University of Agriculture, Technology and Science, Naini, Allahabad maintained at Axis Bank Branch, Civil Lines, Allahabad was unearthed, on the basis of which, an F.I.R. was lodged on 5.5.2017 by the Branch Manager of the Axis Bank, Civil Lines, Allahabad, naming two persons, namely Kamal Ahsan, Relationship Manager of the Bank and Rajesh Kumar, an employee working with the University. These two persons came to be arrested and thereafter in the course of investigation, as per the report placed on record by learned counsel for the State, which he passed on in a sealed cover, it transpires that present petitioners were named by Rajesh Kumar, the named accused, in his statement under Section 161 Cr.P.C., 1973 recorded on 12.9.2017. He stated that the petitioners were aware of all the transactions and developments, resulting in commission of the offence. He even went to the extent of saying that the mastermind behind the entire fraud is the Vice Chancellor, who was at the helm of the affairs of the University, and his two brothers S.B. Lal and Vinod B. Lal and their close accomplice Robin L. Prasad, Registrar. He also mentioned about the properties purchased by them from the ill gotten money. 4. It has also come on record that after the fraud was unearthed, the Axis Bank carried out an investigation by a team comprising of three officials of the Bank namely, Mr. Shailesh Verma (SBP and Head-FCMD), Mr. P. Natraj (Head-Investigations) and Mr. Mallappa D. Patil (Lead Investigator), in which it was discovered that there had been misappropriation of an amount of Rs. Shailesh Verma (SBP and Head-FCMD), Mr. P. Natraj (Head-Investigations) and Mr. Mallappa D. Patil (Lead Investigator), in which it was discovered that there had been misappropriation of an amount of Rs. 22 crores and odd, involving 385 transactions, spread over a period of three years from March 2013 to November 2017. According to the said report, the modus operendi was that Rajesh Kumar, Accountant, SHIAT used to get the accounts of the University debited from time to time, without presenting any instrument (cheques/vouchers), except in five cases, which too were non-MICR cheques. Although huge sums were withdrawn from the accounts of the University but the University authorities maintained pin-drop silence until a complaint was received by the Bank from a whistle blower and on basis of which, after preliminary inquiry and investigation, it was discovered that a fraud of such a magnitude had been continuing since a long time. 5. In this backdrop, we have heard learned counsel for the petitioners. He submitted that the petitioners were not named in the FIR. There is absolutely no "evidence" against the petitioners to show their involvement/complicity in the alleged offence. It is submitted that the Vice Chancellor of the University, had taken all steps to find out the persons responsible for the fraud. It is pointed out that the fraud was, for the first time, intimated to the University by Mr. Mallappa D Patil, Lead Investigator of the Bank and soon thereafter, the Vice Chancellor made various inquiries from the Bank and also constituted a team for conducting internal investigation. It is submitted that there is no evidence which may point needle of suspicion towards the petitioners. It is further submitted that in case the petitioners are arrested, it would be a great dent to their prestige and reputation. 6. Concededly, the offence relates to syphoning of a huge sum of money of a University from its bank accounts. The magnitude of the fraud can well be estimated from the fact that it involved not some, but as many as 385 transactions, spreading over a period of three years. After discovery of the fraud, in the investigation got conducted by the Bank, it transpired that in respect of these transactions, no instrument (cheques/voucher) was available, except in five cases, which too were non-MICR cheques, which had ceased to be valid. After discovery of the fraud, in the investigation got conducted by the Bank, it transpired that in respect of these transactions, no instrument (cheques/voucher) was available, except in five cases, which too were non-MICR cheques, which had ceased to be valid. The enterer/authoriser officials of the Bank have confirmed that they had carried out the transactions without cheques in physical form being presented, merely on instructions of Kamal Hasan, the named accused. The report specifically states that staff negligence, complicity and accountability for lapses is yet to be fixed, for which further interrogation of the concerned officials is in progress. It is really appalling that the petitioners nor any one in the University, reported about fraudulent withdrawal of huge sum of moneys from the account of the University, that too not by single transaction but by as many as 385 transactions extending over a period of three years. We fail to understand how the said fraud was not discovered even at the time of the audit of the accounts of the University. It is not disputed before us that Rajesh Kumar, Accountant of the University, the named accused in his statement under Section 161 Cr.P.C., 1973 has stated that the petitioners had full knowledge of all the transactions. Looking to the magnitude of the fraud, we of the opinion that the same was not possible unless there was a deep rooted conspiracy between the officials of the University and the Bank. Thus, the nexus of the officials of the Bank as well as the University, if any, with these transactions is a matter of investigation, which is still under progress. In order to establish the link, it is claimed by the Investigating Officer that he needs custody of the petitioner. 7. The Supreme Court in Y.S. Jagan Mohan Reddy v. C.B.I., AIR 2013 SC 1933 has held that :- "economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing a serous threat to the financial health of the country." 8. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing a serous threat to the financial health of the country." 8. In Parbatbhai Aahir @ Parbatbhai Bhimsinhbhai Karmur and others v. State of Gujarat & another AIR 2017 SC 4843 the Hon'ble Supreme Court has laid down the broad principles in regard to quashing of criminal proceedings. The Supreme Court, after laying down the principles which are to be applied for quashing criminal proceedings, has observed that these principles would not apply to economic offences involving the financial and economic well-being of the state have implications which lie beyond the domain of a mere dispute between private disputants. The High Court would be justified in declining to quash where the offender is involved in an activity akin to a financial or economic fraud or misdemeanour. The consequences of the act complained of upon the financial or economic system will weigh in the balance. 9. Again, the Supreme Court in Ram Narayan Popli v. CBI (2003) 3 SCC 641 has observed that in matters relating to economic offences "the cause of the community deserves better treatment at the hands of the court in the discharge of its judicial functions. A murder may be committed in the heat of the moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an evenhanded manner without fear of criticism from the quarters which view white-collar crimes with a permissive eye, unmindful of the damage done to the national economy and national interest." 10. Having regard to the facts of the instant case and the principles enunciated by the Supreme Court in the aforesaid judgements for dealing with a matter where the offence committed poses a threat to the very foundation of the financial institutions of the country, we do not consider it even a case worth considering for quashing the first information report. Having regard to the facts of the instant case and the principles enunciated by the Supreme Court in the aforesaid judgements for dealing with a matter where the offence committed poses a threat to the very foundation of the financial institutions of the country, we do not consider it even a case worth considering for quashing the first information report. We are unable to accept, at this stage, that the petitioners had no role, although they are holding important posts. Accordingly, the prayer made for quashing of the FIR is rejected. 11. As regards the second prayer, we would like to quote from the judgement of the Supreme Court in Km. Hema Mishra v. State of U.P. and others AIR 2014 SC 1066 wherein the Supreme Court has laid down the principles for exercise of power by the High Courts under Article 226 for grant of relief against arrest pending the investigation, which is as under :- "Thus, such a power has to be exercised very cautiously keeping in view, at the same time, that the provisions of Article 226 are a devise to advance justice and not to frustrate it. The powers are, therefore, to be exercised to prevent miscarriage of justice and to prevent abuse of process of law by authorities indiscriminately making pre-arrest of the accused persons. In entertaining such a petition under Article 226, the High Court is supposed to balance the two interests. On the one hand, the Court is to ensure that such a power under Article 226 is not to be exercised liberally so as to convert it into section 438, Code of Criminal Procedure, 1973 proceedings, keeping in mind that when this provision is specifically omitted in the State of Uttar Pradesh, it cannot be resorted to as to back door entry via Article 226. On the other hand, wherever the High Court finds that in a given case if the protection against pre-arrest is not given, it would amount to gross miscarriage of justice and no case, at all, is made for arrest pending trial, the High Court would be free to grant the relief in the nature of anticipatory bail in exercise of its power under Article 226 of the Constitution. It is again clarified that this power has to be exercised sparingly in those cases where it is absolutely warranted and justified." 12. It is again clarified that this power has to be exercised sparingly in those cases where it is absolutely warranted and justified." 12. In the facts and circumstances of the instant case, we do not consider it a fit case for grant of any protection against arrest during the investigation. 13. The petition lacks merit and is dismissed. This will not preclude the petitioners from filing an application for bail, if they are arrested in connection with the impugned FIR.