THE HONOURABLE Dr. JUSTICE B.SIVA SANKARA RAO CRIMINAL PETITION Nos.4546 and 4547 of 2014
COMMON ORDER:
These Criminal Petitions are filed by the petitioners/A-3 and A-4 separately under Section 438 Cr.P.C seeking anticipatory bail in connection with a case in Crime No.94/2010 registered against the petitioners for the offences punishable under Sections 120-A, 406, 415, 418, 420, 463 and 464 I.P.C.
2) Among the petitioners/A-3 and A-4, A-3 by name Sanjiv Shah is the General Manager (finance services) and A-4 by name Vikranth Singh, General Manager National Sales of A-1 entity B.M.W India of the relevant time, leave about the status and designation of the other accused, A-2, A-
5 and A-6 of whom A-6 is member of the Three Member Credit Committee who was arrested on 25.07.2014 and was granted regular bail on 26.07.2014 undisputedly. The defacto-complainant who filed the private complaint case for the above offences against the accused persons when referred for police investigation under Section 156(3) Cr.P.C by the learned Magistrate concerned having jurisdiction, to the police concerned i.e., S.H.O, Thirumalgherry Police Station who registered the crime supra. The A-1 entity is the manufacturer of the cars and the defacto-complainant is one of the dealers who purchased the cars in wholesale for in turn sale to the customers in retail. There was admittedly a dealership agreement between A-1 entity and the defacto- complainant entity dated 13.06.2007 (1st agreement) with mutual agreement clauses 14 in number with sub-clauses therein and as per clause 692) which is to be read with Schedule-I clause 1(1) and 1(2) respectively the dealer will order the contract goods i.e., cars directly from B.M.W or through such source as B.M.W from time to time direct according to the B.M.W ordering system or such amended procedures as are from time to time notify by the B.M.W. The schedule-I specifically speaks that such orders by the dealer as per B.M.W ordering procedure be subject to acceptance by B.M.W with endeavour to fulfil from its acceptance to make allocation of the vehicles in accordance with the dealer’s orders. The dealer’s orders are otherwise known as purchase orders. Unlike any other dealers to have their own arrangements of financing from any bank for credit limit or working capital limit or cash credit or investing fund as part of the working capital limits to the dealer for purchase and stocking of the vehicles in bulk for inturn retailing for profit within the prescribed limit; there is with A-1 entity B.M.W in-house banking and finance service who provide the working capital facilities by providing amount of loan to the dealer that to be availed at any point of purchase of the cars based on the purchase orders placed and accepted to supply and the dealers liability to pay back funds utilised from this in- house finance of B.M.W is with concession of no interest for a particular period and thereafter in the event of non-payment with interest liability (as per condition No.5) i.e., covered by deferred payment agreement between B.M.W and the Dealer dated 14.06.2007 and as per condition No.2 so far as credit line (credit facility limit) being provided by the company to the dealer concerned for such deferred payments, it speaks from condition No.2.2 and 3 that such credit line will be determined by B.M.W based on the planned sales and its products by the dealer and depends upon risk classification of the dealers business and fulfilment of certain pre-conditions by the dealer that will be notified by B.M.W of the credit limit in writing time to time and on its sole discretion by intimation to the dealer; and as per condition No.8 and 9 in particular 8(2)(i)(v) read with 9(iii) on occurrence of any event of default B.M.W may reject purchase orders of the dealer and stop delivery of goods and terminate the terms of deferred payment and for that matter either party may terminate these terms of deferred payment upon one month prior written notice. No doubt a reading of the above mutual agreement relating to deferred payment and the consideration for enhancing the credit limit as an outer limit to avail in between by the dealer that too sanction out of the limit to the credit purchases of the cars to meet based on the purchase orders being placed by the dealer only and on its acceptance for supply in processing for the payment out of the credit limit and can at no cost at the whims and francis of the A-1 entity B.M.W even from the above. It is to say in pursuance of the purchase orders in writing placed by the dealer that to be considered by the sales division for sale and invoice of the cars to the dealer and they in turn forward to the finance division who releases from outer credit limit of the account of the dealer as specified in the purchase order that was accorded permission to supply the cars by the sales division in turn invoices the cars to the dealer after receipt of the provisions from the finance division. It is not even, at the cost of repetition, at the sole prerogative of the sales division to take it as if granted without purchase order in writing from any of the dealership agreement or deferred payment agreement referred supra to process for sale and invoice of the car and to ask for finance by the finance division as it must require as a pre-condition written purchase order and after processing by the sales division from such purchase order for sale and by invoicing intimation to the finance division to credit the amount to B.M.W from the account out of the outer credit limit of the deferred payment, to meet the sale price initially as a short term loan without interest and thereafter by charging interest referred supra.
3) In this case it is important to note that out of the investigation done and some of the witnesses examined in particular Shilpi Ahuja one of the witness of the sales and marketing division of B.M.W as specialised in sales planning and ordering and Mihir Dayal and Sharang Rathore, Manager in sales who three belong to the sales division responsible in process for sale and invoicing apart from one Sachin Mahajan and under the supervision of A-4 who is one of the bail applicants herein Mr.Vikranth Singh, General Manager of the National Sales and it is after purchase orders only they shall process and intimate to the finance division for financing out of the sanctioned credit limit to meet the case of the complainant right from the private complaint filed including from the investigation so far done by the police is that the B.M.W, in particular the accused persons referred 2 to 6 therein of the B.M.W and more particularly the petitioners A-3 and A-4 of whom A-4 of the sales division and A-3 of the finance division colluded if not with other accused as part of the nefarious plan and conspiracy and to achieve their unlawful object and intention being privy, without even purchase orders muchless in writing (for nothing to say any provision without written purchase to consider from among the dealership agreement or deferred payment agreement referred supra) muchless anything in confirmation of consideration of oral purchase order by e-mail intimation or other written intimation to the dealer if at all there is such purchase order even the complainant say without any request from whom muchless purchase order orally muchless as required written purchase order they demit the cars by processing for sale and invoicing and by enhancing the credit limits on their unilateral actions and charging the complainant with cost price and therein with interest liability as if deferred payment agreement limit period non-chargeable interest liability transgressed in saying one way in boosting the sales for their unlawful gain so far as A-3 and A-4 among other accused 2 to 6 of A-1 by over ordering cars from Germany from the market was affected because of the sub prime crisis of 2008 and having produced more cars than the demand in market and demit the cars on the complainant by the sales division in collusion with finance division in allowing the credit limits by their own enhancement and to use the same to pay for the demit cars and from enhancing the credit limits by their own to facilitate such demitting with guilty mind.
4) It is the contention of the bail applicants that from the dealership agreement vis-à-vis deferred payment agreement referred supra, it is purely a civil liability and brought mischievously by the complainant as if there is a criminal liability even there were oral purchase orders that was considered by taking as a practice without necessitating for written purchase orders. The petitioners could not dispute even of written purchase orders required under the dealership agreement and for bypassing the process they could show nothing of oral purchase orders placed. In fact though not in so many words it is now required to say that the investigation so far done by the police clearly indicates there is mens rea and guilty state of mind and prima facie accusation for the modus operandi which also substantiates such conclusion arrived of no grounds to quash the proceedings sought by the accused persons before this Court with such observation of prima facie accusation particularly in the quash proceedings dismissal order dated 23.02.2012 in Crl.P.No.9724 of 2010 and the petitioners if any among others also went unsuccessful before the Apex Court in their S.L.P.No.2882 of 2012 order dated 17.04.2012. Though it can be said that, the criterion for dismissal of the quash proceedings for not a case to invoke Section 482 Cr.P.C is different to the criterion in anticipatory bail application under Section 438 Cr.P.C; for both, it is the prima facie accusation the main criterion, but for to say so far as anticipatory bail, unlike in other regular bail, it is subject to the case falls within the requirement of Section 438 Cr.P.C. It is no doubt also an equal consideration as part of duty of Court in balancing the personal liberty with the propensity of the crime from prima facie accusation to grant or refuse in exercise of the judicial discretion. In fact, the petitioners though obtained orders against arrest by interim stay in the quash proceedings before this High Court referred supra and also before the Apex Court referred supra and also went unsuccessful in anticipatory bail application moved by them before the learned Sessions Judge in Crl.P.Nos.912 of 2014 and 979 of 2014 respectively that was dismissed on 02.04.2014 with the observations at para-10 that there is a prima facie accusation and there is element of mens rea and there is a collusion between the sales division and finance division headed by A-4 and A-3 respectively in dumping the cars to the dealer the defacto-complainant without even purchase cars by financing the finance limits in crediting the amounts from car particulars from the in-house finance division of B.M.W in dumping the cars to the dealer despite his non-requirement by charging not only the interest by relying upon deferred payment agreement but also made him to suffer to sell the vehicles without demand for discount price with huge financial loss in their having wrongful gain as part of the privy though not in so many or in exact words but for the gist with reference to the complaint case also.
5) The petitioners therefrom having moved these two anticipatory bail applications, obtained interim order not to arrest pending disposal of the anticipatory bail applications which they moved in 15.04.2014. It is to say the A-3 and A-4 were not arrested so far and are under protection of judicial order against their arrest even date from what is referred supra. In fact the element of mens rea even clear as per the contention of the defacto-complainant of even he invested for the premises to store the cars with advertisement till sale to the customer, of the cars that to be obtained to store as per purchase orders from being supplied and the dealership agreement though specifies year after year and accordingly three agreements with same terms referred supra of the one dated 13.06.2007, the other two are dated 05.02.2008 and 05.01.2009 long before expiry of one year respectively from the respective dates, against the bulletin of the B.M.W A-1 entity dated 18.02.2009 clause 2(1) speaks the lease period required is 15 years, however fixing the one year dealership is only to have control on the dealers to play to the tunes of the B.M.W else, to cancel the dealership agreement under the guise of the terms therein. In fact, the dealership agreement supra as well as the deferred payment agreement regarding working capital clearly spelt out the condition precedent of written purchase orders from the dealer to the sales division for sale and invoicing and processing to the finance wing for releasing the amount out of the credit limit. In fact the purchase orders are required is well within the knowledge of A-3 and A-4 not in dispute though they are not parties to the dealership and deferred payment agreements, being parties to the implementation of the same including from their responses in writing or otherwise apart from by A-1 or the four witnesses referred supra and clause 8(2)(i) of the deferred payment agreement to which A-3 is a signatory from the finance division, apart from A-4 is head of the sales division in considering for sale only based on purchase order as per the dealership agreement. The deferred payment agreement clause 2(ii) supra even speaks the three components of (i) sales volume (ii) definite risk classification of dealer and (iii) fulfilment of other pre-conditions for enhancement of credit limit and there is nothing even from any of their responses to the I.O in the correspondence referred and brought to the notice of the Court from the rival contentions of both sides of these criterion required were taken into consideration in enhancing the credit limit which is also one of the circumstance to lend force to the submission by the counsel for the defacto-complainant who was permitted to assist the prosecution under Section 24(8) provision of amended Cr.P.C. Even the complainant resisted against the supply including the factum proved from letter dated 18.11.2009 and requesting return of cars to the accused persons herein, the reply of the (A-3) third accused of even date of A-1 entity will discuss and who in fact intimated for the termination of dealership, without even discussion i.e., in the mail sent by A-4 dated 02.12.2010; that also lend support of prima facie accusation and privy of A-3 and A-4 with A-1; though the contention of the counsel for the petitioners is that A-1 is an entity of it is hardly difficult to believe any privy or pre-concert or conspiracy between A-1 on one hand and the other accused on the other hand in referring to an expression of the Apex Court in C.B.I V.
[1]
V.C.Shukla . The other contention of the accused by placing reliance
[2]
upon the expression in M.C.D. V. State of Delhi para 21 is that, the person who approaches the Court for relief must come with clean hands and cannot withhold any vital information or document in order to gain advantage either side which tantamounts of guilty of playing fraud on Court as well as opposite party to throw out at the threshold of early litigation stage based on such unclean approach tantamounts to fraud and it is the submission that in this case in the private complaint filed by the defacto-complainant he did not mention the arbitration consent award which is a vital document. Admittedly, the B.M.W is also a party to it and there is nothing to show, by its mention the criminal prosecution won’t survive to say the same is within exclusive knowledge and custody and withheld with malice.
6) In fact a perusal of the investigation and several queries raised and the prevaricating replies and time to time changed versions in the replies by the accused persons 3 and 4 herein and the witness referred supra of the sales division and other officers of A-1 entity also show insufficient disclosure of the material to the investigation on one ground or other. It is also important to note that the legal duty to speak the truth as observed by the Apex Court in appeal No.890 of 1986 dated
[3]
12.08.1997 referring to the expression in U.S.A V. James Knocks where that case relates to duty of tax payer to submit true return and has no right under the cause of it incriminates, to submit a false return when faced with choice of prosecution for the failure to file return or a true return may contain incriminating statements against him; the Apex Court therefrom held that every one who is accused of having committed misconduct though entitled to defend himself but right to defend does not include right to set up false defence or speak lies or withhold and to deny the truth in any manner, as for which no one has a right to defend against the valid laws of the land or against the truth. The reason being that in a society which is covered by rule of law, laws cannot be allowed to be eclipse the truth by setting up a false plea whether he is a plaintiff or defendant and even those who are accused of offences entitled to be guaranteed against testimonial compulsion under Article 20(3) of the Constitution of India not being permitted to make false and untrue statements though entitled to be remained silence if they so desire in having that privilege and once waived that privilege and want to say something the obligation to speak truth is there even against them in particular before the public servant conducting the investigation, enquiry or trial.
7) In fact, leave as it is, so far as the prevarications and untrue versions and changed versions to the queries raised and in response to the letters by investigating officer against the accused persons also the witnesses working under the petitioners A-3 and A-4 supra and in particular event so far as A-4 at the initial stage for the investigating officer summons dated 29.12.2010 contended of the investigating officer has no jurisdiction and refused to come in response to the summons issued for appearance, by his written reply undisputedly dated 03.01.2011 and also to the summons subsequently dated 01.02.2011 including under Section 41-A amended Cr.P.C by sending written reply dated 11.02.2011 with what all he had to say stated in the letter dated 03.01.2011 and no need to appear, even the Cr.P.C mandates when the summons to appear bound to appear and equally so far as A-3 having refused to accept the summons under Section 41-A Cr.P.C issued by the investigating officer, dated 29.12.2010 and the other apart from in writing sent through e-mail and his response is at par with what A-4 referred supra dated 11.02.2011 of no need to appear before the investigating officer. However, the Director (finance) of A-1 entity in the reply dated 12.10.2010, having admitted the requirement of the written purchase orders from the dealers, in stating that was superceded by mutually accepted practice could show nothing in that line so also to say for the CKD cars no purchase orders required; even the dealership agreement no way differentiates between CKD cars and other cars and the accused were required with the e-mails seeking purchase orders from the complainant, they responded to the investigating officer in the letter dated 11.02.2011 with a changed version of B.M.W sought purchase orders only in certain instances; and even they were asked to specify in which instances, it was the reply dated 02.04.2014 of only two instances were there in the entire tenure of dealership of complainant asking for written purchase orders and the witnesses Shilip Ahuja, Sharang Rathore and Mihir Dayal supra, then were send notices dated 08.04.2014 asking the details of instances where they sought for purchase orders from the complainant, the version of A-4 dated 12.05.2014 again was instead of two occasions in five occasions purchase orders in writing were sought and A-4 also sought the purchase orders in writing from the complainant though he did not chose to admit out of his privilege and the witnesses supra for the notices sent by investigating officer dated 31.01.2011 to the A-1 entity address. A-1 entity responded the investigating officer on 04.02.2011 as if Shilipi Ahuja and Sachin Mahajan the two witnesses left the A-1 entity and for the investigating officer’s query dated 08.02.2011 of whether they were working in any of their group, it was responded on 11.02.2011 of both are working in their sister company located in the adjoining building. Whereas, the witnesses supra voluntarily sent their version of statements being employees under A-1 and as stated supra under direct control of A-4 if not of A-3 and A-4 with identical covering letters and in their reply dated 08.04.2014 for how many number of times they sought for purchase orders these witnesses supra replied as if they did not receive the notice though the postal department proof indicating the letters were delivered on 11.04.2014 and so far as Shilpi Ahuja in the letter dated 14.05.2014 stated other than mail dated 23.01.2009 as per her, she did not sent any e-mail seeking purchase orders and Sharang Rathore by letter dated 19.05.2014 stated he had not sought purchase orders and Mihir Dayal by letter dated 14.05.2014 stated he sought on five occasions in 2007 and 2008 purchase orders including the one by Shilpi Ahuja dated 25.01.2009. In fact the principle laid down in the decision when equally applies to the accused also, the petitioners/accused cannot raise any contention on that ground of consent arbitration award not mentioned in the complaint that too having not challenged the same on that count in the quash proceedings either before the High Court or against the dismissal order of the High Court before the Apex Court and having if not thereby acquiesced against; it is not the complaint alone that was on referred under Section 156(3) Cr.P.C registered only as F.I.R, the investigation material thereupon that is the basis for consideration in the bail applications in showing prima facie accusation, even by consideration of the consent award and its scope.
8) It is from the above factual matrix, it requires to say that, these petitioners/A-3 and A-4 are not entitled to the concession of anticipatory bail within the judicial discretion conferred within the four corners of Section 438 Cr.P.C. However, as part of the duty of the Court to balance with personal liberty as laid down by the Apex Court in Siddharam
[4]
Satlingappa Mhetre Vs State of Maharashtra by referring to and relying upon the constitutinal bench expression of the Apex Court in
[5]
Gurbaksh Singh Sibbia Vs. State of Punjab from propensity of the crime and the role of the petitioners as accused Nos.3 and 4 and from the facts supra and from the punishment provided for the offences and in particular in wake of Section 41-A of the amended Cr.P.C also, no doubt notices issued by investigating officer supra, thereunder for appearance and to furnish information to the A-3 and A-4 and refused even to appear as detailed supra, even they does not deserve the concession of anticipatory bail as laid down in State of Madhya Pradesh Vs Pradeep Sharma
[6]
and Shobhan Singh Khanka V. State of Jharkhand
[7]
;
from such duty of the Court in balancing with personal liberty from the expressions supra, the accused are entitled to the concession of regular bail subject to surrender and subject to necessary conditions.
9) Coming to the contention of the accused persons particularly by referring to paras 18 and 19 of Gurbaksh Singh Sibbia (supra) and paras 88 and 89 of Siddharam Satlingappa Mhetre (supra) not only entitled to anticipatory bail but also not entitled to any interrogation from no more facts to be ascertained muchless by custodial interrogation, that contention is not tenable also in their saying police may under the guise of custodial interrogation ill-treat or harass; as the answer to it is the expression of the Apex Court in C.B.I V. Anil Sharma[8] in relation to an anticipatory bail at para-6 of the argument that custodial interrogation is a fraught with the danger of the person being subjected to third degree methods need not be contenanced, for, such an argument can be advanced by all accused in all criminal cases and the Court has to presume that responsible police officers would conduct themselves in a responsible manner and that those entrusted with the task of disinterring offences would not conduct themselves as offenders. It is also needless to say the presumption under Section 114 of the Indian Evidence Act in favour of the said conclusion of the Apex Court is to presume, for nothing shown contra in the particular facts by the petitioners though the other expression of the Apex Court placed reliance by the prosecution in refusing the bail of Director, Enforcement V. P.V.Prabhakara Rao[9] analogy directly has no application but for to say from para-13 that the material collected so far can be of stretching-accusing fingers towards the bail applicants, it was not proper to exercise the discretion to grant anticipatory bail under Section 438 Cr.P.C for the offences punishable of the fraud caused a whopping a sum of Rs.133.00 crores even by referring to the Constitutional Bench expression of Sibbia (supra). In fact in Sibbia (supra) even from the nine guidelines laid down, guideline No.4 is with reference to the discussion in para Nos.18 and 19 therein is where it requires a police custody for interrogation can be permitted if at all while granting bail. The facts as referred supra and the tenor of the responses by the accused and the officers immediate subordinates to them in not diverging the true facts, it requires some more information that requires to be elicited by the investigating officer as per the contention of the prosecution for saying the Court police custody can be permitted; no doubt from the voluminous evidence already collected and the accused persons were also already confronted with the questionnaires the period shall not be exceeded 24 hours of each of the accused that too subject to the moving on their enlarged on bail within 15 days.
10) Hence, taking consideration of the personal liberty and having regard to the circumstances stated in the petition as well as submissions made by the learned counsel, instead of dismissing from not entitled to the pre-arrest bail, but for regular bail, these applications are disposed of, by giving liberty to the petitioners-accused Nos.3 & 4 to surrender before the Learned Magistrate concerned to take into custody under Section 44 Cr.P.C by virtue of this order and move before the learned Magistrate within 15 days from the date of receipt of this order for regular bail and with notice to learned Assistant Public Prosecutor concerned and only meanwhile the interim order of stay of arrest in force shall continue; in such an event, the learned Judge/Magistrate shall consider by granting bail in favour of the petitioners/Accused Nos.3 and 4 preferably on same day, if not atleast by next day with necessary conditions, which may include the following:
[1] Petitioner shall execute a self-bond for Rs.50,000/- (Rupees Fifty thousand only) with two sureties each for the like sum each of immovable property or F.D.R or cash deposit as security to the satisfaction of the Learned Magistrate concerned. The bond to be obtained is not only to appear before the court pending investigation and after filing of final report in the form of charge sheet or the like for enquiry/trial before said Court, but also thereafter before any other Court and even after trial before such Court to appear before revisional or appellate Court or other superior Court - vide decision-Pre-Legal Aid Committee, Jamshedpur vs State of Delhi 1982[2]APLJ 43(SC); so that existence and enforceable, without even insisting her further presence, such recourse quickens the proceedings at other stages before that Court or other Court without loss of time and it also to some extent complies with the requirement of Section 437A Cr.P.C.
[2] In the event of the police making out a case for police custody for the reasons discussed in this common bail order at previous paras supra, for the purpose of interrogation, the petitioners shall be liable to be taken in police custody which shall not be exceeded 24 hours of each of the accused for facilitating the further investigation remained if any subject to the moving on their enlarged on bail within 15 days, with the permission of the Magistrate concerned who can grant such police custody, subject to necessary precautions and instructions. It is needless to say the petitioners shall attend for purpose of any further interrogation for purpose of investigation as and when required.
[4] Petitioners shall attend before the Court of law regularly in enquiry and trial without fail, if not their bail shall be cancelled forthwith, without any further order so that, the learned trial Magistrate can also issue NBW by cancelling the bail during pendency of proceedings before the Court.
[5] Petitioners shall furnish their full address either present or changed addresses if any from time to time and submit their bank account particulars and passport if any, after enlargement on bail on the next hearing date before the trial Magistrate concerned for securing presence and obtaining of bond with sureties in future under Section 437A CrPC. etc., failing which it is open to the learned Magistrate concerned to cancel the bail.
[6] The bail now granted is since a anticipatory one, till end of trial (without prejudice to the right to cancel meanwhile in case of need and/or for non-compliance of conditions supra) any absence of petitioners as accused for hearing/enquiry or trial, issuance of non-bailable warrant- NBW (unless cancelled before execution) and even its execution and production of accused as per the NBW; that does not tantamount to cancellation of bail including from the wording of Section 439(2) Cr.P.C. and as such in such an event no fresh bail application can be entertained. As it tantamounts to only cancellation of bail bonds earlier executed, (leave about the power of the court to issue surety notices by forfeiting bonds and for imposing penalty on the bonds forfeited); the proper course is to direct the accused to work out the remedy to pay penalty on the previous forfeited bonds as per Section 441 to 446 Cr.P.C and to submit fresh solvency with self bond for enlarging him by release from custody on payment of penalty of the earlier bonds forfeited without need of enforcing against earlier sureties again.
11) Accordingly, all these criminal petitions are disposed of.
Dr. B.SIVA SANKARA RAO J, August 21, 2014 ksh
[1]
(1998)3 SCC 410
[2]
(2005)4 SCC 605
1965(24) LAW 2 DT (275) = AIR 1970 V-57 C11
AIR 2011 SC312=(2011)1SCC694
(1980)2 SCC 565
2014(2) SCC 171
[7] (2012)4 SCC 684
[8] AIR 1997 SC 3806
[9] AIR 1997 SC 3868