Kashinath Pandurang Jadhav v. The State of Maharashtra

10. On the other hand, Smt. Shinde, learned APP and Shri Pasbola, learned counsel for the complainant/intervener, argued in support of the impugned order passed by the learned Magistrate and prayed for dismissal of the applications. Reliance is placed on the following decisions in support of their submissions:-

(i) Lalita Saini Vs. State[7].

(ii) Manjinder Singh Vs. State of Punjab[8].

(iii) Qazi Mohammed Nooruddin Vs. State Of

(iv) Rakesh Kumar Paul Vs. State of Asam (supra).

11. With the assistance of the learned counsel, I have perused the materials on record. The applicant- Kashinath Pandurang Jadhav is accused No.1. The applicant has introduced the first informant to the director of their company and his son- Mr. Parth Jadhav and his nephew Mr. Vikas Gaikwad who are the applicants herein in Bail Application No. 2954 of 2023. The informant wanted to procure 12,000 matric tons (MT) sugar from India. During the procurement process, one Mr. Rohit Sharma introduced the authorised representative of the informant company to

8 Decided on 12/07/2019 in CRR 1504 of 2019 and CRR 1505 of 2019 accused No.1 and was made to believe that he was a genuine businessman and merchant dealing in sugar export. The accused projected themselves as genuine agents/merchants who had the capacity to procure and supply 12,000 MT sugar to the first informant company. It is the accusation that by deceiving the first informant, the accused with dishonest intentions induced the first informant company to make a payment of USD 30,00,000/- (INR 24,00,00,000/- approximately) in the account of the accused No.5 company. Sale-purchase agreement dated 19/05/2022 was entered into between the accusedcompany and the first informant company. In the salepurchase agreement the procurer-seller in the agreement is referred to as M/s. Royal Agro Mart Pvt. Ltd.- accused No.5, which is represented by accused No.1- the applicant in Bail Application No. 2973 of 2023. The agreement is signed and executed by the director of the company i.e. Mr. Parth Jadhav, accused No.2 and who is the son of accused No.1. As per the terms of the contract, the accused company had to procure and supply 12,000 MT (+/-2%) sugar on immediate basis after receiving 50% of the advance amount of proforma invoice dated 19/05/2022. The first informant company on 20/05/2022 transferred an amount of USD 30,00,000/- in favour of the accused company. As per the commitment, the accused was supposed to start the delivery of the sugar. On 24/5/2022, the Government of India issued a notification No. 10/2015-20 which provided that w.e.f. 01/06/2022 upto 31/10/2022 or until further orders, whichever is earlier, export of sugar is allowed only with specific permission from the Directorate of Sugar, DFPD, Ministry of Consumer Affairs, Food and Public Distribution. The notification was applicable from 01/06/2022 onwards and not prior to the given date. Further, the accusation is that the accused lured the first informant by stating that they would immediately start sending the sugar and therefore, the first informant company paid the amount to the accused company. The accused, time and again informed the informant that they are in the process of procuring the sugar for them and supplying the same as per their agreement. On 01/08/2022 the first informant issued a notice to the accused to refund/return the amount of USD 30,00,000/that was paid by them for sugar. On 03/08/2022, the accused company apologised for the delay in export as per the terms of the contract dated 19/05/2022 stating that the ban was imposed by the Government of India on export of the sugar. The accused company requested the first informant company for time thereby promising and assuring them that till 10/08/2022 they will send as many containers of Indian sugar S-30 to Bandar Abbas so that sugar can reach Kyrgyzstan before 31/08/2023 or they would immediately start the refund process on 10/08/2023 itself. The accused failed in their commitment.

12. According to the first informant company, the accused were only indulging in delaying tactics. As the accused could not procure the sugar, it was decided to cancel the order of sugar. After mutual discussions between respective representatives, the accused stated that if they could not procure the sugar, the entire amount will be refunded in 3 tranches. It was assured that a refund of USD 1 million would be immediate and the remaining USD 2 million would be repaid in 2 tranches by 20/09/2022 and 27/09/2022.

13. The first informant filed a complaint and proceedings against the accused before the Director General of Foreign Trade (DGFT). By the letter dated 13/10/2022, the accused company assured to pay the amount of USD 3 million and demanded that after the payment was made the first informant company should withdraw the complaint and proceedings made by them before the DGFT. After repeated follow-ups, the amount of USD 1 million was refunded. The accused company then assured the first informant company that since the restrictions of sugar export were struck off, the accused had procured sugar from a dealer in Sangli and are about to execute a purchase order with them. They convinced the first informant with certainty that they would supply sugar at the earliest. The accused shared a copy of the cheque of Rs.15,20,00,000/- and the purchase order as well as with the first informant company. The accused company came to know that the said cheque was dishonoured and the seller with whom they had placed the order had initiated legal proceedings against the accused. The accusation is that not only the monies belonging to the first informant company were siphoned off but the accused repeatedly committed the acts of criminal breach of trust.

14. After the complaint was lodged by the informant with the Consulate of Kyrgyzstan on 06/03/2023, the parties came to a mutual agreement whereby the accused agreed to pay the remaining amount of USD 2 million in a certain timeline of 4 instalments and if the accused failed to do so then the accused will provide original documents of the property owned by them in respect of some property. A mutual agreement was, therefore, entered into signed by the parties. On 30/03/2023, the DGFT passed an order that the accused have not acted as per the sale-purchase agreement and that their justification for the same was not proper and if they don’t repay the amount of USD 2 million i.e. due and payable to the first informant company then they would initiate legal proceedings as per the relevant statutory provisions. Even thereafter, the accused requested some more time to repay the entire amount and accordingly entered into a Memorandum of Understanding (MoU) dated 12/05/2023. It was mentioned that failure to repay the said amount, the accused would surrender their rights in the immovable property mentioned in the MoU.

15. The first informant company later came to know that there were multiple criminal cases against the applicants and their company by multiple investigating agencies including the CBI. The accused are facing similar cases with similar facts registered with Pant Nagar police station, Mumbai. It is thus the accusation that right from inception the accused had orchestrated this modus of luring and deceiving the first informant by criminally gaining their trust who never had the intention to procure and supply the sugar to the first informant company and always wanted to cheat them for siphoning off their money.

16. During the course of the investigation, it was revealed that money given by the first informant company was diverted and siphoned off by the accused to purchase personal assets and clear debts viz. gold loans with banks on the pretext of procuring sugar for the first informant company as agents/merchants. The materials on record reveal that after receiving payment from the first informant company, the accused siphoned off and misappropriated the said amount for their personal use in the manner reflected in the following chart submitted by the learned APP:-

17. It is pertinent to note that Section 409 of the IPC was invoked as an offence at the time of registration of the FIR alongwith the other Sections of the IPC. Learned counsel Shri Jha submitted that Section 409 of the IPC is not attracted in the present case. It is his submission that if Section 409 is wrongly invoked then the applicant is entitled to default bail as the charge-sheet is not filed within 60 days. To appreciate this submission, it is necessary to see the ingredients of Section 409 of the IPC. Section 409 of the IPC reads thus:- “409. Criminal breach of trust by public servant, or by banker, merchant or agent.—Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.”

18. The facts clearly reveal that admittedly the amount of USD 3 million was paid by the first informant company to the accused company. There was thus an entrustment of the property by the informant to the accused who represented that the company would procure and sell the sugar as per the agreement. The accused never had the wherewithal or arrangement for procurement and supply of sugar and prima facie it appears that the funds obtained through such modus was meant to be diverted to clear the outstandings of the accused and for investing in other business. Thus, the money of the first informant company was utilised by the accused company for clearing their debts and purchasing more property. Prima facie, I have no hesitation in holding that the respondents are justified in invoking Section 409 of the IPC. It is once again made clear that these are prima facie observations as I had to deal with the painstaking submissions advanced by the learned counsel for the applicants that Section 409 of the IPC is invoked only to defeat the applicants’ right to claim default bail under Section 167(2) of the Cr.P.C. so that the investigating agencies get the benefit of extended time beyond 60 days to file charge-sheet. The decisions relied upon by the learned counsel for the applicants in Alnesh Akil Somji (supra) and Irfan Moiuddeen Saiyyed (supra) are distinguishable on facts as in the facts of those cases the Court was of the opinion that invocation of Section 409 of the IPC is unjustified.

19. The next submission of Shri Jha, learned counsel for the applicants is that even assuming that invocation of Section 409 of the IPC is justified, then also Section 167(2) (a)(i) of the Cr.P.C. would not be applicable as the requirement of law is that a minimum sentence has to be of not less than 10 years and whereas Section 409 of the IPC does not have any provision which mandates the minimum sentence being that of 10 years. It is submitted that in respect of all other offences Section 167(2)(a)(ii) of the Cr.P.C. would be applicable.

20. To appreciate this submission of Shri Jha, it is important to refer to Section 167 of the Cr.P.C. The relevant portion reads thus:- “Section 167 – Procedure when investigation cannot be completed in twenty-four hours. (2) The Magistrate to whom an accused person is forwarded under this section may, whether he has or has not jurisdiction to try the case, from time to time, authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers further detention unnecessary, he may order the accused to be forwarded to a Magistrate having such jurisdiction: Provided that-- (a) the Magistrate may authorise the detention of the accused person, otherwise than in custody of the police, beyond the period of fifteen days, if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorise the detention of the accused person in custody under this paragraph for a total period exceeding,-

(i) ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years;

(ii) sixty days, where the investigation relates to any other offence, and, on the expiry of the said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail, and every person released on bail under this sub-section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that Chapter;” (emphasis supplied)

21. Placing reliance on Section 409 of the IPC, Shri Jha submitted that the punishment prescribed thereunder is punishment with imprisonment for life or imprisonment which may extend to 10 years. It is the contention of Shri Jha that Section 409 which prescribes the punishment of imprisonment which may extend to 10 years will take away Section 409 from the sweep of Section 167(2)(a)(i) as such period of 90 days is applicable only if the imprisonment is for a term of not less than 10 years.

22. The Supreme Court in Rakesh Kumar Paul (supra) interpreted the provisions of Section 167(2)(a)(i) and (ii). The Supreme Court considered Section 167 from personal liberty perspective, then discussed as regards default bail as an indefeasible right while laying down the procedure for obtaining default bail coupled with the duty and responsibility of the Court on coming to know that the accused person before it is entitled to “default bail” to at least apprise him or her of the indefeasible right. Their Lordships observed that a contrary view would diminish the respect for personal liberty, on which so much emphasis has been laid by the Supreme Court. In the concurring opinion of the majority authored by His Lordship Deepak Gupta J. in paragraph No.84 it is observed thus:- “84. In view of the above discussion, my findings are as follows:

84.1. I agree with both my learned Brothers that the amendment made to the Prevention of Corruption Act, 1988 by the Lokpal and Lokayuktas Act, 2013 applies to all accused charged with the offences under this Act irrespective of the fact whether the action is initiated under the Lokpal and Lokayuktas Act, 2013, or any other law.

84.2. Section 167(2)(a)(i) of the Code is applicable only in cases where the accused is charged with (a) offences punishable with death and any lower sentence; (b) offences punishable with life imprisonment and any lower sentence; and (c) offences punishable with minimum sentence of 10 years.

84.3. In all cases where the minimum sentence is less than 10 years but the maximum sentence is not death or life imprisonment then Section 167(2)(a)(ii) will apply and the accused will be entitled to grant of "default bail" after 60 days in case charge-sheet is not filed.

84.4. The right to get this bail is an indefeasible right and this right must be exercised by the accused by offering to furnish bail.” (emphasis supplied)

23. It is thus held that Section 167(2)(a)(i) of the Cr.P.C. is applicable only in cases where the accused is charged with (a) offences punishable with death and any lower sentence; (b) offences punishable with life imprisonment and any lower sentence; and (c) offences punishable with minimum sentence of 10 years. The Supreme Court explained that in all cases where the minimum sentence is less than 10 years but the maximum sentence is not death or life imprisonment then Section 167(2)(a)(ii) will apply and the accused will be entitled to grant of “default bail” after 60 days in case the charge-sheet is not filed. I must bear in mind the principles laid down by the Supreme Court that the right to get bail is an indefeasible right and this right must be exercised by the accused by offering to furnish bail.

24. In the present case, if the interpretation of Section 409 of the IPC, as placed by Shri Jha is accepted, according to me, that would amount to reading the provisions of Section 409 in a piecemeal manner, completely ignoring that Section 409 provides for punishment of imprisonment for life as well. The submission of Shri Jha would have found favour with me in the absence of the words “with imprisonment for life” in Section 409 of the IPC; in such a situation, the accused would be governed by Section 167(2) (a)(ii) as held by the Supreme Court in paragraph No. 84.[3] of Rakesh Kumar Paul (supra). Section 409 of the IPC prescribes punishment of imprisonment for life or imprisonment which may extend to 10 years. The prescribed punishment which may extend to 10 years cannot be read independently and by excluding the punishment of imprisonment for life which is an integral part of Section 409. It is important to note that even Section 167(2)(a)(ii) provides that in all cases where the minimum sentence is less than 10 years but the maximum sentence is not death or life imprisonment then Section 167(2)(a)(ii) will apply... (emphasis mine)

25. There is no disputing the proposition laid down in the Rajiv Chaudhary (supra) relied upon by Shri Jha that the expression “not less than” would mean imprisonment should be 10 years or more and would cover only those offences for which punishment could be imprisonment for a clear period of 10 years or more. However, when a provision like Section 409 of the IPC also prescribes punishment with imprisonment for life, then to such an offence Section 167(2)(a)(i) is applicable and not Section 167(2)(a)(ii).

26. Shri Jha then relied upon the decision in Aslam Babalal Desai (supra), inviting my attention to paragraph No.15 to submit that even where two views are possible, in a matter belonging to the field of criminal justice involving the liberty of an individual, the provision must be construed strictly in favour of the individual liberty since even the law expects early completion of the investigation. It is observed that the delay in completion of the investigation can be on pain of the accused being released on bail. I am afraid that the decision in Asalm Babalal Desai (supra) is distinguishable in the context of Section 409 of the IPC as Section 167(2)(a)

(i) leaves no scope for ambiguity, the only view possible which is already discussed hereinbefore is the one in consonance with that what is laid down in Rakesh Kumar Paul (supra).

27. I, therefore, do not find any merit in the contentions of Shri Jha, consequently the applications are dismissed.

28. The applications are disposed of. All the interim applications, if any, stand disposed of. (M. S. KARNIK, J.) Designation: PA To Honourable Judge