Court’s Decision:
The Bombay High Court granted anticipatory bail to the applicant, apprehending arrest in connection with alleged offenses under Sections 406, 409, and 420 of the Indian Penal Code and Sections 3, 4, and 13 of the Maharashtra Ownership of Flats Act (MOFA). The applicant is released on bail upon a bond of ₹50,000 with specific conditions, including cooperation with the investigation and non-interference with prosecution witnesses.
Facts:
The case arose from an FIR filed by an informant who alleged that the applicant, a partner in a real estate firm, failed to deliver a booked flat as per the agreed schedule, despite having accepted substantial payment. The informant claimed this failure amounted to fraud and misrepresentation.
Issues:
The primary issue was whether the applicant’s conduct, resulting from project delays and financial hardships, could substantiate criminal charges of dishonesty and fraud.
Petitioner’s Arguments:
The applicant’s counsel argued that several uncontrollable factors delayed the project. These included the COVID-19 pandemic’s impact on the construction industry and a financial loss from an alleged bank fraud where ₹6.5 crores were siphoned from the firm’s account by a bank employee. The counsel contended that these factors were outside the applicant’s control and argued that there was no dishonest intent from the outset.
Respondent’s Arguments:
The state’s counsel countered that the elements of the alleged offenses were clear. They argued that despite the applicant’s claims, the informant was intentionally misled into paying substantial amounts without any intent of fulfilling the contract as promised.
Analysis of the Law:
The court considered the applicability of Sections 406, 409, and 420 IPC, which deal with criminal breach of trust, criminal misappropriation, and cheating, respectively. Additionally, the court examined provisions under the MOFA that relate to real estate transactions and protections for flat purchasers.
Precedent Analysis:
The court referred to past judgments addressing anticipatory bail applications where financial distress and project delays were considered mitigating factors, provided there was no prima facie evidence of dishonest intent from the inception.
Court’s Reasoning:
The court noted that, while delays occurred, they were due to exceptional circumstances such as the pandemic and financial setbacks rather than any initial intent to deceive. It highlighted that external factors affecting the applicant’s firm, including the siphoning of funds and NCLT proceedings, contributed to the project’s delay.
Conclusion:
The court allowed the bail application, emphasizing that the evidence on record did not support a prima facie case of fraudulent intent. It found sufficient mitigating factors, including documented financial hardships, that undermined the allegations of deception.
Implications:
This decision underscores the court’s recognition of unforeseeable challenges, such as the COVID-19 pandemic and significant financial setbacks, in evaluating anticipatory bail applications. It also highlights the importance of distinguishing between criminal intent and operational challenges in real estate cases.
