Court’s Decision
The Delhi High Court granted anticipatory bail to the applicant accused of facilitating a ₹1.25 crore fraudulent investment deal, observing that custodial interrogation was unnecessary as the evidence was primarily documentary and the applicant had joined the investigation multiple times. The Court relied on the principles laid down in Siddharam Satlingappa Mhetre v. State of Maharashtra (2011) 1 SCC 694, emphasizing that arrest should not be used as a tool of harassment when the accused’s role is disputed and speculative.
Facts
The complainant, a property dealer in Delhi, alleged that in May 2018 he was approached by the applicant and a co-accused, who claimed to run a UAE-based business through M/s AL Manakh Managements Consultancy, engaged in South Indian film distribution. They allegedly induced him to invest ₹1.25 crore on the promise of high returns and a transfer of 10% company shares. Over a year, the complainant paid the amount in cash and through bank transfers. No shares were transferred, and a post-dated cheque issued by the co-accused bounced. The complainant alleged the applicant gave a written undertaking to repay in case of default, but the applicant denied any such agreement or financial involvement.
Issues
- Whether the applicant’s role in facilitating the alleged fraudulent transaction justified custodial interrogation.
- Whether anticipatory bail could be granted considering the nature of allegations and the stage of investigation.
Petitioner’s Arguments
The applicant contended that:
- He had no financial dealings with the complainant and no money was transferred to him.
- He neither issued nor signed any cheque, and had no role in the UAE-based company.
- The dispute was civil in nature, suitable for proceedings under Section 138 of the Negotiable Instruments Act, not a criminal case under Sections 420/120B IPC.
- No written agreement existed between him and the complainant, and the allegations were speculative.
- The investigation had been pending since 2021, and he had appeared whenever summoned.
- The office where the transaction allegedly took place did not belong to him.
Respondent’s Arguments
The State argued that:
- The applicant had known the co-accused for 15 years and executed a written undertaking to repay in case of default.
- He acted as a dealer, facilitated the transaction on commission, and was aware of its details.
- One cheque bore his handwriting, which the co-accused claimed was a stolen cheque.
- Payments were made at an office allegedly belonging to the applicant.
- The applicant was evasive during investigation, denying his signatures on key documents.
Analysis of the Law
The Court considered the anticipatory bail principles from Siddharam Satlingappa Mhetre, noting factors such as:
- Nature and gravity of the accusation.
- Exact role of the accused.
- Risk of arrest being used to humiliate.
- Whether allegations appear exaggerated or motivated.
It held that the applicant’s alleged involvement was limited to introducing the parties and a disputed written undertaking, the genuineness of which would be tested at trial.
Precedent Analysis
Siddharam Satlingappa Mhetre v. State of Maharashtra — Laid down that arrest should not be mechanical and that bail should ordinarily be granted where the role is disputed, custodial interrogation is unnecessary, and documentary evidence is predominant.
Court’s Reasoning
- The role attributed to the applicant was introducing the complainant to the co-accused and allegedly executing a repayment undertaking, which he denied.
- The key evidence was documentary, and its authenticity would be determined during trial.
- The applicant had cooperated in the investigation, had not absconded, and there was no evidence of tampering.
- The case had been under investigation for over five years without any urgent need for custody.
Conclusion
The Court granted anticipatory bail with conditions:
- Furnish a personal bond of ₹50,000 with one surety.
- Cooperate with the investigation.
- Not threaten or influence witnesses.
- Keep mobile number operational and inform authorities of any change in address or number.
Implications
This ruling underscores that in economic offences involving disputed documentation, courts may lean towards granting anticipatory bail if custodial interrogation is unwarranted and the accused has cooperated with the investigation. It also reinforces that the civil-criminal divide must be assessed carefully, especially in investment disputes.
Case Referred
- Siddharam Satlingappa Mhetre v. State of Maharashtra (2011) 1 SCC 694 — Set anticipatory bail parameters emphasizing individual liberty and limiting unnecessary arrests.
FAQs
1. Can anticipatory bail be granted in high-value fraud cases?
Yes, if custodial interrogation is unnecessary, evidence is documentary, and the accused has cooperated, as in this case.
2. What role did the disputed written undertaking play in the Court’s decision?
Its authenticity was questioned by the applicant; the Court held it should be tested at trial, not at the bail stage.
3. How does the Siddharam Satlingappa Mhetre precedent apply here?
It guides that bail should be granted where the accused’s role is unclear, the case is old, and arrest could cause undue harassment.