Bail Proceedings Cannot Be Turned Into Recovery Proceedings: Himachal Pradesh High Court

The Himachal Pradesh High Court reiterated that bail proceedings cannot be turned into recovery proceedings.

In a gold investment scheme fraud case, the High Court granted bail to two accused citing insufficient evidence to substantiate a prima facie case of inducement or entrustment.

Referring to the decision in Ramesh Kumar vs. State NCT of Delhi [(2023) 7 SCC 461], the Bench of Justice Rakesh Kainthla observed, “the bail proceedings cannot be used to recover the amount advanced by the informant to Geeta[accused]". 

Advocate Vinod Chauhan appeared for the Petitioner and Deputy Advocate General RP Singh appeared for the State.

The Petitioners were accused of duping the informant, Anil Sharma, into investing ₹50.00 lacs in their gold investment scheme. The informant had initially lent money to Geeta on various pretexts, but she later convinced him to invest in gold, promising high returns. However, the investment turned out to be a fraud, and the informant was unable to recover his money. The Petitioners approached the High Court seeking bail, claiming innocence and false implication.

The Bench noted that the informant's version of events is inconsistent, as he initially claimed he gave the money as help but later asserted it was an investment in gold. If the money was given as help and is not being returned, it is a civil matter, not a criminal one under Section 406 of the Indian Penal Code, 1860 (IPC), the Court added.

“It is not the case of the informant that Geeta had made any representation to him on which he paid the money to her. He himself stated that the house of Geeta had collapsed in a landslide and he provided the money as help”, the Bench added.

Additionally, the Court noted the contention raised by the informant and the State that recovery of the money has not been effected from the petitioners and the petitioners are not entitled to the concession of bail.

"This shows that the whole emphasis of the informant and the State is to recover money during the bail proceedings. It was laid down by the Hon’ble Supreme Court in Ramesh Kumar vs. State NCT of Delhi (2023) 7 SCC 461 that the bail proceedings cannot be turned into recovery proceedings", the court said.

Accordingly, the Court allowed the Application. 

Cause Title: Geeta Kashyap v State Of Himachal Pradesh

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