Interests Of The Victims Of Scam Have Also To Be Factored In: SC Sets Aside Bail Granted To Co-Operative Society President Accused Of Misappropriating Funds

The Supreme Court set aside bail granted to a co-operative society president accused of misappropriation of funds.

The Court was dealing with a criminal appeal preferred against the judgment of the Bombay High Court by which the accused was released on bail.

The two-Judge Bench of Justice Hima Kohli and Justice Ahsanuddin Amanullah held, “His release on bail can seriously lead to dissipation of the properties where investments have allegedly been made out of Society funds. At the end of the day, the interests of the victims of the scam have also to be factored in.."

AOR Mrinal Gopal Elker represented the appellants while AOR Manoj K. Mishra represented the respondents.

Factual Background -

As per the prosecution case, one accused was the President of Jai Shriram Urban Credit Co-operative Society Limited and he, in connivance with the co-accused, misappropriated an amount of ₹79,54,26,963/-. Also, it was projected in the charge-sheet that statements of 798 depositors further revealed that their deposits aggregating ₹29,06,18,748/- were not returned and the amount was misappropriated. The appellants were some of the depositors, who purportedly fell victim to the Society and the financial irregularities were categorized by the prosecution under 23 different heads. It was the further case of the prosecution that the respondent was a co-conspirator and a close friend of the alleged mastermind. The respondent deposited an amount of ₹2,38,39,071/- with the Society in his name and in the names of his family members. He was paid an amount of ₹9,69,28,500/- which was withdrawn from the Society and paid to him as financial assistance, upon the directions of the alleged mastermind.

It was further alleged that the respondent purchased five immovable properties for approximately Rs. 10 crores in the name of the said mastermind. During investigation, he was arrested and the High Court released him on bail noting that the material on record is not sufficient to establish his complicity. The bail was granted in connection with the offences punishable under Sections 409, 420, 467, 468, 471, and 120-B of the Indian Penal Code (IPC) and Section 3 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (MPID Act). Therefore, the appellants were before the Supreme Court.

The Apex Court in the above context of the case observed, “The High Court, we have no hesitation in saying so, erred in law. Ergo, for reasons recorded above and upon circumspect consideration of the attendant facts and circumstances, we hold that the discretion exercised by the learned Single Judge of the High Court to grant bail to the respondent no.1 was not in tune with the principles that conventionally govern exercise of such power, a plurality of which stand enunciated in the case-law supra.”

The Court further said that though respondent had already suffered incarceration for a period of about six months at the time when bail was granted, yet in view of the nature of the alleged offence, his release on bail can seriously lead to dissipation of the properties where investments have allegedly been made out of Society funds.

The Court, therefore, directed the Trial Court to proceed uninfluenced and in accordance with law and granted liberty to the respondent to apply for bail at a later period or in the event of a change in circumstances.

“Respondent No.1 is directed to surrender within a period of three weeks from today, failing which the trial Court shall proceed in accordance with law. … Needless to state, such application, if and when preferred, shall be considered on its own merits, without being prejudiced by the instant judgment. The authorities concerned are directed to render appropriate care and assistance as regards the medical condition of the respondent no.1”, it also ordered.

Accordingly, the Supreme Court allowed the appeal and set aside the impugned order.

Cause Title- Manik Madhukar Sarve & Ors. v. Vitthal Damuji Meher & Ors. (Neutral Citation: 2024 INSC 636)

Appearance:

Appellants: AOR Mrinal Gopal Elker and Advocate Shruti Verma.

Respondents: AORs Manoj K. Mishra, Aaditya Aniruddha Pande, Advocates Umesh Dubey, Jeevesh Prakash, Vishal, Madhulika, Amulya Dev, Samrat Krishanrao Shinde, Siddharth Dharmadhikari, Bharat Bagla, Sourav Singh, Aditya Krishna, Preet S. Phanse, and Adarsh Dubey.

Click here to read/download the Judgment