Supreme Court

Shocking State Of Affairs That Bail Is Denied In Magistrate Triable Case: Apex Court Directs Trial Court To Grant Bail In Cheating Case

Aastha Kaushik

28 May 2024 12:30 PM GMT

The Supreme Court, yesterday, expressed shock that in a case involving only offences trialable by a Magistrate, bail had not been granted and the accused had to approach the Supreme Court seeking bail.

The Court directed the trial court to grant bail to one Krishna Damani who was arrested for alleged defalcation of Rs. 30 Crores from a school, siphoned off and misappropriated by channelizing the funds to entities controlled primarily by his family members. The Special Leave Petition was filed challenging the order passed by the Calcutta High Court refusing bail to Damani.

Senior Advocates Dr Abhishek Manu Singhvi, Mukul Rohatgi and Mahesh Jethmalani appeared for Damani and Senior Advocates Siddharth Agarwal and Menaka Guruswamy appeared for respondents.

The Bench of Justice Abhay S Oka and Justice Satish Chandra Sharma told the Counsel for the State, "We perused the Counter. The Counter says that the chargesheet has been filed. Only a report is to be received...this is a magistrate-triable case. So he will continue in jail for ten years. In Magistrate triable cases people are not getting bail, it is a very sad state of affairs, as if these are some offences against the nation. How can the person be denied bail? All stringent conditions can be put by the learned Magistrate while granting bail. This is a shocking state of affairs now. Isn't it shocking such matters come to the Supreme Court?... These are 406, 403, 408...matters, what is there to continue the person's custody?"

The Bench then ordered, "A perusal of the counter affidavit filed by the respondent-State shows that investigation has been complete and a charge-sheet has been filed on 1st April, 2024 for the offences punishable under Sections 120B, 406, 403, 408, 409, 420 and 477A of the Indian Penal Code, 1860 (for short, “the IPC”). It is also mentioned that a supplementary charge-sheet will be filed as soon as a report of the experts of QDEB is received. It is stated that the supplementary charge-sheet will be on applicability of Section 467 of the IPC. It is not in dispute that all the aforesaid offences are triable by the Court of the Magistrate. After the charge-sheet is filed, considering the nature of the offences, there is no reason to deny bail to the appellant. If there is any apprehension that the appellant may try to influence the prosecution witnesses, appropriate conditions can be always imposed while releasing the appellant on bail."

On May 3, 2024, the Calcutta High Court had denied bail to Damani. The High Court had observed, "Upon hearing learned counsel, what is evident is that the chance of the present complaint being a backlash of a civil dispute of commercial nature cannot be ruled out altogether. In the complaint, which was the basis of the FIR, the complainant admits that he is a close acquaintance of Mr. H.V. Lodha, one of the trustees of the Society running the School and that sometime back Mr. Lodha had reported that the assets, properties and funds of the society are being consistently siphoned off / dishonestly misused by a section of the trustees, including the present accused, in a conspiracy. The complaint contains several allegations of a civil nature, clearly evidencing the enmity and animosity between the said H.V. Lodha, who has been alleged to have been sidelined and controls of the schools and the funds taken over by the accused persons, who have allegedly misappropriated the funds of the school blatantly and in a criminal manner."

Damani is a trustee of the Society which runs the school, a member of the Governing Council and a member of the Managing Committee of the School, which is an eminent educational institution in the city of Kolkata. The allegations against him pertain to the petitioner's alleged defalcation of funds by the concerned school, siphoning off the said funds and misappropriating the same by channelizing the said funds to entities controlled primarily by his family members. The approximate quantum of funds alleged to have been defalcated is to the tune of Rs. 30 Cr.

It was alleged that the complaint which led to the arrest of Damani and the filing of the FIR is the outcome of malice on the part of the de facto complainant, who is an agent of one H.V. Lodha. It was also alleged that there has been prolonged litigation between H.V. Lodha on the one hand and the Birla Group on the other, to the latter of which Damani belongs.

The High Court had held, "Since there is an alleged money trail, the enormity of which is yet to be discovered in its entirety, the petitioner, if enlarged on bail, may very well efface such money trail before the investigating agencies even get a clue of the same. In the modern days of online transactions, it would be a matter of minutes for a free person to obliterate such money trails and take appropriate action to smudge the links between the accounts where the money is parked and the original source of the funds."

Cause Title: Krishna Damani v. State of West Bengal (Special Leave to Appeal (Crl.) No(s). 6954/2024)

Appearances:

Petitioner: Senior Advocates Dr Abhishek Manu Singhvi, Mukul Rohatgi, Mahesh Jethmalani with AOR Ashish Choudhury and Advocates Sameer Rohatgi, Gunjan Mangla, Pritha Basu, Akash Agarwal and Debartha Chakravorty.

Respondent: Senior Advocates Siddharth Agarwal and Menaka Guruswamy with AORs Kunal Mimani, Astha Sharma and Advocates Arshdeep Singh, Ankur Chawla, Kunal Vajani, Sanjiv Kumar Trivedi, Somopriyo Chowdhury, Rohit Bharadwaj, Kartikey Bhatt, Shubhang Tandon, Mahima Cholera, Shraddha Chirania, Srisatya Mohanty, Sanjeev Kaushik, Utkarsh Pratap, Lavkesh Bhambhani, Suvangana Agarwal and Bhanu Mishra.

Click here to read/download the order

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