Bezavada Vera Venkata Babu Rao v. The State Of A.P

THE HON'BLE SRI JUSTICE M.SATYANARAYANA MURTHY CRIMINAL PETITION NO.3148 OF 2017 ORDER:

This petition is filed under Sections 437 and 439 of Criminal Procedure Code (for short "Cr.P.C.") by petitioners/accused Nos.18 and 19 in Crime No.378 of 2014 of III Town Police Station, Nellore District, registered for the offences punishable under Sections 120-B, 406 and 420 of Indian Penal Code (for short "I.P.C.") and under Section 5 of APPDEF Act, 1999, to enlarge them on bail in connection with the above crime as they is in judicial custody since 19.03.2017.

It is a case of serious fraud against the society at large involving above Rs.6,000 crores and on account of default committed by Agri Gold and its sister concerns in repayment of investment made by various investors, they committed suicide on account of colossal financial loss they sustained by investing amount into the Agri Gold and its group of companies. It is the contention of the petitioners that they were not arrayed as accused in the complaint lodged by the defacto complainant dated 24.12.2014, but the III Town Police of Nellore are more cleverly mentioned at column 7 and sub-column under the head serial it was noted as 1, and the column of Name of accused it was mentioned as Management of Agri Gold Farm, its agents, other connected persons and registered the crime and issue F.I.R. for the offences punishable under Section 120-B, 406 and 420 of I.P.C. and under Section 5 of APPDEF Act, 1999. But the petitioners were arrayed as accused Nos.18 and 19 in the remand report basing on the confessional statement of the accused

during their illegal police custody, therefore, they are not concerned with any of the offences, but they were remanded to judicial custody on 19.03.2017.

It is the contention of the petitioners that the complaint was lodged by one of the depositors stating that he has deposited Rs.25,000/- in the name of his daughter Velpula Jhansi Lakshmi at Nellore Agrigold branch office and they told that they would get a plot registered in the name of depositor, or they would pay cash of Rs.50,000/- if they wouldn't get plot, and he further averred that believing the representation he has paid total of Rs.4,05,000/- including on his name and his father Venkata Krishnaiah's name in 8 installments, but the accused company failed to pay the amount as promised. Later, they came to know that these petitioners along with others committed fraud. The petitioner No.

1 after completion of education being unemployed, and belongs to poor family joined in the Agri Gold Farms Limited in the year 1995-96 as Liaison Officer on monthly salary of Rs.3,000/- per month and the employment would be renewed every year depending upon his performance, and he worked as Liaison Officer till 01.01.2011. From 01.01.2011 he was working as Managing Director in Nagavalli Planters Pvt. Ltd, which is the sister concern of the Agri Gold Group on a compensation package per year at Rs.8,40,000/-.

No.1 submitted that as per the office order dated 15.11.2010 he was allotted with plantation at Macherla and Narasarao Peta of Guntur District for marketing the company products, due to his skills by another office order dated 17.09.2011 he was allotted Macherla and Narasarao peta, Chilakaluri Peta and Guntur II of Guntur District. Therefore, the petitioner No.1 is no way concerned with the offence allegedly occurred at Nellore, which is beyond the territorial limits of the area entrusted to him. Petitioner No.2 after his education being unemployed and belongs to poor family joined in the Agri Gold Farms Limited in the year 1996-97 as Liaison Officer on monthly salary of Rs.3,000/- per month and the employment would be renewed every year depending upon his performance, and he worked as Liaison Officer till 01.01.2011.

He worked as Marketing Director from 01.01.2011 for the company under the name and style as "Haritha Mohana Agro Projects Private Limited" which is the sister-concern of the Agri Gold Group, on a salary per year at Rs.9,00,000/-, which is termed as compensation package in the renewal agreement dated 01.01.2011. He was nominated for a particular work as assigned by the management for marketing the company product, as such in the company also he has no authoritative position in decision making and look after or carrying financial transaction of the company in particular with other companies at any point of time and as per office order dated 15.11.2010 he was allotted with marketing the milk and its products of the company at Gandhi Nagar of Vijayawada and Nuziveedu of Krishna District.

to him. Hence, both the petitioners were falsely implicated in the above crime, that apart entire investigation is completed, thereby the question of continuing in judicial custody amounts to violation of fundamental right of liberty guaranteed under Article 21 of Constitution of India and prayed to enlarge the petitioners on bail. The prime contention of the learned counsel for the petitioners Sri P.S.Nagarajan is that when the complaint was lodged against the petitioners, they are working in different companies in different fields, hence they cannot be made criminally liable for any of the offences committed by the main company i.e. Agri Gold Farm Limited and that a part no complaint was lodged against these petitioners and the present complaint was lodged at Nellore, whereas petitioner No.1 is working at Guntur and petitioner No.

2 is working at Nuziveedu and Vijayawada of Krishna District dealing with the products of Nagavalli Planters Pvt. Ltd. and Haritha Mohana Agro Projects Private Limited, therefore, the petitioners cannot be detained in jail as Pre-trail detenue as it amounts to infringement of fundamental right of liberty guaranteed under constitution and thereby they are not liable for the offences referred above and prayed to enlarge them on bail.

Learned Public Prosecutor for the State of Andhra Pradesh opposed the bail application on the ground that the petitioners are working in subsidiary or sister companies of Agri Gold Farms Limited and they collected amounts and committed default in repayment of the amount to the pubic at large, the amount collected from the public is invested in subsidiary companies like "Nagavalli Planters Pvt. Ltd." and "Haritha Mohana Agro Projects

Private Limited". Therefore, the basis for the business being carried on by those two companies is the amount collected from the various investors of Agri Gold main company. Therefore, the petitioners cannot be enlarged on bail, that apart the material produced by the petitioners itself suffice to conclude that the petitioners are working in subsidiary companies, which are under the control of Agri Gold Farm Limited and the investigation in this case is not completed as several arrests were affected even after filing this petition. Therefore, at this stage, it is difficult to enlarge the petitioners on bail.

The first and foremost contention raised by the learned counsel for the petitioners Sri P.S.Nagarajan is that no complaint was lodged against these petitioners by the defacto complainant regarding collection of any amount from him and that too these petitioners are working at different places and not even in Nellore District limits. Therefore, they cannot be saddled with any criminal liability. He has drawn the attention of this Court to the allegation made in the complaint dated 24.12.2014 and on the strength of the same police registered the above crime for various offences referred supra.

Undoubtedly, in the allegations made in the complaint there was reference about collection of amount by Agri Gold personnel from the defacto complainant and as seen from the allegations, the Agri Gold representatives collected Rs.25,000/- in the name of daughter of complainant and promising to allot plot or to pay Rs.50,000/- after 6 1⁄2 years if the depositors are not inclined to take plot and thereafter failed to pay the amount or allot any plot as agreed, therefore defacto complainant lodged complaint alleging

that the Agri Gold and its representatives and cheated defacto complainant by making false representation to part with huge amount, thereby committed various offences under various provisions of I.P.C. and APPDFEA Act.

There was no specific reference about the collection of amount by these petitioners in the complaint, but the complaint is only an intimation to the police about the occurrence of noncognizable offence to set the criminal law into motion, the complaint need not contain the minute particulars since it is not encyclopaedia of facts, therefore, failure to refer the names of the petitioners in the complaint is not a ground to enlarge the petitioners on bail in view of serious financial irregularity committed by Agri Gold and it is subsidiaries to a tune of more than Rs.6,000 crores. Therefore, on the ground that there was no reference about the names of these petitioners in the complaint and F.I.R. it is difficult for me to enlarge the petitioners on bail. Second ground urged before this Court is that the petitioner No.

1 is working in Guntur area for Plantation and for marketing the company product and whereas the petitioner No.2 is working within the territorial limits entrusted to him i.e. Vijayawada and Nuziveedu for sale of milk products of "Haritha Mohana Agro Projects Private Limited" and produced certain documents in support of their contentions. As seen from the agreement renewed by the Directors of the Company of "Nagavalli Planters Pvt. Limited" and "Haritha Mohana Agro Projects Private Limited" these two petitioners were employed by "Nagavali Planters Pvt. Ltd." and "Haritha Mohana Agro Projects Pvt. Limited". The petitioner No.1 was appointed as "Whole Time Director" on salary of Rs.

and the petitioner No.2 was appointed as "Whole Time Director" on salary of Rs.9,00,000/-. So, the petitioners are employed by the company with exclusive responsibility as Whole Time Directors and their services can also be utilised by Agri Gold Group of companies as and when required by deputation or transfer or otherwise annexing the responsibilities in annexure - A to the agreement, but the said annexure was conveniently not placed on record by the petitioner No.1 to find out what was his responsibility. But the petitioner No.2 filed copy of agreement specifying his responsibilities.

As seen from the responsibilities of Whole Time Directors of the above said two companies, which are part of Agri Gold Farms Limited, it is clear that these companies are subsidiaries of Agri Gold Farms Limited, and the petitioners are the alleged directors of subsidiaries of Agri Gold Farms Limited. It is the case of the prosecution from the beginning that with the amounts collected by Agri Gold Farms Limited, these two companies have been carried on business by appointing the present petitioners as Whole Time Directors of those companies. Therefore, the petitioners being the Directors of subsidiary companies of Agri Gold Farms Limited are equally responsible for the offences along with the Directors of the Company prima facie.

However, at this stage it is difficult for me to conclude that these petitioners did commit no offence in view of the material available on record more particularly documents produced by the petitioners before this Court.

Limited from various depositors these two companies i.e. "Nagavali Planters Pvt. Ltd" and "Harita Mohana Agro Projects Pvt. Ltd." were established and being run. Therefore, on the ground that the petitioners are working in different areas on the date of incident, they cannot be enlarged on bail.

The material produced by the petitioners would show that the petitioner No.1 was appointed as Liaison Officer in Agri Gold Farms Limited on monthly remuneration of Rs.3,000/- initially and later he was placed as office in-charge and from time to time his salary was increased, but it is contended that his duty is only to keep the premises clean etc, but at this stage it is difficult for me to accept this contention since he was appointed as Whole Time Director of the company as per the material produced. Therefore, I find no substance in the contention of the learned counsel for the petitioner to enlarge the petitioner on bail on the ground that they were entrusted with different areas to operate the business.

It is also contended by the learned counsel for the petitioners is that the investigation is not on correct lines and the petitioners were unnecessarily implicated in the above crime, merely because the investigation is not on correct lines, the petitioners cannot be enlarged on bail at this stage. Moreover, it is pre-mature stage to come to the conclusion that the investigation is not on correct lines; such conclusion can be arrived at only after completion of full-fledged trial by competent Court. Hence, the petitioners cannot be enlarged on bail at this stage on this ground. It is also contended that the crime was registered on 24.12.2014, but the investigation has to be completed within 90

days, till today investigation is not completed. Therefore, the petitioners are entitled to claim bail.

Learned counsel for the petitioners while contending that the offences even if proved the petitioners are liable for punishment for a period of 10 years, in such case petitioners are entitled to be enlarged on bail and placed reliance on a judgment of this Court in "Thangavel Ravi v. State of A.P.1", wherein this Court while deciding a bail application filed by accused in Red Sanders case under Sections 437, 439 and 167 (2) of Cr.P.C. held that "under Section 20 (1) (d) (i) in every case where any of the acts stated in the section relates to Red Sanders wood or sandal wood or any scheduled tree shall upon conviction, be punishable with imprisonment for a term which may extend to 10 years and fine which may extend to 10 lakh rupees.

Therefore, the imprisonment that can be imposed is only extendable up to 10 years and not minimum of 10 years or more and by relying on a decision of Apex Court rendered in "Rajeev Chaudhary v. State (N.C.T.) (2001 (2) ALT (Crl.) 113 (SC) concluded that when the offence is punishable with imprisonment for a term "not less than 10 years", the Magistrate is empowered to authorise the detention of the accused in custody for not more than 90 days. Taking advantage of the principle laid down in the above judgment, it is contended that the Magistrate is competent to extend remand for 90 days, thereafter the Magistrate is competent to extend remand for 90 days, thereafter the Magistrate has no power to extend judicial remand. Thereby the petitioners are entitled for bail. 1 2017 (1) ALD (Crl.)

As seen from the material on record, the petitioners are in judicial custody since 19.03.2017 and the Magistrate is competent to extend the remand for a period of 90 days, which would expire approximately by 19.06.2017, as on today 90 days is not over. On the other hand, it is a ground for filing application under Section 167 (2) of Cr.P.C. for grant of statutory bail. But for grant of bail under Sections 437 and 439 of Cr.P.C. no such ground is available. If really, the petitioners are entitled to claim bail under Section 167 (2) of Cr.P.C., they are at liberty to move appropriate Court for grant of statutory bail. But this is not appropriate forum to grant bail under Section 167 (2) of Cr.P.C. That apart period of 90 days has not been expired from the date of arrest.

Therefore, the principle laid down in the above judgment has no application to the present facts of the case and mere alleged failure of investigating agency to investigate the crime on correct lines and extending remand of the petitioners for more than 15 days is no more a ground to the petitioners. Therefore, the petitioners are not entitled to claim bail.

The other contention raised by the learned counsel for the petitioners is that entire investigation is completed and drawn the attention of this Court to the remand report. Remand Case Diary would show that the petitioners were arrested and part of investigation is completed.

However, District Judge in Crl.M.P.No.705 of 2016 by Order dated 28.07.2016 denied grant of bail observing that the investigation is not completed. As seen from the paragraph No.15 of copy of the remand report produced before this Court the investigation is not completed. Notice under Section 41-A of Cr.P.C. was issued and on

interrogation, on their appearance in pursuance of the notice issued under Section 41-A of Cr.P.C. these petitioners were arrested and remanded to judicial custody. The confession made before the police is not admissible in evidence. However, it is premature stage to arrive at such conclusion in the present petition. In any view of the matter, investigation is not completed even according to the material produced before this Court by the petitioners. In such case, it is difficult for me to enlarge the petitioners on bail.

Learned counsel for the petitioner drawn the attention of this Court to "Sanjay Chandra v. Central Bureau of Investigation2" to contend that gravity alone cannot be a ground deny the bail when the investigation is completed and prayed to enlarge the petitioners on bail. In "Sanjay Chandra v. Central Bureau of Investigation" (referred supra) the Apex Court while dealing with application for grant of bail in 2G spectrum case observed that "magnitude of economic offence is one of the considerations though the offences, if proved, may jeopardise the economy of the country and at the same time, court cannot lose sight of the fact that the investigating agency has already completed investigation and the charge sheet is already filed before the Special Judge, CBI".

Taking advantage of the principle laid down in the above judgment it is contended that these petitioners are entitled for bail. But in the present case, the investigation is not completed, hence the principle laid down in "Sanjay Chandra v. Central Bureau of Investigation" (referred supra) has no application to the present facts of the case.

2 (2012) 1 SCC 40

Learned counsel for the petitioners contended that on account of pre-trial detention of the petitioners, their right of liberty guaranteed under Article 21 of the Constitution of India is infringed and drawn the attention of this Court to a judgment rendered by the Division Bench of this Court in "National Investigation Agency, Hyderabad v.

Mohammed Anwar Shah3", wherein it was held as follows:

"23. Article 21 of the Constitution guarantees life with dignity.

Undoubtedly, national security is of paramount importance. Without protecting the safety and security of the nation, individual rights cannot be protected. Both national interest and individual dignity are core values of the Constitution. It is, therefore, obligatory on the part of the Court to exercise its judicial discretion guided by law. But not merely on assumptions and presumptions, much less on apprehensions, without sufficient material to constitute an offence charged. It is necessary for the Court dealing with an application for bail to consider the following circumstances among others before, granting bail.

1. The nature of accusation and severity of punishment in case of conviction and the nature of supporting evidence.

2. Reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant.

3. Prima facie satisfaction of the Court in support of the charges." No doubt, there is long line of prospective pronouncements of Apex Court regarding principles for grant of bail and a person can be deprived of his right of liberty guaranteed under Article 21 of Constitution of India, in accordance with the procedure established by law (Vide:

Ashrafkhan @ Babu Munnekhan Pathan v. State of Gujarat4) 3 2013 (1) ALD (Crl.) 821 (AP) 4 AIR 2013 SC 217

In "Lokesh Singh v. State of U.P.5" the Apex Court held as follows:

While dealing with an application for bail, there is a need to indicate in the order, reasons for prima facie concluding why bail was being granted particularly where an accused was charged of having committed a serious offence. It is necessary for the Courts dealing with application for bail to consider among other circumstances, the following factors also before granting bail, they are :

1. The nature of accusation and the severity of punishment in case of conviction and the nature of supporting evidence;

2. Reasonable apprehension of tampering with the witness or apprehension of threat to the complainant;

3. Prima facie satisfaction of the Court in support of the charge.

Though a conclusive finding in regard to the points urged by the parties is not expected of the Court considering the bail application, yet giving reasons is different from discussing merits or demerits. As noted above, at the stage of granting bail a detailed examination of evidence and elaborate documentation of the merits of the case has not to be undertaken. But that does not mean that while granting bail some reasons for prima facie concluding why bail was being granted is not required to be indicated.

In "State through C.B.I. v. Amarmani Tripathi6" the Apex Court held as follows:

"It is well settled that the matters to be considered in an application for bail are (i) whether there is any prima facie or reasonable ground to believe that the accused had committed the offence; (ii) nature and gravity of the charge; (iii) severity of the punishment in the event of conviction; (iv) danger of accused absconding or fleeing, if released on bail; (v) character, behavior, means, position and standing of the accused; (vi) likelihood of the offence being repeated; (vii) reasonable apprehension of the witnesses being tampered with; and (viii) danger, of course of 5 AIR 2009 SC 94 6 AIR 2005 SC 3490

justice being thwarted by grant of bail. While a vague allegation that accused may tamper with the evidence or witnesses may not be a ground to refuse bail, if the accused is of such character that his mere presence at large would intimidate the witnesses or if there is material to show that he will use his liberty to subvert justice or tamper with the evidence, then bail will be refused." In view of the law declared by the Apex Court referred supra as the investigation is in the mid-way it is difficult for me to enlarge the petitioners on bail at this stage. Learned counsel for the petitioners contended that the wife of the petitioner No.1 was expired on 06.02.2017 and produced death certificate to establish that he lost his wife. Death took place about two months ago, hence at this stage the presence of the petitioner No.1 is not a eminent necessity, hence on that ground the petitioner cannot be enlarged on bail.

It is clear from the material on record, these petitioners being the directors of the subsidiaries of Agri Gold Farms Limited, are also equally responsible as the amount collected from the depositors is invested in the of various subsidiary companies and it depends upon the role played by each director in the day to day affairs of the business. If the copy of responsibilities to be performed by the directors annexed to the agreement is taken into consideration, the petitioners are actively looking after the day to day affairs of the company. Therefore, they are prima facie liable along with other directors of the company subject to proof. Hence, I find prima facie material to conclude that these petitioners are also privies to the fraud prima facie and the impact of the offence is serious in nature and on account of fraud involving more than Rs.6,000 crores, several deaths of depositors occurred by committing suicide or otherwise. In such case, the petitioners do

not deserve any sympathy. Hence, I find no ground to enlarge the petitioners on bail. Consequently, the petition is liable to be dismissed.

In the result, the petition is dismissed.

The miscellaneous petitions pending, if any, shall also stand closed.

_________________________________________ JUSTICE M. SATYANARAYANA MURTHY 11.05.2017 Ksp