Prabhakar Vishwanath Joshi v. The State Of Maharashtra And ORS
Amberkar IN IN THE THE HIGH HIGH COURT COURT OF OF JUDICATURE JUDICATURE AT AT BOMBAY BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPELLATE JURISDICTION CRIMINAL BAIL APPLICATION NO. 3678 OF 2024 Ketan Babulal Patel .. Applicant
Versus
State of Maharashtra and Anr.
.. Respondent WITH INTERIM APPLICATION NO. 1127 OF 2025 IN CRIMINAL BAIL APPLICATION NO. 3678 OF 2024 Prabhuram Giri .. Intervenor
IN THE MATTER BETWEEN:
Ketan Babulal Patel .. Applicant
Versus
State of Maharashtra and Anr.
.. Respondent WITH INTERIM APPLICATION NO. 4894 OF 2024 IN CRIMINAL BAIL APPLICATION NO. 3678 OF 2024 Prabhakar Vishwanath Joshi .. Intervenor
IN THE MATTER BETWEEN:
Ketan Babulal Patel .. Applicant
Versus
State of Maharashtra and Anr.
.. Respondent WITH INTERIM APPLICATION NO. 5155 OF 2024 IN CRIMINAL BAIL APPLICATION NO.3678 OF 2024 Neerkarrm Infrastructure Private Limited Through Mr. Neeraj Srivastava .. Intervenor
IN THE MATTER BETWEEN:
Ketan Babulal Patel .. Applicant
Versus
State of Maharashtra and Anr.
.. Respondent
WITH CRIMINAL BAIL APPLICATION NO. 4576 OF 2024 Satish Gangadharrao Pillangwad .. Applicant
Versus
The State of Maharashtra .. Respondent WITH INTERIM APPLICATION NO. 821 OF 2025 IN CRIMINAL BAIL APPLICATION NO. 4576 OF 2024 Prabhuram Giri .. Intervenor
IN THE MATTER BETWEEN:
Satish Gangadharrao Pillangwad .. Applicant
Versus
The State of Maharashtra .. Respondent ....................
Mr. Shirish Gupte, Senior Advocate a/w. Mr. Prashant Badole i./by Mr. Omkar Nagwekar for Applicant in BA 3678/24 Mr. Niranjan Mundargi a/w. Mr. Vinay Bhanushali, Mr. Sanmit Vaze and Ms. Keral Mehta Applicant in BA 4576/24 Ms. Harshada Morey for Intervenor in IA 1127/25 and IA 821/25 Mr. Mihir Desai, Senior Advocate a/w. Mr. Pavan Patil & Mr. Devang Mhatre for Intervenor in IA 5155/24.
Mr. Hitendra J. Dedhia a/w. Mr. Dinesh J. Haldankar, APPs for Respondent - State.
Mr. P. R. Patil, Superintendent of Police (IPS), EOW - CID, Pune a/w. Ms. Varsha Choudhari - Kale, Deputy Superintendent of Police, EOW - CID, Pune a/w. Mr. Ramdas Mundhe,Police Inspector, EOW - CID, Pune present in Court.
...................
CORAM : MILIND N. JADHAV, J.
DATE : MARCH 21, 2025 P. C.
:
1.
Bail Applications are filed under Section 439 of CrPC1 seeking regular bail in connection with FIR No. I-383 of 2021 registered at Code of Criminal Procedure, 1973.
Shahapur Police Station (Thane Rural) for offences under Sections 420, 467, 468, 471, 34 of IPC2 along with Sections 3, 13(1) of MOFA3 and Sections 3, 4 of MPID Act4 against present Applicants and 3 other co-accused.
Brief Overview:
2.
Applicants have been arraigned in the FIR as they are/were the directors of Karrm Infrastructure Pvt. Ltd (for Short "KIPL"). KIPL has undertaken large scale housing construction - development projects on the outskirts of Mumbai and Thane. Three separate FIRs are filed at the instance of three flat purchasers who, inter alia, claim that KIPL induced them to make investments in their projects by making false claims and subsequently failed to abide by their obligations. The flat purchasers claim that there are about thousands similarly placed investors like them who have been wronged by the acts of Applicants and many investors who are slightly better placed than the other who are in possession of their flats but have to live in inhumane conditions sans basic amenities due to non-fulfillment of obligations on part of KIPL as the Developer.
Indian Penal Code, 1860.
Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963.
Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999
Intervention Applications By Flat Purchasers: 3.
Intervention to the Bail Application No.4576 of 2024 is filed by one Prabhuram Giri. He claims to have garnered support of numerous similarly placed investors / flat purchasers. I am not persuaded by his assertion. He is represented by learned advocate Ms. Morey. His intervention is already on record. Ms. Morey would request the Court to allow her to file another intervention on behalf of the same intervenor in the connected matter i.e. Bail Application 3678 of 2024. Although an intervenor has no vested right to intervene in a Bail Application as held in the case of Sandeep Kumar Bafna Vs. State of Maharashtra5, I am inclined to allow the present Intervention Application in Bail Application No. 3678 of 2024 considering the facts of the case.
This is because the matter affects large segment of individuals / investors who put in their hard earned money and in many cases who availed Bank loans to finance their investment in their dream homes with the hope of realising their homes for a happy life ahead. It is asserted by Ms. Morey that about 14,000 purchasers are deprived of their rights. However this figure is disputed by the counterparts. Mr. Dedhia points out that the investigation has revealed that there are about 9000 flat purchasers.
and dispute which has arisen. Another intervention is filed by one Mr. Prabhakar Joshi, he is also one of the flat purchasers. Applicant's Submissions:
4.
Mr. Gupte, learned Senior counsel represents Applicant in Bail Application No. 3678 of 2024. He would submit at the outset that the dispute is purely civil in nature pertaining to non-fulfillment of contractual obligations. He would submit that initiating criminal proceedings is a far fetched and unjustified remedy adopted against the Applicant who is one of the director of KPIL. He would submit that the flat purchasers had invested the monies as an initial deposit with the intention of purchasing home and not as an investment in any financial scheme, thus invocation of offences under MPID would not be attracted considering the provisions of Section 3 of MPID Act.
He would submit that Applicant had no motive whatsoever to defraud the flat purchasers at the inception, an essential ingredient for attracting invocation of offence under Section 420 of IPC. He would submit that delay in the project was on account of red tapism and logistical delays rather than Applicant attempting to siphon off monies of flat purchasers.
Applicant would have a much better chance to complete his obligations if he is released on bail as he could then take further steps to involve the new developer who has evinced interest in unity to step into the shoes of Applicant's company and take over the project to its fructification. He would submit that Applicant retired in the year 2018 but since the facts pertain to the period during his Directorship he shall co-operate with the investigation fully. He has placed on record a chart of the entire project to show Applicant's bona fides of having substantially delivered the project. He would submit that out of the 64 number of proposed buildings, 50 number of buildings have been constructed / completed and possession has been handed over to the flat purchasers. He would thus pray for the Application to be allowed. At a glance, the aforesaid submission of Mr. Gupte can be seen from the charts below which are placed by him on record on the basis of the chargesheet as stated by him:-
5.
Mr. Mundargi, learned Advocate appears on behalf of Applicant in Bail Application No. 4576 of 2024. He would submit that at the time of dispute, the Applicant was the erstwhile director of KPIL who subsequently re-joined KPIL after having failed in his business venture post COVID-19. He would submit that the charge sheet, when perused stays conspicuously silent on attributing any role to the Applicant and would submit that it is so because the Applicant has indeed not played any role in the alleged crime (if any). This Applicant has also retired in the year 2018. But he rejoined the Company again. But he assures complete co-operation to the investigation and for taking transfer and take over bid forward. He would wholly adopt the submissions of Mr.
Gupte and submit that this is a case of civil dispute and no ends would be met by keeping the Applicant - Director of company KIPL in custody. In support of his submission he would rely on the decision of Supreme Court in the case of Inder Goswami Vs. State of Uttaranchal 6 to contend that criminal proceedings are not to be used as an instrument of harassment or for seeking private vendetta or with an ulterior motive to pressurize when dispute between the parties constitute only a civil wrong.
2007 12 SCC 1
Submissions of the Intervenor - Prospective Investor: 6.
Mr. Desai, learned Senior Advocate appears on behalf of the Intervenor in Interim Application No.5155 of 2024. He would submit that the Intervenor is a company who after analysing the myriad aspects of Residential Housing projects has decided to invest its funds into the subject matter project with the objective of reviving and resuscitating the project by a complete takeover. He would submit that the company taking over the project would enable the flat purchasers (including the complainants who have filed the F.I.R.) to attain their motive of getting possession of their respective flats. He would submit that the Intervenor Company has already participated in the CIRP proceedings before the Resolution Professional and that Company Petition No.(IB) 651 of 2024 in the NCLT plan is already admitted.
He would submit that the CIRP process would be better served if the Applicant is set at liberty as he would on behalf of KIPL be in a position to negotiate, finalise, execute relevant documents and take the takeover bid forward and it would give impetus to the pending NCLT proceedings which would be in larger interest of the flat purchasers waiting for delivery of their flats. 7.
At this juncture seeking permission from the Court Mr. Gupte, Mr. Mundargi and Mr. Desai would submit in tandem that incarceration of the Applicants is actually an impediment to the
process for completion of the project and eventual handing over of the possession to the flat purchasers in the present circumstances. They would submit that both Applicants, even if they attempt to find a solution to release themselves of their obligations are constrained to wait in incarceration. They would submit that the balance construction of the project cannot move ahead in the interregnum during Applicants being in custody. They would submit that although tall allegations have been made against the Applicants, all that the complainants and other flat purchasers are concerned with is having possession of their respective flats for which the Applicants have been making positive attempts including the CIRP before the NCLT.
They would submit that their clients have negotiated and are intending to present an action plan to the flat purchasers post the outcome of CIRP. They would therefore urge the Court to make a request if possible in the bail order to the NCLT to expedite the process of CIRP considering the interest of substantial number of individuals impacted and are waiting for their houses / homes.
Submissions of the Intervenors - Flat Purchasers: 8.
Ms. Morey appearing on behalf of Intervenor - Flat Purchaser would broadly submit that the entire dispute can be put to a halt if the Applicants complete the project and give possession of the flats to flat purchasers with all basic amenities as promised to them. She wold
however differentiate the present dispute from a civil dispute by pointing out the conduct and disrespect for law by the Applicants. She would submit that the quantum of individuals impacted by the acts / delay caused by Applicant's company KIPL is substantially high. She would submit that Applicants, for their greed of making money induced many people into investing into the project and their conduct depicts that since inception they did not have intention of fulfilling their obligations. She would submit that the aforesaid facts should be considered by the Court while releasing Applicants on bail as they are likely to continue keep the prospects of flat purchasers in abeyance once they are set at liberty. She would urge the Court to impose appropriate conditions which would ensure that the rights of Intervenor are protected.
9.
Mr Dedhia, learned APP appears on behalf of Respondent No.1 State. He would urge the court to consider the fact that the issue involves larger public interest. He would bring to my attention, an intimation by the prosecution agency giving information regarding the progress of investigation. The intimation states that during investigation, it was revealed that the Intervenor - Prospector Investor who is before me today is taking over various projects of the derelict company KIPL and that they have settled 481 accounts of home buyers.
10.
I have heard the learned Advocates at the bar and with their able assistance perused the record of the case. 11.
Prima facie the case arises out of non fulfillment of obligations. Had this been a dispute between a few parties, I would have had a divergent approach than what I am about to take. This Court is conscious of the spirit of the decision of the Supreme Court in the case of Ramesh Kumar V. State of NCT of Delhi7 where it was held that inclusion of a condition for payment of money by applicant for securing bail is not the purpose of provisions of grant of bail. However the Supreme Court in the very same case had carved out an exception where allegation of misappropriation of public money if is alleged to have been done, the same would be open for the Court. The spirit of the decision penned by his lordship Dipankar Datta, J.
speaking for the bench is that criminal proceedings are not for realising disputed dues / obligations, the decision aimed to halt the imposition of burdensome conditions as a condition precedent for grant of bail. However when public interest is at stake Courts are open to impose conditions in larger public interest Paragraphs Nos. 25 and 26 of the decision are reproduced herein to guide this Court in the facts of the present case. They read thus:- 25.
Law regarding exercise of discretion while granting a prayer for bail under Section 438 CrPC having been authoritatively laid down by this Court, we cannot but disapprove the imposition of a 2023 (7) SCC 461
condition of the nature under challenge. Assuming that there is substance in the allegation of the complainants that the appellant (either in connivance with the builder or even in the absence of any such connivance) has cheated the complainants, the investigation is yet to result in a charge-sheet being filed under Section 173(2)CrPC, not to speak of the alleged offence being proved before the competent trial court in accordance with the settled procedures and the applicable laws. Sub-section (2) of Section 438CrPC does empower the High Court or the Court of Session to impose such conditions while making a direction under sub-section (1) as it may think fit in the light of the facts of the particular case and such direction may include the conditions as in clauses (i) to (iv) thereof.
However, a reading of the precedents laid down by this Court referred to above makes the position of law clear that the conditions to be imposed must not be onerous or unreasonable or excessive. In the context of grant of bail, all such conditions that would facilitate the appearance of the accused before the investigating officer/court, unhindered completion of investigation/trial and safety of the community assume relevance. However, inclusion of a condition for payment of money by the applicant for bail tends to create an impression that bail could be secured by depositing money alleged to have been cheated. That is really not the purpose and intent of the provisions for grant of bail.
26.
We may, however, not be understood to have laid down the law that in no case should willingness to make payment/deposit by the accused be considered before grant of an order for bail. In exceptional cases such as where an allegation of misappropriation of public money by the accused is levelled and the accused while seeking indulgence of the court to have his liberty secured/restored volunteers to account for the whole or any part of the public money allegedly misappropriated by him, it would be open to the court concerned to consider whether in the larger public interest the money misappropriated should be allowed to be deposited before the application for anticipatory bail/bail is taken up for final consideration. After all, no court should be averse to putting public money back in the system if the situation is conducive therefor.
We are minded to think that this approach would be in the larger interest of the community. However, such an approach would not be warranted in cases of private disputes where private parties complain of their money being involved in the offence of cheating." (emphasis supplied) 12.
In the matter before me, the purpose of granting Bail is primarily to enable the Applicants to fulfill their obligations towards the flat purchasers. Learned advocates before me have all agreed in
their respective fairness that no good will be done to any of parties in the interregnum if Applicants remain being incarcerated. Even if there is a semblance of a chance, a ray of hope provided to resurrect a completely defunct and spiraled situation, the Court should look into it in the larger interest of the majority of the public at large. 13.
Mr. Gupte, Mr. Mundargi and Mr. Desai have orally undertook to provide an action plan as soon as practicable i.e. after completion of the CIRP proceedings as without it there can be no moving forward. They have sought a direction and request to NCLT from this Court to expedite the pending proceedings concerning the subject matter dispute.
14.
I can therefore only request the NCLT to consider this request and decide the pending NCLT proceedings regarding KIPL pending in NCLT in accordance with law since the matter involves larger public interest which is in the interest of the flat purchasers awaiting their homes.
15.
Ms. Morey however has expressed her deep concerns regarding Applicants forgetting their obligations once they are set at liberty. Her apprehensions stem from the scars which are not healed and are genuine. One concern expressed is that 3 out of 5 directors of KIPL are absconding and hence the present Applicants, if enlarged on bail might follow suit and they may jump bail and would be a flight risk
considering their potential. She would respectfully persuade me to extract a guarantee from the Applicant to fulfill their obligations within a time bound program. Such a request made may be far fetched. A Bail Court cannot indulge in taking guarantees and counter guarantees for fulfilling obligations governed by contractual obligations as conditions while granting bail or impose condition for guarantee. It would set a dangerous precedent, least to say that it would clash with the ethos of bail jurisprudence. At this stage the Applicants have satisfied me prima facie with regards to their bona fides. I am of the opinion that they will submit to the trial.
However their assurances and submissions involve multiple moving variables where even one aspect going south would bring the dispute to square one or for that matter lead to considerable delay. Their assurances are noted by the Court. But considering the overall circumstances delineated herein above and the submissions of the learned Advocates of Applicants at the bar, I am of the opinion that the Applicants will submit to the Investigating Officer, a time bound action plan with regards to the manner in which they plan to complete the balance project after being enlarged on bail and keep the prosecution in the knowhow. Mr. Gupte and Mr. Mundargi have agreed to do so on instructions.
16.
My decision is based on a hope that the Court showing trust in the Applicants would encourage them to undertake their responsibility to get the balance project completed through the Intervenor taking over Company represented by Mr. Desai and hand over possession to the remainder of the flat purchasers in the larger public interest. This is the maximum that this Court can do. It should be borne in mind that their actions will have a considerable impact on the quality of life and peace of mind of the flat purchasers and their family members who had entrusted the Applicants with their hard earned money and booked the flats. Applicants are incarcerated in prison since 26.07.2023 (BA 3678/24) and 07.12.2023 (4576/24). Their further custody is unwarranted.
17.
In view of the above prima facie observations and considerations, both Applications are allowed in terms of prayer clause (a) subject to the following terms and conditions:- (i) Applicants are directed to be released on bail on furnishing P.R. Bond in the sum of Rs.1,00,000/- each with one or two sureties in the like amount;
(ii) In the Applicants are permitted to furnish provisional cash bail of Rs.1,00,000/- for their release immediately and file undertaking that they will provide one or two sureties in the like amount of Rs.1,00,000/- within a
period of four weeks after their release which shall be accepted by the Trial Court. Applicants shall provide sureties as directed;
(iii) Before their actual release from jail, Applicants shall furnish their addresses where they proposes to reside after their release from jail to the concerned Police Station and also to the trial Court;
(iv) After their release from jail, Applicants shall report to the Investigating Officer as and when called for; (v) Applicants shall attend the trial Court on the first Tuesday of every month between 11.00 a.m. and 1.00 p.m. to mark their presence. If the first Tuesday of the said month falls on a holiday and / or non Court working day, the Applicants shall mark their presence on the next working day;
(vi) Applicants shall co-operate with the conduct of the trial and attend the trial Court on all dates unless specifically exempted and will not take any unnecessary adjournments, if they do so, it will entitle the prosecution to apply for cancellation of this order; (vii) Applicants shall not leave the State of Maharashtra
without prior permission of the Trial Court; Applicants shall deposit their passports, if any, with the Trial Court within one week of being released from prison. (viii) Applicants shall not influence with any of the witnesses or tamper with the evidence in any manner;
(ix) Applicants shall furnish an affidavit as described in paragraph No. 14 of the order within a month of their release and (x) In case of any infraction of the above conditions and / or two consecutive defaults in marking his attendance before trial Court, it shall attract the provisions of Section 439(2) of Cr.P.C. i.e. for cancellation of bail.
18.
It is clarified that the observations made in this order are limited for the purpose of granting Bail only and I have not made any observations on merits of the case. The trial shall be adjudicated on the strength of the evidence led and strictly on its own merits being uninfluenced with any of the prima facie observations made herein above in this order.
19.
Bail Application No.3678 of 2024 and Bail Application No.4894 of 2024 are allowed and disposed. In view of disposal of the Bail Applications, all Interim Applications are also disposed. Amberkar [ MILIND N. JADHAV, J. ] by RAVINDRA MOHAN AMBERKAR Date:
2025.03.21 19:46:52 +0530 RAVINDRA MOHAN AMBERKAR