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2017 (1) TMI 1804

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..... Article 21 of Constitution of India and societal interest and such discretion to grant anticipatory bail under Section 438 Cr.P.C has to be exercised in exceptional circumstances where the Court satisfied that the petitioners did commit no offence prima facie and that there is no possibility of interfering with the further investigation or fleeing from justice, so also the seriousness of the crime. In the present facts, the petitioners committed a serious offences, the total amount involved in the crime is more than Rs.110 crores by allegedly forging the signatures of 5200 customers within a span of 3 hours, that too during night time. I am unable to comprehend such situation where 5200 customers transacted business worth more than Rs.110 crores during night time within a span of 3 hours. It is highly improbable in ordinary course of events and even obtaining signatures of 5200 customers on vouchers and receipts, may take days together, but the petitioners by their ability allegedly obtained signatures 5200 customers and transacted business more than Rs.110 crores and that too paid advance for purchase of bullion in future. Whether the petitioners delivered gold to the cust .....

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..... are liable to be dismissed. Petition dismissed. - CRIMINAL PETITION NOs.124, 125, 132, 155 AND 157 OF 2017 COMMON ORDER: - - - Dated:- 30-1-2017 - THE HON BLE SRI JUSTICE M.SATYANARAYANA MURTHY For The Petitioner B CHANDRASEN REDDY For The Respondent PUBLIC PROSECUTOR TG These petitions are filed under Section 438 of Criminal Procedure Code (for short Cr.P.C. ) for grant of anticipatory bail to the petitioners in the respective criminal petitions in the event of their arrest in relation to Crime No.263 of 2016 of Central Crime Station, Hyderabad apprehending their arrest for the offences punishable under Sections 420, 468, 471, 474, 477(A), 201, 212, 109, 120-B r/w 34 I.P.C. Petitioner in Crl.P.No.124 of 2017 is Accused No.12 in Crime No.263 of 2016. Petitioner in Crl.P.No.125 of 2017 is Accused No.05 in Crime No.263 of 2016. Petitioners in Crl.P.No.132 of 2017 are Accused Nos.8 3 in Crime No.263 of 2016. Petitioners in Crl.P.No.155 of 2017 are Accused Nos.9, 1 6 in Crime No.263 of 2016. Petitioners in Crl.P.No.157 of 2017 are Accused Nos.10, 7 4 in Crime No.263 of 2016. As the lis in all the petitions is one and the same, all the five .....

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..... its registered office located at Shanti Kiran, H.No.8-2- 12/88 89/MB, Road No.2, Opp. KBR park, Banjara Hills, Hyderabad and the said company was incorporated on 25.05.2012 and the share capital of the company is Rs.5,00,000/-. Mr. Nitin Gupta (A-1), Mr. Narenderji Gellaboina (A-7) and Mrs. Vinutha Bolla (A-4) are its Directors. Mrs. Nitin Gupta and Mr. Kailash Chand Gupta are also the Directors of M/s Musaddilal Jewellers Private Limited, located at Shanti Kiran, H.No.8-2-12/88 89/MB, Road No.2, Opp. KBR park, Banjara Hills, Hyderabad. The Deputy Director of Income Tax (Investigation), Hyderabad, came to know through credible source that M/s Musaddilal Gems and Jewels Private Limited and M/s Vaishnavi Bullion Private Limited, Hyderabad have deposited an amount of Rs.57 crore and Rs.40 crore in State Bank of India, Industrial Finance Branch, Punjagutta, Hyderabad Axis Bank, Jubilee Hills, Hyderabad, respectively, after the demonetisation of Rs.1000/- Rs.500/- currency notes by Government of India on 08.11.2016, by colouring the same as genuine business by raising around 5200 cash advance receipts on 08.11.2016 and subsequent sale invoices. The Directorate has initiated e .....

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..... d there are no employees in these companies and that these two companies were not opened on 08.11.2016 and that on 08.11.2016 he left office at around 06.00PM and was not called back to office and he attended office on 09.112016 at around 10.00 PM. The statement of Mr. Jeelan Basha, cashier (as claimed by Mr. Nitin Gupta that this person was in office on 08.11.2016 till late night during the visit of 5200 customers) that he attended office at 10.00 AM and left around 8:30 PM on 08.11.2016 and he did not come back to office on 08.11.2016. Thus, these statements of the employees including the statement of Mr. Nitin Gupta prima facie establish that 5200 customers did not visit the premises on 08.11.2016. During investigation, the Deputy Director of Income Tax also collected CCTV footage of neighbour clearly indicating that there were no visitors after 8:00 Pm on 08.11.2016. Further, all the advance cash receipts and subsequent sale invoices raised by two companies are amounts below Rs.2 lakhs each only as PAN is not required to be mandatorily obtained for transactions below Rs.2 lakh. Out of 5200 customers, the Deputy Director of Income Tax has collected declarations from 65 cus .....

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..... etised currency. Since the above three companies made a dubious claim of receipt of cash advance amounting to less than Rs.2 lakhs from more than 5200 persons, forging of documents and destruction of evidence, these companies and persons concerned are liable for punishment under Sections 204 464 of IPC. Hence, the Deputy Director of Income Tax, Unit II(2), Hyderabad lodged a complaint with the police. On the strength of the above complaint, Central Crime Station registered F.I.R. No.263 of 2016 on 11.12.2016 against several accused, including the petitioners in the criminal petitions for the offences punishable under Sections 420, 468, 471, 474, 477(A), 201, 212, 109, 120-B r/w 34 I.P.C. Crl.P.No.155 of 2017 was filed A-9, A-1 A-6 contending that the Station House officer, without ascertaining the facts and circumstances of the case, erroneously registered the crime against the petitioners for various offences and it is to be noted that the petitioners are engaged in purchase and sale of gold and silver jewellery, gems, diamonds, pearls and also ornament designers, makers, dealers, importers and exporters of precious and semiprecious metals, stones and also in the busines .....

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..... ection of direct taxes. It is also urged that, even taking the entire allegations into consideration, no offence can be made out against the petitioners to attract the ingredients of the alleged offences, thereby, there is absolutely no material to establish prima facie that the petitioners committed any offence referred supra. The petitioners filed W.P.No.43777 of 2016 before this Court to quash the F.I.R and this Court by order dated 15.12.2016 has directed the petitioners to appear before the Investigation Officer and the Investigation officer was directed to file status report on 21.12.2016. On 21.12.2016, the Government Pleader for Home has informed that the petitioners are not cooperating with the investigation by nor furnishing the details of the customers. This Court has disposed of the writ petition with a direction that the Investigation Officer shall complete the investigation in accordance with law, following the procedure, as notice under Section 41-A was already issued and this Court did not express any opinion on merits of the case. In pursuance of the interim order dated 15.12.2016, the Investigation Officer has issued 41-A notice on 18.12.2016 along with 41 ques .....

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..... e. The respondent filed counter affidavit in all the five criminal petitions raising common grounds, admitting about receipt of complaint from Deputy Director of Income Tax and registration of crime against the petitioners for various offences under Indian Penal Code and after issuing F.I.R, the Station House Officer, took up investigation, examined 37 witnesses. It is stated in the counter affidavit that most of the witnesses are employees of the petitioner/accused companies, who denied that 5200 persons visited the office of the accused within short-span. It is stated that their statements clearly disclose and their evidence clearly reveal that the petitioners/accused resorted to fraud, inducement, forgery, falsification of accounts, cheating, dishonest intention showing that they received cash advances from about 5200 customers on 08.11.2016 within 3 hours, in view of demonetization of currency notes of value of Rs.1000/- Rs.500/- by the Government of India. Thus, the Directors of the three companies fabricated the documents and forged several documents like receipts, evidencing receipts of sale consideration by conspiring with each other for wrongful gain and deposited h .....

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..... pose of investigation. But, the petitioners are not cooperating with the Investigating Officer. The petitioners also filed bail application for grant of anticipatory bail, but the Metropolitan Sessions Judge dismissed the petitions observing that the petitioners miserably failed to establish any grounds for consideration regarding anticipatory bail order. It is stated in the counter affidavit that during investigation, they interrogated A-4 Vinutha Bolla A-5 Neha Gupta in the presence of Smt. Renuka, Women Police Constable. A-5 voluntarily confessed to have committed the offence along with other accused persons and also confessed that Neel Sunder, owner of M/s Astha Lakshmi Gold Bullion also connived and conspired with the other accused in exchange of demonetized currency by fraudulent means. A-4 also confessed to be having knowledge about the conspiracy made by the other accused for fraudulently exchanging the demonetized currency. It is stated in the counter affidavit that, during investigation, the police unearthed a serious crime affecting the State economy, committed by the petitioners, creating fake customers and fabricating and forging various documents, depositin .....

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..... It is also contended by the learned Senior Counsel that the entire investigation is completed except filing charge sheet and arrest of the petitioners in the above crime is unnecessary. Therefore, to protect the personal liberty of the petitioners who are reputed bullion merchants in the State of Telangana, they are entitled to claim anticipatory bail, as their apprehension of arrest is reasonable. In support of his contention, learned Senior Counsel placed reliance on three judgments reported in Keki Hormusji Gharda and others v. Mehervan Rustom Irani and another((2009) 6 Supreme Court Cases 475), Bhadresh Bipinbhai Sheth v. State of Gujarat and another((2016) 1 Supreme Court Cases 152 ) and Sunil Bharti Mittal v. Central Bureau of Investigation((2015) 4 Supreme Court Cases 609). Learned senior counsel also drawn attention of this Court to the proceedings issued by the Reserve Bank of India on 08.11.2010, withdrawing legal tender with character of existing Rs.500/- and Rs.1000/- bank notes and prayed to enlarge the petitioners on bail in the event of their arrest, in the above crime. Sri K. Pratap Reddy, learned Public Prosecutor for the State of Telangana contended tha .....

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..... he State economy. The first offence allegedly committed by the petitioners is punishable under Section 420 of I.P.C. Section 420 deals with cheating and dishonestly inducing delivery of property. To punish an offender under Section 420 of I.P.C, there must be cheating and dishonest inducing delivery of property. The word cheating is defined under Section 415 I.P.C as whoever by deceiving any person, fraudulently or dishonestly induces the person so deceived to deliver any property to any person, or to consent that any person shall retain any property, or intentionally induces the person so deceived to do or omit to do anything which he would not do or omit if he were not so deceived, and which act or omission causes or is likely to cause damage or harm to that person in body, mind, reputation or property, is said to cheat . The explanation annexed to Section 415 I.P.C further says that a dishonest concealment of facts is a deception within the meaning of Section 415 I.P.C. Here, the petitioners allegedly concealed the unaccounted income and taking advantage of demonetization, created certain documents by forgery, fabrication, etc, to convert alleged black money into white .....

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..... erson, or to support any claim or title, or to cause by person to apart with property, or to enter into any express or implied contract, or with intent to commit fraud or that fraud may be committed commits forgery. Here, the petitioners allegedly fabricated the vouchers and receipts in the name of 5200 customers within a span of 3 hours. Even according to the allegations made in the petition i.e from 8:30 PM to 12.00 PM (mid night ) on 08.11.2016 by receiving crores of rupees as advance for purchase of bullion. When the said persons i.e. 9 fake customers denied their signatures, it amounts to making false document with an intent to cause damage to the public and to defraud the State. Such act prima facie would attract the offence punishable under Section 468 IPC, which is punishable for a period of 7 years of imprisonment and with fine. The third offence allegedly committed by the petitioners is punishable under Section 471 I.P.C. i.e. using as genuine a forged document or electronic record and the punishment prescribed for the offence is same as punishment of forgery i.e. two years of imprisonment or fine or both. As discussed above, the petitioners prima facie forged a d .....

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..... d to be subject of the fraud, or any particular day on which the offence was committed. Here, in this matter, the accounts were falsified by the petitioners themselves with the aid of employer or by themselves or they abated the employer who omitted or altered the accounts by creating false documents i.e. vouchers or receipts from fake customers who are 5200 persons in number. Thus, the act committed by the petitioners prima facie falls within Section 477-A I.P.C. The sixth offence allegedly committed by the petitioners is punishable under Section 201 I.P.C which deals with causing disappearance of evidence of offence, or giving false information to screen offender. But the allegations would not prima facie attract Section 201 I.P.C, since the petitioners themselves are the alleged offenders. Moreover, the other offences allegedly committed by the petitioners is punishable under Section 212 of I.P.C i.e. harbouring offender. But the material on record would not prima facie fall within Section 212 I.P.C. The other offences allegedly committed by the petitioners are punishable under Sections 109 120-B r/w 34 I.P.C. Section 109 deals with punishment of abetment if the act a .....

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..... be legal tender with effect from 09.11.2016 to the extent specified in the notification. A new series of bank notes called Mahatma Gandhi (New) Series having different size and design, highlighting the cultural heritage and scientific achievements of the Country, will be issued. Bank branches will be the primary agencies through which the members of public and other entities will be exchanging the Specified Bank Notes in other valid denominations or depositing the Specified Bank Notes for crediting to their accounts, upto and including the December, 30, 2016, made certain arrangements referred in the proceedings. According to 3(C)(ii) of the guidelines in the Gazette Notification dated 08.11.2016, there shall not be any limit on the quantity or value of the specified bank notes to be credited to the account maintained with the bank by a person, where the specified bank notes are tendered; however, where compliance with extent Know Your Customer (KYC) norms is not complete in an account, the maximum value of specified bank notes as may be deposited shall be Rs.50,000/- Further, directed the banks to send by email or fax to the Controlling Officer about exchange of Rs.500/- Rs.1 .....

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..... ived on the night of 08.11.2016 by the three companies is as under: Name of the company No. of customers who are claimed to have given cash advance (all in 500 and 1000 denomination notes) Amount of cash advance said to have been received on 08.11.2016 from 9.00 Pm onwards (Rs. In Crores) Premises where the cash advance is stated to have been collected on 08.11.2016 from 9.00 Pm onwards Musaddilal Gems and Jewels P. Ltd 3105 57.85 Shanti Kiran, H.No.8-2- 12/88 89/MB, Road No.2, Opp. KBR park, Banjara Hills, Hyderabad Vaishnavi Bullion P Ltd 2153 40.11 Musaddilal Jewellers P Ltd 352 6.55 -do- 280 4.61 Punjagutta show room -do- 98 1.80 Vijayawada show room Total 5988 110.92 The Deputy Director of .....

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..... of Income Tax under Section 206(1)(B) of Income Tax Act. Thus, the material allegedly collected by the Income Tax Department during investigation and the material collected by the Investigating Agency i.e. Central Crime Station, Hyderabad prima facie establishes that these petitioners committed offences punishable under Sections 468, 471, 477(A), 109, 120-B r/w 34 I.P.C. The main endeavour of the learned Senior Counsel is that the petitioners did commit no offence and there by they are not liable for prosecution under the provisions of Income Tax Act. Even if they have violated the provisions of Income Tax Act, the action to be taken against them is only under Income Tax Act, but not under Indian Penal Code, this contention is without any substance, since the petitioners forged the signatures of fake customers on the vouchers and receipts to claim that they received huge amount from 5200 customers within a span of 3 hours time after demonetization of high value currency notes of Rs.500/- Rs.1000/- and to deposit the same, obviously for different reasons known to them. Such offence of forgery is not punishable under the provisions of Income Tax Act. Similarly, the offences p .....

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..... reinafter, this proposition would run contrary to the principle of vicarious liability detailing the circumstances under which a direction of a company can be held liable. (iii) Circumstances when Director/Person in charge of the affairs of the company can also be prosecuted, when the company is an accused person: No doubt, a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so, when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicar .....

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..... able loss of reputation both in the business community and in the general public, including customers who are transacting business with the petitioners, besides violation of their fundamental right of liberty guaranteed under Article 21 of Constitution of India. Whereas, the learned Public Prosecutor for the State of Telangana contended that it is the duty of the Investigating Agency to unearth a serious fraud, forgery of signatures, fabrication of documents by examining the persons who transacted business who are 5200 in number. Unless the documents and papers are seized, examination of those persons is required to find out whether they actually transacted the business that these petitioners within a span of 3 hours on 8.11.2016 after demonetization of currency and to collect such information, the custodial interrogation of the petitioners is imperative and in the event of enlarging the bail, there is every possibility of interfering with the investigation and tampering of records maintained by the companies either in hard copies or soft copies, including computers and thereby it is difficult for the Investigating Agency to complete investigation fairly. So far, the Invest .....

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..... s to be struck between two factors namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused; ix. The court to consider reasonable apprehension of tampering of the witness or apprehension of threat to the complainant; x. Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as to the genuineness of the prosecution, in the normal course of events, the accused is entitled to an order of bail. The learned counsel also drawn the attention of this Court to the principles laid down in Gurbaksh Singh Sibbia and Ors. v. State of Punjab( AIR 1980 SC 1632) and reiterated the duty of the Court while deciding an application filed under Section 438 of Cr.P,.C and the guidelines to be followed for grant of such bail. There is no quarrel regarding the law laid down by the Apex Court in Bhadresh Bipinbhai Sheth( 2016) 1 Supreme Court Cases 152 ) case. But, the relief under Section 438 Cr.P.C is purely discretion .....

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..... Gurbaksh Singh Sibbia (AIR 1980 SC 1632)) case, as the power of granting 'anticipatory bail' is somewhat extraordinary in character and it is only in exceptional cases where it appears that a person might be falsely implicated, or a frivolous case might be launched against him, or there are reasonable grounds for holding that a person accused of an offence is not likely to abscond, or otherwise misuse his liberty while on bail that such power is to be exercised. No hard and fast rule can be laid down in discretionary matters like grant or refusal of bail whether anticipatory or regular bail. The Apex Court further held that, it cannot be laid down as an inexorable rule that anticipatory bail cannot be granted unless the proposed accusation appears to be actuated by mala fides; told, equally, that anticipatory bail must be granted if there is no fear that the applicant will abscond. There are several other considerations, too numerous to enumerate, the combined effect of which must weigh with the court while granting or rejecting anticipatory bail. The nature and seriousness of the proposed charges, the context of the events likely to lead to the making of the charges, a .....

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..... e judgment, the Courts shall not extend undeserved sympathy to the accused and that the Court while exercising discretion has to follow the settled principles and at the stage of consideration of anticipatory bail while dealing with application for pre-arrest bail, the Court is under obligation to indicate in the order, reasons for prima facie coming to the conclusion as to why bail was being granted, particularly, where the accused was charged for having committed serious offences. It is necessary for the Courts dealing with the applications for pre-arrest bail to consider several circumstances. Though, the conclusive finding in regard to the points urged by the petitioners is not accepted by the Court, considering the bail applications, yet, giving reasons, is different from discussing merits or demerits. At the stage of granting bail, a detailed examination of evidence and elaborate documentation of merits of the case is not to be undertaken, but that does not mean that while granting bail, some reasons for prima facie conclusions as to why bail was being granted is required to be indicated. In Lavesh v. State (NCT Delhi) ( (2012) 8 SCC 730) the Apex Court held that conduct .....

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..... omprehend such situation where 5200 customers transacted business worth more than Rs.110 crores during night time within a span of 3 hours. It is highly improbable in ordinary course of events and even obtaining signatures of 5200 customers on vouchers and receipts, may take days together, but the petitioners by their ability allegedly obtained signatures 5200 customers and transacted business more than Rs.110 crores and that too paid advance for purchase of bullion in future. Whether the petitioners delivered gold to the customers in pursuance of alleged receipt of cash is to be enquired into, atleast to accept their contention. The office or business premises of the petitioners also would not accommodate such huge number of 5200 person and the transaction with 5200 customers could not be completed within a span of 3 hours. Transferring the cash deposits to other bullion merchants like Ashtalakshmi bullion Merchant is another strong circumstance to conclude that the petitioners made serious attempts to keep the transactions out of the hand of dealers. If, totality of the circumstances of the case is taken into consideration, the act of the petitioners is a serious economic off .....

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..... an Rs.110 crores and it is a calculated plan deliberately achieved by the petitioners, obviously for different reasons known to them. Thus, the offence allegedly committed by the petitioners is grave and serious offence against the State. In such case, the petitioners are disentitled to claim pre-arrest bail. In Rajesh Ranjan Yadav @ Pappu Yadav v. CBI through its Director(AIR 2007 SC 451) the Supreme Court held that, a balance has to be struck between right to individual liberty guaranteed under Article 21 of the Constitution of India and interest of society as no right can be absolute. No doubt, in the event of the petitioners arrest, certainly, their Fundamental Right guaranteed under Article 21 of Constitution of India will be infringed. Fundamental Right under Article 21 of Constitution of India is not an absolute right and such liberty can be deprived of in accordance with law. Arrest of a person in the process of investigation is permissible under the provisions of Criminal Procedure Code and such act of arrest by the police is deprivation of right of liberty of an individual in accordance with law. Therefore, it does not amount to violation of Fundamental Right guara .....

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..... nd his appeal is pending before the higher court and bail is sought during the pendency of the appeal. In State (CBI) v. Anil Sharma (AIR 1997 SC 3806) the Supreme Court observed that custodial interrogation is qualitatively more elicitation orientated than questioning a suspect who is well ensconced with a favourable order under Section 438 of the Code. In a case like this effective interrogation of suspected person is of tremendous advantage in disinterring many useful information and also materials which would have been concealed. Success in such interrogation would elude if the suspected person knows that he is well protected and insulated by a pre-arrest bail order during the time he is interrogated. Very often interrogation in such a condition would reduce to a mere ritual. Similarly, in State of Andhra Pradesh v. Bimal Krishna Kundu (AIR 1997 SC 3589) the Apex Court observed that, it is disquieting that implications of arming respondents, when they are pitted against this sort of allegations involving well orchestrated conspiracy, with a prearrest bail order, though subject to some conditions, have not been taken into account by the learned Single Judge. We have a .....

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..... f bail and such grant of anticipatory bail would impede the very purpose of custodial interrogation and the said interrogation would remain as a mere ritual and it would be difficult for the Investigating Agency to unearth the said serious fraud against the State and it would directly effect the society at large. Keeping in view the law declared by the Apex Court and this Court referred supra, it is difficult for me to exercise my discretion to grant pre-arrest bail for the following reasons: 1. There is prima facie material against the petitioners to conclude that they committed offences punishable under Sections 468, 471, 477(A), 109, 120-B r/w 34 I.P.C. 2. The entire transactions are based on the receipts and vouchers issued to various customers who are 5200 in number and those vouchers or bills are computer generated and in case, the petitioners are protected from pre-arrest by granting anticipatory bail, it would be difficult to find out the details of those customers, so as to find truth in the transactions, since there is a possibility of influencing those witnesses and tampering the evidence. In view of my foregoing discussion, I find no ground to enlarge .....

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