CRLP/6840/2020 of BOLLUPALLI MADHAVILATHA Vs THE STATE OF TELANGANA on 31 December 2020

ORDER

THE H()N'BLE SRI JUSTICE T.VINOD KUMARCRIMINA.L PETITION Nos.684O AND 7O2O of 2O2O

COMMON ORDER:

These criminal petitions under Sections 437 and 439 of theCode of Criminal Procedure, 1973, are filed by [the]petitioners/ arrayed as accused no.1 and 2 (A-1 and A-2) fc,r grantof regular bail ir Crime No.141 of 2O2O dated 01.10.2020 on thefile of CCS police station, Hyderabad, registered for the offencespunishable under Sections 403,409, 42O read with 34 IPC.

2. Heard Sri Resu Mahender Reddy and Sri. T. PradyumnaReddy, learned counsel for the petitioners/A-1 and A-2respectively, lear:red Additional Public Prosecutor appearing for therespondent State and Sri Tarun G. Reddy, learned Counselappearing on behalf of tlne defacto-complainant and pertrsed therecord.

3. With the consent of the learned counsel appearing for theparties, the criminal petition is taken up for hearing through VideoConferencing in the virtual Court today, i.e.31.12.2O2O.

4. Learned counsel for the petitioners would submit that aperusal of the ccmplaint lodged by the defacto-complainant datedO6.Oa.2O2O, on the basis of which the present complaint bas beenregistered by the respondent authority on 01.10.2020 would revealthat it is based on the information stated to have been given by theaccused No.2 i.e., the petitioner in Criminal Petition No.7020 of2O2O, the deJ,tcto-cornplainant became aware of financialirregularities thzrt are taking place in tlne defacfo-complainantcompany, resulling in huge amount of money to the tune of Rs. 15 crore being swindled away from the account of the companyby way of iliegal means. Learned Counsel for the petitionerswould submit that, though it is being claimed that the accusedNo.2 is stated to have approached the defacto-complainant andbrought to his notice about the financial irregularity in February,2O2O, the complaint came to be lodged only in August, 2020.

5. Learned counsel for the petitioners would also submit evenbefore lodging of the complaint relating to the alleged financialirregularity with the respondent authority, the petitioners wereissued with show cause notices calling for explanation in themonth of June, to which the petitioners had given their reply,would only go to show that the defacto-complainant in order to getover the contractual terms of employment governing separation,wanted the petitioners leave the service on their own, so that thedefacto-complainant could get over the statutory requirement forpayment of compensation etc., and had made false allegationsrelating to financial irregularities against the petitioners. It issubmitted by the learned Counsel for the petitioners that, thoughit is claimed that the defacto-complainant was made aware of thefinancial irregularities which are alleged to have been done at thebehest of the petitioner/ accused No.1 in Criminal Petition No.6840of 2O2O in February, 2O2O, rhe petitioner continued to be theauthorized signatory in respect of bank transactions till about17.O7.2O2O, which is unfathomable if only the alleged claim iscorrect.

6. Learned Counsel for the petitioner / Accused No. 1, wouldfurther submit that the details as stated in the complaint lodgedwould also go to show that the monies from the company's account have been transferred into the accounts [of the Accused ][No s ][2, 3, ][4]and 5, who it is being claimed to have [conlessed ][of ][rt:ceipt ][of]money from the company's account, but, the [same ][having ][been]withdrawn in cash and passed on to [petitioner/ accused No.1 ][in]the crime. It is thus, submitted that based on [the ][confessional]statement given by the accused, the [petitioner ]in [Criminal ][Petition]No. 6840 of 2O2O cannot be implicated in the [crime ][as ][Accused]No. 1.

7. Learned Couosel would also submit that the [petitioners ][were]taken into [judicial ]custody on 26.11.2O2O and since, for more than40 days, the pretitioners are in judicial custody. It is alsosubmitted that based on the petition moved by the prosecution,the custody of [--he ]accused No.l was given to the investigatirrgauthority for a day on lO.l2.2O2O. Thereafter, no applicationseeking for extension or seeking for further time lor hand ing overthe custody of arccused No. 1 was filed, which only goes to sho\r'that the investigating agency did not require custody of thepetitioner/A- I ilny further for the purpose of conductinginvestigation. It is aiso submitted by the learned Counsel for thepetitioner that no benefit would be derived by keeping thepetitioner in judicial custody. On the other hand, if the petitionersare granted bail and are directed to appear before the authoritiesand cooperate rvith the investigation, the investigation into theabove case registered can be progressed with, so that theauthorities r,r,ou1d be able to complete the investigation arrd file afinal report/ charge sheet before the concerned Court. LearnedCounsel for the petitioner/ accused No.1 would also further submitthat during the period 2015-16 till about 2018-19, s'hen rhe

alleged financial misappropriation is stated to have taken place,the petitioner was only a second signatory along with another whothe petitioner was only a second signatory along with another whowas the head of the company at the relevant point of time and thesaid person has not been made as an accused, but the petitioner isonly shown as an accused, which only goes to show that thesaid person has not been made as an accused, but the petitioner isonly shown as an accused, which only goes to show that theendeavor of th,e defacto complainant to give a criminal color whatis otherwise a purely an employment issue, to ensure theis otherwise a purely an employment issue, to ensure thepetitioners walk out on their own as stated above. It is alsosubmitted by the learned Counsel for the petitioners that, since,these are financial transactions relating to transfer of monies fromthe accounts of the company through banking channels, the entiretransactions can be traced and no useful purpose would be servedby keeping the petitioners in [judicial ]custody. It is also submittedthat, since the investigating authority has examined the witnesses,namely the officials of the company and recorded their statementsand the information being available with the company, thesubmitted by the learned Counsel for the petitioners that, since,these are financial transactions relating to transfer of monies fromthe accounts of the company through banking channels, the entiretransactions can be traced and no useful purpose would be servedby keeping the petitioners in [judicial ]custody. It is also submittedthat, since the investigating authority has examined the witnesses,namely the officials of the company and recorded their statementsand the information being available with the company, thepetitioners would not have any access to deal or tamper with thesame. Finally, the learned counsel would submit that during thesame. Finally, the learned counsel would submit that during thependency of the present criminal petition, the Accused No.3 wasgranted bail on 24 .12.2O2O by the concerned Magistrate court.Therefore, the learned Counsel for the petitioners seeks for grant ofbail to the petitioners and would also submit that the [petitioners]would abide by any conditions as may be imposed by this Court forconsidering grant of bail.Therefore, the learned Counsel for the petitioners seeks for grant ofbail to the petitioners and would also submit that the [petitioners]would abide by any conditions as may be imposed by this Court forconsidering grant of bail.

8. Opposing the grant of bail, the learned Additional PublicProsecutor would submit that the [petitioners ]are involved in [large]scale financial irregularity to the tune of over [ten ][crores resulting]rn the defacto-complainant suffering financial loss. But for [the]

information given by the accused No.2, the same [would oot ][have]seen the light of the day. Learned Additional Public Prosecutorwould further submit that based on the complaint made by thedefacto-complainant, the respondent authority had registered theabove crime and commenced investigation thereinto. It is alsostated that in the process of investigation, the respondentauthority had examined seven witnesses as of today along with trvopunch witnesses. It is also stated that the investigation is inadvanced stage inasmuch as the investigating agency is required tocollect information as to the manner and method of flovy of fundsfrom the accounts of the accused Nos.2,3,4 and 5 to accusedNo.1 and how the said funds were used by the accused. LearnedAdditional Pubic Prosecutor would lurther submit that, though thetrial Court had granted custody of the petitioner/ accused No. I inCriminal Petition No.6840 of 2O2O, for a day, for investigation onlO .12.2O2O , nc, information could be elicited from thepetitioner/ accused No.1 as the petitioner / accused No. I did notcooperate with the investigation and, as such the respondentauthority did not seek for further extension of the police custody ofthe petitioner/ accused No. 1. Learned Additional Public Prosecutorwould also submit that if the petitioners are enlarged on bail, thepetitioner may resort to w,iping out the evidences relating to illegaltransactions undertaken by them, thereby hampering the processof investigation. The learned Additional Public Prosecutor wouldsubmit that the investrgating agency is conducting detailedinvestigation into the crime registered by collecting all the linkingevidences / material and thus, prays for dismissal of the presentpetition'- *-

9. Sri. Tarun G. Reddy, learned Counsel appearing on behalf ofthe defacto-complainant would submit that it is lor this Court toconsider the bail application having regard to the prima facie caseto be established by the petitioner. However, he would submit thatserious prejudice would be caused to the defacto-complainant, ifthe petitioners are granted bail, as the petitioners who are arrayedas accused Nos.1 and 2 have caused loss to the company to theextent of more than 10 crores. Learned Counsel would furthersubmit that, though initially information was given by the accusedNo.2 in February, 2O2O, to fne defacto-complainant, since, theauthorities did not resort to taking immediate action against thepetitioners merely based on the information, without the defacto-complainant company gathering necessary basic information ordocuments to show the involvement of petitioners in themisappropriation being complained of. It is only for the abovesaid reason, no action was taken either to withdraw the chequesigning power of the accused No. 1 in the above crime or the matterbeing complained to the respondent investigation agency. LearnedCounsei would further submit that it is upon completion of theinternal investigation, the petitioners were issued show causenotice and after receiving their reply and having found explanationgiven being not satisfactory, the defacto-complainant companyapproached the investigating authority and lodged the complainton 06.08.2020. Learned Counsel would further submit that even ifthis Court is inclined to consider grant bail to the petitioners, thiscourt may consider putting the petitioners on terms, as this courtmay consider deem fit in the facts of the case and also by takingnote of the fact that the petitioners are a flight risk case.

10. Having regard to the submissions [made as above, ][it ][is to ][be]seen that, though tLre defacto-complainant [was ]made aware [of ][the]financial irregularities and misappropriation being resorted to [by]the accused No. t in February, 2O2O, no immediate action [is ][taken]to withdraw the various powers vested in petitioner / accused [No.1]to deal with companies financial matters was taken, [which ][should]have been the instant reaction of tt,e defocto-complainanr and onthe other hand the petitioner/accused No.l was allowed to be atthe helm of frnancial affairs of the company till the time of beingissued with a show cause notice. It is also to be seen that, thoughthe complaint rvas given on 06.08.2020 for the reasons bestknown, the same was not registered for about nearly two monthsand was only registered on 01.10.2020 nor the defacto-complainant followed up with the authorities for registration ofcrime, is another factor which need to be taken note of. Similarly,since, the ofience for which the petitioners are charged withrelating to siphoning of funds from the companies account by wayof transactions through banking channels, traces of suchtransactions cannot be erased so easily, so as to hamper theprogress of investigation by the respondent authority. In view ofthe weight of all the above aspects of the matter, and the legalDoctrine laid dourn by the Hon'ble Supreme Court of India :n Stateof RaJasthan a. Balchand alias Baliyat, that - "Bail is Rule,JaiI is Exception", this Court is inclined to grant baii to thepetitioners, subje ct to the following conditions:

(i) The [petitioners/A-1 ]and A-2 shall be released on bailon each of the petitioners executing personal bond for an amount of Rs. 1,00,000/- (Rupees One Lakh only)with two sureties each for a like sum each to thesatisfaction of the XII Additional Chief MetropolitanMagistrate, City Criminal Court, Nampally, Hyderabad;

(ii) The petitioner (A. 1) in Criminal Petition No.6840 of2020 shall appear before the investigating authority onMonday, Wednesday and Friday; while the petitioner(A.2) in Criminal Petition No.7020 of 2O2O shall appearbefore the investigating authorit5z on Tuesday,Thursday and Saturday in between 10:00 a.m. and5:00 p.m,, till the competition of investigation andfiling of charge sheet before the concerned Magistratecourt and shall cooperate with the investigatingauthority and produce necessary / information as maybe required for expeditious investigation into thecrime;2020 shall appear before the investigating authority onMonday, Wednesday and Friday; while the petitioner(A.2) in Criminal Petition No.7020 of 2O2O shall appearbefore the investigating authorit5z on Tuesday,Thursday and Saturday in between 10:00 a.m. and5:00 p.m,, till the competition of investigation andfiling of charge sheet before the concerned Magistratecourt and shall cooperate with the investigatingauthority and produce necessary / information as maybe required for expeditious investigation into thecrime;

(iii) The petitioners shall deposit their passport into the XIIAdditional Chief Metropolitan Magistrate, CityCriminal Court, Hyderabad;Additional Chief Metropolitan Magistrate, CityCriminal Court, Hyderabad;

(iv) The petitioners shall not leave the jurisdiction of theconcerned Court without obtaining prior [permission]from the Court concerned;concerned Court without obtaining prior [permission]from the Court concerned; (") The petitioners after being enlarged on bail, shall notcontact with any of the witnesses or resort to [influence]or lntimidate the witnesses and also shall not try toremove or erase the evidence; andcontact with any of the witnesses or resort to [influence]or lntimidate the witnesses and also shall not try toremove or erase the evidence; and il ;, \

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To

("i) II the petitioners/A- [1 ][and A-2 ][fail ][to ][comply ][with ][any]of the conditions stipuiated [hereinabove, ][liberty]granted to them shall automatically [stand ][cancelled]and the respondent [petitioners/A-l ][and A-2 ][sha1l ][be]tzrken into custody forthwith [by ][following ][clue process]ol law.

1 1. Subject to the above, both [the ][criminal ][petitions tire ][allowed']Pending miscellaneous [petitions, ]if [any, ][shall ][stand ][closed ][in ][the]light of this firal order.

SI),'- [.K.SHYLESHI].\SlilSl [\\'l' ttll(il:iTlt'rll']V4/

//TRUE COPY//

]ECTION OFFICER

1. The XII Addl. Chief lYetropolitan Magistrate, Nampally, Hyderabad

2. The Superintendent, Chanchalguda Jail, Hyderabad

3. The Superintendent, Chanchalguda lail for Women, Hyderabad

4. The Station'louse Officer, Police Station Central Crime Station, Hyderabad

5. One CC to S.l K Pradeep Reddy, Advocate (OPUC)

6. One CC to STt N Anula Advocate [OPUC][OPUC]

7. Two CCs to the Public Prosecutor', High Court for the State ofTelangana(CUT)Telangana(CUT)

8. One spare copy.

i.

HIGH COURT

TVK,J

DATED: 3L.[2.2O2O

ORDER:

CRLP. NOs: 6840 & 7O2O of 2O2O

BAIL

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