Sulaiman and others v. State of Kerala

## `IN THE HIGH COURT OF KERALA AT ERNAKULAM` ## `PRESENT` ## `THE HONOURABLE MR.JUSTICE C.S.DIAS` ``` THURSDAY, THE 4[TH] DAY OF APRIL 2024 / 15TH CHAITHRA, 1946 ``` ``` BAIL APPL. NO. 1092 OF 2024 ``` ``` CRIME NO.2827/2023 OF ERNAKULAM SOUTH POLICE STATION, ERNAKULAM ``` ## `PETITIONER/S:` ``` 1SULAIMAN, AGED 68 YEARS SAFIYA ESTATE, NILAMEL P.O., KOLLAM, PIN – 691535 2SURENDRAN, AGED 54 YEARS SAFIYA ESTATE, NILAMEL P.O., KOLLAM, PIN – 691535 3ASHIFA SULAIMAN, AGED 49 YEARS SAFIYA ESTATE, NILAMEL P.O., KOLLAM, PIN – 691535 4SHABANA SULAIMAN, AGED 49 YEARS SAFIYA ESTATE, NILAMEL P.O., KOLLAM, PIN – 691535 5SEHRA SULAIMAN, AGED 31 YEARS SAFIYA ESTATE, NILAMEL P.O., KOLLAM, PIN – 691535 6YOUSAF SULAIMAN, AGED 26 YEARS SAFIYA ESTATE, NILAMEL P.O., KOLLAM, PIN – 691535 ``` ``` BY ADVS.NIKITA J. MENDEZ P.M.RAFIQ AJEESH K.SASI M.REVIKRISHNAN SRUTHY N. BHAT RAHUL SUNIL SRUTHY K.K SOHAIL AHAMMED HARRIS P.P. ``` _-:2:-_ _B.A.No.1092/2024_ ## `RESPONDENTS:` - `1 STATE OF KERALA, REPRESENTED BY PUBLIC PROSECUTOR, HIGH COURT OF KERALA, PIN – 682031` - `2 BINOJ. A.B , S/O. ABDUL BASHEER,TC NO.15/215, UDARASIROMANI ROAD,SASTHAMANAGALAM VILLAGE,THIRUVANANTHAPURAM ( SOUGHT TO BE IMPLEADED` ``` BY ADVS.K.K.DHEERENDRAKRISHNAN N.P.ASHA ``` ## `OTHER PRESENT:` ``` SR ADV SRI VIJAYABHANU ``` ``` SR PP SMT SEETHA S ``` ``` THIS BAIL APPLICATION HAVING COME UP FOR ADMISSION ON 04.04.2024, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ``` _B.A.No.1092/2024_ _-:3:-_ _Dated this the 4[th] day of April, 2024_ ## **O R D E R** The application is filed under Section 438 of the Code of Criminal Procedure, 1973, for an order of pre-arrest bail. 2. The petitioners are the accused Nos.1 to 6 in Crime No.2827/2023 of Ernakulam Town South Police Station, Ernakulam, registered against them for allegedly committing the offences punishable under Sections 120-B, 409, 420, 465, 468 & 471 read with Section 34 of the Indian Penal Code, 1860(in short, ‘IPC’). 3. The gravamen of the prosecution case is that: the first accused and the de-facto complainant had, in the year 2007, incorporated a company named ‘White Castle Realtors and Resorts India Private Limited’ with the first accused being the Managing Director with 5% shares and the de-facto complainant with the _B.A.No.1092/2024_ _-:4:-_ remaining shareholding. The company had purchased a property in Pettah Village, Thiruvananthapuram. The first accused, in connivance with the other accused, had fradulently removed the de-facto complainant from the position of the Director and transferred his shares to the other accused and, thereafter, the accused, in furtherance of their common intention, sold the property of the company, without the knowledge and consent of the de-facto complainant. Thus, the accused have committed the above offences. 4. Heard; Sri. Vijayabhanu. P, the learned Senior Counsel appearing for the petitioners; Smt.Seetha S., the learned Senior Public Prosecutor and Sri. K.K. Dheerendrakrishnan, the learned counsel appearing for the de-facto complainant/ intervenor. 5. The learned Senior Counsel for the petitioners submitted that the petitioners are totally innocent of the accusations levelled against them. A _B.A.No.1092/2024_ _-:5:-_ reading of Annexure-1 First Information Report [FIR] would substantiate that none of the offences alleged against the petitioners are sustainable in law. The very fact that the alleged incident occurred as early as on 01.01.2008 and the crime was registered only on 05.12.2023 i.e., after an inordinate delay of 15 years, proves the frivolity and the falsity in the crime. Pursuant to the interim order passed by this Court on 13.03.2024, the petitioners have subjected themselves to interrogation by the Investigating Officer and have co-operated with the investigation. They have produced all the documents that were in their possession before the Investigating Officer. Nonetheless, the Investigating Officer is demanding for records which have already been destroyed. The Investigating Officer is dancing to the tunes of the intervenor and pressuring the petitioners to yield to the intervenor’s demands. The first petitioner is aged _B.A.No.1092/2024_ _-:6:-_ 86 years, and the second petitioner is aged 54 years. The petitioner Nos.5 & 6 were only minors at the time of the alleged commission of the offences. The petitioners’ custodial interrogation is not necessary, and no recovery is to be effected. If the petitioners are arrested, they would be subjected to custodial torture. Hence, the applications may be allowed. 6. The learned Public Prosecutor opposed the application. She submitted that, notwithstanding the interim order passed by this Court on 13.03.2024, the petitioners are not co-operating with the Investigating Officer. They have only produced the resignation letter of the intervenor. The petitioners have deliberately not produced the other incriminating materials for the proper and full investigation of the crime. The petitioners’ custodial interrogation is necessary. Hence, the applications may be dismissed. 7. The learned counsel for the intervenor also _B.A.No.1092/2024_ _-:7:-_ opposed the application. He submitted that a reading of Annexures-5 & 8 documents would substantiate that they have forged by the accused. The originals of the documents are in the custody of the accused. The same have not been produced before the Registrar of Companies. The petitioners are deliberately not producing the documents with the intention to sabotage the investigation. Annexures-8 & 10 documents would show that amounts were transferred to the account owned and operated by the first accused. The intervenor has invested substantial amounts in the company, and he has been thoroughly cheated by the accused. The petitioners’ custodial interrogation is necessary, and the original documents are to be recovered. 8. The learned Senior Counsel refuted the above submissions and stated that, even as per law, the company is not supposed to keep any documents for a _B.A.No.1092/2024_ _-:8:-_ period of more than six years. He made available a letter submitted by the first petitioner to the Investigating Officer dated 25.03.2024, wherein it is, inter-alia, contended that the intervenor had resigned from the company as early as on 30.05.2008. The resignation letter in FORM 32 was uploaded on the portal of the Registrar of Companies on 05.11.2019 and the same was accepted by the Registrar of Companies on 06.11.2009. All the documents pertaining to the resignation of the intervenor were already entrusted to the Registrar of Companies. As per 283(g) of the Companies Act, 1956, if the Director absents himself for three consecutive meetings of the Board of Directors, it is presumed that his office is vacant. Even assuming that the intervenor has not resigned, he is absent from the Board of Directors, as per the presumption in law. The intervenor had left the company had not attended any of the meetings for 14 _B.A.No.1092/2024_ _-:9:-_ years. During the course of the interrogation, the Investigating Officer had asked for the original share transfer deeds. The company is not in a position of the original transfer deeds. But, photocopies were provided to the Investigating Officer which have not been accepted. However, in view of Section 397 of the Companies Act, 2013, a duly authenticated document by the Registrar can be treated as secondary evidence. The learned Senior Counsel submitted that, despite receipt of the said letter, the Investigating Officer is again demanding the documents which are not in their possession. The demand made by the Investigating Officer for the custodial interrogation of the petitioners is only under the pressure and influence of the intervenor. Hence, the application may be allowed. 9. On an analysis of the prosecution allegation, it can be seen that the first accused and the de-facto complainant had incorporated the company in the year _B.A.No.1092/2024_ _-:10:-_ 2007. The intervenor alleges that accused in prosecution of their common intention had forged his signature and fabricated a resignation letter in the year 2008. It is on the basis of the resignation letter that the accused had alienated the properties of the company in favour of a third person. Indisputably, all these transactions occurred between the period from 01.01.2008 to 30.12.2011. Indisputably, Annexure-1 FIR was registered on 05.12.2023, at 18.01 hours. 10. While dealing with a similar matter, the Honourable Supreme Court in **Ashok Kumar v. State of Union Territory, Chandigarh** [SLP (Crl.) No.9949/2023], taking note of the fact that the crime was registered after six years from the alleged date of incident and that the accused had joined the investigation, went on to observe that, even though custodial interrogation is one of the effective modes of investigation, it is equally true that just because _B.A.No.1092/2024_ _-:11:-_ custodial interrogation is not required, that by itself may not be a ground to release an accused on anticipatory bail if the offences are serious in nature. However, a mere assertion on the part of the State while opposing a plea for anticipatory bail that custodial interrogation is necessary would not be sufficient. The State has to show and indicate more than prima facie why custodial interrogation of the accused is required for the purpose of investigation. 11. In the case at hand, the offences alleged against the accused are under Sections 409, 420, 465, 468 & 471 of the IPC. On a consideration of the allegations, prima-facie, the dispute seems to be civil in nature. 12. In **Indian Oil Corporation v. NEPC India** **Ltd.** [(2006) 6 SCC 736], the Honourable Supreme Court observed in the following lines: - “13. ……. Any effort to settle civil disputes and _B.A.No.1092/2024_ _-:12:-_ claims, which do not involve any criminal offence by applying pressure through criminal prosecution should be deprecated and discouraged”. 13. Similarly in **Sarabjit Kaur v. State of Punjab** and Another [2023 SCC Online 210] the Honourable Supreme Court held that, a mere breach of contract does not give rise to criminal prosecution for cheating unless fraudulent or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up a promise will not be enough to initiate criminal proceedings. 14. Again in **ARCI v. Nimra Cerglass Technics** **(P) Ltd.** [(2016) 1 SCC 348] the Honourable Supreme Court while considering the difference between breach of contract and the offence of cheating held that the distinction depends upon the intention of the accused at the time of the alleged incident. Only if the the dishonest intention of the accused can be established at the time of entering the transaction the criminal _B.A.No.1092/2024_ _-:13:-_ liability can be attracted. 15. Recently, in **Sachin Garg V. State of U.P.** [(2024) KHC Online 6046], the Honourable Supreme Court has again reiterated that a mere breach of contract will not constitute the offence of cheating. 16. The parameters to grant an order of pre-arrest bail have been succinctly laid down by the Hon’ble Supreme Court in **Siddharam Satlingappa Mhetre v. State of Maharashtra** [(2011) 1 SCC 694] in the following lines: “111. No inflexible guidelines or straitjacket formula can be provided for grant or refusal of anticipatory bail. We are clearly of the view that no attempt should be made to provide rigid and inflexible guidelines in this respect because all circumstances and situations of future cannot be clearly visualised for the grant or refusal of anticipatory bail. In consonance with the legislative intention the grant or refusal of anticipatory bail should necessarily depend on the facts and circumstances of each case. As aptly observed in Satishchandra Ratanlal the Constitution Bench decision in Sibbia case [(1980) 2 SCC 565 : 1980 SCC (Cri) 465] that the High Court or the Court of Session has to exercise their jurisdiction under Section 438 CrPC by a _B.A.No.1092/2024_ _-:14:-_ wise and careful use of their discretion which by their long training and experience they are ideally suited to do. In any event, this is the legislative mandate which we are bound to respect and honour. 112. The following factors and parameters can be taken into consideration while dealing with the anticipatory bail: (i) The nature and gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made; (ii) The antecedents of the applicant including the fact as to whether the accused has previously undergone imprisonment on conviction by a court in respect of any cognizable offence; (iii) The possibility of the applicant to flee from justice; (iv) The possibility of the accused's likelihood to repeat similar or other offences; (v) Where the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her; (vi) Impact of grant of anticipatory bail particularly in cases of large magnitude affecting a very large number of people; (vii) The courts must evaluate the entire available material against the accused very carefully. The court must also clearly comprehend the exact role of the accused in the case. The cases in which the accused is implicated with the help of Sections 34 and 149 of the Penal Code, 1860 the court should consider with even greater care and caution because overimplication in the cases is a matter of common knowledge and concern; (viii) While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors, namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention _B.A.No.1092/2024_ _-:15:-_ 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”. 17. On an overall consideration of the facts, the rival submissions made across the Bar, and the materials placed on record and the law referred to in the afore-cited decisions, and on prima facie being satisfied that the petitioners have co-operated with the Investigating Officer and the disputes that have been raised are prima-facie civil in nature, I am of the view that the petitioners’ custodial interrogation is not necessary. Consequently, I hold that the petitioners have made out exceptional grounds to invoke the extra ordinary jurisdiction of this Court under Section 438 of the Code. _B.A.No.1092/2024_ _-:16:-_ In the result, the application is allowed subject to the following conditions: - (i) The petitioner Nos 1 to 4 and 6 are directed to surrender before the Investigating Officer within ten days from today. Taking into account the fact that the fifth petitioner is pregnant and has been advised bed rest as per Annexure-14 certificate, I permit the fifth petitioner to surrender before the Investigating Officer within one month from today. - (ii) In the event of the petitioners’ arrest, the Investigating Officer shall produce them before the jurisdictional court on the date of surrender itself. - (iii) On such production, the jurisdictional court shall release the petitioners on bail on them executing a bond for Rs.1,00,000/- (Rupees One Lakh only) each with two solvent sureties for the like amount each, to the satisfaction of the jurisdictional court; _B.A.No.1092/2024_ _-:17:-_ - (iv) The petitioners shall co-operate with the investigation and make themselves available for interrogation and for the purpose of investigation as and when directed by the Investigating Officer; - (v) The petitioners shall not intimidate the witnesses or interfere with the investigation in any manner; - (vi) The petitioners shall not get involved in any other offence while on bail. - (vii) In case of violation of any of the conditions mentioned above, the jurisdictional court shall be empowered to consider the application for cancellation of bail, if any filed, and pass orders on the same, in accordance with law. - (viii) Applications for deletion/modification of the bail conditions shall also be filed before the court below. - (ix) Needless to mention, it would be well within the powers of the Investigating Officer to _B.A.No.1092/2024_ _-:18:-_ investigate the matter and, if necessary, to effect recoveries on the information, if any, given by the petitioners even while the petitioners are on bail as laid down by the Hon'ble Supreme Court in **Sushila Aggarwal v. State (NCT of Delhi) and another** [2020 (1) KHC 663]. - (x) The observations made in this order are only for the purpose of considering the application and the same shall not be construed as an expression on the merits of the case to be decided by competent Courts. Sd/- ## **C.S.DIAS,JUDGE** DST/04.04.24 //True copy// P.A. To Judge _B.A.No.1092/2024_ _-:19:-_ ## `APPENDIX` - `PETITIONER ANNEXURES` - `Annexure 1 TRUE COPY OF THE FIR ALONG WITH THE F.I. STATEMENT IN CRIME NO. 2827/2023 OF THE ERNAKULAM TOWN SOUTH POLICE STATION` - `Annexure 2 TRUE COPY OF THE 41A NOTICE ISSUED TO THE 1ST APPLICANT IN CRIME NO. 2827/2023 OF ERNAKULAM TOWN SOUTH POLICE STATION` - `Annexure 3 TRUE COPY OF THE 41A NOTICE ISSUED TO THE 2ND APPLICANT IN CRIME NO. 2827/2023 OF ERNAKULAM TOWN SOUTH POLICE STATION` - `Annexure 4 TRUE COPY OF THE MINUTES OF FIRST MEETING OF THE BOARD OF DIRECTORS OF WHITE CASTLE REALTORS AND RESORTS INDIA PRIVATE LIMITED DATED 20-09-2007` - `Annexure 5 TRUE COPY OF THE RESIGNATION LETTER DATED 30-05-2008 ISSUED BY THE DEFACTO COMPLAINANT` - `Annexure 6 TRUE COPY OF THE MINUTES OF FIRST MEETING OF THE BOARD OF DIRECTORS OF WHITE CASTLE REALTORS AND RESORTS INDIA PRIVATE LIMITED DATED 31-05-2008` - `Annexure 7 TRUE COPY OF FORM 32, FOR REMOVAL OF THE NAME OF DIRECTOR FILED BEFORE THE REGISTRAR OF COMPANIES` - `Annexure 8 TRUE COPY OF THE FORM 7B, SHARE TRANSFER FORM, FILED BEFORE THE REGISTRAR OF COMPANIES` - `Annexure 9 TRUE COPY OF THE CHEQUES DATED 03-11-2009 ISSUED BY INDUSIND BANK LTD. TO THE DEFACTO COMPLAINANT` - `Annexure 10 TRUE COPY OF THE RELEVANT PAGE OF THE BANK STATEMENT DEPICTING THE RELEVANT TRANSACTION.` - `Annexure A11 TRUE COPY OF AFFIDAVIT SWORN BY THE 5TH APPLICANT SIGNIFYING HER INCONVENIENCE TO` _B.A.No.1092/2024_ _-:20:-_ ## `APPEAR BEFORE THE INVESTIGATION OFFICER` ``` Annexure A12TRUE COPY OF THE MEDICAL CERTIFICATE DATED 16-03-2024 ISSUED BY DR. GOPIKA MATRIA EXCLUSIVE WOMAN AND CHILD HOSPITAL Annexure 13TRUE COPY OF AFFIDAVIT SWORN BY THE APPLICANT SIGNIFYING HER INCONVENIENCE TO APPEAR BEFORE THE INVESTIGATION OFFICER. Annexure 14TRUE COPY OF THE MEDICAL CERTIFICATE DATED 16-03-2024 ISSUED BY DR. GOPIKA, MATRIA EXCLUSIVE WOMAN AND CHILD HOSPITAL. ```