Facts of the Case

The petitioner, Sandeep Kumar, filed a second petition under Section 439 of the Code of Criminal Procedure, 1973, seeking regular bail in connection with FIR No. 578 dated 04.10.2018, registered at Police Station City Fatehabad, District Fatehabad. The FIR involved alleged offences under Sections 420, 120-B and 34 of the Indian Penal Code, 1860, along with Sections 3, 4, 5 and 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

The prosecution case, as reflected through the connected bail proceedings of co-accused, arose from a complaint by Vikram and 99 other persons alleging that accused persons had induced investors to part with substantial sums on the representation that their money would be doubled within a short period. Huge amounts were allegedly invested in RTPS Life Care Private Limited, described in the order as a chit fund company, through banking transactions. The State alleged that innocent members of the public had been swindled of more than ₹59 crore.

The petitioner had remained in judicial custody for approximately 2 years, 11 months and 25 days. A significant subsequent development was that an application filed by the prosecution under Section 319 CrPC had been allowed, resulting in additional persons being summoned as accused. According to the petitioner, this development was likely to prolong the proceedings substantially, particularly as only four prosecution witnesses had been examined.

The petitioner also relied upon the fact that co-accused Kuldeep and Ajay Pal @ Dilbag had already been granted regular bail by a Coordinate Bench through a composite order dated 09.09.2022 in CRM-M Nos. 5627 and 25161 of 2021.

Issues Involved

The principal issues before the High Court were:

  1. Whether prolonged judicial custody of nearly three years, coupled with the remote possibility of early conclusion of trial, justified grant of regular bail under Section 439 CrPC.
  2. Whether the petitioner was entitled to bail on the ground of parity with similarly placed co-accused who had already been granted regular bail.
  3. Whether the summoning of additional accused under Section 319 CrPC, and the consequent likelihood of further delay in trial, constituted a material subsequent circumstance supporting the second bail petition.
  4. Whether the seriousness of allegations involving cheating, conspiracy and an alleged money circulation/chit fund scheme outweighed the petitioner’s long incarceration pending trial.
  5. Whether the petitioner’s asserted role as merely an employee of the company, as distinguished from co-accused allegedly managing its affairs, supported grant of bail.

Petitioner’s Arguments

The petitioner submitted that the present second bail petition was founded upon a new and substantial ground, namely that he had remained in judicial custody for 2 years, 11 months and 25 days, while the trial was not progressing toward an early conclusion.

It was argued that the Coordinate Bench had already granted regular bail to co-accused Kuldeep and Ajay Pal @ Dilbag. The petitioner sought parity with those co-accused and further contended that they were managing the affairs of the company, whereas he was only an employee.

The petitioner further submitted that:

  • he was not involved in any other case under Section 420 IPC;
  • his prolonged incarceration had continued without conclusion of trial;
  • the prosecution’s application under Section 319 CrPC had been allowed and additional accused had been summoned;
  • only four prosecution witnesses had been examined;
  • the addition of further accused was likely to prolong the proceedings considerably; and
  • continued detention was therefore unjustified when the trial was likely to take a long time.

Respondent’s Arguments

The State opposed the grant of bail. In the connected co-accused proceedings reproduced in the judgment, the prosecution had alleged that the accused, acting in connivance with one another, had swindled innocent members of the public of more than ₹59 crore and were alleged to be masterminds behind the scam.

The State had also expressed apprehension that the accused could pose a flight risk and might abscond if released on bail. However, in the petitioner’s present proceedings, learned State counsel, on instructions from ASI Birbal and on the basis of the custody certificate filed before the Court, did not dispute the factual position concerning the petitioner’s custody and the stage of trial.

Court Order / Findings

The High Court allowed the petition without commenting upon the merits of the case.

The Court considered the following circumstances decisive:

  • the petitioner had remained in long judicial custody;
  • two co-accused had already been granted regular bail by the High Court;
  • the trial was likely to take a long time to conclude; and
  • the factual position regarding custody and progress of trial was not disputed by the State.

Accordingly, the High Court directed that the petitioner be released on regular bail upon furnishing appropriate bail/surety bonds to the satisfaction of the Trial Court, Duty Magistrate or Illaqa Magistrate concerned.

Important Clarification

The bail order was passed without expressing any opinion on the merits of the prosecution case. The grant of regular bail did not amount to a finding that the petitioner was innocent, nor did it determine the correctness of allegations concerning cheating, criminal conspiracy or the alleged money circulation scheme.

The decision is significant for the principle that even where allegations involve substantial financial fraud, the Court may consider prolonged pre-trial incarceration, parity with co-accused, subsequent procedural developments under Section 319 CrPC, and the likelihood of delayed conclusion of trial while exercising jurisdiction under Section 439 CrPC.

A further important distinction emerging from the petitioner’s submissions was that the co-accused already released on bail were alleged to have managed the affairs of the company, whereas the petitioner claimed that he was merely an employee. The Court, however, granted bail without adjudicating the merits of this factual assertion.

Sections Involved

  • Section 439, Code of Criminal Procedure, 1973 – Special powers of the High Court and Court of Session regarding bail.
  • Section 319, Code of Criminal Procedure, 1973 – Power to proceed against other persons appearing to be guilty of an offence.
  • Section 420, Indian Penal Code, 1860 – Cheating and dishonestly inducing delivery of property.
  • Section 120-B, Indian Penal Code, 1860 – Punishment for criminal conspiracy.
  • Section 34, Indian Penal Code, 1860 – Acts done by several persons in furtherance of common intention.
  • Section 3, Prize Chits and Money Circulation Schemes (Banning) Act, 1978 – Banning of prize chits and money circulation schemes or enrolment as members or participation therein.
  • Section 4, Prize Chits and Money Circulation Schemes (Banning) Act, 1978 – Penalty for contravening Section 3.
  • Section 5, Prize Chits and Money Circulation Schemes (Banning) Act, 1978 – Penalty for other offences connected with prohibited schemes.
  • Section 6, Prize Chits and Money Circulation Schemes (Banning) Act, 1978 – Offences by companies.

Link to download the order –https://www.mytaxexpert.co.in/uploads/1783326817_1268compressed.pdf

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