Facts of the Case

The petitioner, Srinivas, shown as Accused No. 1, filed a petition under Section 438 of the Code of Criminal Procedure seeking anticipatory bail in Crime No. 179 of 2022 of Sirguppa Police Station, registered for offences punishable under Sections 406 and 420 IPC.

According to the prosecution case recorded by the High Court, the Municipal Council, Town Municipality, Shirguppa filed a complaint alleging that the petitioner, a Class-I Contractor, had undertaken work valued at:

  • Contract work: ₹31,97,575
  • GST: ₹3,83,709
  • Total: ₹35,81,285

The order records the relevant date as 01 January 2022.

The petitioner allegedly commenced execution of the work on 10 February 2022 and completed it on 18 April 2022.

An amount of ₹13,70,773 was paid to the petitioner for execution of sewerage works.

The complainant received a report from the inspection team of the Kalyana Karnataka Development Board and sent a requisition through the complainant to the Deputy Commissioner seeking release of the remaining balance amount of ₹21,16,926.

The prosecution alleged that when the Executive Engineer, District Urban Development Cell, Ballari, inspected the spot on 01 July 2022, deficiencies were noticed in the execution of the work.

The allegations recorded by the Court included that:

  • Work of less than the specified density/thickness was allegedly found in relation to asphalting.
  • The estimated specification contemplated 50 mm asphalting (BM) and 25 mm (SDBC).
  • The petitioner allegedly executed poor-quality work without using prescribed quality material.
  • 10 MPA work was allegedly found instead of M20 grade concrete.

On these allegations, a complaint was filed against the petitioner and Crime No. 179 of 2022 was registered for offences punishable under Sections 406 and 420 IPC.

The petitioner apprehended arrest and initially approached the competent Sessions Court through Criminal Miscellaneous No. 624 of 2022 seeking anticipatory bail.

The Principal District and Sessions Judge, Ballari, rejected that application by order dated 16 September 2022.

The petitioner thereafter approached the Karnataka High Court seeking anticipatory bail.

Issues Involved

The principal issues arising before the High Court were:

  1. Whether the petitioner/Accused No. 1 was entitled to anticipatory bail under Section 438 CrPC in Crime No. 179 of 2022.
  2. Whether allegations of violating tender conditions and executing allegedly low-quality municipal contract work justified denial of pre-arrest bail.
  3. Whether the alleged conduct disclosed circumstances requiring custodial arrest when the offences under Sections 406 and 420 IPC were not punishable with death or imprisonment for life.
  4. Whether the question of actual execution of low-quality work and alleged cheating required investigation and determination through the final report.
  5. Whether the prosecution’s apprehension that the petitioner could hamper the investigation or tamper with prosecution witnesses could be adequately addressed through stringent bail conditions.
  6. Whether the petitioner’s status as a Class-I Contractor, permanent residence, and undertaking to cooperate with investigation supported grant of anticipatory bail.
  7. Whether the GST component of ₹3,83,709 recorded as part of the total contract amount had any independent bearing on the criminal allegations.

Petitioner’s Arguments

Learned counsel for the petitioner advanced the following submissions:

1. Offences Not Punishable with Death or Life Imprisonment

The petitioner contended that the offences alleged against him were not punishable with death or imprisonment for life.

2. Petitioner Was a Class-I Contractor

It was submitted that the petitioner was a Class-I Contractor.

3. No Earlier Allegation of Low-Quality Work

The petitioner argued that there was no allegation that he had previously executed low-quality work.

4. False Complaint Due to Difference of Opinion

The petitioner submitted that there had been some difference of opinion between him and the complainant and that, on account of such difference, a false complaint had been filed against him.

5. Willingness to Cooperate with Investigation

The petitioner undertook to cooperate with the police during investigation.

6. Willingness to Abide by Conditions

The petitioner expressed readiness to comply with any terms and conditions imposed by the High Court.

On these grounds, the petitioner sought anticipatory bail.

Respondent’s / State’s Arguments

The learned High Court Government Pleader opposed the anticipatory bail petition.

The State advanced the following contentions:

1. Investigation Was in Progress

The prosecution submitted that investigation in the criminal case was still underway.

2. Violation of Tender Conditions

The State contended that the petitioner had violated tender conditions.

3. Low-Quality Work Allegedly Executed

It was argued that the petitioner had carried out low-quality work and committed the alleged offences.

4. Offences Punishable with Imprisonment for Several Years

The State emphasised that the offences alleged against the petitioner carried punishment extending to several years of imprisonment.

5. Risk of Hampering Investigation

The prosecution apprehended that, if granted anticipatory bail, the petitioner might hamper the ongoing investigation.

6. Risk of Witness Tampering

The State also contended that the petitioner could tamper with prosecution witnesses.

On these grounds, the respondent sought rejection of the petition.

Court Order / Findings

After considering the submissions of the petitioner and the State, the High Court examined:

  • the complaint,
  • the FIR, and
  • the order passed by the Sessions Court.

The Court recorded that the petitioner was a Class-I Contractor and that the contract work had been awarded to him by the Town Municipality, Shirguppa.

The allegation was that, while executing the contract work, the petitioner violated tender conditions by carrying out low-quality work and thereby cheated the complainant.

Whether Low-Quality Work Was Actually Done Is a Matter of Investigation

The High Court specifically observed that whether the petitioner had actually carried out low-quality work and cheated the complainant was a matter for:

  • investigation, and
  • filing of the final report.

This was a significant factor in the Court’s consideration of the anticipatory bail application.

Offences Not Punishable with Death or Life Imprisonment

The Court noted that the offences alleged against the petitioner were not punishable with:

  • death, or
  • imprisonment for life.

Undertaking to Cooperate

The Court took note of the petitioner’s undertaking to cooperate with the police during investigation.

Petitioner Could Be Easily Secured

The Court observed that the petitioner was a resident of Karur Village in Shirguppa Taluka and could be secured easily for purposes of investigation and trial.

Prosecution Concerns Could Be Addressed by Conditions

The principal prosecution objection was that grant of anticipatory bail might result in:

  • hampering of investigation, and
  • tampering with prosecution witnesses.

Having regard to the facts, circumstances and submissions, the High Court found valid grounds to grant anticipatory bail subject to specific terms and conditions.

Final Court Order

The Karnataka High Court allowed the petition filed under Section 438 CrPC.

Consequently, the petitioner/accused was ordered to be released on bail in the event of his arrest in Crime No. 179 of 2022 of Sirguppa Police Station, subject to the following conditions:

  1. Personal Bond and Surety:
    The petitioner was directed to execute a personal bond of ₹1,00,000 with one surety for the like sum to the satisfaction of the Investigating Officer.
  2. Appearance Before Investigating Officer:
    The petitioner was directed to voluntarily appear before the Investigating Officer within 15 days from the date of the order, execute the bail bond and furnish surety.
  3. Periodic Attendance at Police Station:
    The petitioner was directed to remain present before the concerned police station on every first and third Sunday of each month between 10:00 a.m. and 2:00 p.m.

This attendance requirement was to continue for:

    • a period of two months, or
    • until filing of the final report,

whichever was earlier.

  1. Cooperation with Investigation:
    The petitioner was required to cooperate with the police and make himself available for interrogation whenever required.
  2. No Inducement, Threat or Promise to Witnesses:
    The petitioner was prohibited from directly or indirectly making any inducement, threat or promise to any witness acquainted with the facts of the case so as to dissuade such person from disclosing facts to the Court or any police officer.
  3. No Obstruction or Hampering of Investigation:
    The petitioner was directed not to obstruct or hamper the police investigation.
  4. No Interference with Evidence:
    The petitioner was prohibited from interfering or playing mischief with evidence already collected or yet to be collected by the police.

Important Clarification

This order is an anticipatory bail order and not a final adjudication of whether the petitioner actually executed substandard work, violated tender conditions, committed criminal breach of trust, or cheated the complainant.

The High Court expressly treated the question of whether the petitioner had done low-quality work and cheated the complainant as a matter for:

  • investigation, and
  • filing of the final report.

Therefore, grant of anticipatory bail should not be interpreted as:

  • acquittal of the petitioner,
  • quashing of the FIR,
  • a finding that the work met contractual specifications,
  • a finding that no tender condition was violated,
  • a finding that Sections 406 or 420 IPC were inapplicable, or
  • a final determination that the complaint was false.

Specific GST Clarification

The order records a contract work amount of ₹31,97,575, a GST component of ₹3,83,709, and a total of ₹35,81,285.

However, the uploaded judgment does not record:

  • any offence under the CGST Act, 2017,
  • any offence under the Karnataka GST Act,
  • any GST evasion allegation,
  • any fraudulent input tax credit allegation,
  • any fake invoice allegation,
  • any GST demand adjudication, or
  • any interpretation of a GST statutory provision.

Accordingly, the reference to GST in this case is part of the monetary composition of the contract amount recorded in the prosecution narrative. It should not be presented as an independent GST prosecution or substantive GST case law.

Sections Involved

·         Section 438 CrPC – Anticipatory Bail

·         Section 406 IPC – Punishment for Criminal Breach of Trust

·         Section 420 IPC – Cheating and Dishonestly Inducing Delivery of Property

Link to download the order -

https://www.mytaxexpert.co.in/uploads/1783405293_1193compressed.pdf

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