Facts of the Case

The three connected petitions arose from the same FIR and sought anticipatory bail in a criminal case initially registered under Section 420 IPC, with Sections 467, 468, 471 and 120-B IPC subsequently added.

The complainant, Manisha Bansal, and the petitioners belonged to the same family. Petitioner Anu Bansal was the complainant’s sister-in-law; Kamal Kishore Bansal was her brother-in-law; Rabia Bansal was the wife of the complainant’s nephew; and Sunny Bansal was the complainant’s nephew.

According to the prosecution case, the complainant and Anu Bansal were partners in M/s Shiva Knitters, a partnership firm established in 2004. The firm maintained three bank accounts for its business operations, and those accounts were operated by the complainant and Anu Bansal. The firm also had GST registration bearing GST No. 03AAZFS4553R1Z6.

The prosecution alleged that on 20.02.2020, Anu Bansal opened a separate bank account in the name of M/s Shiva Knitters with Amritsar Central Cooperative Bank, Chetanpura Branch, without disclosing this fact to the complainant. It was further alleged that Anu Bansal submitted an affidavit dated 22.06.2021 stating that she was the sole owner of M/s Shiva Knitters.

As per the prosecution allegations, approximately ₹8,05,73,032 from the business earnings of the firm was deposited into the said account. Out of this amount, approximately ₹1,59,23,290 was allegedly transferred into the personal bank accounts of Anu Bansal, Kamal Kishore Bansal, Rabia Bansal, Sunny Bansal and certain relatives.

The prosecution further alleged that Kamal Kishore Bansal opened another bank account in the name of M/s Shiva Knitters with Canara Bank, Court Road Branch, Amritsar, and that Kamal Kishore Bansal and Rabia Bansal signed documents as partners of the firm. A new GST number was also allegedly obtained.

A family settlement was entered into on 09.11.2020 and registered before the Sub-Registrar, Amritsar, on 10.12.2020. However, according to the prosecution case, the terms of the family settlement were not complied with.

Following a detailed inquiry by the Deputy Commissioner of Police (Law & Order), Amritsar, the FIR was registered.

During the pendency of the proceedings, the High Court had referred the dispute to its Mediation and Conciliation Centre and stayed the arrest of the petitioners to facilitate mediation. However, the mediation proceedings remained unsuccessful.

Issues Involved

The principal issues before the High Court were:

  1. Whether the existence of an arbitration clause in the partnership deed could justify grant of anticipatory bail where allegations involved cheating, forgery, use of forged documents, criminal conspiracy and diversion of substantial partnership funds.
  2. Whether the alleged family settlement and its registration automatically dissolved the partnership firm.
  3. Whether allegations regarding opening separate bank accounts in the firm’s name without the knowledge or consent of the other partner required custodial interrogation.
  4. Whether the claim that transferred amounts represented repayment of unsecured loans was sufficient to justify anticipatory bail.
  5. Whether the role of persons who were primarily alleged to be beneficiaries of transferred funds could be distinguished from the role of persons accused of opening accounts, using allegedly forged documents and diverting partnership funds.
  6. Whether the family and commercial character of the dispute excluded or diluted the alleged criminal offences.

Petitioners’ Arguments

The petitioners contended that the dispute was essentially among family members and arose from partnership and financial arrangements.

It was argued that Clause 16 of the partnership deed contained an arbitration clause under which disputes between the partners were required to be referred to arbitration. According to the petitioners, the existence of such a contractual mechanism demonstrated the predominantly civil and commercial nature of the dispute.

The petitioners further alleged that Vikas Bansal, husband of the complainant, had himself embezzled partnership funds and transferred approximately ₹1.5 crore from the firm’s account to his personal HDFC Bank account in connivance with bank officials. It was also alleged that he had stolen two cheques and certain factory documents, regarding which Anu Bansal had already submitted a police complaint on 21.02.2020.

Anu Bansal contended that the separate bank account had been opened bona fide. It was further argued that after execution and registration of the family settlement on 10.12.2020, the partnership firm stood automatically dissolved. On this basis, the FIR was characterised as an attempt to harass, humiliate and extract valuable consideration from the petitioners.

The petitioners also contended that, pursuant to the family settlement, Anu Bansal had transferred a large number of properties in favour of the complainant, whereas the complainant had transferred only two properties in her favour.

Another important argument was that Anu Bansal had advanced unsecured loans to the partnership firm. According to the petitioners, those loans were duly reflected in the books of account and Income Tax Returns. Therefore, amounts transferred into personal accounts could be treated as repayment of unsecured loans rather than misappropriation.

Regarding Kamal Kishore Bansal and Rabia Bansal, it was argued that they were not partners of the firm and had not submitted documents to the bank for opening the firm’s account as alleged by the prosecution. Any amounts received by them were stated to be connected with payments made toward unsecured loans of the firm.

Sunny Bansal similarly contended that any amount credited to his account was received against unsecured loans extended to the firm and that he otherwise had no connection with the alleged incident.

Respondent State’s Arguments

The State opposed the anticipatory bail petitions and contended that the FIR was registered only after a thorough inquiry.

It was submitted that relevant documents had been collected and examined and that an FSL report had been obtained regarding the allegedly forged signatures of the complainant. According to the State, the FIR was registered only after such verification and inquiry.

The State specifically referred to the investigation findings concerning transfers from the account maintained with Amritsar Central Cooperative Bank, Chetanpura Branch. According to the status report referred to before the Court, amounts were transferred as follows:

  • ₹56,63,000 to Anu Bansal’s personal account;
  • ₹1,05,00,000 to her husband’s account;
  • ₹7,80,000 to Rabia Bansal’s account;
  • ₹1,00,000 to Sunny Bansal’s account;
  • ₹6,00,000 to Gopal Kapoor’s account; and
  • ₹3,80,290 to Sandhya Kapoor’s account.

The State therefore argued that the nature, magnitude and pattern of the alleged transactions did not justify the concession of anticipatory bail.

Complainant’s Arguments

The complainant opposed the petitions and contended that there were specific allegations against the petitioners and other accused persons of acting in connivance to misappropriate approximately ₹8 crore belonging to the firm.

It was alleged that Anu Bansal opened a separate account by using forged and fabricated documents without the complainant’s knowledge or consent. It was further alleged that she submitted an affidavit portraying herself as the sole proprietor of the firm even though the partnership had not been dissolved and no consent had been obtained from the complainant.

The complainant further argued that a consent letter dated 01.04.2021 and attested on 09.04.2021, purportedly signed by Anu Bansal and Manisha Bansal, was found to be forged.

It was also alleged that Kamal Kishore Bansal and Rabia Bansal opened a new account in the name of the firm by representing themselves as partners.

Court Order / Findings

The High Court noted that interim protection from arrest had earlier been granted with the objective of facilitating mediation because the parties were family members. However, the mediation proceedings failed.

1. Arbitration Clause Did Not Justify Anticipatory Bail

The Court rejected the petitioners’ reliance on the arbitration clause in the partnership deed.

The Court found that before registration of the FIR, the matter had been thoroughly inquired into by the Deputy Commissioner of Police (Law & Order), Amritsar. According to the Court’s findings at the anticipatory-bail stage, documents were found to have been forged, and a bank account of the firm had allegedly been opened by Anu Bansal behind the back of the complainant, who was the other partner.

The Court also noted the allegation that approximately ₹8 crore had been deposited in the account and approximately ₹1,59,23,290 had been transferred in the name of Anu Bansal and co-accused persons.

Accordingly, the mere presence of an arbitration clause did not persuade the Court to grant anticipatory bail in the face of allegations involving forgery and diversion of substantial partnership funds.

2. Family Settlement Did Not Automatically Dissolve the Partnership

The Court rejected the argument that execution and registration of the family settlement on 10.12.2020 automatically dissolved the partnership firm.

The Court observed that the complainant and the prosecution maintained that the family settlement had not been implemented by the parties. In those circumstances, the Court held that there was no basis to conclude that the partnership firm automatically stood dissolved.

3. Custodial Interrogation Required for Anu Bansal and Kamal Kishore Bansal

Having regard to the allegations and facts of the case, the High Court declined anticipatory bail to Anu Bansal and Kamal Kishore Bansal.

The Court found that their custodial interrogation was required to investigate how separate bank accounts of the firm were allegedly opened without the consent and knowledge of the complainant and behind her back, as well as to investigate the alleged misappropriation of the firm’s funds.

Accordingly:

  • CRM-M-4227-2022 filed by Anu Bansal was dismissed.
  • CRM-M-999-2022 was dismissed qua Kamal Kishore Bansal.

4. Interim Anticipatory Bail Granted to Rabia Bansal and Sunny Bansal

The Court distinguished the role of Rabia Bansal and Sunny Bansal.

Taking into consideration that they were beneficiaries of amounts transferred to their accounts by Anu Bansal, the Court accepted their prayer for ad-interim anticipatory bail.

Accordingly, Rabia Bansal and Sunny Bansal were directed to join the investigation. Upon doing so, they were to be released on interim bail to the satisfaction of the Investigating Officer/Arresting Officer, subject to the conditions contemplated under Section 438(2) CrPC.

5. Anticipatory Bail Cannot Obstruct Statutory Investigation

The Court expressly clarified that anticipatory bail granted in exercise of judicial discretion should not operate as an inroad into the statutory investigational powers of the police.

The matter was adjourned to 16.01.2023.

Important Clarification

This judgment is significant for several reasons:

First, the existence of an arbitration clause in a partnership deed does not, by itself, neutralise criminal allegations involving forgery, cheating, use of forged documents, conspiracy and alleged diversion of substantial business funds.

Second, a family settlement does not necessarily result in automatic dissolution of a partnership merely because it has been executed and registered. The implementation and legal effect of the settlement remain material, particularly where the prosecution and complainant assert that the settlement was never implemented.

Third, the Court differentiated between the alleged principal actors and persons whose role was comparatively limited to receiving transferred amounts. This distinction materially affected the anticipatory-bail outcome.

Fourth, the fact that parties are family members or that the dispute has a commercial background does not automatically convert allegations of forgery and misappropriation into a purely civil dispute.

Fifth, the judgment demonstrates that custodial interrogation may be considered necessary where the investigation concerns the alleged opening of undisclosed bank accounts, forged documents, unauthorised representations regarding ownership or partnership status, and tracing of substantial fund transfers.

Sixth, the reference to the firm’s GST registration and the allegation that a new GST number was obtained formed part of the factual prosecution narrative. However, the anticipatory-bail petitions themselves arose from offences under the IPC and the application of Section 438 CrPC. The judgment did not adjudicate a substantive tax demand or GST liability under the CGST Act.

Sections Involved

Indian Penal Code, 1860:

  • Section 420 – Cheating and dishonestly inducing delivery of property
  • Section 467 – Forgery of valuable security, will, etc.
  • Section 468 – Forgery for the purpose of cheating
  • Section 471 – Using as genuine a forged document
  • Section 120-B – Criminal conspiracy

Code of Criminal Procedure, 1973:

  • Section 438 – Anticipatory bail
  • Section 438(2) – Conditions that may be imposed while granting anticipatory bail

Link to download the order -https://www.mytaxexpert.co.in/uploads/1783490370_1383compressed.pdf

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