Indiabulls Housing Finance Ltd vs Rhc Holding Private Limited Anr Ors

CRM-M-28655-2018 (O&M) 1

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH

Sr. No.267 CRM-M-28655-2018 (O&M) Date of decision : 02.11.2018

Indiabulls Housing Finance Limited ..... Petitioner

VERSUS

RHC Holding Private Limited and others ..... Respondents

CORAM: HON'BLE MR. JUSTICE SUDHIR MITTAL

Present: Mr. R.S. Rai, Sr. Advocate with Mr. V.K. Sachdeva, Advocate and Ms. Rubina Virmani, Advocate, for the petitioner.

Mr. J.S. Bedi, Sr. Advocate with Mr. Lovekirat S. Chahal, Advocate, for the respondents. ***** SUDHIR MITTAL, J.

The petitioner is a finance company. It has disbursed a loan

to respondent No.1. In discharge of its liability to repay the loan amount,

a cheque dated 5.12.2017, amounting to Rs.2,91,55,500/- was issued by

respondent No.1, but vide memo dated 27.12.2017, the same was

dishonoured. A legal notice under Section 138 of the Negotiable

Instruments Act, 1881, (hereinafter referred to as 'the Act') was issued,

but the cheque amount was not paid within the statutory period, leading to

filing of a complaint under Section 138 of the Act. Vide summoning

order dated 7.2.2018, the respondents were summoned for 27.4.2018. On

this date, the respondents put in appearance through counsel and sought

exemption from personal appearance on various grounds. Respondent

Nos.2 and 5 sought exemption on the ground of ill-health of the mother of

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respondent No.2 and respondent Nos.3 and 4 sought exemption on the

ground of their own ill-health. The matter was adjourned to 10.05.2018

on which date exemption was again sought on behalf of respondent Nos.2

to 5. Meanwhile, the petitioner filed an application dated 1.5.2018 for

putting respondent Nos.2 to 5 to terms. It was prayed that the said

respondents be directed to deposit their passports and not to leave the

country without prior permission of the Court. Vide impugned order

dated 29.5.2018, application dated 1.5.2018 filed on behalf of the

petitioner was rejected.

2. Notice of motion was issued vide order dated 11.7.2018, after

noticing that the respondents had taken a loan of Rs.481.56 crores and

their cheques worth total of Rs.10.55 crores had been dishonoured,

various complaints had been filed, but respondent Nos.2 to 5 failed to

appear personally and seek bail; the petitioner therefore, apprehended

that respondent Nos.2 to 5 might flee the country. On the next date of

hearing i.e. 30.7.2018, the respondents put in appearance through counsel

and sought time to file a reply. The case was adjourned to 31.8.2018 and

interim directions were issued restraining respondent Nos.2 to 5 from

travelling abroad without permission of the Court.

3. Thereafter, on 02.08.2018, a miscellaneous application for

modification/rectification of order dated 30.7.2018 was filed on behalf of

respondent Nos.2 to 5. It was stated therein that actual direction

contained in order dated 30.7.2018 was that respondent Nos.2 to 5 would

not travel abroad without 'informing' the Court, but by a clerical error,

the order records that the said respondents would not travel abroad

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without 'permission' of the Court. Since respondent Nos.4 and 5 were

due to leave the country on 4.8.2018, an application dated 2.8.2018 was

also filed before the trial Court for advancing the date of hearing.

Another application of even date was filed for grant of bail and a third

application of even date was filed for permission to travel abroad. Vide

order dated 2.8.2018, the trial Court granted bail and permitted

respondent Nos.4 and 5 to travel abroad. Meanwhile, the application for

modification/rectification of order dated 30.7.2018, was taken up in this

Court in the post lunch session and orally, it was conveyed to the parties

that there is no clerical error in the order and that respondent Nos.2 to 5

were required to take 'permission from this Court'. Thus, application for

modification/rectification was dismissed as not pressed. Thereafter, the

petitioner filed an application for issuance of appropriate directions

during the pendency of the present petition alleging that respondent Nos.2

to 5 were attempting to over-reach the Court. They were aware that this

Court vide order dated 30.7.2018 had directed them not to travel abroad

without the 'permission of this Court.' Yet, an application was filed

before the trial Court seeking permission to travel abroad and a similar

application was also filed before 'this Court' allegedly for

modification/rectification and during the course of arguments in the said

application, 'this Court' had specifically observed that permission of

'this Court' was required for travelling abroad. Moreover, even in the

past, they had sought exemption from personal appearance without

seeking bail on a number of occasions. Their act and conduct

demonstrates that respondent Nos.2 to 5 consider themselves to be above

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the law and therefore, they should be put to adequate terms. A reply to

this application has been filed, in which it is stated that there is no

attempt to over-reach. Order dated 30.7.2018 mentions 'the Court' and

therefore, in deference to that order, respondent Nos.4 and 5 moved an

application before the trial Court seeking permission to travel abroad. It

was only during the course of the arguments on 2.8.2018 that it transpired

that permission had to be taken from 'this Court' for permission to travel

abroad. By then, the application moved before the trial Court had already

been allowed. The Code of Criminal Procedure, 1973, permits the

Magistrate to grant exemption from personal appearance to an accused

person and in exercise of the said power, the concerned Magistrate did

grant exemption and therefore, it is wrong to suggest that respondent

Nos.2 to 5 are taking the Courts for a ride. Before seeking permission to

travel abroad, respondent Nos.4 and 5 sought bail and complied with the

terms of the order granting bail. The actions of respondent Nos.2 to 5

have been within confines of law.

4. Learned senior counsel for the petitioner argues that

respondents are indebted to the petitioner to the tune of Rs.746.14 crores.

A number of cheques issued by them for repayment of loan have been

dishonoured. The respondents owe a huge amount of

Rs.10,100 crores approximately to various financial institutions/other

entities and there are allegations of corporate fraud having been

committed by the respondent Nos.2 to 5 leading to investigations by

Securities and Exchange Board of India and the Serious Fraud

Investigation Organization. Thus, they are likely to flee the country

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without repaying public money taken by them as loans. Further, they

have been seeking exemption from personal appearance as a matter of

routine, even without taking bail on frivolous grounds. Their conduct

shows their arrogant nature and their perception that they are above the

law. Thus, even though, the offence under Section 138 of the Act, is

bailable, respondent No.2 to 5 be directed to deposit their passports and

seek permission of the Court before travelling abroad. The trial Court

was in error in rejecting the application moved by the petitioner. Recent

events in the country had shown that well connected and wealthy people

flee the country without repaying the loans taken by them and it would be

in the interest of the country at large, if appropriate conditions are

imposed upon respondent Nos.2 to 5 restricting their movement. Reliance

is placed upon a single bench judgment of this Court passed in 'CRM-M-

45749-2018 (O&M) titled as Pritpal Singh Vs. State of Punjab and

another decided on 13.2.2017'.

5. Learned senior counsel appearing for the respondents submits

that respondent Nos.2 to 5 respect the law of this Court and have not

violated the same. Exemption from personal appearance was sought on

account of inevitable circumstances and because the law permits the

same. An offence under Section 138 of the Act, is bailable and by virtue

of Section 436(1) Cr.P.C., an accused has a right to be granted bail

subject to terms imposed by the Court/Arresting Officer. There is no

sanction in law to imposition of conditions such as deposit of passports in

bailable offences. Only if, an accused violates a term of the bail such as

failure to appear on a date of hearing, in exercise of jurisdiction Section

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436 (2) Cr.P.C., the Court may impose conditions. It is also argued that

in exercise of jurisdiction under Section 482 Cr.P.C. this Court does not

have the right to pass orders when there is a specific provision in the Code

of Criminal Procedure, 1973, governing the relief sought. The present

case is not one of money laundering. It is a simple cheque bounce case

and the amount of default would not be a relevant consideration. The

impugned order is legal and in accordance with law and it deserves to be

upheld. Reliance is placed upon 'Vaman Narain Ghiya Vs. State of

Rajasthan, 2009(1) RCR (Criminal) 473', 'State of Punjab Vs.

Davinder Pal Singh Bhullar and others, 2012(1) RCR (Criminal)

126', 'State Rep. by D.S.P, S.B. C.I.D., Chennai Vs. K.V. Rajendran

and others, 2008(4) RCR (Criminal), 278' and 'Satya Narayan

Sharma Vs. State of Rajasthan, 2001(4) RCR (Criminal) 377.'

6. Section 436 of the Code of Criminal Procedure, 1973 is

reproduced below:-

"436. In what cases bail to be taken.-- (1) When any person other than a person accused of a non-bailable offence is arrested or detained without warrant by an officer in charge of a police station, or appears or is brought before a Court, and is prepared at any time while in the custody of such officer or at any stage of the proceeding before such Court to give bail, such person shall be released on bail:

Provided that such officer or Court, if he or it thinks fit, [may, and shall, if such person is indigent and is unable to furnish surety, instead of taking bail] from such person, discharge him on his executing a bond without sureties for his appearance as hereinafter provided:

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Provided further that nothing in this section shall be deemed to affect the provisions of sub-section (3) of section 116 [or section 446A].

[Explanation-where a person is unable to give bail within a week of the date of his arrest, it shall be a sufficient ground for the officer or the Court to presume that he is an indigent person of the purposes of this proviso].

(2) Notwithstanding anything contained in sub-section (1), where a person has failed to comply with the conditions of the bail-bond as regards the time and place of attendance, the Court may refuse to release him on bail, when on a subsequent occasion in the same case he appears before the Court or is brought in custody and any such refusal shall be without prejudice to the powers of the Court to call upon any person bound by such bond to pay the penalty thereof under section

446."

7. The language of the provision indicates that in a bailable

offence, an accused person has a right to grant of bail provided said

person is prepared to give bail subject to furnishing bonds with or without

sureties for securing his appearance. However, if the accused fails to

comply with the terms of the bail regarding time and place of attendance,

the Court may refuse to release him on bail when he is next brought

before it.

8. In Vaman Narain Ghiya's case (supra), it has been held as

under:-

"17. Chapter XXXIII consists of Sections 436 to 450. Sections 436 and 437 provide for the granting of bail to accused persons before trial and conviction. For the purposes of bail, offences are classified into two categories, that is, (i) bailable, (ii) non-bailable. Section 436 provides for

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granting bail in bailable cases and Section 437 in non bailable cases. A person accused of a bailable offence is entitled to be released on bail pending his trial. In case of such offences, a police officer has no discretion to refuse bail if the accused is prepared to furnish surety. The Magistrate gets jurisdiction to grant bail during the course of investigation when the accused is produced before him. In bailable offence there is no question of discretion for granting bail. The only choice for the Court is as between taking a simple recognizance of the principal offender or demanding security with surety. Persons contemplated by this Section cannot be taken in custody unless they are unable or unwilling to offer bail or to execute personal bonds. The Court has no discretion, when granting bail under this section, even to impose any condition except the demanding of security with sureties."

9. In view of the unambiguous wording of Section 436 of the

Code of Criminal Procedure, 1973, and its interpretation by the Supreme

Court of India in Vaman Narain Ghiya's case (supra), there is no room

for doubt that in a bailable offence an accused has an absolute right to bail

provided he is willing to give bail. Terms as to bail bonds and sureties

can be imposed by the Court, but no condition can be imposed as the

same would amount to curtailing the statutory right under Section 436

Cr.P.C. The judgment of this Court in Pritpal Singh's case (supra),

cannot apply to the facts of this case as in the said case the accused person

did not appear before the trial Court on a particular date of hearing

resulting in cancellation of his bail and surety bonds. Thereafter, when

the accused person was brought before the Court while granting bail

condition of deposit of passport was imposed.

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10. Adverting to the next contention of learned senior counsel for

the petitioner that considering the huge liability of the respondents,

restrictions should be placed on their movements, I am of the view that

allegations of serious fraud against respondent Nos.2 to 5 are still under

investigation. Proceedings under the relevant law are being taken. In case

the concerned authorities feel that restrictions should be placed on their

movements, they would seek appropriate directions from the appropriate

forum. I cannot rely on allegations made in other unrelated cases for the

purposes of imposing conditions in this case. No law has been cited in

this regard and therefore, I hold that allegations of fraud are not germane

to this case.

11. The contention of learned senior counsel for the petitioner

that a large amount of public money is owed by the respondents and that

this should be a relevant consideration while granting bail, also cannot be

accepted. The amount of default does not make a bailable offence

non-bailable. The principles governing grant of bail will not change

depending upon the cheque amount. The argument is not supported either

by the language of the statute or by any other legal principle and

accordingly, is rejected.

12. Learned senior counsel for the respondents has placed strong

reliance upon the principle that jurisdiction under Section 482 Cr.P.C.

cannot be used to pass orders, where a specific provision exists governing

the relief sought. His submission is that inherent power cannot be

invoked to by-pass inbuilt bar in Section 436(1) Cr.P.C. against

imposition of conditions while granting bail in bailable offence. The

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contention of learned senior counsel is sound and is based upon legal

principle. The contention is also supported by judgments cited by him i.e.

'Davinder Pal Singh Bhullar (supra), K.V Rajendran (supra) and

Satya Narayana Sharma (supra). However, the question is whether this

proposition is applies to the facts and circumstances of this case ? In my

opinion, it does not. The petitioner had filed an application for directions

to respondent Nos. 2 to 5 to deposit their passports and not to travel

abroad without permission of the Court. This application does not

mention any provision of law under which the same was filed and is thus,

relatable to Section 436 Cr.P.C. The application having been rejected

vide impugned order, the present petition under Section 482 Cr.P.C. has

been filed challenging the same. Thus, it cannot be said that the inherent

jurisdiction is being invoked for the purpose of by-passing Section 436

Cr.P.C. An order passed by the trial Court is amenable to challenge under

Section 482 Cr.P.C. and under the facts and circumstances of this case,

the argument of learned senior counsel for the respondents is rejected.

13. Finally, the parties have joined issue on whether the conduct

of respondent Nos.2 to 5 deserves to be deprecated. The offence is

bailable undoubtedly, but to my mind, even in a bailable offence, on

being summoned, the accused must immediately put in appearance and

seek bail. Only thereafter, they may seek exemption from personal

appearance in case the circumstances so warrant. However, in the present

case, respondent Nos.2 to 5 appeared to seek bail only when they had to

travel abroad. The trial Court continued to grant them exemption from

personal appearance, even though, the said exemption was sought on

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specious grounds such as ill-health of mother/mother-in-law. The trial

Courts must not feel over-awed by the financial status of a party and

must act in accordance with law un-fazed by the status of a party before

it. The Courts would do well to ensure that the letter and spirit of law is

obeyed under all circumstances.

14. So far as the allegations of the petitioner regarding, the

attempt by respondent Nos.4 and 5 to over-reach the Court by

approaching the trial Court on 2.8.2018 and not bringing this fact to the

notice of this Court while seeking modification/rectification of order

dated 30.7.2018, suffice to say that I am satisfied with the explanation

given by the respondents. No further orders are necessary under the

circumstances.

15. The petition is accordingly dismissed. The miscellaneous

applications stand disposed of and the interim orders passed stand merged

with the final judgment. It is, however, directed that whenever

respondent Nos.2 to 5 have to travel abroad, they shall inform the trial

Court regarding the dates of their travel, the purpose of the travel and the

destination.

(SUDHIR MITTAL) JUDGE 02.11.2018 Ramandeep Singh

Whether speaking / reasoned Yes / No Whether Reportable Yes/ No

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