Hari Arjuna Panda @ Butu vs State of Orissa

The appellant Hari Arjuna Panda @ Butu who was the Additional Director of M/s. Tresty Securities Ltd. (hereafter ''the company'') has filed

this appeal under section 13 of the Odisha Protection of Interests of Depositors (in Financial Establishments) Act, 2011 (hereafter ''OPID Act'') to

set aside the impugned order dated 17.10.2016 passed by the learned Presiding Officer, Designated Court, OPID Act, Cuttack in C.T. Case

No.18 of 2015 in rejecting his prayer for bail with a further prayer for grant of bail. The said case arises out of Khurda E.O.W., Bhubaneswar

P.S. Case No.14 of 2015 in which first charge sheet has been submitted on 10.03.2016 under sections 467, 468, 471, 420, 406 read with

section 120-B of the Indian Penal Code and section 6 of the OPID Act and sections 4, 5 and 6 of the Prize Chits and Money Circulation Schemes

(Banning) Act, 1978 (hereafter ''1978 Act'') and the investigation has been kept open under section 173(8) of the Cr.P.C.

The prosecution case, as per the first information report lodged by one Prasant Kumar Majhi of village Eram under Basudevpur police station in

the district of Bhadrak before the Superintendent of Police, Economic Office Wing, Bhubaneswar is that the informant was a teacher and he came

to know about the company making wide propaganda to provide higher rate of interest on different schemes of the company than any other

Nationalized Bank. The appellant was one of the Directors of the company and the head office of the company was located at Bhubaneswar and

one of the branch offices was at Basudevpur. Being induced by the Managing Director and Directors of the company, the informant deposited a

sum of Rs.8,28,700/- (rupees eight lakhs twenty eight thousand and seven hundred only) in different schemes of the company and obtained money

receipts and share certificates but before the maturity of the deposit amount, the company closed down the head office as well as the branch

offices and the accused persons absconded. It is further stated in the F.I.R. that the accused persons have misappropriated several crores of

rupees collected from hundreds of investors and they have misutilised the public money for their personal benefits. It is further stated that the

company deceived the innocent investors/depositors for their self gain by manufacturing forged documents and using the same as genuine for the

purpose of cheating in connivance with each other.

After registration of the case, Tapan Kumar Mohanty, Deputy Supdt. of Police, EOW, CID, CB, Bhubaneswar took up investigation of the

case. During course of investigation, the appellant was arrested on 18.11.2015 and it was found out that the company was having its head office at

Jayadev Bihar, Bhubaneswar and co-accused Dayanidhi Mohapatra was the Managing Director of the company and other accused persons

including the appellant were the Directors of the company. The company had floated various schemes and induced the general public through

various means including distribution of pamphlets, brochures etc. to deposit money in the company with a promise of paying higher rate of interest

as compared to Nationalized Banks and other financial institutions. No permission was taken by the company from RBI and SEBI for its business

activity. It was found that the accused persons conspired together and fabricated false documents with a dishonest intention to cheat the depositors

and failed to render service for which the deposits were collected. The investors across the State produced the money receipts and preference

share certificates which were issued to them under the signatures of the appellant and other co-accused persons. The appellant was forwarded to

the Court on the date of his arrest. Finding prima facie evidence against the appellant and other co-accused persons, the first charge sheet was

submitted on 10.03.2016 under sections 467, 468, 471, 420, 406 read with section 120-B of the Indian Penal Code and section 6 of the OPID

Act and sections 4, 5 and 6 of the 1978 Act keeping the investigation open.

Mr. Manoj Behari Das, learned counsel appearing for the appellant contended that the appellant is in custody since 18.11.2015 and he was the

Additional Director of the company and he had tendered his resignation on 28.07.2013. It is further contended that co-accused Rasmi Ranjan

Mohapatra has been granted bail by this Court in BLAPL No.398 of 2016 vide order dated 24.01.2017 and as per the charge sheet, the said

coaccused had played a vital role in respect of getting the company registered with ROC, selecting the houses located at Bhubaneswar and other

places for functioning of the offices of the company and making agreement with concerned house owners, contacting the charted accountant

engaged by the company, issuance of bonds/certificates/money receipts as a token of acceptance of money from public, inducing the innocent

public to deposit with the company in the pretext of high rate of interest etc. It is further contended that the appellant''s bail application may be

favourably considered on the ground of parity and equity and the cash security of Rs.10,00,000/- and property surety Rs.15,00,000/- which were

imposed on the co-accused Rasmi Ranjan Mohapatra should not be imposed on the appellant as the role of the appellant in the company affairs is

trivial in nature and he is not in a position to furnish such security.

Mr. Bibekananda Bhuyan, learned Addl. Govt. Advocate appearing for the State on the other hand filed an affidavit of the Investigating Officer

wherein it is indicated that though the first charge sheet has been submitted but further investigation of the case is under progress and money trailing

of the accused persons are to be made in detail, complicities of other suspects are to be verified and details of scrutiny of bank documents are also

to be made. It is further indicated in the affidavit that the appellant along with his associates induced the general public through various means

including distribution of pamphlets, brochures etc. to deposit money in the company with promises of paying high rate of interest and the company

also floated various scheme such as own your house plot scheme (OYHPS), fixed deposit (preference share) and monthly income scheme. It is

further indicated that the appellant was the Additional Director of the company who was inducted on 20.03.2012 and no document was found

during investigation that the appellant had tendered his resignation from the company on 28.07.2013 and there is no such entry in the Register of

company. It is further stated that the company was inducing the depositors on the plea to pay high interest rate which is quite more as compared to

Nationalized Banks and other financial institutions without the permission of RBI and SEBI and the company was running money circulation

scheme which was an illegal activity. It is further stated in the affidavit that the investigation so far revealed that the company had collected three

crores forty nine lakhs sixty six thousand and six hundred rupees from different depositors of various schemes. It is further stated that since it is an

economic offence, the interest of public in general is to be taken care of rather than that of the personal interest of the appellant. It is further stated

that the materials on record show that the accused persons have embezzled huge amount of public money by fraudulently cheating innocent

persons and prima facie case is made out against the appellant and three of the bank accounts of the appellant were verified and it was found that

there was suspicious transaction of Rs.12 lakhs made in one of the accounts of Bank of India after the appellant became Addl. Director of the

Company and Rs.24 lakhs was transacted in the said account from the date of opening of the account.

The learned counsel for the appellant filed a rejoinder affidavit to the objection filed by the State wherein it is indicated that the appellant was a

mere matriculate and without knowing the duty and responsibility of a Director in a company, when a job was offered in the company as Addl.

Director, he joined the company but when he came to know about the fraudulent activities of the Managing Director, he sent a letter to the

Managing Director to accept his resignation from the directorship and also to make necessary arrangement with the Registrar of Companies for

removal of his name from the directorship. It is further stated that the appellant became a scape goat when the allegation was made against the

company by the depositors with the police. It is further stated that after the appellant became the Addl. Director of the company, he had raised a

gold loan for an amount of Rs.2,02,000/- (rupees two lakhs two thousand) from ICICI Bank and such money was deposited in the Bank of India

account and on 29.12.2014 in order to set up a poultry farm, the appellant raised a loan of Rs.15,00,000/- from Kadabarang Branch of Bank of

India. It is further contended that the appellant has no money and therefore, he is not in a position to clear up the loan which he raised from the

Bank of India for which the loan account was declared as a non-performing asset (NPA) by the Bank Authority.

Adverting to the contentions raised by the learned counsels for the respective sides, though it is not disputed that the co-accused Rasmi Ranjan

Mohapatra has been granted bail by this Court in BLAPL No.398 of 2016 but it was with a condition that he has to furnish cash security Rs.10

lakhs and property security of Rs.15 lakhs. It is stated at the Bar that the said accused has not yet furnished the cash security for which he is still

languishing in custody. The learned counsel for the appellant fairly submitted that the appellant is not in a position to furnish any cash security. The

contention of the learned counsel for the appellant that the appellant was not aware about the duty and responsibility of a Director in a company

and that he was induced to sign some papers on the basis of which he became Addl. Director of the company by the fraudulent act of the

Managing Director Dayanidhi Mohapatra is too difficult to be accepted as this juncture. The materials collected during course of investigation and

the first charge sheet clearly reveals the position of the appellant in the company as Addl. Director and he was holding such post since 20.03.2012.

Similarly the factum of resignation of the appellant from the post of Addl. Director since 28.07.2013 as contended by the learned counsel for the

appellant is not borne out from any corresponding documents of the company. There are materials to show that the company has collected huge

deposits of more than three crores from different depositors on the basis of various schemes by making false promises to the depositors of high

rate of interest. The conspiracy between the accused persons, fabrication of false documents with dishonest intention to cheat the depositors is

prima facie apparent so also suspicious transition of rupees twelve lakhs in the account of the appellant after he became the Addl. Director of the

company. There is no dispute that the case relates to the commission of economic offences.

In the case of Y.S. Jagan Mohan Reddy -Vrs.- CBI reported in (2013) 55 Orissa Criminal Report (SC) 825, it is held as follows:-

Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences

having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the

economy of the country as a whole and thereby posing serious threat to the financial health of the country.

While granting bail, the Court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the

punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of

securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of public/State

and other similar considerations.

In case of State of Gujurat -Vrs.- Mohan Lal Jitamalji Porwal reported in AIR 1987 SC 1321, it is held as follows:-

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The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be

committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with

an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the community can be manifested only at

the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from

the quarters which view white colour crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest"".

In case of Nimmagadda Prasad -Vrs.- CBI reported in (2013) 7 Supreme Court Cases 466, it is held as follows:-

Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence have

been deep-rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting

the economy of the country as a whole and thereby posing serious threat to the financial health of the country.

Thus on a careful scrutiny of the entire materials available on record, it is prima facie apparent that the appellant was the Addl. Director of the

company and he was directly involved in the affairs of the company. The contentions raised by the learned counsel for the appellant that the

appellant had not played any active role with regard to the collection of any deposits from the public by the company and that he was made a

scape goat by co-accused Dayanidhi Mohapatra is not acceptable inasmuch as it has come on record that the appellant and other Directors used

to motivate the depositors to invest money in the company for higher returns by distributing pamphlets and brochures. There is also evidence

relating to money trailing to the personal account of the appellant to the tune of Rs.12,00,000/- (rupees twelve lakh only). A deep-rooted criminal

conspiracy between the appellant and the co-accused persons is also prima facie apparent as a result of which innocent depositors were allured to

invest their hard earned money with the company and the appellant has played a crucial role in cheating the public and misappropriating the public

money by making false promises. In view of the nature of accusation, the punishment prescribed for the offences under which the first charge sheet

has been submitted, prima facie availability of supporting materials to establish such accusation, the continuance of further investigation to unearth

many vital links, role played by the appellant in the entire episode, the impact of such economic offences on the society particularly on the common

man who are poor, downtrodden, underprivileged and belong to the middle class families and the fact that though the learned counsel for the

appellant is claiming parity of the appellant with the co-accused Rasmi Ranjan Mohapatra who has been enlarged on bail but submits that the

appellant cannot comply with the term of deposit of cash security which was imposed on the co-accused, in the larger interests of public and State,

I am not inclined to release the appellant on bail at this stage. The first charge sheet was submitted on 10.03.2016 and in the meantime more than

one year and nine months has passed. The Investigating Officer shall make every endeavour to conclude the investigation as expeditiously as

possible, if the same has not been concluded in the meantime. The appellant is at liberty to move the learned trial Court for bail after conclusion of

investigation which will be considered on its own merit without being influenced by any observation made in this order.

Accordingly, the CRLA stands dismissed. Lower Court records be sent back immediately.