Sri.M.G.Mohan Kumar, vs State of Karnataka

Heard the learned counsel for the applicant and

the learned counsel for the petitioners on the

application I.A.No.2/2017 seeking permission of this

Court to assist the public prosecutor.

Perused the application. Application

I.A.NO.2/2017 is allowed and the counsel is permitted

to assist the prosecution in hearing the petition.

This is a petition filed by petitioners-accused

Nos.1 to 3 under Section 438 of Cr.P.C seeking

anticipatory bail and to direct the respondent police to

release the petitioners-accused on bail in the event of

arrest of the petitioners for the alleged offences

punishable under Sections 406, 420, 465, 468, 477A

and 120B of IPC registered by the respondent police in

Crime No.87/2017.

Heard the arguments of the learned counsel

for the petitioners-accused Nos.1 to 3, learned counsel

for the applicant who has come on record and the

learned High Court Government Pleader for the

respondent state.

Learned counsel for the petitioners submit

that vague and bald allegations are made in the

complaint alleging that there is misappropriation of the

funds. Looking to the Audit Report which is produced

by the petitioners, the Auditor has clearly opined that

there is no misappropriation of any funds of the

company. In this connection learned counsel for the

petitioners drew the attention of this Court to Page

No.85 of the file and to the last paragraph of the

Auditor''s Report wherein it is stated as follows:

"During the course of our examination of the books and records of the company, carried out in accordance with generally accepted auditing practices in India and according to the information and explanation given to us, we have neither come across any fraud on or by Company noticed or reported during the year, nor have been informed of such case by management."

Referring to this observation made by the

Auditor i.e., Chartered Accountant, learned counsel

submits that it clearly goes to show that there is no

misappropriation of the funds at all. He also drew the

attention of this Court to the contents of the complaint

and to clause 9 in the said complaint and submitted

that complainant has mentioned in the said paragraph

that audited report will be submitted in due course of

investigation. In this connection, he submits that

already Audit Report is produced by the learned counsel

for the petitioners herein and there is no

misappropriation. Hence, the question of producing the

Auditor''s Report will not arise at all. Hence, he submits

that there is no prima-facie case made out by the

complainant to attract the alleged offences. Further he

submits that all the offences are triable by the

Magistrate Court and they are not exclusively

punishable with death or life imprisonment. Hence, by

imposing reasonable conditions petitioners may be

admitted to anticipatory bail.

Per contra, counsel representing the

complainant made submission that he has also

produced the documents and looking to the Auditors

Report produced for the period 31.03.2015 to

31.03.2016, learned counsel drew the attention of the

Court to the relevant part in the said report and stated

that it is very clear at this stage that prosecution has

established prima-facie material regarding the

misappropriation of the funds in the company. Hence,

he submits that matter requires consideration and it is

necessary to interrogate the petitioners herein.

Therefore, petitioners are not entitled to anticipatory

bail at this stage and the petition may be rejected.

Learned HCGP representing the State also

submits that petitioners are not entitled to be granted

with anticipatory bail.

I have perused the grounds urged in the bail

petition, FIR, complaint and other documents produced

by the petitioners along with petition including the

Audited Report and the documents produced by the

respondent-complainant. Looking to these materials, at

this stage, I am of the opinion that there is prima-facie

case to show that there is misappropriation of the

amount by the petitioners. The documents, receipts,

vouchers, bills were not properly maintained. Even for

loan there is no security taken. Therefore, considering

these aspects of the matter and the magnitude of the

amount alleged to be involved in the case, it is not a fit

case to grant anticipatory bail.

Hence, petition is hereby rejected.

In view of the disposal of the main petition

I.A.No.1/2017 does not survive for consideration.

Hence, I.A.No.1/2017 is disposed of.