Sunithabeegum And Ors vs Central Bureau Of Investigation And Ors

Applications filed under Sections 438 and 439 of the Cr.P.C for anticipatory and regular bail.

The applicants in BA No. 2607/2021 for anticipatory bail are accused numbers 2, 4 and 5 while the applicants in BA No. 2619/2021 for regular bail are accused numbers 1 and 3 in Crime No. RC 3 (A)/2019/CBI/ACB/Cochin registered by the Central Bureau of Investigation, ACB, Cochin. The applicants are accused of committing offences punishable under Sections 120 B, 406 and 420 of the I.P.C and under Section 13 (2) read with 13 (1) (d) of the Prevention of Corruption Act, 1988. The prosecution was launched on the basis of a complaint filed by the Regional Manager, Business Office-1, State Bank of India, Thiruvananthapuram and the Controller of State Bank of India, Kowdiar branch alleging that the the 1st accused as the Managing Director and the rest of the accused as Directors of M/s.Heera Construction Company Pvt. Ltd. , a construction company, hatched a conspiracy and dishonestly induced the State Bank of India (formerly, State Bank of Travancore) Kowdiar branch to deliver a loan of Rs 9.90 crores to them on mortgaging properties and deceitfully alienated the properties offered as primary security and collateral security for the loan and committed criminal breach of trust.

The 1st accused, Mr.Abdul Rasheed, is the husband of the 2nd accused and they have three children born in that wedlock who are accused numbers 3, 4 and 5. The 1st accused is engaged in construction of residential and non-residential apartment complexes throughout the State of Kerala mainly concentrating business in the cities of Thiruvananthapuram, Kochi and Kottayam. M/s. Heera Construction Company Pvt. Ltd. (HCCPL) was formed by the 1st accused with its registered office at Panaji. There is also a regional office in Thiruvananthapuram. There is a sister company named M/s. Heera Lifestyle, Tripunithura. A loan of Rs 15,00,00,000/- was availed by M/s. Heera Lifestyle from the Kerala State Financial Corporation. The entire loan was repaid on time as evident from Annexure 1. The companies of the accused had availed loans from various other financial institutions as well for various projects and those loans have been repaid and settled. HCCPL is the owner of 50 cents of land in Kollam Corporation purchased in the year 1996. The company constructed a commercial complex named "Heera Plaza" having three floors with 72 shop rooms in Kollam. Out of the said rooms, 46 shop rooms together with the undivided share in the land were sold to various persons and the balance 26 shop rooms remain unsold. A cash credit facility of Rs 15 crores was availed from the Kowdiar branch of erstwhile State Bank of Travancore (SBT) as per Annexure 2 letter dated 02/12/2013. The collateral security offered by the company is the undivided share in 52.15 cents of land and the balance 26 shop rooms remaining in two floors of Heera Plaza project at Kollam. The primary security was equitable mortgage of 79.7 cents of land in Attipara village besides the personal guarantee of the 1st accused and that of his wife, who is arraigned as the 2nd accused. When the company decided to sell 14 shop rooms together with the equivalent undivided share to a person named Murali, he applied for a loan before the Kerala State Financial Enterprises (KSFE) to make the purchase. Since the shop rooms and proportionate undivided share was mortgaged with State Bank of Travancore, the KSFE by Annexure-3 letter dated 20-07-2016 requested SBT to issue a non-encumbrance certificate for granting the loan, and SBT issued non-liability certificate to KSFE. Similarly, in respect of sale of other 8 shop rooms, SBT issued Annexure-4 no objection certificate dated 29-08-2015 for three shop rooms and Annexure-5 NOC dated 20-10-2015 for sale of 5 shop rooms. While so, the loan become NPA and the balance liability was fixed at Rs.9.90 Crores. The SBT merged with State Bank of India (SBI) under Section 35 of State Bank of India Act w.e.f. 01-04-2017. The SBI then filed a complaint alleging that the sale of 14 shop rooms and undivided share in the land was without the consent of the Bank and thereby accused cheated the Bank. On the basis of the complaint, Annexure-6 FIR was registered on 10-04-2019, as stated earlier. No public servants were implicated as accused. The CBI conducted an investigation, in the course of which, all the Directors except the 4th accused were summoned before the CBI, and were interrogated. All the documents requisitioned by the CBI were produced. After investigation, CBI filed a final report on 29-06-2020 as against the Directors of the Company. However, the Court below did not accept the final report and returned the same on 30-06-2020 for further investigation regarding involvement of Bank officials. Thereafter, the CBI summoned A1 and A3 to the CBI office, and they appeared before the 2nd respondent. After interrogation, their arrest was recorded on 10-03-2021 and produced before the CBI Court, Trivandrum. The CBI submitted Annexure-7 remand report seeking for judicial remand. The 2nd respondent also filed a petition for police custody. Police custody was given till 15-03-2021, and thereafter they were remanded to judicial custody as per Annexure-8 remand report. The accused Nos. 1 and 3 filed Crl.M.P.No.26 of 2021 for bail before the jurisdictional court, and vide Annexure-9 order dated 17-03-2021, the bail application was rejected mainly on the ground that the investigation is still in the infancy, and that their release would adversely affect the investigation.

A1 states that he is a Chronic Diabetic Neuropathic Type-1 patient and is installed with an insulin pump. He is also having chronic hypertension and is having back pain due to Vertebral Lesion. Further, he is also having Benign Prostate Hyper Plasia. Annexure-10 is the report of the MRI Whole Spine Screening of KIMS DDNMRC, Trivandrum dated 23-12-2019. Annexure-11 is the Discharge Card from the Medical College Hospital, Trivandrum dated 18-11-2020 of A1. Annexure-12 is the Discharge Summary of A1 dated 23-11-2020, issued from the Aster Medicity. A3 had undergone surgery for removal of Thymic Tumour/ Cyst in the mediastinum on 15-10-2020 at Yenepoya Specialty Hospital, Manglore. A true copy of the Certificate issued from Yenepoya Specialty Hospital dated 26-10-2020 is Annexure-13 indicating that he cannot take up any strenuous activities with restrictive travelling and is advised to avoid dusty environment. It is submitted that applicants have not committed any offence. Even if the sale of 14 shop rooms without the consent of SBI is true, it will not make out an offence, as the first charge of the undivided share and the shop rooms are with the Bank and they have the liberty to ignore the same. Moreover, the Bank has taken possession of the secured assets and the property, which is sufficient and more to discharge the liability.

The rest of the applicants state that they had little role in the affairs of the company as it was all managed by the first accused. A1 and A3 had appeared before the CBI investigating officer, they were thoroughly interrogated and the final report was filed even without seeking their custody. It was only consequent to the return of the final report that A1 and A3 were arrested and produced for remand. It is thereafter that the Investigating officer sought their custody, and were given custody till 15/03/2021. The custody of accused 2, 4 and 5 may not help the prosecution in any manner. Hence they seek anticipatory bail. The applicants state that they are willing to cooperate with the investigation and their detention may not be justified.

A statement was also filed by the Assistant Solicitor General reiterating the case of the prosecution. It is stated that the rooms sold by A1 to Murali illegally and without the permission of the Bank have been further sold to 3rd parties who are presently in possession of the shop rooms. Further investigation was conducted in consequence to the return of the final report. Investigation was conducted regarding the roles of public servants Sri .R Ramaswamy, the then AGM and the then Deputy Manager, Smt. Veena Das. It is also submitted that the company has been declared insolvent and liquidation proceedings are pending before the National Company Law Tribunal. The investigation also revealed that the accused are in possession of unencumbered property at Nedumangad, which is worth Rs100 crores and a College of Engineering is functioning there.

Heard the learned Senior Counsel Sri S. Sreekumar appearing for the applicants as instructed by Sri Martin Jose. Sri. Suvin R Menon, appeared for the CBI.

After having heard the learned Senior Counsel appearing for the applicants, and the learned counsel appearing for the CBI and having gone through the records produced and the objections filed, and on going through the precedents on the subject like; Gurubaksh Singh Sibbia V. State of Pujab [1980 KHC 665 :1980(2) SCC 565], Siddharam Satlingappa Mhetre V. State of Maharashtra [2010 KHC 4952: AIR 2011 SC 312] and Sushila Aggarwal and Ors v. State (NCT of Delhi) and Another [2020(5)SCC 1 : 2020(1) KHC 663], I find that in the instant case, the investigation was earlier completed by the CBI and the final report was also filed. No public servants were implicated as accused, although the provisions of the Prevention of Corruption Act were incorporated. Even after the final report was returned by the jurisdictional Court, except for recording the statement of the Bank officials who are connected with the issuance of the no objection Certificate, none have been arraigned as accused. A1 and A3 were taken into custody for custodial interrogation.

They cannot be taken into custody again even though, in the objection it is stated that their custodial interrogation is a must for the purpose of identifying the public servants involved in the crime. HCCPL has since gone into liquidation and the National Company Law Tribunal is seized of the matter. The accused have sufficient unencumbered assets worth Rs 100 crores. I find no reason for the applicants to flee from justice. A1 and A3 who were at the helm of affairs of the company have already been questioned and they are in custody since 10/03/2021. Both these accused have some illnesses as pointed out. A1, in particular, is suffering from comorbidities like diabetes and hypertension. He is a senior citizen. The prosecution has not pointed out to any criminal antecedents of the accused persons. A2 and A5 are ladies without any antecedents. A1 has in his application for bail admitted that he was the person who constituted the company and was running the business as Managing Director. In cases where an offence is committed by a company, the person or persons who are at the helm of affairs and responsible for the functioning of the company could be made accused. There is no specific overt act attributed to the rest of the Directors of the company. I therefore find that further detention of A1 and A3 may not be required and therefore they are entitled to regular bail. Custodial interrogation of the rest of the applicants is not found to be essential for the purpose of investigation and hence, they are entitled to pre-arrest bail.

In the result, the bail applications are both allowed. A1 and A3 are directed to be released on bail on execution of a bond for Rs5,00,000/- (Rupees five lakhs only) each with two solvent sureties for like amount each to the satisfaction of the jurisdictional Court. Accused Nos.2, 4 and 5 shall in the event of their arrest be released on bail on execution of a bond for Rs5,00,000/- (Rupees five lakhs only) each with two solvent sureties for like amount each to the satisfaction of the arresting officer. The bail granted to the accused shall be subject to the following conditions:

They shall appear before the investigating officer as and when required and cooperate with the investigation

They shall surrender their passports before the jurisdictional Court and shall be entitled to get it released for going abroad only with the permission of the jurisdictional Court on such conditions as may be imposed by that Court. In case they do not have a passport, they shall file an affidavit to that effect before the jurisdictional Court.

They shall not tamper with evidence, intimidate or influence witnesses.

Breach of the conditions above shall entail in cancellation of bail on request made by the prosecution before the jurisdictional Court.