"May Adversely Affect Investigation": Andhra Pradesh HC Denies Anticipatory Bail To Man Accused In ₹28 Cr Bank Fraud Case

Justice T. Mallikarjuna Rao, in his order, held:

“The Power under section 438 of Cr.P.C., is extraordinary and must be exercised sparingly. The Power of the pre-arrest bail should be granted only in exceptional cases. To some extent, the grant of anticipatory bail interferes in the sphere of investigation of an offence, and the Court must be circumspect while exercising such Power for the grant of anticipatory bail. The grant of anticipatory at the investigation stage may frustrate the investigating agency in interrogating the accused and collecting helpful information and the materials which might have been concealed. Success in such interrogation will elude if the suspected person knows that he is well protected and insulated by a pre-arrest bail order when he is interrogated.”

"As previously noted, the Prosecution asserts that the custodial interrogation of the Petitioner is imperative. The Petitioner withdrew the amount of Rs.1.5 crore. Given these circumstances, the contention put forth by the Petitioner's counsel is challenging to endorse. The material on record indicates that the investigation is at the initial stage. The Petitioner has to be interrogated in the custody. The ordering of anticipatory bail to the Petitioner may adversely affect the investigation process," it added. 

Background

The Court was hearing the petitioner's plea for anticipatory bail in an FIR registered under offences of cheating, criminal breach of trust and criminal conspiracy punishable under BNS Sections 318(4), 316(5), 61(2), respectively.

Initially, on 09.10.2024, the CID Police Station in Mangalagiri received a complaint from the Head-Retail of ICICI Bank, Vijayawada reporting that multiple ICICI Bank customers complained of fraudulent activities including unauthorised overdraft taken on FDs, invalid FC receipts, fraudulent diversion of funds to third party accounts through cheques against OD limit reductions, and missing jewels from gold loans.

After conducting internal checks, it was found that ICICI Bank employees, including the Branch Manager, Regional Head-Sales, and Gold Loan Counsellor, had orchestrated a money transfer fraud of approximately Rs 28.34 crores using various schemes targeting existing and new customers.

It was alleged that they built personal relations with the customers and encouraged them to invest in FDs and gold loans, promised zero interest on gold loans, enrolled customers in fraudulent schemes, and misused their deposits. It was also alleged that they  manipulated FD accounts and loans by using fake receipts and OTPs. Based on the investigation, the petitioner was added as Accused No. 20.

The petitioner contended that he was a victim and not an accused and was neither a banker nor an authorized individual. He said that he had only approached accused no. 1 to open an account for his friend and was unaware of the fraudulent activity. He contended that ingredients of Section 316(5) of BNS were not applicable to the facts of the case, as the property was not entrusted to the Petitioner.

Meanwhile, the Assistant Public Prosecutor contended that the anticipatory bail is not warranted as the investigation was still pending.

Findings

The Court observed that multiple omissions on part of the petitioner raised serious concerns regarding his actions and also raised the possibility that he may have intentionally hidden or misappropriated the funds. I

It said, “This Court, upon reviewing the circumstances, prima facie observes that prior to withdrawing this substantial sum, the Petitioner must have had knowledge that the amount in question did not belong to him. If this is indeed the case, then when the Petitioner made the withdrawal, he would have been duty-bound to notify the bank officials that an amount of Rs.1.5 crores, which did not belong to him, had been credited to his account. However, the Petitioner did not take any steps to inform the bank about this discrepancy, nor did he raise any concerns. The absence of such a notification leads the Court prima facie to infer that the Petitioner acted with a (dishonest) intention in withdrawing the funds.”

It further said that post the registration of the crime, the petitioner had not provided any explanation regarding the whereabouts of the amount. 

It thus said that custodial interrogation of the Petitioner is necessary adding that the purpose of such an interrogation would be to recover the amount that was withdrawn under questionable circumstances.

"Given the gravity of the offence and the Petitioner's failure to account for the misappropriated funds, it is essential to ensure that further investigations are carried out to determine the fate of the withdrawn money and to ascertain the Petitioner's role of involvement in the crime," it added.

With respect to the issue of Section 316(5) BNS and consequently section 35(3) BNSS (notice by police in case arrest is not required under Section 35(1)) being applicable, the Court held that a possibility of Section 316(5) of BNS being applicable cannot be ruled out. It further noted that simply because the offences prima facie made out against the petitioner were punishable with imprisonment of seven years or less than seven years, it could not be held that the petitioner was entitled to the benefit of notice under section 35(3) BNSS.

In this regard, the Court held, “In a case containing severe allegations, the Investigating Officer deserves a free hand to take the investigation to its logical conclusion. The investigation officer who has been prevented from subjecting the Petitioner to custodial interrogation can hardly be fruitful in finding prima facie substance in the extremely serious allegations. The possibility of the investigation being effected once the Petitioner is released on bail is very much foreseen. Custodial interrogation can be one of the relevant aspects to be considered along with other grounds while deciding an application seeking anticipatory bail.”

The court dismissed the plea. 

Case Title: Chimakurthi Naga Venkata Sai Kiran v. The State Of Andhra Pradesh and Others

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