1
NON -REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 998 OF 2018 @
(SPECIAL LEAVE PETITION (CRL.) NO.9196 OF 2017)
Arvind Tiwary ……Appellant
Versus
State of Bihar and Another ..….Respondents
With
Criminal Appeal No.996 of 2018 @
(Special Leave Petition (Crl.) No.9029 of 2017)
Criminal Appeal No.997 of 2018 @
(Special Leave Petition (Crl.) No.9043 of 2017)
Criminal Appeal No.999 of 2018 @
(Special Leave Petition (Crl.) No.9246 of 2017)
Criminal Appeal No.1026 of 2018 @
(Special Leave Petition (Crl.) No.9334 of 2017)
Criminal Appeal No.1019 of 2018 @
(Special Leave Petition (Crl.) No.9312 of 2017)
Criminal Appeal No.1020 of 2018 @
(Special Leave Petition (Crl.) No. 9409 of 2017)
Criminal Appeal No.1021 of 2018 @
(Special Leave Petition (Crl.) No.9405 of 2017)
Criminal Appeal No.1022 of 2018 @
(Special Leave Petition (Crl.) No.9406 of 2017)
2
Criminal Appeal No.1000 of 2018 @
(Special Leave Petition (Crl.) No.9904 of 2017)
Criminal Appeal No.1001 of 2018 @
(Special Leave Petition (Crl.) No.9664 of 2017)
Criminal Appeal No.1002 of 2018 @
(Special Leave Petition (Crl.) No.1283 of 2018)
Criminal Appeal No.1003 of 2018 @
(Special Leave Petition (Crl.) No.1238 of 2018)
Criminal Appeal No.1004 of 2018 @
(Special Leave Petition (Crl.) No.1192 of 2018)
Criminal Appeal No.1023 of 2018 @
(Special Leave Petition (Crl.) No.1252 of 2018)
Criminal Appeal No.1024 of 2018 @
(Special Leave Petition (Crl.) No.1286 of 2018)
Criminal Appeal No.1025 of 2018 @
(Special Leave Petition (Crl.) No.1239 of 2018)
Criminal Appeal No.1005 of 2018 @
(Special Leave Petition (Crl.) No.1327 of 2018)
Criminal Appeal No.1006 of 2018 @
(Special Leave Petition (Crl.) No.1568 of 2018)
Criminal Appeal No.1007 of 2018 @
(Special Leave Petition (Crl.) No.2966 of 2018)
Criminal Appeal No.1008 of 2018 @
(Special Leave Petition (Crl.) No.3107 of 2018)
Criminal Appeal No.1009 of 2018 @
(Special Leave Petition (Crl.) No.3087 of 2018)
3
Criminal Appeal No.1010 of 2018 @
(Special Leave Petition (Crl.) No.3064 of 2018)
Criminal Appeal No.1011 of 2018 @
(Special Leave Petition (Crl.) No.3041 of 2018)
Criminal Appeal No.1012 of 2018 @
(Special Leave Petition (Crl.) No.3238 of 2018)
Criminal Appeal No.1013 of 2018 @
(Special Leave Petition (Crl.) No.3814 of 2018)
Criminal Appeal No.1014 of 2018 @
(Special Leave Petition (Crl.) No.4116 of 2018)
Criminal Appeal No.1015 of 2018 @
(Special Leave Petition (Crl.) No.5128 of 2018)
Criminal Appeal No. 1017 of 2018 @
(Special Leave Petition (Crl.)No.6707 of 2018 (D.No.25551/2018)
Criminal Appeal No.1016 of 2018 @
(Special Leave Petition (Crl.) No.5870 of 2018)
JUDGMENT
Uday Umesh Lalit, J.
Leave granted in all the matters.
2. Since similar questions arise in all these matters, they are being
disposed of by this common Judgment. The matters can be broadly classified
in three categories. We have taken Criminal Appeal arising from Special
Leave Petition (Crl.) No.9196 of 2017, Criminal Appeal arising from Special
4
Leave Petition (Crl.) No.9029 of 2017 and Criminal Appeal arising from
Special Leave Petition (Crl.) No.9409 of 2017 to be the lead matters
representing each of those three categories. The facts leading to the filing of
said appeals are set out in detail hereunder:-
A. Criminal Appeal @ SLP(Crl) No.9196 of 2017
3. Under an agreement dated 29.03.2014 entered into between the
appellant and Bihar State Food and Civil Supplies Corporation Ltd.
(hereinafter referred to as “the Corporation”) the appellant undertook to mill
paddy procured from District Office of the Corporation as per terms and
conditions mentioned in the agreement. Clause 2 of the agreement was as
under:
“That the Second Party with a monthly milling capacity
of 400 MT of paddy shall furnish a bank guarantee equivalent
to the value of paddy issued to him by the First Party for
milling in the current procurement season and in case, he is
issued an additional quantity of paddy for milling he shall to
furnish an additional bank guarantee equivalent to the value of
the amount of the additional paddy issued to him by the First
Party. In case he is not capable of furnishing the above
mentioned bank guarantee(s), he shall pledge unencumbered
immovable property belonging to him in the name of District
Manager, Kaimur of the same amount or more, as certified by
the competent authority Circle Officer/Sub-Divisional Officer.
In the prescribed manner, for the entire value of paddy as per
his milling capacity. However it will be mandatory for the
5
Second Party to provide a minimum bank guarantee as per the
milling capacity enumerated in the table below:
Sl.No. Milling Capacity Minimum
Manadtory Bank
Guarantee
1 UP to 2 MT per hour Rs.5 lakh
2 More than 2 MT and upto 5 MT
per hour
Rs.10 lakh
3 More than 5 MT per hour
The said bank guarantee of Rs. Five Lakh Rupees
(amount in words) issued in favour of the District Manager,
Bihar State Food & Civil Supplies Corporation Ltd., Kaimur
vide Serial No. at BG No.2696IG-002214 issued by P.N.B.
Bank Akerhi Branch Mohania, Kaimur District has been
submitted by the Second Party.”
4. The appellant had thus undertaken to furnish bank guarantee
equivalent to the value of paddy issued to him. As per the concerned clause,
in case the appellant was unable to furnish such bank guarantee, he could
pledge unencumbered immovable property belonging to him in favour of the
Corporation for the equivalent sum. In addition it was mandatory for the
appellant to provide a minimum bank guarantee as per the milling capacity.
Accordingly a bank guarantee on that count in the sum of Rupees Five
Lakhs was furnished.
5. The procurement season in terms of the aforesaid agreement was
2013-14. However, it is the case of the Corporation that though the
6
appellant was supplied 6000 quintals of paddy, he failed to return 3212.70
quintals of rice amounting to Rs.79.62 lakhs and thus the appellant
misappropriated the aforementioned sum. A first information report was
registered on 02.04.2015 vide Bhabhua P.S. Case No.151 of 2015 under
Sections 409 and 420 of the Indian Penal Code. The appellant thereafter
approached the High Court of Judicature at Patna seeking anticipatory bail
which was granted to him vide order dated 30.07.2015.
B. Criminal Appeal @ SLP(Crl) No.9029 of 2017
6. Under an agreement dated 06.03.2013 entered into between the
appellant and the Corporation, the appellant undertook to mill paddy lying at
Kaimur Centre of the Corporation in terms of the agreement. Clauses 2 and
3 of the agreement were as under:
“2. The Second Party has monthly milling capacity of 1 ton
of paddy but he has to furnish bank guarantee equivalent to the
value of paddy taken by him for milling in concerned
procurement season and in case, he requires further quantity for
paddy for milling, he has to furnish further bank guarantee
equivalent to value of paddy desired by him to be taken for
milling. However, he has to deliver C.M.R. in time before next
lot of paddy is taken from him. The said bank guarantee of Rs.
…….. issued in favour of District Manager, Bihar Food & Civil
Supplies Corporation Ltd. vide series No…….. dated ……….
has been submitted by the second party as per State
Government Instruction from time to time.
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3. The second party is at liberty to take paddy for milling as
the quantity, he desired during the said procurement season in
accordance with his monthly milling capacity but, he has no
further bank guarantee for the value of the paddy, which, he
takes for milling in case, he is not capable of furnishing bank
guarantee, he had to pledge immovable property in the form of
mortgage bond for amount or he can pledge immovable
property for the entire value paddy which he takes for milling.
The property details so mortgaged must be certified to be in his
own name by the competent authority either by circle officer of
the block or SDO of the concerned sub division so that in case
of default of second party or any deviation of paddy may be
recovered.”
According to the appellant since he had pledged his land valued at
Rs.1.3 cores he was not required to furnish any bank guarantee. The
procurement season for the aforesaid agreement was 2012-13.
7. On a written report that though the appellant had lifted entire quantity
of paddy by 31.12.2013 he had not delivered any rice in terms of the
agreement and that he had misappropriated 2401.48 quintals of rice
amounting to Rs.51.99 lakhs, Kudra P.S. Case No.119 of 2015 was
registered against the appellant for offences punishable under Sections 409
and 420 of the Indian Penal Code. On an application moved by the appellant,
the High Court of Judicature at Patna vide judgment and order dated
24.07.2015 granted anticipatory bail to the appellant subject to his
depositing 20% of the due amount within six weeks. According to the
8
appellant, in compliance of such order the appellant deposited an amount of
Rs.10.42 lakhs vide DD dated 22.01.2016.
C. Criminal Appeal @ SLP(Crl) No.9409 of 2017
8. Under an agreement entered into between the appellant and the
Corporation on 11.2.2012 for the procurement season 2011-12, the appellant
had undertaken to mill paddy lying at Bhabhua Centre of the Corporation on
delivery of rice in terms of the agreement Clauses 2, 3 and 4 of the
agreement were as under:-
“2. After delivery of rice to the Corporation proportionate
paddy will be issued to the miller by Bihar State Food & Civil
Supplies Corporation Ltd.
3. Rice will be accepted in the same Gunny bags in which
the paddy is delivered by the Corporation. For the first
consignment/lot, rice will be delivered by the miller in new
SBT gunnies. The excess gunny bags will be returned by the
miller and if retrained by the Miller of excess gunny bags (in
which paddy supplier miller) will be deducted by the
Corporation @ 60% of net wages price from the bills submitted
by the miller.
4. The miller has already deposited Rs.50,000/- as security
money through DD No.710733 dated 11.02.2012 of Rs. Fifty
thousand in favour of District Manager, Bihar State Food &
Civil Supplies Corporation Ltd.”
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9. Since the rice was to be supplied at the time paddy would be given,
unlike previous two illustrations, no bank guarantee or pledge was
contemplated but deposit in terms of Clause 4 as security was given. On an
allegation that the appellant was supplied 2306 quintals of paddy for the
procurement year 2011-12 and the appellant had not returned 1545.02
quintals of rice amounting to Rs.28.9 lakhs, Kudra P.S. Case No.131 of
2015 was registered on 19.4.2015 for offences under Sections 409 and 420
IPC. The appellant was granted anticipatory bail by the High Court of
Judicature at Patna on 16.07.2015.
10. Similar orders were passed granting anticipatory bail to number of
persons against whom cases were filed by the Corporation. Those orders
were questioned by filing special leave petitions by State of Bihar or the
Corporation. These petitions came up before this Court on 28.02.2017 when
following order was passed by this Court:
“Heard.
Permission granted.
Delay condoned.
These petitions have been preferred by the State of
Bihar/Bihar State Food Civil Supplies Corporation against
orders granting anticipatory bail/bail, in connection with cases,
the facts of which are identical.
10
It has been stated by Mr. Siddharth Luthra, learned senior
counsel appearing for the State/Corporation, that a sum of
Rupees fifteen hundred crores in all has been allegedly
misappropriated by the accused for which 600 FIRs have been
filed. According to the case of the State, agreements for milling
of paddy were entered into with different rice mills in
pursuance of which paddy was handed over for milling but the
rice from the milled paddy was not returned or was returned
partly. Thus, there is misappropriation to a huge extent. In such
circumstances, grant of anticipatory bail/bail will seriously
hamper the investigation/trial resulting in huge loss to the State.
Our attention has been drawn to the Deed of Agreement.
Clause 3 thereof provides for furnishing of bank guarantee for
26 the value of paddy, which is taken for milling, or for
pledging of the immovable property of the value of the paddy.
There is also provision in clause 12 that in case of default of
terms of agreement the bank guarantee can be forfeited and
legal action initiated for recovery of the amount from the
mortgaged immovable property.
The High Court has passed an order for deposit of 10 to
20 % of the amount, alleged to be involved in different cases
for grant of bail/anticipatory bail.
Since the anticipatory bail/bail was granted more than
one year back and financial interest of the State is or can be
secured, we are not inclined to cancel the anticipatory bail/bail
but modify the order of granting of anticipatory bail/bail
conditional adding conditions as follows:
(1) The accused in all the FIR(s), will ensure that bank
guarantee, if not furnished, is furnished and if lapsed, is
renewed within a period of one month from today failing which
the anticipatory bail/bail granted will stand cancelled.
(2) The accused will cooperate with investigation/trial and their
failure to appear, when required, will be a ground for
cancellation of anticipatory bail/bail. An order of cancellation
11
will be passed by the trial court on being satisfied about such
failure.
(3) The investigation will be completed within a period of three
months.
(4) All the accused will be tried only at five places viz. Patna,
Gaya, Chhapra, Darbhanga and Purnia by officers of the 27
appropriate rank determined by the High Court within one week
from today. The High Court may specify the area of jurisdiction
of the said five courts by a public order. If required by the High
Court, the State Government may sanction extra strength of
officers with requisite infrastructure so that normal work of
courts is not disturbed on account of the special arrangement
for these cases.
(5) The officers posted will deal with these cases exclusively. If
free from their work, any other work may be assigned to the
said officers.
(6) The concerned authorities will be at liberty to encash the
bank guarantee(s) after holding that there is a breach of terms
of the agreement which decision will be subject to appropriate
remedies of the parties.
(7) If not otherwise encashed, the bank guarantee will be kept
alive till the trial is over. However, deposits/furnishing of bank
guarantees will be abide by further orders of the trial court,
interim or final.
(8) If any amount is deposited by the accused, the said amount
will be adjusted in the amount of the bank guarantee, which is
to be furnished by the accused.
(9) The accused will surrender their passports to the respective
courts within a period of four weeks from today and will not
leave the country without prior permission from the concerned
court.
12
On compliance of the above order, if any accused is in
custody, he will be granted bail in accordance with law.
Any other proceedings between the parties will remain
unaffected by this order and the same can proceed in
accordance with law.
The trial court/High Court will be at liberty to pass any
further order which it considers appropriate, having regard to
the individual fact situation or modify the above directions in
exigencies of the situation.
The special leave petitions are disposed of accordingly.
Pending applications, if any, shall also stand disposed
of.”
11. In Criminal Appeal arising from S.L.P.(Crl.) No. 9196 of 2017, the
Corporation vide its letter dated 18.03.2017 directed the appellant to furnish
bank guarantee equivalent to the “defalcated sum” of Rs.79.62 lakhs.
The appellant having failed, non-bailable warrant for arrest was issued on
29.05.2017. In the second matter i.e. in Criminal Appeal arising from S.L.P.
(Crl.) No.9029 of 2017, the Corporation vide its letter dated 18.03.2017
directed the appellant to deposit bank guarantee for the “defalcated amount”
of Rs.51.99 lakhs. On his failure, a non-bailable warrant of arrest was issued
against the appellant on 22.07.2017. Similar such direction was issued by the
Corporation in the third matter on 18.03.2017 for furnishing bank guarantee
for the “defalcated sum” of Rs.29.40 lakhs. After the failure to comply, nonbailable
warrant of arrest was issued on 30.05.2017.
13
12. Aggrieved, the appellants in all three cases and similarly situated
persons approached the High Court of Judicature at Patna. The High Court
by its common judgment and order dated 09.10.2017 in Crl. Misc. No.
29168 of 2017 and other connected cases, rejected the challenge. Paras 42,
43 and 45 of the judgment were as under:
“42. Thus, I see no merit in the submission of the learned
counsel for the petitioners that the aforesaid order would not
bind the petitioners, who were not parties before the Supreme
Court.
43. So far as the point of pledging of property for the value
of paddy in lieu of bank guarantee, and non-requirement of
bank guarantee in such cases are concerned, they were already
raised before the Supreme Court by the rice millers, which is
evident from the plain reading of the order of the Supreme
Court, but the Supreme Court did not accept their contention
and passed order for deposit of bank guarantee.
45. So far as the liberty granted to this Court to modify the
directions issued by the Supreme Court is concerned, as the
order of the Supreme Court has already taken effect and the
pre-arrest bail granted to the petitioners already stood cancelled,
it is not permissible for this Court to modify the directions
issued by the Supreme Court. May be that in appropriate case,
having regard to the individual fact situation, in view of the
liberty granted by the Supreme Court, this Court could have
modified any condition if the petitioner(s) would have
approached this Court in time. However, such a recourse would
be impermissible once the order of the Supreme Court has
taken its effect. I am also of the opinion that if the persons are
aggrieved by the order of the Supreme Court regarding deposit
of bank guarantee, the only course left to them is to approach
the Supreme Court and till the time the order of the
14
Supreme Court stands, the petitioners, whether they were party
before the Supreme Court or not have to abide by its orders.”
13. The appellants in all three cases have approached this Court
challenging the correctness of the view taken by the High Court. Similar
such petitions have also been filed by other persons. Leading the
submissions on behalf of said persons including the appellant, Mr. Kapil
Sibal, learned Senior Advocate submitted:
(a) The order passed by this Court on 28.02.2017 did not
contemplate furnishing of bank guarantee or keeping the bank guarantee
alive in the sum equivalent to the alleged “defalcated sum”
(b) The bank guarantee was in terms of the stipulations
contemplated by the agreement. Only such bank guarantee was to be
furnished and kept alive.
(c) In cases where concerned millers had pledged their properties,
the interest of the corporation was well secured and there could not be any
insistence on furnishing of bank guarantee by way of additional security.
14. Appearing for the respondent-State, Mr. Ranjit Kumar, learned Senior
Advocate submitted:
15
(a) About 1500 crores of public money was involved in all the
matters. The rice in issue was part of public distribution system and
all the millers were guilty of swindling public funds.
(b) In cases where bank guarantees were required to be given and
kept alive in terms of the agreements and yet the millers had not
furnished and kept alive such bank guarantees, the benefit of
anticipatory bail/bail was rightly cancelled.
(c) In order to sub-serve public interest, the corporation be allowed
to put to auction all the pledged properties and recover the defalcated
sums.
15. The aforesaid three criminal appeals, the facts whereof are discussed
in detail in preceding paragraphs show that there were three categories of
matters. In the first, the miller was to give bank guarantee equivalent to the
value of paddy. However in case of his inability to furnish such bank
guarantee, the facility of pledging unencumbered immovable property was
afforded to him. The miller was however required to provide minimum
bank guarantee. In the second matter, the bank guarantee had to be given in
respect of value of paddy. Here also an option was given to pledge
immovable property in lieu of the requirement of furnishing of bank
16
guarantee. Though there appears to be slight distinction in phraseology
employed in the concerned clauses, the intent appears to be identical. It is
also a matter of record that the appellant in the second matter had pledged
his land valued at Rs.1.3 crores and was not required to furnish any bank
guarantee. In the third matter, there was no requirement of furnishing any
bank guarantee at all and all that the agreement insisted upon was furnishing
of security.
The requirement of furnishing bank guarantee was thus not mandatory
and an option was given to the miller to pledge his unencumbered
immovable property.
16. The matters therefore lie in a short compass. The order granting
anticipatory bail/bail to the millers was challenged by the State/Corporation
in matters which came up before this Court on 28.02.2017. While declining
to cancel such orders granting anticipatory bails/bail, this Court deemed it
proper to impose certain additional conditions. The first condition was that,
in all FIRs the concerned accused would ensure that bank guarantee was
furnished and kept alive, failing which, the benefit of anticipatory bails/bail
would stand cancelled. The reference to “Bank Guarantee” in said condition
No.1 was to the obligation arising from the agreement entered into with each
of the accused.
17
17. It may be noted here that prior to the passing of the order dated
28.02.2017, none of the orders passed by the High Court or this Court
required furnishing of bank guarantee or keeping it alive in respect of the
“defalcated sum”. The order passed by this Court on 28.02.2017 is quite
clear. The reference to “Bank Guarantee” and the condition modulated in
that behalf was one which the accused was obliged to and had undertaken to
furnish in terms of the agreement. If according to the terms of the agreement
and the benefit enjoyed by the concerned accused, he had already pledged
unencumbered immovable property in the equivalent sum, there was no
requirement to furnish and to keep alive additional bank guarantee.
Therefore the Corporation was not justified in demanding that the millers
must furnish bank guarantee in respect of “defalcated sum”. The trial court
was also not justified in cancelling the facility of bail/anticipatory bail
already enjoyed by the miller and in issuing non-bailable warrants.
18. However there are certain categories of persons, who were enjoined to
furnish bank guarantee, in terms of their agreement, to keep such bank
guarantee alive, had completely failed in that behalf. Such failure on their
part was in complete derogation and violation of the order dated 28.02.2017
passed by this Court. In such cases the trial court was certainly justified in
18
cancelling the facility of bail/anticipatory bail extended to such millers and
to issue non-bailable warrants of arrest. There is one more category of cases
where the millers in question were not parties to the proceedings in this
Court which were disposed of by order dated 28.02.2017. The submission in
that behalf made by such millers that the condition imposed by this Court
would not apply to them was rightly rejected by the trial court and we affirm
the view so taken.
19. We now come to the last submission made by Mr. Ranjit Kumar,
learned Senior Advocate. The idea behind requirement of furnishing bank
guarantee and or pledge of unencumbered property was to ensure sufficient
security in the hands of the Corporation. Going by the terms of the
agreement, in case there be any failure on part of the concerned miller to
discharge his obligations, the Corporation would certainly be entitled and
justified to take appropriate steps to secure its interest either by encashing
the bank guarantee and or by disposing the pledged properties in accordance
with law. We therefore accept the submission and hold that the Corporation,
in such cases, would be well within its rights to take appropriate steps in the
concerned matters.
19
20. In the circumstances we direct:-
a) The expression “Bank Guarantee” used in condition No.1 as
stipulated in order dated 28.02.2017 passed by this Court pertains to bank
guarantee which the concerned miller was obliged, in terms of the agreement
in question to furnish. The obligation to furnish the bank guarantee and to
keep it alive is referable to the terms of the agreement and not to the
“defalcated sum” as was submitted by the Corporation.
b) If on account of failure to submit and to keep it alive in respect
of the “defalcated sum”, any benefit of bail/anticipatory bail was withdrawn
and orders of non-bailable warrants were issued, such orders stand cancelled
and recalled. However the concerned millers ought to have furnished and
kept alive bank guarantees as contemplated in terms of the agreement. If
there be any failure on this count the cancellation of bail/anticipatory bail
was perfectly justified.
c) The order dated 28.02.2017 passed by this Court would apply
to every single case, irrespective whether the concerned miller was a party to
the proceedings before this Court or not.
d) If any miller, in terms of the order dated 28.02.2017, had not
furnished bank guarantee or had not kept it alive in terms of his obligations
under the agreement, the facility of bail/anticipatory bail would not be
20
available to him. The orders cancelling such facility stand confirmed and
the challenge in that behalf is negated. All such millers shall be immediately
taken in custody by the concerned Police.
e) We permit the Corporation to secure its interest either by
invoking the bank guarantees wherever furnished and or by putting to
auction the unencumbered immovable property pledged by the millers with
it, after due process of law.
21. All the appeals stand disposed of in aforesaid terms, without any order
as to costs.
…....….………………J.
(Abhay Manohar Sapre)
……………………….J.
(Uday Umesh Lalit)
New Delhi
August 13, 2018
NON -REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 998 OF 2018 @
(SPECIAL LEAVE PETITION (CRL.) NO.9196 OF 2017)
Arvind Tiwary ……Appellant
Versus
State of Bihar and Another ..….Respondents
With
Criminal Appeal No.996 of 2018 @
(Special Leave Petition (Crl.) No.9029 of 2017)
Criminal Appeal No.997 of 2018 @
(Special Leave Petition (Crl.) No.9043 of 2017)
Criminal Appeal No.999 of 2018 @
(Special Leave Petition (Crl.) No.9246 of 2017)
Criminal Appeal No.1026 of 2018 @
(Special Leave Petition (Crl.) No.9334 of 2017)
Criminal Appeal No.1019 of 2018 @
(Special Leave Petition (Crl.) No.9312 of 2017)
Criminal Appeal No.1020 of 2018 @
(Special Leave Petition (Crl.) No. 9409 of 2017)
Criminal Appeal No.1021 of 2018 @
(Special Leave Petition (Crl.) No.9405 of 2017)
Criminal Appeal No.1022 of 2018 @
(Special Leave Petition (Crl.) No.9406 of 2017)
2
Criminal Appeal No.1000 of 2018 @
(Special Leave Petition (Crl.) No.9904 of 2017)
Criminal Appeal No.1001 of 2018 @
(Special Leave Petition (Crl.) No.9664 of 2017)
Criminal Appeal No.1002 of 2018 @
(Special Leave Petition (Crl.) No.1283 of 2018)
Criminal Appeal No.1003 of 2018 @
(Special Leave Petition (Crl.) No.1238 of 2018)
Criminal Appeal No.1004 of 2018 @
(Special Leave Petition (Crl.) No.1192 of 2018)
Criminal Appeal No.1023 of 2018 @
(Special Leave Petition (Crl.) No.1252 of 2018)
Criminal Appeal No.1024 of 2018 @
(Special Leave Petition (Crl.) No.1286 of 2018)
Criminal Appeal No.1025 of 2018 @
(Special Leave Petition (Crl.) No.1239 of 2018)
Criminal Appeal No.1005 of 2018 @
(Special Leave Petition (Crl.) No.1327 of 2018)
Criminal Appeal No.1006 of 2018 @
(Special Leave Petition (Crl.) No.1568 of 2018)
Criminal Appeal No.1007 of 2018 @
(Special Leave Petition (Crl.) No.2966 of 2018)
Criminal Appeal No.1008 of 2018 @
(Special Leave Petition (Crl.) No.3107 of 2018)
Criminal Appeal No.1009 of 2018 @
(Special Leave Petition (Crl.) No.3087 of 2018)
3
Criminal Appeal No.1010 of 2018 @
(Special Leave Petition (Crl.) No.3064 of 2018)
Criminal Appeal No.1011 of 2018 @
(Special Leave Petition (Crl.) No.3041 of 2018)
Criminal Appeal No.1012 of 2018 @
(Special Leave Petition (Crl.) No.3238 of 2018)
Criminal Appeal No.1013 of 2018 @
(Special Leave Petition (Crl.) No.3814 of 2018)
Criminal Appeal No.1014 of 2018 @
(Special Leave Petition (Crl.) No.4116 of 2018)
Criminal Appeal No.1015 of 2018 @
(Special Leave Petition (Crl.) No.5128 of 2018)
Criminal Appeal No. 1017 of 2018 @
(Special Leave Petition (Crl.)No.6707 of 2018 (D.No.25551/2018)
Criminal Appeal No.1016 of 2018 @
(Special Leave Petition (Crl.) No.5870 of 2018)
JUDGMENT
Uday Umesh Lalit, J.
Leave granted in all the matters.
2. Since similar questions arise in all these matters, they are being
disposed of by this common Judgment. The matters can be broadly classified
in three categories. We have taken Criminal Appeal arising from Special
Leave Petition (Crl.) No.9196 of 2017, Criminal Appeal arising from Special
4
Leave Petition (Crl.) No.9029 of 2017 and Criminal Appeal arising from
Special Leave Petition (Crl.) No.9409 of 2017 to be the lead matters
representing each of those three categories. The facts leading to the filing of
said appeals are set out in detail hereunder:-
A. Criminal Appeal @ SLP(Crl) No.9196 of 2017
3. Under an agreement dated 29.03.2014 entered into between the
appellant and Bihar State Food and Civil Supplies Corporation Ltd.
(hereinafter referred to as “the Corporation”) the appellant undertook to mill
paddy procured from District Office of the Corporation as per terms and
conditions mentioned in the agreement. Clause 2 of the agreement was as
under:
“That the Second Party with a monthly milling capacity
of 400 MT of paddy shall furnish a bank guarantee equivalent
to the value of paddy issued to him by the First Party for
milling in the current procurement season and in case, he is
issued an additional quantity of paddy for milling he shall to
furnish an additional bank guarantee equivalent to the value of
the amount of the additional paddy issued to him by the First
Party. In case he is not capable of furnishing the above
mentioned bank guarantee(s), he shall pledge unencumbered
immovable property belonging to him in the name of District
Manager, Kaimur of the same amount or more, as certified by
the competent authority Circle Officer/Sub-Divisional Officer.
In the prescribed manner, for the entire value of paddy as per
his milling capacity. However it will be mandatory for the
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Second Party to provide a minimum bank guarantee as per the
milling capacity enumerated in the table below:
Sl.No. Milling Capacity Minimum
Manadtory Bank
Guarantee
1 UP to 2 MT per hour Rs.5 lakh
2 More than 2 MT and upto 5 MT
per hour
Rs.10 lakh
3 More than 5 MT per hour
The said bank guarantee of Rs. Five Lakh Rupees
(amount in words) issued in favour of the District Manager,
Bihar State Food & Civil Supplies Corporation Ltd., Kaimur
vide Serial No. at BG No.2696IG-002214 issued by P.N.B.
Bank Akerhi Branch Mohania, Kaimur District has been
submitted by the Second Party.”
4. The appellant had thus undertaken to furnish bank guarantee
equivalent to the value of paddy issued to him. As per the concerned clause,
in case the appellant was unable to furnish such bank guarantee, he could
pledge unencumbered immovable property belonging to him in favour of the
Corporation for the equivalent sum. In addition it was mandatory for the
appellant to provide a minimum bank guarantee as per the milling capacity.
Accordingly a bank guarantee on that count in the sum of Rupees Five
Lakhs was furnished.
5. The procurement season in terms of the aforesaid agreement was
2013-14. However, it is the case of the Corporation that though the
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appellant was supplied 6000 quintals of paddy, he failed to return 3212.70
quintals of rice amounting to Rs.79.62 lakhs and thus the appellant
misappropriated the aforementioned sum. A first information report was
registered on 02.04.2015 vide Bhabhua P.S. Case No.151 of 2015 under
Sections 409 and 420 of the Indian Penal Code. The appellant thereafter
approached the High Court of Judicature at Patna seeking anticipatory bail
which was granted to him vide order dated 30.07.2015.
B. Criminal Appeal @ SLP(Crl) No.9029 of 2017
6. Under an agreement dated 06.03.2013 entered into between the
appellant and the Corporation, the appellant undertook to mill paddy lying at
Kaimur Centre of the Corporation in terms of the agreement. Clauses 2 and
3 of the agreement were as under:
“2. The Second Party has monthly milling capacity of 1 ton
of paddy but he has to furnish bank guarantee equivalent to the
value of paddy taken by him for milling in concerned
procurement season and in case, he requires further quantity for
paddy for milling, he has to furnish further bank guarantee
equivalent to value of paddy desired by him to be taken for
milling. However, he has to deliver C.M.R. in time before next
lot of paddy is taken from him. The said bank guarantee of Rs.
…….. issued in favour of District Manager, Bihar Food & Civil
Supplies Corporation Ltd. vide series No…….. dated ……….
has been submitted by the second party as per State
Government Instruction from time to time.
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3. The second party is at liberty to take paddy for milling as
the quantity, he desired during the said procurement season in
accordance with his monthly milling capacity but, he has no
further bank guarantee for the value of the paddy, which, he
takes for milling in case, he is not capable of furnishing bank
guarantee, he had to pledge immovable property in the form of
mortgage bond for amount or he can pledge immovable
property for the entire value paddy which he takes for milling.
The property details so mortgaged must be certified to be in his
own name by the competent authority either by circle officer of
the block or SDO of the concerned sub division so that in case
of default of second party or any deviation of paddy may be
recovered.”
According to the appellant since he had pledged his land valued at
Rs.1.3 cores he was not required to furnish any bank guarantee. The
procurement season for the aforesaid agreement was 2012-13.
7. On a written report that though the appellant had lifted entire quantity
of paddy by 31.12.2013 he had not delivered any rice in terms of the
agreement and that he had misappropriated 2401.48 quintals of rice
amounting to Rs.51.99 lakhs, Kudra P.S. Case No.119 of 2015 was
registered against the appellant for offences punishable under Sections 409
and 420 of the Indian Penal Code. On an application moved by the appellant,
the High Court of Judicature at Patna vide judgment and order dated
24.07.2015 granted anticipatory bail to the appellant subject to his
depositing 20% of the due amount within six weeks. According to the
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appellant, in compliance of such order the appellant deposited an amount of
Rs.10.42 lakhs vide DD dated 22.01.2016.
C. Criminal Appeal @ SLP(Crl) No.9409 of 2017
8. Under an agreement entered into between the appellant and the
Corporation on 11.2.2012 for the procurement season 2011-12, the appellant
had undertaken to mill paddy lying at Bhabhua Centre of the Corporation on
delivery of rice in terms of the agreement Clauses 2, 3 and 4 of the
agreement were as under:-
“2. After delivery of rice to the Corporation proportionate
paddy will be issued to the miller by Bihar State Food & Civil
Supplies Corporation Ltd.
3. Rice will be accepted in the same Gunny bags in which
the paddy is delivered by the Corporation. For the first
consignment/lot, rice will be delivered by the miller in new
SBT gunnies. The excess gunny bags will be returned by the
miller and if retrained by the Miller of excess gunny bags (in
which paddy supplier miller) will be deducted by the
Corporation @ 60% of net wages price from the bills submitted
by the miller.
4. The miller has already deposited Rs.50,000/- as security
money through DD No.710733 dated 11.02.2012 of Rs. Fifty
thousand in favour of District Manager, Bihar State Food &
Civil Supplies Corporation Ltd.”
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9. Since the rice was to be supplied at the time paddy would be given,
unlike previous two illustrations, no bank guarantee or pledge was
contemplated but deposit in terms of Clause 4 as security was given. On an
allegation that the appellant was supplied 2306 quintals of paddy for the
procurement year 2011-12 and the appellant had not returned 1545.02
quintals of rice amounting to Rs.28.9 lakhs, Kudra P.S. Case No.131 of
2015 was registered on 19.4.2015 for offences under Sections 409 and 420
IPC. The appellant was granted anticipatory bail by the High Court of
Judicature at Patna on 16.07.2015.
10. Similar orders were passed granting anticipatory bail to number of
persons against whom cases were filed by the Corporation. Those orders
were questioned by filing special leave petitions by State of Bihar or the
Corporation. These petitions came up before this Court on 28.02.2017 when
following order was passed by this Court:
“Heard.
Permission granted.
Delay condoned.
These petitions have been preferred by the State of
Bihar/Bihar State Food Civil Supplies Corporation against
orders granting anticipatory bail/bail, in connection with cases,
the facts of which are identical.
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It has been stated by Mr. Siddharth Luthra, learned senior
counsel appearing for the State/Corporation, that a sum of
Rupees fifteen hundred crores in all has been allegedly
misappropriated by the accused for which 600 FIRs have been
filed. According to the case of the State, agreements for milling
of paddy were entered into with different rice mills in
pursuance of which paddy was handed over for milling but the
rice from the milled paddy was not returned or was returned
partly. Thus, there is misappropriation to a huge extent. In such
circumstances, grant of anticipatory bail/bail will seriously
hamper the investigation/trial resulting in huge loss to the State.
Our attention has been drawn to the Deed of Agreement.
Clause 3 thereof provides for furnishing of bank guarantee for
26 the value of paddy, which is taken for milling, or for
pledging of the immovable property of the value of the paddy.
There is also provision in clause 12 that in case of default of
terms of agreement the bank guarantee can be forfeited and
legal action initiated for recovery of the amount from the
mortgaged immovable property.
The High Court has passed an order for deposit of 10 to
20 % of the amount, alleged to be involved in different cases
for grant of bail/anticipatory bail.
Since the anticipatory bail/bail was granted more than
one year back and financial interest of the State is or can be
secured, we are not inclined to cancel the anticipatory bail/bail
but modify the order of granting of anticipatory bail/bail
conditional adding conditions as follows:
(1) The accused in all the FIR(s), will ensure that bank
guarantee, if not furnished, is furnished and if lapsed, is
renewed within a period of one month from today failing which
the anticipatory bail/bail granted will stand cancelled.
(2) The accused will cooperate with investigation/trial and their
failure to appear, when required, will be a ground for
cancellation of anticipatory bail/bail. An order of cancellation
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will be passed by the trial court on being satisfied about such
failure.
(3) The investigation will be completed within a period of three
months.
(4) All the accused will be tried only at five places viz. Patna,
Gaya, Chhapra, Darbhanga and Purnia by officers of the 27
appropriate rank determined by the High Court within one week
from today. The High Court may specify the area of jurisdiction
of the said five courts by a public order. If required by the High
Court, the State Government may sanction extra strength of
officers with requisite infrastructure so that normal work of
courts is not disturbed on account of the special arrangement
for these cases.
(5) The officers posted will deal with these cases exclusively. If
free from their work, any other work may be assigned to the
said officers.
(6) The concerned authorities will be at liberty to encash the
bank guarantee(s) after holding that there is a breach of terms
of the agreement which decision will be subject to appropriate
remedies of the parties.
(7) If not otherwise encashed, the bank guarantee will be kept
alive till the trial is over. However, deposits/furnishing of bank
guarantees will be abide by further orders of the trial court,
interim or final.
(8) If any amount is deposited by the accused, the said amount
will be adjusted in the amount of the bank guarantee, which is
to be furnished by the accused.
(9) The accused will surrender their passports to the respective
courts within a period of four weeks from today and will not
leave the country without prior permission from the concerned
court.
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On compliance of the above order, if any accused is in
custody, he will be granted bail in accordance with law.
Any other proceedings between the parties will remain
unaffected by this order and the same can proceed in
accordance with law.
The trial court/High Court will be at liberty to pass any
further order which it considers appropriate, having regard to
the individual fact situation or modify the above directions in
exigencies of the situation.
The special leave petitions are disposed of accordingly.
Pending applications, if any, shall also stand disposed
of.”
11. In Criminal Appeal arising from S.L.P.(Crl.) No. 9196 of 2017, the
Corporation vide its letter dated 18.03.2017 directed the appellant to furnish
bank guarantee equivalent to the “defalcated sum” of Rs.79.62 lakhs.
The appellant having failed, non-bailable warrant for arrest was issued on
29.05.2017. In the second matter i.e. in Criminal Appeal arising from S.L.P.
(Crl.) No.9029 of 2017, the Corporation vide its letter dated 18.03.2017
directed the appellant to deposit bank guarantee for the “defalcated amount”
of Rs.51.99 lakhs. On his failure, a non-bailable warrant of arrest was issued
against the appellant on 22.07.2017. Similar such direction was issued by the
Corporation in the third matter on 18.03.2017 for furnishing bank guarantee
for the “defalcated sum” of Rs.29.40 lakhs. After the failure to comply, nonbailable
warrant of arrest was issued on 30.05.2017.
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12. Aggrieved, the appellants in all three cases and similarly situated
persons approached the High Court of Judicature at Patna. The High Court
by its common judgment and order dated 09.10.2017 in Crl. Misc. No.
29168 of 2017 and other connected cases, rejected the challenge. Paras 42,
43 and 45 of the judgment were as under:
“42. Thus, I see no merit in the submission of the learned
counsel for the petitioners that the aforesaid order would not
bind the petitioners, who were not parties before the Supreme
Court.
43. So far as the point of pledging of property for the value
of paddy in lieu of bank guarantee, and non-requirement of
bank guarantee in such cases are concerned, they were already
raised before the Supreme Court by the rice millers, which is
evident from the plain reading of the order of the Supreme
Court, but the Supreme Court did not accept their contention
and passed order for deposit of bank guarantee.
45. So far as the liberty granted to this Court to modify the
directions issued by the Supreme Court is concerned, as the
order of the Supreme Court has already taken effect and the
pre-arrest bail granted to the petitioners already stood cancelled,
it is not permissible for this Court to modify the directions
issued by the Supreme Court. May be that in appropriate case,
having regard to the individual fact situation, in view of the
liberty granted by the Supreme Court, this Court could have
modified any condition if the petitioner(s) would have
approached this Court in time. However, such a recourse would
be impermissible once the order of the Supreme Court has
taken its effect. I am also of the opinion that if the persons are
aggrieved by the order of the Supreme Court regarding deposit
of bank guarantee, the only course left to them is to approach
the Supreme Court and till the time the order of the
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Supreme Court stands, the petitioners, whether they were party
before the Supreme Court or not have to abide by its orders.”
13. The appellants in all three cases have approached this Court
challenging the correctness of the view taken by the High Court. Similar
such petitions have also been filed by other persons. Leading the
submissions on behalf of said persons including the appellant, Mr. Kapil
Sibal, learned Senior Advocate submitted:
(a) The order passed by this Court on 28.02.2017 did not
contemplate furnishing of bank guarantee or keeping the bank guarantee
alive in the sum equivalent to the alleged “defalcated sum”
(b) The bank guarantee was in terms of the stipulations
contemplated by the agreement. Only such bank guarantee was to be
furnished and kept alive.
(c) In cases where concerned millers had pledged their properties,
the interest of the corporation was well secured and there could not be any
insistence on furnishing of bank guarantee by way of additional security.
14. Appearing for the respondent-State, Mr. Ranjit Kumar, learned Senior
Advocate submitted:
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(a) About 1500 crores of public money was involved in all the
matters. The rice in issue was part of public distribution system and
all the millers were guilty of swindling public funds.
(b) In cases where bank guarantees were required to be given and
kept alive in terms of the agreements and yet the millers had not
furnished and kept alive such bank guarantees, the benefit of
anticipatory bail/bail was rightly cancelled.
(c) In order to sub-serve public interest, the corporation be allowed
to put to auction all the pledged properties and recover the defalcated
sums.
15. The aforesaid three criminal appeals, the facts whereof are discussed
in detail in preceding paragraphs show that there were three categories of
matters. In the first, the miller was to give bank guarantee equivalent to the
value of paddy. However in case of his inability to furnish such bank
guarantee, the facility of pledging unencumbered immovable property was
afforded to him. The miller was however required to provide minimum
bank guarantee. In the second matter, the bank guarantee had to be given in
respect of value of paddy. Here also an option was given to pledge
immovable property in lieu of the requirement of furnishing of bank
16
guarantee. Though there appears to be slight distinction in phraseology
employed in the concerned clauses, the intent appears to be identical. It is
also a matter of record that the appellant in the second matter had pledged
his land valued at Rs.1.3 crores and was not required to furnish any bank
guarantee. In the third matter, there was no requirement of furnishing any
bank guarantee at all and all that the agreement insisted upon was furnishing
of security.
The requirement of furnishing bank guarantee was thus not mandatory
and an option was given to the miller to pledge his unencumbered
immovable property.
16. The matters therefore lie in a short compass. The order granting
anticipatory bail/bail to the millers was challenged by the State/Corporation
in matters which came up before this Court on 28.02.2017. While declining
to cancel such orders granting anticipatory bails/bail, this Court deemed it
proper to impose certain additional conditions. The first condition was that,
in all FIRs the concerned accused would ensure that bank guarantee was
furnished and kept alive, failing which, the benefit of anticipatory bails/bail
would stand cancelled. The reference to “Bank Guarantee” in said condition
No.1 was to the obligation arising from the agreement entered into with each
of the accused.
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17. It may be noted here that prior to the passing of the order dated
28.02.2017, none of the orders passed by the High Court or this Court
required furnishing of bank guarantee or keeping it alive in respect of the
“defalcated sum”. The order passed by this Court on 28.02.2017 is quite
clear. The reference to “Bank Guarantee” and the condition modulated in
that behalf was one which the accused was obliged to and had undertaken to
furnish in terms of the agreement. If according to the terms of the agreement
and the benefit enjoyed by the concerned accused, he had already pledged
unencumbered immovable property in the equivalent sum, there was no
requirement to furnish and to keep alive additional bank guarantee.
Therefore the Corporation was not justified in demanding that the millers
must furnish bank guarantee in respect of “defalcated sum”. The trial court
was also not justified in cancelling the facility of bail/anticipatory bail
already enjoyed by the miller and in issuing non-bailable warrants.
18. However there are certain categories of persons, who were enjoined to
furnish bank guarantee, in terms of their agreement, to keep such bank
guarantee alive, had completely failed in that behalf. Such failure on their
part was in complete derogation and violation of the order dated 28.02.2017
passed by this Court. In such cases the trial court was certainly justified in
18
cancelling the facility of bail/anticipatory bail extended to such millers and
to issue non-bailable warrants of arrest. There is one more category of cases
where the millers in question were not parties to the proceedings in this
Court which were disposed of by order dated 28.02.2017. The submission in
that behalf made by such millers that the condition imposed by this Court
would not apply to them was rightly rejected by the trial court and we affirm
the view so taken.
19. We now come to the last submission made by Mr. Ranjit Kumar,
learned Senior Advocate. The idea behind requirement of furnishing bank
guarantee and or pledge of unencumbered property was to ensure sufficient
security in the hands of the Corporation. Going by the terms of the
agreement, in case there be any failure on part of the concerned miller to
discharge his obligations, the Corporation would certainly be entitled and
justified to take appropriate steps to secure its interest either by encashing
the bank guarantee and or by disposing the pledged properties in accordance
with law. We therefore accept the submission and hold that the Corporation,
in such cases, would be well within its rights to take appropriate steps in the
concerned matters.
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20. In the circumstances we direct:-
a) The expression “Bank Guarantee” used in condition No.1 as
stipulated in order dated 28.02.2017 passed by this Court pertains to bank
guarantee which the concerned miller was obliged, in terms of the agreement
in question to furnish. The obligation to furnish the bank guarantee and to
keep it alive is referable to the terms of the agreement and not to the
“defalcated sum” as was submitted by the Corporation.
b) If on account of failure to submit and to keep it alive in respect
of the “defalcated sum”, any benefit of bail/anticipatory bail was withdrawn
and orders of non-bailable warrants were issued, such orders stand cancelled
and recalled. However the concerned millers ought to have furnished and
kept alive bank guarantees as contemplated in terms of the agreement. If
there be any failure on this count the cancellation of bail/anticipatory bail
was perfectly justified.
c) The order dated 28.02.2017 passed by this Court would apply
to every single case, irrespective whether the concerned miller was a party to
the proceedings before this Court or not.
d) If any miller, in terms of the order dated 28.02.2017, had not
furnished bank guarantee or had not kept it alive in terms of his obligations
under the agreement, the facility of bail/anticipatory bail would not be
20
available to him. The orders cancelling such facility stand confirmed and
the challenge in that behalf is negated. All such millers shall be immediately
taken in custody by the concerned Police.
e) We permit the Corporation to secure its interest either by
invoking the bank guarantees wherever furnished and or by putting to
auction the unencumbered immovable property pledged by the millers with
it, after due process of law.
21. All the appeals stand disposed of in aforesaid terms, without any order
as to costs.
…....….………………J.
(Abhay Manohar Sapre)
……………………….J.
(Uday Umesh Lalit)
New Delhi
August 13, 2018
