Supreme Court Grants Anticipatory Bail in Rice Mill Deficit Case: Dwarika Das Rathi vs. State of Chhattisgarh (2018)

Date of the Judgment: 09 October 2018
Citation: Dwarika Das Rathi vs. The State of Chhattisgarh, Criminal Appeal No(s). 1267/2018 (Arising from SLP (CRL) Nos.587/2017)
Judges: Justice Kurian Joseph and Justice S. Abdul Nazeer
Can a person accused of not returning the required quantity of rice after custom milling be granted anticipatory bail? The Supreme Court addressed this question in a case where a rice mill owner was accused of a significant deficit. The court ultimately granted the accused anticipatory bail, subject to certain conditions, while allowing the investigation to continue. This judgment clarifies the conditions under which anticipatory bail can be granted, even in cases involving substantial financial discrepancies. The judgment was delivered by a bench comprising Justice Kurian Joseph and Justice S. Abdul Nazeer. The opinion was authored by Justice Kurian Joseph.

Case Background

The case involves Mr. Dwarika Das Rathi, who owned a rice mill. He was accused of not returning the required quantity of rice after custom milling. The State of Chhattisgarh alleged that Mr. Rathi had a deficit of Rs. 2,71,34,937/-. This led to the registration of Crime No. 123 of 2016 at Police Station Vidhan Sabha, Raipur, Chhattisgarh, for offences under Section 420 and 409 of the Indian Penal Code (IPC) and Sections 3 and 7 of the Essential Commodities Act.

Timeline

Course of Proceedings

Initially, Mr. Rathi approached the Supreme Court seeking anticipatory bail under Section 438 of the Code of Criminal Procedure (Cr.P.C.). The Supreme Court, on 25.01.2017, directed Mr. Rathi to deposit Rs. 2,71,34,937/- with the State Government/Chhattisgarh State Cooperative Marketing Federation within three weeks. Additionally, he was required to cooperate with the investigation and was to be released on a personal bond of Rs. 1,00,000/- with two sureties of the like amount upon arrest. However, Mr. Rathi reported that he could not raise the required amount. The Court then directed the State to attach and sell his immovable properties. Despite attempts, the sale could not be completed. Subsequently, on 08.05.2018, the Court directed the Land Acquisition Collector to disburse any compensation due to Mr. Rathi from land acquisition to the State.

Legal Framework

The case involves the following legal provisions:

• Section 438 of the Code of Criminal Procedure (Cr.P.C.): This section deals with the grant of anticipatory bail, which is bail granted to a person in anticipation of an arrest.
• Section 420 of the Indian Penal Code (IPC): This section pertains to cheating and dishonestly inducing delivery of property.
• Section 409 of the Indian Penal Code (IPC): This section deals with criminal breach of trust by a public servant, banker, merchant, or agent.
• Sections 3 and 7 of the Essential Commodities Act: These sections relate to the powers to control the production, supply, and distribution of essential commodities and penalties for contravention.

Arguments

The arguments presented by the parties are as follows:

Appellant’s Arguments:

• The appellant, Mr. Rathi, contended that he was unable to deposit the initially required amount of Rs. 2,71,34,937/-.
• He argued that he was entitled to certain compensation for the acquisition of his land, which could be used to offset the deficit.
• The appellant sought the Court’s intervention to grant him anticipatory bail, given his inability to meet the initial deposit condition.

Respondent’s Arguments:

• The State of Chhattisgarh argued that Mr. Rathi had not returned the required quantity of rice after custom milling, leading to a significant financial deficit of Rs. 2,71,34,937/-.
• The State submitted that despite attempts, the sale of Mr. Rathi’s attached immovable properties did not materialize.
• The State sought to continue with the investigation and recover the deficit amount through all available means, including attachment of properties and bank accounts.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in the judgment. However, the core issue addressed was:

• Whether the appellant should be granted anticipatory bail despite his inability to deposit the initially required amount, and given the ongoing investigation and recovery efforts by the State.

Treatment of the Issue by the Court

Authorities

The Supreme Court did not explicitly cite any cases or books in this judgment.

The legal provisions considered by the court were:

• Section 438 of the Code of Criminal Procedure (Cr.P.C.): This provision was central to the issue of granting anticipatory bail.
• Section 420 of the Indian Penal Code (IPC): This provision was part of the charges against the appellant for cheating.
• Section 409 of the Indian Penal Code (IPC): This provision was part of the charges against the appellant for criminal breach of trust.
• Sections 3 and 7 of the Essential Commodities Act: These provisions were part of the charges against the appellant related to essential commodities.

Judgment

Authorities:

No authorities were cited by the court in the judgment.

What weighed in the mind of the Court?

The Supreme Court’s decision was influenced by a combination of factors. The court recognized the appellant’s inability to deposit the large sum initially required for anticipatory bail. It also considered the State’s need to recover the deficit amount. The Court aimed to balance these interests by granting anticipatory bail while ensuring that the investigation could continue and the State could recover the dues. The Court also took into account that the appellant was entitled to some compensation for the acquisition of his land, which could be used to offset the deficit.

The Supreme Court’s decision was primarily influenced by the need to balance the rights of the accused with the State’s interest in ensuring that the investigation is carried out properly and the deficit is recovered. The court acknowledged the appellant’s inability to deposit the large sum of money initially required and the fact that he was entitled to some compensation for the acquisition of his land. The court also considered the fact that the sale of the appellant’s properties did not materialize. The Court, therefore, decided to grant anticipatory bail while permitting the State to continue its efforts to recover the deficit by attaching the properties and bank accounts of the appellant. The court also made it clear that the appellant would have to seek regular bail after submission of the final report by the Investigating Officer.

The Court stated:

• “The Investigating Officer is free to continue with his investigation.”
• “The State is permitted to attach all the immovable properties of the appellant and the bank accounts so as to cover up the deficit of the deposit, as directed by this Court.”
• “The interim protection granted by this Court vide order 25.01.2017 is made absolute.”

There were no dissenting opinions in this case. The judgment was delivered by a bench of two judges, Justice Kurian Joseph and Justice S. Abdul Nazeer, with the opinion authored by Justice Kurian Joseph.

Key Takeaways

• Anticipatory bail can be granted even if the accused is unable to deposit a large sum of money initially required by the court.
• Courts can balance the rights of the accused with the State’s interest in ensuring that the investigation is carried out properly and the deficit is recovered.
• The State can attach the properties and bank accounts of the accused to recover the deficit.
• The accused will have to seek regular bail after submission of the final report by the Investigating Officer.

Directions

The Supreme Court gave the following directions:

• The Investigating Officer is free to continue with the investigation.
• The State is permitted to attach all the immovable properties of the appellant and the bank accounts to cover the deficit.
• The Trial Court is directed to pass appropriate orders at the time of conclusion of the trial with regard to the deposit/recovery already made.
• The interim protection granted by this Court vide order 25.01.2017 is made absolute.
• In case of violation of bail conditions, the Investigating Officer can approach the Trial Court for cancellation of bail.
• The appellant will have to appear before the Court and seek regular bail after the submission of the final report by the Investigating Officer.
• The appellant is permitted to seek appropriate orders with regard to the amount quantified by the Investigating Officer, or for varying the quantum, or with regard to any other dispute on the amount already recovered.

Development of Law

The ratio decidendi of this case is that anticipatory bail can be granted even if the accused is unable to deposit the required amount, provided that the investigation can continue and the State can recover the deficit through other means. This judgment emphasizes a balanced approach where the court considers both the individual rights of the accused and the State’s interest in ensuring proper investigation and recovery of dues. This case does not overrule any previous position of law, but rather applies existing principles to a specific set of facts.

Conclusion

The Supreme Court granted anticipatory bail to Mr. Dwarika Das Rathi, who was accused of a deficit in rice after custom milling. The court balanced the need to protect the accused’s rights with the State’s interest in continuing the investigation and recovering the financial deficit. The court made the interim protection of anticipatory bail absolute, subject to certain conditions, while allowing the State to attach properties and bank accounts to recover the dues. This judgment highlights the court’s approach to balancing individual rights and state interests in cases involving financial discrepancies and criminal charges.