Case Note & Summary
The matter arose from an application for anticipatory bail filed by Murtuza Yusuf Electricwala in connection with C.R. No. 63 of 2018 registered at Byculla Police Station, Mumbai, under Section 420 read with Section 34 of the Indian Penal Code, 1860. The applicant and other accused persons had formed a trust named 'Jagrut Samaj Ekta Foundation Trust' and, in 2011, advertised a housing project called 'Mohammedi Colony Project' at Boisar (East) targeting the Bohari Muslim community. The first informant paid a total of Rs. 2,93,000 towards a flat, with the last payment made in 2013. The applicant failed to deliver possession within the stipulated period, and when the informant sought a refund, the applicant avoided repayment. It came to light that approximately 300 other persons had similarly been duped. The applicant apprehended arrest and sought pre-arrest bail under Section 438 of the Code of Criminal Procedure, 1973. The applicant argued that he had no intention to cheat and was genuinely unable to start the project due to local opposition; he claimed he would complete the project and hand over flats. The State opposed bail, highlighting the large number of victims and the fact that the applicant had not returned any money. The court noted that the investigation was at a crucial stage, the applicant's complicity was evident from the record, and thorough custodial interrogation was necessary to unearth the full extent of the crime. Considering the gravity of the offence, the large-scale cheating of economically middle-class people, and the need for custodial interrogation, the court held that the applicant did not deserve pre-arrest bail and rejected the application.
Headnote
A) Criminal Procedure - Anticipatory Bail - Section 438 Code of Criminal Procedure, 1973 - Grant of Anticipatory Bail - Gravity of Offence and Necessity of Custodial Interrogation - The court considered that the applicant is alleged to have cheated a large number of middle-class persons by collecting money for a housing project and failing to deliver possession or refund amounts. The investigation was at a crucial stage and custodial interrogation was deemed necessary to uncover the full truth. Held, that the applicant did not deserve pre-arrest bail given the serious allegations and clear complicity. (Paras 6-7) B) Criminal Law - Economic Offences - Cheating (Section 420 IPC) - Factors in Anticipatory Bail - Where an accused collects money from numerous investors for a project and fails to deliver or refund, it indicates prima facie intention to cheat, and pre-arrest bail may be refused to allow complete investigation. The court noted that the applicant had accepted money from more than 300 persons and had not returned it despite inability to complete the project over several years. Held, that such conduct warranted custodial interrogation. (Paras 5-6)
Issue of Consideration
Whether the applicant is entitled to anticipatory bail under Section 438 of the Code of Criminal Procedure, 1973, in a case registered under Section 420 read with Section 34 of the Indian Penal Code, 1860, involving allegations of cheating numerous investors in a housing project?
Final Decision
The application for anticipatory bail is rejected.
Law Points
- Pre-arrest bail under Section 438 CrPC is a discretionary relief and is to be refused when the allegations are serious and investigation is at a crucial stage requiring custodial interrogation
- in economic offences involving cheating of a large number of persons
- the gravity of the offence and the need to unearth the truth outweigh the liberty of the accused.
