REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.  1573    OF 2008 ARISING OUT OF

SPECIAL LEAVE PETITION (CRL.) NO. 5321 OF 2004

C.R. PATIL  … APPELLANT

VERSUS

STATE OF GUJARAT & ORS.  … RESPONDENTS

WITH CRIMINAL APPEAL NO.  1574    OF 2008

ARISING OUT OF SPECIAL LEAVE PETITION (CRL.) NO. 5492 OF 2004 CHOTUBHAI EKNATH PATIL … APPELLANT

VERSUS

STATE OF GUJARAT  … RESPONDENT

J U D G M E N T C.K. THAKKER, J. 1. Leave granted.

2. The  present  appeals  are  directed

against the judgment and order dated October

06, 2004 passed by the High Court of Gujarat in

Criminal  Miscellaneous  Application  NOs.  3331

and 5302 of 2003. By the said order, the High

Court dismissed the bail applications filed by

the appellant.

3. It  is  not  necessary  to  narrate  the

prosecution-case in detail in view of the fact

that the matter relates to criminal prosecution

and default in making payment by the appellant

but the matter is settled between the parties

and the amount has already been paid by the

appellant as per the settlement.  

4. Briefly  stated,  the  case  of  the

prosecution  is  that  the  appellant  herein  is

engaged in the business of construction and he

is a Director and majority shareholder of M/s

Abhishek  Estates  Pvt.  Ltd.  (‘M/s  AEPL’  for

short).  On  May  01,  2000,  the  appellant

requested  Gujarat  Industrial  Development

Corporation  (‘GIDC’  for  short),  Surat  for

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allotment  of  land  for  the  purpose  of

development  of  Housing  Zone.   The  land  was

allotted and permission was granted by Surat

Urban  Development  Authority  (SUDA)  for

construction of houses.  An application made by

M/s AEPL to the Diamond Jubilee Co-operative

Bank Ltd., Surat (in liquidation), respondent

NO. 4 herein to advance a loan was granted and

substantial amount was paid by respondent No. 4

to M/s AEPL.  The Bank was ordered to be closed

as per the direction of the Reserve Bank of

India.  Respondent No.4 Bank filed Lavad Case

NO.1180 of 2002 against M/s. AEPL and others

for  recovery  of  more  than  Rs.51  crores.

Criminal  proceedings were  also initiated  for

various offences under the Indian Penal Code,

1860 and the appellant herein was arrested in

connection with those offences.

5. The  appellant  remained  in  jail  for

quite  some  time.   He  made  applications  for

release  on  bail.  When  the  matters  came  up

before the High Court of Gujarat, a prayer was

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made  to  enlarge  the  appellant  on  temporary

bail.  The  Court  granted  the  prayer  by  an

interim order, dated July 25, 2003 on certain

terms  and  conditions.  One  of  the  conditions

imposed on the appellant reads thus;

“The  petitioners  shall  file  and undertaking  on  oath  in  this  court within a period of one week from today giving  copies  of  the  learned  Public prosecutor  and  the  administrator  of the  complainant  bank,  to  undertake that he shall facilitate, assist and co-operative in the earliest possible disposal of all the properties pledged to the bank by himself or his family members of the company in which either of them was one of the directors of, members  as  per  the  agreement  and understanding recorded in this order. List  with  exact  details  and approximate market value of the seven other immovable properties which were stated  to  be  available  as  recorded hereinabove  shall  be  annexed  to  the undertaking and the undertaking shall state that the petitioner shall not, directly  or  indirectly,  alienate, transfer, encumber, let out or in any way deal with any of those properties or allow such dealing till recovery of full amount due to the bank and that those  properties  shall  also  be available  for  being  sold  by  the Administrator of the complainant bank in case of any deficit after sale of the  properties  pledged  to  the  bank. If any of the aforesaid properties are held or standing in the name of any of

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the family members of the petitioners, such  family  member  shall  also  file similar undertaking in respect of the particular property.  The petitioners shall also undertake, as stated before the court, that the petitioners shall sign the necessary documents, make the necessary applications in the pending legal  proceedings  regarding  the properties to be put up for sale and co-operative  in  every  manner  and  be available  at  all  times  for implementation  and  execution  of  the arrangement  arrived  at  as  above  for the purpose of discharging his debts.  

6. The appellant was accordingly enlarged

on bail during the pendency of the petition.

At the final hearing, however, the High Court

dismissed  the  petitions  and  vacated  interim

relief which was granted earlier.  Resultantly,

the relief which was granted in favour of the

appellant came to an end and he was taken in

custody again.

7. The  appellant  approached  this  Court.

Notice was issued and the matter was heard from

time to time.  On July 22, 2005, a three-Judge

Bench  granted  relief  to  the  appellant  by

observing as under;

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“Having heard the learned counsel for the parties, we are of the view that it would be in the interest of justice to  grant  prayer  of  the  petitioners. As stated in the petition itself, the order  passed  by  the  High  Court  is subject  matter  of  challenge  and Special  Leave  Petitions  are  pending before this Court.  It has also come on  record  that  earlier  prayer  for temporary  bail  was  granted  by  this Court  pursuant  to  which  the petitioners were enlarged on bail, no doubt for a temporary period.  It is not  even  the  allegation  of  the respondents that the petitioners have violated  terms  and/or  conditions  of the said order passed by this Court. When the petitioners have shown their willingness to pay the amount and the Special  Leave  Petitions  are  pending, this Court will consider all aspects when the matters will be taken up for hearing.  But in view of the fact that an  order  was  passed  by  this  Court temporarily releasing them on bail is over and Special Leave Petitions await hearing  and  as  stated  by  learned counsel  for  the  petitioners,  the petitioners  intend  to  enter  into meaningful  negotiations  with  the respondents  and  to  do  all  the necessary  acts  for  payment  of  loan amount, it would be in the interest of justice to enlarge them on bail so as to  enable  them  to  make  arrangements for such payment.  

For  the  foregoing  reasons,  the application deserves to be allowed and is  accordingly  allowed.   The petitioners are ordered to be enlarged on bail till further orders on their

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each furnishing a personal bond in an amount  of  Rs.1,00,000/-  (Rupees  one lakh only) with two solvent sureties of the like amount to the satisfaction of the Sessions Court, Surat, on the same  terms  and  conditions  on  which they  were  released  on  bail  by  this Court on March 7, 2005.

As is clear, we are allowing bail to  the  two  petitioners  persuaded  by very peculiar facts and circumstances of this case, and guided mainly by the consideration that their retention in jail would be adverse to the interest of the several investors/depositors of the bank while the latter are likely to be benefited by the release of the petitioners on temporary bail, it is hoped that the petitioners shall make a genuine effort making use of their liberty to clear the debts.  If the petitioners are found to have failed in  discharging  this  obligation  or misusing their liberty in any way, the order of bail shall be liable to be recalled.”

8. Pursuant  to  the  above  order,  the

appellant was released on bail.  The learned

counsel  for  the  appellant  stated  that  the

appellant made sincere efforts and has entered

into  One  Time  Settlement  (OTS)  with  the

respondent Bank and fully re-paid the amount as

per the said settlement.  Respondent No. 4-Bank

addressed  a  letter  to  the  appellant  in  the

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capacity of Director of M/s AEPL which reads

thus;

“This  is  to  certify  that  the abovementioned  account  No.OD-ODR-011 has  been  fully  repaid  as  per  your application  under  Special  One  Time Settlement  Scheme  (18-5-07)  approved by  the  High  Level  Committee  meeting held on 25-8-2008.”

9. The  matter  was  thereafter  placed

before a two-Judge Bench on September 19, 2006

and the following order was passed;

“It  is  stated  by  Mr.  K.T.S.  Tulsi, learned  senior  counsel  appearing  for the  petitioner(s)  that  the  parties have settled their disputes in terms whereof  out of Rs.68 crores, 25% of which would come to Rs.17 crores would be paid by the petitioner(s).  It is stated  that  the  petitioner(s)  have deposited  a  total  amount  of  Rs.12 crores  by now.  The diamond Jubilee Co-operative Bank Ltd. in terms of its letter dated 14.9.2006 has allowed the petitioner(s) to pay balance amount of Rs.5 crores by 4.10.2006.  Mr. Tulsi states  that  petitioner(s)  shall  pay the  balance  amount  of  Rs.5  crores within the aforementioned period.”

10. The  respondent  No.  4-Bank  is  in

liquidation and Official Liquidator is managing

the affairs of the Bank who has filed Lavad

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Case No. 1180/2002 in the Court of Board of

Nominees at Surat.  He has also informed the

Board of Nominees that the defendants in the

Lavad Suit (M/s AEPC & Ors.) had fully paid up

the  full  amount  under  OTS  Scheme  and  the

plaintiff (Bank) did not want to proceed with

the matter and accordingly it sought permission

to withdraw the suit.   

11. The said application reads thus;

“The defendant of this matter has fully  paid up the full amount under the OTS Scheme, which has been agreed in the meeting dated 25.8.2008 of High Level  Committee  (Gandhinagar),  this plaintiff does not want to proceed in this  suit and on today withdraw the same unconditionally, which is declare to this honourable court.

For, this suit has been withdrawn whatever refund for it is required to be paid, same shall have to be paid in the name of the bank."

12. Necessary  permission  was  granted  by

the Board of Nominee for withdrawal of the suit

and the Lavad Case is no more pending.

13. We have also heard the learned counsel

for the State.  On behalf of the State it was

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stated  that  the  entire  amount  which  was

required to be paid by M/s AEPC has already

been  paid  and  an  appropriate  order  may  be

passed  granting  relief  in  favour  of  the

appellant and the State has no objection if

such prayer is granted.

14. From the above facts, it is clear that

the amount which was required to be paid by M/s

AEPC has already been paid by the appellant

herein  under  OTS.  The  Bank  has,  vide  its

communication dated September 19, 2008 referred

to above, accepted the above fact.  Again, the

Bank  which  had  filed  Lavad  Case  through

Official Liquidator in the Court of Board of

Nominees,  Surat  has  also  withdrawn  the  said

suit  in  view  of  settlement  and  receipt  of

payment  under  OTS.  The  State  has  also  no

objection to the said settlement.

15. The learned counsel for the appellant

now prays that in view of full payment under

OTS,  nothing  requires  to  be  done  by  the

appellant.  The condition imposed by the High

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Court in the interim order referred to above

does  not  survive  and  his  properties  may  be

ordered to be released from attachment and be

made available to him by relieving him of the

undertaking given by him.

16. In  our  opinion,  the  appellant  is

entitled to the relief sought.  In view of full

settlement between the parties and payment made

by the appellant under OTS now nothing is due

and payable by the appellant to the respondent

No.4-Bank.  Accordingly,  the  properties  are

ordered  to  be  released.  Title  Deeds  and

documents,  if  any,  pertaining  to  the  said

property be handed over and returned to the

appellant  by  respondent  No.4-Bank.   The

appellant is also relieved of the undertaking

given to the Court.

17. The appeals are allowed to the above

extent.

…………………………………………………J. (C.K. THAKKER)

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…………………………………………………J. (D. K. JAIN)

New Delhi. October 3, 2008.  

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