Keeping undertrial in custody impacts his right of defence: Delhi High Court grants bail in bank fraud case

The Delhi High Court recently granted bail to a man in a bank fraud case, observing that the right to fair trial under Article 21 of the Constitution will be denied and that keeping an undertrial in custody impacts his right of defence [Vikas Chawla v. State]..Justice Chandra Dhari Singh was acting on the bail plea of a man who was arrested by the Economic Offences Wing of the Delhi Police under Sections 406 (criminal breach of trust), 420 (cheating) and 120B (criminal conspiracy) of the Indian Penal Code..“The consequences of pre-trial detention are grave and keeping an under-trial in custody would necessarily impact his right to defend himself during trial in as much as he will be clearly denied the right to a fair trial, which is guaranteed under Article 21 of the Constitution,” the bail order noted..The accused had availed credit facilities from HDFC Bank in 2014 for running the sales and service of vehicles manufactured by car maker Hyundai.However, the Bank alleged that in 2019, it noticed gaps in the company’s stock audit report. The Bank eventually found that the vehicles available in stocks of the company were much less than the inventory received from the manufacturer, pursuant to the disbursals made by the bank..It was alleged that the company had utilised a credit limit of ₹13.81 crore, sanctioned by the bank, but there were stocks of only ₹2.35 crore - a gap of an unaccounted ₹11.45 crore.“In other words, stock of only 34 Vehicles at ₹2.35 crore was found available with accused persons and vehicles amounting to ₹11.45 crores had been found to been fraudulently misappropriated,” the Court was informed..The accused, on the other hand, submitted his company made repayments of approximately ₹600 crore to the Bank over the course of their business relations between 2014 and 2020. The accused also claimed to have settled ₹200 crore with BMW Financial Services. Additionally, a proposal was made by the accused before the Court to settle the outstanding liabilities with the Bank and the financial credit company..Counsel appearing for the State, the Bank and the financial credit company opposed the bail plea highlighting the serious charge against the accused of dishonestly misappropriating the funds..While deciding the bail plea, the Court observed that the fundamental rule of bail in criminal jurisprudence is the presumption of innocence.“It is settled law that fraudulent and dishonest intention should be present since inception for an offence of Cheating. In the present case a non-payment of minuscule amount (due to reasons beyond the control of applicant) in comparison to the huge amounts paid over the years has been deliberately given a criminal colour,” the order underlined..The Court noted that as the investigation was complete, there was no apprehension of the accused tampering with any documents, influencing witnesses or absconding during the trial.While allowing bail, the man was directed to furnish a personal bond of ₹1 lakh with two sureties of the like amount, apart from other riders. The accused was asked to surrender his passport and not leave the country without prior permission of the Court. It was also ordered, “He shall drop a PIN on the Google map to ensure that his location is available to the investigating officer.”.Senior Advocate Vikas Pahwa along with Advocates Sumer Singh Boparai, Abhishek Pati, Sidhant Saraswat and Shadman Siddiqui represented the accused. Additional Public Prosecutor Kusum Dhalla appeared for the State whereas Advocates Tushar Jarwal, Rahul Sateeja, Ambar Bhushan and Anurag Soan represented BMW Finance. HDFC Bank was represented by Advocates Kunal Tandon and Chetan Roy..[Read Order]