C.R. Patil Vs. State of
Gujarat and Ors.  INSC 1691 (3 October 2008)
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 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
C.K. THAKKER, J.
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.
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.
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 3 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.
were also initiated for various offences under the Indian Penal Code, 1860 and
the appellant herein was arrested in connection with those offences.
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 4 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;
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 5 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.
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.
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;
6 "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
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 7
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
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 8 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."
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."
respondent No. 4-Bank is in liquidation and Official Liquidator is managing the
affairs of the Bank who has filed Lavad 9 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.
said application reads thus;
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
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."
permission was granted by the Board of Nominee for withdrawal of the suit and
the Lavad Case is no more pending.
have also heard the learned counsel for the State. On behalf of the State it
was 1 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
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.
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 1 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.
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.
appeals are allowed to the above extent.
(D. K. JAIN)