In Bail Appln. 884/2023 -DEL HC- Delhi High Court denies anticipatory bail in Rs. 50 crore fraud case, rules custodial interrogation necessary to unearth the trail of money
Justice Amit Sharma [20-10-2023]

Read Order: Parshant Jain V. The State (NCT of Delhi)

Chahat Varma

New Delhi, October 27, 2023: The Delhi High Court has denied anticipatory bail to a maninvolved in a Rs. 50 crore fraud case. The Court's decision was based on the belief that custodial interrogation was essential to unearth the trail of the money involved in the case.

In the matter at hand, the prosecution's case revolved around the registration of an FIR by Sumit Agarwal (complainant) against the applicant, Parshant Jain, and other accused individuals. The complainant, engaged in wholesale trade of synthetic yarns, alleged that in July 2021, he was introduced to the applicant by Mr. Rishab Jain, a co-accused. The applicant facilitated a business arrangement whereby the complainant would sell yarn through the applicant's proprietorship firm, M/s Prashant Zippers. This transaction involved purchasing yarn at a discounted price and reselling it in the market. Later, the complainant received a hand-written note on WhatsApp from the applicant, instructing all creditors, who were wholesale yarn dealers, to gather at his factory. At the factory, the applicant, along with his father, stated that his total liability to all of them was zero, and he would not pay anyone for their goods. It was further alleged that the applicant's practice of buying yarn from wholesale dealers and selling it at a lower price had caused a loss of Rs. 50 Crores to wholesale dealers, including the complainant. Subsequently, the FIR was registered, and an investigation was conducted.

The counsel representing the applicant had argued that the present dispute was fundamentally of a civil nature. It was highlighted that there had been a running account between the applicant and the complainant, and according to the accounts, the complainant actually owed amount to the firm of the co-accused, Rishab Jain. This alleged debt, as per the applicant, had been intentionally concealed by the complainant in the present FIR. The counsel also pointed out that the applicant had actively cooperated with the Investigating Officer during the investigation.

However, the single-judge bench of Justice Amit Sharma noted that in the present case, the primary contention of the applicant that the dispute in the FIR was essentially of a commercial or civil nature had appeared attractive at first glance. However, the counsel representing the applicant could not provide any explanation for the fact that material purchased at a higher price was, in fact, sold at a lower price. No explanation for this aspect was provided.

The bench opined that the modus operandi adopted by the applicant had prima facie amply demonstrated his dishonest intention. Furthermore, the applicant had been seeking anticipatory bail, and even after being granted interim protection, he had not cooperated with the investigation.

Citing the case of State Rep. by the C.B.I. v. Anil Sharma [LQ/SC/1997/1203], the court observed that custodial interrogation is qualitatively more focused on eliciting information than questioning a suspect who is already protected by a favourable order under Section 438 of the Code.

Consequently, considering the circumstances of the case, the court opined that custodial interrogation of the applicant was necessary to unearth the money trail. As a result, the interim protection granted to the applicant was withdrawn.