Chhattisgarh High Court Denies Fourth Anticipatory Bail in Multi-Crore Deposit Fraud Case

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Case Name

Kuleshwar Sonkar v. State of Chhattisgarh (High Court of Chhattisgarh, Bilaspur)

MCRCA No. 1347 of 2023

Date: 11th March 2024

Key Takeaways

• Repeated Bail Applications: The court emphasized that multiple anticipatory bail applications on the same grounds are not maintainable, especially after previous rejections on merits.
• Seriousness of Offence: The allegations involve large-scale public cheating and violation of financial regulations, making bail less likely.
• Director’s Liability: Resignation from directorship does not absolve a person from liability for acts committed during their tenure.
• Clarification from Supreme Court: The Supreme Court clarified that the High Court could consider subsequent bail applications on their own merits, but this did not guarantee bail.
• No New Grounds: The court found no substantial new facts or legal grounds to justify granting anticipatory bail.

Issue

Should the applicant, Kuleshwar Sonkar, be granted anticipatory bail despite previous rejections, in a case involving alleged fraudulent collection of public deposits and cheating under various financial laws?

Facts

• Who: Kuleshwar Sonkar, former director of Mahanadi Advisory Services Pvt. Ltd.
• What: Accused of collecting over ₹1.46 crore from 67 people through fraudulent investment schemes between 2010 and 2016, then closing the company and absconding.
• When: The FIR was lodged in March 2019. The alleged fraudulent activities occurred from 2010 to 2016.
• Previous Bail Attempts: This was Sonkar’s fourth attempt at anticipatory bail. His first two applications were dismissed on merits. The third was withdrawn after the Supreme Court clarified that the High Court could consider fresh applications.
• Current Status: The investigation is complete, and other co-accused have been granted bail.

Arguments

Applicant (Kuleshwar Sonkar)

• Innocence Claimed: Argued he was falsely implicated and had resigned as director in September 2017, before the FIR was filed.
• No Personal Gain: Claimed no money was deposited in his personal account.
• Refunded Amount: Asserted that the full amount was refunded to the complainant, even exceeding the claimed sum.
• Cooperation: Stated he cooperated with the investigation and responded to all queries.
• Other Co-accused on Bail: Pointed out that others involved had already been granted bail.
• No Flight Risk: Claimed he was not a flight risk and would not tamper with evidence.

State (Prosecution)

• Serious Offence: Highlighted the large-scale fraud and violation of the SEBI Act, 1992 and RBI Act, 1934, specifically Section 45S of the RBI Act (deposits not to be accepted in certain cases).
• Director’s Responsibility: Emphasized that Sonkar was a director during the period of the alleged fraud.
• No New Grounds: Argued that the grounds for bail had already been considered and rejected in previous applications.
• Supreme Court Clarification: Noted that the Supreme Court only allowed the High Court to consider the application on its merits, not to grant bail automatically.
• No Proof of Refund to All Investors: Pointed out that Sonkar could not confirm if all investors were refunded.

Key Legal Precedents & Statutes Cited

• Section 438, Code of Criminal Procedure (CrPC): Provision for anticipatory bail.
• Sections 420 & 34, Indian Penal Code (IPC): Cheating and common intention.
• Sections 3, 5 & 6, Prize Chits and Money Circulation Schemes (Banning) Act, 1978
• Section 10, Chhattisgarh Protection of Depositors Act, 2005
• Section 45S, Reserve Bank of India Act, 1934: Prohibits certain entities from accepting public deposits.
• Section 12, SEBI Act, 1992: Requires registration for certain financial activities.
• Supreme Court Order in SLP (Crl.) No. 6923/2021: Clarified that the High Court could consider subsequent bail applications on their own merits, but did not direct bail to be granted.

Judgement

• Decision: The High Court dismissed the fourth anticipatory bail application.
• Reasoning: The court found that the grounds raised had already been considered and rejected in previous applications. There were no new facts or legal grounds to justify bail. The seriousness of the allegations, the scale of the fraud, and the applicant’s role as director during the relevant period weighed against granting bail.
• Order: Application for anticipatory bail was dismissed.

FAQs

Q1: Why was anticipatory bail denied?

A: The court found no new grounds for bail, and previous applications had already been rejected on merits. The seriousness of the alleged fraud and the applicant’s role as director were key factors.

Q2: Does resigning as director protect someone from liability?

A: No. The court held that resignation does not absolve a person from acts committed during their tenure as director.

Q3: What did the Supreme Court say about this case?

A: The Supreme Court clarified that the High Court could consider subsequent bail applications on their own merits, but did not direct the High Court to grant bail.

Q4: Were other accused granted bail?

A: Yes, but the court noted that this did not automatically entitle the applicant to bail, especially since he was not facing trial and the circumstances were different.

Q5: What laws were allegedly violated?

A: The case involved alleged violations of the IPC (cheating), the Prize Chits and Money Circulation Schemes (Banning) Act, the Chhattisgarh Protection of Depositors Act, the SEBI Act, and the RBI Act.