Mumbai, Maharashtra – July 8, 2022 – A Mumbai Sessions Court has rejected the bail application of Maansingh Kumar @ Pradeep Singh Nirwan, accused of cheating a company of ₹2,07,93,882. The court, presided over by Additional Sessions Judge Dr. A.A. Joglekar, denied bail citing the prima facie evidence against the accused, the non-recovery of the defrauded amount, and the ongoing investigation.

Maansingh Kumar @ Pradeep Singh Nirwan was arrested in connection with C.R. No. 26 of 2022, registered at L.T. Marg Police Station, for offenses punishable under sections 120(B) (criminal conspiracy), 406 (criminal breach of trust), 409 (criminal breach of trust by a public servant, or by banker, merchant or agent), 417 (cheating), 418 (cheating with knowledge that wrongful loss may ensue to person whose interest offender is bound to protect),¹ and 420 (cheating and dishonestly inducing delivery of property), read with 34 (acts done by several persons in furtherance of common intention) of² the Indian Penal Code (IPC).

Details of the Allegations:

According to the prosecution, Nimish Umesh Shah’s company, engaged in selling raw cotton, entered into a contract with the complainant to purchase gray cotton. Initially, a 10% advance payment was agreed upon, later revised to 20%. The complainant supplied raw cotton worth ₹2,07,93,882 to M/s. Max Global Impex Exporters of High Fashion Garment and Fabrics, where Nirwan was the Sales Manager. Payments were made initially, but later, bulk orders were placed, and no payments were made. The company’s office was found locked in May 2021, and the accused persons absconded. Nirwan allegedly misrepresented himself as a director of the company, which was later found to be a sole proprietorship.

Arguments Presented During the Bail Hearing:

Advocate A.A. Siddiqui, representing Nirwan, argued that his client was merely an employee and that the matter was a civil dispute governed by the Sale of Goods Act. He relied on a Supreme Court judgment to argue that civil disputes should not be converted into criminal cases.

Ld. APP Abhijit Gondwal, representing the prosecution, opposed the bail, stating that the defrauded amount was yet to be recovered, invoices and transportation receipts had been recovered, and the total amount involved was ₹6,24,00,000. He emphasized that the investigation was ongoing.

Advocate Aditya Iyer, representing the intervener, argued that Nirwan was part of a syndicate that had cheated other traders using fake identities and designations.

Court’s Reasoning and Decision:

Judge Joglekar, after reviewing the case records and hearing both sides, noted that the company had received goods worth ₹2,07,93,882 and no payment had been made.

“On meticulous survey of the case record it evinces to me that, the company under the name and style M/s. Max Global Impex Exporters of High Fashion Garment and Fabrics had raised their demand pertaining to supply of cloth since 28.01.2021 and it was duly supplied. Further, prosecution has placed a chart which ranges from 04.03.2021 until 07.04.2021 wherein the said chart propels for the invoice received from the applicant/accused qua his company and the total balance amount is shown to be Rs.02,07,93,882/-. Thus, in this regard no any explanation with regard to payment has been advanced by and on behalf of the applicant/accused,” Judge Joglekar stated in the order.

The court distinguished the Supreme Court judgment relied upon by the defense, stating that the facts were different as Nirwan had admitted to the transaction and no payment had been made.

“Considering the conspectus of the aforesaid case law I do humbly submit that the said case is distinctive on facts as the payment in the instant case is on and behalf of the applicant/accused and apart from the same as stated hereinabove the applicant/accused has apparently admitted for such transaction,” Judge Joglekar noted.

The court emphasized that while deciding a bail application, it is necessary to see whether a prima facie case exists, and a roving inquiry is not required.

“Moreover, while deciding an application for bail it is settled that the Court is required to see whether the prima-facie case exists or not. It is not necessary to make roving enquiry or examining the merits of prosecution case,” Judge Joglekar stated.

The court also highlighted the non-recovery of the defrauded amount and the ongoing investigation.

“The Ld. Prosecutor has categorically stated that, there is no recovery till date and considering the quantum of amount involved in the crime it would be inappropriate to enlarge the applicant/accused on bail. Thus, in this regard, the role of the applicant/accused in connivance with that of the co-accused cannot be negated. In the back of the aforesaid facts, I hold that this is not a fit case for grant of bail,” Judge Joglekar concluded.

Decision:

The court rejected Nirwan’s bail application, citing the prima facie evidence, non-recovery of funds, and ongoing investigation.

Implications of the Decision:

This decision underscores the court’s stringent approach in cases involving financial fraud, especially when the defrauded amount is substantial and yet to be recovered. It highlights the importance of prima facie evidence and the court’s role in ensuring that the investigation is not hampered by the release of the accused. The ruling also emphasizes that the court will not readily convert criminal cases into civil disputes, especially when there is clear evidence of fraud and misrepresentation.