The Supreme Court of India has delivered a significant judgment in the case of Manik Madhukar Sarve & Ors. vs. Vitthal Damuji Meher & Ors. [Criminal Appeal No. 3573 of 2024, arising from Special Leave Petition (Crl.) No. 3945 of 2022]. The case revolved around the financial irregularities of the Jai Shriram Urban Credit Co-operative Society Limited, where the accused were implicated in a massive financial scam involving the misappropriation of funds worth ₹79.54 crores.
The appellants in the case, who are depositors of the society, challenged the decision of the Bombay High Court (Nagpur Bench) which had granted bail to one of the accused, Vitthal Damuji Meher, citing insufficient evidence. The judgment was delivered by a Bench comprising Justice Hima Kohli and Justice Ahsanuddin Amanullah.
Key Legal Issues Involved
The case primarily focused on the alleged misappropriation of funds by the Society’s President, Khemchand Meharkure, in connivance with co-conspirators, including respondent no.1, Vitthal Damuji Meher. The legal issues revolved around:
1. Nature of the Offence: The accusations involved offences under Sections 409, 420, 467, 468, 471, and 120-B of the Indian Penal Code, 1860, and Section 3 of the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999. The prosecution alleged a systematic siphoning off of funds from the society by the accused.
2. Role of Respondent No. 1: Vitthal Damuji Meher was accused of conspiring with Khemchand Meharkure, facilitating the misappropriation of society funds, and benefiting from financial assistance. According to the prosecution, Meher deposited ₹2.38 crores in the Society and received a financial benefit of ₹9.69 crores.
3. Grant of Bail by High Court: The High Court had granted bail to Meher, citing insufficient evidence to establish his complicity in the scam. This decision was challenged on the grounds that the bail could lead to the dissipation of assets acquired from the misappropriated funds and potential tampering with evidence and witnesses.
Supreme Court’s Observations and Decision
The Supreme Court, in its analysis, emphasized the importance of considering the nature of the accusations, the role of the accused, and the potential risk to the trial process when granting bail. The Court underscored that:
– Nature and Gravity of Offence: The Court noted that the misappropriation involved a large number of vulnerable depositors, which necessitated a careful approach to bail decisions.
– Role of the Accused: It was highlighted that respondent no.1 had played a significant role in the financial irregularities and had benefited disproportionately from his deposits.
– Tampering with Evidence: The Court stressed that bail should be denied when there is a risk of tampering with evidence or influencing witnesses, especially in cases involving severe economic offenses affecting the public.
Justice Amanullah, writing the judgment, noted:
“The interests of the victims of the scam have also to be factored in. The President of the Society systematically siphoned off these funds, with the aid of other office-bearers as also through respondent no.1.”
The Court found that the High Court’s decision to grant bail was not in line with established legal principles, as it had failed to properly weigh the factors of the case, including the societal impact and the scale of the financial misconduct.
The Bench concluded that the bail granted to Vitthal Damuji Meher was inappropriate under the circumstances and ordered its cancellation. The Court directed Meher to surrender within three weeks and allowed him the liberty to reapply for bail in the future should there be a change in circumstances.
