Chartered Accountant involved in preparing forged bill & embezzling money in Coaching Institute gets bail by HC

Bail applicant is a Chartered Accountant and Company Secretary (Mr. Abhinandan Bafna) engaged in the profession of teaching students who aspire to become Chartered Accountant. The complainant is the Managing Director of a Coaching Institute for CA and CS titled as J.K. Shah Education Private Limited.

The said company opened a Branch for imparting coaching for CA and CS at Raipur in the year 2019. Mr. Abhinandan Bafna was appointed as the Branch In-charge at Raipur, who was responsible for managing the affairs of the said Institute like admission, fee collection etc.

Allegation against the present applicant is that several students opted for coaching in the complainant’s Institute for which the fee collection was done by said Abhinandan Bafna. The company raised a doubt in the accounts in the month of November, 2020 and sought for collection report and other details of the account from said Abhinandan Bafna. The said Abhinandan Bafna replied vide his e-mail dated 12.12.2020 stating that a sum of Rs.1,11,93,911/- has been received from the students through various modes, which was doubted by the Company. It is alleged that many students have directly deposited the fee in the personal account of said Abhinandan Bafna and thereby it is further alleged that the said Abhinandan Bafna committed financial irregularities and also prepared various forged bills for merchants’ payment and embezzled huge amount of money by getting the same deposited in his personal account and forged receipts in the name of Company were issued.

Alleging aforesaid irregularities, the Managing Director of the company namely, Mr. Jitendra Shah (complainant) lodged an FIR against the said Abhinandan Bafna.

Allegations of Bail applicant:

The complainant has a long history of filing vexatious and frivolous litigation against the ex-employees and former lecturers of the complainant’s company for harassing them. The applicant was working with the complainant from the year 2009 to 2020, initially in the capacity of Chief Operating Officer and thereafter as CEO from April, 2020. However, the role of the applicant was very limited. Form DIR-12 and Form MGT-14 are the mandatory documents to be filed before the company for appointment as CEO, however, the said requirement was not complied with.

The applicant never signed any agreement with the Company and was always entitled to start his new business. In the end of October, 2020, the applicant and his wife founded a company viz. EDNOVATE Education Private Limited with an intention to provide quality education to the students aspiring to become CA.

So the applicant resigned from the complainant’s company from 4th October, 2020. After formation of new concern by the applicant, some of the lecturers voluntarily inclined to join the applicant’s company. So the complainant with a view to restrain the applicant’s business filed a Commercial IP Suit No.25/2021 before the Hon’ble High Court of Bombay and also lodged the FIR against the applicant under Section 408 of the IPC at Andheri Police Station, Mumbai vide FIR No.872/2020. A separate suit was also filed by the complainant against Dhawal Purohit for recovery of Rs.49,54,000/- before the Bombay City Civil Court bearing Suit No.4234/2020 and also lodged FIR against Dhawal Purohit under Section 408 of the IPC. The complainant had threatened to initiate multiple proceeding against the applicant before the various Courts and also in different Police Stations all over India.

Similar legal notices were also sent to different lecturers. As the entire career and future of the applicant and other lecturers was at stake, a consent terms has been signed which was drafted by the complainant’s advocate and the said consent terms was filed before the Hon’ble Bombay High Court. The said terms are void, as the applicant and other lecturers could not obtain proper legal advise and they could not understand the ill-motive and malafide intention of the complainant. Thereafter the complainant filed a Contempt Petition before the Bombay High Court bearing Contempt Petition (L) No.3533/2021. The said petition was dismissed on 16.2.2021 and cost of Rs.1.5 lakhs was imposed on the complainant and in favour of the applicant’s new concern.

In order to stop the EDNOVATE Education Private Limited to conduct their business, a false FIR No.50/2022 was filed at Jaipur on 27.1.2022. Learned counsel emphasizes that main allegations are against Abhinandan Bafna and he has forged certain documents under the instructions of Dhawal Purohit for which Dhawal Purohit has received Rs.3 lakhs. Dhawal Purohit in his statement has clearly stated that the present applicant is not aware about the affairs of the business in relation to the Raipur Branch. Considering all the aspecrts of the matter, the applicant may be released on anticipatory bail.

Allegations of complainant

The applicant being the CEO has accessed the ERP (Enterprise Resource Planning) system, which is the central point through which all the data relating to the students of all the Branches of complainant are regulated. The applicant manipulated the data relating to fee collected through students at Raipur Branch by directing the co-accused to issue receipts for all those students whose part remaining was collected and not deposited by the co-accused in the company‘s account. Abhinandan Bafna has also prepared various fake bills showing bogus/inflated expenses in the name of electrical and painting workers, which was approved by the co-accused Dhawal Purohit. The applicant along with other co- accused were siphoning funds from the Raipur and Jaipur Branch.

Court Order

10. I have heard learned counsel for the parties at length and perused the record. It is settled law hat while deciding the bail application, the Court should refrain from assessing the evidence and the same is not relevant consideration at the threshold stage. While the Court examining the issue including any reasonable ground extensive consideration of merits which has the potential to prejudice either the case of the prosecution or defence, is undesirable. Perusal of the FIR would reveal that the allegations were mainly against Abhinandan Bafna for the period 22.1.2019 to 30.11.2020 and even the forensic audit was done on 6th April, 2021 in which it was reported that Rs.1,00,93,251/- was misappropriated. The FIR was lodged by the complainant on 22.10.2021 belatedly vide FIR No.258/2021 and in column 8, reason for delay is not mentioned. Abhinandan Bafna was enlarged on regular bail by the coordinate Bench and the Hon’ble Supreme Court while dismissing the SLP has observed that Abhinandan Bafna shall deposit Rs.16,39,600/- within 3 weeks. Memorandum statement of Dhawal Purohit was recorded on 3rd April, 2021 wherein he has specifically stated that the present applicant was not aware about the affairs of Raipur Branch. Dhawal Purohit was also enlarged on regular bail.

11. From perusal of record, it appears that the applicant has responded properly to the notices of the IO and sent an e-mail on 21.1.2022 stating that he has no relations with the Raipur Branch and seeks time for personal appearance. Thereafter the Bombay High Court has granted transit anticipatory bail vide order dated 8.2.2022. The applicant appeared before the Investigating Agency on 16.2.2022 and his statement was also recorded. In the statutory audit report for the period ending 31.3.2020 & 31.3.2021, no fraud was reported by the employees or officers of the company. The applicant has started new concern. Thereafter such dispute arose and various cases have been filed.

12. The present case is based on documentary evidence as sufficient evidence was collected by the complainant himself through forensic audit, though there is conflict of the amount mentioned and the Coordinate Bench has also observed while granting bail in para-11 that the embezzled amount is highly disputed question of fact. After granting interim bail by this Court on 14.3.2022, the IO never issued any notice or supplied any questionnaire to the applicant, as admitted by learned State Counsel during the course of arguments.

13. Moreover, in Siddharam Satlingappa Mhetre v. State of Maharashtra, (2011) 1 SCC 694 the following was observed while considering the grant of anticipatory bail :

“90. A great ignominy, humiliation and disgrace is attached to the arrest. Arrest leads to many serious consequences not only for the accused but for the entire family and at times for the entire community. Most people do not make any distinction between arrest at a pre-conviction stage or post-conviction stage.

112. The following factors and parameters can be taken into consideration while dealing with the anticipatory bail:

(i) The nature and gravity of the accusation and the exact role of the accused must be properly comprehended before arrest is made;

(ii) The antecedents of the applicant including the fact as to whether the accused has previously undergone imprisonment on conviction by a court in respect of any cognizable offence;

(iii) The possibility of the applicant to flee from justice;

(iv) The possibility of the accused’s likelihood to repeat similar or other offences;

(v) Where the accusations have been made only with the object of injuring or humiliating the applicant by arresting him or her;

(vi) Impact of grant of anticipatory bail particularly in cases of large magnitude affecting a very large number of people;

(vii) The courts must evaluate the entire available material against the accused very carefully. The court must also clearly comprehend the exact role of the accused in the case. The cases in which the accused is implicated with the help of Sections 34 and 149 of the Penal Code, 1860 the court should consider with even greater care and caution because overimplication in the cases is a matter of common knowledge and concern;

(viii) While considering the prayer for grant of anticipatory bail, a balance has to be struck between two factors, namely, no prejudice should be caused to the free, fair and full investigation and there should be prevention of harassment, humiliation and unjustified detention of the accused;

(ix) The court to consider reasonable apprehension of tampering of the witness or apprehension of threat to the complainant;

(x) Frivolity in prosecution should always be considered and it is only the element of genuineness that shall have to be considered in the matter of grant of bail and in the event of there being some doubt as to the genuineness of the prosecution, in the normal course of events, the accused is entitled to an order of bail.

113. Arrest should be the last option and it should be restricted to those exceptional cases where arresting the accused is imperative in the facts and circumstances of that case. The court must carefully examine the entire available record and particularly the allegations which have been directly attributed to the accused and these allegations are corroborated by other material and circumstances on record.

14. Considering the aforesaid principle and the nature of accusation, charge sheet was filed against Abhinandan Bafna and Dhawal Purohit and permission was also sought to file supplementary charge sheet against co-accused Dhawal Purohuit wherein specific name of the applicant was not mentioned and further considering all the aspects of the matter, this Court is of the considered view that the applicant deserves to be enlarged on anticipatory bail.

15. Accordingly, the application is allowed and it is directed that in the event of arrest of the applicant, he shall be released on anticipatory bail on his executing a personal bond for a sum of Rs.25,000/- with one surety in the like sum to the satisfaction of the arresting officer with the following conditions:-

(i) he shall make himself available for interrogation by a police officer as and when required;

(ii) he shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to any police officer.

(iii) he shall not act in any manner which will be prejudicial to fair and expeditious trial.

(iv) he shall appear before the trial Court on each and every date given to him by the said Court till disposal of the trial.

(v) The applicant shall produce all the necessary documents and shall respond to the notice/questionnaire, if issued to him during investigation, failing which the State shall be at liberty to move application for cancellation of anticipatory bail.