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Delhi Court grants relief to Ford India Managing Director & Director in cheating case

December 6, 2021
justice brown

By Nihit Nagpal and Manmeet Singh Marwah

INTRODUCTION

A Delhi Court (District Court at Rohini), in State vs. Anurag Mehrotra[1], has granted interim bail to the Managing Director, Mr. Anurag Mehrotra, and Director, Mr. David Allan Schock, of Ford India Pvt. Ltd. (hereinafter referred as the Accused) in a case of cheating filed by the Managing Director of a Ford Dealership, namely Libra Cars Pvt. Ltd. (hereinafter referred to as Complainant).

Bail is the release of an accused against an amount paid/guaranteed for the appearance of the accused before the Court as long as proceedings against him are pending. Before such an accused is granted liberty to be free, certain conditions like cooperation in the investigation; abstaining from tampering the evidence; distancing from the prosecution witness, etc. as set out by the Court must be fulfilled.

The said Ford Dealer had filed a complaint of criminal breach of trust and cheating against Ford India Pvt. Ltd. (hereinafter the Company) in November, 2020 with the Economic Offenses Wing (EOW) of the Delhi Police. The Complainant had alleged that Ford India Pvt. Ltd. (through the Accused) has violated the terms and conditions of their mutual contract by assigning another dealer to function within 10km radius of their location.

BRIEF FACTS

The case revolves around the Dealer Sales and Service Agreement (hereinafter referred to as the Agreement) as entered into between the Complainant and the Accused (on behalf of his Company) on April 21, 2018 which granted Libra Cars Pvt. Ltd. to act as a Ford Dealer for the area of GT Karnal Road.

The contention raised by the Complainant was regarding the breach of  Article 02 clause 10 of the Agreement which provided that the company Ford India Pvt. Ltd. will not authorize any other service station to operate within a radius of 10 Kms from the Complainant’s showroom. However, the Accused completely ignoring the given clause of the Agreement permitted another service station workshop, ‘Harpreet Ford Facility’, to establish its operation within the said radius. Further, when the Complainant had approached the Accused Company to complain regarding this breach internally, he had instead started received notices relating to outstanding dues from the Accused and his Company. The Complainant further claimed that Ford India Pvt. Ltd. had duplicitously published a public notice in Hindustan Times newspaper that Libra Cars Pvt. Ltd. has resigned as a Ford dealerp. The Complainant also contended that the arbitrary termination of the Agreement had caused them wrongful loss of INR 35 Crores. Based on such claims of the Complainant an FIR was lodged against the senior management of Ford India Pvt. Ltd. for commission of the offences of criminal breach of trust and cheating.

An Application under Section 438 of The Code of Criminal Procedure, 1973 (hereinafter referred to as CrPc) was filed before the Hon’ble District Court at Rohini, Delhi on behalf of the Accused by their counsels for the grant of Anticipatory Bail. The counsel for the Accused pleaded that their clients, who are well educated and qualified professionals of impeccable repute, are wrongly being incriminated. They have added that the case is a clear backlash against the termination of the dealership with the sole intention of extracting money from the Company. The counsel while pointing out that the Complaint, which is purely civil in nature, has been filed after 18 months of termination of the dealership showing ill-will on the part of the Complainant, has also stated that even the EOW failed to make a case against Ford’s management team. Counsel for the Accused further argued that the Complainant himself has cheated the public at large by not sticking to the terms mentioned in the Agreement. Counsel for the Accused subverted the argument of the Complainant by submitting that the Complainant paid INR 65 Lacs to the Accused’s Company post-termination of the Agreement, whereas  had there been any provision regarding compensation, the Complainant would have never paid a single penny to the Accused’s Company.

Various judgements such as: Amandeep Singh Johar vs State of NCT of Delhi & ors [2]; K. Jayaram & Anr vs State [3]; Arnesh Kumar vs State of Bihar [4]; Sushila Aggarwal & ors  vs State,[5] etc. pertaining to criminal justice,  was relied upon by Ld. Counsel for the Accused for grant of bail.

ORDER BY THE HON’BLE COURT

The Hon’ble Court granted Interim Bail to both the Accused on furnishing of bail bonds of INR 5 lakhs with surety amount. The Hon’ble Court further directed the Accused to join the further investigation and cooperate in the same. The Interim Bail was granted to both Accused as the investigation is still pending and the final decision is yet to be taken by the Hon’ble Court.

TYPES OF BAIL IN INDIA

In view of the above decision, a distinction between Interim, Regular and Anticipatory Bail must be laid out. Bail in India is of three types-

Regular Bail Anticipatory Bail Interim Bail
Bail granted to an accused after his arrest due to the commission of non-bailable and cognizable offences. When such offences have been committed, the police can take custody of the accused without a warrant and after expiration of the period of custody, he is sent to jail. Section 437 and 439 of CrPc entitles the accused to the right to be released from police custody by applying for regular bail.

 

Bail granted to an Accused in anticipation that he might be arrested for a non bailable offence in near future. An application under Section 438 of CrPc can be made to the High Court or the Sessions Court for getting anticipatory bail.

 

In Sushila Aggarwal & ors vs State, the Apex Court [6] has held that Anticipatory Bail should not be seen as blanket protection which enables an applicant to commit further crimes. It is not to be construed as a shield from arrest, rather as limited to the offence for which the accused apprehends an arrest.

 

There are no specific provisions of CrPc dealing with Interim Bail in India. ‘Interim’, as the word defines means short term. Interim bail is granted for a short term that occurs before the start of the hearing for grant of either anticipatory bail or regular bail.

 

The Apex Court in Sukhwant Singh vs State [7] has bridged the gap between Section 437 and Section 439 of CrPc by stating that the power to grant Interim Bail emanates from the power to grant Bail at all, which simply means that the Court has been inherently bestowed with the power to grant Interim Bail while hearing any plea for Bail, provided that the final disposal of bail application is still pending.

 GROUNDS FOR BAIL

As established by the Hon’ble Supreme Court in State through C.B.I vs Amaramani Tripathi [8] certain elements have to be looked upon by the Courts while deciding a Bail Application:

  1. Whether there is any prima facie ground to believe that the Accused is involved in the offence;
  2. Nature and severity of the charges against the Accused;
  3. Quantum of punishment in the event of conviction;
  4. Whether there are chances of Accused absconding upon release on bail;
  5. Character, behavior and reputation of the Accused;
  6. Whether there is probability that the offence can be repeated;
  7. Whether there are chances that the Accused can tamper with the evidence or turn any witness hostile while released on bail;
  8. Danger of justice being defeated because of grant of bail.

CONCLUSION

The decision of grant of Interim Bail by Additional Sessions Judge came at a time when Ford India Pvt. Ltd. was in the process of launching new cars, and thus served as a relief for both the Managing Director and the Director of the company. As the investigation is pending and the case is in its preliminary stage, it is yet to be seen whether any cause of action has in fact arisen in favour of Libra Cars Pvt Ltd. The precedents relied by the Accused in the abovementioned case like Amandeep Singh Johar vs State of NCT of Delhi & ors [9]; Arnesh Kumar vs state of Bihar [10] etc, deals with the principles established by the Hon’ble Supreme Court to ensure that unnecessary arrests do not take place by the police or are not allowed by the Magistrate.  Some of the salient principles set down by the Apex Court in this regard are, notably-

  1. The arrest should not be made in a careless and a casual manner or simply because the offense is non-bailable and cognizable. It shall also not be made on an insignificant claim of the commission of an offense made against an individual. Arrest must be made only after due investigation with respect to charge and only after fulfillment of the conditions set out in Section 41(1) of CrPc which provides for conditions precedent to making an arrest;
  2. Police officers to be given a check-list containing conditions as prescribed under Section 41 of CrPc for reference and compliance.
  3. The Accused may be detained in police custody beyond 24 hours only after due permission in this regard has been granted by the Magistrate.
  4. The Accused must be served with the Notice of Appearance as mentioned in Section 41A of CrPc within two weeks from the date of the initiation of the case. Such a notice shall also be sent to the Superintendent of Police.

[1] Bail application no. 635/2021 before Rohini District Court, New Delhi

[2]  W.P.(C) 7608/2017

[3] Bail Appln No.3008 to 3009 of 2006

[4] Criminal Appeal No. 1277  of 2014

[5] Special Leave Petition (criminal) nos.7281­7282/

[6] Special Leave Petition (Criminal) Nos.7281­7282/2017

[7] (2009) 7 SCC 559: 2009 (3) SCC (Cri) 487

[8] Appeal (crl.)  1248 of 2005

[9] W.P.(C) 7608/2017

[10] Criminal Appeal No. 1277 of 2014

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