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R/CR.

MA/4677/2014

CAV JUDGMENT

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

CRIMINAL MISC.APPLICATION (FOR ANTICIPATORY BAIL ) NO. 4677 of


2014
With
CRIMINAL MISC.APPLICATION NO. 4679 of 2014
With
CRIMINAL MISC.APPLICATION NO. 4680 of 2014

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR.JUSTICE J.B.PARDIWALA
================================================================

Whether Reporters of Local Papers may be allowed to see


the judgment ?

To be referred to the Reporter or not ?

Whether their Lordships wish to see the fair copy of the


judgment ?

Whether this case involves a substantial question of law as


to the interpretation of the Constitution of India, 1950 or any
order made thereunder ?

Whether it is to be circulated to the civil judge ?

================================================================

TEESTA ATUL SETALVAD & 1....Applicant(s)


Versus
STATE OF GUJARAT....Respondent(s)
================================================================

Appearance:
MR MIHIR THAKORE, SR.ADVOCATE with MS MANISHA NARSINGHANI
WITH M/S. MIHIR DESAI AND KALPESH N SHASTRI, ADVOCATE for the

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Applicant(s) No. 1 - 2
MR MAHESH JETHMALANI, SPECIAL PUBLIC PROSECUTOR WITH MR PK
JANI, ADDL. ADVOCATE GENERAL WITH MR AC CHOKSHI, for the
Respondent(s) No. 1

CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA


Date : 12/02/2015
CAV JUDGMENT

Since all the three applications with a prayer for


anticipatory bail arise from a selfsame FIR, those were heard
analogously and are being disposed of by this common
judgment and order.
The Criminal Misc. Application No.4677 of 2014 is treated
as the lead matter.
This motion for anticipatory bail has been made on behalf
of the applicants (husband and wife) and relates to an FIR
registered with the D.C.B. Crime Police Station, Ahmedabad,
vide I-CR No.1 of 2014 of the offence punishable under
Sections 420, 406, 468, 120B of the Indian Penal Code and
Section 72(A) of the Information and Technology Act.
I.
The
summarised

case of the
as under :

prosecution

may

be

The State of Gujarat witnessed one of the worst


communal riots in the year 2002. During the period of riots, a
residential society in the name of Gulbarg Society, situated in
Ahmedabad, was ransacked and set on fire. Many people
residing in the said society lost their lives, which includes aged
women and children. In all 69 people lost their lives.

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CAV JUDGMENT

The applicants herein are running two trusts in the form


of Non-Governmental Organizations, viz. Citizens for Justice
and Peace (CJP) and Sabrang Trust. The applicants who are
husband and wife are the trustees of the Trusts along with few
other persons.
A complaint in writing dated 12th March 2013 was
addressed by 11 inhabitants

of the Gulbarg Society, which

includes one Mr.Firozkhan Saeedkhan Pathan, to the Joint


Commissioner of Police, Crime Branch, Ahmedabad city,
stating that every year the members of the NGOs have been
organizing a function in the memory of those who lost their
lives in the riot. It is alleged that during such functions, various
schemes for the rehabilitation of the riot victims, financial
support and support for the reconstruction of the houses were
announced by the applicant no.1, viz. Teesta Setalvad, under
the banner of her two NGOs.
It is alleged that over a period of time, the applicant
established a close rapport with the riot affected victims. In the
month of December 2007, the applicant no.1 put forward an
idea of purchasing the entire Gulbarg Society at the then
market price and thereafter convert the same into the
Gulbarg Society Museum of Resistance. It is alleged that she
promised to make good the payment within a month if the
members of the society were ready and willing to sell their
respective residential units. It is alleged that she also
requested the unfortunate inhabitants of the society to
cooperate and help her in raising funds through publications,
interviews, programmes, etc. The formal proposal in that
regard was submitted by the Sabrang Trust in January 2008.
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CAV JUDGMENT

The members of the society were also assured of full


reimbursement towards the rent borne by them over a period
of time while occupying the rental premises since their
individual houses were destroyed. The consent of all the
members of the society was obtained in June 2008 and a
resolution to that effect
dated 29th June 2008 was also passed by the society.
It is alleged that although such representations were
made by the accused persons, no financial support was
extended

for

the

reconstruction

of

the

houses

to

the

inhabitants of the society nor any amount towards the


reimbursement of the rent was paid to them. It is alleged that
the society was also not converted into a museum even after a
period of more than 4 years from the date of passing of the
resolution. It is the case of the first informant that the
members of the society, therefore, addressed a letter dated
21st February 2013 to the applicant no.1, requesting her to
furnish the details of the amounts collected as donations for
the reconstruction of their houses and for conversion of the
society into a museum. The said letter was never replied at
any point of time. It is the case of the first informant that the
applicants herein kept on projecting the victims of the riots as
the unfortunate human-beings before the whole world and the
media, and thereby, the applicants kept on seeking sympathy
and received huge amount of donations.
Ultimately,

memorandum

was

submitted

by

15

members of the society to the Commissioner of Police with a


request to prohibit the outsiders from entering the Gulbarg
Society. Such memorandum is dated 28 th February 2013. The

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said application referred to the advertisement published in a


magazine called Communalism Combat and its website
fervently requesting the people at large to generously donate
to help develop a memorial for the victims of the communal
violence, viz. Gulbarg Society Museum of Resistance. The
Communalism

Combat

is

magazine

owned

by

the

applicants, wherein both the applicants are the Editors.


It is alleged that the CJP and Sabrang Turst run and
managed by the applicants are guilty of collecting huge foreign
funds as donations from various international organizations in
the name of providing financial assistance, legal assistance,
etc. to the 2002 Gujarat Riot victims. The applicants also
referred to the details furnished by the Ministry of Home
Affairs, Government of India, stating that according to the FC
Form-3 submitted by the CJP, foreign donations to the tune of
Rs.63 lac were received between 2009 and 2011 and were
credited in the IDBI Bank Account No.014104000204204736 of
the CJP and donations to the tune of Rs.88 lac were received
during the period between 2008 and 2011 and were credited in
the Union Bank of India Account No.369102010802885 of the
Sabrang Trust.
The Commissioner of Police took cognizance of the said
complaint lodged in writing, and having found more than a
prima facie case, ordered registration of the FIR, which came
to be registered with the D.C.B. Crime, Ahmedabad, on 4 th
January 2014.
It appears from the materials on record that the
applicants herein are permanent residents of Mumbai. The two

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Trusts referred to above are also registered at Mumbai.


Therefore, apprehending arrest at the hands of the police in
connection

with

the

present

FIR,

the

applicants

first

approached the High Court of Bombay by filing anticipatory


bail application No.14 of 2014. The High Court of Bombay, vide
its order dated 10th January 2014, granted interim protection to
the applicants. The matter was thereafter heard by a learned
Single Judge of the Bombay High Court and the application for
anticipatory bail was ordered to be rejected on 31 st January
2014 substantially on the ground of territorial jurisdiction of
the High Court of Bombay. However, the High Court of Bombay
granted a transit bail for a period of four weeks to enable the
applicants to file an appropriate application before the
appropriate forum in the State of Gujarat.
It appears that the order of the Bombay High Court dated
31st January 2014 rejecting the anticipatory bail application
was challenged before the Supreme Court by filing SLP. The
SLP (Cri) No.1770 of 2014 was disposed of by the Supreme
Court vide order dated 24th February 2014, which reads as
under :
The matter relates to grant of Anticipatory bail under
Section 438 of the Code of Criminal Procedure. The
Bombay High Court vide impugned order dated 31 st
January, 2014 allowed the petitioners to move before
appropriate Court in Gujarat for said relief and granted
Transit Bail for four weeks so as to enable the petitioner
to approach before the appropriate Court at Gujarat.
Having heard the learned Counsel for the petitioners, we
are not inclined to interfere with the impugned order.
However, taking into consideration the nature of the case
and submission made on behalf of the petitioners, we
extend the Transit Bail in favour of petitioners upto 31 st
March, 2014 so as to enable the petitioners to approach

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the appropriate Court in Gujarat. If such petition is filed,


the appropriate Court in Gujarat will consider the same
independently without being influenced by any
observation made by the Bombay High Court.
The question of law about jurisdiction of High Court is
kept open.
The special leave petition stands disposed of.
After the disposal of the SLP, the applicants herein
preferred Criminal Misc. Application No.761 of 2014 before the
City Sessions Court, Ahmedabad, and prayed for anticipatory
bail. The anticipatory bail application came to be rejected vide
order dated 25th March 2014 passed by the learned Additional
Sessions Judge, City Sessions Court No.15, Ahmedabad.
Being dissatisfied with the order passed by the City
Sessions Court, the applicants have come up with this
application, praying for anticipatory bail.
It appears from the various orders recorded uptil now
that on 28th March 2014 rule was issued in this application,
making it returnable on 4th April 2014. In the course of hearing
of this application, I was informed by both the sides that on
that particular date i.e. on 28th March 2014, an oral statement
was made on behalf of the State that till the conclusion of the
application, the applicants would not arrested. It appears that
thereafter on one ground or the other, the matter was being
adjourned from time to time. Ultimately, the same was notified
before this Court on 12th January 2015. The arguments of both
the sides were concluded on 6th February 2015 at around 5:00
p.m. and the judgment was kept reserved.

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II.

CAV JUDGMENT

Submissions on behalf of the Applicants :

Mr.Mihir Thakore, the learned senior advocate appearing


on behalf of the applicants, vehemently, submitted that the FIR
lodged against the applicants is nothing but an abuse of
process of law. He submitted that the same is politically
motivated. The principal argument of Mr.Thakore, while
making good his case for anticipatory bail is, the malafides
alleged against the State Government. Mr.Thakore submits
that his clients have fought very hard from day one against the
State Government as, according to the applicants, it is only the
State Government who was responsible for the Godhra
carnage and the riots which flared up thereafter in the entire
State of Gujarat.
Mr.Thakore submits that his clients, through the two
Trusts, have thoroughly exposed the State Government so far
as their dubious role in the riots is concerned. Mr.Thakore
submits that his clients are instrumental in securing many
convictions of those persons who have been found guilty of
murder during the period of riots.
Mr.Thakore submits that with a view to seek revenge, a
false case has been framed against the applicants, and on the
basis of such a false case, they are now sought to be arrested.
Mr.Thakore

submits

that

his

clients

are

Journalists

by

profession and are highly reputed persons in the society. They


have been striving hard for serving the cause of justice by
helping the innocent victims of political vendetta.
Mr.Thakore

submitted

that

the

allegations

of

misappropriation are totally false and baseless. No such


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amount has been misappropriated by the applicants for their


personal use. According to Mr.Thakore, the documents speak
for themselves. Mr.Thakore submitted that his clients are
ready and willing to extend full cooperation for effective
investigation but no case for custodial interrogation is made
out having regard to the nature of the allegations.
Mr.Thakore submitted that the entire matter relates to
accounts. It is for the Investigating Officer to look into the
accounts with the help of any expert and find out whether any
amount has been misappropriated or not. For that purpose,
arrest of the applicants and custodial interrogation is not
necessary.
Mr.Thakore submitted that the other trustees of the two
Trusts are people with great reputation. One of those is a
noted Poet and a Lyricist and one another is a well-known
Architect who had designed the New Taj Intercontinental at
Mumbai. He has submitted that the accounts of the Trusts are
being regularly audited, and even the reports of the Auditor
make the picture clear that nothing has gone in the pockets of
the applicants.
Mr.Thakore has placed strong reliance on the following
decisions of the Supreme Court :
(1)

Gurbaksh Singh Sibia v. State of Punjab, 1980(2)


SCC 565;

(2)

Hema Mishra v. State of U.P., 2014(4) SCC 453;

(3) Pokar Ram v. State of Rajasthan and others,


1985(2)
SCC 597; and
(4)

Siddharam

Satlingappa
Page 9 of 63

Mhetre

v.

State

of

R/CR.MA/4677/2014

Maharashtra

CAV JUDGMENT

and others, 2011(1) SCC 694

In such circumstances referred to above, Mr.Thakore


prays that the application merits consideration and the
applicants be ordered to be released on anticipatory bail in the
event of their arrest by the police.
III.

Submissions on behalf of the Respondent -

State :
On the other hand, this application has been vehemently
opposed by Mr.Mahesh Jethmalani, the learned Special Public
Prosecutor appearing for the State. Mr.Jethmalani submitted
that no case worth the name is made out for anticipatory bail.
He submits that the allegations are very serious. He submits
that huge amounts have been converted by the applicants for
their personal use through their credit cards. The amount
which was received by way of donations was meant for the
poor and the needy i.e. the riot victims. By creating sympathy
for the riot affected victims, the applicants were successful in
obtaining huge amount by way of donations. The documentary
evidence on record would suggest that they have not been
able to satisfactorily account for the same. Huge amounts were
transferred from the Trusts' accounts to the personal accounts
of the husband and the wife, which are 10 in number. He has
submitted that there are huge cash withdrawals with no
corresponding vouchers in that regard. He submitted that huge
amounts have been paid towards their personal expenditure
on credit cards. Mr.Jethmalani pointed out that for years
together the accounts were not audited so far as the two
Trusts are concerned and then all of a sudden one fine day
they got the accounts of past couple of years audited through

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the two Auditors. The principal argument of Mr.Jethmalani is


that there has been total non-cooperation at the end of the
applicants so far as the investigation is concerned. He submits
that the money which was meant for the poor and the needy
have been misappropriated by the applicants for their own
materialistic pleasure and comfort. Huge amount has been
used for the purchase of items like wine, shoes, holiday
resorts,

air-tickets,

etc.

Mr.Jethmalani

pointed

out

that

although it is the case of the applicants that they have spent


the money for their own personal use from their own income,
yet they did not even furnish their income tax returns before
the Investigating Officer.
Mr.Jethmalani submitted that by merely producing few
documents, the need for custodial interrogation cannot be
done away with. It is only the applicants who are in know of
the matter and the facts which are within their personal
knowledge. Mr.Jethmalani pointed out that the applicants are
also guilty of tampering with the witnesses, more particularly,
they

have

restrained

the

Auditors

from

furnishing

the

necessary details and data to the Investigating Officer.


According to Mr.Jethmalani, this itself is a ground on which the
application deserves to be rejected.
Mr.Jethmalani submits that the two Trusts are being run
and managed by the applicants on their own. The other
trustees are just for the name sake. They have no idea about
the management of the affairs of the Trusts. He submitted that
being trustees, they are also drawing salary, which is
otherwise not permissible in law and is an offence.

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Mr.Jethmalani submitted that the applicants are guilty of


making false representations before the people and they are
guilty of duping not only the donors but even those who have
been deprived of the financial help meant for them.
In such circumstances referred to above, Mr.Jethmalani
prays that there being no merit worth the name in this
application, the same deserves to be rejected.
IV. ANALYSIS :
Having heard the learned counsel appearing for the
parties and having gone through the materials on record, the
only question that falls for my consideration in this application
is, whether any case is made out for grant of anticipatory bail.
At this stage,

I need to point out that the arguments

were concluded on 6th February 2015. The judgment was kept


reserved. On 13th February 2015, Mr.Thakore mentioned the
matter submitting that his clients have furnished all the
vouchers and other documents including the income tax
returns to the Investigating Officer. Mr.Thakore wanted to
place few documents in that regard, however, since the
arguments were already concluded and the judgment was kept
reserved, I did not deem fit to take such documents on record.
The other side also vehemently opposed such mentioning of
the matter after the arguments were concluded.
Before I proceed to consider the matter on merits, I would
like to quote few paragraphs of the averments made in the
affidavit-in-reply filed by the State of Gujarat duly affirmed by
Shri K.N.Patel, Assistant Commissioner of Police, Cyber Crime
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Cell, Crime Branch, Ahmedabad city :


The learned City Sessions Judge has also been pleased
to note that in the applications preferred by the present
applicants the entire thrust of the Petitioners defence is
that as NGOs and that they have been registered under
the Public Trust Act, their accounts are duly audited and
that the Charity Commissioner, Mumbai, has raised no
query regarding their accounts. During the course of
investigation the prosecution has been informed by the
office of the Charity Commissioner that Sabrang Trust
has not filed audit reports for six years i.e. from 2002-03,
2003-04, 2004-05, 2005-06, 2006-07 and 2007-08.
Furthermore copies of the few audited accounts received
from the Charity Commissioner shockingly reveal huge
discrepancies and omissions to the extent that over and
above donations received, even amounts received from
the Govt of India as grants, are no where reflected in the
Income & Expenditure Account of the trust. The same
would be elaborately dealt with subsequently in the
reply. Suffice it to say that the resistance of the
petitioners to any kind of scrutiny by the Gujarat Police,
being resisted under the guise of accounts being audited
is also a falsified.
The IO addressed a communication dated 18.3.2013 to
the present Petitioners, seeking copies of Audited
account statements and Balance Sheet, of CJP and
Sabrang Trust for the Last ten years apart from other
information regarding foreign donations received from
national and international institutions for providing
financial and legal assistance to riots victims and the
utilization of the said funds. Specific queries were raised
with regard to the receipt and utilization of donations
received from the national/international bodies and
private individuals for providing legal and financial
assistance to riots victims in the accounts of CJP and
Sabrang Trust. In response thereto, vide communication
dated 26.3.2013, the petitioners declined to furnish any
specific details sought for. Except maligning the Gujarat
State Police, constitutional functionaries and alleging
victimization, the petitioners did not reply to any of the
querries raised.

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The concerned IO addressed the second communication


dated 8.5.2013, seeking information as sought for vide
communication dated 18.3.2013, calling upon the
petitioners to co-operate with the investigation and
furnish necessary details. Vide letter dated 20.5.2013,
the petitioners informed the IO that they had received
Rs. 4,60,000/- towards the proposed Dream Museum,
their accounts were audited and submitted to the
relevant authorities and investigating into the matter
reflects the vindictive attitude of the forces trying to
subvert the process of justice. However, no details
sought for by the IO were furnished.
The I.O addressed communications to the Ministry of
Home Affairs (MHA), seeking details of the permission
granted to CJP and Sabrang Trust, enabling receipt of
foreign
donations
under
Foreign
Contribution
(Regulation) Act (FCRA). The MHA intimated the IO that
CJP and Sabrang Trust obtained FCRA registration on
21.11.2007 bearing registration no. 083781099 and no.
083781100 under the category of Educational, Social
and Economic Educational respectively. MHA also
furnished copies of Form FC-6, mandatorily required to
be submitted by every NGO annually declaring details of
the foreign funds received. Condition no. 3 of the FCRA
registration specifically stipulates that the association
cannot bring out any publication (registered under PRB
Act, 1867) or act as correspondent, columnist, editor,
printer or publisher of a registered newspaper or engage
in the production or broadcast of audio news or audio
visual news or current affairs programs through
electronic mode or any other electronic form or any other
mode of mass communication at a later stage thereby
attracting provisions of the Section 3(1)(g) and (h) of the
FC(R) Act, 2010. In addition thereto, the association is
forbidden from getting involved in any activity of political
nature. Details of accounts of CJP and Sabrang trust were
received from the IDBI Bank and the Union Bank of India.
It is noteworthy that when the Petitioners failed to
provide even the copies of audited balance sheets and
books of accounts of CJP and Sabrang Trust, the IO,
addressed
a
communication
to
the
Charity
Commissioner, Mumbai for providing the same. The
Office of the Charity Commissioner, Mumbai, has
furnished some of the audit reports of Sabrang Trust and
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CJP which are clearly in variance with the bank


statements received. A bare scrutiny of the accounts
have revealed huge discrepancies.
A) Sabrang Trust:
Audit reports of the following years i.e 2008-09, 2009-10,
201011, 2011-12 and 2012-13 have been received.
Audit reports of 6 years i.e 2002-03, 2003-04, 2004-05,
2005-06, 2006-07 and 2007-08 have not been filed with
the Charity Commissioner.
B) Citizens for Justice & Peace:
Audit reports of following years i.e 2003-04, 2004-05,
2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11,
2011-12 and 2012-13 have been received from office of
the Charity Commissioner.
It is respectfully submitted that on scrutiny of available
audited reports (Income & Expenditure Account (I & E
A/C), as provided by the office of the Charity
Commissioner, Mumbai, major apparent discrepancies
are observed which are as under:
A. Sabrang Trust:
Financial
Year
2008-09
2009-10
2010-11
2011-12
2012-13
Total in Rs

Donation as
per Audit
Report
34,02,674
16,96,503
10,000
7,12,500
73,779
58,95,456

Donation as per
bank
statement
1,31,00,850
40,91,187
1,07,55,091
55,71,424
28,40,070
3,63,58,622

Amount
Difference
96,98,176
23,94,684
1,07,45,091
48,58,924
27,66,,291
3,04,63,166

(i) As against receipt of Rs.3,63,58,622 which reflected in


the Bank
statement, in the audited reports only
Rs.58,95,456 has been shown.
A huge discrepancy of
Rs.3,04,63,166 is noticed in just above five years. Since
for the rest of the years audit reports are not available,
further investigation has not been possible.

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(ii) It is humbly submitted that on scrutiny of SB-General


A/c No.369102010037953 of Sabrang Trust, it was
noticed that the Govt. of India, Ministry of HRD, has paid
through RTGS Approx Rs1.40 crores to Sabrang Trust as
per details given below:
1. Rs 58,72,500 on 17.02.2011
2. Rs 26,66,570 on 13.07.2012
3. Rs 54,20,848 on 06.07.2013
(iii) On scrutiny of Audit reports for the year 2010-11 of
Sabrang trust it was noticed that this amount of Rs
58,72,500 is not reflecting in the Income & Expenditure
Account for the year ending 31st March- 2011. Such a
huge sum received from Govt. of India is found missing
from the books of account and the Auditors too have
found no reason to examine this.
(iv) It is humbly submitted that in the audit report of
Sabrang Trust for the financial year 2011-2012, no
income as interest received is reflected in the books of
accounts however, scrutiny of the accounts of Sabrang
trust reveals that during the financial year 2011-12, the
trust has earned interest income of Rs.1,13,973. These
details too seem to have missed the Auditors scrutiny.
B. CITIZENS FOR JUSTICE & PEACE:
Financial Year
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
Total Recd:

Donation as per Donation as Amount


Audit Report
per bank
Difference
statement
12,83,058
2,85,947
+ 9, 97,111
24,49,677
41,85,015
46,05,944
23,50,471
66,03,238
53,33,780
42,77,484
51,28,452
81,39,536
2,94,82,490

23,18,426
43,52,540
46,14,986
25,60,704
71,03,630
47,67,630
63,49,086
47,71,812
95,93,414
3,25,85,572

+ 1,31,251
+ 167525
+
9,042
+ 2,10,233
- 5,00,392
- 5,66,150
- 20,71,602
- 3,56,640
- 14,53,878
61,87,302

NOTE: The above analysis is based on only 2 accounts of


CJP with IDBI Bank i.e. SB A/c N0-014104000105705 and
FCRA A/C No-014104000204736.

Page 16 of 63

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(i) It is humbly submitted that as in case of Sabrang


Trust referred above, the donations received as reflected
in the Audit reports of CJP are far less as against the
amounts reflected in the bank statement. For example,
during the years 2008-09 upto 2012-13 the total
donation amount shown in the audit reports of CJP above
is Rs.29,48,2,490 however as per the bank statement the
amount of donation is Rs.3,25,85,572 i.e. discrepancy of
an amount of Rs.31,03,082 in just three years.
A bare scrutiny of above table reveals that the accused in
connivance with the auditors, have manipulated their
accounts as well as the audit reports submitted before
statutory authorities. It will not be out of place to
mention here that IO has also addressed letters to the
concerned Auditors of Sabrang trust and CJP, to provide
information related to their audit reports.
It is respectfully submitted that the Auditors have
submitted their replies to the IO. The analysis of their
replies reveal serious discrepancies/concealment of facts
as per details given below:
A) SABRANG TRUST
a) The investigating authority in its communication dated
27.03.2014 addressed to the Auditor of Sabrang Trust,
M/s DM Sathe and Co., Mumbai has specifically sought
complete details of the accounts of the Sabrang Trust.
However, the auditors have choose to provide payment
details with regards to only one account, concealing the
fact that the petitioners have withdrawn huge cash
amounts,
transferred
large
sums
to
their
personal/individual accounts as well as in the accounts of
their privately owned companies, from 2 other accounts
of Sabrang Trust during the same period as per the
details given below:
Amount transferred from three accounts of SABRANG
TRUST to Teesta Setalvad
Particulars

FCRA A/c *
In Rs.

HRD A/c**
In Rs.

Teesta Setalvad

Page 17 of 63

SB-Gen A/c***
In Rs.

R/CR.MA/4677/2014

CAV JUDGMENT

a) Amount as per 22,49,956


bank account
statement

8,59,435

4,97,762

b) Amount as per 15,58,000


statement
provided by
D.M.Sathe,
auditor of
Sabrang Trust

No information
provided by C.A.

No information
provided by C.A.

Amount transferred from three accounts of SABRANG


TRUST to Javed Anand
Particulars

FCRA A/c *
In Rs.

HRD A/c**
In Rs.

SB-Gen A/c*** Total


In Rs.

a) Amount as 19,18,676
per bank
account
statement

7,58,320

34,743

27,11,538

b) Amount as 13,87,650
per statement
provided by
D.M.Sathe,
auditor of
Sabrang Trust

No
information
provided by
C.A.

No
information
provided by
C.A.

13,87,650

Javed Anand

Amount transferred from three accounts of SABRANG


TRUST to Sabrang Communication & Publishing Pvt Ltd.
Particulars
FCRA A/c *
Sabrang
In Rs.
Communication
& Publishing
Pvt Ltd

HRD A/c**
In Rs.

SB-Gen A/c*** Total


In Rs.

a) Amount as
per bank
account
statement

22,54,766

19,91,870

45,02,848

Page 18 of 63

87,49,484

R/CR.MA/4677/2014

b) Amount as
per statement
provided by
D.M.Sathe,
auditor of
Sabrang Trust

28,35,920

CAV JUDGMENT

No
information
provided by
C.A.

No
information
provided by
C.A.

28,35,920

Amount transferred from three accounts of SABRANG


TRUST
Particulars

FCRA A/c *
In Rs.

HRD A/c**
In Rs.

SB-Gen
A/c***
In Rs.

Total

a) Amount as 12,75,000
per bank
account
statement

11,02,000

18,93,925

42,70,000

b) Amount as 10,00,000
per statement
provided by
D.M.Sathe,
auditor of
Sabrang Trust

No
information
provided by
C.A.

No
information
provided by
C.A.

10,00,000

Cash
Withdrawal

* FCRA A/c No.369102010802885 with UBI


** HRD A/c No 369102010806781 with UBI.
*** SB-General A/c No 369102010037953 with UBI
b) As per the information gathered from the office of the
Charity commissioner, Mumbai, the Petitioners have not
submitted Audited Copies of the Balance Sheet and
Income & Expenditure Account of Sabrang Trust till
April 2014, for the following 6 years i.e 2002-03, 200304, 2004-05, 2005-06, 2006-07 and 2007-08 which is
mandatory requirement.
Non submission of audited accounts to the Charity
Commissioner continuously for 6 years automatically
demolishes the argument of the Petitioners that Their
Accounts were audited and submitted to the relevant
authorities. It appears that for this very reason the
Page 19 of 63

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CAV JUDGMENT

Petitioners have refused to share any information with


the authorities as regards to the working of the 2 NGOs.
c) It humbly submitted and also note worthy that the
auditor D M Sathe in their reply to the IO, have given a
certificate clearly stating that No grants were received
(by Sabrang Trust) in the Financial year 2012-13 and
2013-14 but the Bank statements reflect that Sabrang
Trust has received Rs.26,66,570 in the Financial year
2012-13 and Rs.54,20,848 in the Financial year 2013-14
as grants from the Ministry of HRD, Govt of India, New
Delhi by way of an RTGS transfer.
d) It is also note worthy that the Auditor D M Sathe, in
their reply to the IO, have given payments details of
financial years 2007-08 to 2011-12 only, the years of
which auditors have submitted audited copies to the
Charity Commissioner Office. They have not given any
payment details of the Petitioners for the years 20022008, i.e. the 6 years for which audit reports were not
submitted to the Charity Commissioner. This deliberate
attempt by the auditors to conceal the facts from
investigating authorities is a subject mater of
investigation.
B) Citizens for Justice & Peace (CJP)
a) It is humbly submitted that similarly an analysis of
reply sent by M/s Haribhakti & Company, the Chartered
Accountants of Citizens For Justice & Peace (CJP) the
following discrepancies were noticed.
b) The aggregate amount mentioned by them towards
credit card payment of the Petitioners was shown as Rs
13,26,960 however as per the bank statements this
amount is Rs 20,04,817.
c) It is note worthy that the Petitioners in their various
replies/pleadings have admitted to having made
expenditure of very personal nature including purchase
of wines, branded shoes, grocery, clothes etc through
Credit Cards from the accounts of the Trust CJP, however
the Chartered Accountant in their reply has claimed that
none of such personal expenses have been debited in
the books of accounts of CJP. These contradictory
statements are subject matter of investigation.
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d) Chartered Accountant M/s Haribhakti & Company in


their reply also categorically stated that We have not
noticed that the funds of CJP were used by its Trustees
for the purpose other than its objects, however they
seem to have missed noticing that trustees have
transferred Rs 82.35 lacks from the Trust account to their
own company i.e. Sabrang Communication & Publishing
Pvt Ltd.
e) The Chartered Accountant has also not commented on
50 cheques issued from the accounts of the CJP by the
Petitioners towards Credit Card payments. The Chartered
accountants has not given any justification on huge cash
withdrawal by the petitioners from these accounts also.
f) It is note worthy that the IO informed the CA that both
the accused persons in their reply in the session court
have claimed that they were authorized by the board of
trustees to make such expenses i.e. (Personal expenses)
information was sought for from the CA to provide the
copies of all such resolutions. In response to this specific
question, the CA of CJP instead of providing copies of
those specific resolutions, has provided copies of
resolutions which were related to adoption of financial
statements for the year 2008-9, 2009-10, 2010-11 and
2011-12, It is apparent that the Petitioners were not
authorized by the board of Trustees to make such
personal expenses from the Trust accounts.
From the scrutiny of replies received from Chartered
Accountants of Sabrang Trust and CJP, prima facie it is
established that it is not only a serious case of
embezzlements of public funds received by the
Petitioners for charitable purposes is also a case of grave
negligence on the part of auditors also.
The investigation of accounts revealed the following
facts:
Statement of Financial Irregularities By Teesta
Setalvad & Javed Anand In The Account of Citizens
For Justice & Peace (CJP) & Sabrang Trust

Page 21 of 63

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CAV JUDGMENT

Name of the Institution

Foreign
Donation
Credited

Local
Donation
Received

Total Amount

In Rs.

In Rs.

1,35,10,311

NIL

1,35,10,311

NIL

3,25,46,613

3,25,46,613

NIL

15,630

15,630

In Rs.
SABRANG TRUST:
A) FCRA A/c
No.369102010802885
with UBI
Period 10.04.07 to
06.01.14
B) SB-General A/c No
369102010037953 with
UBI
Period
01.01.01
03.04.14

to

C)
HRD
A/c
No
369102010806781 with
UBI.
Period
23.02.11
03.04.14

to

Total

4,60,72,554

CITIZENS FOR JUSTICE


& PEACE:
A) FCRA A/c
No.1404000204736 with
IDBI Bank
Period 12.04.07 to
08.01.2014

1,02,05,312

NIL

1,02,05,312

NIL

4,11,97,234

4,11,97,234

B) SB A/c No .
014104000105705 with
IDBI
Period 26.02.2004 to
18.12.2013
Total

5,14,02,546

Grand TOTAL

9,74,75,100

Page 22 of 63

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CAV JUDGMENT

(Rs 9.74
Crores)
Note: With the emergence of these two new accounts,
the total donation in Sabrang Trust has gone to Rs 4.61
crores as against Rs 1.35 Crores as referred to earlier.
These facts were never disclosed before any Court by the
the Petitioners in their Petitions and pleadings.
It is humbly submitted that on the Analysis of the
Personal Account of Teesta Setalvad and Javed Anand
following facts have emerged.
(A) Account Analysis Teesta Setalvad:
(I) SB A/c No.369102010003883 with UBI, Mumbai:
Account Opening Date: 01/01/2001
Deposit From 01.01.2001 to 31.12.2001
NIL
Deposit From 01.01.2002 to 31.12.2002
NIL
Deposit from 16.03.2003 to 17.01.2014 Rs 1,53,70,519
(II) SB A/c No.014104000142595 with IDBI Bank, Mumbai:
Account Opening Date: 30/04/2005

Deposit from 30.04.05 to15.01.2014


Rs
68,25,000
Total
Rs
2,21,95,519
(Rs 2.22 Crore)
(B) Account Analysis Javed Anand:
(I) SB A/c No.369102010006884 with UBI, Mumbai:
Account Opening Date: 01/01/2001

Deposit from 01.01.2001 to 31.12.2001


NIL

Deposit from 01.01.2002 to 31.12.2002


NIL

Deposit from 1.1.2003 to 18.02.2014


Rs
96,43,000
(II) SB A/c No.014104000142601 with IDBI Bank, Mumbai:
Account Opening Date: 30/04/2005
Deposit from 30.04.05 to 26.12.13
Rs 39,65,000
Total
Rs
1,36,08,000
(Rs 1.36
crores)

Page 23 of 63

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CAV JUDGMENT

Note 1: Analysis of above SB accounts of Petitioners


accused no 1 & 2, it was found that they are receiving
huge amount in their personal account from Citi Bank
N.A. On inquiry from Citi Bank about these credit entries,
the bank has informed that an amount of Rs 29,20,000
has been received in the account of Accused no-1, from
Ashoka Foundation, Arlington, USA. It appears that the
Petitioners have directly accepted the foreign donation in
their SB accounts which requires thorough investigation.
Note 2: Analysis of SB account no 369102010003883, of
Accused no 1, it was also noticed that an amount of Rs
6,05,442 was credited on 13.11.2003 in this account. On
inquiry from UBI, it was informed that it was a foreign
remittance ( Apprx $ 13500) received in the SB account
of Ms Setalvad. It appears that the Petitioner no-1 has
directly accepted the foreign remittance in her SB
account which is also a subject matter of investigation.
Note 3: The analysis of the 2 accounts of CJP and the 3
accounts of Sabrang Trust and 1 account of Sabrang
Communication & Publication Pvt Ltd, has revealed that
the Petitioners Teesta Setalvad and Javed Anand, are
drawing salary /reimbursement regularly from all the 6
accounts simultaneously which requires thorough
investigation.
Note 4: It is humbly submitted that 2 accounts of CJP in
IDBI Bank and 1 account of Sabrang Trust in Union Bank
of India were seized by the Police vide communication
dated 14.01.2014. The Banks in compliance with the
instructions, seized the accounts on 20.01.2014. Till such
time the Police had knowledge of only 3 accounts as the
accounts of CJP and Sabrang Trust. However as soon as
these three accounts were seized, on 23.01.2014 the
petitioner immediately transferred Rs 24,50,000 and Rs
11,50,000 from the other 2 accounts of Sabrang trust
unknown to the investigation authority, i.e. from account
no 369102010806781 and account no 369102010037953
of Sabrang Trust respectively by way of Demand Drafts
of Rs 36,00,000 has been drained in a single day.
It is respectfully submitted that Petitioners no 1 & 2 in
their joint affidavit dated 20.03.2014 before the Sessions
Court, Ahmedabad, have narrated several procedures of
how the grants/donations are sanctioned and given to

Page 24 of 63

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CAV JUDGMENT

the NGOs by the International bodies and its utilization


certificate from the Auditors etc to book the expenditure.
The cogent documentary bank details demonstrating
direct transfers of substantial amount in petitioners
name, credit card payments running into lacs of Rupees,
major discrepancies in Audit Reports,non submission of
Audit reports , remains unexplained. Mere oral denials
cannot obliterate facts received from Nationalized banks,
MHA,
Charity
Commissioner
etc
which
clearly
substantiate the charge of mis-appropriation of crores of
public funds. Mere auditing of accounts cannot be
presumptive of their lack of involvement and preclude
investigation. The Petitioners by their conduct have
revealed that they are not ready and willing to cooperate with the investigation. As trustees, they should
have readily offered their accounts for investigation and
scrutiny.
It is respectfully submitted that in so far as the
allegation of Petitioners no 1 & 2 for obtaining personal
Credit Card details by the Police is concerned, it is
submitted that on scrutiny of account statement of CJP
and Sabrang Trust, it was noticed that substantial
amount has been paid from these accounts towards the
Credit card bill payments, hence it was found necessary
to investigate the nature of payments made from the
accounts of Trusts for these Credit cards. After receiving
the Credit cards payment details it was noticed that the
payment of purely personal nature have been
undertaken by the Petitioners from the Trust Accounts.
a) BRIEF DETAILS OF PURELY PERSONAL EXPENDITURE
MADE BY PETITIONER NO-1 FROM THE FUNDS OF CJP:
From the scrutiny of credit card payments the most
shocking revelation came from the payment made
towards wine and liquor purchases from Chincholi Wines
Mumbai and Duty Free Shops of Mumbai Airport, Movie
Tickets, regular hair salon and grocery expenses.
Expenditure on purchase of branded shoes, beauty
products, Purchase of clothes from branded show rooms
in India, Islamabad and Rome, online shopping from
Flipkart, Amazon and Google storage in US Dollars,
purchases of electronic goods, music systems, dinning
expenses at five star hotels, purchases of jewellery,
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CAV JUDGMENT

watches, suitcases, health equipments, articles from


emporiums, Art Galleries Islamabad, payment to JK
Tourism, Online payments in foreign currency towards
SAT/college board entrance exams in US, UK Universities
for admissions.
Shopping expenses in Pakistan, Kuwait, US, Canada,
Europe have been noticed in the credit card expenses,
raises serious doubts about the nature of social work
being undertaken by the accused no.1 from the funds
received from various donors in CJP
b) BRIEF DETAILS OF PURELY PERSONAL EXPENDITURE
MADE BY PETITIONER NO-2 FROM THE FUNDS OF
SABRANG TRUST:
The data received from the Union Bank of India show
that substantial amounts are spent by Petitioner no-2
was towards shopping, entertainment, foreign goods
purchase,
domestic
requirements
and
other
ancillary expenses of absolutely personal nature
such as Hair Salon expenses, purchases from Mona
Lucky Stores, Reliance Fresh, Beauty Stores, cottage
Industries, Royal Fashion Corner, Medicines, Cakes, shoes
from Vogele Shoes Geneva, Manor AG departmental
store, Geneva, watches, dining in high end restaurants in
India and abroad, clothes from branded show rooms, stay
in Marriot Hotel, Islamabad, Agoda Hotel, London and
Duty free shopping at Abu Dhabi
airport
etc
raises serious doubts about the nature of social work
being undertaken by the accused no.2 from the funds
received from various donors in Sabrang Trust.

In the additional affidavit-in-rejoinder filed by the State of


Gujarat, the details of the false statements made by the
applicants on oath have been furnished. Those are as under :
It is respectfully submitted that in view of pleading
which now
stand concluded, following relevant and
undisputed
facts
of
suppressions
of
materials
facts/incorrect statements on oath before the various
Courts including this Honble Court are clearly borne out

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on record as per details given below:A) The Petitioners in Criminal Writ Petition No 173/2014
filed in the Bombay High Court on 15.01.2014 for
quashing of present FIR No 1/2014, at page no 11, para
(G) of the Petition stated that:
As required under the Bombay Public Trust Act,
1950 the Accounts of Sabrang Trust are audited
annually by Chartered Accountants and are filed
with the Charity Commissioner, Mumbai along with
the Auditors Report every year. Similarly, as
required under the Bombay Public Trust Act, 1950
the Accounts of CJP are audited annually by
Chartered Accountants and are filed with the
Charity Commissioner, Mumbai along with the
Auditors Report every year
Copies of relevant pages of CWP No-173/2014 are
annexed herewith as ANNEXURE C.
B) The Petitioners in Criminal Writ Petition No 293/2014
filed in the Bombay High Court on 24.01.2014 for deceasing the accounts of Sabrang Trust & CJP etc, at page
no Q115 para (h) of the Petition stated that:
As required under the Bombay Public Trust Act,
1950 the Accounts of CJP are audited annually by
the Chartered Accountants and arefiled with the
Charity Commissioner, Mumbai along with the
Auditors Report every year. Similarly, as required
under the Bombay Public Trust Act, 1950 the
Accounts of Sabrang Trust are audited annually by
the Chartered Accountants and are filed with the
Charity Commissioner, Mumbai, along with the
Auditors Report every year
Copies of relevant pages of CWP No-293/2014 are
annexed herewith as ANNEXURE D.
C)
The Petitioners in Misc Criminal Application No
761/2014 filed before the Sessions Court, Ahmedabad on
21.02.2014, in Affidavit-in-rejoinder of the Applicants
dated 10.03.2014 for grant of anticipatory bail, at page
no 4 para (6) of the Affidavit-in-rejoinder stated that:
Both the trusts have been regularly filing their
Page 27 of 63

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returns with the Charity Commissioner as well as


with the Income Tax Department.
Copies of relevant pages of CWP No-761/2014 are
annexed herewith as ANNEXURE E.
D) The Petitioners in Misc Criminal Application No
4677/2014 filed before this Honble Court on 27.03.2014
for grant of anticipatory bail and quashing judgment and
order dated 25.03.14 passed by the Ld City Session
Judge, Ahmedabad in MCA No 761/2014, at page no 24
para (cc) of the Petition stated that:
Both the trusts have been regularly filing their
returns with the Charity Commissioner as well as
with the Income Tax Department
Copy of relevant pages of CWP No-4677/2014 is annexed
herewith as ANNEXURE F.
E) The Petitioners in Special Criminal Application No
2710/2014 filed before this Honble Gujarat High Court on
07.07.2014 for de-freezing of accounts of Sabrang Trust,
CJP etc, at page no 10 para (h) )of the Petition stated
that:
(h) As required under the Bombay Public Trust Act,
1950 the Accounts of CJP are audited annually by
the Chartered Accountants and are filed with the
Charity Commissioner, Mumbai along with the
Auditors Report every year. Similarly, as required
under the Bombay Public Trust Act, 1950 the
Accounts of Sabrang Trust are audited annually by
the Chartered Accountants and are filed with the
Charity Commissioner, Mumbai, along with the
Auditors Report every year
The Petitioners at para (j) again repeated the same
statement as under:( j) The Audited accounts of both the CJP &
Sabrang Trust that have beenregularly submitted,
every year, with the Charity Commissioner and till
date there have been no adverse remark by the
Auditors concerning any financial irregularity not
has there been any query from the Charity
Page 28 of 63

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Commissioners office regarding the same. Copies


of relevant pages of CWP No-2710/2014 are
annexed herewith as ANNEXURE G.
Some of the facts which are admitted by the applicants
have also been highlighted. Those are as under :
The Petitioners in their various Petitions, Applications
and pleadings as mentioned herein above have
categorically and repeatedly mentioned that the
accounts of their both NGOs i.e. Sabrang Trust and
Citizens for Justice & Peace(CJP) are audited and
submitted to the Charity Commissioner/Income Tax
Department along with Auditors Reports every year.
The entire thrust of the Petitioners defence all
throughout has been that as NGOs, they have been
registered under the Public Trust Act and their accounts
are duly audited and submitted to the Charity
Commissioner, Mumbai, every year and the Charity
Commissioner has raised no query regarding their
accounts till date.
Investigation has revealed that the Petitioners have not
been filing their annual Audited Reports and statements
of Accounts to the Charity Commissioner, every year, as
repeatedly claimed by them and proved from the
following
alarming
facts
emerged
during
the
investigation:
a) Citizens for Justice & Peace (CJP):
Audited Reports and statement of Accounts of CJP for the
Period from 2003-04 to 2009-10 i.e. of 7 years were
submitted on 06.01.2012 in the office of the Charity
Commissioner. Mr Javed Anand, Petitioner No-2, also
accused no 2, filed an Affidavit dated 05.01.2012 to the
Charity Commissioner, Mumbai, and sought condonation
of this delay and stated that :
I say that the delay occurred due to our
understanding of section 34 of the Bombay Public
Trusts Act, 1950 and Bombay Public Trust Rules
1951 because of which trustees of CJP assumed
that it is the auditors who are required to file the
annual reports with the office of the Deputy Charity
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Commissioner. Our Auditors Messers Haribakti &


Company, chartered Accountants, have also been
filing our Income Tax Returns regularly with the
Income Tax Department which was the additional
reason for our assumption that they must also be
submitting Audit Report with your office. We
recently learnt from the Auditors that they had in
turn assumed that the Trustees were filing the
reports with your office. Owing to this unfortunate
slip in communication the Audited statements of
accounts, the stipulated schedules and the Auditors
report have not filed with your office for the years
ending 31st March 2004 till March 31,2010 and I
hereby request you to kindly condone the delay in
submission of accounts of our Trust.
The Petitioner No-2 in the said Affidavit has also stated
that I now enclose herewith the accounts duly audited
by the Chartered Accountants/Certified Auditor for the
period from April1, 2003 to March, 31, 2010 for your
perusal and records. I say in Future the Accounts of our
Trust will be submitted in time
Copy of Affidavit dated 05.01.2012 filed by Petitioner No2 is annexed herewith as ANNEXURE H.
It is pertinent to note that the Petitioners in their
additional Affidavit in rejoinder dated 23.07.2014 (served
in the Court on 26.08.2014) running into 44 pages, have
not even once mentioned that audited reports of CJP
were also not submitted on time by the Petitioners and
that they have sought 7 years condonation of delay from
the Charity Commissioner in January 2012.
b) Sabrang Trust:
Audited Reports and Statement of accounts of Sabrang
Trust for the Period 2003-04 to 2007-08 i.e. of 5 years
were submitted only on 26.03.2014 in the office of the
Charity Commissioner, that too, after the filing the
present FIR. Mr Javed Anand, Petitioner No-2, submitted
an Affidavit dated 19.02.2014 to the Charity
Commissioner, Mumbai, for condonation of delay and
stated:
I

say

that

the

delay

Page 30 of 63

occurred

due

to

our

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CAV JUDGMENT

understanding of section 34 of the Bombay Public


Trusts Act, 1950 and Bombay Public Trust Rules
1951 because of which trustees of Sabrang Trust
assumed that it is the auditors who are required to
file the annual reports with the office of the Deputy
Charity Commissioner. Our Auditors Messers D M
Sathe & Associates,, chartered Accountants, have
also been filing our Income Tax Returns regularly
with the Income Tax Department which was the
additional reason for our assumption that they must
also be submitting Audit Report with your office.
Some of our original records of annual returns were
maintained at the office of our Auditors. We
recently learnt from the Auditors that they had in
turn assumed that the Trustees were filing the
reports
with
your
office.
Owing
to
this
miscommunication, the Audited statements of
accounts, the stipulated schedules and the Auditors
report have not filed with your office for the years
ending 31st March 2004 till March 31,2008 and I
hereby request you to kindly condone the delay in
submission of accounts of our Trust.
The Petitioner No-2 in the said Affidavit has also stated
that I now enclose herewith the accounts duly audited
by the Chartered Accountants/Certified Auditor for the
period from April1, 2003 to March, 31, 2008 for your
perusal and records. I say in Future the Accounts of our
Trust will be submitted in time
Copy of Affidavit dated 19.02.2014 submitted by
Petitioner No-2 on 26.03.2014 i.e. after more than one
month, in the office of the Charity Commissioner is
annexed herewith as ANNEXURE I.
The Petitioners in their additional Affidavit in rejoinder
dated 23.07.2014 have admitted to have submitted 5
years Audited Reports of Sabrang Trust in one go on
March, 26th, 2014 i.e. after filing of the present FIR.
Affidavit dated 19.02.2014 by Petitioner no-2, along with
audited reports of Sabrang Trust, was actually filed in the
office of the Charity on 26.03.2014 i.e. after a lapse of 5
weeks. When the accounts were yearly prepared and
audited, as repeatedly claimed by the Petitioners, why
petitioner took more than 5 weeks to actually submit the
audited reports in the office of the Charity Commissioner
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is subject matter of investigation.


c) It is pertinent to note that the Petitioner no-2 in his
affidavit dated 05.01.2012 to the Charity Commissioner
for condonation of 7 years delay in the case of CJP and
Affidavit dated 19.02.2014 for condonation of 5 years
delay in the case of Sabrang Trust made identical pleas.
(i) In the case of CJP, 7 years delay in submitting the
audited accounts for the years APRIL 2003- 31 st MARCH
2010 was noticed by the Petitioners in the year 2012 and
7 years accounts were filed simultaneously seeking
condonation of delay in January 2012. The grounds for
this gross lapse and irregularity in accounting for public
funds running into crores of rupees meant for the
charitable purposes is very casually explained away by
the Petitioners as a communication gap between the
Auditor and the Trustees
The culpability of the
petitioners/accused is apparent from the fact that in the
case of Sabrang Trust, 5 years audited annual accounts
from APRIL 2003 To 31st MARCH 2008 were filed in the
year 2014, i.e. after the filing of the present FIR in
January
2014,
raising
an
identical
plea
of
miscommunication with the Auditors.
(ii)
It is pertinent to note that when the Petitioners
noticed 7 years delay in submission of audited annual
accounts & reports of CJP in January 2012, it is beyond all
reasonable comprehension, that as managing trustees
receiving crores of rupees as funding, they did not check
into the filing of the audited annual accounts of their
another NGO Sabrang Trust till February 2014. From the
available records and admission, it is evidently clear that,
it is only when the FIR came to be filed in January 2014
for embezzlement of funds, that the petitioners
apprehended the likelihood of their accounts being
scrutinized and they rushed to get them prepared & filed
in March 2014.
(iii) As Managing Trustees of SABRANG TRUST, the
Petitioners have made incorrect statements on oath in 2
petitions before the Honble High Court of Bombay (WP
No- 173/2014 filed on 15.01.2014, CWP No-293/2014
filed on 24.01.2014), SLP No 1770/2014 filed on
20.02.2014 in the Honble Supreme Court and MCA No
761/2014 filed on 21.02.2014 before the Sessions Court,
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Ahmedabad and whilst stating on oath that they have


annually submitted regular audited accounts, whereas in
fact till 26th MARCH 2014, annual accounts for the period
APRIL 2003 to 31st MARCH 2008 i.e continuously of 5
years, were not even filed before the Charity
Commission.
(iv) These two Affidavits filed by the Petitioners in the
office of the Charity Commissioner for condonation of
delay, eastablishes beyond reasonable doubt, that the
Petitioners were not filing their Annual Audited Report
and Statement of Accounts of both the trusts in the office
of the Charity Commissioner regularly every year, which
is a mandatory requirement for every registered Trust,
and that they have repeatedly lied on oath before various
Courts as per details mentioned above. Since, the Income
Tax department has not furnished any information to the
IO, it is not known whether the Petitioners are similarly
lying about their regularly filing I T Returns to the Income
Tax Department.
This conduct of the accused also speaks volumes about
their style of functioning, their faith in the Judicial System
of the Country. It is humbly submitted that this Honble
court would take a serious note of series of misconduct/mis-representation by the Petitioners who
choose to mislead the Honble court to secure favourable
orders by stating falsehoods.
Thus, from the above, it is evident that the accounts were
also not audited for a long period of time, and it is only when
the

FIR

was

registered

wherein

serious

allegations

of

misappropriation of lacs of rupees have been alleged that all of


a sudden the accounts from April, 2003 to March, 2008 were
got audited in the year 2014.
It appears from the affidavit-in-reply filed by the State
and the submissions of Mr.Jethmalani, the learned advocate
appearing on behalf of the State, that detailed investigation of
the following transactions is necessary :

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(a) From the accounts of the Sabrang Trust and

CJP, a total

amount of Rs.1,69,84,669=00 have been transferred to the


Sabrang Communication & Publishing Pvt Ltd, a company
owned by the petitioners.
(b) From the accounts of the Sabrang Trust and of CJP, an amount
of Rs.46,91,250=00 and Rs.28,34,804=00 were transferred to
the personal accounts of the petitioner nos. 1 & 2 respectively.
(c) From the accounts of the Sabrang Trust and CJP, the petitioners
have withdrawn Rs.1,08,73,782=00 as cash.
(d) From the accounts of the Sabrang Trust and CJP, the petitioners
have paid Rs.29,66,121=00 towards Credit Card payments.
(e) The petitioners have endeavored to explain the credit card
payment running into lakhs of rupees by stating that all such
personal expenditure were repaid to the NGO accounts. This
employment of public donations to personal use needs to be
investigated. The petitioners have not submitted any debit/
credit

vouchers

and/or

cheques

details

to

prove

their

statement.
(f) Upon scrutiny of the saving accounts Nos.014104000142595 &
014104000142601 of the petitioner nos. 1 & 2 with the IDBI,
Mumbai, it was noticed that both the accounts were opened on
30.04.2005. The FCRA permission from MHA for CJP and
Sabrang Trust was granted in November, 2007. Proposal to
purchase the Gulbarg Society was mooted by petitioner no.1
orally in December, 2007 and formally in January, 2008,
Resolution was passed by the society accepting her proposal in
June, 2008 and thereafter the advertisements commenced and
monies started pouring in. Further no substantial income of any

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nature, except from the CJP and Sabrang Trust, is noticed in


both the above mentioned personal accounts of the petitioners,
which were further invested in fixed deposits, shares and
mutual funds such as ICICI Prudential, Reliance Capital, Kotak
Mahindra, Franklin Templeton etc.
(g) The donations received by the Sabrang Trust and

CJP are

utilized for personal purposes.


(h) Receipt of donations to the tune of Rs.29,20,000=00 from
Ashoka Foundation, Arlington, USA, in the personal accounts of
Ms.Setalvad and Rs.6,05,442=00 as foreign remittance in
Ms.Setalvads personal account.
(i) Monthly withdrawal of salary by both the accused from all the
six

accounts

of

CJP,

Sabrang

Trust

and

Sabrang

Communications.

It also appears that the custodial interrogation is


necessary for the following reasons :
1. The case of the prosecution is based on cogent
documentary

evidence

received

from

the

Charity

Commissioner, Mumbai, Ministry of Home Affairs, New


Delhi, various Banks, etc. Financial details received from
these authorities require detailed investigation.
2. The petitioners have never remained present before
any investigating agency and have employed every
means to avoid the due process of law. The petitioners
seek to avoid custodial interrogation by the investigating
authorities by dismissing cogent documentary evidence

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as accounting jugglery. Approximately 44% of the total


donations

received

in

the

Sabrang

Trust

and

approximately 35% of the total donations received in the


CJP, were transferred to their personal accounts.
3. Cash withdrawal running into over Rs 1.09 crore need
to

be

further

scrutinized

and

examined

wherein

Rs.50,000=00 to Rs.5,00,000=00 have been withdrawn


as cash on a single day.
4.

Credit card details received from the UBI and Citi

Bank revealed expenditure of purely personal nature


running into lacs of rupees being serviced from the CJP
and Sabrang Trust accounts through cheques signed by
the petitioners.
5.

Investigation has also revealed frequent foreign

trips to Pakistan, Abu Dhabi, Kuwait, Switzerland, U.A.E.


etc. Investigation is merited into the nature of these visits
and the expenses incurred thereon.
6.

The

petitioners

have

sought

to

dismiss

cash

withdrawals, bank transfers and credit card payments on


the specious plea of having their accounts audited.
Investigation has already proved that there are major
discrepancies in the

Audits Reports. The nature of

expenditure as revealed from the data received from the


Citi Bank shows that substantial amount is spent on
entertainment, shopping, domestic requirements and
other

expenses

of

purely

personal

nature.

Online

payment of hundreds of U.S. Dollars, Pounds, Canadian


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Dollars towards college board entrance exams in colleges


in U.S, UK, from the NGO Trust accounts raises doubts
about the nature of social work undertaken by these
NGOs.
7.

Whether the Board of Trustees of the Sabrang Trust

and CJP have ever authorized the accused nos. 1 and 2 to


incur such purely personal expenditure and whether the
same is permissible in law, is the subject matter of
investigation. It needs to be examined as to how the
Chartered Accountants who have audited the accounts of
these two Trusts have missed examining the use of the
funds by the Trustees for the purposes other than
charitable.
8.

The statements of the 13 witnesses recorded till

date clearly indicate that not a single rupee is received


by them towards financial aid or rehabilitation or
construction of Museum. Investigation has revealed that
it is only after the publication of interviews, photographs,
articles relating to the Gujarat riots and more particularly
after the

massive campaign

in

2008

onwards

for

collecting funds for establishment of the Museum of


Resistance for the Gulbarg Society that funds started
flowing into the two NGOs in crores, 44% of which in the
Sabrang Trust and 35% of the CJP have been transferred
to their personal accounts.
9.

The CJP and the Sabrang Trust were granted

registration under the Foreign Contribution Regulation


Act (FCRA) by the Ministry of Home Affairs in November,
2007. The CJP and Sabrang Trust respectively opened the
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FCRA accounts in I.D.B.I. and Union Bank of India. In


December, 2007, the accused placed a proposal before
the residents of the Gulbarg Society, to purchase the
entire land and building of the Gulbarg Society at the
current market price and further reimburse them for the
rent which they had paid for all these years. Lucrative as
the proposal sounded, it was unanimously accepted by all
the residents and members of the Gulbarg Society,
Ahmedabad, in June, 2008.
10.

The manner in which the petitioners have dealt with

the public funds needs to be investigated, considering


that whilst on the one hand, as stated by several
witnesses, not a single rupee of financial aid has ever
been received by any of the riots victims, crores of
rupees received for the upliftment/ rehabilitation of the
riots victims and for construction of a unique Museum of
Resistance has been transferred to their personal
accounts, credit card payments and expenses of purely
personal nature. Whilst financial condition of the victims
remained unchanged over the years, the accused, who,
till February 2003, had not even deposited Rs.10,000=00
in their accounts, in the short time, have amassed crores
of rupees of funds.
11.

The

matter

involves

commission

of

grave

economic offence as the petitioners are managing


trustees of the two NGOs.
Since a lot has been argued by both the sides so far as
the scope and ambit of Section 438 is concerned, I deem it
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necessary to consider the position of law.


I may begin with the decision of the Supreme Court in the
case of Balchand Jain v. State of M.P., AIR 1977 SC 366. Fazal
Ali, J. observed in no uncertain terms as follows :
Section 438 does not contain unguided or uncanalised
powers to pass an order for anticipatory bail, but such an
order being of an exceptional type can only be passed if,
apart from the conditions mentioned in S.437, there is a
special case made out for passing the order. The words
for a direction under this section and Court may, if it
thinks fit, direct clearly show that the Court has to be
guided by a large number of considerations including
those mentioned in S.437 of the Code.
Balchand Jain (supra) was a case, wherein the primary
question before Their Lordships was, whether anticipatory bail
can be granted with regard to an offence under rule 184 of the
Defence and Internal Security of India Rules. His Lordship
Bhagwati, J. in his concurring judgment first observed as to the
nature of this power as follows :
"Now, this power of granting 'anticipatory bail' is
somewhat extraordinary in character and it is only in
exceptional cases where it appears that a person might
be falsely implicated, or a frivolous case might be
launched against him, or there are reasonable grounds
for holding that a person accused of an offence is not
likely to abscond, or otherwise misuse his liberty while on
bail' that such power is to be exercised. And this power
being rather of an unusual nature, it is entrusted only to
the higher echelons of judicial service, namely, a Court of
Session and the High Court."
The exceptional nature of this power was further
highlighted by Fazal Ali, J. who prepared the main judgment in
the following words:--

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"It would thus appear that while the Law Commission


recommended that provision for an order of anticipatory
bail to be effective when a person is arrested should be
made, at the same time it stressed that this being an
extraordinary power should be exercised sparingly and
only in special cases."
As regards the guidelines and the limitations on the
exercise of the power under Section 438, the Supreme Court
laid them down in the following terms (at p. 377 of AIR):-"We have already stated that S. 438 of the Code does not
contain the conditions on which the order for anticipatory
bail could be passed. As S. 438 immediately follows S.
437 which is the main provision for bail in respect of nonbailable offence it is manifest that the conditions
imposed by S.437(1) are implicitly contained in S. 438 of
the Code. Otherwise the result would be that a person
who is accused of murder can get away under S. 438 by
obtaining an order for anticipatory bail without the
necessity of proving that there were reasonable grounds
for believing that he was not guilty of offence punishable
with death or imprisonment for life. Such a course would
render the provisions of S. 437 nugatory and will give a
free licence to the accused persons charged with nonbailable offences to get easy bail by approaching the
Court under S. 438 and by-passing S. 437 of the Code.
This, we feel, could never have been the intention of the
Legislature. Section 438 does not contain unguided or
uncanalised powers to pass an order for anticipatory bail,
but such an order being of an exceptional type can only
be passed if, apart from the conditions mentioned in S.
437, there is a special case made out for passing the
order. The words "for a direction under this section" and
'Court may, if it thinks fit, direct' clearly show that the
Court has to be guided by a large number of
considerations including those mentioned in S. 437 of the
Code.
Balchand Jain (supra) laid down the following proposition
for the grant of anticipatory bail.

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(1) That the power under Section 438, Criminal


Procedure Code, is of an extra-ordinary character and
must be exercised sparingly in exceptional cases only;
(2) That the said power is not unguided or uncanalised,
but all the limitations imposed in the proceeding S. 437,
Criminal Procedure Code, are implicit therein and must
be read into S. 438 as well; and
(3) That in addition to the limitations imposed in S.
437, the petitioner must further make out a special case
for the exercise of the power to grant anticipatory bail.
The broad canvas against which the significant question
aforesaid has to be examined cannot be better spelled out
than in the memorable words of Lord Porter in Emperor v.
Khwaja Nazir Ahmad, AIR 1945 PC 18(at p. 22):
"In their Lordships' opinion however, the more serious
aspect of the case is to be found in the resultant
interference by the Court with the duties of the police.
Just as it is essential that every one accused of a crime
should have free access to a Court of Justice so that he
may be duly acquitted if found not guilty of the offence
with which he is charged, so it is of the utmost
importance that the judiciary should not interfere with
the police in matters which are within their province and
into which the law imposes upon them the duty of
enquiry. In India as been shown there is a statutory right
on the part of the police to investigate the circumstances
of an alleged cognizable crime without requiring any
authority from the judicial authorities, and it would, as
their Lordships think, be an unfortunate result if it should
be held possible to interfere with those statutory rights
be an exercise of the inherent jurisdiction of the Court.
The functions of the judiciary and the police are
complementary not overlapping and the combination of
individual liberty with a due observance of law and order
is only to be obtained by leaving each to exercise its own
function, always, of course, subject to the right of the
Court to intervene in an appropriate case when moved
under Section 491, Criminal Procedure Code, to give

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directions in the nature of habeas corpus."


There is thus the authority of the Privy Council itself
which has been re-affirmed by their Lordships of the Supreme
Court times out of number for the proposition that the Code
confers a statutory right on the police to investigate into
cognizable crime without the sanction of any judicial authority.
Therefore, it is unnecessary to elaborate on this aspect and the
briefest reference to Chapter XII of the Code regarding the
information of cognizable offences to the police and their
powers to investigate therein would suffice. Section 154
requires

that

information

regarding

the

commission

of

cognizable offence shall be reduced in writing and prescribes


the procedure for recording the same. Section 156 in the
clearest terms lays down that the Officer-in-charge of a police
station may without the order of a Magistrate investigate
forthwith into such a cognizable case. The succeeding Section
157 whilst providing for the procedure for investigation in
terms empowers the police to take measures for the discovery
and arrest of the offender.

In this context, it is worthwhile to recall that by virtue of


S. 57 of the Code, a police officer would be entitled to detain in
custody such a person for twenty-four hours exclusive of the
time necessary for the journey from the place of arrest to the
Magistrate's Court without seeking the sanction of any Court or
Magistrate. This right of the police indeed seems to have
constitutional sanction by virtue of Article 22(2) of the
Constitution of India which is almost in similar terms. However,
if the investigation cannot be completed with the period of 24
hours aforesaid, the Code makes express provision therefor by
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Section 167 and sub-section (2) of the same is pertinent and


the relevant part thereof may be set down here for facility of
reference:-"167 (1) x x x x
(2) The Magistrate to whom an accused person is
forwarded under this section may, whether he has or has
not jurisdiction to try the case, from time to time,
authorise the detention of the accused in such custody as
such Magistrate thinks fit, for a term not exceeding
fifteen days in the whole; and if he has no jurisdiction to
try the case or commit it for trial, and considers further
detention unnecessary he may order the accused to be
forwarded to a Magistrate having such jurisdiction.
Provided that-(a) the Magistrate may authorise detention of the
accused person, otherwise than in custody of the police,
beyond the period of fifteen days if he is satisfied that
adequate grounds exist for doing so."
Now reading the relevant provisions together, it is plain
that in a serious cognizable offence, the Code authorises the
arrest and detention in custody of the offender for the first
twenty-four hours without the interposition of the Magistracy
and further police custody up to a period of 15 days with the
authority of the Magistrate. It is clear, therefore, that the arrest
and interrogation in police custody for cognizable crime is not
only visualised but expressly authorised by the Code. On
behalf of the respondent-State, indeed the stand is that this is
not merely a right of the police but a duty enjoined upon them
and is the life blood of any effective investigation into a serious
crime. It is contended on their behalf that if the power under
Section 438, Cr.P.C., is used indiscriminately and as a routine it
would denude and render nugatory the provisions of Section

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167 of the Code even in those cases where the investigative


agency can lay legitimate claim to the effective interrogation
and offender in their custody.
After Balchand, the Supreme Court delivered the decision
in the case of Gurbaksh Singh Sibia (supra). In Gurbaksh Singh
Sibia (supra), the Supreme Court examined the various facets
of this provision. The Supreme Court has observed in regard to
the legislative intent of the provision :
"The Legislature conferred a wide discretion on the High
Court and the Court of Session to grant anticipatory bail
because it evidently felt firstly, that it would be difficult
to enumerate the conditions under which anticipatory
bail should or should not be granted and secondly,
because the intention was to allow the higher Courts in
the echelon a somewhat free hand in the grant of relief in
the nature of anticipatory bail. That is why, departing
from the terms of Ss. 437, 439, S. 438(i) uses the
language that the High Court or the Court of Sessions
'may if it thinks fit' direct that the applicant be released
on bail."
While examining the amplitude of judicial discretion given
by Section 438, the Supreme Court observed :
"The true question is whether by a process of
construction, the amplitude of judicial discretion which is
given to the High Court and the Court of Session, to
impose such conditions they may think fit while granting
anticipatory bail, should be cut down by reading into the
Statute conditions which are not to be found therein, like
those evolved by the High Court or canvassed by the
learned Solicitor General. Our answer, clearly and
emphatically is in the negative. The High Court and the
Court of Session to whom the application for anticipatory
bail is made ought to be left free in the exercise of their
judicial discretion to grant bail if they consider it fit so to
do on the particular facts and circumstances of the case
and such conditions as the case may warrant. Similarly
they must be left free to refuse bail if the circumstances
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of the case so warrant. On considerations similar to those


mentioned in S. 437 or which are generally considered to
be relevant under Section 439 of the Code."
While repelling the contention that the anticipatory bail
cannot be granted unless it is shown that proposed allegation
is mala fide, the Supreme Court observed :
"It is understandable that if mala fides are shown
anticipatory bail should be granted in generality of the
cases. It is not easy to appreciate why an application for
anticipatory bail must be rejected unless accusation is
shown to be mala fide."

In regard to the scope and ambit of Section 438, the


Supreme Court observed :
"The expression "if it thinks fit which occurs in S. 438(i) in
relation to the power of the High Court or the Court of
Session, is conspicuously absent in S. 437(i). We see no
valid reason for re-writing S. 438 with a view not to
expanding the scope and ambit of the discretion
conferred on the High Court and the Court of Session but,
for the purpose of limiting it."

The Supreme Court also examined the fact as to whether


the discretion vested in the Court under Section 438 can be
exercised in relation to the offences punishable with death or
life imprisonment unless the Court is satisfied that such a
charge appears to be false or groundless and observed as
under :
"We see no warrant for reading into this provision the
conditions subject to which bail can be granted under
Section 437(i) of the Code. That section, while conferring
the power to grant bail in case of non-bailable offences,
provides by way of exception that a person accused or
suspected of the commission of a non-bailable offence

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shall not be so released, if there appears to be


reasonable grounds for believing that he has been guilty
of an offence punishable with death or imprisonment for
life. If it was intended that the exception in S. 437(i)
should govern the grant of relief under Section 438(i)
nothing would have been easier for the Legislature than
to introduce into the latter section a similar provision."
The law on the subject is thus very clear and this Court's
powers

to

grant anticipatory bail are unfettered.

That,

however, does not solve the issue which is essentially of


exercise of discretion and, which discretion has to be exercised
judicially in the light of facts and circumstances of each and
every case.
Balchand Jain (supra) and Gurbaksh Singh (supra) later
on came to be considered by the Supreme Court in Siddharam
Satlingappa Mhetre (supra), wherein the Supreme Court
explained in detail the scope and ambit of anticipatory bail.
SCOPE AND AMBIT OF ANTICIPATORY BAIL:
118. A good deal of misunderstanding with regard to the
ambit and scope of section 438 Cr.P.C. could have been
avoided in case the Constitution Bench decision of this
court in Sibbia's case (supra) was correctly understood,
appreciated and applied.
119. This Court in the Sibbia's case (supra) laid down the
following principles with regard to anticipatory bail:
a) Section 438(1) is to be interpreted in light of
Article 21 of the Constitution of India.
b) Filing of FIR is not a condition precedent to
exercise of power under section 438.
c) Order under section 438 would not affect the right
of police to conduct investigation.
d) Conditions mentioned in section 437 cannot be
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read into section 438.


e) Although the power to release on anticipatory bail
can be described as of an "extraordinary" character
this would "not justify the conclusion that the power
must be exercised in exceptional cases only." Powers
are discretionary to be exercised in light of the
circumstances of each case.
f) Initial order can be passed without notice to the
Public Prosecutor. Thereafter, notice must be issued
forthwith and question ought to be re- examined
after hearing. Such ad interim order must conform to
requirements of the section and suitable conditions
should be imposed on the applicant.
120. The Law Commission in July 2002 has severely
criticized the police of our country for the arbitrary use of
power of arrest which, the Commission said, is the result
of the vast discretionary powers conferred upon them by
this Code. The Commission expressed concern that there
is no internal mechanism within the police department to
prevent misuse of law in this manner and the stark
reality that complaint lodged in this regard does not
bring any result. The Commission intends to suggest
amendments in the Criminal Procedure Code and has
invited suggestions from various quarters. Reference is
made in this Article to the 41st Report of the Law
Commission
wherein
the
Commission
saw
`no
justification' to require a person to submit to custody,
remain in prison for some days and then apply for bail
even when there are reasonable grounds for holding that
the person accused of an offence is not likely to abscond
or otherwise misuse his liberty. Discretionary power to
order anticipatory bail is required to be exercised
keeping in mind these sentiments and spirit of the
judgments of this court in Sibbia's case (supra) and
Joginder Kumar v. State of U.P. and Others (1994) 4 SCC
260.
Relevant consideration for exercise of the power
121. No inflexible guidelines or straitjacket formula can
be provided for grant or refusal of anticipatory bail. We

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are clearly of the view that no attempt should be made to


provide rigid and inflexible guidelines in this respect
because all circumstances and situations of future cannot
be clearly visualized for the grant or refusal of
anticipatory bail. In consonance with the legislative
intention the grant or refusal of anticipatory bail should
necessarily depend on facts and circumstances of each
case. As aptly observed in the Constitution Bench
decision in Sibbia's case (supra) that the High Court or
the Court of Sessions to exercise their jurisdiction under
section 438 Cr.P.C. by a wise and careful use of their
discretion which by their long training and experience
they are ideally suited to do. In any event, this is the
legislative mandate which we are bound to respect and
honour.
122. 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 the 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.
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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 accused is
implicated with the help of sections 34 and 149 of the
Indian Penal Code, the court should consider with even
greater care and caution because over implication 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.
123. The 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.
124. 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.
125. These are some of the factors which should be

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taken into consideration while deciding the anticipatory


bail applications. These factors are by no means
exhaustive but they are only illustrative in nature
because it is difficult to clearly visualize all situations and
circumstances in which a person may pray for
anticipatory bail. If a wise discretion is exercised by the
concerned judge, after consideration of entire material
on record then most of the grievances in favour of grant
of or refusal of bail will be taken care of. The legislature
in its wisdom has entrusted the power to exercise this
jurisdiction only to the judges of the superior courts. In
consonance with the legislative intention we should
accept the fact that the discretion would be properly
exercised. In any event, the option of approaching the
superior court against the court of Sessions or the High
Court is always available.
126. Irrational and Indiscriminate arrest are gross
violation of human rights. In Joginder Kumar's case
(supra), a three Judge Bench of this Court has referred to
the 3rd report of the National Police Commission, in
which it is mentioned that the quality of arrests by the
Police in India mentioned power of arrest as one of the
chief sources of corruption in the police. The report
suggested that, by and large, nearly 60% of the arrests
were either unnecessary or unjustified and that such
unjustified police action accounted for 43.2% of the
expenditure of the jails.
127. Personal liberty is a very precious fundamental right
and it should be curtailed only when it becomes
imperative according to the peculiar facts and
circumstances of the case.

Thus, considering Balchand Jain (supra), Gurbaksh Singh


(supra) and Siddharam Satlingappa Mhetre (supra), it is clear
that a balance must be struck between the two factors,
namely, no prejudice should be caused to the investigation,
and at the same time, the Court should also ensure that there
is no undue harassment and humiliation to the accused. Beside

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this, the nature and gravity of the accusation and the exact
role of the accused is also necessary to be looked into after
evaluating the entire material against the accused. In short,
what has been laid down by the Supreme Court in Siddharam
Satlingappa Mhetre (supra) is that the arrest should be a last
option and should be restricted to those exceptional cases
where arresting the accused is imperative. I may add here that
custodial interrogation is one of the most important factors
which the Court should consider while considering the plea of
the accused for anticipatory bail.
My attention has been drawn by Mr.Thakore, the learned
senior advocate appearing for the applicants, to a very recent
pronouncement of the Supreme Court in the case of Hema
Mishra v. State of Uttar Pradesh and others, (2014)4 SCC 453,
wherein His Lordship Dr.A.K.Sikri, J. in a concurring but a
separate

judgment

made

the

following

observations

in

paragraphs 30 and 31 :
30. It is pertinent to explain that there may be imminent
need to grant protection against pre-arrest. The object of
this provision is to relieve a person from being disgraced
by trumped up charges so that liberty of the subject is
not put in jeopardy on frivolous grounds at the instance
of the unscrupulous or irresponsible persons who may be
in charge of the prosecution. An order of anticipatory bail
does not in any way, directly or indirectly, take away for
the police their right to investigate into charges made or
to be made against the person released on bail.
31. The purposes for which the provisions of anticipatory
bail are made are quite obvious. One of the purposes of
the arrest is that the accused should be available to the
investigating machinery for further investigation and
questioning whenever he is required. Another purpose is
that the trial should not be jeopardized and for this
purpose the restrictions on the movements of the

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accused are necessary. The genuineness of the alleged


need for police custody has to be examined and it must
be balanced against the duty of courts to uphold the
dignity of every man and to vigilantly guard the right to
liberty without jeopardizing the state objective of
maintenance of law and order.

I am not impressed by the submissions of Mr.Thakore


that the applicants deserve to be released on anticipatory bail
because they have levelled serious allegations of malafides
against the State Government. The

malafides must be

specifically

be proved

alleged

and

required

to

by the

applicants. By merely hurling allegations of malafides, the


accused who is otherwise prima facie involved in a crime is not
automatically entitled to anticipatory bail. The extraordinary
power conferred upon the Courts of Justice under Section 438
of the Code of Criminal Procedure needs to be exercised very
guardedly and with a little care and circumspection.
Having gone through the materials on record, I have
noticed something very shocking, and at the same time,
extremely sad. There are serious allegations against the
applicants of misuse and misappropriation of huge amount
received by them through various donors. The money which
should have gone to the poor and the needy appears to have
been prima facie misused for their personal pleasure and
comfort. Although in the course of lengthy arguments it was
vehemently submitted that the applicants are ready and
willing to cooperate with the investigation, yet I have noticed
that there is no cooperation worth the name. It is only after the
arguments were concluded that the applicants thought fit to
part with their income tax returns and vouchers.

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The applicants did appear before the Investigating Officer


once or twice and they were put number of questions for the
purpose of effective investigation. Mr.Jethmalani, in the course
of hearing of these applications, made available for my perusal
the case-diary, wherein number of questions were put to the
applicants and the stock reply which I find is necessary to be
quoted :
As the question relates to accounts, the reply of which is
given in our affidavit. If there is no reply, and if you will
give me in writing, we will give you reply for the same.
To very few specific questions as regards purchase of air
tickets, holiday resorts bills, fees paid in dollars so far as the
education of children is concerned, credit card payments,
expensive shoes, clothes, beauty parlour bills, etc., the stock
reply was, Please give me in writing, we will give you reply for
the same.
To few other questions, the only reply was, At present I
do not remember it. Sir, if you will give me in writing, I will
provide information of the same later on.
To a specific question as regards the personal expenses
incurred using the credit cards from the bank accounts of the
CJP and the Sabrang Trust, the reply was, I state that we have
submitted the detailed reply regarding use of Credit Card in
Page No(s). 606 to 613 and Page No(s).617 to 659, in
Annexure-A (Colly) of Affidavit Dated 18/06/2014 to our
Miscellaneous Criminal Application No.4677/2014 filed before
the Honourable High Court of Gujarat. We have also informed
in Audit Report of Shri D.M.Shathe and Haribhakti that we have

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not incurred any personal expenses from Trust Bank Account


(s). This information is asked for only to harass and defame us.
You have not produced any documentary proof regarding your
allegation in the matter.
To a specific question regarding vouchers, the reply was,
if we are asked in writing to submit vouchers of particular
time and expenses, thereafter, we will provide you the same.
As per the legal advice, we have obtained, it is neither
necessary nor desirable to submit the same for the present
investigation.
To a specific question regarding the income tax returns,
the reply was, You have demanded copies of I.T.Returns for
the years from 2004-05 to 2012-13, but we are not bound to
produce the same (before you).
If everything is in the affidavit filed before this Court, and
if everything is to be looked into by the Investigating Officer
and understand from the affidavit, then that hardly can be a
ground for grant of anticipatory bail.
The above is suggestive of the fact that there is no
cooperation at all. At any cost, the applicants want to evade
the interrogation and are not ready and willing to disclose the
true facts. If such are the answers given by the applicants to
the questions put by the Investigating Officer at a stage when
they are under the umbrella of an oral interim protection, I
wonder what would be the position when they appear before
the Investigating Officer armed with a full-fledged anticipatory
bail order.

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It is at that stage and in such circumstances that the


custodial interrogation becomes a very important factor.
Custodial interrogation is qualitatively more elicitation
oriented than questioning a suspect who is well ensconced
with a favorable order under Section 438 of the Code. In a case
like this effective interrogation of suspected person is of
tremendous

advantage

in

disinterring

many

useful

informations and also materials which would have been


concealed. Success in such interrogation would elude if the
suspected person knows that he is well protected and
insulated by a pre-arrest bail during the time he interrogated.
Very often interrogation in such a condition would reduce to a
mere ritual. The argument that the custodial interrogation is
fraught with the danger of the person being subjected to thirddegree methods need not be countenanced, for, such an
argument can be advanced by all accused in all criminal cases.
The court has to presume that responsible Police Officers
would conduct themselves in a responsible manner and that
those entrusted with the task of disinterring offences would not
conduct themselves as offenders. (see State Rep. by the C.B.I.
v. Anil Sharma, (1997)7 SCC 187.
The case on hand, in my opinion, is one of custodial
interrogation in public interest taking into consideration the
fact that money meant for the poor and those being largely
affected by riots is alleged to have been embezzled. Day-in
and day-out we are witnessing with regret and sorrow that our
political executives and bureaucracy are being involved in
corruption cases. Now, even the NGOs who claim to work for

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the upliftment of the poor and the downtrodden of the society


have

started

to

involve themselves

in

such

acts.

The

materialistic race is going on in every section of the society


and this disease of corruption has eaten the very roots of our
system. If the custodial interrogation of an accused is
necessary in public interest and that the gravity of the
allegation is such that the custody of the accused should be
handed over to the police for fair and impartial interrogation,
the provision of Section 438 of the Code should not be invoked
in favour of such an accused.
So far as the aspect of custodial interrogation in public
interest is concerned, I am supported by a decision of the
Supreme Court in the case of Er.K.K.Jerath v. Union Territory,
Chandigarh and others, 1998 Cri.L.J. 2555, wherein the Court
observed in paragraphs 3, 4 and 5 as under :
3. Shri R.K. Jain, learned senior counsel for the petitioner

relying upon the decision of this Court in Joginder Kumar


vs. State of U.P. & Ors. 1994(4) SCC. 260, Shri Gurbaksh
Singh Sibbia & Ors. vs. State of Punjab 1980 (2) SCC 565.
Nandini Satpathy vs. P.L. Dani & Anr. 1978 (2) SCC 424,
and Babu Singh & Ors. vs. State of U.P. 1978. (1) SCC
579, submitted that the matter will have to be examined
from the constitutional angle bearing in mind the scope
of Articles 20(2) and 21 of the Constitution. He
contended that though an accused person could be
arrested, it may not be appropriate to detain him in
custody in every case and when there is presumption of
innocence in his favour until the charge against him is
established, it would not at ll be consistent with the
philosophy of the Constitution that such a person should
be subjected to interrogation by application of
psychological or ambient pressures much less physical
torture. And he very vehemently stressed that this Court
has a duty to protect a citizen against such inroads of
these fundamental right. He relied upon the decisions in :
(i) 1994 (4) SCC 260 (ii) 1980 (2) SCC 565 (iii) 1978 (2)
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SCC 424 and (iv) 1978 (1) SCC 579 to contend that in law
an accused person could be arrested and if arrested, is
entitled to bail unless detention in needed in public
interest.
4. Shri Arun Jaitley and Sri Gopal Subramaniam, learned
Senior Advocates for the respondents, brought to our
notice that there were several special features in this
case which clearly indicate that retaining the petitioner in
custody till the investigation is over is absolutely
necessary and is in public interest, which far outweighs
the interest of the petitioner.
5. We do not wish to enter into any detailed discussion
on these legal aspects raised by the learned counsel for
the respondents as this Court in the several decision
referred to by the learned counsel for the petitioner has
explained the scope of the provisions of Articles 20(2)
and 21 of the Constitution and Section 486 of the Code of
Criminal Procedure and their inter-relationship. We may
only state in considering a petition for grant of bail
necessarily if public interest requires detention of citizen
in custody for purposes of investigation could be
considered and rejected as otherwise there could be
hurdles in the investigation even resulting in tempering
of evidence. This very aspect has been borne in mind by
the High Court . On the facts and in the circumstances of
the case, we do not think there is any god reason to
interfere with the order made by the High Court in
refusing bail at this state of the proceedings. The special
leave petition is, therefore, dismissed.

I should be conscious of the fact that I am not dealing


with an application for grant of regular bail after arrest. The
principal bail and not jail would be more germane while
considering the application for post arrest bail.
The consideration which should weigh with the Court
while dealing with a request for anticipatory bail in these type
of cases need not be the same as for an application to release

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on bail after arrest.


I may quote with profit a decision of the Supreme Court
in the case of Pokar Ram v. State of Rajasthan and others,
1985 SC 969, wherein in para 5 the following observations
were made :
Relevant considerations governing the court 's decision
in granting anticipatory bail under Sec. 438 are
materially different from those when an application for
bail by a person who is arrested in the course of
investigation as also by a person who is convicted and
his appeal is pending before the higher court and bail is
sought during the pendency of the appeal. Three
situations in which the question of granting or refusing to
grant bail would arise, materially and substantially differ
from each other and the relevant considerations on
which the courts would exercise its discretion, one way or
the other, are substantially different from each other.
This is necessary to be stated because the learned Judge.
in the High Court unfortunately fell into an error in mixing
Up all the considerations, as if all the three become
relevant in the present situation.
By merely pleading malafides, the applicants cannot
escape from their liability. I should not shut my eyes to the
other aspects of the matter, more particularly, the serious
allegations of misappropriation to the tune of lacs of rupees by
merely accepting the submission of malafides. Malafides is
something which definitely should be considered, but if there is
other materials on record to prima facie indicate the complicity
and involvement of the accused, then only on the ground of
malafides anticipatory bail should not be granted. On account
of

malafides,

some

times,

the

Court

may

find

some

exaggeration, but that does not mean that the entire case put
forward by the prosecution is false or baseless.

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It also appears from the materials on record that on


account of some pressure or influence that might have been
exerted by the applicants, the Auditors who are stationed at
Mumbai have also not cooperated with the investigation.
As observed earlier, the facts of this case are quite
shocking and disturbing. How can one seek materialistic
pleasure and happiness at the expense of the poor and needy
persons. How can one even use five paise which is meant for
the poor and the needy. The facts of this case reflect the sorry
state of affairs of the NGOs. People from all corners of the
world are ready to help them. There are people who may not
be able to directly help and, therefore, they use the NGOs to
help the poor and the needy. The donations are made with lot
of trust and hope that ultimately the money would reach to the
poor and the needy. However, here is a case where, in the
name of the poor, needy and unfortunate riot affected victims,
lacs of rupees was received and embezzled.
A person who considers the happiness and the pain of
others as those of his own, is, in my opinion, the real social
worker.
Whilst giving freedom to the civil society to function with
flexibility is positive, too much freedom can lead to abuses by
certain groups or individuals calling themselves an 'NGO', thus
giving civil society a bad name. Situations like these have a
negative impact on the many honest NGOs and create a
situation of low trust in the NGOs. This, in turn, leads to a
situation where funding is not easily obtained and where the
public is less ready to contribute to the sector. Ultimately, it is
only the poor and the needy who are the sufferers. It is,

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therefore, very important to have strict laws regulating


accountability and monitoring of the NGOs so as to maintain a
high trust level and good functioning.
Proper

registration,

genuine

board

composition,

compliance with procedures, and well laid-out policies relating


to activities and resource mobilisation are the basic attributes
of the well-governed organisations. Broadening and deepening
the regulatory process, as well as enhancing the capacity of
the department to carry it out, would be the best government
response to this controversy.
A lot was argued regarding the reputation of the two
applicants. My attention has been drawn to the various awards
received by the two Trusts. It was also sought to be argued
that the trustees are well-renowned persons of great repute.
Well, by only looking towards the awards and the medals the
hard reality should not be ignored. So far as the well-renowned
persons being the trustees are concerned, I may only say that
the two Trusts appear to be a one-woman and one-man show.
The other trustees, I doubt, whether have any idea as regards
the affairs of the Trusts. They may have lended their names
unmindful that they may also lend up some day in difficulty.
After bestowing my anxious consideration, including the
perusal of the case-diary referred to above, I have reached to
the conclusion that no case is made out for exercise of the
discretionary power under Section 438 of the Code of Criminal
Procedure.
For the foregoing reasons, the Criminal Misc. Application
No.4677 of 2014 fails and is hereby rejected.

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It goes without saying that any observations touching the


merits of the case are purely for the purpose of deciding the
question of grant of anticipatory bail and shall not be
construed as an expression of the final opinion in the main
matter.
So far as the other two applications are concerned, i.e.
Criminal Misc. Application Nos.4679 of 2014 and 4680 of 2014,
it is submitted very fairly by Mr.Jethmalani that no custodial
interrogation is required of the applicants. He submitted that,
therefore, the State has no objection if the anticipatory bail is
granted to the applicants of the other two applications.
In view of such stance of the State, the two applications
being Criminal Misc. Application Nos.4679 of 2014 and 4680 of
2014 are hereby allowed, by directing that in the event of
arrest of the applicants of the Criminal Misc. Application
Nos.4679 of 2014 and 4680 of 2014 in connection with the FIR
registered with the D.C.B. Crime Police Station, Ahmedabad,
the applicants shall be released on bail on their furnishing a
personal bond of Rs.10,000/- (Rupees ten thousand only) each
with one surety of the like amount on the following conditions
that they shall:
(a) cooperate with the investigation and make
themselves available for interrogation whenever
required;
(b) remain present at the concerned Police Station on
19th February 2015 between 11.00 a.m. and 2.00 p.m.;
(c) 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/them from
disclosing such facts to the court or to any police

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officer;
(d) not obstruct or hamper the police investigation and
not to play mischief with the evidence collected or yet
to be collected by the police;
(e) at the time of execution of bond, furnish the
address to the Investigating Officer and the Court
concerned and shall not change their residence till the
final disposal of the case till further orders;
(f) not leave India without the permission of the Court,
and if having passport, shall deposit the same before
the trial Court within a week; and
(g) it would be open to the Investigating Officer to file
an application for remand if he considers it just and
proper and the learned Magistrate would decide the
same on merits;
Despite this order, it would be open for the Investigating
Agency to apply to the competent Magistrate for police
remand of the applicants. The applicants shall remain present
before the learned Magistrate on the first date of hearing of
such application and on all subsequent occasions as may be
directed by the learned Magistrate. This would be sufficient to
treat the accused in the judicial custody for the purpose of
entertaining application of the prosecution for police remand.
This is, however, without prejudice to the rights of the accused
to seek stay against an order of remand if, ultimately, granted,
and the powers of the learned Magistrate to consider such a
request in accordance with law.
It is clarified that the applicants, even if, remanded to the
police custody, upon completion of such period of police
remand, shall be set free immediately, subject to the other
conditions of this anticipatory bail order.

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At the trial, the trial Court shall not be influenced by the


prima facie observations made by this Court while enlarging
the applicants on bail. Rule is made absolute to the aforesaid
extent. Direct service is permitted.

(J.B.PARDIWALA, J.)

After the order is pronounced, Mr.Thakore, the learned


senior advocate appearing on behalf of the applicants of the
Criminal Misc. Application No.4677 of 2014, prays for extension
of the oral interim protection granted to the applicants.
In view of what has been stated above, the prayer is
rejected.

(J.B.PARDIWALA, J.)
MOIN

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