Mr. Uday Mohanlal Acharya vs. State of Maharashtra 2001 Cri LJ 4563

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Mr. Uday Mohanlal Acharya vs. State of Maharashtra 2001 Cri LJ 4563

Case Name:	Mr. Uday Mohanlal Acharya Vs. State of Maharashtra 2001 Cri LJ 4563
Equivalent Citation:	2001 Cri LJ 4563
Date of Judgement:	29 March, 2001
Court:	The Supreme Court of India
Case no:	Appeal (Crl.) 394 of 2001
Case type:	Criminal
Appellant:	Mr. Uday Mohanlal Acharya
Respondent:	State of Maharashtra
Bench:	B.N. AgrawalG.B PattanaikU.C Banerjee
Referred:	Indian Penal Code, 1860 The Code of Criminal Procedure, 1973

BACKGROUND OF THE CASE

In recent decades, the State of Maharashtra has seen a surge in the number of financial institutions. The sole purpose of these establishments was to acquire money received as deposits from the general public, mostly middle-class and poor people, on the promise of a highly attractive rates of interest or rewards, with no obligation to refund the deposit to the investors at maturity or any provision for ensuring the rendering of the services in kind as promised. Many of these financial institutions had failed to return deposits on maturity, pay interest, or provide services in kind as promised to the public. This situation had caused widespread public dissatisfaction and outcry, resulting in a law and order crisis in the State of Maharashtra.

The Maharashtra legislature enacted the Maharashtra Protection of Interest of Depositors (in Financial Establishment) Act, 1999 to curb the fraudulent activities of such financial establishments. Section 3 of the Act provides that any financial establishment if found guilty of such financial fraudulent activities, every person responsible for the management or conduct of the business or affairs of such establishment, including the promoter, partner, director, manager or any other person or an employee, shall be punished with imprisonment for a term of up to six years and a fine of up to 1 lakh rupees.

FACTS OF THE CASE

The accused in this case was remanded to judicial custody on the magistrate’s order of June 17, 2000, following his surrender in Court.
A case has been registered against him under Sections 406 and 420 of the Indian Penal Code as well as the Maharashtra Protection of Depositors Interest (in Financial Establishments) Act, 1999.
On August 16, 2000, the deadline for submitting a charge sheet had expired.
The following day, on August 17, 2000, an application for release on bail was made to the Magistrate, claiming that the proviso to Section 167 (2) of the Code of Criminal Procedure, which provides that the accused may be released on bond if the challan is not filed within 60 days.
On the same day, the Magistrate dismissed the prayer, concluding that the provisions of section 167 (2) CrPC do not apply to matters involving the MPID Act.
The accused filed a criminal application in the Bombay High Court. And after hearing both the sides, a learned single judge recommended the case to the Division Bench on August 23, 2000, and the case was scheduled for hearing before the Division Bench on August 29, 2000.
On that date, the Division Bench postponed the case for argument to August 31, 2000, and in the meantime, a charge-sheet was filed before the trial judge on August 30, 2000.
The Division Bench of Bombay High Court, after examining the relevant provisions of the MPID Act and relying on the Supreme Court’s decisions in Sanjay Dutt vs. State through CBI, the bench concluded that there is no prohibition in the Maharashtra Act of 1999 against the application of Section 167 (2) proviso of Cr.P.C.
The High Court ultimately refused to grant relief on the grounds that, by the time the application for bail before the Division Bench came to be considered on August 31, 2000, a charge-sheet had been filed before the Magistrate on 30.08.2000, and thus the allegedly enforceable right had not survived or remained enforceable.
Following the cancellation of an application made by the accused, the current appeal has been filed with the Supreme Court.

ISSUES RAISED

The following are the primary issues in this case:

Whether the accused is eligible for release on bail?
When does an accused have an indefeasible right to be released on bail under section 167 (2) of Code of Criminal Procedure?

CONTENTIONS OF THE APPELLANT

Mr. K.T.S. Tulsi, learned Senior Counsel representing the appellant, argued that the legislative mandate granting the right for the accused to be released on bail upon expiration of the period stated under the proviso of Section 167 (2) of Cr.P.C.
Mr. Tulsi claims that the phrase “shall be released on bail” in the proviso of section 167 (2) not only grants the accused an indefeasible right but also places responsibility or obligation on the Magistrate because the Magistrate will no longer be able to retain the accused.
Mr. Tulsi further argued that if the prosecution had not filed a charge-sheet by the time the application was filed, the accused must be released on bail and the right conferred upon him under the aforementioned provision of the Code must be enforced, and subsequent filing of the charge-sheet will not change the position.

CONTENTIONS OF THE RESPONDENT

Mr. Janardhan, learned Additional Advocate General, appearing for the State of Maharashtra, contended that in several decisions of the Apex Court, including in the Sanjay Dutt case, that the alleged indefeasible right accruing to the accused is enforceable from the time of default until the challan is filed but does not survive or continue to be enforceable after the challan is filled.
The learned attorney for the State claims that unless the provisions of the Section 167 are interpreted in this way, hard-core criminals will be permitted to be released on bail even if a challan is only filed the day after the time allotted by the Act has expired. This interpretation would not serve the interests of society as a whole.
Mr. Janardhan added that the Rustam case judgement further reaffirmed the ruling of the Constitution Bench in the Sanjay Dutt case, meaning the question is no longer res integra and the High Court was entirely justified in rejecting the application of the accused.

JUDGEMENT

The three-judge bench heard the case, and on March 29, 2001, the Court rendered the verdict. According to the majority opinion, the appeal has been granted.

The majority opinion was presented by Justice Pattanaik and Justice Banerjee. According to the Court there can be no doubt that when the period specified in the proviso to sub-section (2) of section 167 of Cr.P.C. expires, the accused must be freed on bail if he is willing to and does furnish the bond.

Justice B.N Agarwal, on the other hand, delivered the dissenting opinion. Justice Agarwal referred to section 167 of Cr.P.C while pronouncing his decision. According to him, the phrase “availed of” does not refer to the mere filing of an application for bail expressing willingness to give bail bond, but rather the stage at which actual furnishing of a bail bond is required. If the challan is filed before, then the right under the default provision cannot be exercised, regardless of how valuable or indefeasible it may be. Justice Agarwal thus upheld the High Court’s ruling and rejected the accused’s appeal.

CONCLUSION

The Apex Court issued a significant decision in Mr. Uday Mohanlal Acharya vs. State of Maharashtra 2001 Cri LJ 4563; holding that an accused is entitled to release on bail once the specified time limit has passed, as stated in section 167 of the Cr.P.C.

Many Courts have ruled that the right to seek “default” bail is a fundamental right guaranteed by the Constitution and cannot be violated. The bail system is extremely complicated and expensive, especially for the poor. Only those with money and property can obtain bail, and if they are unable to pay for bail, they have to remain in jail for a longer period of time.

When an accused person is eligible for bail, refusing to grant it to him violates both section 167 of the Cr.P.C’s statutory requirements as well as his basic human rights. In this case, the Supreme Court granted bail to the accused because he met all of the standards outlined in section 167 of the Cr.P.C.

REFERENCES

written by Saheli Naha intern under legal vidhiya