In a judicial order passed on March 28, 2024, the LXV Additional City Civil and Sessions Judge, Bengaluru City (CCH-66), Sri Hemanth Kumar C.R., B.A.L., LL.B., allowed the anticipatory bail application in Criminal Miscellaneous No. 2862/2024. The court granted pre-arrest bail protection to Nagesh Nayak N.A. (Accused No. 5) in connection with Crime No. 25/2024 registered by the Bagalagunte Police Station, Bengaluru. The petitioner faced apprehension of arrest for alleged offences punishable under Sections 406 (criminal breach of trust), 420 (cheating), 504 (intentional insult with intent to provoke breach of the peace), and 506 (criminal intimidation) read with Section 149 of the Indian Penal Code (IPC).

Factual Matrix and Prosecution Allegations

The criminal proceedings originated from a complaint lodged by one Hanumantharaya regarding an alleged financial loan fraud. According to the prosecution narrative, in the year 2021, Accused No. 1 and Accused No. 2 (who are husband and wife) approached the complainant and informed him that Canara Bank was disbursing loans under the Central Government’s Pradhan Mantri Rozgar Yojana scheme for small-scale industries to purchase machinery, complete with a 30 percent government subsidy. Relying on these representations, the complainant handed over personal identification and financial documents, including his PAN card, Income Tax returns, and GST registration certificate.

The prosecution alleged that the accused created a duplicate quotation from Manjunatha Engineering Workshop and submitted it to Canara Bank, securing a loan sanction of ₹17,80,000/- in the complainant’s name. The sanctioned loan amount was subsequently transferred directly to the accounts controlled by the accused persons under the guise of delivering centering construction materials. When the complainant inquired about the equipment, the accused offered evasive responses. Three months later, bank officials notified the complainant to start paying monthly installments of ₹22,000/- from his account, revealing that the accused had misappropriated the entire ₹17,80,000/- for personal use. The complainant lodged an FIR alleging that the accused group had similarly defrauded multiple individuals. Following the complaint, Bagalagunte Police registered Crime No. 25/2024 against the accused persons.

The details of the petitioner as per court records are:

• Nagesh Nayak N.A. (Petitioner / Accused No. 5): Aged about 45 years, son of Appayya Nayak, residing at No. 506, Anugraha Meadows, 4th Cross, Near Canara Bank, Bhuvaneshwarinagar, Dasarahalli Main Road, H.A. Farm, Bengaluru – 560024.

Arguments Advanced on Behalf of the Petitioner

Appearing on behalf of the applicant, learned advocate Sri P.R. presented several grounds seeking pre-arrest protection under Section 438 of the Code of Criminal Procedure, 1973 (Cr.P.C.):

• Delay in Lodging FIR: The defense highlighted that while the alleged transaction occurred on January 1, 2021, the formal complaint was lodged only on January 20, 2024, after an unexplained delay of over three years, indicating false implication.
• Lack of Direct Privity: Counsel submitted that the complaint explicitly details direct interactions and financial dealings exclusively with the primary accused persons (Accused Nos. 1 and 2). The petitioner was not acquainted with the complainant, had no direct or indirect involvement in obtaining or transferring the loan proceeds, and was nowhere connected to the alleged transaction.
• Principle of Parity: The defense pointed out that co-accused Accused No. 4 had already been enlarged on bail by the trial court, making the petitioner entitled to equal relief under the doctrine of parity.
• Non-Capital Penalties and Undertaking: The alleged offences under Sections 406, 420, 504, and 506 IPC do not carry mandatory death or life imprisonment sentences. The petitioner, a permanent resident of Bengaluru, promised to abide by all court conditions and fully cooperate with the ongoing investigation.

Prosecution Objections and State Arguments

The Public Prosecutor strongly opposed the grant of anticipatory bail, filing a formal statement of objections detailing the seriousness of the financial scheme:

• Severity of Allegations: The prosecution submitted that the accused group operated an organized scheme that defrauded innocent citizens by misusing government welfare initiatives and bank loan facilities, resulting in a substantial financial loss of ₹17,80,000/-.
• Ongoing Investigation: The investigation was in an active phase to trace diverted funds and uncover similar frauds committed against other victims.
• Apprehension of Interference: The state expressed concern that if granted pre-arrest protection, the petitioner might threaten prosecution witnesses, destroy financial records, or abscond to evade trial.

Judicial Findings and Detailed Legal Reasoning

The Sessions Court evaluated the complaint, FIR records, bank loan documents, and rival submissions to determine whether the petitioner made out a case for pre-arrest protection under Section 438 Cr.P.C.

1. Absence of Direct Financial Allegations

Judge Hemanth Kumar C.R. observed that the primary allegations in the complaint focused on representations made by and loan transfers executed in favor of the principal accused persons. The court noted that the exact nature of Accused No. 5’s participation remained a matter for investigation and trial.

2. Application of Parity

The court emphasized that co-accused Accused No. 4 had already been granted bail in connection with the same crime. Holding that the present petitioner stood on a similar procedural footing regarding the nature of allegations, the court found him entitled to pre-arrest protection under the principle of parity.

3. Non-Capital Penalties and Conditional Liberty

The court highlighted that the offences alleged under Sections 406, 420, 504, and 506 IPC are triable by a Magistrate and do not carry sentences of death or life imprisonment. Holding that the guilt or innocence of the accused must be established through trial evidence, the court concluded that the prosecution’s concerns regarding flight risk or witness interference could be safeguarded by imposing reporting and cooperation conditions.

It remains a settled principle of criminal jurisprudence that an order deciding an anticipatory bail application is procedural in nature and does not constitute an expression on the ultimate guilt or innocence of the accused, which remains subject to trial.

Final Pre-Arrest Bail Order and Conditions Imposed

Answering the point for consideration in the affirmative, LXV Additional City Civil & Sessions Judge Sri Hemanth Kumar C.R. allowed the petition filed under Section 438 Cr.P.C. and passed the following order:

The petition filed by the petitioner/Accused No. 5 under Section 438 Cr.P.C. is hereby allowed. The respondent Bagalagunte Police Station is directed to release the petitioner on bail in the event of his arrest in Crime No. 25/2024 registered for offences punishable under Sections 406, 420, 504, and 506 read with Section 149 IPC, on execution of a personal bond for ₹1,00,000/- (Rupees One Lakh only) with one surety for the likesum, subject to the following conditions:

• The petitioner shall appear before the court on all dates of hearing and shall cooperate with the investigation.
• The petitioner shall appear before the Investigating Officer whenever called upon for the purpose of investigation.
• The petitioner shall not tamper with evidence and shall not threaten, induce, or allure prosecution witnesses in whatsoever manner.
• The petitioner shall not involve himself in any criminal activity.
• The petitioner shall produce permanent address proof documents.