Police "Con-Wrote" Story In Connivance With Developer: Bombay High Court Directs ₹5L Compensation For Illegal Arrest In Extortion Case

The Bombay High Court has declared the arrest of a Power of Attorney holder in an alleged extortion case under Section 384 of the Indian Penal Code, 1860, as unlawful and illegal, and has directed the State to pay him compensation of Rs. 5,00,000/-.

It was held that the Police Sub-Inspector, in connivance with the Developer, had falsely implicated the Petitioner by “con-writing” a story of extortion, with a view to prevent him from pursuing his lawful remedy.

The Court directed strict action, including immediate suspension, against the Sub-Inspector and all concerned officers, and referred the conduct of the Magistrate to the Administrative Committee of the High Court for granting remand without recording reasons.

The Division Bench of Justice AS Gadkari and Justice Kamal Khata held, "Upon examining the entire case and the record, we find that the Police have attempted to characterize the Petitioner as some gangster, history-sheeter or an extortionist without having an iota of evidence in that regard and even without an investigation into genuineness of complaint. Even a simple analysis and investigation of the messages and communication on record reveal that the Petitioner was alleging wrongdoings by the partners of the Developers. The Police have entirely failed to do so. It clearly appears to us that the Respondent No.2 in connivance with the Developer/ Intervener, with a view to prevent the Petitioner from pursuing his lawful remedy has falsely implicated him in the present crime by clearly con-writing a story of alleged extortion."

Petitioner appeared in person, while APP JP Yagnik appeared for the State 

Brief Facts of the Case

A writ petition was filed under Article 226 of the Constitution seeking relief that his arrest on August 4, 2017, was illegal, unlawful and effected without due process of law. He further sought a departmental inquiry against the Sub Inspector of Police (Respondent No. 2) and all concerned Officers. He additionally sought compensation from the State for illegal detention and deprivation of his lawful rights.

The Petitioner, a businessman engaged in import and export of garments, held a power of attorney from his mother-in-law, a senior citizen, who was a member of a Co-operative Housing Society in Andheri East, Mumbai. The Society’s building was demolished for redevelopment by M/s. Seth and Sonal Developers, without individual agreements being executed. The Petitioner negotiated with the Developers either for sale of the flat or for a larger area after redevelopment, together with transit rent.

In the course of negotiations, the Petitioner met the Developers at their office. He negotiated the sale of the flat for approximately Rs. 1.64 crores, and the Developers handed him an advance of Rs. 2,00,000/-. As soon as he received the cash, the Police arrived, handcuffed him and took him to the Azad Maidan Police Station.

The Developers lodged F.I.R. for extortion under Section 384 of the Indian Penal Code, 1860. A Notice under Section 41A of the Code of Criminal Procedure, 1973 was served upon the Petitioner only after his arrest. He was produced before the learned Magistrate and remanded to Police custody, which was continued, and thereafter to judicial custody, in each instance without cogent reasons. The Sessions Court ultimately granted him bail. In all, he spent about twenty-four days in custody.

Contentions of the Parties

The Petitioner appeared in person. He submitted that his arrest was illegal and that he was falsely implicated through collusion between Respondent No. 2 and the Developers, who had manipulated the records. He pointed out that Section 384 of the IPC carries a maximum sentence of three years and that there was no reason to arrest him. He contended that the Section 41A Notice was served after the arrest, that no opportunity to comply was given, and that there was total non-compliance with the provision.

He further submitted that the Arrest Form, the F.I.R. and the Station Diary entries reflected serious lacunae and inconsistencies, which showed that the arrest was mala fide. He contended that the custody was unwarranted, that it caused a permanent blot on his goodwill and standing, and that the Developers had abused the process of law to prevent him from exposing their wrongdoings. 

The State opposed the Petition. It was submitted that “grounds of arrest” and “reasons of arrest” bear different connotations and that the CrPC does not prescribe a specific mode or time for communicating the grounds of arrest. It was further submitted that the grounds were required to be furnished to the arrestee two hours prior to remand, and that this was not done in the present case.

Observations of the Court

The Court termed the present case as a classic case where a Police Sub Inspector exploited his official position and weaponized Police machinery at his command to advance the Developer’s interest against the Petitioner, to wreak havoc in the Petitioner’s life, apparently because he did not succumb to their pressure to accept the deal offered and threatened to expose their wrongdoings along with certain Society members. 

Reagrding the service of Notice under section 41-A of CrPC to the Petitioner, the Court found that there were no statements or evidence on record to show that the Petitioner was granted a genuine opportunity to comply with the Notice as per the provisions of 41-A (2) and (3).

"No reasons are recorded by the Police under 41-A to show that petitioner had failed to comply with the terms of the notice. Evidently, the arrest was prior to the Notice and therefore undoubtedly illegal under the well-settled law", the Bench held.

The Court examined the Station Diary entries, the F.I.R. and the Arrest Form, and found several irregularities. No preliminary investigation or verification of the genuineness of the complaint was carried out. The F.I.R. was registered after the arrest, though the Police claimed prior knowledge of a written complaint. The RTI response contradicted the claim that such a complaint was received, and the charge-sheet itself stated that it was not annexed. The Arrest Form was overwritten as to the date, which the Court held constituted tampering with a statutorily maintained document.

The Court held that the decisions relied upon by the Respondents did not assist them. In Satender Kumar Antil, a police officer cannot simply arrest a person to ask questions and must satisfy himself why investigation cannot proceed without custody. In Arnesh Kumar, the Police failed to give legally justifiable answers to the questions whether arrest was necessary, what purpose it would serve and what object it would achieve. Tapan Kumar Singh did not help either, as the Police were obliged to collect information, which they deliberately failed to do.

The Court concluded that the arrest and remand were high handed, arbitrary, mala fide, and made without application of mind and without following the basic statutory provisions of law.

"We find that, the learned Magistrate of the 64th Court was also responsible for the Petitioner’s wrongful detention. No reasons have been recorded for justifying continuation of remand of the Petitioner. We find that the Ld. Magistrate has failed to independently apply his mind and adopted a very casual approach, thereby causing grave prejudice to the Petitioner on account of continued entirely unlawful arrest and detention", the Bench held.

The Court acknowledged that the unlawful arrest caused substantial financial loss, irreparable damage to reputation and lasting blemish on the Petitioner’s credibility.

The Court declared the arrest unlawful and illegal and directed the State to pay compensation of Rs. 5,00,000/- to the Petitioner. It directed the State to initiate strict action, including immediate suspension, against Respondent No. 2 and all concerned officers, and to recover the proportionate compensation from their salaries if so advised. The Registry was directed to place the Judgment before the Administrative Committee of the High Court for appropriate action against the learned Magistrate(s) who permitted the custody without recording reasons.

The Petition was allowed, and the Criminal Application stood disposed of.

Cause Title: Bipin Satish Chandra Agrwal v. State of Maharashtra and Anr. [Neutral Citation: 2026:BHC-AS:43037-DB]

Appearances:

Respondents: APP J. P. Yagnik, Advocates Anvay Pawar and Yuvraj Tidke 

Click here to read/download the Judgment