2024:BHC-AS:42924-DB

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CRIMINAL APPELLATE JURISDICTION
WRIT PETITION (ST) NO. 18663 OF 2024

Prashantkumar K. Brahmbhatt .. Applicant

Versus
The State of Maharashtra .. Respondent
…

Mr. Ali Kaashif Khan Deshmukh with Ms.Hitanshi Gajaria,

Ms.Snigdha Khandelwal, Ms.Zainab Burmawala and
Ms.Bhagyashree Sortur for the petitioner.
Mr.S.V. Gavand, APP for the State.

CORAM: BHARATI DANGRE &

MANJUSHA DESHPANDE,JJ.
DATED : 24th OCTOBER, 2024

P.C:-

1 The petitioner has filed the present petition seeking

a declaration that his arrest on 6/1/2024 in connection with
C.R.No. 54/2021 registered with Cyber police station, Pune, by
invoking Sections 420 r/w Section 34 of IPC and Sections 3 and
4 of the Maharashtra Protection of Interest of Depositors Act
(for short ‘MPID Act’) and Section 66D of the Information
Technology Act, is illegal, and in gross violation of his
fundamental rights guaranteed under Article 21 and 22 of the
Constitution of India.

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Pursuant thereto, a declaration is sought to set aside

the remand order dated 9/1/2024 and the subsequent remand
orders as null and void, being in violation of Section 50 of the
Code of Criminal Procedure,1908, coupled with his
fundamental right and therefore, his release is prayed for.

2 We have heard learned counsel Mr.Kaashif Khan

Deshmukh along with Ms.Hitanshi Gajaria for the petitioner,
whereas the State is represented by the learned APP
Mr.Gavand.

FIR No. 54/2021 came to be registered on the

complaint filed by one Sachin Agarwal, who through his
acquaintances became aware of the 'BUXCOIN' Scheme
“BITSOLIVES' Company, and he was persuaded to invest money
on the said scheme with an assurance that he would receive
10% of the said amount for 20 consequent months. The
complainant alleged that it was Ganesh Vhatkar, Santosh Pawar
and Mr. Kapurchand Prajapati who introduced the scheme to
him and he was told that the amount must be sent through
Bitcoin to the owner of BITSOLIVES Company, Mr.Ganesh Sagar
and thereafter an ID will be generated on its website.

On inspiring confidence, he transferred a sum of

Rs.8,69,687/- to Mr.Ganesh Sagar on the blockchain address
through his ZEBPAY cryptocurrency transfer mobile App.

Upon the confirmation of the deposit of the amount,

the ID of the informant was created and he was given a login ID

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and password and was informed that the account was created
in exchange of the transferred Bitcoin.

3 The First Informant was given the information

about the Directors of the Company and he was also invited to
Malaysia where a seminar was organized and during this
seminar, he met the petitioner and accused no.4, who were
introduced as Directors of the Company. He was also introduced
to a person referred to as 'Administrator of the Company’ and in
the seminar, information was provided about BUXCOIN
Scheme. Mr. Ganesh Sagar claimed to be the owner of the
BITSOLIVES Company and he provided informant about the
Company and the prospects of investing in the said Company.

The FIR further allege about how the complainant

was roped into the whole web, by investing hug amount from
time to time and he even travelled to Dubai, and was persuaded
to participate in different schemes.

The complainant alleged that from November 2017,

till date, he invested total amount of Rs.39,54,641.76 and it is
also alleged that BISTOLIVES Pvt Company, Dubai, and its
Officers, Ganesh Sagar, the petitioner, accused no.4
Chandrashekhar Bali, as well as BullInfotech Company in U.K,
and its officers conducted seminars at different locations and
forced investors to invest into cryptocurrency BUXCOIN by
assuring extra returns, plans like multi-level marketing but
failed to deliver and over the time, the platforms, plans,
websites, portals initiated by them were closed and he along

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with the other investors, were financially defrauded without

refunding the amount of Rs.84,34,641.76.

It is in this background when the FIR was

registered, on 27/11/2021, the petitioner came to be arrested
on 6/1/2024 and remanded to PCR till 1/1/2024 by the Addl.
Sessions Judge, Pune. His PCR was further extended till
11/1/2024 and he was subsequently transferred to Judicial
Custody.

4 The petitioner filed an application for Anticipatory

Bail before the Addl. Sessions Judge, Pune, which was disposed
off, in the wake of his arrest on 6/1/2024, by recording that the
applicant is arrested and is behind bar and therefore, it has
been rendered infructuous.

The present petition filed by the petitioner on

30/8/2024 seek a declaration about his arrest being illegal as it
being in violation of the fundamental rights guaranteed under
Article 21 and 22 of the Constitution of India. It is alleged that
his detention is illegal on account of the breach of the
constitutional provision and the procedural safeguards as, at
the time of effecting his arrest, the Investigating officer did not
adhere to the requirement of Section 50 of the Cr.P.C, which
mandate that the Arresting Officer must inform the Arrested
Person of the grounds of his arrest.

Failure to provide the necessary information in

regards his arrest, according to the petitioner, is a breach of the

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constitutional safeguard. A specific ground is raised by the

petitioner to the effect that by not informing the grounds of his
arrest in writing, the respondent has violated Section 50 of the
Code.

5 Reliance is placed upon the decision of this Court in

case of Mahesh Naik Vs. State of Maharashtra, where it was
concluded that the arrest of the petitioner not being in
compliant with clause (1) of Article 22 of the Constitution of
India and Sectin 50 of the Cr.P.C, as laid down by the Apex
Court, the arrest was liable to be declared as illegal and upon
setting aside the order of arrest and the subsequent remand
order, the petitioner therein was held entitled for his release.

The learned counsel would also place reliance upon

the decision of the Apex Court in case of Pankaj Bansal Vs.
Union of India1 and Prabir Purkaystha2 Vs. State (NCT of
Delhi), in support of his contention that since the grounds of
arrest were not communicated to him in writing, he is entitled
to be released.

6 Responding to the grounds raised in the petition,

claiming that the petitioner is innocent and also alleging that
the arrest is in flagrant violation of the constitutional rights,
the Senior Police Inspector, Shivaji Nagar police station, Pune
City, the Investigating Officer has filed his affidavit on
14/10/2024, wherein it is specifically pleaded as under :-

1 2023 SCC Online SC 1244

2 (2024) INSSC 414

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“7 I say that after taking custody of the petitioner as per production

warrant by Investigating Officer, the petitioner was brought to Cyber
Police Station, Pune City on 6/1/2024. I say that thereafter the
accused/petitioner was arrested in this offence as per arrest
Panchnama dated 6/1/2024. I say that before effecting arrest of the
accused/petitioner, he was specifically informed about his involvement
in the offence and grounds on which he was arrested in the said
offence. I say that this fact is specifically mentioned in the arrest
panchnama, which is drawn in presence of panch wintesses. I say that
before arresting the accused he was specifically informed verbally
about the grounds on which he was being arrested i.e. there is
sufficient material collected during the course of investigation, which
point out involvement of the accused in the crime, the technology used
by the accused for committing the crime is to be recovered and if the
arrest is not effected then the accused is likely to dispose of the
amount and for further investigation it is necessary to arrest the
person which is mentioned in case diary of the Former Investigating
Officer Mr.Chandrashekhar Vithal Sawant, Police Inspector.
Investigating Officer has communicated with the petitioner about
grounds of arrest and that he can arrange Advocate on behalf of
himself. I say that thereafter the accused no.2 of this crime/petitioner
has given his advocate named Ali Kashif Deshmukh from his side for
denial of police custody. I say that the Investigating Officer has
produced the petitioner before Ld. JMFC, 6 th Court, Shivaji Nagar,
Pune, on same date with Remand report and checklist. Investigating
Officer has conducted the arrest of the accused as per regular arrest
procedures. The copy of Arrest Panchnama, Remand Report and
grounds of arrest i.e. check clist of arrest is annexed hereto and
marked as Annexurre “B” collectively.
8 I say that, the petitioner has applied for bail in Ld. District and
Sessions Court at Pune and his bail has been rejected by the Court vide
order dated 5/3/2024 in Bail Application No. 628/2024. The cope of
the said order dated 5/3/2024 passed by learned Sessions Court in
Bail Application No. 628/2024 is annexed hereto and marked as
Annexure ‘C’ collectively.
9 I say that it is pertinent to note that prior to arrest of the petitioner
in the present offence, the petitioner had filed Anticipatory Bail
Application in Ld. District and Sessions Court at Pune vide C.R. BA No.
7884/2023. The applicant was apprehending his arrest in the said
offence and thus the applicant was aware about the details of the FIR
and probable grounds of arrest as per the apprehension expressed by
the applicant in the said offence. I crave leave to refer to and rely upon
the copy of said anticipatory bail application and the order passed in
the said application as and when produced.”

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7 Mr.Gavand would invite our attention to Section

438 of the Code of Criminal Procedure, is a provision for
releasing a person apprehending arrest on bail, and by relying
upon the proviso appended to sub-section (1) of Section 438,
he has brought about a contingency when it is open to the
Officer-in-charge of a police station to arrest without warrant
and thereafter, according to him, the provision of Section 50 of
Cr.P.C do not get attracted, as it is made applicable only to a
scenario where police officer is effecting an arrest without
warrant.

8 In order to appreciate the said argument, we must

reproduce sub-section (1) of Section 438 along with its proviso.

“438(1) Direction for grant of bail to person apprehending arrest.

- [(1) Where any person has reason to believe that he may be arrested on an
accusation of having committed a non-bailable offence, he may apply to the
High Court or the Court of Session for a direction under this section that in the
event of such arrest he shall be released on bail; and that Court may, after
taking into consideration, inter alia, the following factors, namely:-

(i)the nature and gravity of the accusation;

(ii)the antecedents of the applicant including the fact as to

whether he has previously undergone imprisonment on conviction
by a Court in respect of any cognisable offence;

(iii)the possibility of the applicant to flee from justice; and

(iv)where the accusation has been made with the object of

injuring or humiliating the applicant by having him so arrested,
either reject the application forthwith or issue an interim order for
the grant of anticipatory bail:

Provided that, where the High Court or, as the case may be, the Court of
Session, has not passed any interim order under this sub-Section or has
rejected the application for grant of anticipatory bail, it shall be open to an
officer incharge of a police station to arrest, without warrant, the applicant on
the basis of the accusation apprehended in such application.

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9 Reading of the aforesaid provision along with the

proviso, make it evidently clear that when a person has reason
to believe, that he may be arrested on accusation of having
committed a non-bailable offence, he may apply for grant of
bail in apprehension of his arrest and the Court may take into
consideration several factors while considering his application
and it may either grant the application or reject it forthwith or
issue an interim order for grant of Anticipatory Bail.

The proviso appended to sub-section (1) however,

provide that when no interim order under the sub-section is
passed, or where the application for grant of Anticipatory Bail is
rejected, it shall be open to an Officer-in-charge of a police
station to arrest, without warrant, the applicant on the basis of
the accusation apprehended in such application.

The aforesaid proviso therefore, allow the

Investigating Officer to arrest a person whose Anticipatory Bail
Application is rejected, or interim relief is refused to him,
without warrant, since in the application, he has already
formulated the basis on which he was apprehending the arrest
and the case of the petitioner before us squarely falls within this
proviso.

10 On the last date of hearing, we had asked the

learned counsel for the petitioner to produce before us the copy
of the Anticipatory Bail Application filed by him before the
Sessions Court and in compliance, the application is before us.

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ABA NO.7884/2023 filed by the petitioner,

apprehending his arrest in C.R. No.54/2021 has set out the
details of the complaint lodged by Sachin Agarwal as to how he
was cheated by the accused persons as he was induced to invest
the money into BUXCOIN, a cryptocurrency and he along with
seven investors, were financially defrauded without returning
the amount invested. In the application, the applicant has
admitted that on account of his past experience as a marketing
agent, he was part of promotion of BUXCOIN scheme, but he
was not involved in the internal affairs of the Company as his
role was restricted to promotion of the scheme.

There is a specific denial about he encouraging the

complainant to invest in the Scheme and in addition, it is
averred by him, that BUXCOIN is a de-centralised currency and
the entire cryptocurrency market fluctuates based on demand
and supply, and is subject to the market risk and since the
informant received BUXCOIN in his e-wallet for the money he
invested, it cannot be said that the money was misappropriated
at the end of the accused.

11 What is most pertinent to note are the grounds on

which the relief of Anticipatory Bail is sought and each of the
ground set out therein would reflect that the applicant was
aware of the accusations levelled against him and what are the
grounds which contemplate his arrest and this could be inferred
from the following averments in the application:-

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“9 Because the complainant himself stated in the FIR that he got

influenced by the response of thousands of people who attended the
seminar and based on that, he believed in the Buxcoin scheme
explained by the applicant during the seminar in Malaysia. He then
made an investment in the company on a later date. It is submitted
and argued that the complainant never had any direct transaction with
the applicant of alleged sending any Bitcoins to the applicant’s wallet
or blockchain account.”
10 It should also be imperatively noted that the representations made
were not only targeted at the complainant, but there were thousands of
people from different countries present at the presentation, which
demonstrates the credibility of the presentations. Therefore, the
allegations do not specifically implicate the applicant and the general
nature of the allegations cannot hold the applicant responsible. The
applicant being a freelancer digital marketer was just full-filling his
professional duties.
14 Upon reviewing the investment records of the complainant and
other individuals, it is evident that they had already invested in
Buxcoin and Bitcoin back in February, March and April 2017.
Therefore, there was no reason for the applicant to make false
representation or deceive the complainant or other investors. The
complainant himself admitted to receiving Buxcoins in exchange for
BIC and transferring them through cashlinex.com. It is clear that no
harm was done to the complainant by the applicant, as he willingly
received and utilized the Buxcoins.
15 The complainant, in his own admission, expressed interest in
investing in the Diamond Plan and willingly invested a substantial
amount of money in this plan. The applicant argues that the
complainant’s decision to invest was driven by his own greed and free
will.
16 The applicant asserts that the complainant is not an inexperienced
individual in the cryptocurrency market. The complainant has been
investing in this market for several years and has gained significant
profits. Therefore, the complainant should be well aware of the risks
associated with such investments.
18 Buxcoin is a decentralised encrypted cryptocurrency over which
the applicant and other co-accused individuals have no control. The
price of Buxcoin, like any other cryptocurrency, is determined by the
demand and supply in the market. The applicant argues that is is
beyond his control to manipulate or reduce the rate of Buxcoin.
Additionally, all open-source platforms that list Buxcoin clearly state
that investing in cryptocurrencies involves market risks.
22 The applicant has no control over the Bitsolives web portal and
cannot be held responsible for any actions or decisions made by its
owners. No offence under sections 3 and 4 of the Maharashtra

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Protection of Interest of Depositors (MPID) Act can be established

based on the allegations in the FIR. The assurances made by the
complainant do not meet the criteria for “unprecedented and highly
attractive rates of interest or rewards” as defined by the MPID Act.
Furthermore, the applicant did not receive any money or valuable
commodities, which are essential elements for a case under Section
406 IPC or the MPID Act.
23 Since the allegations and evidence in the FIR are electronic in
nature, the applicant cannot tamper with the same. Therefore, there is
no need for custodial interrogation and the applicant should be
granted anticipatory bail.”

12 In the wake of the aforesaid grounds specifically set

out in the application filed under Section 438 of Cr.P.C, it is
evident that the petitioner had knowledge about the grounds,
which contemplated his arrest in the subject C.R and through
application, he made an attempt to offer clarification as far as
his role in the entire offence is concerned.

Though the applicant filed his application in

anticipation of his arrest in C.R.No. 54/2021, immediately, after
the offence was registered i.e. 27/11/2021, he was refused any
interim relief which caused his arrest on 6/1/2024 and
therefore, on 16/1/2024, the application came to be disposed
off, being rendered infructuous.

Subsequently, he moved the application for grant of

regular bail which is already rejected by the Addl. Sessions
Judge, Pune on 5/3/2024.

13 We find substance in the argument of Mr.Gavand,

APP by relying upon the proviso appended to sub-section (1) of
Section 438 of Cr.P.C, as we find that upon the Court of Sessions

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refusing any interim order in his favour, the officer-in-charge of

the police station arrested him on 6/1/2024, on the basis of the
accusation apprehended in the application, and in the present
case, we have already made reference to the specific pleadings
in this application.

A perusal of Section 50 of the Cr.P.C make it

evidently clear that the obligation cast upon a police officer or
other person arresting any person to forthwith communicate
the full particulars of the offence for which he is arrested or
other grounds for such arrest, come into picture when the
arrest is being effected without warrant.

It is in this contingency, communication of grounds

of arrest become imperative and which has received a broader
interpretation from the Apex Courut in case of Pankaj Bansal as
well as Prabir Purkayst (supra), holding that it is imperative to
communicate the grounds of arrest in writing.

14 The authoritative pronouncement of the Apex Court

was even followed by this Court (Bharati Dangre and Manjusha
Deshpande, JJ) in case of Mahesh Naik Vs. State of
Maharashtra, when we have distinguished between grounds of
arrest and reasons for arrest.

However, since before us, we have a case which is

covered by proviso to sub-section (1) of Section 438, where the
petitioner was aware of the grounds of arrest as he had already
approached the Court in anticipation of his arrest, by setting

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out the grounds on which he apprehended his arrest, we are of

the view that non-communication of the grounds of arrest has,
in no manner, caused any prejudice to him, as he had already
collated the grounds and approached the Court apprehending
his arrest and since the interim relief was not granted to him,
he came to be arrested.

Finding no merit and substance in the petition, the

same is dismissed.

No order as to costs.

(MANJUSHA DESHPANDE,J) (BHARATI DANGRE, J.)

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