Delhi High Court
Gopichand P. Hinduja, Prakash P. ... vs Central Bureau Of Investigation on 27 April, 2001
Equivalent citations: 2001IVAD(DELHI)499, 91(2001)DLT450, 2001(59)DRJ74
ORDER S.K.Agarwal, J.
1. This order will dispose of three petitions field by the petitioners, who are foreign nationals of Indian origin, under sections 439(1)(b) read with Section 482 of the Code of Criminal Procedure, 1973 (hereinafter 'Cr.P.C.'), for modification of bail order dated 19.1.2001, passed by the trial court, imposing condition directing that they shall not leave the country without permission of the Court, and for quashing of the order dated 1.2.2001, declining them permission to go abroad, in case No.39 of 1999 arising out of RC No. 1(A)/90/ACU-IV under section 120B read with sections 420 IPC etc read with sections 5(2) and 5(1)(d) of the PC Act, 1947.
2. Facts in brief are: that on 22.1.90 above noted case/FIR was registered by the Central Bureau of Investigation (for short CBI) against several accused persons, of whom named are (i) Martin Ardbo, former President of M/s. A.B. Bofors, Sweden, (ii) W.N.Chadha alias Win Chadha, of M/s.Anatronic General Corporation and (iii) G.P. Hinduja, beneficiaries of M/s.Pitco/Moresco/Moineosa C/o. G P Hinduja, Sangam Ltd., London. Rest of the accused are stated in general terms as directors/employees/shareholders of the said companies and public servants of Government of India; FIR was registered on the basis of source information, facts made available through media regarding report dated 1.6.87 of Swedish National Audit Bureau (for short, 'SNAB'), certain facts contained in the report dated 22.4.88 of the Joint Parliamentary Committee (for short, JPC) and the report dated 28.4.88 of the Comptroller and Auditor General of India. FIR gives sequence of events, relating to the purchase of 155 m.m. FH 77-B guns from M/s.AB Bofors for a value of Swedish Kroners (for short, SEK) 8410.66 million (Rs.14377.2 million) vide agreement dated 24.3.86, in violation of the Government's decision not to involve any agent and other laws of the land. It is alleged that during 1982-87 certain public servants entered into criminal conspiracy with private persons in India and abroad and in pursuance of the same committed offences of bribery, cheating and fraud in respect of the said agreement and obtained amounts, from M/s. A B Bofors, including payments by the holders/beneficiaries of account code name accounts : "Tulip" with Manufacturers Hannover Trust Company; "Lotus" with Suissee Bank Corporation, and "Mont Blanc" with Credit Suissee, in Geneva.
3. On 22.10.99, after receipt of first set of documents, police report under section 173 Cr.P.C.(hereinafter charge sheet) was filed by the CBI against S.K. Bhatnagar, Win Chadha, Ottavio Quattrocchi and Martin Ardbo, former President of M/s. A.B. Bofors, as well as against M/s.A.B. Bofors and others for the said offences stating that further investigation u/s. 173(8) Cr.P.C. were in progress. Cognizance was taken by the Special Judge, Delhi, on 4.11.99. Outcome of extradition proceedings are pending against Martin Ardbo, of Sweden is awaited. The matter is listed before the trial court of supply of copies etc. to accused persons who have already appeared and for appearance of the remaining accused persons.
4. In December, 1999 another set of documents was received from Swiss authorities in execution of the Letters of Rogatory dated 7.2.90. These documents revealed that nine payments aggregating to SEK 80,797,709.92 (Approximately SEK 81 million), were made by M/s.A.B. Bofors, in the abovenoted code name accounts, in three different bank accounts of M/s.Mc Intyre Corp., during the period from 22.5.86 to 22.12.86. These bank names were earlier also mentioned in SNAB's report. The total amount paid as per these documents was also the same as disclosed by the representative of M/s.A.B.Bofors, during their meeting with Government officials in September, 1987. Investigations revealed that petitioners were party to the criminal conspiracy and had received commission/illegal money/bribe from M/s.A.B. Bofors during 1986-87; thereupon, supplementary chargesheet was filed against them. The trial court took cognizance and summoned the petitioners for 19.1.2001.
5. Petitioners appeared before the trial court and were granted bail subject to the condition that they shall join investigations and would not leave the country without permission of the court. On the same day, petitioners moved an application seeking permission to travel abroad for such period and on such terms as may be deemed fit and proper which was dismissed on 1.2.2001. Petitioners have challenged the bail order imposing condition that they shall not leave the country without permission of the court, and the order dismissing their application for permission to go abroad.
6. I have heard learned counsel for the parties and have been taken through the record.
7. At the outset, it was argued that appearance of petitioners before the trial court was under section 88 of the Cr.P.C., and they were not in "custody" within the meaning of section 437 Cr.P.C. therefore, the court had no jurisdiction or power to impose the condition that they shall not travel outside India without permission of the Court. In order to appreciate this contention, reference to Section 437 Cr.P.C. is necessary. It reads:-
"437. When bail may be taken in case of non-bailable offence. -(1) When any person accused of, or suspected of, the commission of any non-bailable offence is arrested or detained without warrant by an officer-in-charge of a police station or appears or is brought before a court other than the High Court or Court of Session, he may be released on bail, but-
(i) .....
(ii) .....
(2) xxxxx (3) When a person accused or suspected of the commission of an offence punishable with imprisonment which may extend to seven years or more or of an offence under Chapter VI, Chapter XVI or Chapter XVII of the Indian Penal Code or abetment of, or conspiracy or attempt to commit, any such offence, is released on bail under sub-section (1), the Court may impose any condition which the Court considers necessary-
(a) in order to ensure that such person shall attend in accordance with the conditions of the bond executed under this Chapter, or
(b) in order to ensure that such person shall not commit an offence similar to the offence of which he is accused or of the commission of which he is suspected, or
(c) otherwise in the interest of justice. "
8. Bare reading of section 437 shows that the expression "arrest" and detention are used to signify arrest and detention by the police. The expression "appears" and "is brought" are used to signify appearance and arrest on the basis of the process of court. And the expression "appears" is used in relation to issuance of summons, by the court. The accused is deemed to be in "custody" when he surrenders in the court and submits to its directions. Reference in this regard can be made to the Supreme Court in Niranjan Singh Vs. Prabhakar Rajaram Kharote and Ors. , , wherein it was held:-
"Custody, in the context of S.439, (we are not, be it noted, dealing with anticipatory bail under S 438) is physical control or at least physical presence of the accused in court coupled with submission to the jurisdiction and orders of the court." (emphasis supplied)
9. In this case, cognizance of the alleged offences was taken by the court. Petitioners were summoned to appear on 19.1.2001 when they appeared before the court, submitted to its jurisdiction, section 437 came into play and they were in "custody". Section 437 and 439 Cr.P.C. give discretion to the court to release the accused persons who are in custody on bail, even in cases of non-bailable offences; Sub-section (3) of section 437, sub-section (1) of section 439 makes it clear that the court while granting bail can impose condition which are considered necessary for the purposes mentioned in the three clauses of sub section (3) of section 437. The discretion vested in the court imposing conditions under clause (c) of section 437(3) is of wide amplitude. Conditions can be imposed to ensure attendance of the accused in the court; to ensure that the accused does not commit similar offence the commission of which is suspected or any other condition which is otherwise in the interest of justice. The conditions mentioned is Clauses (i), (ii) and (iii) of sub-section (2) of section 438 namely, that the accused shall make himself available for interrogation by a police officer as and when required; that the accused shall 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 from disclosing such facts to the Court or to any police officer and that the accused shall not leave India without the previous permission of the Court. can be imposed while granting bail under section 437(1) or 439(1). Therefore, while releasing them on bail, conditions could be validly imposed.
10. Next it was argued that it was obligatory for the court to first consider prima facie case, gravity of the offence and circumstances in which the offence was committed and only thereafter it could impose any condition. It was argued that there is no prima facie material to connect the petitioners with the Bofors gun agreement. Receipt of payment from M/s.A B Bofors in three different bank accounts in the name of McIntyre Corporation, on different occasions does not connect petitioners with the alleged crime. Reference to the chargesheet and supporting documents, prima facie, shows that following incriminating facts and circumstances are alleged against the petitioners :-
(a) on 24.3.86, the contract for supply of 155 mm FH 77 B gun system for the total amount of Swedish Kroners 84106 million (equivalent to Rs.1437.7 million) was concluded between M/s.A B Bofors and Government of India. Proposal for purchase of such defense equipment was under consideration earlier.
(b) on 14.2.86 a company McIntyre Corporation was registered in Panama, Switzerland. And three code name accounts in the name of this company were opened (i) with M/s.Manufacturers Hanover Trust A/c. No. 229ARAB/TULIP, (ii) with Swiss Bank Corporation A/c.No.87595/LOTUS and (iii) with Credit Suisse A/c.No.416036/Mont Blanc in May, 1986;
(c) initially account no.229/ARAB was opened by the petitioners, G.P. Hinduja and S.P. Hinduja, then India nationals with first bank "M/s.Manufacturers Hanover Trust". The account opening documents bear the stamp 'cancelled'. However, another account in the name of the company was opened in the same bank on 30.5.86 with the number 229/ARAB/TULIP through its attorney;
(d) in the account opening from with Swiss Bank Corporation name of Mr.P P Hinduja was mentioned in letter dated 15.5.86 to the bank requesting the opening of current accounts in US$ and SEK in the name of the company through their lawyer. He requested the bank to accept from another company amount of SEK 11,774,925 order M/s.AB Bofors under reference "Mont Blanc" without beneficiary's name or account, with the instruction that these funds be placed at 2 days call. The letter states "we confirm you that we are the beneficial owners of McIntyre Corp",
(e) The documents received in December 1999 from Swiss authorities revealed that nine payments aggregating to SEK 80,797,709.92 were made by M/s.AB Bofors in said bank accounts in Switzerland, in said three accounts of M/s.McIntyre Corp. during the period from May to December, 1986;
(f) The Swedish National Audit Bureau (SNAB) in its report dated 1.6.87 had mentioned the names of these banks as well as and payments send under code names. In the report it was stated that circumstances relating to the last two payments by M/s.AB Bofors indicated that they were not made in usual manner;
(g) In September, 1987 official of M/s.AB Bofors were summoned to appear before the JPC . As per the "Agreed Summary of Discussions" between their officials and officials of Government of India. M/s.Bofors had initially engaged M/s.Moresco/Pitco and had agreed to pay 3% commission for consultancy and payments in three installments of SEK 37 million, SEK 12 million and SEK 32 million (total SEK 81 million) were made. It was stated that last payment was made in the account under the code name "Lotus". However, the said documents, received in December, 1999, revealed that officials of M/s.AB Bofors had misled the Government at that time and in fact name of the company was M/s. McIntyre Corp and not Moresco/Pitco/Moineo.
(h) The dates on which these payments were credited to the accounts of "M/s.McIntyre Corp", are relatable and coincide with the dates of payments by Government of India to M/s.AB Bofors in terms of the agreement dated 24.3.1986. The ratio of these payments also work out to be approximately 3% of the total contract value.
(i) In this case Letter of Rogatory seeking transmission of documents/evidence from the Swiss authorities was issued in 1990 but the came were transmitted in December, 1999 and some documents are still awaited as per the original request.
(j) Conduct of petitioners in successfully stalling the transmission of documents/evidence by Swiss authorities to Government of India for nine long years (1990-99) by filing successive petitions or appeals before judicial and executive authorities.
11. The offence of criminal is generally proved by circumstantial evidence. If above allegations are prima facie, assumed to be true at this stage, it cannot be said that there is no material against the petitioners. The detailed evaluation of the material relied upon by the prosecution is being avoided, as trial is yet to commence.
12. Learned counsel for the petitioners also argued that the CBI has asked for more documents from the Swiss authorities which shows that the material already collected is not sufficient to sustain the charge against them. I am unable to agree. Merely because CBI has asked for more documents from the Swiss authorities cannot be construed, to mean that the material already collected is not enough to sustain prosecution.
13. Next it was argued that petitioners have vast business interest throughout the world particularly in North and South America, UK, Iran Middle East and India. Petitioners appeared before the trial court without summons being actually served; that there is a presumption of law abidingness in their favor, therefore, imposition of condition prohibiting them to go abroad without permission of the court ought not to have been imposed on the basis of some future apprehension.
14. In reply learned counsel for the CBI argued that the case was registered on 22.1.90, first chargesheet was filed in the court of special judge, Delhi on 22.10.99. However, investigations continued; after the receipt of second set of documents in December 1999, supplementary chargesheet against petitioners was field; Petitioners had been visiting India regularly from 1991 till 1999; however, after the Swiss Federal Court dismissed their appeal and allowed transmission of documents/evidence to Indian authorities they stopped visiting India. They did not participate in the investigations despite repeated requests on 12.1.2000, 26.1.2000, 23.3.2000 and 12.5.2000. It was argued that GP Hinduja took up British nationality on 23.6.98 after the Examining Magistrate, Geneva issued a decision closing the procedure on 15.6.98 allowing transmission of evidence/documents to Indian authorities; SP Hinduja obtained British nationality on 27.4.99 shortly before Swiss Cantonal court dismissed their appeal on 17.5.99 and PP Hinduja also took up Swiss nationality on 21.9.2000. Thus obtaining foreign nationalities is apparently linked to the developments in the case. After the supplementary chargesheet was filed petitioners appeared before the court and were interrogated under the orders of the court but the petitioners remained as evasive as possible on the vital issues.
15. I have given my thoughtful consideration. In my view, taking in to consideration, the nature and gravity of the offence revealed through the circumstances noticed above and the conduct of the petitioners, who are foreign nationals, imposition of condition, directing them not to leave the country without permission of the court is fully justified and in accordance with law. The fact that the accused persons are foreign nationals by itself can be a ground to decline bail in the given circumstances.
16. Learned counsel for the petitioners next argued that the petitioners have deep roots in the society and have vast financial interests in India which they are seeking to expand. It is highly improbable for them to jeopardize their family and financial interests in India by not appearing before the court and that the amounts received from M/s.AB Bofors are lying "intact and invested" in the companies of petitioners.
17. After arguments were heard it was found that copy of the chargesheet field along with the petition was not complete; it did not even contain the list of witnesses. There was nothing on record to show the assets held by petitioners in India or abroad. Consequently, on 1.3.2001, trial court record was summoned and on 9.3.2001 petitioners were directed to file an affidavit showing (a) immovable or movable assets held by the petitioners in India individually and (b) where the amounts received by the petitioners' company are lying invested and market value of the same along with supporting documents, if any. On 14.3.2001 petitioners filed their respective affidavits stating that they do not have immovable or movable assets in India in their individual names.
18. In answer to the other query petitioners have filed copy of the certificate issued by Chartered Accountants stating that the amount in question was lying invested in Hinduja Group of Companies and that there has not been any "diminution" in the value of the funds. The certificate was issued by Chartered Accountants on the basis of verification done by them in December, 1993 and February, 1994. As per the certificate nine payments aggregating to SEK 80,797,709.92 were made by M/s.AB Bofors in three bank accounts of M/s.McIntyre Corp in Switzerland during the period from 22.5.1986 to 18.12.1986. Interest earned on these amounts up to 31st December, 1989 is also reflected in the certificate. It is also stated that copy of this certificate was earlier supplied to the investigating agency. As per the certificate total amount credited to the accounts of the petitioners, along with earned interest thereon, up to 31.12.89, after getting these amounts converted into US Dollars are as under :-
CREDIT SUISSE, GENEVA :US$ 1,758,156 HANOVER TRUST :US$ 5,456,985 SWISS BANK CORPORATION, GENEVA :US$ 4,631,250 TOTAL :US$11,846,391
19. The certificate does not show present status of funds claimed to be lying invested in the accounts of Hinduja Group of Companies. However, from the certificate two things are clear that amount of about SEK 81 million was received from 22.5.86 to 18.12.86 in the three different bank accounts in the name of McIntyre Corporation. This amount along with interest accrued thereon up to 31.12.89 was converted in US Dollars and credited into the accounts of Hinduja Group of Companies. These appears to be no other transaction. The name of the companies or account numbers where the funds are invested have not been revealed. It is vaguely stated that there has not been any "diminution" in the value of the funds. These are the facts specially within the knowledge of the petitioners and onus of proving the same would be on them during the trial. The claim by the Chartered Accountants in the certificate that "we have not noted any element which lead us to believe that the amounts received in the accounts of McIntyre Corporation were in relation to the armament sale contract no.6/(9)/84/D(GS.IV) is without any basis. In the face of abovenoted facts and circumstances, this observation, prima facie, does not hold any water.
20. Section 102 Cr.P.C. provides for seizure of property found under the circumstances which create suspicion of commission of offence. Chapter XXXIV, sections 451 to 459 deal with disposal of such properties either during the trial or at the conclusion of the trial; Sub-section (5) of section 452 defines that the term "property" includes in the case of property regarding which an offence appears to have been committed, not only such property as has been originally in the possession or under the control of any party, but also any property into or for which the same may have been converted or exchanged and anything acquired by such conversion or exchange, whether immediately or otherwise. This would equally apply to the interpretation of the expression 'property' used in section 102 Cr.P.C. If the prosecution allegations are prima facie taken to be true, aforesaid amount lying in the Hinduja Group of Companies creates suspicion of the offence having been committed. Therefore, these funds would be liable to be seized and dealt with by the court as the case property, of course, after adjudication of the rights of the petitioners. Reference in this regard can be made to decision of this Court in P K Parmar vs. Union of India 1992 Crl.L.J. 2499(Delhi) and decision of Punjab & Haryana High Court in Dr.Gurucharan Singh vs. State of Punjab 1978(V.80) PLR 514. It may be recalled that FIR in this case was registered on 22.1.90, however, these funds are still out of the reach of the court.
21. The petitioners have claimed that they have vast financial interests in India and they are running several philanthropic, educational, medical and charitable institutions. It is not relevant to the issues involved in the case. It was also argued that the petitioners have written letters to their Home Office, London/Federal Office for the Justice Matters, Berne, stating "I elect and forego the protection afforded by the law and give my consent to any further investigations in the proceedings which may be required by Indian Judiciary". There is nothing on record to show whether the respective Governments have taken any action on the letters. In the absence of appropriate order by the concerned Governments, no cognizance of any such communication can be taken. It is doubtful whether right to oppose extradition by a citizen to another country can be waived more particularly in case of Swiss citizens in view of Article 7.1 of the Swiss Federal Act on International Mutual Assistance(IMAC) in Criminal Matters which reads as "No Swiss national may, without his written consent, be extradited or surrendered to a foreign State for prosecution or execution of sentence. The consent may be withdrawn until the time the surrender is ordered." It may be mentioned that the petitioners succeeded in blocking transmission of documents/evidences for nine long years. Even after the Swiss Federal Court (Supreme Court) by its judgment dated 17.8.89 dismissed their appeals against the judgment of the Cantonal Court, Geneva, allowing transmission of documents by Swiss authorities to India, petitioners filed petition before the Federal Councilor asking her to stop transmission on the ground that "legal assistance to India in Bofors case might injure the sovereignty and public order essential to the interest of Switzerland". This petition was however, dismissed on 15.12.99 and the documents were made available by the Swiss authorities to the CBI. It is rightly said, "when morality comes up against profit, it is seldom that profit loses."
22. To summarise: on 24.3.86 contract for purchase of 155 mm FH-77B guns was executed between M/s.A B Bofors and Government of India; M/s.McIntyre Corp, was registered in Panama on 14.2.86; initial account opening from shows that G P Hinduja and S P Hinduja opened an account no.229/ARAB in the name of the company but the same was cancelled and the account no.229/ARAB/Tulip was opened through attorney;, in the other bank, P P Hinduja, vide letter dated 15.5.86, informed the bank "we confirm that we are the beneficial owners of M/s.McIntyre Corp". The Swedish National Audit Bureau, in its report dated 6.6.87, mentioned names of these banks and the payments under code names; officials of Bofors in the "agreed summery of discussions" mentioned the code name account "Lotus" and admitted payment of 3% commission of the contract value amounting to SEK 81 million to a company. It is now alleged that Bofors officials misled the Government of India officials and the name of the company was M/s.McIntyre Corp; petitioners' blocked transmission of evidences/documents for nine long years (from 1990-99); after their appeal was dismissed they even alleged that transmission of evidence/documents is likely to injure the sovereignty and public order essential to the interest of Switzerland; petitioners obtained foreign nationalities which is relatable to the developments in the case regarding transmission of documents; the amount along with interest thereon untill 31.12.1989 was got converted into US $ 11,846,391 and was invested in their companies and other accounts of the petitioners, the details of which are not disclosed. Above FIR was registered on 22.1.1990.
23. In view of the above, taking into consideration the nature and gravity of the offence, conduct of the petitioners and the fact that they have no immovable or movable assets in this country, apprehension of the prosecution that the petitioners may not be available before the court, if they feel that proceedings of the case were going adverse to them, cannot be said to be unfounded.
24. Lastly learned counsel for the petitioner argued that the trial is not yet commenced, appearance of some of the accused persons is still awaited, trial is bound to take long time and petitioners fundamental right for speedy trial is being violated.
25. There cannot be any dispute that speedy trial is the essence of criminal justice. The Apex court has reiterated in several pronouncements that just and reasonable procedure implicit in Article 21 of the Constitution of India creates a right in the accused to be tried speedily. In this case respondents filed an additional affidavit stating that they have no objection in moving an application before the trial court praying for separating the trial and the proceedings against the petitioners and other accused persons who have already appeared. On 11.9.2000, the Supreme Court while disposing of similar prayer made by Win Chadha, co-accused in Special Leave to Appeal (Crl.) No.2744/2000 titled W.N. Chadha Vs Central Bureau of Investigation observed :-
"Mr.Gopal Subramanium, alternatively pleaded for speeding up the trial. The said submission was made on the apprehension that since some of the co-accused have not been apprehended the trial court may have delay further proceedings. It is for the petitioner to move for adopting measures provided in the Code of Criminal Procedure for speeding up in such contingency the trial.
(emphasis supplied)
26. In view of the above, under the facts and circumstances of this case, respondents are directed to move the trial court for splitting up the trial of the petitioners and of the other accused persons who have already appeared; on such application being moved trial court would pass appropriate orders and hold trial as expeditiously as possible, preferably on a day to day basis. In case the respondents fail to conclude their evidence within six months from the date first fixed for the same, except for the reasons beyond their control, the petitioners may approach the trial court for permission to go abroad. In that eventuality, court would consider such application of the petitioner, inter alia, on the condition requiring them to deposit amount equivalent to US Dollars 11,846,391 along with interest @ 10% per annum from 1.1.90 till the date of payment, in any nationalized bank, in Fixed Deposit to be released, subject to the orders of the court. This would be without prejudice to the rights and contentions of the petitioners. Trial court may impose such other terms as may be deemed fit and proper.
27. With the above directions, three petitions stand disposed of. Trial court record be sent back forthwith. Needless to add that any observation made herein would not prejudice the rights of the petitioners during the trial.