Orissa High Court
Shrikant Mohta vs Republic Of India ....... Opp. Party on 13 May, 2019
Equivalent citations: AIRONLINE 2019 ORI 69
Author: S. K. Sahoo
Bench: S.K. Sahoo
IN THE HIGH COURT OF ORISSA, CUTTACK
BLAPL NO. 1983 Of 2019
An application under section 439 of the Code of Criminal Procedure
in connection with R.C. Case No. 39(S) of 2014 corresponding to
SPE Case No. 34 of 2014 pending on the file of Special C.J.M.
(C.B.I.), Bhubaneswar.
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Shrikant Mohta ........ Petitioner
-Versus-
Republic of India ....... Opp. Party
For Petitioner: - Mr. Suresh Tripathy
For Opp. party: - Mr. Anup Kumar Bose
(Asst. Solicitor General)
Mr. Kali Charan Mishra
Special P.P., C.B.I.
---------------------------------
P R E S E N T:
THE HONOURABLE MR. JUSTICE S.K. SAHOO
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Date of Order: 13.05.2019
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S. K. SAHOO, J. The petitioner Shrikant Mohta who is an accused in R.C.
Case No. 39(S) of 2014 corresponding to SPE Case No. 34 of 2014
pending on the file of Special C.J.M. (C.B.I.), Bhubaneswar for
offences punishable under sections 420, 408, 409, 120-B/34 of the
Indian Penal Code read with sections 4, 5 and 6 of the Prize Chits
and Money Circulation Schemes (Banning) Act, 1978 (hereafter
2
'1978 Act'), has filed this application under section 439 of Code of
Criminal Procedure seeking for bail as his bail application has been
rejected by the learned Sessions Judge, Khurda at Bhubaneswar in
Bail Application No.200 of 2019 vide order dated 14.02.2019.
2. The present case was instituted by clubbing three First
Information Reports of three different cases i.e. Buguda P.S. Case
No.75 of 2013, Jeypore Town P.S. Case No.71 of 2013 and Nuapada
P.S. Case No.82 of 2013 in pursuance of the order dated 09.05.2014
of the Hon'ble Supreme Court of India passed in W.P. (Civil) No.401
of 2013 filed by Shri Subrata Chattoraj and W.P. (Civil) No.413 of
2013 filed by Shri Alok Jena.
According to the prosecution case, Rose Valley Group of
Companies (hereafter for short 'Rose Valley') collected huge amount
of money from public enticing them with false promise of paying
higher rates of interest although Rose Valley was not having any
authorization from the Reserve Bank of India (hereafter for short
'RBI') or the Securities and Exchange Board of India (hereafter for
short 'SEBI') for carrying out such activities and therefore, the
company cheated the public.
Investigation revealed that 'Rose Valley Resorts and
Plantations Limited, Kolkata' was founded in the year 1997 and in
the year 2002, SEBI imposed ban on the teak based investment
schemes which the company was carrying out, for which the
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schemes floated were stopped. The company was renamed as 'Rose
Valley Hotel and Entertainment Limited' in the year 1999. Two more
companies in the name of 'Rose Valley Real Estates Constructions
Limited' and 'Real Estate and Landbank India Ltd.' were founded
subsequently in the year 1999 and 2001 which were registered with
the Registrar of Companies (hereafter for short 'ROC'). Rose Valley
started expanding its spheres and a lot of new companies were
formed in between 1997 to 2012. The accused persons, namely
Goutam Kundu, Chairman of Rose Valley, Shibamoy Dutta, Managing
Director, Ashok Kumar Saha and Ram Lal Goswami, Directors of
Rose Valley in furtherance of criminal conspiracy by establishing
branches of the companies in different parts of India, collected
money from the public through multi-level agent network system.
They cheated the investors/depositors by way of camouflaged
schemes and false assurance about legal sanctity and false promise
of higher rates of interest. The accused persons also cheated the
depositors as well as the agents by making false assurance that the
accused companies were legally empowered to collect money from
the public. They were running ponzi schemes and circulating the
money collected from the depositors which was not disclosed to the
depositors and agents. The accused persons made false propaganda
that Rose Valley is having a big business empire and diversified
business. They fraudulently claimed that the money collected from
the depositors would be invested in those businesses and with the
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help of high returns from those companies; they would be able to
pay back to the depositors their invested money with interest on
maturity. The accused persons deceived the depositors and
deliberately induced them to invest their hard-earned money in the
accused companies. It further revealed from the scrutiny of the
balance sheet of all the companies of Rose Valley that almost all the
companies were making loss and old depositors were paid by using
money of the new depositors since there was no income generated
by the companies from any source. It further revealed that the total
business model of Rose Valley was commercially unrealistic/unviable
and it was not in a position to pay to its depositors the promised
higher rates of interest and therefore, it was just rotating the
money. Rose Valley not only collected thousand of crores of rupees
illegally from the depositors by cheating them but they did not utilize
the same for the purpose for which the money was invested. The
accused persons did not return the money of lakh of depositors and
thereby committed criminal breach of trust. The total money
collection of Rose Valley according to the database up to the
financial year 2012-13 was Rs.1471,18,81724/- (rupees fourteen
hundred seventy one crores eighteen lakhs eighty one thousand
seven hundred twenty four only).
On 06.01.2016 first charge sheet was submitted against
accused Goutam Kundu, Shibamoy Dutta, Ashok Kumar Saha, Ram
Lal Goswami and three Rose Valley Companies under sections 420,
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408, 409, 120-B/34 of the Indian Penal Code and sections 4, 5 and 6
of 1978 Act keeping the further investigation open under section
173(8) of Cr.P.C. for ascertaining the role of regulatory agencies like
SEBI, ROC and RBI and other agencies and also other influential
persons involved in it and for probing the larger criminal conspiracy
and money trailing.
During course of further investigation, the roles of Tapas
Paul and Shri Sudeep Bandyopadhyay, both Members of Parliament
were examined and it was found that both the accused allowed their
stature to be used to allure the investors, agents and in return, they
also gained wrongfully. In order to promote the illegal money
collection business of Rose Valley, they grossly abused their
respective official positions and overtly certified the business of Rose
Valley and their presence with the company bestowed confidence in
the minds of agents and investors about the credential of the
company. Thus, the two accused M.Ps. also deceived the investors to
deposit money in the Rose Valley, cheated them and
misappropriated the money in conspiracy with other accused
persons.
On 26.04.2017 second charge sheet was submitted
under section 120-B read with sections 420 and 409 of the Indian
Penal Code and sections 4 and 6 of 1978 Act and section 13(2) read
with section 13(1)(d) of the Prevention of Corruption Act, 1988
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against the M.Ps. Tapas Paul and Shri Sudeep Bandyopadhyay and
others keeping the further investigation open to look into the role of
the regulatory authorities, larger criminal conspiracy and money
trailing.
During course of further investigation, materials were
found against accused Ramesh Gandhi, who was the Managing
Director of M/s. Rainbow Productions Limited. It was found that
having full knowledge that Rose Valley was collecting money from
the general public in an illegal manner and their activities were
under the scanner of law enforcement agencies, accused Ramesh
Gandhi, who was a producer of T.V. programmes and was in
electronic media business entered into business relation with
accused Gautam Kundu and an agreement was executed to protect
illegal money collection business of Rose Valley and to gain
wrongfully. The said accused Ramesh Gandhi projected himself to be
keeping control over the media channels/ newspapers of Assam for
protecting the business of Rose Valley. Huge amount was paid to
M/s. Rainbow Productions Ltd. towards the release of advertisements
of the company from the account of Rose Valley.
On 15.05.2018 third charge sheet was submitted against
accused Ramesh Gandhi, M/s. Rainbow Productions Ltd. and M/s.
Aarambh Advertising and Marketing Ltd. under section 120-B read
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with sections 420 and 409 of the Indian Penal Code and sections 4
and 6 of 1978 Act keeping the further investigation open.
During course of further investigation, it was found that
the petitioner is the Founder Director of M/s. Shree Venkatesh Films
Private Limited (hereafter 'SVFPL'). SVFPL entered into an
agreement with a sister concern of Rose Valley, namely, M/s. Brand
Value Communication Ltd. (hereafter 'BVCL') on 07.04.2010 for
supplying the telecast rights of 70 Bengali films for an amount of
Rs.25 crores to be broadcasted through the satellite channel of BVCL
namely 'Rupashi Bangla'. During telecast of Bengali films, publicity of
Rose Valley was made in the T.V. channel owned by Rose Valley for
alluring the investors to make investment which reflects the real
purpose behind the agreement for supply of 70 Bengali films to
BVCL. Nineteen films supplied by SVFPL to BVCL amounting to
Rs.6.84 crores were found to be technically not viable and as such
those films were returned to SVFPL but the amount of Rs.6.84 crores
was not returned back by SVFPL to BVCL.
Investigation further revealed that BVCL lodged a First
Information Report against SVFPL and its employees on 16.11.2011
at Baguiati Police Station, Kolkata in which charge sheet was
submitted against all the F.I.R. named accused persons including the
petitioner. The said charge sheet was challenged by the petitioner
and other accused persons before the Hon'ble Calcutta High Court
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and the Hon'ble Court quashed the charge sheet. BVCL challenged
the matter before the Hon'ble Supreme Court which upheld the
decision of the Hon'ble Calcutta High Court. Finally, as it was found
that the SVFPL had not supplied nineteen technically feasible films to
BVCL, in an arbitration proceeding, the learned Arbitrator vide order
dated 13.06.2018 awarded a payment of Rs.6.84 crores by SVFPL to
BVCL. The award amount of Rs.6.84 crores passed by the learned
Arbitrator was not paid by SVFPL. Investigation further revealed that
the petitioner and accused Gautam Kundu, Chairman of Rose Valley
entered into a criminal conspiracy amongst themselves to
misappropriate the public fund illegally collected by the Rose Valley
on the garb of an agreement for telecast right of films to the BVCL.
The illegal financial business activities of the Rose Valley Group of
companies namely Rose Valley Real Estates & Constructions Ltd.,
Rose Valley Resorts & Plantations Ltd. (subsequently renamed as
'Rose Valley Hotels and entertainments Ltd.'), Real Estates &
Landbank India Ltd. were banned by SEBI by its orders in the year
2002 and during 2010-11 respectively. The same was widely
publicised through media. The petitioner having full knowledge of
banning of the activities of Rose Valley by the regulatory authority
SEBI, entered into an agreement with BVCL. The petitioner through
his company SVFPL purchased paintings from an exhibition held in
Kolkata during 2011-13 for a declared amount of Rs.15 lakhs from
'Jago Bangla'. According to the prosecution, the amount which was
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received by SVFPL from BVCL was the money collected by the Rose
Valley Group of companies from the depositors by deceiving them
with assurance of getting higher returns without the permission of
RBI. The money so collected has been diverted by the Rose Valley to
its sister concern BVCL which was further diverted to the accounts of
SVFPL. It is the case of the prosecution that the petitioner belonged
to the community of media and he was supposed to have the
knowledge of the banning of the activities of the Rose Valley by the
regulatory authority SEBI and in spite of that the petitioner's
company SVFPL entered into an illegal agreement with BVCL. During
course of investigation, as the petitioner did not cooperate with the
investigation and prima facie case relating to his involvement in the
crime was made out, he was arrested and forwarded to Court.
3. Mr. Suresh Tripathy, learned Senior Counsel appearing
for the petitioner contended that the petitioner is in judicial custody
since 24.01.2019. He argued that SVFPL was formed way back in
18.09.1995 and it is a reputed Media and Entertainment Company
which was doing business in film production, film distribution and
television serial production and has produced about 120 films since
its inception and it has played a pioneer role in taking Bengli cinema
to a global platform. It has produced five National Award-winning
films. A film assignment agreement was executed between SVFPL as
assignor and BVCL as assignee on 07.04.2010 by virtue of which the
assignor assigned sole and exclusive satellite television broadcasting
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rights of 70 feature films to the assignee to be broadcasted through
the satellite channel of BVCL namely 'Rupashi Bangla' and the total
consideration of the assigned films was Rs.25 crores. Dispute arose
between BVCL and SVFPL when some of the films supplied to BVCL
by SVFPL were found to be not technically feasible for telecast and
those were not replaced by SVFPL. BVCL launched criminal
prosecution against the petitioner and other Directors of SVFPL at
Baguiati police station and after completion of investigation, charge
sheet was submitted under sections 403, 405, 406, 408, 418, 420 of
the Indian Penal Code. The matter was challenged before Calcutta
High Court in CRR No.2927 of 2012 and CRAN No.1887 of 2013 by
the petitioner and others and the Hon'ble Court vide judgment and
order dated 15.01.2014 quashed the charge sheet. BVCL challenged
the order of the Calcutta High Court before the Hon'ble Supreme
Court in SLP Crl. No.4271-4272/2014 which was dismissed vide
order dated 30.11.2015. Justice A.K. Ganguly, a retired Judge of the
Hon'ble Supreme Court adjudicated the dispute between the parties
in an Arbitration Proceeding and passed the award on dated
13.06.2018 and directed SVFPL to pay Rs.6.84 crores to BVCL with
interest @ 8% per annum from 06.08.2013 till 13.06.2018 and the
said award has been challenged by SVFPL before the learned District
Judge, Barasat taking recourse to section 34 of the Arbitration and
Conciliation Act, 1996 which was filed on 12.09.2018. It is
contended that merely because the arbitral award amount of Rs.6.84
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crores plus interest which comes to Rs.9.98 crores has not been paid
by SVFPL to BVCL since the impugned award is under challenge
before the proper forum, it cannot be said that the non-refund of
balance amount constitutes any criminal offence. According to Mr.
Tripathy, the allegations levelled against the petitioner and SVFPL
relating to cheating, misappropriation and conspiracy have been
adjudicated conclusively by Hon'ble Calcutta High Court and by
Hon'ble Supreme Court and proceeding against the petitioner is
contemptuous on the face of the orders passed by both the Courts.
It is contended that the investigating agency is not fair and impartial
and it is indirectly trying to defend BVCL what BVCL could not
achieve directly and merely because the price of the painting is
Rs.15 lakhs which was paid by way of a cheque and duly reflected in
the books of accounts of SVFPL, it cannot be said that the petitioner
has committed any criminal offence. It is strenuously argued that
the petitioner had neither collected any money from the public either
himself nor as an agent of Rose Valley and he had no concern with
Rose Valley as he and the company that he formed are independent
entities engaged in altogether different business activities. The
petitioner had not assured the public to refund money with higher
interest. Therefore, the accusation levelled by the C.B.I. against the
petitioner that he had cheated the public by not refunding the public
money is fallacious and lacks commonsense. The business carried
out by the petitioner was neither illegal nor forbidden by law and the
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agreement was also lawful. Once the agreement is recognised as a
legally valid document, the non-refund of amount as alleged has to
be dealt with in accordance with the said agreement which is
basically civil in nature. The learned counsel further contended that
the finding of the investigating agency that the petitioner was aware
of the illegal activities of Rose Valley is based on no material. The
commercial transaction of SVFPL was with BVCL by way of an
agreement and it was not expected on the part of the petitioner to
enquire in detail as to from which source the money came to BVCL
or to verify the status of BVCL. It is contended that the petitioner
and his company were in film business since 1995 and Rose Valley
came at a later point of time and there was no occasion on the part
of the petitioner to know that the money which was received by
SVFPL by virtue of a valid agreement from BVCL had flown from
Rose Valley. It is further contended that in pursuance of the notices
under sections 160 and 91 of Cr.P.C., the petitioner appeared before
the investigating agency on 29.08.2018, 27.11.2018 and
04.12.2018 and produced all the relevant documents including
judgment, order and award and the arrest of the petitioner is quite
illegal, capricious, unjustified and reflects abuse of power. Learned
counsel emphasised that it was not a case of money trailing which
means money parked unlawfully and whose identity is undisclosed
rather it is a case of valid contract between the two parties.
According to the learned counsel, since there is no chance of
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absconding or tampering with the evidence and in the three charge
sheets submitted so far, there is no allegation against the petitioner,
the bail application of the petitioner may be favourably considered.
He placed reliance in case of Sanjay Chandra -Vrs.- C.B.I.
reported in (2012) 51 Orissa Criminal Reports (SC) 128.
Mr. Anup Kumar Bose, learned Assistant Solicitor
General being ably assisted by Mr. Kali Charan Mishra, learned
Special Public Prosecutor for C.B.I. produced the three charge sheets
submitted so far and fairly contended that in all the three charge
sheets, there is nothing against the petitioner. He however
submitted that during course of further investigation, it was revealed
as to how the petitioner being a Director of SVFPL entered into a
criminal conspiracy with accused Shri Gautam Kundu, Chairman of
Rose Valley and others to misappropriate the public fund illegally
collected by the Rose Valley on the garb of an agreement for telecast
right of Bengali feature films to the BVCL. He argued that during
telecast of Bengali films, publicity of Rose Valley was made in the
T.V. channel 'Rupashi Bangla' owned by Rose Valley for alluring the
investors to make investment which reflects the real purpose behind
the agreement. He placed the statement of one Kranti Kumar, the
then AGM Operations, BVCL which reveals as to how the accused
Goutam Kundu wanted to meet the petitioner in connection with
production of some feature films under the banner of Rose Valley
and how he organised the meeting in the office of BVCL, where a
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detailed discussion took place and the accused Goutam Kundu
wanted that the Bengali films produced by a top Director like the
petitioner should be telecasted in the channels of BVCL for capturing
more and more audience and advertisements of Rose Valley were
shown on regular basis during such telecast and in all the films
produced by Rose Valley, details of producer i.e. Rose Valley was
used to be shown at the beginning or end during casting. It is the
contention of Mr. Bose that the petitioner had knowledge regarding
the illegal fund collection business of Rose Valley and he even
attended a party hosted at Hotel Chrome (owned by Rose Valley)
being invited by the prime accused Gautam Kundu. Even though the
learned Arbitrator passed an award for payment of Rs.6.84 crores
with interest vide order dated 13.06.2018 but SVFPL has not paid
the award amount so far. No efforts were also made from the side of
BVCL for the recovery of the amount from SVFPL. Therefore, an
amount of Rs.6.84 crores which is the public money and collected
from the gullible investors remained unrefunded by SVFPL. It is
contended that the petitioner through his company SVFPL utilized
the funds received from BVCL to purchase paintings from an
exhibition organized by 'Jago Bangla' held in Kolkata during the year
2011-13 for a declared amount of Rs.15,00,000/- (rupees fifteen
lakhs) and those paintings were drawn by a powerful political leader
of West Bengal and the political party to which such leader belonged
also made declaration regarding receipt of such amount from SVFPL.
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The seizure list of the paintings and the declaration so made were
produced in sealed cover. It is argued that further investigation is
under progress and the petitioner is involved in offences which have
got serious social ramifications. SVFPL has got several bank accounts
and after scrutiny of all the bank accounts, it can be known as to
what more money has come from Rose Valley or its sister concerns.
The defrauded amount is yet to be traced out and once the
petitioner who is a very influential person is released on bail, he is
likely to influence the witnesses utilizing such defrauded amount,
derailing the ongoing investigation and tampering with the evidence
which is yet to be collected. It is contended that when the
Investigating Officer went to the office of the petitioner and
requested him to join the investigation by visiting the C.B.I. office as
the petitioner did not turn up in spite of receipt of the notices under
section 160 of Cr.P.C., instead of cooperating with C.B.I., he lodged
a false case that some unknown persons visited his office. The
conduct of the petitioner in not cooperating with the C.B.I. was
questionable. The learned counsel placed reliance in the case of
Nimmagadda Prasad -Vrs.- C.B.I. reported in (2013) 55
Orissa Criminal Reports (SC) 833, C.B.I. -Vrs.- V. Vijay Sai
Reddy reported in (2013) 7 Supreme Court Cases 452 and
Ram Chandra Hansdah -Vrs.- Republic of India reported in
(2015) 62 Orissa Criminal Reports 219. Some important
documents were submitted in a sealed cover for perusal and it is
16
contended that on many important aspects relating to the activities
of the petitioner, the investigation is under progress and therefore,
at this stage it would not be proper to release the petitioner on bail.
4. There is no dispute that the case relates to commission
of economic offences. Now, let me discuss the ratio laid down by the
Hon'ble Supreme Court and by this Court relating the bail in
economic offences.
In case of Y.S. Jagan Mohan Reddy -Vrs.- CBI
reported in (2013) 55 Orissa Criminal Report (SC) 825, it is
held as follows:-
"15. Economic offences constitute a class apart and
need to be visited with a different approach in the
matter of bail. The economic offences having deep
rooted conspiracies and involving huge loss of public
funds need to be viewed seriously and considered as
grave offences affecting the economy of the country
as a whole and thereby posing serious threat to the
financial health of the country.
16. While granting bail, the Court has to keep in
mind the nature of accusations, the nature of
evidence in support thereof, the severity of the
punishment which conviction will entail, the
character of the accused, circumstances which are
peculiar to the accused, reasonable possibility of
securing the presence of the accused at the trial,
reasonable apprehension of the witnesses being
17
tampered with, the larger interests of public/State
and other similar considerations."
In case of State of Gujarat -Vrs.- Mohan Lal Jitamal
Torwal reported in A.I.R. 1987 S.C. 1321, it is held as follows:-
"5.........The entire community is aggrieved if the
economic offenders who ruin the economy of the
State are not brought to book. A murder may be
committed in the heat of moment upon passions
being aroused. An economic offence is committed
with cool calculation and deliberate design with an
eye on personal profit regardless of the
consequence to the Community. A disregard for the
interest of the community can be manifested only at
the cost of forfeiting the trust and faith of the
Community in the system to administer justice in an
even handed manner without fear of criticism from
the quarters which view white colour crimes with a
permissive eye unmindful of the damage done to the
National Economy and National Interest".
In the case of Nimmagadda Prasad (supra), it was
held that economic offences have serious repercussions on the
development of the country as a whole. Such offences constitute a
class apart and need to be visited with a different approach in the
matter of bail. The economic offence having deep rooted
conspiracies and involving huge loss of public funds needs to be
viewed seriously and considered as a grave offence affecting the
18
economy of the country as a whole and thereby posing serious
threat to the financial health of the country.
In the case of Ram Chandra Hansdah (supra), it is
held that economic offences are considered grave offences as it
affects the economy of the country as a whole and such offences
having deep rooted conspiracy and involving huge loss of public fund
are to be viewed seriously. Economic offence is committed with cool
calculation and deliberate design solely with an eye on personal
profit regardless of the consequence to the community. In such type
of offences, while granting bail, the Court has to keep in mind, inter
alia, the larger interest of public and State. The nature and
seriousness of an economic offence and its impact on the society are
always important considerations in such a case and those aspects
must squarely be dealt with by the Court while passing an order on
bail applications.
5. Keeping in view the aforesaid settled principle of law and
adverting to the contentions raised by the learned counsel for the
respective parties and on a careful scrutiny of the case records and
the documents submitted by the C.B.I. in sealed cover, the following
facts are apparent:-
(i) The investigation of the case commenced in the
year 2014 after the order dated 09.05.2014 was passed
by the Hon'ble Supreme Court in W.P. (Civil) No.401 of
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2013 and W.P. (Civil) No.413 of 2013. First charge sheet
was submitted on 06.01.2016, second charge sheet was
submitted on 26.04.2017 and third charge sheet was
submitted on 15.05.2018 but there is nothing against the
petitioner in those three charge sheets.
(ii) The SEBI in its order dated 24.12.2002, in
exercise of its powers conferred under section 11B read
with section 4(3) of the Securities and Exchange Board
of India Act, 1992 (hereafter 'SEBI Act') and regulation
65 of SEBI (Collective Investment Schemes) Regulations,
1999 (hereafter 'CIS Regulations'), directed M/s. Rose
Valley Resorts and Plantations Ltd., Kolkata to refund the
money collected under the collective investment
schemes with returns which was due to the investors as
per the terms of the offer within a period of one month
from the date of order, failing which consequential
actions, inter alia, like initiation of prosecution
proceedings under section 24 of the SEBI Act would be
taken against the company.
(iii) The SEBI in exercise of its powers conferred
under section 11B of the SEBI Act and regulation 65 of
CIS Regulations in its order dated 03.01.2011 directed
M/s. Rose Valley Real Estates and Constructions Ltd. not
to collect any money from the investors or to launch any
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scheme, not to dispose of any of the properties or
delineate assets of the Ashirbad Scheme and not to
divert any fund raised from public at large kept in bank
account and/or at the custody of the company.
(iv) SEBI published an advertisement in the Times of
India on dated 19.05.2013 in the public interest by
cautioning the general public that none of the companies
of Rose Valley Group had obtained a certificate of
registration from the SEBI to run a collective investment
scheme to raise money from the investors.
(v) The whole time Member of SEBI in exercise of the
powers conferred under sections 11(1), 11B and 11(4) of
the SEBI Act read with regulation 65 of CIS Regulations
in the order dated 10.07.2013 directed M/s. Rose Valley
Hotels and Entertainments Ltd. and its Directors not to
collect any more money from the investors under the
existing schemes, not to launch any new schemes, not to
dispose of any of the properties or alienate any of the
assets of the schemes and not to divert any funds raised
from public which are kept in bank accounts and/or in
the custody of the company.
(vi) A film assignment agreement was executed
between SVFPL as assignor and BVCL, a sister concern of
Rose Valley as assignee on 07.04.2010, by virtue of
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which the assignor assigned the sole and exclusive
satellite television broadcasting rights of 70 feature films
to the assignee to be broadcasted through the satellite
channel of BVCL namely 'Rupashi Bangla' and the total
consideration of the assigned films was Rs.25 crores.
(vii) Dispute arose between BVCL and SVFPL when
some of the films supplied to BVCL by SVFPL were found
to be not technically feasible for telecast which were not
replaced by SVFPL. BVCL launched criminal prosecution
against the petitioner and other Directors of SVFPL at
Baguiati police station, in which after completion of
investigation, charge sheet was submitted.
(viii) Submission of charge sheet was challenged by the
petitioner and others before Calcutta High Court in CRR
No.2927 of 2012 and CRAN No.1887 of 2013 and the
Hon'ble Court quashed the charge sheet as per judgment
and order dated 15.01.2014. BVCL challenged the order
of the Calcutta High Court before the Hon'ble Supreme
Court which was dismissed as per order dated
30.11.2015.
(ix) Justice A.K. Ganguly, a retired Judge of the
Hon'ble Supreme Court adjudicated the dispute between
the parties in an Arbitration Proceeding and passed the
award on dated 13.06.2018 and directed SVFPL to pay
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Rs.6.84 crores to BVCL with interest @ 8% per annum
from 06.08.2013 till 13.06.2018.
(x) The total outstanding amount to be paid by SVFPL
to BVCL as per the award passed in the Arbitration
proceeding is Rs.9.98 crores. The arbitral award has
been challenged by SVFPL before the learned District
Judge, Barasat taking recourse to section 34 of the
Arbitration and Conciliation Act, 1996 which is
subjudiced.
(xi) The petitioner through his company SVFPL
purchased paintings drawn by a powerful political leader
of West Bengal from an exhibition organized by 'Jago
Bangla' held in Kolkata during the year 2011-13 for a
declared amount of Rs.15,00,000/- (rupees fifteen
lakhs), which according to the C.B.I. came from the
funds received from BVCL.
6. While discussing the principle for grant of bail, the
Hon'ble Supreme Court in the case of V. Vijay Sai Reddy (supra)
held that while granting bail, the Court has to keep in mind the
nature of accusation, the nature of evidence in support thereof, the
severity of the punishment which conviction will entail, the character
of the accused, the circumstances which are peculiar to the accused,
reasonable possibility of securing the presence of the accused at the
trial, reasonable apprehension of the witnesses being tampered with,
23
the larger interests of the public/State and other similar
considerations. It has also to be kept in mind that for the purpose of
granting bail, the Legislature has used the words "reasonable
grounds for believing" instead of "the evidence" which means the
Court dealing with the grant of bail can only satisfy itself as to
whether there is a genuine case against the accused and that the
prosecution will be able to produce prima facie evidence in support
of the charge. It is not expected, at this stage, to have the evidence
establishing the guilt of the accused beyond reasonable doubt.
Even though till the third charge sheet was submitted,
there was no material against the petitioner but thereafter during
course of further investigation, it was found out as to how huge
amount of money collected illegally by Rose Valley from the gullible
depositors without any authorisation from RBI and in spite of ban
imposed by the regulatory authority SEBI with false promise of
paying higher rates of interest, was diverted to its sister concern
BVCL, out of which Rs. 25 crores was given to petitioner's SVFPL.
Whether the petitioner had knowledge regarding the illegal activities
of Rose Valley or not, about the diversion of illegally acquired money
by Rose Valley to its sister concern BVCL, whether it was necessary
on the part of the petitioner to enquire in detail as to from which
source the money came to BVCL and to verify the status of BVCL
before entering into a commercial transaction with BVCL by way of
an agreement, whether he knowingly entered into such agreement
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for his personal illegal gain and thereby the Bengali feature films
produced by him were utilised by Rose Valley for its publicity
through the satellite channel of BVCL namely 'Rupashi Bangla' for
alluring the investors to make investment and whether the role of
the petitioner was just for producing the feature films for BVCL
under the agreement or it has got any nexus with the illegal
activities of Rose Valley are the matters which is still under
investigation. Recording any finding over such issues at this stage
and that to while considering the bail application, in my humble
opinion, would not be proper and justified. Though the arguments
advanced by Mr. Tripathy that since the criminal proceeding
instituted by BVCL has been quashed and the arbitral award is still
under challenge before the proper forum, it cannot be said that the
petitioner has committed any criminal offence by accepting money
under an agreement, seems to be attractive, I am afraid there are
many more important aspects in between which prima facie raises
accusing fingers against the petitioner. The documents submitted in
sealed cover by C.B.I. shows that there was close acquaintance
between the petitioner and the main accused Gautam Kundu.
Accused Goutam Kundu met the petitioner in connection with
production of some feature films under the banner of Rose Valley
and he was aware that the petitioner was a top producer of Bengali
film industry known for production of quality films and wielding
considerable clout and influence on the television audience and he
25
wanted the Bengali films produced by the petitioner to be telecasted
in the channels of BVCL for capturing more and more audience.
During telecast of Bengali films in the T.V. channel 'Rupashi Bangla'
owned by Rose Valley, publicity of Rose Valley was made on regular
basis for alluring the investors to make investment which according
to the investigating agency was the real purpose behind the
agreement. In all the films produced by Rose Valley, details of
producer i.e. Rose Valley was used to be shown at the beginning or
end during casting. The petitioner also attended a party hosted by
Gautam Kundu at Hotel Chrome in the year 2013 even when SVFPL
was fighting litigation with BVCL and SEBI had published
advertisement in the Times of India against Rose Valley. The
contentions raised by Mr. Bose that litigation fought between SVFPL
and BVCL prima facie appears to be a friendly fight dragged on in
different forums since 2013 and that both were having close
proximity with each other and the ultimate looser in the transaction
was the innocent depositors, has got sufficient force. The funds
received from BVCL was utilised by SVFPL to purchase paintings
drawn by a powerful political leader of West Bengal from an
exhibition organized by 'Jago Bangla' for an amount of
Rs.15,00,000/- (rupees fifteen lakhs) and how and why the money
collected from the investors of Rose Valley had gone to the accounts
of a political party under the guise of purchase of paintings and what
was the nexus between that political party and Rose Valley and real
26
purpose behind execution of agreement requires a deeper probe. It
prima facie appears that huge amount of money collected illegally by
Rose Valley was diverted to SVFPL through BVCL for twin purpose,
firstly, to produce some feature films which could be utilised for
propaganda of investment benefits in the Rose Valley and secondly,
money can be further diverted to a political party through SVFPL in
the name of purchasing paintings to get patronage for flourishing
illegal business activities. In the chain of events, the role of the
petitioner cannot be said to be a negligible one.
The case of Sanjay Chandra (supra) which was placed
by the learned counsel for the petitioner is not applicable to this
case. In that case, it was held that merely because the offence
alleged is a serious one in terms of huge loss to the State
exchequer, that, by itself, should not deter the Court from enlarging
the accused on bail when there is no serious contention of the
respondent that the accused, if released on bail, would interfere with
the trial or tamper with the evidence. It was further held that the
investigating agency has already completed investigation and the
charge sheet is already filed and therefore, the presence of the
appellant in the custody may not be necessary for further
investigation. In the present case, however, the investigation is still
under progress and it has been ascertained that SVFPL has got
several bank accounts and after scrutiny of all the bank accounts, it
can be known as to what more money has come from Rose Valley or
27
its sister concerns to the accounts of SVFPL. There is also
apprehension by the investigating agency that the petitioner is a
very influential person and if he is released on bail, he is likely to
influence the witnesses utilizing such defrauded amount, derailing
the ongoing investigation and tampering with the evidence which is
yet to be collected.
7. After bestowing my anxious, painstaking and careful
consideration to the tactical and enthralling contentions raised at the
Bar and without detailed examination of evidence and elaborate
discussions on merits of the case but considering the nature and
gravity of the accusation, strong prima facie case available against
the petitioner to show his involvement in the economic offence
committed by Rose Valley, likelihood of tampering with the evidence
when the investigation is at a crucial stage and several bank
accounts of the petitioner and his company are under scrutiny to
trace out any further money transactions with Rose Valley and above
all in the larger interest of society, I am not inclined to release the
petitioner on bail.
Rose Valley was a bed of roses for its Promoters and
Directors but it created a bed of thorns for the gullible investors. The
spider web was designed in such a calculative devilish way by the
business tycoons showing mirage of huge outturn with active
support of politicians and film personalities that it trapped the
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depositors who were left only with tears in their eyes which never
dried up. What could have been done to check/stop the illegal
activities from its incipient, was not done seemingly for obvious
reasons of political patronage till much water had flown under the
bridge leaving incomprehensible pain and suffering for those
hundreds and thousands of unfortunate guys.
Accordingly, the bail application sans merit and hence
stands rejected.
Before parting, I would like to place it on record by way
of abundant caution that whatever has been stated hereinabove in
this order has been so said only for the purpose of disposing of the
prayer for bail made by the petitioner. Nothing contained in this
order shall be construed as expression of a final opinion on any of
the issues of fact or law arising for decision in the case which shall
naturally have to be done by the trial Court at the appropriate stage
of the trial.
Urgent certified copy of this order be granted on proper
application.
...............................
S. K. Sahoo, J.
Orissa High Court, Cuttack The 13th May 2019/Pravakar/RKM