Bombay High Court
Gokulnath Raghu Shetty vs Central Bureau Of Investigation And Anr on 15 February, 2024
Author: M. S. Karnik
Bench: M. S. Karnik
2024:BHC-AS:7855
PMB 907.ba.2521-23.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
BAIL APPLICATION NO.2521 OF 2023
GOKULNATH RAGHU SHETTY ..APPLICANT
VS.
1. CENTRAL BUREAU OF INVESTIGATION
2. STATE OF MAHARASHTRA ..RESPONDENTS
------------
Adv. Sandeep Karnik for the applicant.
Adv. H. S. Venegavkar a/w Adv. Kamar Ali Shaikh for
respondent No.1-CBI a/w CBI Officers - Mr. Arvind More,
Dy.SP a/w Mr. Mohak Chaudhary, PSI.
Mr. S. H. Yadav, APP for the State-respondent No.2.
------------
CORAM : M. S. KARNIK, J.
DATE : FEBRUARY 15, 2024.
P.C. :
1. Heard learned counsel for the applicant, learned
counsel for respondent No.1 and learned APP for the State.
2. This is a second application for bail in this Court. Bail
Application No.3409 of 2022 earlier filed on behalf of the
applicant was withdrawn on 22.02.2023 with liberty to file
fresh application for bail after six months. The applicant is
the accused No.3 in respect of a trial arising out
of FIR No.RC.1(E)/2018-CBI/BS&FC/MUMBAI registered on
14.05.2018 under Sections 420, 409 read with 120-B of the
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Indian Penal Code and under Sections 13(2) read with
13(1)(c) and (d) of the Prevention of Corruption Act, 1988
(hereafter 'the PC Act' for short) by the Central Bureau of
Investigation, BS & FC, Mumbai.
3. I am not referring to the facts in detail as I am
satisfied that on merits, considering the role of the
applicant, the accusations are serious having impacted the
economy of the country. Suffice it to observe that at the
relevant time the applicant was working as a Deputy
Manager in Forex Department in Punjab National Bank
('PNB' for short). The accusation is that the applicant issued
Letter of Undertakings (LOUs) to the companies belonging
to the absconding accused - Nirav Modi and his companies
to the tune of Rs.6,498.20/- crores in complete
contravention of the Reserve Bank of India's guidelines and
without following the procedure laid down towards that end.
The applicant was in charge of the Mid Corporate Branch,
Brady House, Mumbai at the Forex Department. There are
in all thirty accused. As many as five accused are
absconding. The trial as regards the absconding accused is
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separated. The LOUs were issued without sufficient
collaterals and guarantees. The verification process as
required was not carried out by the applicant. According to
Mr. Venegavkar, learned counsel for respondent No.1, the
applicant is the mastermind along with the main accused -
Nirav Modi. He submits that the investigating agency is
making every possible effort to secure the return of the
absconding accused to face trial. Mr. Venegavkar submitted
that the materials indicate that the applicant is a beneficiary
to the tune of Rs.2,27,57,000/- which amounts were
deposited in the bank account of the friends and relatives of
the applicant by those in charge of the companies who
benefited from the transactions. Mr. Venegavkar submitted
that but for the active involvement of the applicant, a scam
of such magnitude would never have seen the light of the
day. The applicant made every possible attempt to
circumvent the well established procedure, safeguards and
norms prescribed before sanctioning such LOUs. The
applicant directly issued SWIFT messages without making
entry in Core Banking Solution (CBS), as a result, the
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superiors and the concerned officials of the bank did not get
knowledge about the issuance of such LOUs. On merits,
therefore I find that prima facie the accusations are serious.
4. The reason why I am inclined to enlarge the applicant
on bail is only on the ground of long incarceration. The
applicant was arrested on 17.02.2018 and is now in custody
almost for six years. Though the trial has been separated
from that of the absconding accused, the charge has not
been framed so far. There are around hundred witnesses to
be examined. The trial is not likely to conclude any time
soon. The applicant is 65 years of age. Mr. Venegavkar
expressed an apprehension that the applicant who is well
versed with the banking norms and may try to scuttle the
investigation so far as the absconding accused are
concerned. Mr. Venegavkar, on instructions, fairly submitted
that major investigation is completed. He apprehends that
as the applicant is a banker and well versed with the modus
of transfer of funds especially to foreign countries, there
may be an attempt on his part to tamper with the
investigation and aid the absconding accused. Considering
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the advanced stage at which the investigation is, I am of
the opinion that the applicant's enlargement on bail in view
of the long incarceration is not going to prejudice the
investigation. However, to allay the apprehension of the
prosecution, I propose to impose stringent conditions, which
even the learned counsel on instructions submits that the
applicant is willing to abide. The applicant cannot be
indefinitely incarcerated as even at this stage after six years
as an under-trial prisoner, it is obvious that the trial is going
to take a long time to conclude. The applicant does not
appear to be a flight risk.
5. I draw support from the decision of the Supreme Court
in Manish Sisodia vs. Central Bureau of Investigation 1.
The observations in paragraph 26 are relevant which read
thus :-
"26. However, we are also concerned about the prolonged
period of incarceration sufered by the appellant - Manish
Sisodia. In P. Chidambaram v. Directorate of Enforcement, the
appellant therein was granted bail after being kept in custody for
around 49 days, relying on the Constitution Bench in Shri
Gurbaksh Singh Sibbia and Others v. State of Punjab, and Sanjay
Chandra v. Central Bureau of Investigation, that even if the
allegation is one of grave economic ofence, it is not a rule that
bail should be denied in every case. Ultimately, the
consideration has to be made on a case to case basis, on the
facts. The primary object is to secure the presence of the
1 Special Leave Petition (Criminal) No.8167 of 2023 decided on 30.10.2023
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accused to stand trial. The argument that the appellant therein
was a fight risk or that there was a possibility of tampering with
the evidence or infuencing the witnesses, was rejected by the
Court. Again, in Satender Kumar Antil v. Central Bureau of
Investigation and Another, this Court referred to Surinder Singh
Alias Shingara Singh v. State of Punjab and Kashmira Singh v.
State of Punjab, to emphasise that the right to speedy trial is a
fundamental right within the broad scope of Article 21 of the
Constitution. In Vijay Madanlal Choudhary (supra), this Court
while highlighting the evil of economic ofences like money
laundering, and its adverse impact on the society and citizens,
observed that arrest infringes the fundamental right to life. This
Court referred to Section 19 of the PML Act, for the in-built
safeguards to be adhered to by the authorised ofcers to ensure
fairness, objectivity and accountability. Vijay Madanlal
Choudhary (supra), also held that Section 436A of the Code can
apply to ofences under the PML Act, as it efectuates the right to
speedy trial, a facet of the right to life, except for a valid ground
such as where the trial is delayed at the instance of the accused
himself. In our opinion, Section 436A should not be construed as
a mandate that an accused should not be granted bail under the
PML Act till he has sufered incarceration for the specifed period.
This Court, in Arnab Manoranjan Goswami v. State of
Maharashtra and Others, held that while ensuring proper
enforcement of criminal law on one hand, the court must be
conscious that liberty across human eras is as tenacious as
tenacious can be."
6. Learned counsel for the applicant submitted that the
applicant does not have a passport and in any case has no
intention of applying for a passport. A statement is made on
instructions of the applicant's son who is present in the
Court that no application for passport will be made by the
applicant during the pendency of the trial. It is submitted by
learned counsel for the applicant on instructions that an
affidavit to this effect will be filed before the trial Court by
the applicant prior to his release on bail also indicating that
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he will not leave Mumbai/Mumbai Suburban district till the
trial concludes without the leave of the trial Court. The
applicant shall report to the investigating agency's office
once in a week on every Tuesday between 11.00 a.m. and
12.00 noon. The statements made are accepted and shall
be duly abided.
7. Learned counsel for the applicant relied on the order
dated 05.02.2024 passed by the Supreme Court in respect
of the co-accused - Hemant Dahyalal Bhatt in SLP (Crl.)
No.16667 of 2023 to which reference is made. The order
reads thus :-
"Leave granted.
In view of the age and also the incarceration of about
six years, the appellant - Hemant Dahyalal Bhatt is
directed to be released on bail during the pendency of the
trial in the chargesheet(s) arising out of First Information
Report (FIR) no. RC BSM 2018 E0001 dated 31.01.2018
registered with CBI BS&FC, Mumbai, District - Mumbai,
Maharashtra for the offence(s) punishable under Section
120-B read with Section 420 of the Indian Penal Code,
1860 and Section 13(2) read with Section 13(1)(d) of the
Prevention of Corruption Act, 1988, on terms and
conditions to be fixed by the trial Court.
The appellant - Hemant Dahyalal Bhatt will also
comply with the conditions stipulated in Section 438(2) of
the Code of Criminal Procedure, 1973.
Additionally, the appellant - Hemant Dahyalal Bhatt
will surrender his passport in the trial Court. He will give a
mobile phone number to the Court, on which he can be
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contacted by Central Bureau of Investigation to ascertain
his whereabouts.
The impugned order is set aside and the appeal is
allowed in the aforesaid terms.
We clarify that the observations made in this order
and grant of bail will not be treated as findings on the
merits of the case.
We also clarify that the present order has been
passed in light of the peculiar facts of the individual case,
and will not be treated as a precedent in other cases,
especially where the accused is stated to be absconding.
Pending application(s), if any, shall stand disposed
of."
(emphasis mine)
8. Mr. Venegavkar submitted that the Supreme Court
passed the order in the peculiar facts of the individual case
clarifying that the same will not be treated as a precedent in
other cases, especially where the accused is stated to be
absconding. It is further submitted that the accusations in
respect of co-accused - Hemant Bhatt are distinguishable
from those in respect of the present applicant. It is
submitted that co-accused - Hemant Bhatt was an
employee of Nirav Modi and he acted as per the instructions
of his employer while signing the applications for LOUs;
whereas the present applicant was the one who issued the
LOUs with complete knowledge that the same are being
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issued only with a view to favour the main accused in
complete breach of the well established banking practices
and norms in this regard and that too for monetary
consideration. It is then submitted that the age of the co-
accused - Hemant Bhatt is also one of the factor which
taken into consideration by the Supreme Court. He submits
that the applicant herein is in good health.
9. There is no doubt that the order dated 05.02.2024
passed by the Hon'ble Supreme Court cannot be treated as
a precedent in this case. The fact however remains that the
applicant is 65 years of age and is incarcerated almost for
six years awaiting trial which is likely to take a long time to
conclude with around hundred witnesses to be examined.
10. Learned counsel for the applicant on instructions
assures that the applicant will not make any attempt to
contact the absconding accused or other accused or do
anything which will have the effect of tampering with the
investigation. The applicant undertakes that he will not
establish any contact with the co-accused. It is made clear
that if there is any attempt on the part of the applicant in
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tampering with the investigation, the same will be viewed
seriously which may entail the consequence of cancellation
of this bail. In view of the above, I am inclined to enlarge
the applicant on bail, but on conditions.
11. Hence, the following order :-
ORDER
(a) The application is allowed.
(b) The applicant-Gokulnath Raghu Shetty be released on bail in connection with FIR No.RC.1(E)/2018-CBI/BS&FC/MUMBAI registered by the CBI, on furnishing P.R. Bond in the sum of Rs.1,00,000/- with one or more local sureties in the like amount.
(c) The applicant shall report to the office of the CBI once in a week on every Tuesday between 11.00 a.m. and 12.00 noon.
(d) The applicant 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 the facts to Court or any Police Officer. The applicant shall not tamper with evidence.
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(e) On being released on bail, the applicant shall furnish his contact number and residential address to the trial Court as well as the Investigating Officer and shall keep them updated, in case there is any change.
(f) The applicant shall attend the trial regularly. The applicant shall co-operate with the trial Court and shall not seek unnecessary adjournments.
(g) The applicant shall not leave Mumbai/Mumbai Suburban District without the leave of the trial Court.
(h) The applicant shall not apply for issuance of a passport till trial concludes.
(i) The applicant to fle the afdavit/undertaking as indicated hereinabove prior to his release. The applicant to abide by the statements made in the afdavit-cum-undertaking.
12. The application is disposed of.
13. At this stage, Mr. Venegavkar submitted that considering the magnitude of the offence and the serious impact it had on the economy, in the interest of justice, this order be not given effect to for a period of six weeks from 11/12 PMB 907.ba.2521-23.doc today. Learned counsel for the applicant on instructions did not oppose such a request. This order therefore shall take effect after a period of six weeks from today.
14. It is made clear that the aforesaid observations are prima facie in nature.
(M. S. KARNIK, J.) 12/12 Signed by: Pradnya Bhogale Designation: PA To Honourable Judge Date: 17/02/2024 12:51:35