Allahabad High Court
Rakesh Singh vs Cbi on 24 February, 2023
Author: Dinesh Kumar Singh
Bench: Dinesh Kumar Singh
HIGH COURT OF JUDICATURE AT ALLAHABAD ?Court No. - 87 Case :- CRIMINAL MISC ANTICIPATORY BAIL APPLICATION U/S 438 CR.P.C. No. - 2166 of 2023 Applicant :- Rakesh Singh Opposite Party :- Cbi Counsel for Applicant :- Mohd. Afzal,Shivangi Singh Counsel for Opposite Party :- Sanjay Kumar Yadav Hon'ble Dinesh Kumar Singh,J.
1. Heard Ms. Shivangi Singh, learned counsel for the accused-applicant as well as Sri Gyan Prakash, learned Senior Advocate/Deputy Solicitor General of India, assisted by Sri Sanjay Kumar Yadav, for the Central Bureau of Investigation (for short ''CBI').
2. The present bail application under Section 438 Cr.P.C. has been filed seeking anticipatory bail in Case No.01 of 2022, arising out of RC No.219 2019 E 0006, under Sections 120-B read with 420, 467, 468 and 471 I.P.C. and Section 13(2) of Prevention of Corruption Act, Police Station CBI/EO-1, New Delhi.
3. The FIR in question was registered on 29.6.2019 under Sections 120-B read with 420, 467, 468 and 471 IPC against accused M/s Naftogaz India Private Limited, Mahadoom Bawa, Deepak Gupta, Seema Gupta, Ram Murti Devi, Vijay Kumar, Vyas Dev, Ravinder Pandita and K. Gangadharan on the basis of a written compliant dated 27.6.2019 filed by Ms. Beena Vaheed, Deputy General Manager and Zonal Head, Delhi (North) of erstwhile Corporation Bank, New Delhi.
4. During the year 2009-10 to 2012-13, M/s Nafto Gaz India Private Limited having registered office at E 14/13, Vasant Vihar, New Delhi through its Managing Director Sri Mahadoom Bawa was availing credit facilities of Rs.472.79 Crores from the consortium of eight banks including Corporation Bank, Mid Corporate Branch, Sector-18, Noida, U.P.. The said branch of the Corporation Bank had sanctioned Cash Credit Limit of Rs.20 Crores and LC/BG for Rs.85 Crores to M/s Nafto Gaz India Private Limited. The said cash credit facilities were secured by Paripassu charge on Book debts/current assets amounting to Rs.528.16 Crores, pledge of FD amounting to Rs.12.75 Crores, Plant, machinery and other movable assets amounting to Rs.3.20 Crores, Residential building situated at Plot No.13, Street No.E-14M, Vasant Vihar, New Delhi of the company valuing Rs.5.91 Crores and residential property situated at 51-A, Khasra No.75, Arjun Nagar, Yusuf Sarai, New Delhi in the names of guarantors namely accused Deepak Gupta, Seema Gupta and Ram Murti Devi.
5. The account turned into NPA with outstanding balance of Rs.92.21 Crores on 22.11.2012 due to non-payment by the party. Thereafter, in the year 2013 accused Vijay Kumar and Vyas Dev also stood as guarantors in the loan account of the company and mortgaged another immovable property bearing Plot No.H-7, Khasra No.79/6/1, Laxmi Park, Nangloi Jat, Delhi admeasuring 1000 Sq. Yards owned jointly by them as security exclusively to Corporation Bank. Value of the said property was done by co-accused Ravinder Pandita and this property was assessed to be of value of Rs.20 Crores.
6. During the course of investigation, it was found that the property situated at Plot No.51A, Khasra No.75, Arjun Nagar, Yusuf Sarai, New Delhi was not in the name of guarantors, namely, Deepak Gupta, Seema Gupta and Ram Murti Devi, rather it stood in the names of different persons and the title deeds submitted with the Bank were defective. The title deed of Plot No.H-7, Khsra No.79/6/1, Nangloi Jat, Delhi deposited with the bank was also defective. It was found that the signatures of the vendor of the original sale deed available with the bank and its certified copy were also slightly different. Further, the book debt statement submitted to the bank a on 31.7.2012 was also bogus.
7. During the investigation, the role of the accused applicant has come to light. C.B.I. in its charge sheet, in paragraphs 16.68 to 16.103, has delineated the role of the accused applicant in commission of such a large scale banking fraud.
8. Investigation would reveal that the account of M/s Nafto Gaz India Pvt. Ltd. was got regularized by way of routing of some portions of the proceeds of LC No. 3/2012 in the CC account of the company, accused Ramesha JS in conspiracy with the accused Mahdoom Bava. The present accused applicant was the Director of M/s Boom Buying Pvt. Ltd., accused Anil Kumar, Authorized Signatory and accused Akash Gupta, Director of M/s CCL Internation Ltd. and accused Manoj Koul, Director of M/s H.M. Informatics Pvt. Ltd. fraudulently opened the six LCs accounts without obtaining the credit status report of the beneficiaries and gave acceptance to the negotiating banks for payment of the LC on the basis of bogus bills, bogus lorry receipts of non IBA approved transporters and without obtaining copy of insurance of the goods.
9. Investigation would reveal that the accused Ramesha JS in conspiracy with accused Mahdoom Bava and accused Rakesh Singh also opened LC No. 2012/4 in favour of M/s. Boom Buying Pvt. Ltd. on 17.01.2012 for total amount of Rs,8,54,15,000/- for supply of 1553 tonnes of I-Beam by the party to M/s. Nafto Gaz India Pvt. Ltd. The shipment was to be made from Ghaziabad to Bhatinda (Punjab). The advising bank of LC was Standard Chartered Bank, H-2, Connaught Circus. After issuing the LC vide his letter dated 17.01.2012, accused Ramesha JS forwarded the said LC to the Branch Manager of the Standard Chartered Bank, H-2, Connaught Circus, Trade Services, New Delhi i.e. the advising bank.
10. The investigation would further reveal that M/s. Boom Buying Pvt. Ltd. which has registered office at E-986, Lower Ground Floor, Chitranjan Park, New Delhi was registered with Registrar of Companies Delhi and Haryana. M/s. Boom Buying Pvt. Ltd. was enjoying Bill discounting facility since 20.01.2012 of rupees 25 crores and overdraft facility of Rs.2 crore from the Standard Chartered Bank and was maintaining current account in the said bank.
11. The investigation further revealed that the present accused applicant submitted the request for discounting of the bills under LC amounting to Rs.8,54,15,000/- to Standard Chartered bank along with bill of exchange dated 18.01.2012 and the copies of the fake bills (which find mention in paragraph - 16.71 of the charge sheet) along with supporting lorry receipts of M/s. Kartar Roadways, Main Road, Transport Nagar, Delhi. The lorry receipts of the transporter did not contain the IBA code and the address of the transporter was also incomplete. The investigation about the vehicles mentioned on the Bills and LRs revealed that the several vehicles were car, motor cycle/scooter, Innova Motor Car (LMV), LMV Vikram/kal, Bus (HPV) and some of the vehicles were not even registered. C.B.I. has detailed such vehicles which were allegedly used for transporting the goods in paragraphs 16.71 and 16.72. C.B.I. concluded that number non-goods transport vehicles like m-cycle/scooter, cars, bus etc were shown to have been used for transporatation of huge amount of iron, and, thus the accused applicant was fully involved in banking fraud with other accused. The accused applicant had opened another LC for Rs.8,06,90,510/- which was discounted and credited to the account of the concern of the present accused applicant in the same fashion as earlier. Third LC of Rs.9,79,02,900/- was also discounted and credited to the account of the present accused applicant. The fourth LC of Rs.9,22,40,250/- was also discounted and credited to the account of the present accused applicant.
12. Considering the mammoth banking frauds in which the accused applicant and other accused were deeply involved in large scale of fraud, this Court does not find it a fit case to enlarge the accused applicant on anticipatory bail.
13. It is well settled law that while dealing with the case in respect of the financial and economic fraud, the Court has to adopt a different approach as the economic offences are distinct and stand alone than the other offences committed under the IPC.
14. The banking system is backbone of the economy. If the bank officials and other persons in furtherance of criminal conspiracy cheat the bank of its fund, the Court should not enlarge such an accused on anticipatory bail.
15. The economic crimes of such mammoth scale and width are craftily planned and executed. It is well settled that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. While granting bail, the Court has to keep in mind the nature of accusations, magnitude and gravity of offence and nature of evidence in support of accusations.
16. The Supreme Court in the case of Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation, (2013) 7 SCC 439 has opined in paragraphs 34 and 35 as under:-
"34. 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.
35. 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 tampered with, the larger interests of the public/State and other similar considerations."
17. The Supreme Court in the case of State of Bihar and another Vs. Amit Kumar alias Bachcha Rai, (2017) 13 SCC 751 in paragraphs 9 and 13, while considering the bail application of an accused involved in economic offence of huge magnitude, has held as under:-
"9. We are conscious of the fact that the accused is charged with economic offences of huge magnitude and is alleged to be the kingpin/ringleader. Further, it is alleged that the respondent-accused is involved in tampering with the answer sheets by illegal means and interfering with the examination system of Bihar Intermediate Examination, 2016 and thereby securing top ranks, for his daughter and other students of Vishnu Rai College, in the said examination. During the investigation when a search team raided his place, various documents relating to property and land to the tune of Rs 2.57 crores were recovered besides Rs 20 lakhs in cash. In addition to this, allegedly a large number of written answer sheets of various students, letterheads and rubber stamps of several authorities, admit cards, illegal firearm, etc. were found which establishes a prima facie case against the respondent. The allegations against the respondent are very serious in nature, which are reflected from the excerpts of the case diary. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the credibility of the education system of the State of Bihar.
13. We are also conscious that if undeserving candidates are allowed to top exams by corrupt means, not only will the society be deprived of deserving candidates, but it will be unfair for those students who have honestly worked hard for one whole year and are ultimately disentitled to a good rank by fraudulent practices prevalent in those examinations. It is well settled that socio-economic offences constitute a class apart and need to be visited with a different approach in the matter of bail [Nimmagadda Prasad v. CBI, (2013) 7 SCC 466 : (2013) 3 SCC (Cri) 575; Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439 : (2013) 3 SCC (Cri) 552] . Usually socio-economic offence has deep-rooted conspiracies affecting the moral fibre of the society and causing irreparable harm, needs to be considered seriously."
18. In the case of Rohit Tandon Vs. Directorate of Enforcement, (2018) 11 SCC 46, the Supreme Court has again reiterated the consistent view that 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. Paragraphs 21 and 22, which are relevant, are extracted hereunder:-
"21. The consistent view taken by this Court is that 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. Further, when attempt is made to project the proceeds of crime as untainted money and also that the allegations may not ultimately be established, but having been made, the burden of proof that the monies were not the proceeds of crime and were not, therefore, tainted shifts on the accused persons under Section 24 of the 2002 Act.
22. It is not necessary to multiply the authorities on the sweep of Section 45 of the 2002 Act which, as aforementioned, is no more res integra. The decision in Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra [Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294 : (2005) SCC (Cri) 1057] and State of Maharashtra v. Vishwanath Maranna Shetty [State of Maharashtra v. Vishwanath Maranna Shetty, (2012) 10 SCC 561 : (2013) 1 SCC (Cri) 105] dealt with an analogous provision in the Maharashtra Control of Organised Crime Act, 1999. It has been expounded that the Court at the stage of considering the application for grant of bail, shall consider the question from the angle as to whether the accused was possessed of the requisite mens rea. The Court is not required to record a positive finding that the accused had not committed an offence under the Act. The Court ought to maintain a delicate balance between a judgment of acquittal and conviction and an order granting bail much before commencement of trial. The duty of the Court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. Further, the Court is required to record a finding as to the possibility of the accused committing a crime which is an offence under the Act after grant of bail."
19. Again, in the case of Serious Fraud Investigation Office Vs. Nittin Johari and another, (2019) 9 SCC 165, the Supreme Court has held that stringent view should be taken by the Court towards grant of bail with respect to economic offences. Paragraphs 24, 25, 26 and 27 of the aforesaid case are extracted hereunder:-
"24. At this juncture, it must be noted that even as per Section 212(7) of the Companies Act, the limitation under Section 212(6) with respect to grant of bail is in addition to those already provided in CrPC. Thus, it is necessary to advert to the principles governing the grant of bail under Section 439 of CrPC. Specifically, heed must be paid to the stringent view taken by this Court towards grant of bail with respect of economic offences. In this regard, it is pertinent to refer to the following observations of this Court in Y.S. Jagan Mohan Reddy [Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439 : (2013) 3 SCC (Cri) 552] : (SCC p. 449, paras 34-35) "34. 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 35. 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 tampered with, the larger interests of the public/State and other similar considerations." This Court has adopted this position in several decisions, including Gautam Kundu v. Directorate of Enforcement [Gautam Kundu v. Directorate of Enforcement, (2015) 16 SCC 1 : (2016) 3 SCC (Cri) 603] and State of Bihar v. Amit Kumar [State of Bihar v. Amit Kumar, (2017) 13 SCC 751 : (2017) 4 SCC (Cri) 771] . Thus, it is evident that the above factors must be taken into account while determining whether bail should be granted in cases involving grave economic offences.
25. As already discussed supra, it is apparent that the Special Court, while considering the bail applications filed by Respondent 1 both prior and subsequent to the filing of the investigation report and complaint, has attempted to account not only for the conditions laid down in Section 212(6) of the Companies Act, but also of the general principles governing the grant of bail
26. In our considered opinion, the High Court in the impugned order has failed to apply even these general principles. The High Court, after referring to certain portions of the complaint to ascertain the alleged role of Respondent 1, came to the conclusion that the role attributed to him was merely that of colluding with the co-accused promoters in the commission of the offence in question. The Court referred to the principles governing the grant of bail as laid down by this Court in Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra [Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294 : 2005 SCC (Cri) 1057] , which discusses the effect of the twin mandatory conditions pertaining to the grant of bail for offences under the Maharashtra Control of Organised Crime Act, 1999 as laid down in Section 21(4) thereof, similar to the conditions embodied in Section 212(6)(ii) of the Companies Act. However, the High Court went on to grant bail to Respondent 1 by observing that bail was justified on the "broad probabilities" of the case
27. In our considered opinion, this vague observation demonstrates non-application of mind on the part of the Court even under Section 439 CrPC, even if we keep aside the question of satisfaction of the mandatory requirements under Section 212(6)(ii) of the Companies Act."
20. The Supreme Court in the case of P. Chidambaram Vs. Directorate of Enforcement, (2019) 9 SCC 24 while considering the scope and ambit of Section 438 Cr.P.C. and the power of the Court to grant anticipatory bail to an accused involved in economic offences, held as under:-
"78.Power under Section 438 CrPC being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offences. Economic offences stand as a different class as they affect the economic fabric of the society. InDirectorate of Enforcementv.Ashok Kumar Jain[Directorate of Enforcementv.Ashok Kumar Jain, (1998) 2 SCC 105 : 1998 SCC (Cri) 510] , it was held that in economic offences, the accused is not entitled to anticipatory bail.
79.The learned Solicitor General submitted that the "scheduled offence" and "offence of money-laundering" are independent of each other and PMLA being a special enactment applicable to the offence of money-laundering is not a fit case for grant of anticipatory bail. The learned Solicitor General submitted that money-laundering being an economic offence committed with much planning and deliberate design poses a serious threat to the nation's economy and financial integrity and in order to unearth the laundering and trail of money, custodial interrogation of the appellant is necessary.
80.Observing that economic offence is committed with deliberate design with an eye on personal profit regardless to the consequence to the community, inState of Gujaratv.Mohanlal Jitamalji Porwal[State of Gujaratv.Mohanlal Jitamalji Porwal, (1987) 2 SCC 364 : 1987 SCC (Cri) 364] , it was held as under : (SCC p. 371, para 5) "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 collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest.
81.Observing that economic offences constitute a class apart and need to be visited with different approach in the matter of bail, inY.S. Jagan Mohan Reddyv.CBI[Y.S. Jagan Mohan Reddyv.CBI, (2013) 7 SCC 439 : (2013) 3 SCC (Cri) 552] , the Supreme Court held as under : (SCC p. 449, paras 34-35 "34.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
35. 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 tampered with, the larger interests of the public/State and other similar considerations."
(emphasis supplied)
82.Referring toDukhishyam Benupaniv.Arun Kumar Bajoria[Dukhishyam Benupaniv.Arun Kumar Bajoria, (1998) 1 SCC 52 : 1998 SCC (Cri) 261], inDirectorate of Enforcementv.Bher Chand Tikaji Bora[Directorate of Enforcementv.Bher Chand Tikaji Bora, (1999) 5 SCC 720 : 1999 SCC (Cri) 1045] , while hearing an appeal by the Enforcement Directorate against the order [Bherchand Tikaji Borav.State of Maharashtra, Criminal Application No. 2140 of 1998, decided on 21-7-1998 (Bom)] of the Single Judge of the Bombay High Court granting anticipatory bail to the respondent thereon, the Supreme Court set aside the order of the Single Judge granting anticipatory bail
83.Grant of anticipatory bail at the stage of investigation may frustrate the investigating agency in interrogating the accused and in collecting the useful information and also the materials which might have been concealed. Success in such interrogation would elude if the accused knows that he is protected by the order of the court. Grant of anticipatory bail, particularly in economic offences would definitely hamper the effective investigation. Having regard to the materials said to have been collected by the respondent Enforcement Directorate and considering the stage of the investigation, we are of the view that it is not a fit case to grant anticipatory bail
84.In a case of money-laundering where it involves many stages of "placement", "layering i.e. funds moved to other institutions to conceal origin" and "interrogation i.e. funds used to acquire various assets", it requires systematic and analysed investigation which would be of great advantage. As held inAnil Sharma[Statev.Anil Sharma, (1997) 7 SCC 187 : 1997 SCC (Cri) 1039] , success in such interrogation would elude if the accused knows that he is protected by a pre-arrest bail order. Section 438 CrPC is to be invoked only in exceptional cases where the case alleged is frivolous or groundless. In the case in hand, there are allegations of laundering the proceeds of the crime. The Enforcement Directorate claims to have certain specific inputs from various sources, including overseas banks. Letter rogatory is also said to have been issued and some response have been received by the Department. Having regard to the nature of allegations and the stage of the investigation, in our view, the investigating agency has to be given sufficient freedom in the process of investigation. Though we do not endorse the approach of the learned Single Judge in extracting the note produced by the Enforcement Directorate, we do not find any ground warranting interference with the impugned order [P. Chidambaramv.CBI, 2019 SCC OnLine Del 9703]. Considering the facts and circumstances of the case, in our view, grant of anticipatory bail to the appellant will hamper the investigation and this is not a fit case for exercise of discretion to grant anticipatory bail to the appellant."
21. The Court has to take into consideration while considering the anticipatory/regular bail application, nature of offence and the Court should refuse the bail if the offence is serious and is of huge magnitude, particularly, in economic offences. Corruption is a menace which is eating the vitals of economy of this country
22. Considering the allegations in the charge sheet, nature of offence in which the huge money of the corporation Bank was allegedly syphoned off by the accused-applicant in furtherance of criminal conspiracy, this Court does not find it a fit case where the accused-applicant should be enlarged on anticipatory bail as the offence allegedly committed by the accused-applicant does not fall within the parameters of Section 438 Cr.P.C.
23. Anticipatory bail application is accordingly rejected
24. However, it is provided that if the accused-applicant surrenders before the concerned trial court within two weeks from today and apply for bail, his bail application shall be considered and decided expeditiously in accordance with law without being prejudiced by any of the observations made by this Court while rejecting the anticipatory bail application of the accused-applicant.
Order Date :- 24.2.2023 Arun K. Singh