Calcutta High Court (Appellete Side)
Prabha Surana vs Unknown on 28 July, 2023
28.07.2023.
5
Ct.No.28
as
(Allowed)
C.R.M. (DB) 187 of 2023
(CRAN 1 of 2023)
In Re:- An application for bail under Section 439 of the Code
of Criminal Procedure in connection with Bhowanipore P. S.
Case No.76 of 2020 dated 07.03.2020 under Sections
406/420/120B/34 of the Indian Penal Code read with
Section 3(2) of the West Bengal Protection of Interest of
Depositor in the Financial Establishment Act, 2013.
In the matter of : Prabha Surana.
.... Petitioner.
Mr. Ratnanko Banerjee, ld. Sr. Adv.,
Mr. Ayan Bhattacharyya,
Mr. Abhijit Chowdhury,
Mr. Aditya Ratan Tiwari.
...for the Petitioner.
Mr. Saswata Gopal Mukherji, ld. P.P.,
Mr. Neguive Ahmed, ld. A.P.P.
Mr. Ranabir Roy Chowdhury,
Mr. Mainak Gupta.
...for the State.
Mr. Anirban Dutta,
Mr. Anurag Sarkar.
...for the De-facto complainant
Amita Dani & Vishal Agarwal
Ms. Samira Grewal
... for the De-facto complainant
Vikram Jairath, Harleen Jairath & Arjun Jairath
Genesis of the case:-
1.Petitioner is a lady and the wife of co-accused Shanti Kumar Surana. Shanti Kumar Surana and his associates had floated a number of business ventures which are commonly described as 'Surana Group of Companies'. The de-facto complainant is a business associate of 'Surana Group of 2 Companies'. It is alleged that on the basis of dishonest representation and by showing brochure falsely portrayed a rosy picture with regard to the business ventures of the 'Surana Group' inviting deposits for fund management primarily for senior citizens. The de-facto complainant was induced to deposit a sum of Rs.11 crores between 2015 to 2017 as follows:-
RTGS NO DATE AMOUNT 1. SCBLR22015031300005684 13/03/2015 Rs.3,50,00,000/- 2. SCBLR22015031600005499 16/03/2015 Rs.1,00,00,000/- 3. SCBLR22015052600005735 26/05/2015 Rs.2,00,00,000/- 4. SCBLR22016040700002701 07/04/2016 Rs.50,00,000/- 5. SCBLR22017101800004405 18/10/2017 Rs.50,00,000/-
Total Rs.7,50,00,000/- from Bank Account No.33210014581 of Nitin Dani at Standard Chartered Bank, 41, Chowringee Road, Kolkata -700071 RTGS NO DATE AMOUNT
1. SCBLR22015031600005505 16/03/2015 Rs.1,00,000,00/-
2. SCBLR22015120200003465 02/12/2015 Rs.50,00,000/- Total Rs.1,50,00,000/- from Bank Account No.33210014719 of Amita Nitin Dani in Standard Chartered Bank, 41, Chowringee Road, Kolkata -700071 RTGS NO DATE AMOUNT
1. SCBLR22015120200003593 02/12/2015 Rs.1,50,000,00/-
2. SCBLR22016081700003583 17/08/2016 Rs.50,00,000/- Total Rs.2,00,000,00/- from Bank Account No.33210019060 of Anand Nitin Dani in Standard Chartered Bank, 41, Chowringee Road, Kolkata -700071
2. It is further alleged in the FIR inspite of repeated demands the accused persons failed and/or neglected to make the aforesaid payment. In 2021 FIR was registered.
3. In the course of investigation, petitioner was arrested and presently is in custody for over 300 days. It may not be 3 out of place to mention a coordinate Bench of this Court granted bail to the petitioner.
4. The State challenged the order before the Hon'ble Apex Court being Criminal Appeal No.1119 of 2023. The Hon'ble Apex Court by order dated 13th April, 2023 quashed the bail order and remanded the matter to be disposed of in accordance with law and on merits after taking into consideration the materials collected in the course of investigation.
5. The matter was assigned before this Bench on 20th June, 2023 for hearing.
Arguments at the Bar:-
6. We have heard the learned Senior Advocate for the petitioner, learned Public Prosecutor for the State and learned Advocate for the de-facto complainant.
7. Learned Senior Advocate for the petitioner submits petitioner is a housewife and a mere name lender in the business. Even in the charge sheet, no overt act is attributed to her. She is suffering from various ailments and required treatment while in custody. De-facto complainant had advanced a loan to the company in the ordinary course of business and cannot be treated as a depositor under the West Bengal Protection of Interest of Depositors in Financial Establishments Act, 2013 (hereinafter referred to as the Act of 2013).
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8. He strenuously contends that there were continuing business transactions between 'Surana Group of Companies' and the de-facto complainant and her associates. In the ordinary course of business investments were made in the 'Surana Group of Companies' and it is incorrect that the de- facto complainant was induced to make investments on the strength of a brochure/leaflet floated by the 'Surana Group'.
9. In fact, the brochure referred to in the FIR is a fake and fabricated document. No such brochure was floated on behalf of the company and a criminal case was registered against the de-facto complainant on that score. Though a report in final form was filed in that case, it has been challenged in Court.
10. It is also contended on similar allegations another criminal case was lodged by the de-facto complainant wherein petitioner has been enlarged on bail by a co-ordinate Bench of this Court in CRM (DB) 4148 of 2022.
11. It is further stated out of Rs.11 crores a sum of Rs.5.47 crores has been refunded and the same was suppressed in the FIR.
12. It is also argued investigation is complete and the petitioner has suffered incarceration for a considerate period of time. There is little possibility of trial commencing let alone concluding in the near future. Accordingly, petitioner may be enlarged on bail.
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13. In response learned Public Prosecutor submits petitioner has been described as the Chief Investment Officer of the 'Surana Group Fund'. It cannot be said that she was a mere name lender. 'The Surana Group of Companies' under the leadership of Shanti Kumar Surana and his wife i.e. petitioner herein had created 'Surana Group Fund' and invited deposits from various unsuspecting investors. They were promised high return on investment and were assured that the principal sum would be refunded after a stipulated period. They misappropriated the funds. A number of persons have been affected. Enquiries made with the regulatory authorities i.e. SEBI and RBI show Surana Group of Companies did not have requisite permission to invite deposits from members of the public. Nature of activities clearly depicts a collective investment scheme. Bail prayer may be rejected.
14. Learned Advocate for the de-facto complainant opposes the bail application. He submits that the petitioner is a principal player and had defrauded his clients. Bail prayer may be refused.
Decision with reasons:-
15. In the order of remand the Apex Court observed, this Court while granting bail to the petitioner had not adverted to relevant matters. In one of the remand matters involving the same batch of cases the Apex Court had clarified the relevant 6 parameters to be considered while considering the prayer for regular bail as follows1:-
i) Nature and gravity of offence;
ii) Role of the petitioner in the crime and vis-à-vis co-
accused who are on bail;
iii) Materials collected in the course of investigation
and;
iv) 'Triple Test' Theory.
We have examined the bail prayer in the light of the aforesaid parameters:-
(i) Nature and gravity of offence:-
16. Allegations in the First Information Report show that the de-facto complainant had been induced to part with a sum of Rs.11 crores between 2015 and 2017 on the promise of high returns on investments. It is also alleged in the FIR that a brochure describing the 'Surana Group of Companies' as fund manager for senior citizens and portraying a rosy picture on investment possibilities had been presented before the de-facto complainant.
17. On the other hand, the petitioner had contended that the brochure was subsequently manufactured to give the impression of a fraudulent transaction and paint a simplicitor business relationship in a sinister manner.
18. Though it is contended at the Bar a large number of persons were defrauded, inspite of repeated queries learned 1 Criminal Appeal No. 966 of 2023 7 Public Prosecutor was unable to come out with a quantum more than Rs.55 crores allegedly misappropriated by the 'Surana Group of Companies'.
19. Apart from the offence punishable under Section 3 of the Act of 2013, other offences attract a maximum sentence of seven years and are triable by Magistrate. Even with regard to the applicability of the Act of 2013 to the present transaction, learned Senior Advocate contends it is doubtful that the de- facto complainant had made deposits upon being induced by the brochure inviting investments primarily from senior citizens to 'The Surana Group Fund'. On the contrary, it is the defence plea that the transaction was a loan investment made in the ordinary course of business. This defence plea requires to be thrashed out against the prosecution case during trial. Even otherwise, offence under section 3 of the Act of 2013 does not attract mandatory life imprisonment and prescribes a minimum imprisonment of three years which may extend to life. The special law does not impose any additional embargo on bail like PMLA.
20. We are conscious in economic offences quantum of sentence is not the only parameter to assess its gravity. Impact of such offence on the economic health of the nation, number of victims affected and overall impact on society are also to be considered.
21. Collective investment schemes run by ponzi firms form a class apart. But in the present cases alleged 8 misappropriation is said to be around Rs.55 crores and would not qualify as a large collective investment scheme over Rs.100 crores to which the rigours of SEBI Act would apply. Moreover, profile of the investors including the de-facto complainant show they form a close knit group of friends and associates of 'The Surana Group of Companies'. The activity of the company does not impact victims across the broad cross section of society unlike other Ponzi cases.
22. Statements of some witnesses have been placed before us who also claim they have been duped. But these statements are not backed by contemporaneous documents evidencing acknowledgement of deposit and do not inspire confidence.
23. With regard to criminal antecedents apart from the batch of cases involving a corpus of Rs.55 crores, no other case against the petitioner is placed on record apart from a case registered in Nagaland. In that case, the intermediary in the negotiation is the de-facto complainant in the present case. This reinforces the defence plea that the de-facto complainant/ investors and the accused persons had a close knit business relationship between themselves. Said case has been assailed before the jurisdictional High Court.
24. These aspects need to be kept in mind while the nature and gravity of offence in the present batch of cases are assessed vis-à-vis the plea of bail of the under trial. 9
(ii) Role of the petitioner in the crime and vis-à-vis co-accused who are on bail:-
25. Petitioner argues that she is the wife of Shanti Kumar Surana and is not a director of any of the companies.
26. Learned Public Prosecutor rebuts such stance and draws our attention to the brochure wherein she has been described as the Chief Investment Officer of 'The Surana Group Fund'. It is also alleged that the investments were made in the joint accounts of the petitioner and her husband. She does not stand on the same footing with co-accused who are on bail. It may not be out of place to note that the petitioners have cast serious doubt with regard to the authenticity of the brochure itself.
27. Be that as it may, we find substance in his submission and have proceeded to consider the bail prayer of the petitioner on its own merits.
(iii) Materials collected during investigation:-
28. Investigation in the crime essentially revolves around documents. All relevant documents pertaining to the subject matter of case are in the hands of the investigating agency. Investigation is complete and it cannot be said further detention of the petitioner for the purpose of investigation is warranted.
29. At this stage it is strenuously argued by the de facto complainant that assets of 'The Surana Group of Companies' 10 are encumbered and petitioner may be directed to secure the acknowledged dues.
30. In response, senior counsel submits that the petitioner is not in a position to secure dues.
31. We have considered the prayer of the de facto complainant with regard to continued detention for recovery of dues in the light of the direction of the Apex Court in Ramesh Kumar vs. State of NCT of Delhi2.
32. In the said case the Apex Court has clarified the process of criminal law may not be utilized to recover private dues. Only exception has been made with regard to misappropriation of public fund.
33. The present batch of cases show a number of persons who are closely associated with 'The Surana Group of Companies' had made investments in the said companies presumably on the expectation of high returns. Investigation reveals alleged misappropriation is to the tune of Rs.55 cores which falls below the threshold of Rs.100 cores which would have attracted powers of search, seizure and attachment under the SEBI Act.
34. However, provisions under the Act of 2013 provide for attachment and confiscation of assets of the financial establishment and its entities for recovery of dues. None of the powers have been invoked.
2 2023 SCC OnLine SC 766 11
35. In this backdrop we are unable to accept the submission of the de facto complainant that further detention of the petitioner is necessary for recovery or securing the outstanding liabilities. Other recourses in law require to be availed as has been done in some of the cases through institution of civil proceedings etc.
(iv) 'Triple test' and period of detention:-
36. Other test for under trial detention is the 'triple test' i.e. (i) flight risk/ abscondence of the accused and her availability during trial (ii) tampering of evidence, (iii) winning over of witnesses etc.
37. It is argued on behalf of the State and the de facto complainant that the petitioner had been arrested from a different State namely Rajasthan. There is chance of abscondence. We are not impressed by such submission. Petitioner is a lady and her passport is already in the custody of the court. There is no flight risk whatsoever.
38. With regard to tampering of evidence or winning over of witnesses we note that the case revolves around documents which have been already seized. Vital witnesses are the de- facto complainant and his associates and it is highly unlikely that the petitioner or any of her associates would be in a position to exercise influence over them. Her availability in the course of trial may be secured by appropriate restrictions which are less intrusive than continued custody. 12
39. Petitioner had been granted bail after 162 days of detention. Hon'ble Apex Court quashed the order of bail and remanded the matter for reconsideration. Presently the petitioner is in custody for over 300 days. Investigation is complete.
40. We have considered the nature and gravity of offence. Investments in the cases appear to have been made by close friends and associates of 'The Surana Group' and not from diverse sections of society. Quantum of investment is to the tune of Rs. 55 crores and does not exceed the threshold envisaged under the SEBI Act of 2014.
41. We have also taken into consideration number of witnesses and the documents which the prosecution proposes to adduce in the course of trial. There is little possibility of trial concluding in the near future.
42. It is argued some of the co-accused are absconding. This needs to be addressed by appropriate coercive measures taken by the investigating agency and continued detention of the petitioner is not an answer.
Conclusion:-
43. In the light of the aforesaid discussion, we are of the opinion petitioner may be enlarged on bail.
44. Accordingly, the petitioner be released on bail upon furnishing a bond of Rs. 50,000/- with two sureties of like amount each, one of whom must be local to the satisfaction of the learned CJM, South 24 Parganas at Alipore on the 13 condition that the petitioner shall appear before the trial court on every date of hearing and shall not intimidate witnesses or tamper with evidence in any manner whatsoever and on further condition that the petitioner while on bail shall remain within the municipal limits of Kolkata until further orders.
45. In the event she fails to appear before the trial court without justifiable cause, the trial court shall be at liberty to cancel her bail automatically without reference to this court.
46. Trial court is requested to take appropriate measures to ensure attendance of the absconding accused. In the event their attendance cannot be secured inspite of exhaustion of all processes, to declare them as proclaimed offenders and proceed with the trial of the petitioner and other co-accused who are before the court and conclude the same at an early date without unnecessary adjournment.
47. It is also made clear any unjustified adjournment of dilation resorted by the petitioner would entail cancellation of bail by the trial court without reference to this court.
48. In view of the disposal of the bail application, CRAN 1 of 2023 is also disposed of.
(Ajay Kumar Gupta, J.) (Joymalya Bagchi, J.)