Calcutta High Court (Appellete Side)
In Re : Sandhir Aggarwal vs Union Of India And Ors.) Heard Along With on 25 September, 2014
Author: Indira Banerjee
Bench: Indira Banerjee
14.
25.09.2014.
debajyoti
CRM No.14434 of 2014
In re : Sandhir Aggarwal
...Petitioner.
Re: An application under Section 439 of the Code of Criminal Procedure filed on
17.09.2014in connection with CBI Special Case RC-04/S/2014, CBI, SPE, SCB, SIT, Kolkata under Sections 420/409/406 of the Indian Penal Code.
Mr. Anindya Mitra, Mr. Sekhar Kumar Basu, Mr. Joydeep Kar, Mr. Avishek Sinha, Mrs. Anasuya Sinha, Mr. Somopriyo Choudhury ...For the Petitioner.
Mr. K. Raghavacharyulu, Md. Ashraf Ali ... For the CBI.
This application has been filed under Section 439 of the Code of Criminal Procedure by the petitioner, who has been in jail custody. It appears that the petitioner has been in custody for about 32 days. We have perused the entire Case Diary.
The records reveal that the Saradha Group of Companies had floated several schemes, which were allegedly fraudulent to allure the depositors, and collected deposits on the promise of attractive returns.
This allegedly fraudulent (ponzi) schemes included land allotment schemes, flat allotment schemes, tours and travel scheme etc. Many economically underpriviledged people have been allured by the fraudulent (ponzi) schemes to invest relatively small amounts on the promise of lucrative returns.
These (ponzi) schemes were allegedly in violation of the Securities and Exchange Board of India Act, 1992, Reserve Bank of India Act, 1935, Companies Act, 1956 and the Income Tax Act, 1961, inter alia by resort to fraudulent certification, non-compliance of accounting standards, material misstatement of facts etc. Failure of the Saradha Group of Companies to refund deposits collected from the public led to public outcry. A commission of enquiry was constituted to investigate into the scam and recommend remedial action to the State Government. Cases were initiated against the Saradha Group Companies and their office bearers and cases were investigated by the State Police. Several writ petitions were filed seeking transfer of investigation from the State Police to CBI. By an order dated 9th May, 2014 in Writ Petition (Civil) No. 401/2013 (Subrata Chattoraj Vs. Union of India and Ors.) heard along with other writ petitions, the Supreme Court allowed the writ petitions and directed transfer of investigation from the State Police Agency to the Central Bureaue of Investigation (CBI). The CBI was given the freedom to conduct further investigation in terms of Section 173(8) of the Criminal Procedure Code to investigate the larger conspiracy angle in relation to cases where charge sheet had already been presented.
By its judgement and order dated 9th May, 2014 the Supreme Court made it clear that investigation was not to be confined only to those directly involved in the affairs of the Saradha Group of Companies, but might extend to several others who needed to be questioned with regard to their role in the sequence of events. It is in pursuance of the judgment of the Supreme Court that investigation has been taken up by the CBI.
In Subrata Chattoraj vs. Union of India & Ors. being Writ Petition (Civil) No.401 of 2013 which was heard along with several other writ petitions, the Supreme Court inter alia observed and directed as follows:
" The Regulatory Authorities, it is common ground, exercise their powers and jurisdiction under Central legislations. Possible connivance of those who were charged with the duty of preventing the scams of such nature in breach of the law, therefore, needs to be closely examined and effectively dealt with. Investigation into the larger conspiracy angle will, thus, inevitably bring such statutory regulators also under scrutiny. "
Mr. Mitra, Senior Advocate, appearing on behalf of the petitioner, cited the judgment of the Supreme Court in Siddharam Satlingappa Mhetre Vs. State of Maharashtra and Ors. reported in (2011) 1 SCC 694 where the Supreme Court held as follows:
" The gravity of charge and the exact role of the accused must be properly comprehended. Before arrest, the arresting officer must record the valid reasons which have led to the arrest of the accused in the case diary. In exceptional cases the reasons could be recorded immediately after the arrest, so that while dealing with the bail application, the remarks and observations of the arresting officer can also be properly evaluated by the court.
The Law Commission in July 2002 has severely criticised the police of our country for the arbitrary use of power of arrest which, the Commission said, is the result of the vast discretionary powers conferred upon them by this Code. The Commission expressed concern that there is no internal mechanism within the Police Department to prevent misuse of law in this manner and the stark reality that complaint lodged in this regard does not bring any result. The Commission intends to suggest amendments in the Criminal Procedure Code and has invited suggestions from various quarters. Reference is made in this article to the 41st Report of the Law Commission wherein the Commission saw "no justification"
to require a person to submit to custody, remain in prison for some days and then apply for bail even when there are reasonable grounds for holding that the person accused of an offence is not likely to abscond or otherwise misuse his liberty. Discretionary power to order anticipatory bail is required to be exercised keeping in mind these sentiments and spirit of the judgments of this Court in Sibbia case and Joginder Kumar v. State of U.P. Arrest should be the last option and it should be restricted to those exceptional cases where arresting the accused is imperative in the facts and circumstances of that case. The court must carefully examine the entire available record and particularly the allegations which have been directly attributed to the accused and these allegations are corroborated by other material and circumstances on record.
Personal liberty is a very precious fundamental right and it should be curtailed only when it becomes imperative according to the peculiar facts and circumstances of the case.
In case the arrest is imperative, according to the facts of the case, in that event, the arresting officer must clearly record the reasons for the arrest of the accused before the arrest in the case diary, but in exceptional cases where it becomes imperative to arrest the accused immediately, the reasons be recorded in the case diary immediately after the arrest is made without loss of any time so that the court has an opportunity to properly consider the case for grant or refusal of bail in the light of reasons recorded by the arresting officer.
Mr. Mitra also cited Sanjay Chandra Vs. Central Bureau of Investigation, reported in (2012) 1 Supreme Court Cases 40, where the Supreme Court held as follows:
" In bail applications, generally, it has been laid down from the earliest times that the object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Deprivation of liberty must be considered a punishment, unless it is required to ensure that an accused person will stand his trial when called upon. The courts owe more than verbal respect to the principle that punishment begins after conviction, and that every man is deemed to be innocent until duly tried and duly found guilty.
The grant or refusal to grant bail lies within the discretion of the court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction, to assure that he will submit to the jurisdiction of the court and be in attendance thereon whenever his presence is required. "
On the other hand, Mr. Raghavacharyulu Konduri cited the judgment of the Supreme Court in Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation reported in (2013) 7 SCC 439 where the Supreme Court held:-
"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."
Mr. Raghavacharyulu Konduri also cited Central Bureau of Investigation Vs. V. Vijay Sai Reddy reported in (2013) 7 SCC 452 where the Supreme Court held:-
"34. 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. 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."
On perusal of the materials in the case diary produced before us, we are of the view that there are reasonable grounds for detention of the petitioner. At this crucial stage of investigation, release of the petitioner on bail would seriously hamper the investigation.
We are not oblivious of the ignominy, humiliation and disgrace attached to arrest. We are conscious arrest leads to serious consequences not only for the accused, but also, persons associated with the accused. However, we are cast with the duty of balancing societal interest with individual interest.
Section 41(1)(a) of the Code of Criminal Procedure, 1973 provides as follows:-
"41. When police may arrest without warrant. - (1) Any police officer may without an order from a Magistrate and without a warrant, arrest any person-
(a) who has been concerned in any cognizable offence, or against whom a reasonable complaint has been made, or credible information has been received, or a reasonable suspicion exists, of his having been so concerned; or .........."
The police officer has power to arrest without any order from a Magistrate and without a warrant, any person who is concerned with any cognizable offence or against whom a reasonable complaint has been made or credible information has been received or a reasonable suspicion exists. It is not necessary that the person sought to be arrested should, beyond all doubt, have actually committed the offence.
After the CBI took over the investigation, several persons were interrogated and several documents were ceased from different persons. Perusal of the case diary reveals incriminating materials including statements of Sudipta Sen and others, which indicate that the petitioner in the instant case acted as a conduit between SEBI authorities, RBI authorities and those associated with Saradha Group.
There can be no doubt that it is imperative for the courts to carefully and with meticulous precision evaluate the facts of each case. The discretion to grant bail must be exercised on the basis of the available material and the facts of the particular case. In cases where the Court is of the considered view that the accused has joined investigation and he is fully cooperating with the investigating agency and is not likely to abscond, in that event, his custodial interrogation should ordinarily be avoided.
As held by the Supreme Court in Siddharam Satlingappa Mhetre Vs. State of Maharashtra & Ors. (supra) the order granting or refusing bail must reflect perfect balance between the conflicting interests, namely, sanctity of individual liberty and the interest of the society. While the court is not oblivious to the right of the petitioner as an individual, there are, as observed above, materials in the Case Diary which suggest complicity of the petitioner. The petitioner apparently acted as a conduit between the Saradha Group and their associates and various authorities, such as, SEBI and the Reserve Bank of India. Whether the allegations are correct or not, are not matters which are to be decided at this stage. The question is whether there are any prima facie materials and we are unable to hold that there are no prima facie materials at all to justify the continuation of the petitioner in judicial custody.
It is the case of the CBI that investigation relating to the affairs of the Saradha Group is at a crucial stage. Evidence including materials seized from the residence, such as, hard discs, are required to be analyzed and examined. There is a strong possibility that release of the petitioner at this stage might impede investigation. If all materials were to be divulged at this stage, the investigation would seriously be impeded.
Having regard to the nature of the allegations, proper investigation is absolutely essential. The materials seized are under analysis and may lead to discovery of further materials. At this stage, we are not inclined to allow the prayer of the petitioner for bail. The prayer for bail is, thus, rejected.
The application for bail is, accordingly, disposed of.
( Indira Banerjee, J. ) ( Sahidullah Munshi, J. ) 1 8