Madhya Pradesh High Court
Sharad T Kabra vs Directorate Of Enforcement (Dept.Of ... on 15 December, 2015
M.Cr.C. No.10167/2015
15.12.2015
Shri Vikram Choudhary, learned Senior Counsel with
Shri Sudhanshu Vyas, learned counsel for the applicant.
Shri Deepak Rawal, learned Deputy Advocate General
for the respondent/CBI.
This is first bail application filed by the applicant under section 439 of the Code of Criminal Procedure for grant of bail.
The counsel for the respondent filed a written reply of the application and other relevant papers which are on record.
The present applicant was arrested by the respondent, Directorate of Enforcement in Crime No.ICIR/INSZO/07/13 nd and also in Criminal Case No.162/2015 pending before the 2 Additional Sessions Judge, Indore under section 3/4 of Prevention of Money Laundering Act (hereinafter referred to as 'PML Act 2002').
The matter relates to the company M/s Zoom Developers Pvt. Ltd. (hereinafter referred to as 'ZDPL'). It was a private limited company having its corporate office at Mumbai. The company was undertaking works of infrastructure development projects on contract basis, subsequently, as the company grew, it acquired expertise in providing 'Engineering Design Drawing' Services, project management, Asset Reconstruction and supply of domain specialists for various industrial and infrastructure projects in India and abroad. For conduction of its business, the company acquired non-fund based credit facility by way of Bank guarantees for approximately Rs.1.80 crores from United Bank of India, Mumbai. In the year 1997-1998, the company secured certain works through Aggregators, which were independent companies, which assigned work to ZDPL. It is further stated that between 1997-2003, the business of the company further grew and for this purpose, it required 'advance payment-cum-performance guarantees' from Banks of International repute of equivalent value and for this purpose, it approached multiple banks in India and seven banks formed a consortium led by Punjab National Bank. The foreign banks issued bank guarantees on the basis of the bank guarantees issued by the domestic banks, and thus, through the Aggregators the company received various work orders for development of infrastructure as well as providing Engineering Design Services. This arrangement went on upto 2008 when the European and U.S. Market faced major financial crisis and then it is alleged that the company faced severe financial crunch.
The Director of company ZDPL is the co-accused, Vijay Choudhary, the present applicant joined the company as Company Secretary in the year 2003 and resign from the post in 2011.
As per the reply filed by the respondent, the allegations against the present applicant are as follows:-
"1. Mr. Sharad Kabra is in knowledge of the fact that foreign trusts and beneficiary companies, called as Aggregators, were formed by Mr. Vijay Choudhary, who is the Director of ZDPL;
2. He has deliberately concealed this fact before the Bankers and thereby involved in the offence of money laundering.
3. Based on request letter submitted by Mr., Sharad Kabra, BG No.1232FLG006106 was issued by the PNB, on the basis of fabricated Contract No.LL/ZDPL/20/06/06, containing scanned signature of the authorised signatories of the so called foreign aggregators.
4. Letters of aggregators were also submitted for fraudulent extension of bank guarantee. Such letters were prepared in the office of ZDPL using scanned images of signatures. Such letters were projected as if the same were faxed, by creating header as appears on fax document. Funds mobilised out of such fraudulently availed Bank Guarantee were partially utilised to purchase property in USA. Such Bank Guarantee was invoked on 25.01.2010.
5. He carried out the transactions of aggregators, such as, M/s. Llondenium Trading Limited, M/s. Astikor AG etc., which resulted into invocation of Bgs. During the recording of statement u/s 50 he did not disclose the true nature of transactions with Aggregators.
6. He was knowingly involved in transferring the amounts received in the Punjab National Bank and other banks, as mobilization advances, to the account of SBBJ for purchase of the said property,;
7. He signed the Form A2, mis-declaring the purpose of payment. He also signed both the cheques paid to First American Title Co.- amounting to USD 7 MILLIOINS, for purchase of 1280 Acre of Land in Soledad, Monetary County, California, USA.
8. He has willfully mis-declared the purpose of transfer of subject funds to USA by mentioning that they were towards part payment of services received by them from Siok Savers Inc.
9. He admittedly involved himself in transferring the title of the subject property on to the name of M/s. Novagold International Lic, Dubai during July, 2014;
10. He has directly attempted and indulged and has knowingly assisted and knowingly is a party and is actually involved in the process or activity connected with the proceeds of crime including its concealment, possession, acquisition, and use and projecting and claiming it as untainted property, hence he is guilty of the Offence of Money Laundering u/s 3 of PMLA, 2002."
Learned counsel for the applicant submits that against the present applicant and the co-accused Vijay Choudhary, 7 cases were filed on complaint being lodged by 7 banks who were members of consortium before Mumbai Court. In all the cases, the present applicant and the co-accused Vijay Choudhary was never arrested by CBI, which was the investigating agency, investigating the main offence under sections 120-B and 420 IPC. According to him, the present case is filed under section 3 of PML Act 2002 which defines the offence of money-laundery and there are two ingredients that a person should be involved in process or activity connected with concealment, possession, acquisition or use of proceeds of crime and projecting or claiming it as untainted property. According to him, the present applicant called by the respondent for recording his statement under section 50 of PML Act. After recording his statement, he was arrested in May, 2015 and thereafter, he is under custody. He further submits that the offence under PML Act is not non-cognizable and for this purpose, he prefers the judgment of Gujarat High Court in the case of Rakesh Manekchand Kothari vs. Union of India passed in Special Criminal Application (Habeas Corpus) No.4247/2015 dated 03.08.2015 in which it was held that even if the offence under PML Act held to be cognizable or non cognizable respective procedures provided by Cr.P.C. are to be followed. This case was referred by co-ordinate Bench of this Court filed by co-accused Vijay Choudhary and the present applicant who filed W.P. No.5625/2015 co- ordinate Bench of this Court observed as under:-
"15. Counsel for the petitioner has also relied upon the judgment of the Gujarat High Court in the matter of Rakesh Manekchand Kothari Vs. Union of India dated 3.8.2015, passed in Special Criminal Application (Habeas Corpus) No.4247/2015 but in that judgment the Gujarat High Court has considered and stated about the procedure to be followed in both the eventualities, i.e. if the offence under PMLA is treated to be cognizable and if it is not treated to be cognizable. At one place the Gujarat High Court has, in one sentence, said that offence under provisions of PMLA is non-cognizable, but in my humble opinion the said finding is not supported by reasons. Even otherwise the said judgment only has persuasive value and considering the provisions of Section 4 of PMLA read with Part-II of First Schedule to Cr.P.C., I am of the opinion that the offence under PMLA is cognizable."
The co-ordinate Bench also observed that the Additional Sessions Judge, before whom the complaint has been filed under section 45 of PML Act, is competent to try the case and any objection in respect of procedure followed may be raised before him and in this view of the matter, the co-ordinate Bench of this Court dismissed the Habeas Corpus Petition filed by the present applicant stating that his detention is not illegal.
It is further submitted by the counsel for the applicant that an SLP was filed against the order passed by the Gujarat High Court in case of Rakesh Manekchand Kothari (supra) was dismissed in limine by the Hon'ble Apex Court.
Learned counsel for the applicant submits that as the present applicant was granted bail in all the main offences pending before the Court at Mumbai and in the present case only punishable imprisonment for 7 years, bail should be granted to the present applicant.
At this stage, it is pertinent to note that during the argument of the case, the investigating officer from Directorate of Enforcement appeared before the Court in person. He directly submitted certain papers in sealed envelop stating at the bar that after filing of complaint under section 45 of PML Act, further investigation is on under section 173(8) Cr.P.C. and he is filing certain documents to showing further investigation taken place, in the present case showing involvement of the present applicant in offence of Money Laundering. I have opened the sealed envelop and gone through the papers submitted by him.
Learned counsel for the respondent opposes the application mainly on the ground that its a case involving huge money to the tune of Rupees Twenty Two Hundred Crores. The present applicant is the main master mind and writer of various documents in contract through which the money was siphoned from the banks to the Aggregators which were mainly headed by the co-accused Vijay Choudhary. He submits that if bail is granted to the present applicant, further investigation in this case would be adversely affected.
I have gone through the reply filed by the respondent and the papers attached with the reply and also the additional papers submitted by the investigating officer in which sealed envelop, after due consideration and without commenting on merit, in considered opinion of this Court, this application under section 439 of Cr.P.C. deserves to be allowed especially because of the fact that in all the main offences investigated by CBI, the present applicant was granted bail and, he was never arrested. There is nothing on record to show that he ever misused the liberty granted to him or ever tried to leave the country or abscond. This apart, the argument of the counsel for the respondent that releasing the present applicant on bail shall hinder the further investigation in the matter appears to have no merit as the properties identified by the respondent are located at various places in India and abroad. In what way, the further investigation in respect of these properties would be affected if the present applicant is released on bail is not clear from the record of the argument of the respondent. In this view of the matter, this application under section 439 of the Cr.P.C. is allowed.
It is directed that the applicant shall be released on bail on his furnishing a personal bond of Rs.5,00,000/-(Rs. Five Lac only) and two solvent sureties of the like amount to the satisfaction of the trial Court for his appearance before the trial court on every date fixed for it and also on following additional conditions :-
1. That he would surrender his passport before the trial court if he holds one and then the trial court shall send the passport to the concerning passport authority which issue the passport with a direction that the concerning passport authority shall make an endorsement on the passport following the provisions of section 10 of the Passport Act 1967 and to the effect that the present applicant shall not leave the country without prior permission of the trial court and if the present applicant does not hold passport then the passport authority while issuing the passport to him shall take into consideration that fact the criminal proceedings are pending against him.
2. On being released on bail, the present applicant shall mark his presence before the Directorate of th Enforcement on every 15 of each month and if there is a th public holiday on 15 on any calendar months then he would mark his presence by next following day.
3. It is further clarified that if any conditions of this order is breached, this Order shall be deemed to have been cancelled without further reference to the Court.
Paper submitted by I.O. in sealed envelope are returned back to the counsel for the respondent in a sealed envelop.
Certified copy as per rules.
Kafeel (Alok Verma)
Judge