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CR.MA/11415/2010 11/ 11 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
CRIMINAL
MISC.APPLICATION No. 11415 of 2010
For
Approval and Signature:
HONOURABLE
MR.JUSTICE RAJESH H.SHUKLA
===========================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment?
2
To be
referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
===========================================
DIPAK
SHUBHASHCHANDRA MEHTA - Applicant(s)
Versus
CENTRAL
BUREAU OF INVESTIGATION - BANKING & SECURITY FRAUD & 1 -
Respondent(s)
===========================================
Appearance
:
MR BB NAIK, SR. ADVOCATE with MR ND NANAVATI,
SR. ADVOCATE, with MR AJ YAGNIK
for Applicant(s) : 1,
MR
YN RAVANI for Respondent(s) : 1,
Ms MANISHA LAVKUMAR SHAH, APP,
for Respondent(s) : 2,
MR PRANAV DESAI for Original
Complainant
===========================================
CORAM
:
HONOURABLE
MR.JUSTICE RAJESH H.SHUKLA
Date
: 19/10/2010
ORAL
JUDGMENT
The
present application has been filed by the applicant-accused for
grant of regular bail under sec. 439 of the Code of Criminal
Procedure after the charge sheet is filed.
2. The
applicant-accused is charged with having committed offences under
sections 406, 420, 467, 468, 471 and 120B of IPC for which FIR being
BS&FC/MUM bearing No. 1(E)/2010, has been registered with
CBI-Mumbai.
3. Learned
Sr. Counsel Mr. BB Naik as well as learned Sr. Counsel Mr. ND
Nanavati appearing with learned advocate Mr AJ Yagnik have made
submissions at length and learned counsel Mr. YN Ravani appearing for
CBI and learned counsel Mr. Pranav Desai appearing for the
complainant Bank have also been heard.
4. Learned
Sr. Counsel Mr. Naik has referred to the nature of allegations with
reference to the history of the litigation and the details about the
advances made from time to time by the bank. Learned Sr. Counsel Mr.
Naik submitted that the facilities were given by the bank and the
transactions are as back as in 1997 and up to 2006 there was no
problem. He submitted that a consortium of banks, where SBI was the
lead bank, has found irregularities and in fact the proceedings were
filed before the DRT and even at that time no allegations for the
alleged offences of fraud or cheating have been made.
5. Learned
Sr. Counsel Mr. Naik submitted that it is a case of commercial
transactions where there is a failure in repayment due to various
circumstances and therefore filing of the complaint at this stage is
only to cause harassment and pressure. Learned Sr. Counsel Mr. Naik
submitted that the assets have been also seized under the
Securitsation Act and referring to the FIR which is lodged in 2010 he
submitted that the present application for bail may be considered as
now the charge sheet has been filed, the documents are seized and the
entire case is based on documentary evidence and the witnesses are
only of the CBI or the bank officers and therefore there is no
question of tampering with the evidence or witnesses.
6. Learned
Sr. Counsel Mr. Naik has also referred to the provisions of sec. 467,
468, 471 and submitted that these are regarding forgery and submitted
that these provisions would not be attracted. He emphasized the role
of the applicant accused and submitted that it is not even the case
of the investigating agency-CBI that the goods have not been
exported after having taken necessary benefits under the scheme of
export incentives of the Export Credit and Guarantee Corporation. He
therefore submitted that the alleged offences under sec. 467, 468,
471 are not attracted and the present application may be allowed.
7. Learned
Sr. Counsel Mr. Naik also submitted referring to various details that
the advances have been granted in routine course on the basis of the
procedure followed and therefore merely because there is a default in
repayment the alleged offences would not be attracted. He also
submitted that when the charge sheet has been filed, the present
application may be allowed.
8. Learned
counsel Mr. Ravani referred to the paper-book including the FIR and
other papers and pointedly referred to the manner in which
well-designed systematic fraud has been committed by the accused. He
submitted that having obtained the benefit under the scheme of the
Central Government for export incentives and on that basis having
obtained huge finances from various banks, the banks are duped to the
tune of Rs. 500 crores. He therefore submitted that the submission
that the provisions of sec. 467, 468, 481 are not attracted cannot be
accepted in light of the material and evidence at this stage. He
submitted that the charge sheet itself reveals as to how the funds
have been diverted or siphoned off from one firm or another in the
name of the so-called business incentive policies for the export, and
having taken sch advantage, the same documents have been produced
before two or three banks for the purpose of advances. He therefore
submitted that it is hot only the banks but the government schemes
have also been exploited for siphoning off the money resulting in
huge loss to the banks to the extent of Rs. 500 crores.
9. Learned
Counsel Mr. Ravani further submitted that the submission with regard
to other proceedings under the DRT and/or the civil suit would not be
a relevant consideration as it cannot be said that the dispute is
simply of a civil nature looking to the systematic design in which
the banks have been defrauded. He submitted that a consortium of 26
banks have been formed with SBI as the lead bank and he referred to
the details of the huge amount involved in the alleged fraud and
submitted that the submission made by the learned counsel for the
applicant cannot be accepted at this stage.
10. For
that purpose, he also referred to the affidavit-in-reply filed by
the CBI and pointedly emphasized that the accused persons have
cheated about 23 banks and the investigation has revealed that the
fraud amount is more than Rs. 500 crores. He also referred to the
manner in which the entire operations have been carried out. He
therefore submitted that the present application may not be
entertained. He submitted that it is not merely a failure of business
commitment, but it is a well designed fraud of huge amount on various
banks resulting in duping the banks and the public money. He
therefore submitted that merely because some proceedings are taken
under the DRT Act or suit has been filed would not be relevant as for
the same transaction more than one remedy, that is, civil and
criminal, both options could be exercised and the recovery part is a
civil consequence whereas the present complaint for the offences
suggest about mens rea and the criminal liability for the
offences. He therefore submitted that the present application may not
be entertained.
11. Learned
counsel Mr. Pranav Desai referred to the affidavit filed on behalf of
the original complainant, opponent No. 3, and supported the
submissions made by learned counsel Mr. Ravani for the CBI. He
pointedly referred to the affidavit particularly Para 7 & 8 and
submitted that how in the name of different firms amounts have been
diverted which has gone back to the accounts of the applicant herein.
He further submitted that as stated in detail in the charge sheet as
well as in this affidavit, same documents have been produced before
two or three banks and he emphasized that false and forged export
contract was produced and believing it to be genuine the complainant
bank made advances to the tune of Rs. 9.07 crores and the accused
persons utilized the credit for making payment to Marvel Impex. Out
of the total amount of Rs. 9.07 crores an amount of Rs. 5.15 crores
were paid to the firm during August 2006 to September 2006. The said
firm had an account with Union Bank o India, Mumbai which was dealing
in diamonds and bullion. Thus, funds have been utilised for different
purposes and thereby fraudulently duped the bank. He further
submitted that similarly, as clarified in Para 9, LCs were produced
before one bank and also the bills have been discounted in the name
of M/s. well Worth Overseas Ltd. which was having two accounts with
Kalupur Commercial bank and the account was operated only to siphon
off the amount.
12. Therefore,
learned counsel Mr. Desai submitted that considering the magnitude of
the amount involved and also the well designed systematic fraud
played on various banks, as revealed in the investigation made by the
CBI, the present application may not be entertained.
13. Learned
Sr. Counsel Mr. Naik again referred to the facts to emphasise his
submissions with regard to the fact that the ingredients for the
alleged offences cannot be said to have been fulfilled and
therefore the same would not be attracted. He also made a reference
to the other proceedings in detail and further emphasized that as the
investigation is over and the charge sheet is filed and the case is
based on documentary evidence, the present application may be
allowed.
14. In
rejoinder, learned counsel Mr. Ravani submitted that the offence is
also under sec. 120B and looking to the manner in which the alleged
offences are committed, the present application may not be
entertained. He submitted that there are other complaints which have
also been filed and the accused are habituated to committing such
offences.
15. Learned
Sr. Counsel Mr. Nanavati was also permitted to address the court and
has made submissions referring to the DRT proceedings and he also
submitted that a suit has also been filed against the bank by the
accused persons.
16.
Learned counsel Mr. Desai appearing for the complainant Bank, in
rejoinder, further emphasized that it is not a simple case of failure
to fulfill the business commitment. The charge sheet and the material
and evidence clearly suggest about a well designed fraud to siphon
off huge amount of money from different banks and mens rea or
intention is prima facie made out and revealed from the investigation
made by the CBI. For that he has again referred in detail as to the
modus operandi and submitted that the present application may not be
allowed. He strenuously submitted that merely because the charge
sheet is filed is not a ground to release the applicant as the
accused are influential persons and could still influence the
witnesses and in such big scam involving huge public money, the
courts have made observations expressing a word of caution for
granting bail and therefore merely because it is triable by the Court
of Magistrate would not be sufficient as some of the offences are
punishable with imprisonment for life or 10 years and therefore the
present application may not be entertained.
17. In
view of rival submissions, it is required to be considered whether
the present application can be entertained or not.
18. It
is well accepted that the court is not required to appreciate and
discuss the evidence in detail at this stage for the purpose of
deciding the bail application. However, the relevant aspects for
deciding such applications for bail and the prima facie involvement
of the accused are required to be considered. The relevant facts
would be the nature/gravity of offence, the manner in which it is
alleged to have been committed, the role attributed and also, though
it could be said to be a white collar crime, the social impact and
severity of the offence has to be judged with reference to the
magnitude of the amount involved, the well-planned, systematic design
by which the banks have been defrauded for huge amounts, affecting
financial institutions like the banks which also will have a social
impact. It is also required to be mentioned that in such cases of
large-scale irregularity where fraud has been alleged for siphoning
off huge amount in a systematic foul play, the court has to be slow.
The submissions made by learned Sr. Counsel Mr. Naik referring to the
gravity of the offence that it is only under sec. 467, 468, 471 which
is triable by the court of magistrate, cannot be accepted that. The
fact that it is triable by the Court of Magistrate will not lessen
the nature/gravity of the offences and the impact thereof in the
society. Further, it will also have a reference to the role
attributed which is reflected in detail in the FIR with regard to the
well-designed fraud of duping the banks of a huge amount. This
itself would be one of the considerations suggesting mens rea and
prima facie case.
19. It
is required to be mentioned that as stated thee are other FIRs/cases
for similar offences filed against the present accused. That itself
suggests about the magnitude of the alleged offences involving
systematic ways and means by which the alleged fraud is perpetrated
for siphoning off crores of rupees of the bank affecting the public
at large.
20. Therefore,
the Hon’ble Apex Court has also made observations expressing a note
of caution that with the change in the circumstances the court, while
granting bail, should be slow for even economic offences and big
scams. The concern of the Hon’ble Apex Court has been with reference
to the public interest.
21. A
useful reference can be made to the observations made by this Court
in a judgment in the case of Bholabhai Chaturbhai Patel v. State
of Gujarat & anr., reported in 2005(3) GLR 2549, where this
Hon’ble Court has negatived such contentions. Further, a reference
can also be made to the observations made by the Hon’ble Apex
Court in a judgment in the case of Himanshu Chandravadan Desai &
ors. v. State of Gujarat, reported in AIR 2006 SC 179, where a
word of caution has been expressed and it has been also reflected as
to the change in the scenario even in such white collar crimes.
Therefore, while considering such bail application and the
submissions referring to the gravity of the offence and the right of
the accused under sec. 21 of the Constitution of India and the
liberty, the submissions cannot be readily accepted.
22. Further,
it has been observed by the Hon’ble Apex Court in a judgment in
the case of Kalyan Chandra Sarkar v. Rajesh Ranjan alias Pappu
Yadav and anr., reported in AIR 2005 SC 921, that such aspect of
liberty under Art. 21 of the Constitution cannot be overemphasized
when the person has been in judicial custody as per the law
established in this country and therefore cannot claim right to
liberty on the same footing as any other citizen as it will be
subject to the criminal justice system of the country.
23. Therefore,
having regard to the nature of offences whereby huge amounts of the
banks have been defrauded which has also got a social impact, the
present application deserves to be rejected and accordingly stands
rejected. Rule is discharged.
(Rajesh
H. Shukla, J.)
(hn)
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