* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on : May 30, 2011
Decided on : June 08, 2011
+ BAIL APPLICATION NO. 723/2011
SHARAD KUMAR ....PETITIONER
Through: Mr. Altaf Ahmed, Sr. Advocate with Mr. R.
Shunmughasundaram, Sr. Advocate, Mr.
V.G. Pragasam, Advocate, Mr. S.J.
Aristotle, Advocate & Mr. Sudershan
Rajan, Advocate.
Versus
CENTRAL BUREAU OF INVESTIGATION ....RESPONDENT
Through: Mr. U.U. Lalit, Sr.Advocate/Special Public
Prosecutor with Ms. Sonia Mathur,
Advocate & Mr. Sushil Dubey, Advocate.
WITH
+ BAIL APPLICATION NO. 724/2011
KANIMOZHI KARUNANITHI ....PETITIONER
Through: Mr. Altaf Ahmed, Sr. Advocate with Mr. R.
Shunmughasundaram, Sr. Advocate, Mr.
V.G. Pragasam, Advocate, Mr. S.J.
Aristotle, Advocate & Mr. Sudershan
Rajan, Advocate.
Versus
CENTRAL BUREAU OF INVESTIGATION ....RESPONDENT
Through: Mr. U.U. Lalit, Sr.Advocate/Special Public
Prosecutor with Ms. Sonia Mathur,
Advocate & Mr. Sushil Dubey, Advocate.
CORAM:
HON'BLE MR. JUSTICE AJIT BHARIHOKE
1. Whether Reporters of local papers
may be allowed to see the judgment?
Bail Applications No. 723/2011 & 724/2011 Page 1 of 37
2. To be referred to the Reporter or not ?
3. Whether the judgment should be
reported in Digest ?
AJIT BHARIHOKE, J.
1. Accused Ms. Kanimozhi Karunanithi and Sharad Kumar vide
above referred applications under Section 439 Cr.P.C. are seeking bail
in case FIR No.RC-DAI-2009-A-0045 P.S. ACB, CBI New Delhi.
2. Briefly stated, facts relevant for the above bail applications are
that on 21.10.2009, the Central Bureau of Investigation, Anti
Corruption Branch, New Delhi registered a case No.RC DAI-2009-A-
0045 on the allegations of criminal conspiracy and criminal misconduct
against unknown officials of Department of Telecommunications, Govt.
of India, unknown private persons/companies and others under Section
120-B IPC, 13(2) read with 13(a)(d) of P.C. Act, in respect of allotment
of Letters of Intent, Unified Access Services (UAS) Licences and 2G
spectrum by the Department of Telecommunications.
3. First charge sheet was filed on 02.04.2011 in the court of Special
Judge, Patiala House, New Delhi against 12 accused persons including
M/s. Swan Telecom Pvt. Ltd. and its directors Shahid Balwa and Vinod
Goenka for the offences punishable under Section 120-B, 420, 468, 471
of IPC and Section 109 read with 420 IPC, as also under Section 13(2)
read with 13(1)(d) of P.C. Act, 1988.
4. A supplementary charge sheet was filed in the above mentioned
case on 25.04.2011 against five accused persons including the
Bail Applications No. 723/2011 & 724/2011 Page 2 of 37
petitioners for offences under Section 120B IPC read with Section 7/11
and 12 of P.C. Act, 1988.
5. Briefly put, case of the prosecution is that earlier to accused
A.Raja taking over as Minister for Communications and Information
Technology, the departmental policy of DOT regarding grant of Unified
Access Services Licence (UASL) was first come first serve subject to
eligibility and after the issue of Letter of Intent (LOI) to the successful
applicant, he was given sufficient time to comply with the conditions of
LOI and deposit of the licence fee.
6. In order to achieve the end of conspiracy, accused R.K. Chandolia
on 24th September 2007 inquired from the concerned officer of “Access
Services Cell” of Department of Telecommunication if the applications
of Unitech Group of Companies for grant of UAS Licences were received
and instructed that after the receipt of their applications, no further
applications be accepted. PW Avdesh Kumar Srivastava, DDG(AS-I)
told R.K. Chandolia that it may not be proper/fair to abruptly refuse to
receive the applications. A note dated 24th September, 2007 in this
regard was initiated by the Department on instructions of R.K.
Chandolia. Accused A.Raja approved the note and ordered issue of
press note informing public about the cut off date 01.10.2007 for
acceptance of the applications for UASL. A Press Release was
accordingly published in Newspapers on 25th September, 2007.
Bail Applications No. 723/2011 & 724/2011 Page 3 of 37
Though hundreds of applications were received after 25th September,
2007, those applications were not considered for issue of UAS Licence.
7. Charge sheet also disclose that as per the existing policy, the
allottees of Letters of Intent (LOI) were given sufficient time to comply
with the conditions of LOI. The licences were issued on the basis of
seniority of the date of applications and after the issue of UAS
Licences, the licensee could apply for allocation of spectrum.
8. On 2nd November, 2007, Director (AS-I) DOT initiated a note
seeking for issue of Letters of Intent as per the existing policy of first
come first served. The then Telecom Secretary returned the file with
the noting, “action may be initiated after orders of MOC & IT are
obtained on the issue. He had expressed his desire to discuss this
further.” A fresh note was put up by Director (AS-I) of DOT on 7th
November, 2007 highlighting the existing policy and pointing out that a
policy statement in that regard was made in Rajya Sabha on 23rd
August, 2007. A draft Letter of Intent was also put up along with the
note for approval of the Minister. Accused A.Raja approved the note,
but deliberately replaced Para 3 of the draft LOI with the following: “the
date of payment of entry fee would be priority date for signing the
licence agreement. If the date of payment of entry fee in more than
one case is the same, then the licence will be first signed with the
applicant whose application was received earlier.”
Bail Applications No. 723/2011 & 724/2011 Page 4 of 37
9. It is alleged that on 23rd November, 2007, the Licensing Finance
Branch of DOT objected to change made in LOI by accused A.Raja and
suggested that it appears logical to keep the date of applications as
date of priority for issue of licence provided the applicant is able to
establish that he is eligible on the date of application and is also
eligible when the LOI is issued. This note was endorsed by
Member(Finance), Telecom Commission and Secretary(Telecom) also
suggesting the revision of entry fee for new licences in line with
revision of fee for dual technology spectrum as suggested by Ministry
of Finance in its letter. Accused A.Raja, however, ignored the advice to
keep the date of application as date of priority for issue of licence or to
review and enhance the licence fee and this resulted in a loss to the
tune of almost of 30000 crores to the State exchequer.
10. That while putting up a note dated 7th January, 2008 for
processing UASL application received upto 25th September, 2007,
Director (AS-I) reiterated the existing policy and noted, “sequence of
granting of LOIs/UAS Licence has been maintained till now to the date
of respective application for a particular service area.” In his note
DDG(AS-I) raised the issue of eligibility and clarified that the eligibility
on the date of application needs to be considered. When the matter
was put up before accused Siddhartha Behura, he attached a draft
press release for the approval of the Minister. Accused A.Raja, MOC &
IT asked Secretary (Telecom) to show the draft press release to the
Solicitor General and seek his legal opinion. Accused Siddhartha
Bail Applications No. 723/2011 & 724/2011 Page 5 of 37
Behura personally took the file to the Solicitor General of India, who
advised “I have seen the matter. Issues regarding new LOIs are not
before any court. What is proposed is fair and reasonable. The press
release makes for transparency. This seems to be in order.” However,
after obtaining the advice of Solicitor General, accused A.Raja in
conspiracy with accused Siddhartha Behura dishonestly deleted the
last paragraphs of the approved press release shown to the Solicitor
General which recorded, “However, if more than one applicant
complies with LOI condition on the same date, the inter-se seniority
would be decided by the date of application” and approved the
amended draft of press release. This was done to portray as if the
amended draft had the approval of the Solicitor General.
11. On 10th January, 2008, the Press Release was put on the website
of DOT calling upon the applicants to collect the LOIs from Siddhartha
Behura at 3:30 pm. Four counters were created for collection of LOIs.
The LOIs were, however, distributed in a disorderly manner and not as
per the seniority of applicants. This resulted in shuffling of priority of
the applicants as against the seniority of date of application and
provided them opportunity to deposit entry fee prior to the applicants
who had applied for licence before them. It is alleged that in aforesaid
manner, the accused public servants managed to disturb the seniority
of applicants as per the date of application and caused undue
advantage to the accused Sanjay Chandra as also Shahid Balwa and
Vinod Goenka as also their companies, namely, Unitech Group of
Bail Applications No. 723/2011 & 724/2011 Page 6 of 37
Companies (since merged in Unitech Wireless (Tamil Nadu) Ltd. and
M/s. Swan Telecom Pvt. Ltd. respectively, who managed to get UAS
Licences which they otherwise would not have got, but for dishonest
change of policy of first come first serve by the public servants.
12. The first charge sheet reveals that Reliance ADA Group of
Companies was interested in obtaining UAS Licences for 13 circles
which they were not eligible for in view of Clause 8 of UASL policy
guidelines. In order to circumvent the aforesaid ineligibility clause and
to cheat the Department, accused Gautam Doshi, Hari Nair and
Surendra Pipara in furtherance of the conspiracy created and
structured a new company M/s Swan Telecom Pvt. Ltd which applied
for UASL Licence on 2nd March, 2007. The above referred accused
persons has structured M/s Swan Telecom Pvt. Ltd. in such a manner
that its equity holding was shown as 90.1% with M/s Tiger Traders Pvt.
Ltd. and 9.9% with M/s Reliance Telecom Ltd. The investigation into
holding structures of M/s Tiger Traders Pvt. Ltd. revealed that aforesaid
company was actually funded by the Group Companies of M/s Reliance
ADA Group. It was revealed that `3 crores utilized by M/s Tiger Traders
Pvt. Ltd. in January 2007 and `95.51 crores used by said company in
March, 2007 to subscribe to majority equity shares of M/s Swan
Telecom Pvt. Ltd. was arranged through Group Companies of Reliance
ADA Group. Besides that, a sum of `992 crores which constituted the
bulk of networth of M/s Swan Telecom Pvt. Ltd. was also provided by
Reliance Telecom Ltd. under the garb of subscribing to preferential
Bail Applications No. 723/2011 & 724/2011 Page 7 of 37
shares to M/s Swan Telecom Pvt. Ltd. Those preferential shares were
purchased by Reliance Telecom Ltd. at abnormally high premium of
`999/- per share of face value `1/- although M/s Swan Telecom Pvt. Ltd.
had no business history at that time. Aforesaid amount was
immediately returned by M/s Swan Telecom Pvt. Ltd to M/s Reliance
Communications Ltd. on the pretext of advance against a purchase
order. These transactions were carried out on the instruction of
Gautam Doshi and Hari Nair.
13. Charge sheet also disclose that in order to achieve the end of
conspiracy, above three accused persons created two other companies
M/s Zebra Consultancy Services Pvt. Ltd. and M/s Parrot Consultants
Pvt. Ltd. The equity holding of aforesaid two companies and M/s Tiger
Traders Pvt. Ltd. was structured by Gautam Doshi, Hari Nair and
Surendra Pipara insuch a manner that those companies were cross-
holding each other in interlocking structure during the period w.e.f.
March, 2006 to 4th April, 2007. This interlocking was done in such a
manner that 50% equity shares of M/s Zebra Consultancy Services Pvt.
Ltd. and M/s Parrot Consultants Pvt. were purchased by M/s Tiger
Traders Pvt. Ltd., 50% equity shares of Parrot Consultants Pvt. Ltd. and
Tiger Traders Pvt. Ltd. were purchased by M/s Zebra Consultancy
Services Pvt. Ltd. and 50% equity shares of Zebra Consultancy Services
Pvt. Ltd. and Tiger Traders Pvt. Ltd. was purchased by M/s Parrot
Consultants Pvt. Ltd. This arrangement ensured that neither of those
three companies was absolute owner of any company and this
Bail Applications No. 723/2011 & 724/2011 Page 8 of 37
practically left the control of all the three companies in the hands of
the Directors i.e. the petitioners. In order to achieve the end of
conspiracy, Hari Nair in league with Gautam Doshi and Surendra Pipara
falsified the records of Board Meetings of Swan Telecom Pvt. Ltd. and
Tiger Traders Pvt. Ltd to show that M/s. Tiger Traders Pvt. Ltd. was held
by India Telecom Infrastructures Fund of Ashok Wadhwa Group and
also to show the appointment of Ashok Wadhwa as Director of those
companies and his presence during the meetings.
14. Before the LOI could be granted, M/s Reliance Communications
Ltd., a group of Reliance ADA Group got GSM spectrum in those 13
circles pursuant to its applications under dual technology policy. Thus,
the application dated 2nd March, 2007 moved through M/s Swan
Telecom Pvt. Ltd was of no use to Reliance ADA Group. Accordingly,
Reliance ADA Group withdrew its holding from M/s Swan Telecom Pvt.
Ltd. and the accused Gautam Doshi, Hari Nair and Surendra Pipara
transferred the control of M/s Swan Telecom Pvt. Ltd. to the co-accused
Shahid Balwa and Vinod Goenka in order to facilitate them to cheat
DOT by getting UAS Licence in the name of M/s Swan Telecom Pvt. Ltd.
which company till 18th October, 2007 was ineligible for UAS Licence in
view of Clause 8 of policy guideline.
15. The original charge sheet also disclose that accused Shahid
Balwa and Vinod Goenka through their company M/s. D.B.
Bail Applications No. 723/2011 & 724/2011 Page 9 of 37
Infrastructures Pvt. Ltd., a company of Dynamic Balwa Group took over
majority stake in Swan Telecom Pvt. Ltd. on 18.10.2007.
16. It is alleged in the supplementary charge sheet that pursuant to
the criminal conspiracy, accused A.Raja, the then MOC&IT and accused
petitioners Sharad Kumar and Kanimozhi Karunanithi were stake
holders and/or directors of M/s. Kalaignar T.V. Pvt. Ltd. accepted and
received an illegal gratification of `200 crores in M/s. Kalaignar T.V. Pvt.
Ltd. from the co-accused Shahid Balwa and Vinod Goenka from the
account of M/s. D.B. Group Companies in the year 2008-09 as a reward
for undue favours shown by accused A.Raja in connivance of other
public servants to M/s. Swan Telecom Pvt. Ltd. in the matter of
allocation of UAS Licences and valuable scarce spectrum.
17. It is further alleged that M/s. Swan Telecom Pvt. Ltd. received a
sum of `3228 crores from M/s. Etisalat Mauritius Ltd. and `381 crores
from M/s. Genex Exim Ventures Pvt. Ltd. on 17.12.2008 as a
consideration of offloading the equity shares. Immediately, thereafter
with effect from 23.12.2008 till 11.08.2008, accused Shahid Balwa and
Vinod Goenka transferred a sum of `200 crores to M/s. Kalaignar T.V.
Pvt. Ltd. through a circuit route via M/s. Kusegaon Fruits & Vegetables
Pvt. Ltd. and M/s. Cineyug Films Pvt. Ltd. This was allegedly done with
a view to conceal the transfer of money from D.B. Realty Group to M/s.
Kalaignar T.V. Pvt. Ltd. The fund transfer from M/s. Dynamix Realty, a
Bail Applications No. 723/2011 & 724/2011 Page 10 of 37
firm belonging to the D.B. Realty Group, took place in following
manner:
23.12.08 10
Crore
12.01.09 2.5 Crores
14.01.09 0.25 Crores
M/s. Kusegaon Fruits & Vegetable Pvt. Ltd.
16.01.09 2 23.12.2008 ` 10
Crore Crore
27.01.09 0.25 Crores 16.01.2009 `2
Crore
`8
M/s. Cineyug Films Pvt. Ltd.
28.01.09 8 28.01.2009
M/s. Kalaignar TV Pvt. Ltd.
Crore Crore
M/s Dynamix Realty
29.01.09 1.5 29.01.2009 ` 1.5 23.12.2008 ` 10
Crore Crore Crore
12.02.09 2 12.02.2009 `2 28.01.2009 ` 10
Crore Crore Crore
20.03.09 5 20.03.2009 `5 20.03.2009 `5
Crore Crore Crore
06.04.09 1.5 06.04.2009 ` 25 06.04.2009 ` 25
Crore Crore Crore
08.04.09 25 08.04.2009 ` 1.5 15.07.2009 ` 100
Crore Crore Crore
22.06.09 1 22.06.2009 `1 07.08.2009 ` 50
Crore Crore Crore
15.07.09 0.25 Crore 15.07.2009 ` 25
Lacs
16.07.09 100 Crore 15.07.2009 ` 100
Crore
11.08.09 50 Crore 07.08.2009 ` 50
Crore
18. During investigation, accused persons took a plea that M/s
Cineyug Films Pvt. Ltd. transferred the said funds to M/s Kalaignar TV
Pvt. Ltd. in order that M/s Cineyug Films Pvt. Ltd. could acquire the
equity shares of M/s Kalaignar TV Pvt. Ltd. to the tune of 32-35% of
Bail Applications No. 723/2011 & 724/2011 Page 11 of 37
total equity. Investigation has revealed this plea to be false, as no valid
agreement to this effect was entered into by the said companies. Later,
after registration of this criminal case by Central Bureau of
Investigation vide FIR No. RC DAI 2009 A 0045, this amount was shown
as loan, having an interest @ 10% per annum, on the pretext of clause
2.2 of a Share Subscription and Shareholders’ Agreement dated
19.12.2008 claimed by accused persons to have been signed between
M/s Cineyug Films Pvt. Ltd., M/s Kalaignar TV Pvt. Ltd. and promoters.
Accused Sharad Kumar (A-16) signed the same on behalf of M/s
Kalaignar TV Pvt. Ltd. and its promoters. Investigation has also
revealed that accused Karim Morani, Asif Balwa and Rajiv B. Agarwal
arranged these funds from M/s Dynamix Realty, a partnership firm of
DB group companies managed and controlled by Shahid Balwa (A-4) &
Vinod Goenka (A-5) and facilitated the transfer of these funds in a
dubious manner to M/s Kalaignar TV Pvt. Ltd.
19. Investigation has revealed that for all the aforesaid transactions
amounting to `200 Crores between M/s Dynamix Realty, M/s Kusegaon
Fruits & Vegetables Pvt. Ltd., M/s Cineyug Films Pvt. Ltd.,and M/s
Kalaignar TV Pvt. Ltd., claimed to be in nature of loan, no valid
agreement was signed between any of the parties and no collaterals/
securities were ensured to secure the alleged loan amounts. Later,
after registration of the criminal case vide FIR no. RC DAI 2009 A 0045
dated 21.10.2009 by CBI, and on taking various steps in investigation
of the case, M/s Cineyug Films Pvt. Ltd offered some securities to M/s
Bail Applications No. 723/2011 & 724/2011 Page 12 of 37
Kusegaon Fruits & Vegetables Pvt. Ltd against the above referred
unsecured loan of ` 200 crores.
20. Investigation has also revealed that in terms of the Share
Subscription and Shareholders’ Agreement dated 19.12.2008, claimed
by accused persons to have been signed between M/s Cineyug Films
Pvt. Ltd., M/s Kalaignar TV Pvt. Ltd. and promoters, it was required that
the funds transferred till 31.3.2009 be treated as loan if no agreement
could be entered regarding the price of equity of M/s Kalaignar TV Pvt.
Ltd. However, investigation has revealed that though no such
agreement could admittedly be reached between M/s Cineyug Films
Pvt. Ltd. and M/s Kalaignar TV Pvt. Ltd., still the additional amounts of `
175 crores were paid by M/s Cineyug Films Pvt. Ltd. to M/s Kalaignar TV
Pvt. Ltd. Sh. Sharad Kumar signed the agreement dated 19.12.2008, as
Director of the company and for and behalf of the promoters of the
company including present two petitioners.
21. Later, after registration of the criminal case vide FIR no. RC DAI
2009 A 0045 dated 21.10.2009 by CBI, and on taking various steps in
investigation of the case, entire equity holding of M/s Kalaignar TV Pvt.
Ltd. was pledged, vide an Agreement to Pledge dated 30.12.2009, to
M/s Cineyug Films Pvt. Ltd as security for the due payment/repayment
of the purported loan amount under the Loan agreement and as
security for performance of the obligations of the company set out
under Loan agreement. Accused Sharad Kumar (A-16) signed the said
Bail Applications No. 723/2011 & 724/2011 Page 13 of 37
agreement on behalf of the company and for and behalf of the
promoters of the company including present two petitioners.
22. During investigation accused persons belonging to M/s Kalaignar
TV Pvt. Ltd. have claimed that they got their company valued in June,
2009 by a consultant and it was valued at around ` 846 crore. Since, by
this valuation the proposed stake to be given to M/s Cineyug Films Pvt.
Ltd. in lieu of ` 200 Crores fell below 20%, M/s Cineyug Films Pvt. Ltd
purportedly decided to call back their investment in M/s Kalaignar TV
Pvt. Ltd. It is also claimed by the accused persons and the companies
concerned that till such time of repayment, an interest @ 10% per
annum was decided to be charged on the amount paid so far. However,
investigation has revealed that before this valuation was purportedly
done in June, 2009, and any agreement regarding valuation of equity
could be reached between the two parties, as claimed, an amount of `
50 Crores had already been transferred to M/s Kalaignar TV Pvt. Ltd.
Contrary to the claim of the accused persons that no agreement could
be reached about the valuation of equity of M/s Kalaignar TV Pvt. Ltd.
to be subscribed by M/s Cineyug Films Pvt. Ltd., additional amount of `
150 Crores was transferred in July-August, 2009, after such purported
agreement failed. The aforesaid transactions related to purported
investment by M/s Cineyug Films Pvt. Ltd. in M/s Kalaignar TV Pvt. Ltd.,
without any due diligence, or provision of any collateral, defies
common sense and normal business practices.
Bail Applications No. 723/2011 & 724/2011 Page 14 of 37
23. Investigation has also revealed that when accused A Raja (A-1)
was contacted by CBI for his examination scheduled on 24.12.2010,
M/s Kalaignar TV Pvt. Ltd started refunding the amount of ` 200 crores
to M/s Dynamix Realty, through M/s Cineyug Films Pvt. Ltd. and M/s
Kusegaon Fruits & Vegetables Pvt. Ltd. A substantial part of the
amount was refunded by it just before and after 02.02.2011, when
accused A Raja (A-1) was arrested by CBI in this case. The details of
such transfers by M/s Kalaignar TV Pvt. Ltd. to M/s Cineyug Films Pvt.
Ltd. are as under:-
SI. NO. Date Amount
1. 24.12.2010 ` 10 Crore
2. 27.12.2010 ` 20 Crore
3. 04.01.2011 ` 10 Crore
4. 05.01.2011 ` 10 Crore
5. 11.01.2011 ` 10 Crore
6. 24.01.2011 ` 65 Crore
7. 29.01.2011 ` 25 Crore
8. 03.02.2011 ` 50 Crore
Total `200 Crore
24. Investigation has also revealed that, in order to conceal the
dubious nature of the transaction, M/s Kalaignar TV Pvt. Ltd.
transferred amounts shown as interest to M/s Cineyug Films Pvt. Ltd. as
per following details:-
Date Amount (Net after TDS) Gross Amount
20/12/2010 ` 14,86,54,109 ` 15,24,65,753
Bail Applications No. 723/2011 & 724/2011 Page 15 of 37
29/12/2010 ` 9,61,90,000 ` 10,00,00,000
03/02/2011 `5,82,95,576 ` 6,11,64,384
Total ` 30,31,39,685 ` 31,36,30,137
25. Investigation revealed that M/s Cineyug media & Entertainment
Pvt. Ltd, also, in furtherance of the design to facilitate concealing the
dubious nature of entire transactions, paid back the amount of
` 200 crores to M/s Kusegaon Fruits & Vegetables Pvt. Ltd. as per
following details:-
SI. NO. Date Amount
1. 24.12.2010 ` 10 Crore
2. 27.12.2010 ` 20 Crore
3. 04.01.2011 ` 10 Crore
4. 05.01.2011 ` 10 Crore
5. 11.01.2011 ` 10 Crore
6. 24.01.2011 ` 65 Crore
7. 29.01.2011 ` 25 Crore
8. 03.02.2011 ` 50 Crore
Total `200 Crore
26. Investigation has also revealed that, in order to cover up the
dubious nature of the transaction of money transfer, M/s Cineyug Films
Pvt. Ltd. transferred amounts described as interest to M/s Kusegaon
Realty Pvt. Ltd. as per following details:-
Date Amount (Net after TDS) Gross Amount
20/12/2010 ` 12,00,89,041 `12,19,17,808
29/12/2010 ` 7,96,00,000 ` 8,00,00,000
03/02/2011 ` 4,86,86,849 `4,89,31,507
Total ` 24,83,75,890 ` 25,08,49,315
Bail Applications No. 723/2011 & 724/2011 Page 16 of 37
27. Investigation has revealed that M/s Kusegaon Fruits & Vegetables
Pvt. Ltd, in turn, paid back ` 200 crores, with interest @ 7.5% per
annum to M/s Dynamix Realty. The details are as under:-
SI. NO. Date Amount
1. 23.12.2010 ` 12 Crores
2. 29.12.2010 ` 10 Crores
3. 30.12.2010 ` 20 Crores
4. 31.12.2010 ` 7.95 Crores
5. 10.01.2011 ` 7.95 Crores
6. 01.01.2011 `12.06 Crores
7. 17.01.2011 ` 10 Crores
8. 24.01.2011 ` 65 Crores
9. 01.02.2011 `25 Crores
10. 04.02.2011 `50 Crores
11. 12.02.2011 `1.35 Crores
12. 28.02.2011 `2.24 Crores
Total `223.55 Crores
28. Investigation has revealed that in June 2007, accused Sharad
Kumar (A-16), along with other promoters, incorporated M/s Kalaignar
TV Pvt. Ltd. after they left Sun TV network. Accused Sharad Kumar (A-
16) was a promoter & director or M/s Kalaignar TV Pvt. Ltd. and is a
stakeholder of the company to the tune of 20%. He is a director and
CEO of the company. He has attended/ chaired all the board meetings
of the company wherein the decisions regarding the aforesaid
transactions were taken by the company. He has also signed all the
agreements purportedly signed with M/s Cineyug Films Pvt. Ltd., and
other relevant documents in this regard, not only on behalf of the
Bail Applications No. 723/2011 & 724/2011 Page 17 of 37
company but also on behalf of himself and other directors/
shareholders of the company. He had also been visiting accused A Raja
(A-1) in connection with pursuing various pending works relating to M/s
Kalaignar TV Pvt. Ltd.
29. Investigation has revealed that in June 2007, accused Ms.
Kanimozhi Karunanithi (A-17), along with other promoters, incorporated
M/s Kalaignar TV Pvt. Ltd. after they left Sun TV Network. She had also
been in regular touch with accused A Raja (A-1) regarding launching of
Kalaignar TV channels and other pending works of M/s Kalaignar TV
Pvt. Ltd. Accused Ms. Kanimozhi Karunanithi (A-17) was also an initial
director of the company and resigned only for the reason that her
clearance from MHA was pending and could take time and delay the
matter of launching the Kalaignar TV channels. Accused A. Raja (A-1)
was further pursuing the cause of M/s Kalaignar TV Pvt. Ltd. not only
for getting registration of the company from Ministry of Information &
Broadcasting but also for getting it in the Tata Sky bouquet.
Investigation has also revealed that accused Ms. Kanimozhi Karunanithi
(A-17) was a stakeholder of M/s Kalaignar TV Pvt. Ltd. to the tune of
20% equity and was an active brain behind its operations. She was also
widely covered by the Kalaignar Seithigal (News) channel. She also
actively pursued with the intermediaries and DMK Hqrs. The matter
regarding reappointment of accused A Raja (A-1) as Minister of
Communications & Information Technology in 2009. PW-103, Sh.
Ashirvadam Achary has stated the above facts showing association of
Bail Applications No. 723/2011 & 724/2011 Page 18 of 37
accused Sharad Kumar and Kanizmozhi with accused A. Raja regarding
the issues of Kalaignar TV.
30. Learned Shri Altaf Ahmed, Sr. Advocate appearing for the
petitioners submitted that the petitioners were not arrested during
investigation and they appeared in the court of Special Judge pursuant
to the summons issued under Section 204 Cr.P.C. Thus, they were not
in custody. Learned Sr. counsel further submitted that the liberty of a
person is sacrosanct and no court has inherent power to remand an
accused to custody, as such, the power has to be exercised in
accordance with law. It is submitted that relevant provisions in the
Code of Criminal Procedure dealing with remand of accused are Section
167 and 309 Cr.P.C. Section 167 of the Code of Criminal Procedure
deals with the situation during investigation and once the charge sheet
has been filed, only provision under which an accused can be
remanded to custody is Section 309(2) Cr.P.C. Learned counsel
submitted that a plain reading of Section 309 Cr.P.C. would show that
while adjourning a case under Section 309 Cr.P.C., the court can
remand an accused to custody only if he is already in custody. In the
instant case, since the petitioners were not in custody, the trial court
has committed an error by rejecting their applications and remanding
them to judicial custody.
31. I do not find any merit in this contention. The question as to
when a person in custody within the meaning of Section 439 Cr.P.C.
Bail Applications No. 723/2011 & 724/2011 Page 19 of 37
came up before Supreme Court in Niranjan Singh and Anr. Vs.
Prabhakar Rajaram Kharote and Ors., AIR 1980 SC 785: 1980
Crl.L.J. 426, wherein the Supreme Court answered the question as
under:
“7. When is a person in custody, within the meaning of Section
439 Cr. P.C. ? When he is in duress either because he is held by the
investigating agency or other police or allied authority or is under
the control of the court having been remanded by judicial order, or
having offered himself to the court’s jurisdiction and submitted to
its orders by physical presence. No lexical dexterity nor
precedential profusion is needed to come to the realistic conclusion
that he who is under the control of the court or is in the physical
hold of an officer with coercive power is in custody for the purpose
of Section 439. This word is of elastic semantics but its core
meaning is that the law has taken control of the person. The
equivocatory quibblings and hide-and-seek niceties sometimes
heard in court that the police have taken a man into informal
custody but not arrested him, have detained him for interrogation
but not taken him into formal custody and other like terminological
dubieties are unfair evasions of the straightforwardness of the law.
We need not dilate on this shady facet here because we are satisfied
that the accused did physically submit before the Sessions Judge
and the jurisdiction to grant bail thus arose.
8. Custody, in the context of Section 439, (we are not, be it noted,
dealing with anticipatory bail under Section 438) is physical
control or an least physical presence of the accused in court coupled
with submission to the jurisdiction and orders of the court.
9. He can be in custody not merely when the police arrests him,
produces him before a Magistrate and gets a remand to judicial or
other custody. He can, be stated to be in judicial custody when he
surrenders before the court and submits to its directions. In the
present case, the police officers applied for bail before a Magistrate
who refused bail and still the accused, without surrendering before
the Magistrate, obtained an order for stay to move the Sessions
Court. This direction of the Magistrate was wholly irregular andBail Applications No. 723/2011 & 724/2011 Page 20 of 37
maybe, enabled the accused persons to circumvent the principle of
Section 439 Cr.P.C. We might have taken a serious view of such a
course, indifferent to mandatory provisions by the subordinate
magistracy but for the fact that in the present case the accused
made up for it by surrender before the Sessions Court. Thus, the
Sessions Court acquired jurisdiction to consider the bail
application. It could have refused bail and remanded the accused to
custody, but, in the circumstances and for the reasons mentioned
by it, exercised its jurisdiction in favour of grant of bail. The High
Court added to the conditions subject to which bail was to be
granted and mentioned that the accused had submitted to the
custody of the court. We therefore, do not proceed to upset the
order on this ground. Had the circumstances been different we
would have demolished the order for bail. We may frankly state
that had we been left to ourselves we might not have granted bail
but sitting under Art. 136 do not feel that we should interfere with a
discretion exercised by the two courts below”.
32. In similar vein, the Supreme Court in Nirmal Jeet Kaur Vs.
State of M.P., (2004)7 SCC 558 observed thus:
“16. The crucial question is when a person is in custody, within the
meaning of Section 439 Criminal Procedure Code? When he is in
duress either because he is held by the investigating agency or
other police or allied authority or is under the control of the court
having been remanded by judicial order, or having offered himself
to the court’s jurisdiction and submitted to its orders by physical
presence. No lexical dexterity nor precedential profusion is needed
to come to the realistic conclusion that he who is under the control
of the court or is in the physical hold to an officer with coercive
power is in custody for the purpose of Section 439. The word is of
elastic semantics but its core meaning is that the law has taken
control of the person. The equivocatory quibblings and hide-and-
seek niceties sometimes heard in court that the police have taken a
man into informal custody but not arrested him, have detained him
for interrogation but not taken him into formal custody and otherBail Applications No. 723/2011 & 724/2011 Page 21 of 37
like terminological dubieties are unfair evasions of the
straightforwardness of the law.
17. Since the expression “custody” though used in various
provisions of the Code, including Section 439, has not been defined
in the Code, it has to be understood in setting in which it is used and
the provisions contained in Section 437 which relates to jurisdiction
of the Magistrate to release an accused on bail under certain
circumstances which can be characterized as “in custody” in a
generic sense. The expression “custody” as used in Section 439,
must be taken to be a compendious expression referring to the
events on the happening of which Magistrate can entertain a bail
petition of an accused. Section 437 envisages, inter alia, that the
Magistrate may release an accused on bail, if such accused appears
before the Magistrate. There cannot be any doubt that such
appearance before the Magistrate must be physical appearance
and the consequential surrender to the jurisdiction of the Court of
the Magistrate.
18. In Black’s Law Dictionary by Henry Campbell Black, M.A.
(Sixth Edn.), the expression “custody” has been explained in the
following manner:
“…..The term is very elastic and may mean actual imprisonment or
physical detention….within statute requiring that petitioner be ‘in
custody’ to be entitled to federal habeas corpus relief does not
necessarily mean actual physical detention in jail or prison but
rather is synonymous with restraint of liberty….Accordingly,
persons on probation or parole or released on bail or on own
recognizance have been held to be ‘in custody’ for purposes of
habeas corpus proceeding.”
33. It is apparent from the above that the Supreme Court has
ascribed a wide meaning to the word “custody” and it has to be
understood in the context of the setting in which it is used and the
provisions contained in Section 437 Cr.P.C. which relates to the
Bail Applications No. 723/2011 & 724/2011 Page 22 of 37
jurisdiction of the Magistrate to admit an accused on bail under certain
circumstances which can be characterised as “in custody” in generic
sense. Anybody within the control of the court is said to be in custody.
What is relevant is whether the accused is in control of the court and
not whether he is physically in custody of the court. Section 437 (1)
Cr.P.C. provides when any person accused of the commission of a non-
bailable offence is arrested or detained without warrants by an officer
in-charge of a Police Station or appears or is brought before a court
other than the High Court or Court of Sessions, he may be released on
bail subject to the restrictions detailed in Section 437(1)(i) and (ii)
Cr.P.C. The word “or appears” used in Section 437(1) Cr.P.C. signifies
that on appearance of a person accused of non-bailable, the Magistrate
is required to consider whether to grant or refuse bail to him/her. In
case the bail is refused to such person, then the natural corollary is
that he has to be taken into physical custody. Therefore, it is obvious
that the moment a person accused of non-bailable offence appears in
the court pursuant to the summons, he is within the control of the court
till his bail application is decided, as such he is in custody of the court.
In the instant case, learned Special Judge after hearing the parties
dismissed the request of the petitioners to be released on furnishing
personal bond with or without sureties. The moment their request was
rejected, their physical custody automatically vested with the court. As
such, the order of learned Special Judge remanding the petitioners to
Bail Applications No. 723/2011 & 724/2011 Page 23 of 37
judicial custody while adjourning the matter under Section 309 Cr.P.C.
cannot be faulted.
34. Learned Shri Altaf Ahmed, Sr. Advocate further submitted that
the petitioners appeared before the Special Judge pursuant to the
summons issued under Section 204 Cr.P.C. Therefore, in view of
Section 87 and 88 of the Code of Criminal Procedure, they are entitled
to be set free on furnishing bond for appearance with our without
sureties to the satisfaction of the court.
35. The interpretation sought to be given by the petitioner to Section
87 and 88 of the Code of Criminal Procedure is misconceived and
based on incorrect reading of the said provisions of law which are
reproduced thus:
“87. Issue of warrant in lieu of, or in addition to, summons.
A court may, in any case in which it is empowered by this Code to
issue a summons for the appearance of any person, issue, after
recording its reasons in writing, a warrant for his arrest-
(a) If either before the issue of summons, or after the issue of the
same but before time fixed for his appearance, the court sees
reason to believe that he has absconded or will not obey the
summons; or
(b) If, at such time he fails to appear and the summons is proved
to have been duly served in time to admit of his appearing in
accordance therewith and no reasonable excuse is offered for
such failure”
……………….
………………..
“88. Power to take bond for appearance.—When any
person for whose appearance or arrest the officer presiding in
any Court is empowered to issue a summons or warrant, is
present in such court, such officer may require such person to
execute a bond, with or without sureties, for his appearanceBail Applications No. 723/2011 & 724/2011 Page 24 of 37
in such court, or any other court to which the case may be
transferred for trial”
36. Section 87 and 88 Cr.P.C. are incorporated in Chapter VI of the
Code of Criminal Procedure meant to deal with the processes to compel
appearance and are given in Part D of the Chapter under the Sub-Head
“Other Rules Regarding Processes”.
37. Bare reading of Section 87 and 88 makes it clear that these
provisions set out the parameters and scope of powers of a court to
issue the processes for appearance. Section 87 provides that in cases
in which the court is empowered to issue summons only for
appearance of any person, the court may in exceptional circumstances
detailed in Section 87(a) and (b) after recording its reasons in writing
issue warrants for arrest of such person. This has nothing to do with
the judicial function of a Magistrate or a court to deal with the issue of
grant or refusal of bail to a person accused of non-bailable offence.
38. Similarly, on reading of Section 88 Cr.P.C. it is obvious that
Section 88 Cr.P.C. empowers the court to seek bond for appearance
from any person present in the court in exercise of its judicial
discretion. The Section also provides that aforesaid power is not
unrestricted and it can be exercised only against such persons for
whose appearance or arrest the court is empowered to issue summons
or warrants. The words used in the Section are “may require such
person to execute a bond” and any person present in the court. The
Bail Applications No. 723/2011 & 724/2011 Page 25 of 37
user of word “may” signifies that Section 88 Cr.P.C. is not mandatory
and it is a matter of judicial discretion of the court. The word “any
person” signifies that the power of the court defined under Section 88
Cr.P.C. is not accused specific only, but it can be exercised against
other category of persons such as the witness whose presence the
court may deem necessary for the purpose of inquiry or trial. Careful
reading of Section 88 Cr.P.C. makes it evident that it is a general
provision defining the power of the court, but it does not provide how
and in what manner this discretionary power is to be exercised.
Petitioners are accused of having committed non-bailable offences.
Therefore, their case falls within Section 437 of the Code of Criminal
Procedure which is the specific provision dealing with grant of bail to
an accused in cases of non-bailable offences. Thus, in my considered
view, Section 87 and 88 Cr.P.C. only defines the parameters of power
of the court in certain situation and those provisions have no bearing
on the right of a person accused of non-bailable offence to bail. For
that purpose, the relevant provision is Section 437 Cr.P.C. and the
plea of the accused for his release on bail is required to be considered
by the Court on the basis of well established principles i.e. the nature
of the accusation; the nature of the evidence collected in support of
accusation; possibility of the accused interfering with the process of
justice and the possibility of the accused fleeing away from
justice.
Bail Applications No. 723/2011 & 724/2011 Page 26 of 37
39. Next contention on behalf of the petitioners is that the Special
Judge after taking cognizance of the case in exercise of the power to
issue process under section 204 CrPC preferred to issue summons for
appearance to the petitioners instead of warrants. This imply that the
Ld. Special Judge on consideration of the charge sheet found it to be
case in which the detention of the petitioners was not necessary. Thus
it is contended that the refusal of bail to the petitioners after their
appearance in the court amounts to review of the earlier position taken
by the Ld. Special Judge, which is not permissible in law as the
subordinate court has no power to review its order. Referring to the
Judgment of Kerala High Court in Sreekumar Vs. State of Kerala,
(2008) 3 KLT 748, Ld. Counsel submitted that if warrant for appearance
were issued against the petitioners, they certainly would have been
entitled to move Superior court for Anticipatory bail. Ld. Special Judge
by exercising the discretion under section 204 CrPC to issue summons
to the petitioners have led the petitioners to believe that they can
sefely appear in the court without any fear of detention as such
rejection of the bail to the petitioners is unfair.
40. I am not convinced with the above submission. Perusal of Section
204(1)(b) would show that it confers discretion upon the court taking
cognizance of a warrant trial case to either issue warrants or summons
for appearance of the accused. The use of this discretion is only to
procure the presence of the accused for trial. It has nothing to do with
Bail Applications No. 723/2011 & 724/2011 Page 27 of 37
the grant or refusal of bail to the accused. For that purpose, only
relevant Section is 437 Cr.P.C. in accordance with which the court is
supposed to exercise its judicial discretion to grant or refuse the bail.
Just because the court taking cognizance of a warrant trial case has
opted to issue summons for appearance instead of warrants, it cannot
be assumed that he had applied its mind to the facts of the case from
the point of view of grant or refusal of bail to the accused. In
Sreekumar Vs. State of Kerala,(supra), it was observed thus:
“When a court issues summons and not a warrant under S 204 CrPC
in a non-bailable warrant offence, I must assume that the learned
Magistrate must have advisedly exercised the discretion under S. 204 Cr.PC
to issue a summons and not a warrant. If a warrant were issued against
him, the petitioner would certainly have been entitled, in the light of the
dictum in Bharat Chaudhary & Another V. State of Bihar (2003 (3) KLT 956
(SC) = AIR 2003 SC 4662), to move the superior courts for anticipatory bail.
Having chosen to exercise the discretion under S. 204 CrPC in favour of the
petitioner and having issued only a summons to the accused, it appears to
me to be heartless, insensitive and harsh for any court to remand an accused
person who has come to court on the invitation extended to him by the
court by issuing a summons. That procedure is shockingly unreasonable and
should not be pursued by any court. Having exercised the discretion under S.
204 CrPC to issue only a summons and having led the accused by such
conduct to believe that he can safely appear before court on invitation, it
would be impermissible for any court thereafter to turn turtle and remand
the accused to custody. Issue of summons by exercise of the discretion
under S. 204 CrPC does firmly and eloquently convey that the accused person
on appearance shall not be detained unnecessarily if he is wiling and
prepared to offer bail. The courts will have to be careful at the state of
exercising the discretion under S. 204 CrPC and cannot take parties by
surprise when they appear before court in response to an innocuous
summons issued by the court. This must be so whether the offence is triable
by a Magistrate or not and whether the offence is bailable or not”.
Bail Applications No. 723/2011 & 724/2011 Page 28 of 37
41. I find myself unable to agree with the view taken in the aforesaid
judgment. Issue of process under Section 204 Cr.P.C. is meant for
ensuring the presence of the accused in the court. Issuing summons
under Section 204 Cr.P.C., by no means, is an assurance that the
accused on appearance in the court shall be granted bail nor it
amounts to misleading the accused and preventing him from seeking
his legal remedy by moving an application for anticipatory bail in the
superior court. Otherwise also, now the petitioners are present before
High Court under Section 439 Cr.P.C. seeking bail and their applications
are required to be dealt with in accordance with law on consideration
of well settled principles for deciding a bail application.
42. Before adverting to the submissions of the petitioners on merits,
it would be appropriate to have a look on the law of bail.
43. In Gudikanti Narasimhulu Vs. Public Prosecutor, (1978) 1
SCC 240, Supreme Court has highlighted the importance of personal
liberty of an accused. In the said judgment, the Supreme Court has
emphasized on creating a balance between the right and liberty
guaranteed under Article 21 of the Constitution of India and the
interest of justice as well as the society which is sought to be protected
by Section 437 Cr.P.C., wherein it is, inter alia, observed thus:
10. The significance and sweep of Article 21 make the deprivation of
liberty a matter of grave concern and permissible only when the law
authorising it is reasonable, even-handed and geared to the goals of
community good and State necessity spelt out in Article 19. Indeed, the
considerations I have set out as criteria are germane to the
constitutional proposition I have deduced. Reasonableness postulatesBail Applications No. 723/2011 & 724/2011 Page 29 of 37
intelligent care and predicates that deprivation of freedom by refusal of
bail is not for punitive purpose but for the bi-focal interests of justice–to
the individual involved and society affected.”
44. In State Vs. Jaspal Singh Gill, AIR 1984 SC 1503, the Supreme
Court expressed the view that the court before granting bail in cases
involving non-bailable offences, particularly where the trial has not yet
commenced should take into consideration various factors such as the
nature and seriousness of the offence, character of the evidence,
circumstances peculiar to the accused, a reasonable possibility of the
accused not presenting himself during trial and reasonable
apprehension of witnesses being tampered with and the larger interest
of the society or the State.
45. In CBI, Hyderabad Vs. B. Ramaraju, 2011 Crl.L. J. 301,
Supreme Court cancelled the bail of accused Ramaraja purely on the
basis of the enormity and gravity of the offence observing thus:
“4. According to the allegations of the appellant, the respondents-
accused are involved in one of the greatest corporate scams of the
commercial world. It has caused a financial storm throughout the
country and the world over. Lakhs of shareholders and others have
been duped and the corporate credibility of the nation has received a
serious setback. We are deliberately refraining from making a
detailed observation regarding the conduct of the respondents-
accused because the trial is still pending and we do not want the trial
to be prejudiced in any manner.
5. Ordinarily this Court would be slow in cancelling the bail
already granted by the High Court but in the extraordinary facts and
circumstances of these cases, we are of the considered view that the
impugned orders passed by the High Court granting bail to the
respondents, cannot be sustained in law and the same are
accordingly set aside.
………..
Bail Applications No. 723/2011 & 724/2011 Page 30 of 37
7. We are informed that charges have been framed on 25 th
October, 2010 and trial is scheduled to commence with effect from
2nd November, 2010. In these circumstances, we deem it appropriate
to direct the Trial Court to take up the case on day-to-day basis and
conclude the trial of this case as expeditiously as possible, in any
event, on or before 31st July, 2011.”
46. In a recent judgment in the matter of Prasanta Kumar Sarkar
Vs. Ashis Chatterjee & Anr., 2010(11) Scale 408, Supreme Court
observed thus:
“11. We are of the opinion that the impugned order is clearly
unsustainable. It is trite that this Court does not, normally,
interfere with an order passed by the High Court granting or
rejecting bail to the accused. However, it is equally incumbent
upon the High Court to exercise its discretion judiciously,
cautiously and strictly in compliance with the basic principles laid
down in a plethora of decisions of this Court on the point. It is
well settled that, among other circumstances, the factors to be
borne in mind while considering an application for bail are: (i)
whether there is any prima facie or reasonable ground to believe
that the accused had committed the offence; (ii) nature and
gravity of the accusation; (iii) severity of the punishment in the
event of conviction; (iv) danger of the accused absconding or
fleeing, if released on bail; (v) character, behaviour, means,
position and standing of the accused; (vi) likelihood of the
offence being repeated; (vii) reasonable apprehension of the
witnesses being influenced; and (viii) danger, of course, of
justice being thwarted by grant of bail”.
47. The legal position which emerges from the aforesaid judgments is
that the important factors for consideration while deciding the
applications for grant of bail, the court must take into account various
factors, namely, nature and gravity of accusation; nature of evidence
against the accused; severity of punishment in the event of conviction;
danger of accused fleeing from justice; the danger of accused trying to
Bail Applications No. 723/2011 & 724/2011 Page 31 of 37
influence the witnesses or thwarting the course of justice and the
character and antecedents of the accused etc. And the court will
decide on refusal or grant of bail on cumulative consideration of the
existence or non-existence of aforesaid factors.
48. On merits, it is contended that the petitioners are innocent and
they have nothing to do with the alleged conspiracy between public
servants and the private persons/companies in the matter of allotment
of UAS Licence/Spectrum to M/s. Swan Telecom Private Limited. It is
further submitted that purely innocuous inter-corporate financial
transactions are being projected in the charge sheet as transfer of the
bribe money to the petitioners and their co-accused A.Raja through
dubious money transfer transactions. Learned senior counsel further
contended that even if for the sake of argument, allegations of
prosecution are taken to be correct, then also, the role of the
petitioners is distinct from the other co-accused persons, who are
directly involved in the alleged conspiracy, particularly when, the
petitioners are not the beneficiaries of conspiracy as neither the
petitioners nor any of the company with which they are associated
have received UAS Licence/Spectrum. It is further contended on
behalf of the petitioners that they were neither arrested during
investigation nor there is any allegation against them that they have
interfered with the process of investigation. They have appeared
pursuant to the summons. Therefore, there is no possibility of the
petitioners interfering with the investigation process or influencing the
Bail Applications No. 723/2011 & 724/2011 Page 32 of 37
witnesses or absconding from law. Thus, learned counsel for the
petitioners has strongly urged for admitting them on bail.
49. Bail applications are vehemently opposed by learned Special
Prosecutor. He has referred to the charge sheet and the supporting
evidence and submitted that there is sufficient prima facie evidence on
record to show the complicity of the petitioners in the conspiracy to
confer undue advantage upon M/s. Swan Telecom Pvt. Ltd. by the
public servants including accused A.Raja in the matter of grant of UAS
Licence/spectrum to the said company for which the company was not
eligible as per the policy guidelines. Learned Special PP further
submitted that there is sufficient prima facie evidence on record to
show that the petitioners are the recipients of the illegal gratification of
`200 crores for the aforesaid undue favour shown to M/s. Swan
Telecom Pvt. Ltd. which amount was transferred by M/s. Dynamix
Realty, a partnership firm belonging to DB Realty Group Company to
the account of M/s. Kalaignar T.V. Pvt. Ltd. owned by the petitioners
and the step mother of petitioner Kanimozhi Karunanithi. Factual
submissions of learned Special PP are not reproduced in detail for the
sake of brevity. Learned Special PP contended that merely because
the petitioners were not arrested during investigation and they
appeared in the court pursuant to the summons, they do not become
entitle to bail because the gravity of the accusation and the nature of
evidence collected during investigation is also one important
component to be considered for grant or refusal of bail. Learned
Bail Applications No. 723/2011 & 724/2011 Page 33 of 37
Special PP submitted submitted that allegation against the petitioners
are grave and the investigation is not yet complete as such it would not
be appropriate to release the petitioners on bail at this stage as they
are likely to interfere in investigation and tamper with the witnesses.
50. I have considered the rival submissions and perused the record.
It is well settled that at the stage of consideration of bail application,
the court is required to take prima facie view of the evidence collected
during investigation and it is not supposed to undertake an intricate
exercise of scrutinising the evidence with a view to find out its
truthfulness or otherwise.
51. On care perusal of the charge sheet, following factors have come
to the fore: (a) that M/s. Kalaignar T.V. Pvt. Ltd. is a closely owned
company in which there three shareholders. 20% stake each is held by
the petitioners and balance 60% stake in the company is held by Ms.
Dayalu Ammal, step-mother of the petitioner Kanimozhi Karunanithi;
(b) that petitioner Kanimozhi Karunanithi and the co-accused A.Raja
are important functionaries of same political party; (c) that co-accused
A.Raja took over charge as Minister for Communications and
Information Technology in May, 2007 and the petitioners parted ways
with M/s. Sun T.V. Network in June, 2007 and promoted their own
company M/s. Kalaignar T.V. Pvt. Ltd.; (d) that accused A.Raja had
close associations with the petitioners and he helped their company to
get registration with Information and Technology Department and also
Bail Applications No. 723/2011 & 724/2011 Page 34 of 37
to get included in the Bouquet of Sky T.V.; (e) that M/s. Swan Telecom
Pvt. Ltd. which is owned by DB Realty Group of Companies offloaded
its equity to M/s. ETISALAT Mauritius Ltd. and M/s. Genex Exim
Ventures Pvt. Ltd. and in consideration received `3228 crores and 380
crores respectively on 17.12.2010; (f) that the transfer of the money
from DB Realty Group through its group companies Dynamix Realty,
M/s. Eversmile Construction Company Pvt. Ltd. and M/s. Conwood
Construction Developers Pvt. Ltd. started with effect from 23.12.2008
and it continued till August, 2009; (g) that the bribe money was
transferred to M/s. Kalaignar T.V. Pvt. Ltd. in instalments through a
circuitous route i.e. via M/s. Kusegaon Fruits & Vegetables Pvt. Ltd. and
M/s. Cineyug Films Pvt. Ltd.; (h) that `200 crores was transferred from
accounts of above referred DB Realty Group Companies to the account
of M/s. Kalaignar T.V. Pvt. Ltd. through a circuitous route i.e. from D.B.
Realty Group Companies money was first transferred to the account of
M/s. Kusegaon Furits & Vegetables Pvt. Ltd. which company in turn
transferred the amount to M/s. Cineyug Films Pvt. Ltd. and from that
company the money reached in the account of M/s. Kalaignar T.V. Pvt.
Ltd.; (i) that aforesaid money transfers from one company to the other
and the other was done either on the same dates or in close proximity
of dates as disclosed in the money transfer chart noted in Para 17 of
this order; (j) that once the scam came to the light and FIR was
registered, the reverse trail of money started via same route of
companies; (k) that the reverse money trail started only after co-
Bail Applications No. 723/2011 & 724/2011 Page 35 of 37
accused A.Raja was contacted by the CBI for his examination
scheduled on 24.12.2010. Even in this reverse money trail, the dates
of transfer of money from one company to other and to the other are
either the same or in very close proximity; (l) that the investigation
revealed that no contemporaneous documents pertaining to the
transfer of money was prepared at the time of transfer of money from
DB Realty Group Companies to M/s. Kusegaon Fruits & Vegetables Pvt.
Ltd. and from M/s. Kusegaon Fruits & Vegetables Pvt. Ltd. to M/s.
Cineyug Films Pvt. Ltd. and from M/s. Cineyug Films Pvt. Ltd. to M/s.
Kalaignar T.V. Pvt. Ltd. It is submitted by learned Special PP that
during investigation photocopies of shares subscription and
shareholders agreement and agreement to pledge between M/s.
Cineyug Films Pvt. Ltd. and M/s. Kalaignar T.V. Pvt. Ltd. were produced
by the accused persons but they have deliberately not produced the
original agreements because the date of purchase of stamp papers
used would have revealed that these agreements have been
subsequently prepared to create evidence in defence.
52. Above facts and circumstances, prima facie show the complicity
of the petitioners in the conspiracy and their having received illegal
gratification of `200 crores in the account of the company controlled by
them, namely M/s. Kalaignar T.V. Pvt. Ltd. The proximity of dates on
which the money got transferred via circuitous route involving DB
Realty Group Companies, M/s. Kusegaon Fruits & Vegetables Pvt. Ltd.
and M/s. Cineyug Films Pvt. Ltd. as also the reverse trail of money,
Bail Applications No. 723/2011 & 724/2011 Page 36 of 37
prima facie, cannot be a coincidence and this gives rise to a prima
facie involvement that aforesaid methodology was adopted by the
petitioners and their co-accused persons with a view to conceal the
trail of money from DB Realty Group which owns M/s. Swan Telecom
Pvt. Ltd. and M/s. Unitech Group of Companies in the matter of grant
of UAS Licences and spectrum have caused a loss of about `30,000
crores to the State exchequer. The petitioners are in control of M/s.
Kalaignar T.V. Pvt. Ltd., as such they are in position of power to
influence the witnesses, particularly the employees of their company.
They have got strong political connections. Petitioner Kanimozhi
Karunanithi belongs to the same political party to which accused A.Raja
belongs and the said party is sharing power in the Central Government.
Thus, considering the financial and political clout of the petitioners, a
possibility cannot be ruled out that if the petitioners are freed at this
stage, they would interfere with the investigation or try to influence the
witnesses. Thus, at this stage, I do not deem it appropriate to admit
the petitioners on bail.
53. Bail applications are dismissed accordingly.
54. Nothing contained in this order shall be treated as a finding on
the merits of the case.
(AJIT BHARIHOKE)
JUDGE
JUNE 08, 2011
pst
Bail Applications No. 723/2011 & 724/2011 Page 37 of 37