{"id":200038,"date":"2011-04-21T00:00:00","date_gmt":"2011-04-20T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/cbi-hyderabad-vs-subramani-gopalakrishnan-and-anr-on-21-april-2011"},"modified":"2015-06-27T10:08:31","modified_gmt":"2015-06-27T04:38:31","slug":"cbi-hyderabad-vs-subramani-gopalakrishnan-and-anr-on-21-april-2011","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/cbi-hyderabad-vs-subramani-gopalakrishnan-and-anr-on-21-april-2011","title":{"rendered":"Cbi Hyderabad vs Subramani Gopalakrishnan And Anr on 21 April, 2011"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Cbi Hyderabad vs Subramani Gopalakrishnan And Anr on 21 April, 2011<\/div>\n
Author: P Sathasivam<\/div>\n
Bench: P. Sathasivam, B.S. Chauhan<\/div>\n
                                                                      REPORTABLE\n\n      \n\n               IN THE SUPREME COURT OF INDIA\n\n\n              CRIMINAL APPELLATE JURISDICTION\n\n\n           CRIMINAL APPEAL NO. 985-986  OF 2011\n\n    (Arising out of SLP (Criminal) Nos. 2772-2773 of 2011\n\n\n\n\nCBI, Hyderabad                                           .... Appellant (s)\n\n\n\n            Versus\n\n\n\nSubramani Gopalakrishnan & Anr.                            .... Respondent(s)\n\n\n\n\n\n                            J U D G M E N T \n<\/pre>\n
P. Sathasivam, J.\n<\/p>\n
1)     Leave   granted.     These   appeals,   at   the   instance   of   the <\/p>\n
Central   Bureau   of   Investigation   (in   short   “the   CBI”), <\/p>\n
Hyderabad   are   directed   against   the   order   dated   25.06.2010 <\/p>\n
passed by the High Court of Andhra Pradesh at Hyderabad in <\/p>\n
Criminal   Petition   Nos.   4972   and   4913   of   2010,   in   and   by <\/p>\n
which,   the   High   Court   enlarged   the   respondents   herein, <\/p>\n
namely,   S.   Gopalakrishnan   (A4)   and   V.S.   Prabhakara   Gupta <\/p>\n
(A10) on bail by imposing certain conditions.\n<\/p>\n
                                                                           1<\/span><\/p>\n
2)     Since the CBI has challenged the order of the High Court <\/p>\n
granting   bail   in   respect   of   the   two   accused,   namely,   A4   and <\/p>\n
A10,   we   are   constrained   to   refer   only   the   facts   which   are <\/p>\n
necessary for the disposal of these appeals.\n<\/p>\n
3)     Brief Facts:\n\n\n(a)    On   07.01.2009,   B.   Ramalinga   Raju   (A1),   the   then \n\n\n\n<\/pre>\n
Chairman of M\/s Satyam Computer Services Limited (in short <\/p>\n
“M\/s   SCSL”)   addressed   a   confessional   letter   to   the   Board   of <\/p>\n
Directors   revealing   certain   financial   irregularities   in   M\/s <\/p>\n
SCSL.   As per this letter, the balance-sheet as on 30.09.2008 <\/p>\n
showed inflated (non-existent) cash and bank balances of Rs.\n<\/p>\n
5,040\/- crores, an accrued interest of Rs. 376\/- crores which <\/p>\n
is   non-existent   and   an   understated   liability   of   Rs.1,230\/-\n<\/p>\n
crores on account of funds arranged by him and an overstated <\/p>\n
debtors   position   of   Rs.   490\/-   crores   (as   against   Rs.   2,651\/-\n<\/p>\n
crores  reflected  in  the  books).   He  also revealed  several other <\/p>\n
factual details which resulted an increase in artificial cash and <\/p>\n
bank balances.\n<\/p>\n
                                                                            2<\/span><\/p>\n
(b)    He   also   revealed   several   frauds   and   cooking   books   of <\/p>\n
accounts   ever  happened   in   India’s   corporate   history.     Due   to <\/p>\n
the fraud on the part of the persons in Management including <\/p>\n
the Financial Advisors, Auditors, etc., many investors suffered <\/p>\n
loss   and   on   the   complaint   of   one   of   such   investors,   a   First <\/p>\n
Information   Report   (in   short   “FIR”)   was   registered   on <\/p>\n
09.01.2009   by   the   Andhra   Pradesh   State   Crime   Investigation <\/p>\n
Department   against   the   then   Chairman,   Directors   and <\/p>\n
Auditors   of   M\/s   SCSL   and   others   under   Section   120-B   read <\/p>\n
with Sections 409, 420, 467, 468, 471 and 477A of the Indian <\/p>\n
Penal Code (in short `IPC’).   Considering the magnitude of the <\/p>\n
offence,   investigation  was  entrusted  to  the  CBI   and  a  regular <\/p>\n
case   being   RC.No.4(S)\/2009   was   registered   by   the   CBI,   Anti-\n<\/p>\n
Corruption Branch, Hyderabad, on 20.02.2009.\n<\/p>\n
(c)  Due to fudging of the company accounts and manipulation <\/p>\n
of   records   by   showing   incorrect   and   inflated   figures   in   the <\/p>\n
balance-sheets by the Chairman, M.D. and other  Directors of <\/p>\n
the Company which were certified by the Auditors, the value of <\/p>\n
the   shares   of   the   Company   suddenly   dropped   causing   huge <\/p>\n
financial loss to the shareholders.  The drop in the value of the <\/p>\n
                                                                              3<\/span><\/p>\n
shares   was   due   to   dishonest   and   fraudulent   acts   committed <\/p>\n
by the aforesaid functionaries, who were managing the affairs <\/p>\n
of the Company and were associated with its functioning and <\/p>\n
day-to-day affairs.\n<\/p>\n
4)     With the above brief facts, let us consider the allegations <\/p>\n
leveled against the Respondents herein (A4 and A10) and the <\/p>\n
role played by them.\n<\/p>\n
The   role   of   S.   Gopalakrishnan   (A4),   Partner   and   In-charge   of <\/p>\n
M\/s Price Waterhouse in CC 1\/2010:\n<\/p>\n
(a)    He   affixed   his   signature   on   the   financial   statements   as <\/p>\n
partner   of   M\/s   Price   Waterhouse,   the   Statutory   Auditors   for <\/p>\n
M\/s SCSL from the financial year 2001 till 2007.\n<\/p>\n
(b)    He   was   a   partner   in   the   firm   `M\/s   Price   Waterhouse, <\/p>\n
Bangalore and not in `M\/s Price Waterhouse’.\n<\/p>\n
(c)    In   the   agreement   entered   into   between   M\/s   SCSL   and <\/p>\n
M\/s   Price   Waterhouse,   instead   of   affixing   his   signature,   he <\/p>\n
signed   as   `M\/s   Price   Waterhouse’   which   is   contrary   to   the <\/p>\n
established practice and procedure.\n<\/p>\n
(d)    By   virtue   of   his   status   as   a   Statutory   Auditor,   it   is <\/p>\n
incumbent on his part  to verify the bank balances and  FDRs <\/p>\n
                                                                             4<\/span><\/p>\n
claimed   to   be   held   by   M\/s   SCSL   besides   other   investments, <\/p>\n
liabilities   and   sales   of   the   Company   before   certifying   the <\/p>\n
statutory   Audit   Report   which   forms   the   basis   of   Annual <\/p>\n
Financial Statement of the Company<\/p>\n
(e)    The   presentations   made   by   him  to   the   Audit   Committee <\/p>\n
about the health of the Company were misleading.\n<\/p>\n
(f)    As   a   consideration   for   his   acts   in   accommodating   the <\/p>\n
accused persons, he received an exorbitant audit fee from M\/s <\/p>\n
SCSL over and above the market rate which reflects a quid pro  <\/p>\n
quo arrangement.\n<\/p>\n
(g)    Letters   generated   on   the   letter-heads   of   M\/s   Price <\/p>\n
Waterhouse were recovered from the computer systems of M\/s <\/p>\n
SCSL.     These   letters   were   supposed   to   be   written   by   the <\/p>\n
Auditors addressed to the banks seeking confirmations about <\/p>\n
the balances.\n<\/p>\n
(h)    Though   deficiencies   were   found   in   Information <\/p>\n
Technology   General   Check,   no   substantial   and   elaborate <\/p>\n
examination of the financial accounts was conducted by him.\n<\/p>\n
(i)    Control   deficiencies   identified   in   the   integrated   audit <\/p>\n
were not brought to the notice of the Audit committee.\n<\/p>\n
                                                                         5<\/span><\/p>\n
(j)    The above overt acts of A4 reveal the offences punishable <\/p>\n
under   Section   120-B   read   with   Sections   420,   419,   467,   471 <\/p>\n
and 477A of IPC.\n<\/p>\n
5)     The role of Sri S. Gopalakrishnan (A4), in CC 3\/2010:\n<\/p>\n
(a)    He   failed   to   comply   with   the   Audit   &   Assurance <\/p>\n
Standards   while   conducting   Statutory   Audit   in   case   of   M\/s <\/p>\n
SCSL.\n<\/p>\n
(b)    He   failed   to   point   out   the   existence   of   forged   and <\/p>\n
fabricated invoices in the Invoice Samples.\n<\/p>\n
(c)    As   a  quid   pro   quo  for   his   role   he   received   very   high <\/p>\n
remuneration.\n<\/p>\n
(d)    The above overt acts of A4 reveal the offences punishable <\/p>\n
under Section 120-B r\/w 420, 471 & 477A IPC.\n<\/p>\n
The   role   of   Sri   V.S.   Prabhakara   Gupta   (A10),   Head   Internal <\/p>\n
Audit, M\/s SCSL in the Supplementary Charge-sheet:\n<\/p>\n
(a)    He was the Associate In-charge – Internal Audit and was <\/p>\n
the   Global   Head   of   Internal   Audit   of   M\/s   SCSL   during   the <\/p>\n
relevant period of time.\n<\/p>\n
                                                                            6<\/span><\/p>\n
(b)    He   had   intentionally   not   included   auditing   of   Oracle <\/p>\n
Financials   (OF)   in   the   Internal   Audit   Plan   of   M\/s   SCSL   till <\/p>\n
2007 even though the system was operational since 2002.\n<\/p>\n
(c)     He   intentionally   submitted   a   prioritization   plan   to   the <\/p>\n
Audit   Committee   for   postponing   the   audit   of   many   items <\/p>\n
including Oracle Financials citing several irrelevant reasons.\n<\/p>\n
(d)    With   regard   to   anomalies   pertaining   to   the   invoices   no <\/p>\n
correctional measures or follow up action was taken.\n<\/p>\n
(e)    He   did   not   properly   follow   up   for   the   restoration   of   the <\/p>\n
access to the offshore books of accounts for the Internal Audit <\/p>\n
team.\n<\/p>\n
(f)    He   intentionally   flouted   the   laid   down   procedures <\/p>\n
mentioned in the Internal Audit Manual.\n<\/p>\n
(g)    The   above   overt   acts   of   A10   reveal   the   offences <\/p>\n
punishable under Section 120-B r\/w Section 420 IPC.\n<\/p>\n
6)     Apart from the above details, Mr. P.P. Malhotra, learned <\/p>\n
ASG has also brought to our notice that prior to the grant of <\/p>\n
bail   by   the   High   Court   A4   had   filed   seven   bail   applications <\/p>\n
and   the   High   Court   passed   the   impugned   order   only   in   the <\/p>\n
eighth bail application.   He also pointed out that in the same <\/p>\n
                                                                                7<\/span><\/p>\n
way,   A10   had   filed   six   bail   applications   and   the   High   Court <\/p>\n
passed the  impugned   order  enlarging  him on bail only in  the <\/p>\n
sixth bail application.\n<\/p>\n
7)    By pointing out all these details, learned ASG submitted <\/p>\n
that   at   this   stage,   release   of   the   accused-respondents   from <\/p>\n
judicial   custody   will   jeopardize   the   trial,   particularly,   when <\/p>\n
these two respondents, A4 and A10 who were the external and <\/p>\n
internal auditors of the Company, will influence the witnesses <\/p>\n
and it would be difficult for the employees to come and depose <\/p>\n
against   them.     He   also   submitted   that   considering   the <\/p>\n
seriousness   of   the   offence,   impact   on   the   society   as   a   whole <\/p>\n
and magnitude of the offence, the respondents are not entitled <\/p>\n
for bail and the High Court has committed an error in granting <\/p>\n
the bail to  them.    He also  submitted that  the  reliance on the <\/p>\n
orders   of   this   Court   insofar   as   Talluri   Srinivas   (A5)   is   not <\/p>\n
comparable because after the order of this Court granting him <\/p>\n
bail   on   04.02.2010   in   Criminal   Appeal   No.   257   of   2010,   the <\/p>\n
entire scenario in the trial has changed, hence the said order <\/p>\n
cannot   be   cited   as   a   precedent.     He   also   submitted   that <\/p>\n
though A4 and A5 were Auditors of M\/s  SCSL,  A5 was there <\/p>\n
                                                                             8<\/span><\/p>\n
only for a limited period of one year whereas A4 worked for a <\/p>\n
period of seven years i.e. from 2000-07.   He also relied on the <\/p>\n
order of this Court in Criminal Appeal No. 2068-2072 of 2010 <\/p>\n
dated   26.10.2010   wherein   this   Court   cancelled   the   bail <\/p>\n
granted by the High Court insofar as A1, A2, A3, A7, A8 and <\/p>\n
A9 are concerned.\n<\/p>\n
8)    On   the   other   hand,   Mr.   Mukul   Rohatgi,   learned   senior <\/p>\n
counsel appearing for A4 highlighted the alleged role between <\/p>\n
those accused, i.e. A1, A2, A3, A7, A8 and A9 whose bail has <\/p>\n
been   cancelled   by   this   Court   and   that   of   A4.     According   to <\/p>\n
him,   the   order   of   this   Court   dated   26.10.2010   in   Criminal <\/p>\n
Appeal No. 2068-2072 of 2010 is not applicable.  A4 had been <\/p>\n
in   custody   for   one   year   and   five   months   before   he   was <\/p>\n
enlarged on bail.  He also demonstrated that even according to <\/p>\n
the prosecution the role assigned to A4 and A5 is identical and <\/p>\n
when   A5   was   ordered   to   be   released   by   this   Court   even   as <\/p>\n
early as on  04.02.2010, the  High Court  rightly  applied parity <\/p>\n
between   them   and   granted   bail.     He   also   contended   that   A4 <\/p>\n
was   not   an   employee   of   M\/s   SCSL   but   was   partner   in   M\/s <\/p>\n
                                                                            9<\/span><\/p>\n
Price Waterhouse and has nothing to do with the alleged claim <\/p>\n
in M\/s SCSL.\n<\/p>\n
9)     Shri D. Rama Krishna Reddy, learned counsel appearing <\/p>\n
for   A10   submitted   that   though   he   was   an   internal   auditor   of <\/p>\n
M\/s   SCSL,   no   statutory   function   was   assigned   to   him.     He <\/p>\n
also   pointed   out   that   only   in   the   second   charge-sheet,   his <\/p>\n
name   was   included   as   an   accused.     He   further   pointed   out <\/p>\n
that before granting bail by the High Court, he was put in jail <\/p>\n
for 222 days.\n<\/p>\n
10)    We have perused the impugned order of the High Court, <\/p>\n
various details furnished by both the sides and considered the <\/p>\n
rival contentions.\n<\/p>\n
11)    As per the complaint and investigation, A4 and A10 along <\/p>\n
with   the   other   accused   are   involved   in   one   of   the   greatest <\/p>\n
corporate   scams   of   the   commercial   world.     It   has   caused   a <\/p>\n
financial   storm   not   only   throughout   the   country   but   also <\/p>\n
worldwide   and   by   their   action   and   conduct,   lakhs   of <\/p>\n
shareholders   and   others   have   been   duped   and   the   corporate <\/p>\n
credibility   of  the   nation   has   received  a  serious  setback.     It   is <\/p>\n
                                                                              1<\/span><\/p>\n
not in dispute that nobody can underestimate the sufferings of <\/p>\n
the shareholders and others due to the scam in question.\n<\/p>\n
12)    Though it was argued that the Management of M\/s SCSL <\/p>\n
has  been shifted to other corporate  entity,  it  is demonstrated <\/p>\n
before   us   that   the   employees   who   were   working   in   the <\/p>\n
erstwhile   M\/s   SCSL   are   now   working   under   the   present <\/p>\n
management.  In view of the same, at least persons working in <\/p>\n
the   accounts   section\/financial   management   will   not   come <\/p>\n
forward   to   depose   against   the   Respondents   herein   (A4   and <\/p>\n
A10)   who   were   the   external   and   internal   auditors   of   the <\/p>\n
Company and who had influence in the Company.\n<\/p>\n
13)    The   High   Court,   while   ordering   bail   for   A4   and   A10, <\/p>\n
heavily   relied   on   the   order   of   this   Court   dated   04.02.2010 <\/p>\n
made   in   Criminal   Appeal   No.   257   of   2010.     The   said   appeal <\/p>\n
relates   to   one   –   Talluri   Srinivas   (A5),   who   is   a   Chartered <\/p>\n
Accountant,   registered   with   the   Institute   of   Chartered <\/p>\n
Accountants of India (ICAI).  He was working as a partner with <\/p>\n
M\/s   Price   Waterhouse,   Bangalore   registered   with   the   ICAI.\n<\/p>\n
M\/s  Price  Waterhouse   is  the  statutory  authorized  auditors  of <\/p>\n
M\/s  SCSL  and  allegation  against A5  is  that  while  submitting <\/p>\n
                                                                            1<\/span><\/p>\n
the   audit   report   for   the   year   2007-08,   some   inflated   figures <\/p>\n
were incorporated in the said report and thereby he committed <\/p>\n
serious breach of faith as a Member of the professional body of <\/p>\n
auditors\/accountants.     After   noting   several   details   and <\/p>\n
hearing   the   learned   counsel   on   either   side,   this   Court   noted <\/p>\n
the following circumstances for releasing A5 on bail:\n<\/p>\n
      “i)     the   charge-sheet   is   running   into   several   thousand <\/p>\n
      pages;\n<\/p><\/blockquote>\n
      ii)     The CBI proposes to examine 470 witnesses;\n<\/p><\/blockquote>\n
      iii)    a very large  volume  of records have been produced <\/p>\n
      in this case;\n<\/p><\/blockquote>\n
      iv)     therefore, it can be easily assumed that the trial of <\/p>\n
      this case will take a long time even to start.”\n<\/p><\/blockquote>\n
Considering   these   factual   details   without   expressing   any <\/p>\n
opinion   on   the   merits   of   the   case   regarding   the   nature   of <\/p>\n
offence   or   gravity   thereof   allegedly   committed   by   A5   and <\/p>\n
having regard to the fact that he had been in custody for more <\/p>\n
than   a   year   released   him   on  bail   on   04.02.2010   by   imposing <\/p>\n
certain conditions.\n<\/p>\n
                                                                            1<\/span><\/p>\n
14)    Now   the   question   is   whether   the   same   reasonings   are <\/p>\n
applicable to the respondents herein, i.e. A4 and A10?\n<\/p>\n
15)    We   have   already   pointed   out   that   in   view   of   the   appeal <\/p>\n
filed   by   Talluri   Srinivas   (A5)   against   the   dismissal   of   his   bail <\/p>\n
application by the High Court, this Court considering the facts <\/p>\n
stated in the earlier paragraph passed an order on 04.02.2010 <\/p>\n
releasing A5 on bail subject to certain conditions.   First of all, <\/p>\n
there is no similarity in respect of the role assigned to A4 and <\/p>\n
A5.     Mr. Mukul Rohtagi, learned senior counsel, after taking <\/p>\n
us  through   several  materials,   submitted  that  even as  per  the <\/p>\n
prosecution, the role assigned to A4 and A5 is identical.  After <\/p>\n
going through the same,  prima facie, we are satisfied that the <\/p>\n
said   assumption   is   incorrect.     It   is   pointed   out   that   though <\/p>\n
both   A4   and   A5   were   Auditors   of   M\/s   SCSL   at   the   relevant <\/p>\n
time, admittedly, A5 had worked only for a period of one year <\/p>\n
whereas   A4   was   in-charge   of   auditing   the   accounts   of     M\/s <\/p>\n
SCSL for a period of seven years, i.e., from 2000 to 2007.   In <\/p>\n
addition to the same, we have also verified three charge-sheets <\/p>\n
and   the   imputations   made   against   both   these   accused <\/p>\n
persons.  In these factual details available, prima facie, we are <\/p>\n
                                                                                 1<\/span><\/p>\n
satisfied that A4 and A5 cannot be put on the same footing in <\/p>\n
respect of erroneous auditing   resulting   in inflated  cash and <\/p>\n
bank balances of  M\/s SCSL.\n<\/p>\n
16)      It   is   relevant   to   point   out   the   recent   order   of   this   Court <\/p>\n
dated   26.10.2010   in   Criminal   Appeal   No.   2068-2072   of   2010 <\/p>\n
wherein   this   Court   cancelled   the   bail   granted   by   the   High <\/p>\n
Court in respect of A1, A2, A3, A7, A8 and A9.   After passing <\/p>\n
such order, this Court after recording the fact that the charges <\/p>\n
have   been   framed   on   25.10.2010   and   trial   is   scheduled   to <\/p>\n
commence w.e.f. 02.11.2010 issued several directions, namely,<\/p>\n
(i)      the   trial   Court   to   take   up   the   case   on   day-to-day   basis <\/p>\n
         and conclude the trial as expeditiously as possible in any <\/p>\n
         event on or before 31.07.2011;\n<\/p>\n
(ii)     the   trial   Court   would   avoid   granting   undue <\/p>\n
         adjournments, unless it becomes absolutely imperative;\n<\/p>\n
(iii)    the   parties   are   directed   to   examine   only   material   and <\/p>\n
         most   essential   witnesses   and   fully   cooperate   with   the <\/p>\n
         trial Court;\n<\/p>\n
(iv)     the   accused   shall   be   produced  before   the   trial   Court   on <\/p>\n
         time, on every date of hearing, unless exempted by orders <\/p>\n
         of the Court;\n<\/p>\n
                                                                                      1<\/span><\/p>\n
(v)     the   trial   Court   is   free   to   decide   the   case   without   being <\/p>\n
        influenced  by any of the observations  made by the  High <\/p>\n
        Court or by this Court;\n<\/p>\n
(vi)    for any reason, trial is not concluded before 31.07.2011, <\/p>\n
        the   accused   would   be   at   liberty   to   approach   the   trial <\/p>\n
        Court for grant of bail.\n<\/p>\n
17)     The recent order dated 26.10.2010 of this Court referred <\/p>\n
to   above   makes   it   clear   that   this   Court   cancelled   the   bail   in <\/p>\n
respect of prime accused, namely, A1, A2, A3, A7, A8 and A9.\n<\/p>\n
It   is   also   brought   to   our   notice   that   in   view   of   the   specific <\/p>\n
directions of this   Court in the said order, the trial has started <\/p>\n
and according to the learned ASG, it is likely to be concluded <\/p>\n
by the cut off date, i.e. 31.07.2011.   It is also brought to our <\/p>\n
notice that out of 697 witnesses, the prosecution has dropped <\/p>\n
470   witnesses   and   only   227   witnesses   are   to   be   examined.\n<\/p>\n
Out   of   this,   193   witnesses   have   already   been   examined   and <\/p>\n
some of them are to be cross-examined.  According to the him, <\/p>\n
only 30 more witnesses have to be produced and examined.\n<\/p>\n
18)     In view of the directions of this Court in the subsequent <\/p>\n
order dated  26.10.2010, the trial is proceeding  on  day-to-day <\/p>\n
basis   and   likely   to   be   concluded   by   31.07.2011.     We   are <\/p>\n
                                                                                  1<\/span><\/p>\n
satisfied that the reasons stated while granting bail for Talluri <\/p>\n
Srinivas (A5) by this Court on 04.02.2010 are not applicable to <\/p>\n
the   respondents   herein.     Accordingly   reliance   on  the   basis   of <\/p>\n
the   bail   order   granted   in   favour   of   A5   cannot   be   applied   to <\/p>\n
these respondents.\n<\/p>\n
19)    Mr. Mukul Rohatgi, learned senior counsel, appearing for <\/p>\n
A4   and   Mr.   D.   Rama   Krishna   Reddy,   learned   counsel <\/p>\n
appearing for A10 strongly commented the conduct of the CBI <\/p>\n
in not challenging the order of the High Court granting bail to <\/p>\n
these persons and failure on their part to place these matters <\/p>\n
before the Court at the appropriate time.   It is not in dispute <\/p>\n
that   the   High   Court   granted   bail   to   these   respondents   on <\/p>\n
25.06.2010   and   the   CBI   challenging   the   said   order   filed   two <\/p>\n
special   leave   petitions   before   this   Court   on   06.10.2010.     No <\/p>\n
doubt,   the   matter   was   listed   before   the   Court   only   on <\/p>\n
01.04.2011   on   which   date,   this   Court   issued   notice   to   the <\/p>\n
respondents and on the same day the notice was accepted by <\/p>\n
the   respective   counsel   for   the   respondents   and   they   were <\/p>\n
permitted to file their reply.  After filing reply, when the matter <\/p>\n
again   came   up   for   hearing   on   04.04.2011   at   the   request   of <\/p>\n
                                                                              1<\/span><\/p>\n
both   sides,   the   matter   was   posted   for   final   hearing   on <\/p>\n
15.04.2011   and   was   argued   at   length   on   the   same   day.\n<\/p>\n
Though   the   appellant-CBI   was   not   so   diligent   to   bring   the <\/p>\n
special leave petitions for orders immediately after filing of the <\/p>\n
same   due   to   various   reasons   and   compliance   of   the   office <\/p>\n
report   had   taken   some   time,   however,   on   this   ground   their <\/p>\n
challenge with regard to the order of the High Court granting <\/p>\n
bail cannot be rejected without going into the merits.\n<\/p>\n
20)    Though Mr. D. Rama Krishna Reddy, learned counsel for <\/p>\n
A-10,   submitted   that  he  being   the   internal   auditor,   employee <\/p>\n
of M\/s SCSL, there is no statutory function and his name does <\/p>\n
not find place in the first charge-sheet and he was named only <\/p>\n
in   the   second   charge-sheet,   considering   the   materials <\/p>\n
available,   it   is   not   desirable   to   go   into   the   correctness   or <\/p>\n
otherwise at this juncture and at the same time in view of the <\/p>\n
magnitude   of   the   scam   and   without   the   assistance   and <\/p>\n
connivance of persons in-charge of auditing, we are unable to <\/p>\n
accept the stand of the learned counsel and hold that the High <\/p>\n
Court is not justified in granting bail for him.\n<\/p>\n
                                                                             1<\/span><\/p>\n
21)    It is also relevant to note that there is difference between <\/p>\n
yardsticks for cancellation of bail and appeal against the order <\/p>\n
granting bail.       Very cogent and overwhelming circumstances <\/p>\n
are   necessary   for   an   order   directing   the   cancellation   of   bail <\/p>\n
already   granted.          Generally   speaking,   the   grounds   for <\/p>\n
cancellation   of   bail   are,   interference   or   attempt   to   interfere <\/p>\n
with the due course of administration of justice or evasion or <\/p>\n
attempt   to   evade   the   due   course   of   justice   or   abuse   of   the <\/p>\n
concessions granted to the accused in any manner.  These are <\/p>\n
all only few illustrative materials.  The satisfaction of the Court <\/p>\n
on the basis of the materials placed on record of the possibility <\/p>\n
of   the   accused   absconding   is   another   reason   justifying   the <\/p>\n
cancellation of bail.   In other words, bail once granted should <\/p>\n
not be cancelled in a mechanical manner without considering <\/p>\n
whether   any   supervening   circumstances   have   rendered   it   no <\/p>\n
longer   conducive   to  a  fair   trial   to   allow   the   accused   to  retain <\/p>\n
his freedom by enjoying the concession of bail during the trial.\n<\/p>\n
We have already pointed out that the issue before us is not for <\/p>\n
cancellation of bail granted earlier, the question is whether in <\/p>\n
the facts and circumstances of the magnitude of the scam, the <\/p>\n
                                                                               1<\/span><\/p>\n
bail   granted   in   favour   of   all   the   main   accused   have   been <\/p>\n
cancelled and the Respondent Nos. A4 and A10 being external <\/p>\n
and internal auditors respectively, their role being paramount <\/p>\n
in inflating processing assets and bank balances of M\/s SCSL, <\/p>\n
we   are   of   the   view   that   the   High   Court   is   not   justified   in <\/p>\n
granting bail.\n<\/p>\n
22)    In view of the specific allegation by the prosecution  that <\/p>\n
A4   and   A10   were   party   to   the   criminal   conspiracy   showing <\/p>\n
inflated (non-existent) cash and bank balances reflected in the <\/p>\n
books,   inflated   proceeds   over   a   period   of   last   several   years   , <\/p>\n
frauds   and   cooking   books   of   accounts,   we   are   satisfied   that <\/p>\n
the   High   Court   ought   not   to   have   granted   bail   to   these <\/p>\n
respondents.   Considering the subsequent order of this Court <\/p>\n
dated   26.10.2010   cancelling   the   bail   in   respect   of   other <\/p>\n
accused and issuing directions based on which the trial has to <\/p>\n
be   concluded   within   the   schedule   time,   viz.   31.07.2011,   we <\/p>\n
hold that the High Court  committed an error in granting bail <\/p>\n
to these respondents A4 and A10.\n<\/p>\n
                                                                               1<\/span><\/p>\n
23)      In the light of the above discussion, the impugned order <\/p>\n
of the High Court dated 25.06.2010 in Crl. Petition Nos. 4913 <\/p>\n
and   4972   of   2010   granting   bail   in   favour   of   the   respondents <\/p>\n
i.e., A4 and A10 is set aside.    They are  directed  to surrender <\/p>\n
on   or   before   30.04.2011   otherwise   the   appellant   shall   take <\/p>\n
appropriate steps in accordance with law.  All the observations <\/p>\n
and directions, as stated in the earlier order dated 26.10.2010, <\/p>\n
are also applicable to the respondents (A4 and A10).   We also <\/p>\n
make it clear that the above said conclusion is for considering <\/p>\n
the grant of bail by the High Court and the trial Court is free <\/p>\n
to   decide   the   case   without   being   influenced   by   any   of   the <\/p>\n
observations made by the High court and by this Court in this <\/p>\n
order.\n<\/p>\n
24)      The appeals are allowed.        \n\n\n\n     \n\n\n\n\n                                                ..............................J. \n\n                                                 (P. SATHASIVAM)   \n                                                                                                     \n\n\n\n\n\n                                              .................................J. \n\n                                                 (DR. B.S. CHAUHAN) \n\n\nNEW DELHI;\n\nAPRIL 21, 2011.                                    \n\n\n\n\n                                                                                                         2<\/span>\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Cbi Hyderabad vs Subramani Gopalakrishnan And Anr on 21 April, 2011 Author: P Sathasivam Bench: P. Sathasivam, B.S. Chauhan REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION CRIMINAL APPEAL NO. 985-986 OF 2011 (Arising out of SLP (Criminal) Nos. 2772-2773 of 2011 CBI, Hyderabad …. Appellant (s) Versus Subramani […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-200038","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nCbi Hyderabad vs Subramani Gopalakrishnan And Anr on 21 April, 2011 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/cbi-hyderabad-vs-subramani-gopalakrishnan-and-anr-on-21-april-2011\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Cbi Hyderabad vs Subramani Gopalakrishnan And Anr on 21 April, 2011 - 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