1993 (5) TMI 144 - HC - Companies Law

Summary

Issues Involved:
1. Prima facie case against the petitioner.
2. Applicability of Section 9 of the FERA.
3. Principles for grant or refusal of bail.

Summary:

1. Prima Facie Case Against the Petitioner:
The petitioner approached the High Court for bail after being unsuccessful before the ACMM and ASJ. The prosecution alleged that the petitioner collected payments in India on behalf of Keith Fair Brother of Eastern Suburbs Ltd., UK, and received drafts from U.K. Paints Industries, New Delhi. The petitioner handed over these drafts to Keith, violating Section 9 of the FERA. The petitioner was arrested and his interim bail on medical grounds was declined due to the gravity of the offense and his frequent travels abroad.

2. Applicability of Section 9 of the FERA:
The petitioner contended that there was no prima facie case against him and argued that merely transferring drafts does not constitute payment to a person resident outside India. The court examined Section 9(1) of the FERA, which restricts payments to or for the credit of any person resident outside India unless through an authorized dealer or with RBI exemption. The court noted that the FERA's definition of currency includes drafts, making the petitioner's actions prima facie a violation of Section 9(1)(b). The court rejected the petitioner's argument that actual payment in cash or crediting an account is necessary for an offense under this section.

3. Principles for Grant or Refusal of Bail:
The petitioner argued for bail, citing the technical nature of the offense, his cooperation, and the seizure of his passport. The department opposed, citing ongoing investigations and the petitioner's potential to hamper the investigation. The court considered the petitioner's high connections, the publicity of the case, and the non-arrest of other key individuals. The court granted bail, emphasizing that the petitioner is not likely to flee and can be interrogated further while on bail. The bail was granted with conditions to ensure no tampering with evidence and cooperation with the investigation.

Conclusion:
The petitioner was admitted to bail on furnishing a personal bond of Rs. 2 lakhs with one surety, subject to conditions including not tampering with evidence, joining the investigation when required, not leaving India without court permission, and informing investigating authorities of his travel within India. The observations made were clarified to have no bearing on the final merits of the case.