2017 (3) TMI 1834 - HC - Indian Laws

Grant of Bail - alleged fraud of huge amounts - forged and fabricated sale deeds - diversion of funds in the name of fictitious land development on the basis of forged invoices - non-compliance of relevant provisions while initiating collective investment scheme by the company - HELD THAT - The important fact to be noted in the present case is that in the FIR, the investigation is being carried out where lakhs of investors have been cheated, their money misappropriated and forged documents prepared. In the decision of Narinderjit Singh Sahni Anr. Vs. Union of India Ors. the Hon'ble Supreme Court 2001 (10) TMI 999 - SUPREME COURT held that each transaction of cheating and fraud with every individual investor is a separate cause of action wherein separate FIR could have been registered. Thus, though the CBI consolidated the case in relation to the offences committed qua all investors in one FIR, it would have been within its jurisdiction to have lodged separate FIRs on the complaint of each investor. Considering from that angle, the magnitude and severity of the offence in the present case is not only in relation to the quantum of money involved but also that offences have been committed against lakhs of investors. The apprehension of the CBI that the petitioners are likely to hinder the further investigation being carried out and temper with the evidence is based on credible material as while in custody also efforts have been made to dispose of the property of the company - Considering the nature of serious allegations against the petitioners, the magnitude and severity of the offence allged impacting lakhs of investors and there being a genuine apprehension of causing obstruction in further investigation and tampering with the evidence, this Court does not find it to be a fit case for grant of bail to the petitioners. Petition dismissed.

Summary

Issues Involved:
1. Bail application of petitioners under Sections 120B r/w Sections 409/411/420/467/468/471/474 IPC & Sections 4 & 5 read with Section 6 of the Prize Chits & Money Circulation Schemes (Banning) Act 1978.
2. Consideration of the Supreme Court order dated 2nd May, 2016.
3. Background and history of the case involving M/s Pearls General Finance Ltd. (PGF), M/s Pearls Green Forests Ltd. (PGFL), and M/s Pearl Agrotech Corporation Ltd. (PACL).
4. Analysis of the petitioners' involvement and roles in the alleged offenses.
5. Arguments and precedents cited by the petitioners for bail.
6. CBI’s opposition to the bail application and evidence presented.
7. Legal principles and guidelines for granting bail.

Issue-wise Detailed Analysis:

1. Bail Application of Petitioners:
The petitioners sought bail under various sections of the IPC and the Prize Chits & Money Circulation Schemes (Banning) Act 1978. The court evaluated the seriousness of the allegations, the magnitude of the offense, and the potential impact on the ongoing investigation.

2. Consideration of the Supreme Court Order Dated 2nd May, 2016:
The court noted the Supreme Court's order which directed that no other court except the Supreme Court could entertain applications related to PACL Ltd. and its associated entities. This order did not affect the remedies available under the Code of Criminal Procedure during the trial.

3. Background and History of the Case:
The case involved M/s PGF, later renamed M/s PGFL, and M/s PACL, initially incorporated as M/s Gurwant Agrotech Ltd. Allegations of non-compliance with collective investment scheme regulations led to various legal proceedings, including a public interest litigation and actions by SEBI. The Supreme Court eventually appointed a committee to sell the company's assets and repay investors.

4. Analysis of the Petitioners' Involvement and Roles:
The petitioners, as directors of M/s PACL, were alleged to have been involved in fraudulent activities, including the sale of non-existent or government-owned land to investors, diversion of funds, and creation of sham transactions. Detailed roles of the petitioners were outlined, highlighting their significant involvement in decision-making, policy decisions, and day-to-day operations.

5. Arguments and Precedents Cited by the Petitioners for Bail:
The petitioners argued that the gravity of the offense should not be the sole consideration for denying bail. They cited Supreme Court decisions, including Sanjay Chandra vs. CBI and Manoranjana Sinh @ Gupta vs. CBI, where bail was granted despite serious allegations. They also contended that they were not required for further investigation and had cooperated with the investigation previously.

6. CBI’s Opposition to the Bail Application and Evidence Presented:
The CBI opposed the bail application, presenting evidence that the petitioners were not merely employees but were actively involved in fraudulent activities. The CBI highlighted the diversion of funds, creation of sham transactions, and efforts to dispose of properties even while in custody. The CBI cited various legal precedents to support their opposition.

7. Legal Principles and Guidelines for Granting Bail:
The court referred to the guidelines laid down by the Supreme Court in Gurcharan Singh vs. State (Delhi Admn.), emphasizing the nature and gravity of the offense, the position of the accused, the likelihood of tampering with evidence, and the potential impact on the investigation. The court noted that the magnitude of the offense, involving lakhs of investors and significant financial misappropriation, warranted denial of bail.

Conclusion:
Considering the serious allegations, the magnitude of the offense, and the potential for obstruction of the investigation, the court dismissed the bail application of the petitioners. The petitioners were found to be significantly involved in the fraudulent activities, and there was credible material suggesting a risk of tampering with evidence and hindering the investigation.