2019 (12) TMI 220 - SC - Indian Laws

Grant of bail - Money laundering - siphoning of funds - case of the CBI revolves around the allegation that all the accused conspired amongst themselves to run collective investment schemes in the name of the accused company; and by inducing the public to invest under these schemes with the allure of high returns, collected funds amounting to ₹ 255,91,00,541/, but did not repay the amount to the tune of ₹ 15,69,35,003/, thereby cheating the investors of such amount. HELD THAT - This Court is conscious of the need to view such economic offences having a deeprooted conspiracy and involving a huge loss of investors money seriously. Though further investigation is going on, as of now, the investigation discloses that the Respondent played a key role in the promotion of the chit fund scam described, thereby cheating a large number of innocent depositors and misappropriating their hardearned money. Thus, if the Respondent continues on bail, there is little chance of realising any amount by selling the properties of the Tower Group of companies, since he may use unlawful tactics to keep prospective buyers away. Moreover, it is relevant to note that the investigating agency has not yet assessed the exact total amount invested by the people of Orissa in the accused company, so as to find out the specific liability of the company in that regard. Having regard to the material on record, and since a huge amount of money belonging to investors has been siphoned off, as well as for the aforesaid reasons, the High Court should not have released the Respondent on bail. The impugned order granting interim bail to the Respondent stands set aside. His bail bonds are cancelled - Appeal allowed.

Summary

Issues:
1. Granting of bail to the Respondent by the High Court without assigning reasons.
2. Allegations of conspiracy in running investment schemes and cheating investors.
3. Role of the Respondent in misappropriating funds and obstructing the liquidation of company assets.
4. Cooperation of the Respondent with investigation agencies and One-Man Committee.
5. Impersonation through publication of misleading brochures.
6. Seriousness of economic offenses and need to prevent obstruction of justice.

Issue 1: Granting of bail without reasons
The Supreme Court heard an appeal by the Central Bureau of Investigation (CBI) challenging the bail granted to the Respondent by the High Court without providing any reasons. The CBI alleged that the grant of bail was unjustified and questioned the decision in the petition.

Issue 2: Allegations of conspiracy and cheating
The case revolved around allegations that the accused company, along with the Respondent and others, conspired to run investment schemes, collected funds from the public, and cheated investors by not repaying the amount. The CBI filed a chargesheet under various sections of the IPC and other Acts, highlighting the misappropriation of funds and cheating of investors.

Issue 3: Role of the Respondent and obstruction of justice
The Respondent, a key decision-making authority in the accused company, was accused of misleading investors, misappropriating funds, and obstructing the liquidation of company assets for repaying investors. The Supreme Court noted that the Respondent's actions hindered the sale of company properties, ultimately frustrating the purpose of his interim bail.

Issue 4: Cooperation with investigation agencies
While the Respondent claimed to cooperate with the investigation agencies and the One-Man Committee, the CBI argued that his actions, including publishing misleading brochures and impersonating officials, demonstrated a lack of genuine cooperation. The Supreme Court emphasized the importance of genuine cooperation in such cases of economic offenses.

Issue 5: Impersonation through misleading brochures
The Respondent was accused of deceiving investors by publishing brochures impersonating an official, falsely representing the company's business legitimacy and profitability. The investigation revealed that the accused attempted to mislead the public and investors through such deceptive practices.

Issue 6: Seriousness of economic offenses
The Supreme Court highlighted the seriousness of economic offenses involving a deep-rooted conspiracy and significant loss to investors. Considering the misappropriation of funds and the potential obstruction of justice, the Court set aside the bail granted to the Respondent, emphasizing the need to prevent the misuse of liberty and ensure justice for the affected investors.

This detailed analysis of the judgment addresses the various issues involved in the case, highlighting the legal complexities and implications of the Supreme Court's decision to set aside the bail granted to the Respondent.