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TMI Blog2011 (6) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... fied 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 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007, 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) rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsactions 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 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 Cine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any collateral, defies common sense and normal business practices. 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 (Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustody, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders 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 other 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, mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fuse 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 postulates 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 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, ste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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