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TMI Blog2016 (10) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... returns on the investments made. The applicant while presenting various schemes, have depicted association with, and sponsorship from nationalized banks, the veracity of which remains questionable. It further raises suspicion on the conduct of the accused/ applicant, as to why they reduced the sale price consideration in the sale agreements executed between the accused company and the investors. The accused deducted TDS on the assured returns promised, but apparently the same has not been deposited with the Income Tax Department, thus, prima facie, raising a possibility of misappropriation. Prima facie, there appears to be force in the case of the prosecution that the accused, right from the beginning, had the intention to cheat and defraud the investors and to misappropriate their investments. Moreover, the applicant is accused of cheating in not just the subject FIRs but around 13 other FIRs have been registered against him arising from similar transactions. In light of the above, there can be no doubt that the nature of accusations is serious and weighty in nature. The Court is conscious of the law that a detailed examination of evidence and elaborate discussion of merits cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nants have filed applications in each of the aforesaid Bail Applications, seeking permission to intervene e in the matter on behalf of the "Investors Sanghars Samiti", with a view to oppose the grant of bail to the applicant/ accused. These applications are: (i) Crl. M.A. No. 10390/2016 in Bail Appln. No. 1212/2016; (ii) Crl. M.A. No. 10392/2016 in Bail Appln. No. 1221/2016; and, (iii) Crl. M.A. No. 10388/2016 in Bail Appln. No. 1222/2016. 3. Charge-sheets in the subject FIRS have been filed on 29.12.2014. Supplementary charge-sheets have also been filed, adding Mr. Sanjay Dahiya, brother of the applicant and Mr. Daryao Singh, father of the applicant as co-accused on 20.04.2015. The Ld. ASJ (South) Saket Courts, New Delhi has dismissed the bail applications of the applicant under Section 439 CrPC vide order dated 10.09.15 in all three subject FIRS. The applicant accused has been in judicial custody since 30.10.2014 and the present application has been filed by his wife who is holding a power of attorney executed by the applicant on 19.05.2016. Background: 4. The Applicant states that he is in the business of real estate and in the construction of State-of-the-Art ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Anchor-Unit Agreement and the Developer Anchor Option Agreement-Assured Return Plan. These agreements were entered into somewhere between the years 2006-2008. All these agreements were executed by the applicant on behalf of the aforesaid companies. 9. The Developer assured the investors that the construction will be completed within a period of sixty months from the date of the agreement and after receipt of the completion certificate from government authority. The investors were also guaranteed assured return at the rate of 9% to 12% per month. As per the agreements, on the expiry of the period, the Developers were to hand over the booked units to the investors and the units, post construction, were to be rented, and the rent shared in the ratio 65:35 between the Developer and the respective investor. In the event of the company failing to offer possession of units within the stipulated time i.e. 60 months, accused were to pay back to the investors/complainants sums of money as agreed. 10. It is the grievance of the complainants/investors that more than 60 months have lapsed since their investment, and the accused have not completed the construction at the project sites, let alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complainants to pay the pending assured returns, which have also started getting dishonored. 14. The Complainants allege that the accused has illegally collected service tax and land enhancement cost from the complainants on the undertaking of paying the assured return. This was done with an intention to make the complainants part with more money to pay off their dues to the Service Tax Department. It is also their case that the persons who have paid the amount prior to 01.07.2010 were not even liable to pay the service tax under law. The accuse applicant has not deposited TDS deducted from the amount of assured return paid to the complainants in the previous years. 15. The Complainants have further alleged that the applicant accused has forged the agreements by changing the main clause dealing with refund of invested amount. The accused has also falsely used unauthorized names and styles of nationalized banks in their advertisements, to instill confidence in mind and heart of the public to invest their money in the projects of the accused. The Complainants have referred to an advertisement in Navbharat Times (Hindi) dated 12.04.2009 and Times of India (English) dated 14.04.2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been further revealed that M/s. Vigneshwara Developers Pvt. Ltd. was not permitted to lease or sell the property in question. The analysis of the bank accounts reveal that the directors received ₹ 9,98,10,952/- from the investors before 17.05.2006, which is before the date of agreement between HSIIDC and the applicant. As per the agreement, it was agreed between the corporation and the accused that the breakup of the project implementation shall be as follows: Time-period Percentage Two years 30% Three years 50% Five yearss 75% Extension of 2 year 100% 20. It is stated that more than eight years have lapsed, and project is just 40-50% complete and for the last several months is in an abandoned condition as no construction activity has taken place. Further, as per the terms and conditions of agreement and clause 13.2 of EMP-2011, for booking of built space on lease rental basis during construction stage, the accused/ applicant were to seek permission from the corporation in a prescribed format, which was not sought. Project 2 @ Sector 74, Gurgaon 21. The charge-sheet reveals that the license in respect of this project was obtained in the name of local villager ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of any dispute arising from the contract. The applicant also relies upon the bail orders in FIR Nos. 28/10, 29/10, and 65/10, wherein the accused has been granted bail and the Ld. ASJs have enlarged the applicant on bail on the ground that the dispute is of civil nature. 25. The Applicant further submits that the accused company has diligently paid the assured return since inception. To evidence the same, the Applicant has relied upon a verification report of Dun and Bradstreet verifying the performance of all projects. The Applicant submits that since the assured returns were diligently paid from inception, there is no intention to cheat and mens rea to constitute criminal offence is absent in the present case. 26. Mr. Nigam, learned senior counsel submitted that there was no dishonest intention on part of the Applicant regarding the implementation of the projects, since the project at IMT Manesar is on the verge of completion and the company has obtained extension of two years from HSIIDC vide office order dated 20.09.2013. As regards project at Sector 74, Gurgaon, the Applicant submits that the company could not proceed further for want of relevant sanction and approval ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Additional Sessions Judge. The applicant has been in judicial custody for over twenty one months now. Thus, no purpose will be achieved in unnecessarily keeping the applicant in jail during pendency of the trial. Ld. Senior furthermore states that the trial is likely to take considerable time since there are around 400 complainants. The taking on record of statements of the prosecution witnesses and the documents relied by the prosecution is bound to take long. It is highly improbable that the trial will get completed within the limitation of sixty days from the first date fixed for taking evidence as provided under sub section (6) of Section 437 of CrPC. He submits that the right to automatic bail under the said provision stems from the fundamental right of personal liberty as enshrined under Article 21 of the Constitution. It is violative of Article 21 if an undertrial prisoner is detained in judicial custody for an indefinite period. 30. Ld. Senior Counsel has relied upon Sanjay Chandra v. Central Bureau of Investigation, (2012) 1 SCC 40, in support of the aforesaid submission "24. In the instant case, we have already noticed that the "pointing finger of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en arguments after the evidence is closed in a case, provided prior permission of the Court is obtained. In this regard, reliance is placed on the following cases: 1. Sundeep Kumar Bafna v. State of Maharashtra, 2014 (16) SCC 623 2. Praveen Malhotra v. State, 1990 (18) DRJ 192 3. Kuldeep Singh v. State of Haryana 1980 Cri LJ 1159 4. P.S. Saravanbhavanandam and Ors. v. S. Murugaiyyan & Ors. 1986 Cri LJ 1540 5. Shiv Kumar v. Hukum Chand (1999) 7 SCC 467 33. The Bail Applications are opposed by the learned APP. She submits that in respect of the project at Manesar, only one out of the six towers has been constructed. She relies upon the charge-sheet which reveals that "During the inspection of the project site, it has been found that the project at Manesar is partly constructed and at present no construction activity is going on. The iron rod was found rusting, suggesting thereby that construction activity has not taken place since long. Out of the six proposed towers, only one tower is nearing completion and other towers are partly built. The intent of the directors of the company was never to complete the project in time bound manner." 34. As regards, the proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... group companies, and also to accounts of other directors with the aim and object of siphoning the money. 37. Ld. APP has relied upon Sunil Grover v. State, which distinguished Sanjay Chandra (supra). She submits that in the present case general members of the public have been directly put to loss by floating of advertisements and invitation of offers from the public to invest money into the projects of the applicant by promising them assured lucrative returns. This is unlike Sanjay Chandra (supra) wherein it was the public-exchequer that was put to loss by not holding auction of government resources. 38. Mr. Singla has also advanced his submissions with the permission of the Court. Looking to the very large body of investors involved and concerned in the matter, I have permitted him to do so. He supports Ld. APPs submission by stating that out of an area measuring 10 lac sq.ft., only 2.35 lac sq.ft. has been constructed and 7.60 lac sq.ft. is left. Mr. Singla further submits that as per the Memorandum and Articles of Association, the company's authorized capital is ₹ 1 lac/-. There has been no increase in the authorized capital, inspite of the accused receiving share a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn the factors that a court granting bail should consider. The court observed as follows: "18. The Court granting bail should exercise its discretion in a judicious manner and not as a matter of course. Though at the stage of granting bail, a detailed examination of evidence and elaborate documentation of the merits of the case need not be undertaken, there is a need to indicate in such orders reasons for prima facie concluding why bail was being granted, particularly, where the accused is charged of having committed a serious offence. The Court granting bail has to consider, among other circumstances, the factors such as a) the nature of accusation and severity of punishment in case of conviction and the nature of supporting evidence; b) reasonable apprehension of tampering with the witness or apprehension of threat to the complainant and; c) prima facie satisfaction of the court in support of the charge. In addition to the same, the Court while considering a petition for grant of bail in a non-bailable offence apart from the seriousness of the offence, likelihood of the accused fleeing from justice and tampering with the prosecution witnesses, have to be noted." (Em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assured returns have also been stopped after few years. Post dated cheques issued in that regard have been dishonoured. The construction of the units, which was assured within a time span of 5 years from the date of agreement has, even after a period of more than eight years, not been completed. There are allegations that the applicant/ accused has also deducted service tax from the investors, including during a period when it wasn't required to be deducted under law. The same does not appear to have been deposited with the authorities and may have been misappropriated. Vast amounts collected by the applicant/ accused from the investors appear to have been splurged for personal comforts and pleasures, apparently without any concern for the fact that the people had invested their lifelong savings in the hope of getting their promised properties and returns. Projections were made to the public to invest in the projects without even having the requisite permissions/ clearances. Only partial construction - which too is incomplete, has been done by the accused. Prima facie, there appears to be force in the case of the prosecution that the accused, right from the beginning, had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crutinizing the bank account, we found that they had received the funds from the investors before 17/05/2006 for booking units under the said project ...... ... ..... ........ ... They had received ₹ 9,98,10,952/- from the investors before 17/05/2006. The accused had withdrawn a sum of ₹ 5,40,00,000/- (Rs five crore forty lacs only). They had withdrawn material amount from the funds received from the investors it (sic) shows manipulation/misappropriation of funds. ........................................ The authorized and paid up capital of the company is ₹ 1,00,000/- only, they have received the share application money in such a huge amount without increasing their authorized capital. During the year 2009-2010 company has received share application money of ₹ 21,14,70,980/-. The company had shown the share application money lying pending for allotment since long period, and not taken any step for increase in his authorized capital so that he can allot the shares. In normal practice these types of entries are fake and bogus and companies use this type of practice to manipulate funds and convert black money into white.... .... ... It has also been obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country." 50. Further, in State of Gujarat vs. Mohanlal Jitamalji Porwal and Anr., (1987) 2 SCC 364, the Court in Para 5 observed: "5. The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest.." 51. Prima facie, the allegations of cheating appear to be made out inasmuch, as, the allegation is that the sale price consideration was modified to a lesser price in the sale barter agreements b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese cases cited by the learned counsel for the petitioner, the quantum of money allegedly involved was much higher than the amount of money involved in the instant case, but there is a fundamental difference between these two sets of cases which have been cited by the learned counsel for the petitioner and the present case. In the cases, which have been cited by the learned counsel for the petitioner, no member of the general public was affected directly, rather it was the public ex-chequer which was put to loss by not holding auction of government resources or by over invoicing lenders. This is totally different from the facts of the present case where the petitioner floats advertisements and invites the offers from the members of the public to invest money in their schemes by promising them lucrative returns at regular intervals. He is able to gain their confidence and cheat them of their hard-earned money which ranges from ₹ 1,00,000/- to ₹ 10,00,000/-. This kind of activity ultimately shows a great deal of deliberation, preparation and operation which can be done only by an intelligent person and this whole exercise has been rightly observed by the learned Sessions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the public, who are around 1500 in number, as on date and more are adding by the day." (emphasis supplied) 53. The Supreme Court, in Neeru Yadav v. State of U.P, (2014) 16 SCC 508 - which was also a case of regular bail under Section 439, observed as follows: "16. xxx We are not oblivious of the fact that the liberty is a priceless treasure for a human being. It is founded on the bed rock of constitutional right and accentuated further on human rights principle. It is basically a natural right. In fact, some regard it as the grammar of life. No one would like to lose his liberty or barter it for all the wealth of the world. People from centuries have fought for liberty, for absence of liberty causes sense of emptiness. The sanctity of liberty is the fulcrum of any civilized society. It is a cardinal value on which the civilisation rests. It cannot be allowed to be paralysed and immobilized. Deprivation of liberty of a person has enormous impact on his mind as well as body. A democratic body polity which is wedded to rule of law, anxiously guards liberty. But, a pregnant and significant one, the liberty of an individual is not absolute. The society by its collective ..... X X X X Extracts X X X X X X X X Extracts X X X X
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