9911796707
TMI Blog2021 (10) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... ference in administration of justice in a criminal trial by an accused then a person should not be deprived of his liberty. Only a vague belief that he will tamper with evidence cannot be a ground to deprive a person of his liberty. Gravity of the offence cannot be the sole ground to deny bail to the accused. The investigation against the accused has been completed and the charge sheet has been filed as on 11.11.2019. The further investigation that is being carried out is with respect to other authorities and the accused has no role to play therein. The evidences are documentary in nature and all the relevant documents are within the custody of the prosecution. Therefore, there is no likelihood of tampering of evidence. This court is inclined to grant bail, subject to the conditions imposed - application allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ading member agreement dated 14.11.2017 entered into between IL&FS and AFSPL, the investment was then transferred to IL&FS as collateral. Thereafter, the securities were offered to NSCCL (National Securities Clearing Corporation Limited) as collateral. e) However, the director of AFSPL through his email dated 31.01.2019 again confirmed the complainant's holding in the above DMAT accounts and regretted delay in the processing of redemption request. It assured that the same would be processed by 06.02.2019. As per the allegations, no such redemptions were made as on that date or any time afterwards. f) The accused has been arrested as on 16.08.2019 and the chargesheet has been filed as on 11.11.2019. 3. Mr. Dayan Krishnan, learned Senior Counsel appearing for the petitioner, contends that the petitioner herein is the managing director of AFSPL, which is a depository participant, that facilitates derivative trading on the NSDL platform. The mutual fund units were given to the petitioner herein by the complainant in the capacity of a depository participant. 4. Mr. Krishnan contends that the mutual fund units in question were voluntarily transferred by OCL and DCEL to three compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot have any possession or control over the said mutual fund units. 8. The learned Senior Counsel further contends that bail is the rule and jail is the exception. He states that if the petitioner is made to suffer custody in the present case which is pending trial, then the same shall amount to inflicting punishment, which defeats the presumption of innocence. To support his contention, the learned Senior Counsel placed reliance on the judgment of Dataram Singh v. Union of India (2018) 3 SCC 22. The learned Senior Counsel, relying on Sushila Agarwal v. State (NCT) of Delhi, (2020) 5 SCC 1, further contends that for the purpose of grant of bail, economic offences do not constitute a separate class of offences. 9. The learned Senior Counsel also contends that in terms of Aditya Kumar Bhandari v. SFIO, 2020 SCC Online Del 588, there is no prospect of this trial proceeding further on account of the ongoing covid-19 pandemic. Therefore, if the bail application is dismissed, the accused will remain in custody, unnecessarily, for a prolonged period of time which shall curtail his right to personal liberty under Article 21 of the Constitution of India. 10. The learned Senior Counsel con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts of Money Mishra Financial Services, Money Mishra Overseas Private Ltd. and the petitioner herein and from there it was transferred to IL&FS, as collateral. The learned counsel for the complainant, relying on the FSL report dated 06.09.2019, contends that all sixty-six-delivery instruction slips, through which transactions were initiated from the said accounts, were alleged to be forged and fabricated. He further submits that as per the investigation, securities which were transferred on 13.07.2017 and 17.07.2017 (Instruction Nos. 28818-19 and 28924-26 as reflected in the ledger account of the NSDL) were transferred without any delivery instruction slips. Therefore, there was no authorization on behalf of the complainant for any of the above transfer of securities. 14. The learned counsel for the complainant contends that for the sole purpose of his personal gain, the petitioner herein transferred the securities to its own accounts and those of its related entities and then subsequently offered the same as collateral to IL&FS, without any mandate, consent and knowledge of the complainant. He further submits that the petitioner received a premium of ₹ 380 Crores by using ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e complainant that its securities are intact. He states that the attached holding statements of the Demat accounts of OCL and DCEL as on 31.12.2018 showed that the mutual funds were intact, however, the holding statement collected from NSDL showed that there were no mutual fund units available in the Demat Accounts of OCL and DCEL. 18. The learned counsel for the complainant also brought to the attention of the court that on 08.02.2019 SEBI was apprised of the matter and vide order dated 02.07.2021, it confirmed the allegations against the accused and held that the accused caused fraudulent and unfair treatment to DECL and OCL. He states that the SEBI restrained AFSPL and the petitioner herein from accessing the securities market or selling or dealing in securities, either directly or indirectly, in any manner whatsoever, for a period of 7 years from the date of the said order. He further submits that SEBI also restrained the petitioner herein from associating with a listed entity, a material subsidiary of a listed entity or a SEBI registered intermediary in any capacity, either directly or indirectly, in any manner whatsoever, for a period of 7 years from the date of order. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceedings. 23. The learned counsel for the complainant contends that the bail application for the petitioner must be dismissed since the petitioner is involved in grave economic offences, for which the punishment is severe, particularly, for Section 409 and 467 of the Indian Penal Code, 1860, which prescribe a period of imprisonment which may extend to life. In order to support his contention, the counsel placed reliance on Religare Finvest Ltd. v. State of NCT Delhi, Crl (MC) 796/2021 decided on 14.06.2021. 24. The learned counsel relying on YS Jagan Mohan Reddy v. CBI (2013) 7 SCC 439, State of Gujarat v. Mohanla Jiamalji Porwal, (1987) 2 SCC 364, Nimmagadda Prasad v. CBI, (2013) 7 SCC 466, and State of Bihar v. Amita Kumar, (2017) 13 SCC 751, further contends that since the present matter involves socio-economic offences, bail should not be granted. Further, the learned counsel of the complainant contends that filing of the charge sheet does not lessen the allegations of the prosecution in any manner, rather, it establishes incriminating evidence against the accused persons which includes the petitioner herein. In order to support his contention, the counsel placed relianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e securities of the complainant as their own, the petitioner, along with the other co-accused, gained ₹ 380 Crores and caused an illegal and wrongful loss to the petitioner to the tune of ₹ 344.07 Crores. 29. Charge-sheet has been filed. It is stated in the charge-sheet that the petitioner is the Director of AFSPL and he is responsible for day to day affairs of the company. It is stated that the petitioner induced the complainant to open Demat accounts of OCL and DCEL with his company and further induced them to transfer their Mutual Fund units in their Demat accounts. It is stated that the petitioner manipulated the credentials namely, correspondence addresses, contact number and e-mail ID, provided in Account Opening forms, and uploaded different credentials with NSDL system to deprive the complainant in getting transaction alerts. It is further stated that the petitioner sent false and fabricated client master list of the OCL and DCEL to the complainant through e-mail to make him believe that the registered credentials of the companies with the NSDL is correct. It is also stated that the petitioner fraudulently and dishonestly transferred the Mutual Fund units of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collateral with the clearing member, ISSL. 85.6. Just before quarter end 31/12/2017 and financial year end 31/03/2018, AFSPL ensured that It fraudulently transferred these MF units to the accounts of DCEL and OCL. As explained above, the reason could be to escape scrutiny of independent auditor verification when finalizing financial statements. It is seen that immediately after the quarter and financial year ends, the MF units are again moved out of the accounts. It is noted that without prejudice to the above reason, the conduct of transfer of MF units was to only conceal the true state of affairs i.e., that the MF units were encumbered and that the holdings would be taken away soon again, thereby, making such transfers a fraudulent one on this score. 85.7. ASPL has fraudulently misrepresented to NEPL, the status of the MF units in its demat account by sending a non-genuine holding statement, while the MF units were actually fraudulently transferred for using as collateral by AFSPL." 31. Vide the same order, SEBI was pleased to pass the following directions against the accused : "150. In view of the above, I, in exercise of the powers conferred upon me under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all remain frozen. 152. The penalty shall be paid by the Noticees within a period of forty-five (45) days, from the date of receipt of this order. Payment can be made online by following the below path at SEBI website www.sebl.gov.ln ENFORCEMENT > Orders > Orders of Chairman/Members > Click on PAY NOW or at https://siportal.sebi.gov.in/intermediary/AOPayment Gateway.html and selecting Type of Category as 11B orders. 153. The Order shall come Into force with Immediate effect. 154. If there Is a failure to pay the penalty, as mentioned above, SEBI may recover the amount from the Notlcee as per applicable law." 32. It is pertinent to mention that the co-accused, V. Hansprakash, had approached this Court for grant of bail by filing BAIL APPLN. 1097/2020. This Court vide order dated 01.12.2020 held that V. Hansprakash was in a fiduciary capacity and has allegedly committed gross breach of trust in relation thereto in alleged connivance with other co-accused persons of an alleged amount of ₹ 344.07 crores. This Court further held that the complainant is a public limited company, and that the members of the public have consequently also been allegedly defrauded of the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indirectly, in any manner whatsoever, for a period of seven (07) years. SEBI has also restrained the petitioner from associating with a listed entity, a material subsidiary of a listed entity or a SEBI registered intermediary in any capacity, either directly or indirectly, in any manner whatsoever, for a period of seven (07) years. 35. The short question which arises for consideration is whether the petitioner, who is alleged of committing an offence involving about ₹ 344 Crores, is entitled to bail or not ? 36. The Supreme Court in Sanjay Chandra v. CBI, (2012) 1 SCC 40, has observed as under : "21. In bail applications, generally, it has been laid down from the earliest times that the object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Deprivation of liberty must be considered a punishment, unless it is required to ensure that an accused person will stand his trial when called upon. The courts owe more than verbal respect to the principle that punishment begins after conviction, and that every man is deemed to be innocent until duly tried and duly found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by balancing the valuable right of liberty of an individual and the interest of the society in general. In our view, the reasoning adopted by the learned District Judge, which is affirmed by the High Court, in our opinion, is a denial of the whole basis of our system of law and normal rule of bail system. It transcends respect for the requirement that a man shall be considered innocent until he is found guilty. If such power is recognised, then it may lead to chaotic situation and would jeopardise the personal liberty of an individual." ***** 46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge-sheet is already filed before the Special Judge, CBI, New Delhi. Therefore, their presence in the custody may not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accessing securities market and the petitioner cannot commit the same offence again. 40. Gravity of the offence cannot be the sole ground to deny bail to the accused. The investigation against the accused has been completed and the charge sheet has been filed as on 11.11.2019. The further investigation that is being carried out is with respect to other authorities and the accused has no role to play therein. The evidences are documentary in nature and all the relevant documents are within the custody of the prosecution. Therefore, there is no likelihood of tampering of evidence. In light of the orders dated 16.03.2021 and 02.07.2021, the hands of the accused have virtually been tied. Moreover, the accused herein as deep roots in the society and has agreed to cooperate with the conditions of bail. 41. In view of the law laid down in Sanjay Chandra (supra), this court is inclined to grant bail, subject to the following conditions : a) The Petitioner shall furnish a personal bond in the sum of ₹5,00,000/- with two sureties of the like amount, who should be the relatives of the petitioner, to the satisfaction of the Trial Court/Duty Magistrate. b) The petitioner shall depos ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
