TMI Blog2021 (5) TMI 603X X X X Extracts X X X X X X X X Extracts X X X X ..... plication but on this technical ground alone prayer made by the applicant to consider the bail application on regular side cannot be rejected - preliminary objection raised on behalf of the S.F.I.O. cannot be accepted, particularly, keeping in view the pandemic situation arose in the country and non regular functioning of the subordinate courts. Submissions made by the learned counsel appearing for the applicant and disclosed in the written submission regarding the application of provisions of Section 167 (1), Section 167 (2) and Section 309 Cr.P.C. are not liable to be accepted. If the prosecution had filed complaint/police report within the period of sixty days, the right of default bail would not accrue in favour of the accused person as has been held by the Apex Court consistently in several cases and is being followed by the Courts till today. Construction of provisions of Section 167(2) Cr.P.C. in the manner submitted by learned counsel appearing for the applicant is not permissible and is not akin to the settled legal proposition. Remand could continue under Section 167(2) Cr.P.C. even after filing of complaint / charge-sheet despite this fact that cognizance had not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was rejected. Since argument has been completed on the main bail application, therefore, interim bail application cannot be allowed. At this juncture learned counsel appearing for the S.F.I.O. also referred to the prayer made in the interim bail application and prayed for rejection of the application. 5. Having considered the rival submissions and going through the affidavit annexed with the interim bail application and also the documents annexed therewith, the court is of the view that interim bail application moved by the applicant is not liable to be allowed as main bail application moved by the applicant is being decided today itself. 6. Thus, the interim bail application is hereby rejected. ORDER ON CRIMINAL MISC. BAIL APPLICATION No. - 36542 of 2020 7. This application has been filed with the prayer to enlarge the applicant Rahul Kothari on bail in S.T. No. 577 of 2020 (SFIO Vs. Rotomac Global Pvt. Ltd. and others) for the alleged offences under Sections 36 (c ) r/w 447, 185, 186, 447, 448 r/w 447 of the Companies Act, 2013 and Section 211 r/w 628 of the Companies Act, 1956. 8. Heard Shri Vikram Chaudhary, learned Senior Advocate assiste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efault bail prayer has committed illegality. Remand of the accused after filing the police report / complaint could not continue under Section 167 Cr.P.C., therefore, on this ground also remand extended by the concerned Magistrate is illegal and applicant is entitled to be released on bail as custody of the applicant is illegal in the present matter. It was further argued that ratio laid down by the Hon'ble Supreme Court in Sanjay Dutt Case could not be applied in the present matter. The same was propounded on the basis of concession given by the learned counsel appearing for the accused in that matter. At this juncture, learned counsel appearing for the applicant also referred to the observations recorded by the co-ordinate Bench of this Court in Bail Application No. 2920 of 2018 and 3492 of 2018 and further argued that bar created under Section 212 (6) of the Companies Act will not come in the way in releasing the applicant on default bail. At this juncture learned Sr. Advocate appearing for the applicant also placed reliance on the following case laws : 1. Jamuna Singh Versus Bhadai Shah, (1964) 5 SCR 37 : AIR 1964 SC 1541 2. K.S. Puttaswamy Versus Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ni, (1992) 3 SCC 141 11. Learned Sr. Advocate also referred to the points disclosed in the written argument and further argued that there are two stages in Section 167 Cr.P.C. Section 167 (1) Cr.P.C. is related to the prosecution agency but Section 167 (2) Cr. P. C. is related to the Court. It is next contended that in-action on part of the Court in taking cognizance will not be a ground to deprive the accused to release him on default bail. Material question in the present matter is that cognizance was taken on the complaint after prayer made by the applicant for default bail. Thus, it is argued that present bail application be allowed and applicant be released on bail. 12. Sri Gyan Prakash, learned Sr. Advocate argued that regular bail prayer made by the applicant cannot be entertained as the applicant has not moved regular bail application before the court below. It was next contended that there is no illegality, infirmity or perversity in the impugned order passed by the court below on the default bail application. Contention is also that provision of Section 167 Cr.P.C. itself is ample clear and default bail can only be granted in case charge sheet/complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only provision for extended remand is given in Section 309 Cr.P.C. Thus, referring to the aforesaid facts it was next contended that the applicant is entitled to be released on default bail and also on regular bail. 15. Prosecution case in nutshell, as disclosed in the bail application and affidavits filed by the parties are that the applicant has been arrayed as an accused no. 42 in the complaint dated 15.05.2020 filed by the S.F.I.O.. It has been averred in the said complaint that applicant was one of the promoter-Director of the Rotomac Global Private Limited (hereinafter will be referred as R.G.P.L.), Crown Alba Writing Instruments Private Limited; Kothari Foods and Fragrances Private Limited; Rotomac Exports Private Ltd and also Rotomac Exim Private Limited and other sister companies which caused wrongful loss to the public sector banks to the tune of ₹ 4168 crores as N.P.A. Aforesaid companies and sister companies of the Rotomac Group of Companies were engaged in the business of commodities and merchant trading (MT). Aforesaid companies had secured the credit faciltiies by way of margin money/FDs as well as other co-lateral. It has also been averred that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred that applicant was also indulged in speculative currency trading unrelated to MT being undertaken by RGC thereby gambling with Banks money which resulted in huge loss. Applicant was instrumental in holding the currency losses in the books of accounts under the garb of debit notes. These debit notes were raised against foreign parties and made part of trade receivable. Later on these debit notes were adjusted against the payment received from the LC rotated funds. 17. Allegation against the applicant is also that he abused his position as promoter-director and caused wrongful loss of ₹ 4188 Crores to public sector Banks. He utilized the corporate identity to perpetrate fraud of rotating the funds obtained through Letter of Credit discounting for mopping the interest arbitrage available between LC issuance and discounting charges and that between the interest on fixed deposits. This whole conspiracy was played under the garb of doing MT. 18. Applicant and co-accused also used the corporate identity to rotate LC funds for mopping the interest arbitrage and showed it in the books as Merchanting Trade business. Since it was not actually into MT business, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e curtailed by following the procedure established under law. The procedure unless it serves the purpose of law cannot be allowed to defeat the basic right. Sri S.V. Raju, learned Senior Counsel, reiterating his stand, would argue that the outstanding liability as against the accused applicants is full of doubts in the attending facts and circumstances of the case but the argument would require some more clarifications which he shall address while making submissions in rejoinder. This Court is in the midst of the arguments being advanced by Sri Amarjeet Singh Rakhra on behalf of CBI. Sri Rakhra has explained the position with respect to export booking credits by quoting the instance of one transaction out of 14 entered into between the Rotomac Global Pvt. Ltd. with Comet Overseas Pvt. Ltd. for the purpose of procurement of goods which were to be supplied to Global Pacific Services Pte. Ltd. at Singapore. The export booking credits according to the learned counsel, essentially involve release of money to a borrower on placing an order of supply from foreign importer before the Bank which is unlike the procedure when compared to foreign letters of credit. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngh Rakhra learned counsel for the C.B.I. has also concluded his arguments barring for the fact that some decisions are to be cited by him in support of the arguments advanced. Sri Chandra Shekhar Sinha learned counsel for the Bank craves for an opportunity to make some supplementary submissions with respect to the letter of credit i.e. Document D-7 attached to the charge-sheet. List/put up on 30.11.2018 at 2.15 p.m. for concluding arguments. Hearing was concluded today. Having regard to the arguments made by Sri S.V. Raju, learned Senior Counsel assisted by Sri Pranjan Krishna, who concluded his submissions on 28.11.2018, Sri Amar Jeet Singh Rakhra for the CBI and Sri Chandra Shekhar Sinha for the Bank of Baroda vis-a-vis the facts and circumstances of the case coupled with the material on record, the following order was pronounced in the open Court: For the reasons to follow in the composite order, the bail application of Rahul Kothari is allowed whereas the bail application of Vikram Kothari is rejected at this stage. Learned counsel for the parties have argued the matter on several aspects but this Court is conscious of the fact that while d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a (M.D. Mallya) the then Chairman Managing Director, Sri Rajiv Kumar Bakshi, the then Executive Director, Sri Atul Agarwal the then Direkctor (Part Time Non Official Director) posted at BOB, Head Office, Mumbai and unknown private persons / unknown public servants. After completion of investigation under Section 173(8) against the above mentioned accused persons, supplementary charge sheet will be filed in this Hon'ble Court in due course. The Court has heard the case of both the applicants in the light of material gathered in the charge sheet filed on 19.5.2018. The charge sheet, prima facie, makes a distinction of complicity between the two accused applicants in the backdrop of their role which each of them has severally played in the business of the Company of which they are joint beneficiaries. The distinction lies in the framing of charges itself which read as follows: (i) M/s Rotomac Global Private Limited (M/s RGPL) (A-1) u/s 420 IPC through its CMD, Sh. Vikram Kothari/ authorised representative. (ii) Sri Vikram Kothari (A-2), CMD of M/s RGPL u/s 120- B r/w 420, 467, 468, 471 IPC and Section 13(2) r/w 13 (1) (d) of PC Act, 1988 and substant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accused applicant who is to face trial. In nutshell, it is argued that the same very ground on which the co-accused is entitled to be granted bail, in equal measure, is applicable to the case of Vikram Kothari, therefore, he may also be set free. This Court would note that the advances made to M/s Rotomac Global Pvt. Ltd. have not been secured by primary or collateral security as per the mandate of Section 21 of Banking Regulation Act, 1949. The consortium of nationalised banks, prima facie, appears to have failed to secure the advances by adhering to the condition of primary security/margins and even not to the extent of collateral Securities despite the fact that there exists a pervasive control of the Ministry of Finance and Reserve Bank of India. The Court may strike a note of caution that the public money in the pursuit of windfall profits by the persons of creditworthiness, cannot be advanced in dark and without ensuring cent percent security. This Court would, therefore, not lose sight of the fact that the creditworthiness of the Company has come under the cloud on the basis of alleged misrepresentation by the Managing Director. Hoping that the CBI would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl. Particulars Citation 1 Nimmagadda Prasad versus Central Bureau of Investigation (2013) 7 Supreme Court cases 466 2 Y.S. Jagan Mohan Reddy versus Central Bureau of Investigation (2013) 7 Supreme Court cases 439 3 Gulabrao Baburao Deokar versus State of Maharashtra and others (2013) 16 Supreme Court cases 190 4 Prem Prakash Verma versus Central Bureau of Investigation (2016) 5 Supreme Court cases 414 5 Virupakshappa Gouda and another versus State of Karnataka and another (2017) 3 Supreme Court cases 406 6 State of Bihar and another versus Amit Kumar alias Bachcha Rai (2017) 13 Supreme Court cases 751 Reference to each decision cited by the applicants and dealing with the principles em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall file undertaking to the effect that he shall not seek any adjournment on the dates fixed for evidence when the witnesses are present in court. In case of default of this condition, it shall be open for the trial court to treat it as abuse of liberty of bail and pass orders in accordance with law. (iv) The applicant shall remain present before the trial court on each date fixed, either personally or through counsel. In case of his absence, without sufficient cause, the trial court may proceed against him under Section 229-A of the Indian Penal Code. (v) In case, the applicant misuses the liberty of bail during trial and in order to secure his presence, proclamation under Section 82 Cr.P.C. is issued and the applicant fails to appear before the court on the date fixed in such proclamation, then, the trial court shall initiate proceedings against him in accordance with law, under Section 174-A of the Indian Penal Code. (vi) The applicant shall remain present, in person, before the trial court on the dates fixed for (i) opening of the case, (ii) framing of charge and (iii) recording of statement under Section 313 Cr.P.C. If in the opinion of the trial court a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion regarding the application of provisions of Section 167 (1), Section 167 (2) and Section 309 Cr.P.C. are not liable to be accepted. If the prosecution had filed complaint/police report within the period of sixty days, the right of default bail would not accrue in favour of the accused person as has been held by the Apex Court consistently in several cases and is being followed by the Courts till today. Construction of provisions of Section 167(2) Cr.P.C. in the manner submitted by learned counsel appearing for the applicant is not permissible and is not akin to the settled legal proposition. Remand could continue under Section 167(2) Cr.P.C. even after filing of complaint / charge-sheet despite this fact that cognizance had not been taken on the complaint. It is admitted case of the applicant that he moved default bail application on 18.05.2020. Since complaint had already been filed on 15.05.2020 and sixty days period was to be expired on 17.05.2020, therefore, default bail was not liable to be allowed. It is immaterial whether cognizance had been taken or not on the complaint/police report on the date of filing of the default bail application. Judicial custody could cont ..... X X X X Extracts X X X X X X X X Extracts X X X X
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