TMI Blog2022 (6) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... of 5.46 crore investors spread all over the country from sham land transactions. The Court proceeded on the basis of roles attributed to the applicants therein, as elucidated in the affidavit of the CBI. The applicants in the present case, in contrast, are not directors of PGF/PACL and their roles are required to be independently considered in connection with their applications for bail. As applying the relevant principles to the facts of the present cases, further incarceration of the applicants, pending conclusion of the trial, is unnecessary and they are liable to be released on bail, albeit with stringent conditions to ensure their presence at the trial and to minimise the risk of prejudice to the prosecution. As directed that the applicants will be admitted to bail in connection with FIR No. RCBD1/2014/E/ 0004/CBI/BS FC, registered on 19.02.2014, in Police Station CBI, under Sections 120B/409/411/420/467/468/471/474 of the IPC and Sections 4/5 read with Section 6 of the PCMCS Act. The applicants will furnish a personal bond in the sum of ₹30,00,000/- [Rupees Thirty lakhs] each, with two sureties each in the like amount, to the satisfaction of the Trial Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1860 [ IPC ] and Sections 4/5 read with Section 6 of the Prize Chit and Money Circulation Schemes (Banning) Act, 1978 [ PCMCS Act ]. As the six applications arise out of the same FIR, they were heard together and are being disposed of by this common judgment. 2. The present applications relate to following six accused: Bail Application No. Name of the accused Accused No. 716/2022 Mr. Praveen Kumar Agarwal A-20 1172/2022 Mr. Subhash Agarwal A-24 1173/2022 Mr. Rajesh Agarwal A-25 1203/2022 Mr. Mohan Lal Sehjpal A-14 1278/2022 Mr. Akash Agarwal A-23 1382/2022 Mr. Mannoj Kumar Jain A-22 Factual background 3. The facts relating to these proceedings are as follows:- a. The abovementioned FIR was registered against two companies, namely PGF Limited [ PGF ] and PACL Limited [ PACL ], and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ojects Limited [ PIPL ]. PIPL and Mr. Mohan Lal Sehjpal find mention inter alia in paragraphs 181 to 190, 194 and 196 to 203. i. As far as the present applicants are concerned, they have been named as accused only in a supplementary charge sheet filed on 31.12.2021. A list of 265 witnesses and 307 documents has been filed alongwith the supplementary charge sheet. j. The applicants were all arrested a few days prior to filing of the supplementary charge sheet, i.e. on 22.12.2021. Five other individuals were also arrested on the same day. The applicants were remanded to police custody for a period of two days [from 23.12.2021 to 25.12.2021], and have been in judicial custody since then. k. It is stated in the supplementary charge sheet that the investment plans offered by PGF and PACL were in the nature of a CIS defined under Section 11AA of the Securities and Exchange Board of India Act, 1992 and regulated by the Securities And Exchange Board of India (Collective Investment Schemes) Regulations, 1999. As the companies had not complied with the aforesaid Act and Regulations, the Securities and Exchange Board of India [ SEBI ] had passed orders against them. l. Upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACL Limited (erstwhile M/s. PACL India Limited) on the pretext of land development I earthwork, but no land development work was done and fake / bogus invoices showing execution of work were prepared to justify receipt of such funds. Shri Mannoj Kumar Jain: He was the main Promoter/Director of M/s. Jain Infra-projects Limited. In furtherance of criminal conspiracy with the accused promoters/directors of Pearls Group, Shri Mannoj Kumar Jain dishonestly and fraudulently facilitated diversion/misappropriation of funds to the tune of Rs. 268.73 Crores through M/s. Jain Infra-projects Limited. He dishonestly received the funds from M/s. PACL Limited (erstwhile M/s. PACL India Limited) on the pretext of land development, but no land development work was done and fake / bogus invoices showing execution of work were prepared to justify receipt of such funds. He purportedly sublet the work to 07 different companies, who also raised such bogus / fake invoices without executing any land development work. Shri Subash Agarwal and Shri Rajesh Agarwal: Shri Subhash Agarwal is the Chairman and Shri Rajesh Agarwal is the Managing Director of M/s. ARSS Infrastructure Projects Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2022 and 1382/2022, and Mr. Sanjeev Mahajan and Mr. Anand Nandan, learned counsel for the applicants in BAIL APPLNs. 1278/2022 and 1203/2022 respectively, in support of the present applications. Mr. Bhardwaj also made detailed submissions. 7. The principal arguments urged on behalf of the applicants were as follows [1] :- a. The case against the applicants does not concern the main charge of running a CIS or fraudulently inducing investors to invest in the projects of PACL/PGF. In fact, the applicants have not themselves collected any money from investors and the offences mentioned in the FIR cannot be made out against them. The applicants are accused, not of any direct connection with PGF/PACL, but in respect of transactions entered into by companies of which they were directors/promoters with PGF/PACL. b. The case against the applicants is, at the highest, that they were providing accommodating entities to PACL/PGF and thus facilitating diversion of funds obtained from investors by the said two companies. Although, the allegations against PACL and PGF concern obtaining fraudulent investments to the tune of approximately ₹45000 crores and ₹815 crores respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments of the company are in the possession of the resolution professional and not of the applicants. g. The applicants, despite the long period for which investigations into the affairs of PGF/PACL have been proceeding, have not made any attempt to flee from justice. h. In the cases of Mr. Mannoj Kumar Jain, Mr. Mohan Lal Sehjpal and Mr. Subhash Agarwal, it is urged that they were summoned to the CBI office by virtue of notices under Section 41A of the CrPC dated 28.11.2021 and were arrested soon thereafter on 22.12.2021, despite their cooperation with the IO. Learned counsel submitted that no material has been placed on record to justify the arrest of the concerned individuals despite the fact that they were served notices under Section 41A of the CrPC, which specifically provides that notices under the said section would be issued in cases where the arrest of a person is not required under Section 41(1) of the CrPC. Learned counsel drew my attention to Section 41A(3) of the CrPC, which provides that a person served with notice under Section 41A of the CrPC shall not be arrested in respect of the concerned offence unless reasons are recorded in support of a contrary opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation and also accepted his submission that he is not at flight risk. Learned counsel submitted that the same considerations would apply a fortiori to the present applicants. 8. In support of these applications, learned counsel for the applicants cited the judgments of the Supreme Court in Sanjay Chandra vs. CBI (2012) 1 SCC 40, Y.S. Jagan Mohan Reddy vs. CBI (2013) 7 SCC 439, Nimmagadda Prasad vs. CBI (2013) 7 SCC 466, Dataram Singh vs. State of UP (2018) 3 SCC 22, Sushila Aggarwal vs. State (NCT of Delhi) (2020) 5 SCC 1 and P. Chidambaram vs. Directorate of Enforcement (2020) 13 SCC 791. 9. Mr. Bhardwaj, learned Special Public Prosecutor, opposed the grant of bail on the following grounds:- a. Mr. Bhardwaj referred to the grave nature of the charges against the applicants, and emphasised that the present cases relate to a ponzi scheme in which the allegation is that the principal perpetrators cheated more than 5.4 crore small investors of their hard-earned wealth. He submitted that the present applicants are the persons through whom the principal perpetrators routed the funds raised from the public and their cooperation was, therefore, essential to the succes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was held in Y.S. Jagan Mohan Reddy (2013) 7 SCC 439 and Nimmagadda Prasad (2013) 7 SCC 466 that economic offences must be viewed differently, even for the purpose of bail, even in those cases, while denying bail at a stage prior to filing of charge sheet, the Court granted liberty to the accused to seek bail after the charge sheet had been filed. [5] d. It is made clear in P. Chidambaram that (2020) 13 SCC 791, even in case of grave economic offences, it is not a rule that bail should be denied in every case. Economic offences may fall within the category of grave offences, but this will only be one of the several considerations for grant or refusal of bail. e. An allegation of tampering with evidence and influencing witnesses must be supported by some material. f. It is relevant to consider whether the accused was arrested during investigation, when they would have had the best opportunity to tamper with evidence or influence witnesses. Strong reasons are required to place a person in judicial custody after filing of the charge sheet. The question of the accused participating in the investigation is also relevant, as is his prior conduct. 12. Turning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the CBI that the applicants are likely to tamper with the evidence or influence witnesses. Following the judgments cited above, such a contention cannot be accepted without a strong foundational basis, particularly when almost eight years have passed since the FIR was registered and five and a half years have passed since the original charge sheet was filed, during which period, the applicants were at liberty. d. All the accused were served with various notices from time to time for production of documents and appearance before the IO. There is no substantial allegation that the accused failed to comply with any such notices during the period of investigation. e. Significantly, it has been stated by the CBI in its written submissions that five of the six applicants herein [with the exception of Mr. Akash Agarwal] were issued notices under Section 41A of the CrPC on 28.11.2021. The statutory provision itself indicates that the arrest of the noticees was not contemplated at that stage. No material has been placed on record to establish any change of circumstances on the basis of which their arrest could have been considered necessary a few weeks thereafter, particularly g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applications independently of those orders, as the said orders concern directors of PGF/PACL, whose roles are at considerable variance from the roles attributed to the present applicants by the CBI itself. Suffice it to state that while rejecting Mr. Subrata Bhattacharya s application for bail, the Supreme Court specifically noted that the matter involved an alleged criminal conspiracy in furtherance of which the Directors of M/s PGF Limited and M/s PACL Limited are alleged to have illegally obtained a benefit of Rs 45,184 crores at the expense of 5.46 crore investors spread all over the country from sham land transactions. The Court proceeded on the basis of roles attributed to the applicants therein, as elucidated in the affidavit of the CBI. The applicants in the present case, in contrast, are not directors of PGF/PACL and their roles are required to be independently considered in connection with their applications for bail. 14. The judgments in Rohit Tandon and Nittin Johari, which were cited by Mr. Bhardwaj, do not appear to be conclusive of the present case. Both those cases, unlike the present cases, involve offences under statutes which incorporate statutory limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts will attend the Special Court on each and every date of hearing, unless exempted by the Special Court under exceptional circumstances. f. Each of the applicants will report to the Officer-in-Charge of the police station having jurisdiction over their place of residence on the first and third Monday of every calendar month at 04:00 PM, and will be released within one hour, after completion of necessary formalities. g. The applicants will not tamper with the evidence or attempt to influence any of the witnesses in the case or act in any other manner prejudicial to the trial. 17. It is made clear that these observations are only for the purpose of disposal of the present bail applications, and will not prejudice the parties in the trial. 18. The applications are disposed of with the aforesaid directions. The pending miscellaneous applications also stand disposed of. 19. A copy of this order be communicated to the concerned Jail Superintendent(s) electronically. [1] As the submissions urged on behalf of the applicants were almost on identical lines, I have dealt with them collectively. Wherever any particular submission was made which was relevant onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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