Bombay High Court
Rohit Sudhir Otari vs State Of Maharashtra on 25 July, 2023
Bench: Amit Borkar
2023:BHC-AS:20824
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VRJ
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
ANTICIPATORY BAIL APPLICATION NO.1473 OF 2023
Lohitsingh Darmasingh Subhedar ... Applicant
V/s.
The State of Maharashtra ... Respondent
WITH
INTERIM APPLICATION NO.2105 OF 2023
IN
ANTICIPATORY BAIL APPLICATION NO.1473 OF 2023
Rohit Sudhir Otari ... Applicant
In the matter between
Lohitsingh Darmasing Subhedar ... Applicant
V/s.
The State of Maharashtra ... Respondent
Mr. Satyavrat Joshi i/by Ms. Shivani Kondekar for the
applicant.
Mr. Hrishikesh Mundargi with Mr. Shriram Pingale with
Ms. Shraddha Sawant for the applicant/intervener.
Ms. Veera Shinde, APP for the respondent/State.
CORAM : AMIT BORKAR, J.
DATED : JULY 25, 2023
P.C.:
1. Apprehending arrest in connection with C.R. No.917 of 2022
registered on 25th November 2022 at Shahupuri Police Station for
offences punishable under sections 406, 420 read with section 34
of the Indian Penal Code, 1860 and sections 3 and 4 of the
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Maharashtra Protection of Interest of Depositors (In Financial
Establishments) Act, 1999, the applicant is seeking relief under
section 438 of the Criminal Procedure Code, 1973.
2. According to the Informant, accused No.9 called the
informant to invest in the share market through companies [(i)
A.S. Traders and Developers LLP; (ii) Tradewings Solution Ltd.].
He was called to a seminar attended by around 1000 to 1200
people. All accused persons were present in the seminar portraying
themselves as either the directors of a company or persons
authorised on behalf of the companies. In the said seminar, it was
revealed that the companies had a cash-back plan of 36 months,
and thereafter, the entire principal amount shall be returned. The
second plan was the payment of Rs.30,000/- on investment of
Rs.10 Lakh for 36 months, and thereafter, the entire principal
amount shall be returned.
3. Additionally, foreign trips were promised on investment of
various amounts. Sri Lanka tour for investment of Rs.2,50,000/-;
Singapore tour for investment of Rs.5,00,000/-; Sri Lanka tour for
two persons, Singapore tour for one person and Activa vehicle on
an investment of Rs.7,00,000/-; Sri Lanka tour for six persons,
Singapore tour for three persons and four wheeler car upto Rs.6
lakh for investment of Rs.16,00,000/-; Sri Lanka tour for ten
persons, Singapore tour for five persons, and four wheeler vehicle
upto Rs.10 lakh for investment of Rs.27,00,000/-; Sri Lanka tour
for twenty persons, Singapore tour for ten persons and four
wheeler car upto Rs.20 lakh for investment of Rs.54,00,000/-.
Dubai tour, Thailand tour and Mumbai to Goa trip by Jalesh Cruise
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were also promised. A person investing Rs.10,00,000/- was
promised one guntha plot at Shahuwadi.
4. Moreover, if an individual investor gets two more investors,
the investor should get a fixed commission.
5. According to the plan, the invested amount shall not be
returned before 36 months. The investors were called upon to
invest by cash, cheque or RTGS. Persons investing in their
company were promised a receipt, login ID, and Password.
Believing in the promise made on behalf of aforesaid two
companies, the informant invested Rs.25,00,000/- on 6 th June
2019 by cheque and NEFT. Accused No.24 and Accused No.11 in
May 2022 called the investors to inform them of the cash-back
plan and to send invested persons to Dubai. Accordingly, three
thousand investors invested an amount of Rs.35,05,000/- to
Rs.60,00,000/- in A.S. Token Cryptocurrency Plan, and 3000
people were promised a trip to Dubai. It was told that the
aforesaid two companies had ten more sister companies named in
the report.
6. The informant invested an amount by taking a hand loan
from his relatives as he was getting regular returns. On 5 th January
2020, the informant paid Rs.24,50,000/- to Ravindra Desai, Sagar
Patil and Nasir Mulla towards the old generation plan. The
informant received regular returns from January 2019 to August
2022. However, the payments were made not from the A.S.
Traders company account but from companies like Trexum
Ventures LLP. The informant, in total, invested Rs.49,50,000/-. Due
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to newspaper reports of fraud committed by A.S. Traders, the
informant inquired about the accused persons, and it was revealed
that accused No.3 had absconded by cheating thousands of people
for crores of rupees. On inquiry, it was revealed that the applicant
floated twelve sister companies. The amount received from those
companies was invested in gold, immovable properties, and luxury
cars to make investors believe that the company was genuine.
Around 150 to 200 people gathered to lodge a report against the
accused persons.
7. Numerous investors lodged complaints. Based on their
complaints, C.R. No.917 of 2022 was registered against all accused
persons.
8. The applicant, therefore, applied to the learned Sessions
Court. The Sessions Court rejected the applications. Aggrieved
thereby, the applicant has filed a present anticipatory bail
application.
9. According to the learned advocate for the applicant, he has
refunded a substantial amount to the investors. Due to unforeseen
circumstances, he is not in a position to return the amount. Mere
non-payment of a refund does not give rise to an offence. He is
ready to cooperate with the investigation and to abide by the terms
and conditions; therefore, his custodial investigation is not
necessary.
10. Per contra, learned APP for the State submitted that the
applicant is the sole signing authority of A.S. Traders and
Developer LLP. Considering his plans of astronomical returns,
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dishonest and fraudulent intention at the inception of the
transaction is apparent. In connivance with the co-accused, the
applicant formed bogus companies and arranged different
seminars to promote their plans for more returns, foreign tours,
flats and plots at lower prices. Such a promise was executed on
stamp papers. Instead of depositing the amount in the share
market for trading purposes, they deposited it in different banks in
the name of different companies. Initially, to get investors' faith,
they paid returns as promised; however, on getting more
investment, they stopped giving returns. According to the
prosecution, custodial interrogation of the applicant is necessary to
find details of deposited amounts in different banks in the names
of different companies. To obtain details regarding ID and
Password and technical data to trace a number of investors, details
of the website of companies and persons who created said website
need to be investigated. Without custodial interrogation, such
elicitation-oriented investigation is not possible. There is a
possibility of siphoning off the amount in foreign countries. The
applicant has siphoned off amounts of investments through share
companies and by purchasing benami properties in his relatives'
names. It is submitted that the whereabouts of the applicant is
unknown. The applicant is absconding.
11. I have heard learned to advocate for applicant and victims.
Before considering the material on record, it is necessary to delve
into the parameters of Section 438 of Cr.P.C. in the context of
economic offence and, in particular, offences under Section 406,
409, 420 r/w 120B.
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12. The Supreme Court, in the case of Narinderjit Singh
Sahani & Anr. vs. Union of India and Ors. reported in
(2002) (2) SCC 210, has held that an accused facing a charge
under Sections 406, 409, 420 and 120-B is ordinarily not entitled
to invoke the provisions of Section 438 of the Criminal Procedure
Code unless it is established that such criminal accusation is not a
bona fide one.
13. In the case of Ram Narayan Popli vs. Central Bureau
of Investigation reported in (2003) 3 SCC 641 in paragraph
382 has observed thus:
"382. The cause of the community deserves better treatment
at the hands of the court in the discharge of its judicial
functions. The community or the State is not a persona non
grata whose cause may be treated with disdain. The entire
community is aggrieved if economic offenders who ruin the
economy of the Sate are not brought to book. A murder may
be committed in the heat of the 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, as was aptly stated in State of Gujrat v.
Mohanlal Jitamalji Porwal."
14. The Supreme Court, in the case of Himanshu
Chandravadan Desai And Ors vs. State of Gujarat,
reported in (2005) 13 SCC 234 was considering a similar case
where the applicant, along with other directors of a cooperative
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bank, siphoned off funds of the bank by bogus and fictitious
documents. The Apex Court refused to grant regular bail under
Section 439 of Cr.P.C. relying on Constitution Bench of the
Supreme Court in the case of Bihar Legal Support Society vs.
Chief Justice of India And Anr., reported in 1986 (4) SCC
767, observing that the crime in which petitioners are involved is
very serious, involving a conspiracy to cheat and the fraud public
institutions for a systematic manner and punishment is likely to be
severe in the event of a conviction.
15. The Supreme Court, in the case of Gurbaksh Singh
Sibbia etc. vs. State of Punjab, reported in 1980 (2) SCC
565, delineated the parameters exercising powers under Section
438 of Cr.P.C. holding "the larger interest of public or State" is one
of the relevant factors to be kept in mind by the Court while
deciding the application for anticipatory bail.
16. In the case of Nimmagadda Prasad vs. C.B.I., reported
in 2013 (7) SCC 466, the Apex Court, in paragraph 25, has
observed as under:
"25. Economic offences constitute a class apart and need to
be visited with a different approach in the matter of bail. The
economic offence having deep-rooted conspiracies and
involving huge loss of public funds needs to be viewed
seriously and considered as grave offences affecting the
economy of the country as a whole and thereby posing
serious threat to the financial health of the country."
In Delhi Development Authority v. Skipper Construction
Co. (P) Ltd , (1996) 4 SCC 622, it was held:--
"The concept of corporate entity was evolved to
encourage and promote trade and commerce but not to
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commit illegalities or to defraud people. Where, therefore,
the corporate character is employed for the purpose of
committing illegality or for defrauding others, the court
would ignore the corporate character and will look at the
reality behind the corporate veil so as to enable it to pass
appropriate orders to do justice between the parties
concerned...."
"We feel impelled to make a few observations. What
happened in this case is illustrative of what is happening
in our country on a fairly wide scale in diverse forms.
Some persons in the upper strata (which means the rich
and the influential class of the society) have made the
'property career' the sole aim of their life. The means have
become irrelevant -- in a land where its greatest son born
in this century said "means are more important than the
ends". A sense of bravado prevails; everything can be
managed; every authority and every institution can be
managed. All it takes is to "tackle" or "manage" it in an
appropriate manner. They have developed an utter
disregard for law nay, a contempt for it; the feeling that
law is meant for lesser mortals and not for them. The
courts in the country have been trying to combat this
trend, with some success as the recent events show. But
how many matters can we handle. How many more of
such matters are still there? The real question is how to
swing the polity into action, a polity which has become
indolent and soft in its vitals? Can the courts alone do it?
Even so, to what extent, in the prevailing state of affairs?
Not that we wish to launch upon a diatribe against
anyone in particular but Judges of this Court are also
permitted, we presume, to ask in anguish, "What have we
made of our country in less than fifty years"? Where has
the respect and regard for law gone? And who is
responsible for it?"
17. Unfortunately, in the last few years, the exponential rise in
white-collar crimes has affected the country's economic structure,
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which has serious repercussions on the development of the country
as a whole. Apparently, financial scams have the origin of
committing fraud with the public money running into crores and
crores of rupees. The nation's economy is put in stagnation when
such a massive amount is pocketed in by vested interests through
fraudulent means leaving the poor citizen's hard-earned money,
which he invested for his prosperity or to cater for the evenings of
his life, for being siphoned off by a few culprits. Grant of
anticipatory bail in a case of such huge magnitude is further likely
to have an adverse effect on the case's progress and the trust
reposed by the society in the judicial system.
18. Reverting back facts of the case, the applicant's prima facie
dishonest and fraudulent intention is apparent as he promised
impossible astronomical returns of 5% interest per month, return
of the entire principal amount after 36 months, in addition to the
bonus of foreign tours. The applicant is the director of A.S.
Traders and Developers LLP and Tradewinds Solutions Ltd. The
business of the company shown is agriculture, hunting and allied
subjects. It is not the company's business to accept an amount from
the investors. Prima Facie, it appears that applicant and co-accused
persuaded the investors to invest in A.S. Traders and Developers
LLP and Trade winds Solutions Ltd.
19. Prima facie, it appears that the applicant and co-accused
have received Rupees 1417 crores from investors. At this stage of
the investigation, it appears that the applicant has withdrawn huge
amounts of cash from A.S. Traders and Developers LLP. The
turnover of A.S. Traders and Developers LLP is as under:
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A S TRADERS AND DEVELOPERS LLP Bank transactions of the
company account
Sr. Name of Account Number Total transactions in the
No. the Bank account
1. Federal 14960200012341 Rs. 306,09,73,418/-
(306 Crore 9 Lakh 73
Thousand 418 Rs.)
2. HDFC 10066730606 Rs.68,99,75,468/-
First
68 Crore 99 Lakh 75
Thousand 468 Rs.)
3. Axis 917020032905460 Rs.23,05,95,142/-
(23 Crore 05 Lakh 95
Thousand 142 Rs.)
4. AU Small 2021237528130920 Rs.36,94,63,300/-
Finance
(36 Crore 94 Lakh 63
Thousand 300 Rs.)
5. RBL 409834124124 Rs.13,23,34,874/-
(13 Crore 23 Lakh 34
Thousand 874 Rs.)
6. HDFC 50200024471370 Rs.1,47,91,60,268.96
(147 Crore 91 Lakh 60
Thousand 268.96 Rs.)
TOTAL :- Rs.596,25,02,470.96/-
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(596 Crore 25 Lakh 2
Thousand 470 Rs.)
20. The applicant had sole signing authority to operate all the
bank accounts. At this stage of the investigation, it appears that
towards payment of foreign tours of the investors, the amount of
Rs.9,86,70,000/- has been paid to Kesari Travels and
Rs.7,00,00,000/- paid to W. Holidays through A.S. Traders and
Developers LLP and nine shell companies. Towards the promotion
of the schemes of investment, astronomical amounts have been
disbursed. The seized software of A.S. Traders and Developers LLP
indicates 83,031 user IDs who have invested 1417 Crore rupees.
The investors are not only from the State of Maharashtra but are
also from the State of Karnataka.
21. During the investigation, the total turnover of shell
companies as regards investors' amounts is as under:
(i) Gainero Ventures LLP bank account transaction of
Rs.359,31,34,094/-; and cash deposit by 180 investors
Rs.4,34,00,000/-.
(ii) Trexum Ventures LLP bank account transaction of
Rs.28,56,09,013/-; and cash deposit by 84 investors
Rs.1,55,20,000/-.
(iii) Comercio Vibrant LLP bank account transaction of
Rs.254,93,45,896/-; and cash deposit by 67 investors
Rs.1,08,30,000/-.
(iv) Trading Solutions Ltd. bank account transaction of
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Rs.21,96,69,537/-.
(v) A.S. Traders Solutions Ltd. bank account transaction of
Rs.12,07,97,259/-.
(vi) Capitus Ceker Traders And Developers LLP bank account
transaction of Rs.310,64,12,530/-; and cash deposit by 314
investors Rs.7,20,90,000/-.
22. Therefore, prima facie, the applicant appears to be the
kingpin of the entire financial scam. The total number of investors
is 83,031. The total amount invested is 1417 crores. The applicant,
being director of A.S. Traders and Developers LLP and Tradewinds
Solutions Ltd connected with shell companies, has accepted cash
amounts from investors and, through other co-accused, failed to
repay it and utilized it for his own benefit. Therefore, elicitation-
oriented custodial interrogation of the applicant is necessary to
find out the preparation, commission and aftermath of the offences
alleged against the applicant. According to the investigating
agency, it is impossible to trace crime money without custodial
interrogation of the applicant.
23. The importance of custodial interrogation has been
emphasised in paragraph 6 by the Apex Court in the case of State
represented by CBI v. Anil Sharma reported in (1997) 7 SCC
187 as under:
"6. We find force in the submission of the CBI that
custodial interrogation is qualitatively more elicitation
oriented than questioning a suspect who is well ensconded
with a favorable order under Section 438 of the code. In a
case like this effective interrogation of suspected person is of
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tremendous advantage in disintering many useful
informations and also materials which would have been
concealed. Succession such interrogation would elude if the
suspected person knows that he is well protected and
insulted by a pre-arrest bail during the time he interrogated.
Very often interrogation in such a condition would reduce to
a mere ritual. The argument that the custodial interrogation
is fraught with the danger of the person being subjected to
third degree methods need not be countenanced, for, such an
argument can be advanced by all accused in all criminal
cases. The court has to presume that responsible Police
Officers would conduct themselves in task of disinterring
offences would not conduct themselves as offenders."
24. In the present case involving misappropriation of such
enormous magnitude, elicitation-oriented interrogation is
necessary as the investigating agency has the advantage of
disinterring useful information and material that may have been
concealed if the applicant is granted pre-arrest protection.
25. In a recent judgment in the case of Sumitha Pradeep vs
Arun Kumar, reported in (2022) SCC OnLine SC 1529, the Apex
Court was considering the validity of an order passed by the High
Court releasing an accused on the ground that custodial
interrogation is not necessary. The Apex Court held that custodial
interrogation could be one of the relevant aspects to be considered
along with other grounds while deciding an application seeking
anticipatory bail. There may be many cases in which the custodial
interrogation of the accused may not be required, but that does
not mean that the prima facie case against the accused should be
ignored or overlooked, and he should be granted anticipatory bail.
The first and foremost thing that the court hearing an anticipatory
bail application should consider is the prima facie case put up
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against the accused. Thereafter, the nature of the offence should be
looked into, along with the severity of the punishment. Custodial
interrogation can be one of the grounds for declining custodial
interrogation. However, even if custodial interrogation is not
required or necessitated, that by itself cannot be a ground to grant
anticipatory bail.
26. According to the investigating agency, there is every
possibility of influencing the investors as statements to that effect
have been recorded by the investigating agency, wherein it is
stated that in a meeting held at Mahavir Garden, Nagala Park,
Kolhapur, the investors were dissuaded from lodging complaints.
27. Considering the magnitude of the financial scam, the
applicant does not deserve relief under section 438 of the Criminal
Procedure Code, 1973. Hence, on overall consideration of
aforesaid factors, the anticipatory bail applications deserve to be
rejected.
28. The anticipatory bail application stands rejected.
29. In view of disposal of the anticipatory bail application, the
interim application stands disposed of as infructuous.
(AMIT BORKAR, J.)
