D. Mallesham Goud vs State Through C.B.I.
1998 Latest Caselaw 940 Del

JUDGMENT

D.K. Jain, J.

1. In this petition under Article 227 of the Constitution of India read with Section 482 of the Criminal Procedure Code, 1973 (hereinafter referred to as the Code), the petitioner challenges the order, dated 9th July, 1998, passed by the learned Special Judge, Delhi whereby his fourth application for grant of bail has been dismissed and prays for grant of bail in R.C.

No. 3(A)/96-ACU-I/CBI, registered under Section 120B read with Sections 409 and 420, IPC and Sections 7, 11 and 13(2) read with Section 13(1)(c) & (d) of the Prevention of Corruption Act, 1988. The petitioner was arrested on 12th January, 1998 and is in incarceration since then.

2. Briefly stated, the case of the prosecution, in the charge-sheet, is that the accused, C.K. Ramakrishnan, Managing Director, National Fertiliser Limited (for short NFL), D.S. Kanwar, Executive Director, (Marketing), NFL, M. Sambasiva Rao, Chief Executive, M/s. Sai Krishna Impex, Hyderabad, Tuncay Alankus and Cihan Karanci, both of M/s. Karsan Danismanlik Turizm Sanayi Ticaret Limited, Ankara, Turkey (hereinafter referred to as Karsan Limited), B. Sanjeeva Rao, a close relative of the then Prime Minister Mr. P.V. Narasimha Rao, Prakash Chandra Yadav, son of the then Fertiliser Minister Mr. Ram Lakhan Singh Yadav, D. Mallesham Goud, the present petitioner and one Agnaldo Ernesto Pinto entered into a criminal conspiracy with illegal object to misappropriate the funds of NFL, a Public Sector Undertaking and in furtherance thereof a contract for supply of 2 Lakhs MT of urea at US$ 190 per MT on CIF basis against 100% cash pre-payment of price, was signed by accused D.S. Kanwar and Agnaldo Ernesto Pinto of Brasil Trading Limited, London on behalf of NFL, New Delhi with M/s. Karsan Limited. On behalf of M/s. Karsan Limited the agreement was signed by Tuncay Alankus. Accused Agnaldo Ernesto Pinto was a non-entity for NFL. The NFL officials dishonestly agreed to accept first class Llyods Insurance Policy to cover risk of non-performance and non-delivery of urea departing from normal practice of making payment by Letter of Credit and made cash pre-payment of U5 $ 38 million, i.e. approximately Rs.133 Crores to M/s. Karsan Limited represented by Tuncay Alankus and Cihan Karanci, who being entrusted with the said amount, misappropriated the same by committing criminal breach of trust and did not supply urea to NFL. In relation to the contract Tuncay Alankus promised to pay US $ 3 million and US $ 4 million to Agnaldo Ernesto Pinto and M. Sambasiva Rao respectively. The petitioner, it is alleged, was also a party to the conspiracy since the very beginning and accused Tuncay Alankus and Cihan Karanci had sent US $ 4 million for accused M. Sambasiva Rao, B. Sanjeeva Rao and petitioner and others through M/s. Edible Food Stuffs, Dubai, which money was remitted to Hyderabad through hawala channels as well as banking channels with the help of petitioner's friend Rajendra Kumar Babani, a resident of Dubai and out of the said amount, accused M. Sambasiva Rao paid Rs. 70 lacs to B. Sanjeeva Rao, Rs. 60 lacs to the petitioner who in addition is stated to have issued three cheques of Rs.12 lacs, Rs.10 lacs and Rs. 10 lacs respectively from the accounts of M/s. Marg Leasing and Finance Private Limited, Hyderabad in favour of Medicon Marketing Private Limited, Hyderabad; M/s. SRR Finance and Investment Private Limited, Hyderabad and M/s. Sai Bharath Finance Private Limited, Hyderabad, controlled and owned by accused B. Sanjeeva Rao and his family members.

3. It is also alleged that Cihan Karanci, Vice-President of M/s. Karsan Limited, vide his letter dated 30th October, 1995, had informed NFL that Indian Company M/s. Sai Krishna Impex of Hyderabad was their authorised representative and Indian agent with special authority through accused M. Sambasiva Rao, Chief Executive Officer on their behalf for their day-to-day transactions in India. M/s. Sai Krishna Impex, a partnership concern of the petitioner herein was converted into a private limited company and the petitioner continued to be one of its Directors.

4. On registration of the case the accused C.K. Ramakrishna, D.S. Kanwar, M. Sambashiva Rao, B. Sanjeeva Rao and Prakash Chandra Yadav were arrested in June-July, 1996 but were released on 30th March, 1996 because the charge-sheet against them could not be filed within the statutory period of 90 days. The petitioner was interrogated by the Central Bureau of Investigation on 9th June, 1996 and subsequently his statement was also recorded under Section 40 of the Foreign Exchange and Regulation Act,1973 by the officers of the Enforcement Directorate on 6th August, 1996. The chargesheet was ultimately filed on 26th December, 1997. In response to the summons, the petitioner appeared before the Special Judge on 12th January, 1998, who remanded him to judicial custody. Petitioner's earlier three bail applications were dismissed on 12th January, 1998, 10th February, 1998 and 11th March, 1998. The petitioner, challenging the order dated 11th March, 1998, filed an application for grant of bail in this Court which was dismissed on 24th March, 1998. The relevant portion of the said order reads as follows:

"Learned Counsel for the petitioner has also contended that the other co-accused persons are on bail. Hence the present petitioner is also entitled to an order of bail as he is similarly situated as the other co-accused persons.

I do not agree. The other co-accused persons were released on bail under Section 167(2), Cr. P.C. as the prosecution failed to submit the charge sheet within the statutory period. This is not the position in the present case.

In view of the above I do not think the present case is a fit case for bail at this stage. Dismissed."

5. Aggrieved, the petitioner preferred special leave petition but without success. The order dated 7th April, 1998, dismissing the special leave petition, reads thus:

"The Special Leave Petition is dismissed. However, if fresh ground is made out in future, the petitioner would be at liberty to apply for bail to the Court of the first instance to begin with."

6. The petitioner then moved a fresh application for bail before the Special Judge, which was dismissed by the impugned order mainly on the ground that there has been no change in circumstances after dismissal of the special leave petition of the petitioner by the Supreme Court, which may entitle him to bail. Hence the present petition, which is resisted by the CBI on the ground that the petitioner is involved in an economic offence and there are grave accusations against him.

7. I have heard Mr. P.N. Lekhi, learned Senior Counsel for the petitioner and Mr. R.N. Trivedi, learned Additional Solicitor General for the Central Bureau of Investigation.

8. Mr. Lekhi contends that the petitioner was all through taken as a witness but having failed to coerce him to become an approver, the CBI converted his status from a witness to that of the accused and did not intentionally arrest him either on 9th June, 1996, when he had made a clean breast of everything before it or on 5th August, 1996 when his statement was recorded by the Enforcement Directorate, with a view to deprive him of a similar benefit under Section 167(2) of the Code, which the other co-accused had got on failure of the prosecution to file the charge-sheet within the statutory period. In this context, Mr. Lekhi referred to a decision of this Court in Dr. B. Sanjeeva Rao Vs. State, 1996(3) AD 913, wherein the petitioner had been referred to as "witness" by Counsel for the CBI and it is argued that the conduct of CBI is an abuse of the legal procedure. It is also contended that the investigations being complete and the charge-sheet having been filed, there is no possibility of the petitioner tampering with the evidence, particularly when the entire case of the prosecution is based on documentary evidence, which has already been taken into possession by the CBI; the petitioner having himself appeared before the Trial Court on the issuance of summons, there cannot be any cause to suspect that he will abscond and flee from justice; the petitioner having already spent more than nine months in Jail, and the trial is likely to take a long time, the petitioner deserves to be admitted to bail.

9. Mr. Trivedi, learned Additional Solicitor General, resists the petition primarily on the ground that since the dismissal of the special leave petition no fresh facts have come to light or grounds made out in terms of the Supreme Court order, bail cannot be granted to the petitioner. The allegation that the petitioner was not arrested deliberately is denied and it is pointed out that the statement of petitioner's friend Rajendra Kumar Babani, indicating petitioner's complicity in repatriation of money through hawala channels was recorded only on 17th November, 1997 and 18th November, 1997 (under Section 161 of the Code) and on 25th November, 1997 (under Section 164 of the Code) and the charge-sheet was filed immediately there-after on 26th November, 1997. It is stated that description of the petitioner as "witness" in Dr. Sanjeeva Rao's case (Supra) was misnomer and of no consequence and the correct expression should have been "person".

10. In rejoinder, Mr. Lekhi pointed out that the special leave petition having been dismissed by the Supreme Court in limine by a non-speaking order, it cannot be said that the order of this Court dated 24th April, 1998, was correct on merits, precluding the petitioner from urging the same grounds over again. In support reliance is placed on the decisions of the Supreme Court in Indian Oil Corporation Limited Vs. State of Bihar and Others, AIR 1986 SC 1780 and State of Manipur Vs. Thingujam Brojen Meetei, , holding that the effect of such a non-speaking order of dismissal without anything more only means that the Supreme Court has decided that it is not a fit case where a special leave petition should be granted and such an order does not constitute law laid down by the Supreme Court for the purpose of Article 141 of the Constitution of India.

Two issues arise for consideration:

(i) Factors to be considered for grant or refusal to bail; and

(ii) The effect and impact of the order of the Supreme Court dated 7th April, 1998.

11. There cannot be a set formula in the matter of grant of bail. It depends on the facts and circumstances of each case. The factors to be taken into consideration are the nature and the gravity of the offence; the character of the evidence, the circumstances which are peculiar to the accused; the reasonable possibility of the presence of the accused not being secured at the trial i.e., likelihood of the accused fleeing from justice and the reasonable apprehension of evidence being tampered by him, larger interest of the public or the State etc. See State (Deputy Commis-

sioner of Police, Special Branch), Delhi Vs. Jaspal Singh Gill, .

12. Normally, bail should not be withheld by way of punishment, if on a consideration of the affronted factors, an accused is entitled to bail. 'Bail' and not 'Jail' is the well accepted normal rule.

13. It is true that the petitioner is allegedly involved in an economic offence, which, by any standards is a grave offence, having been committed with cool, calculated and deliberate design with an eye on personal profits regardless of the consequences on the community but at this stage it is neither proper nor desirable to go into a detailed examination of evidence and prejudge the merits of the case without trial. The case set up against the petitioner is that he being a partner of M/s. Sai Krishna Impex, Hyderabad along with Smt. M. Padmashree, wife of accused M. Sambasiva Rao and others was a party to the conspiracy to obtain undue pecuniary benefit for himself and others in the matter of award of the affronted contract for supply of 2 lakh MT of urea, which was not supplied. The entire case of the prosecution seems to be based on documentary evidence, which, in all probability must have been collected by the CBI before filing the charge-sheet against the accused and, therefore, there is hardly any possibility of petitioner's tampering with it. On a pointed query by the Court, the learned Additional Solicitor General could not satisfy the Court as to how and in what manner the petitioner will try to tamper with the evidence. It was only submitted that since Rajendra Kumar Babani, a material witness, is petitioner's close friend he might try to influence him once he is out of Jail. It is, however, not disputed that Rajendra Kumar Babani is a resident of Dubai. I do not find much substance in prosecution's apprehension, particularly bearing in mind the fact that Rajendra Kumar Babani's statements under Sections 161 and 164 of the Code were recorded much after the other co-accused, who, prima facie, appear to be privy to the entire conspiracy, were already out of Jail. There is no allegation against them that they ever tried to contact or influence, either Rajendra Kumar Babani or any other witness. Further, I also do not see any reason as to why the petitioner, who claims to have business establishment in India and his family members are also stated to be residing here, would try to flee from justice. It also seems a little strange that though the petitioner is challaned for conspiracy under Section 120B, IPC and the question of part played by him in the alleged conspiracy to obtain undue pecuniary benefits for himself may not be relevant insofar as question of award of sentence is concerned but, prima facie, it does appear from the charge-sheet that the main beneficiary in the entire conspiracy was M. Sambasiva Rao and some others. According to the prosecution version itself as per the letter of commitment dated 27th July, 1995 issued by M/s. Karsan Limited, addressed to M. Sambasiva Rao and Agnaldo Ernesto Pinto (Annexure R1 to CBI's reply) Tuncay Alankus had promised to deposit in their account US $ 4 million and US $ 3 million respectively. Even though M. Sambasiva Rao got the benefit of Section 167(2) of the Code but the fact remains that despite his much bigger role in the conspiracy, he is out of jail and the petitioner continues to be in incarceration since 12th January, 1998.

14. However, the main question is whether in the light of the order passed by the Supreme Court on 7th April, 1998, the petitioner is estopped from seeking bail on the grounds urged in his earlier bail applications. The stand of the prosecution is that till a fresh ground is made out, the petitioner cannot apply for bail. In my view the stand is fallacious.

15. It is obvious that the order of the Supreme Court, extracted above, is a non-speaking order expressing no reason for dismissal of the special leave petition and, it cannot be said that the order of this Court dated 24th March, 1998, dismissing the petitioner's bail application, has been upheld on merits, more so when the High Court's order does not refer to any ground which might have been urged on behalf of the petitioner. It only tends to indicate that the prayer for grant of bail on the ground of parity with the other accused was rejected by the Court. As observed by the Supreme Court in Thingujam Brojen Meetei's and Indian Oil Corporation cases (supra) the effect of such a non-speaking order is that the Supreme Court was of the view that it was not a fit case where the special leave petition should be granted.

16. To my mind the latter part of the order of the Supreme Court, granting liberty to the petitioner to apply for bail if a fresh ground is made out, was with a view to keep the matter of grant of bail open and not to close it for all times to come. It is axiomatic that it was a benevolent order in so far as the petitioner was concerned, which is now being used by the prosecution to non suit him from applying for bail in future, till a "fresh ground" is made out. This was not the intention of the Supreme Court.

17. For the foregoing reasons and without commenting on die merits of the case, lest it may prejudice the trial, I feel that it is a fit case for grant of bail to the petitioner.

18. Accordingly, it is directed that the petitioner shall be admitted to bail on his furnishing a personal bond in the sum of Rs. 1 lac with two sound local sureties in the like amount to the satisfaction of the Trial Court, subject to further conditions that the petitioner will surrender his passport to the Central Bureau of Investigation, if not already surrendered and will not leave the country without prior permission of the Trial Court; he will not make any attempt to contact directly or indirectly any prosecution witness or in any way try to tamper with the evidence or influence any of the witnesses cited in the case; he shall intimate to the CBI his place of residence and shall not change the same without prior intimation to the CBI and unless exempted, he small attend all the hearings before the Trial Court.

The petition stands disposed of in the above terms.

A copy of the order be given Dasti to learned Counsel for the petitioner.