Cbi vs Suresh Nanda
2007 Latest Caselaw 218 Del

JUDGMENT

S. Ravindra Bhat, J.

Page 0711

1. The present criminal revision petition assails an order of the Special Judge dated 15.1.2007, permitting the respondent accused (hereafter referred to as "the respondent") to travel abroad for 15 days upon imposition of certain conditions.

2. A First Information Report (FIR) was lodged on 9.10.2006 by the Central Bureau of Investigation (CBI) against several persons, including the petitioner. The FIR alleged that on the basis of a reference received from the Ministry of defense, a preliminary enquiry was held which indicated that several persons conspired during the period 1998-2001 in the matter of procurement of 7 Barak Anti Missile defense Systems (AMD) and 200 missiles from M/s IAI Israel and its sister concern M/s Rafael, Israel. The FIR alleged that pursuant to the conspiracy the then defense Minister and the then Chief of Naval Staff abused their position and showed undue favor in the award of contract to M/s IAI Israel.

3. The FIR also alleged that the respondent had met with the other accused at the official residence of the then defense Minister and paid Rs. 1 crore. The FIR further recited that as per enquiry huge amounts of suspected payments had been remitted from M/s Mortoren-Und-Turbines Union (MTU) in the bank accounts of M/s Dynatron Services, a concern managed by the respondent and his family members during the relevant period. It was alleged that the facts mentioned disclosed commission of cognizable offences under Sections 9 and 13(2) read with Section 13(1)(d) of Prevention of Corruption Act, 1988 read with Section 120B of the Indian Penal Code by the accused persons.

4. The respondent moved an application on 2.1.2007 before the Special Judge, claiming that he is a non-resident Indian, (NRI) for the last 23 years and permanently settled in the United Kingdom (U.K). He alleged that he had come to India on 28.9.2006 to attend the 91st birthday of his ailing father, when on 9.10.2006, the CBI conducted a search at various places including his residence and arbitrarily seized passports of all family members including that of the respondent and his son. The respondent stated that the allegations contained in the FIR, as far as he is concerned were entirely baseless.

5. In his application seeking permission to leave India for a limited period it was alleged that there was no truth in the contents of the FIR that huge amounts of suspected payments were remitted from M/s MTU in the bank accounts of M/s Dynatron Services. He also asserted that he was neither a close relative nor business associate of Shri Sudhir Choudhry or M/s MTU and M/s Eureka Corporation both of which were named in the FIR. He similarly disclaimed any relationship with TSL defense Technologies Pvt. Ltd. or Shri Arvind Khanna. The respondent alleged that the entire basis of the FIR was a "sting" operation of Tehelka, where another accused Shri R.K. Jain had dragged several names including respondent's name, and upon being confronted in questioning, by two commissions of enquiry, (constituted for the purpose of finding complete facts), the said Shri Jain had, on oath asserted that his conversations in the sting operations were mere bragging. Page 0712 The respondent averred that ever since he was settled in the U.K., he was engaged in the business of steel, iron ore, heavy machinery, information technology and media and that in 1993 started publishing a daily newspaper in London. In 1999 he became the CEO of a US software company.

6. It was claimed that in order to maintain his non-resident status in accordance with the Income Tax Act he has to remain out of India for more than 182 days and that continued seizure of his passport jeopardized his NRI status and resulted in irreparable loss. He also alleged that for more than three months since 10.10.2006 he had to postpone visits abroad and reschedule business meetings but such indefinite postponement could not be continued for ever.

7. The CBI in its reply, filed on 15.1.2007 (i.e. the date when the application was itself taken up and allowed) inter alia alleged as follows:

3. That the applicant Shri Suresh Nanda is the alleged defense middleman in the procurement of the above said Barak AMD System. As per confession made by one of the accused persons recorded in the Tehelka tapes, applicant Sh. Suresh Nanda had paid illegal gratification of Rs. One crore to Smt. Jaya Jaitely, the then President of Samta Party through Sh. R.K. Jain, both accused of the case for exercising their personal influence on the then defense Minister to obtain order for purchase of Barak AMD System in favor of M/s. IAI, Israel and consequently this order was awarded to this company. This fact is being further corroborated during the investigation of the case.

4. That the investigation has revealed that Sh. Suresh Nanda had received suspected huge foreign remittances in his own bank account as well as in the accounts of M/s. C-1 Indian Pvt. Ltd. and M/s. Crown Corporation Pvt. Ltd., in which he was a Director and the beneficiary of more than 67% of shares, respectively.

5. That the investigation has revealed that Sh. Suresh Nanda was in touch with M/s IAI, Israel, a supplier of above Barak AMD System as well as other accused of the case during the relevant period. It is also revealed that for this deal, applicant Sh. Suresh Nanda had paid illegal gratification of over Rs. One crore to co-accused.

6. That during search of his house, documents related to M/s. Rafael, Israel, a sister concern of M/s IAI, Israel, manufacturing Missiles for Barak AMD Systems and a copy of fax dated 22.09.06 made from Director of Procurement, Mod, New Delhi to Naval Attache, Moscow, and Amiralty Shipyards in respect of tender enquiries for Russian procurement were recovered which establish that the applicant has been still acting illegally as a defense middleman. During search of his house, as well as that of Hotel Claridges of which he is Chairman, unaccounted cash amount more than Rs. 1.35 crores was recovered. This amount is suspected to be the illegal commission of some defense deal.

7. That information has also come on record that Shri Suresh Nanda offered commission to other suspect persons to get favor in defense deals. Authenticity of the same is being verified.

Page 0713

8. That to ascertain the authenticity of claims of Shri Suresh Nanda regarding huge foreign remittances received by him directly and through his companies including M/s Crown Corporation Ltd., Ms. Dynatron Services, M/s C-1 Indian Pvt. Ltd. etc, in lieu of purported services rendered by them, investigation is being done and continuous presence of Shri Suresh Nanda is absolutely essential for unhindered investigation.

9. That there is every possibility that if the applicant who is a prime accused in the case, be allowed to go abroad, he may tamper with evidence especially manipulating foreign bank accounts or witnesses as the case involves investigation abroad also or he may not return to India to join the investigation.

8. The Special Judge, in her impugned order after narrating the brief facts pertaining to the FIR, held as follows:

IO Ins. Surender Malik is present. He states that Letter of Rogatory has to be sent to Israel to obtain certain more information; FIR in this case had been registered in October, 2006 and it is admitted by the IO that the accused has not yet been summoned for investigation but he had been directed vide notice to hand over certain documents which he has given to the IO Ins. Surender Malik in Court today. The other co-accused apart from Shri R.K. Jain have not yet been summoned by the IO.

The applicant ensures that he will return back to the country and deposit his passport with the IO with due intimation to the court within 24 hours of his arrival and he is ready to furnish and security in order that permission is granted to him to travel as per the itinerary mentioned in the application. Applicant undertakes to submit the original property papers of his Farm House i.e. Property No. 4 Casurarin Avenue, Western Green Farm Society (Mut. No. 33 & 34) Village Samlka Mehrauli, New Delhi of which he is the owner which is valued at about 32-35 crores.

I grant permission to the applicant Suresh Nanda to travel London and Dubai for a period of 15 days to be counted from the date of his Journey (date of 15th January being today having now become infructuous) with an undertaking to join the investigation as and when summoned by the IO & on an affidavit give the complete details of his permanent address in London, he will redeposit his passport within 24 hours of his arrival with due intimation to the Court, not tamper with the evidence, no influence the witnesses in any manner and not to travel any other country except London and Dubai and further subject to his furnishing complete itinerary and place of addresses both in London and Dubai including his contact telephone number and on his furnishing security in the sum of Rs. 30 to 34 crores which will be in the form of his property papers 4 Casuarina Avenue, Western Green Farm Society (Mut. No. 33 & 34 ), village Samlka Mehrauli New Delhi. IO who is present is also directed to verify the correctness of the particulars given by the applicant of the aforestated property. This order will come who effect only on the applicant furnishing the requisite and necessary undertaking. Application stands disposed off.

Page 0714

9. The CBI had filed the present proceedings styling it to be under Section 482 of Criminal Procedure Code. During the course of hearing apparently exception as to its maintainability under that provision was taken. Resultantly, the Additional Solicitor General sought leave of the court; Justice B.N. Chaturvedi, (who was hearing the matter at that stage on January 2007) permitted conversion of the proceedings into one under Section 397/401 of Criminal Procedure Code and directed it to be listed before an appropriate Bench. The matter was thereafter heard.

10. Mr. P.P. Malhotra, learned Additional Solicitor General urged that the trial court misdirected itself and erred in acceding to the permission sought by the respondent. He contended that the court did not even advert to, much less consider the reply filed by CBI - it was filed on the same day. It was contended that the reply had clearly indicated that investigations revealed involvement of the respondent, by way of receipt of huge foreign remittances in his bank accounts as well as other bank accounts of concerns with which he was connected. It was contended that the CBI's reply disclosed that the respondent was in touch with M/s IAI Israel, supplier of the Barak AMD System, as well as other accused during the relevant period and that he had paid illegal gratification to co-accused. It was contended that the trial court was even apprised of the circumstance that documents relating to M/s Rafael, sister concern of M/s IAI Israel were recovered and even copy of fax, dated 22.9.2006 pertaining to tender enquiries in Russian procurements were recovered, indicative of the respondent's role as an alleged defense middleman. Additionally, Rs. 1.35 cores were recovered in cash from his premises; it was suspected to be illegal commission for some defense deal.

11. It was contended that the trial court fell into error in completely losing sight of the nature of investigation required and merely went by the fact that the accused had not been summoned for investigation but had been merely directed to hand over certain documents, which were given on the day of the order. It was contended that the materials on record even before this Court reveal that the respondent has not co-operated with the investigation. Particular reliance was placed upon the copy of the reply furnished by the respondent to the queries posed by CBI, in his letter dated 15.1.2007.

12. The learned Additional Solicitor General submitted that the reply was in fact handed over to the CBI during the course of hearing before the trial court and its prima facie consideration shows that six specific questions/queries put to him by letter dated 12.1.2007, were not only left unanswered but attempts were made to evade replying to them.

13. Learned Counsel urged that besides the ex facie non application of mind by the trial court in the impugned order, the reasoning that the accused respondent had not been summoned, was not a valid ground for granting permission to him, to go abroad. It was contended that in cases of such magnitude, involving questionable deals which were not only financially large, but impacted the defense systems of the country, the investigating agency had to collect all relevant materials. The process of collection of such facts Page 0715 and materials was under-way and the likelihood of the respondent accused, trying to tamper with the materials and evidence, available outside India is very real. All these factors were relevant, but completely overlooked in the impugned order.

14. Mr. Dinesh Mathur, learned senior counsel for the respondent, submitted that the petition is unmerited. He claimed that the respondent is a NRI businessman of long standing and dealing with diverse business concerns. He was falsely and baselessly implicated in the FIR. It was submitted that he has no connection or dealings with the Israeli supplier and that the allegation of his having entered into a conspiracy for procurement of the missiles and also paying any amounts as illegal gratification, were all fabrications.

15. Mr. Mathur contended that two commissions of enquiry were constituted by the Central Government. In neither of the proceedings was the petitioner implicated. Indeed in the course of deposition, in one such enquiry Shri R.K.Jain, one of the other accused had admitted that he merely mentioned the respondent's name to brag about his contacts, but with no other purpose and certainly not recording his involvement in the so-called conspiracy or deal.

16. Learned senior counsel contended that the entire basis of the petition that is the respondent's likelihood of tampering with the evidence, which are unsubstantiated speculations. The respondent, a respectable citizen has been traveling in and out of India and also in other parts of the world on numerous occasions. The entire record of such travel is with the CBI which took away his passport as well as passport of other family members, including the respondent's son, a British national. Since the respondent's business concerns are primarily outside India, his indefinite and enforced stay impinges on his right to travel abroad and his right to pursue business and profession, both of which are guaranteed Fundamental Rights under Articles 21 and 19(1)(g) of the Constitution of India. Reacting to the submission that the respondent was not cooperative in the investigation, learned Counsel contended that all the documents and materials sought for were with the custody of the CBI. As and when the respondent was queried about any particulars, he unhesitatingly responded. In these circumstances, the CBI could not hold up his bona fide travel plans on vague surmises of his likelihood of tampering with evidence abroad. It was also contended that the entire family of the respondent is here and that he has valuable properties and assets, evidencing deep roots in India particularly in Delhi. In these circumstances, the trial court was justified in permitting him to go abroad, for the limited period of 15 days, upon fulfilllment of conditions. Those conditions were stringent and would cover the legitimate concerns of the prosecuting agency.

17. No other contention was urged on behalf of either party.

18. The FIR mentions about a criminal conspiracy for acquisition of 7 Barak Anti Missiles Systems and 200 missiles from M/s IAI Israel and its sister concern M/s Rafael. The FIR recorded that in October, 1998 the respondent had allegedly met with Smt. Jaya Jaitely, the then President of Page 0716 Samta Party, (another suspect/accused named in the FIR) through Shri R.K. Jain at the official residence of Mr. Fernandes, the then defense Minister. It is alleged that the respondent paid Rs. 1 crore as illegal gratification, and in furtherance of the conspiracy to seek favor of the defense Minister in defense deals. The FIR also records that the then defense Minister received a direct letter from M/s IAI Israel seeking his intervention for the procurement of the concerned missile systems. The FIR further narrates other incidents and then states that Barak AMD Systems were acquired on a single tender basis without considering that the indigenous alternative, i.e. naval version of Trishul system was in an advanced stage of development. It further alleges that 3% of the contract cost was made over as commission. It further lists involvement of the respondent by way of foreign remittances from a supplier of diesel engines (MTU) to M/s IAI Israel in the bank account of M/s Dynatron Services, a concern managed by him.

19. The above allegations in my opinion are grave and serious. The sequence and the chain of transactions alleged in the FIR span over a considerable period of time. It is no doubt true that the allegations received scrutiny in commissions of enquiry. However, nothing has been brought on record to show that such proceedings ever determined that such allegations were unfounded or baseless. The CBI appears to have conducted a preliminary enquiry in 2005 which eventually culminated in lodging of the FIR, in October, 2006.

20. The nature of the allegations as mentioned earlier are not only serious and span over a long period of time but concern the manner in which the missiles were procured; there are specific allegations concerning the respondent's involvement in at least two places. Besides the CBI in its reply to the application by the respondent had clearly urged that the respondent received suspected huge foreign remittances in his bank accounts and that he was in touch with M/s IAI Israel the supplier of the Barak AMD Systems. In addition the reply had averred that the documents recovered from his premises included a recent fax in respect of another defense deal, which point to his alleged questionable activities. Besides unaccounted money was also recovered. These form the basis of CBI's assertion that the continued presence of the respondent is essential for unhindered investigation. Having regard to the magnitude of the operations the concern cannot be lightly brushed aside; it cannot, in any case, be characterized as unfounded. Therefore it was rightly contended that the trial court fell into an error in ignoring all these aspects.

21. It is no doubt true, as contended by counsel for the respondent, that there would be some hardship in the event of his enforced stay. Apparently, the respondent is a businessman of some considerable standing and has also been traveling in and out of India as well as in other parts of the world. He is also a man of considerable means; and yet these very considerations also lend support to the apprehension that in the event of his being permitted to go abroad, there is a likelihood of his tampering with the materials or evidence so as to hinder the investigation. Even if it were to be assumed that the respondent has roots and is a man of means and is bound to come back Page 0717 as and when required what cannot be lost sight of is that such requests would provide the precise window of opportunity to cover the tracks as alleged by the investigating agency.

22. The right to go abroad and the right to carry on legitimate business or professional activity are undoubtedly valuable rights assured by the Constitution. They cannot be infringed. However, the same guarantees contain enabling power with the State to place reasonable restrictions, in the interests of public and other considerations. Here the court has to balance between the individual right of the respondent - and his right to go abroad and pursue profession, and larger public considerations of ensuring integrity of the investigative process. Neither the right to go abroad nor the right to carry on a profession are unqualified and unconditional. In such circumstances when an individual faces accusations, which may lead to a criminal trial the concerns of the state in not permitting him to go abroad to pursue his business activities, cannot be characterized as unreasonable or unlawful. Of course the reasonableness of such restrictions would be open to scrutiny if the if the restrictions were to prolong for an unduly long period. At this stage, however, the FIR having been lodged in 2006 and only a period of about three months having elapsed, the delay in investigation, in my opinion has not prejudiced the respondent to such an irreparable measure as is made out.

23. As regards the contention the respondent always co-operated with the CBI and provided answers/replies to its queries, I am of the opinion that at this stage the court ought not to scrutinize the investigation too closely. However the reply furnished by the respondent to the CBI, which apparently was handed over to it, on the date of the impugned order, in my considered opinion does point to some evasion on his part. This makes his continued presence all the more crucial. Investigations and fact gathering - in such cases is a sensitive and intense exercise. The trail of evidence may not necessarily travel in one direction; the agency - in this case the CBI- may have to scrutinize masses of data and send queries to scores of persons or concerns, sift through the replies or materials gathered and seek further details or clarifications before giving shape to its conclusions. The disturbance of one or some other links may distort the final picture. It would therefore be the imperative that all attempts are made to maintain the secrecy and integrity of the sources even while ensuring that no attempt is made to tamper with, in the ongoing course of investigation. This does not necessarily mean that the respondent would interfere with the investigation. However, as a part of the attempt to maintain unimpeded access to information and its secrecy, it may be necessary to ensure that not only the respondent but all others - who might be likely to interfere with the course of investigation - are denied any opportunity from doing so, in the manner which is most reasonable. Having regard to these, I am satisfied that the concerns expressed by the petitioner CBI are well founded and reasonable.

24. Before parting I cannot help but comment on the manner in which respondent's application was dealt with, by the trial court. The respondent filed the application on 2.1.2007 and the petitioner filed its reply on Page 0718 the date of the impugned order. The respondent's reply to the queries posed by the CBI were handed over to it in court on that date. Yet the impugned order is not reflective of the contents of the reply by the CBI, to the application of the respondent, and the concerns it had clearly expressed. Besides the court does not appear to have satisfied itself as to what were the contents of the reply furnished by the respondent to the I.O. These point to the court's endeavor to somehow proceed and decide the application early.

25. For the above reasons, I am of the opinion that the trial court fell into error in allowing the application of the respondent to go abroad. The said impugned order dated 15.1.2007 is accordingly set aside. In case of any change in the fact situation it is always open to the respondent to seek an appropriate order having regard to the same.

Order dusty to counsel for parties.