Ajay Verma vs State
2009 Latest Caselaw 466 Del

                                    REPORTED
*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+     BAIL APPLN. 2016/2008

                             DATE OF RESERVE: February 03, 2009

                             DATE OF DECISION: February 10, 2009

      AJAY VERMA                                       ..... Petitioner
                             Through: Mr. Jayant Bhushan, Sr. Advocate with
                                      Mr. Sudhir Makkar, Mr. Ajay Verma and
                                      Mr. Gaurav Bhattacharya, Advocates
                    versus

      STATE                                             ..... Respondent
                             Through: Mr. M.N. Dudeja, Advocate for State.
                                      Mr. Ashok Bhasin, Sr. Advocate with
                                      Mr. Sunil Fernandes and Mr. Rajat
                                      Jariwal, Advocates for the complainant

      CORAM:
      HON'BLE MS. JUSTICE REVA KHETRAPAL

1.    Whether reporters of local papers may be allowed
      to see the judgment?
2.    To be referred to the Reporter or not?

3.    Whether judgment should be reported in Digest?

:     REVA KHETRAPAL, J.

1. The petitioner seeks bail after a period of five months incarceration in a

case registered against him initially under Sections 406/420/120 IPC for which

he was subsequently charge-sheeted under Sections 406/420/465/468/471 IPC.

2. The background in which the case was registered against the petitioner

is that the complainant M/s. Fabritex Exports Pvt. Ltd. had exported goods

through this petitioner, who was operating as a buying agent and a middleman

for bringing the manufacturers in contact with foreign importers. Sometime in

the beginning of June, 2006, the petitioner contacted the complainant

Company, which was facing a lean season and induced the complainant into

entering into an export order for the export of cushion covers to Australia.

Various meetings were held between the petitioner and the complainant at its

office premises in which the petitioner impressed the complainant that not only

was he in the business of acting as a buying agent, but he was also acting as a

middleman facilitating export from India of several products, including

garments to destinations all over the world and that he had a long standing and

excellent relationship not only with foreign importers but also with banks and

that, therefore, because of his involvement in any deal, payments would not be

a problem and the deal would go through smoothly. Based on these

representations, the complainant was induced into entering into a

Memorandum of Understanding (MOU), which was drawn up at Delhi on or

about 10th June, 2006 and the said Memorandum of Understanding was drafted

by the petitioner. As per the aforesaid MOU, the goods were to be exported by

the complainant to a company by the name of NEGO C8, who were stated to

be interested in importing cushion covers worth 1.5 million dollars. The

petitioner also undertook to source the fabric on behalf of the complainant

Company for which payment was to be made by the complainant in favour of

the supplier before the opening of the Letter of Credit itself. It was also

stipulated in the MOU that before the opening of the L/C, the complainant

Company will get 4,600 mts of base fabric of cushion covers worth

Rs.10,70,788/- and 3,100 mts worth Rs.9,25,970/- for border fabric of cushion

covers and accessories. As a counter guarantee, cheque No.482478 dated

30th June, 2006 amounting to Rs.32,10,000/- of Punjab National Bank was

issued in favour of M/s. Fabritex Exports Pvt. Ltd. (the complainant) with the

understanding that if the L/C was not arranged from the buyer till 25 th June,

2006, then the complainant would be at liberty to encash the said cheque and

will give the manufactured items out of 1,250 sets of cushion covers to the

petitioner. If and when the L/C was opened in favour of the complainant, the

guarantee cheque of M/s. Sirdanwal Overseas, the sole proprietary concern of

the petitioner, would be returned back by the complainant to the petitioner.

Total shipment time in the L/C was stipulated as 55 days with a validity of 70

days. The petitioner priced the fabric at Rs.200/- for each cushion cover,

whereas the inherent price of the fabric of each cushion cover was Rs.40/-, on

the misrepresentation that this was the so-called scarcity value of the fabric and

that unless the fabric was available, the complainant could not fulfil the order.

As per the MOU, the petitioner issued a post-dated cheque as a guarantee till

the opening of the L/C and upon the opening of the L/C on 28th June, 2006, the

said cheque was duly returned to the petitioner.

3. It is the case of the complainant Company that they came to know that

the fabric was to be supplied by Yogesh Trading Company and their

apprehensions and fears were partly allayed by the said knowledge, as Yogesh

Trading Company is a very well known name in the fabric trade enjoying

excellent market reputation and goodwill, but subsequently they discovered

that the Yogesh Trading Company to which they had paid by way of demand

drafts for more than five times the market value of the fabric was an imposter

and not the reputed Yogesh Trading Company which they were induced to

believe it was. The Yogesh Trading Company, which supplied fabric, held

out its premises to be at Nawab Sahib Katra, Delhi - 110 006 with its head

office at New Cloth Market, Ahmedabad-2. When contacted, the genuine

Yogesh Trading Company situate at 9/9 Main Road, Kailash Nagar, Gandhi

Nagar, Delhi made it clear that they were not the fabric suppliers and that they

were unaware that some other persons were using their name in this manner.

Subsequently, on enquiry from the addresses mentioned on the bills of Yogesh

Trading Company at Nawab Sahib Katra, Delhi and New Cloth Market,

Ahmedabad-2, the said addresses were found to be bogus addresses. After

tracking the movement of the demand drafts issued to the Yogesh Trading

Company and conducting an internet search for Yogesh Trading Company,

the said Company was found to be located at 9/3422, Gali No.8, Dharampura,

Gandhi Nagar, New Delhi. The said address was also found to be a bogus one

as B.V. Enterprises was found at that address.

4. It is also alleged that the petitioner got the L/C dated 28 th June, 2006

opened by one Diversified Impex Corporation, 445 Fifth Avenue Suite # 30H

New York Ny10016 USA issued by the First International Merchant Bank

Ltd., Malta, Sliema for US $ 3,88,800/- which was subsequently enhanced by

way of amendment to US $ 13,50,000/- on 14th July, 2006. By 30th June, 2006,

tthe complainant Company had gone into production and the finished product

was made available to the accused for inspection on 21st August, 2006. The

complainant alleges that no defect was found in the goods at the time of

inspection, but subsequently, after three days, on 24th August, 2006, some

defects were pointed out. On the complainant Company taking up the matter

strongly that the defects subsequently pointed out were not such as were

contrary to the original product specification, however, the petitioner got the

L/C amended with the delivery time extended from 20th August, 2006 to 5th

September, 2006 and the L/C expiry time extended from 5th September, 2006

to 15th September, 2006. After that, on one pretext or the other, the petitioner

kept delaying the inspection and finally inspected the goods, which were lying

ready for re-inspection, between 28th August, 2006 and 1st September, 2006.

On 15th September, 2006, again the goods were deliberately failed in

inspection for no rhyme or reason. By this time, the L/C had already expired

and the petitioner made it clear that he would not get the L/C extended and that

the complainant would have to ship the goods on a credit period term of 120

days. The complainant Company thereupon approached the Export Credit

Guarantee Corporation (ECGC) to obtain insurance cover for 120 days and

was informed by ECGC that NEGO C8 had a bad history and hence they were

not willing to give an insurance cover on NEGO C8. The matter was brought

to the notice of the petitioner, who, in order to allay the suspicion of the

complainant, informed the complainant that the Common Wealth Bank had

agreed to handle collection bills on behalf of NEGO C8 and to endorse any

shipment documents consigned to the said Bank by the suppliers of NEGO

C8. Thereafter, the consignment was inspected and found "ok" between 30th

September, 2006 and 27th November, 2006 and eventually the goods were

shipped on 9th December, 2006. Confirmation was received by the bankers of

the complainant Company regarding the due date of payment as 14.05.2007 in

the sum of US $ 13,24,560/-, but payment was never received. On

verification, it was found by the complainant that the buyer had not taken

possession of the goods and that the goods were still lying in the docks.

Subsequently, the complainant Company received notice of voluntary

liquidation of NEGO C8 dated 11.07.2007 calling a meeting of creditors of

NEGO C8. It was also learnt by the complainant that NEGO C8 had applied

for de-registration as early as 5th April, 2007. It was also learnt by the

complainant that a similar modus operandi of cheating had been adopted by the

petitioner with various other similarly situate garment manufacturers and

exporters, such as, SM Apparels, 45A Main Road, Velacheri, Chennai 600

032; DKA Exports, 9, Cathedral Road, Chennai - 600 086; R.K. Industries,

Race Course Road, Guindy, Chennai - 600 032; Lakshmi Graha Apparels, SF

No.106/1, Arasur to Avinash NH 47 LPT Bus Stop Arsur, Coimbatore - 641

047 and Myco Pranave Creations, VSM Villa, 59 Appachi Nagar Main Road,

Tirupur - 641 607.

5. Mr. Jayant Bhushan, the learned senior counsel for the petitioner

strenuously urged that it was completely un-understandable as to why no

complaint was made by M/s. Fabritex Exports Pvt. Ltd. till December, 2007

when the Letter of Credit itself had expired in September, 2006, and urged that

the complainant had lodged a false complaint after one year and three months

only with a view to covering up its own defaults and follies. The complainant

could not comply with the time stipulation set out in the Letter of Credit

though the deadline was extended by amending the Letter of Credit. The

complainant admittedly had received an advance payment of US $ 1,50,000/-

(approximately Rs.67 lakhs). The buyer had to make payment to the

complainant upon timely delivery of the goods. The complainant could not

meet the deadlines for delivery and the present false complaint against the

petitioner was an attempt to arm twist the petitioner to make unlawful gains.

6. Mr. Bhushan, the learned senior counsel for the petitioner also

submitted that though the present dispute arises out of a commercial

transaction, it is with the ulterior motive of making good their loss suffered on

account of their own tardiness that the complainant has set the criminal law

machinery in motion. No culpability can be attached in the instant case as the

petitioner was only facilitating the business transaction and taken at its very

best it is a case of contractual breach. The fabric was supplied to the

complainant on an agreed rate fixed in the MOU and till the FIR was

registered, there was not even a whisper about the high value of the fabric. In

any event, it is not disputed that the fabric was completely supplied by the

fabric vendor to the complainant and it is, therefore, immaterial that the vendor

was a bogus Company.

7. The learned senior counsel further contended that the L/C had expired in

September, 2006. Admittedly, the complainant had not shipped the goods.

Subsequently, they got in touch with the Australian buyer and shipped the

goods on D/A basis. The buyer subsequently declared bankruptcy and the

shipping agency sold the goods to meet the warehousing charges once they did

not make the payment. When they came to know that other complainants had

filed complaints, they got the idea of extorting money and filed a verbatim

complaint.

8. Finally, it was urged that the petitioner has been in custody for more

than five months after facing custodial interrogation from 1st September, 2008

till 6th September, 2008, during which period the petitioner fully cooperated

with the investigation. Charge-sheet has since been filed and there is no reason

to deny bail to the petitioner. The petitioner's only son is suffering from

thalasimia, a life threatening disease in which twice in a month blood

transfusion has to be given. If the petitioner is denied bail, his family will be

seriously affected as there is no other male member in his family to look after

his son. There is also no likelihood of the petitioner absconding as the

petitioner did not misuse the interim bail granted by the Hon'ble Supreme

Court of India vide order dated 04.04.2008 and surrendered before the trial

court in compliance with the order dated 26th August, 2008 passed by the

Hon'ble Supreme Court in SLP (Crl.) 1791/2008. Reliance is sought to be

placed upon the judgments of the Hon'ble Supreme Court in the cases of State

of Rajasthan, Jaipur vs. Balchand alias Baliay reported in 1977 (4) SCC 308

and Gudikanti Narasimhulu vs. Public Prosecutor, High Court of A.P.

reported in 1978 (1) SCC 240 to urge that the basic rule is to grant bail except

where there are circumstances suggestive of fleeing from justice or thwarting

the course of justice or creating other troubles in the shape of repeating

offences, or intimidating witnesses and the like.

9. Mr. M.N. Dudeja, the learned counsel for the State, on the other hand,

has urged that this is not a fit case for grant of bail keeping in view the

guidelines laid down by the Supreme Court in State of U.P. vs. Madhumani

Tripathi (2005) 8 SCC 21 wherein the Hon'ble Supreme Court has emphasized

that the nature of accusations, the nature of evidence in support of the

accusations, the larger interest of society and the propensity of the accused are

to be examined before grant of bail. He urged that applying the aforesaid tests

to the present case, the accusations against the petitioner are serious in nature

as the petitioner is stated to have cheated the complainant of the sum of Rs.4

crores. The nature of evidence, he urged, also pointed to the guilt of the

petitioner, in that, the petitioner had not only supplied fabric to the

complainant Company at highly inflated rates, but also under the

misrepresentation that the same were being purchased from the reputed M/s.

Yogesh Trading Company. It was only later on that the complainant realised

that the Yogesh Trading Company known to the fabric trade had not supplied

the fabric and the Yogesh Trading Company whose address was mentioned on

the invoices was a fictitious one. Reliance was placed by Mr. Dudeja in this

regard upon the statements of the proprietors of the original Yogesh Trading

Company, recorded in the course of investigation, to the effect that the

invoices were not of their Company and as a matter of fact they had been

issuing computerised invoices since the year 2006. He further submitted that

the profile of the foreign buyer NEGO C8, which was an Australian Company

run by a husband and wife, who were Indians, was also under scrutiny with the

INTERPOL. Thus, looking at the cumulative effect of all the accusations and

the nature of the evidence on record, it was not a fit case for grant of bail.

10. Particular emphasis was laid by the learned counsel for the State on the

fact that grant of bail to the petitioner would militate against the larger interest

of Society keeping in view the propensity of the petitioner, who was

committing such kind of offences on a regular basis with a calculated mind, as

was clear from the fact that the modus operandi adopted by the petitioner to

cheat innocent garment manufacturers was the same in all the cases in which

the petitioner was involved. It was further highlighted that while the

petitioner was granted interim bail in criminal cases registered against him in

the year 2002, being FIR No.98/02, Police Station Chittaranjan Park and FIR

No.241/02, Police Station Connaught Place both under Sections 420/406/120B

IPC, the petitioner indulged in committing similar offences in the instant case

as well as in three other cases registered against him. The particulars of the

involvement of the petitioner in similar cases was given as follows:-

 S.       FIR/         COMPLAINANT     SO      SO    AMOUNT ACCUSED
NO.      POLICE                      CALLED  CALLED     OF
        STATION                      FOREIGN FABRIC   FRAUD
                                      BUYER SUPPLIER

1.    FIR No.98/02 Joginder Kumar Unnamed        M/s.        Rs.80.50   Ajay
      dated 06.04.02. Seth (M/s. EM              Bajrang     lakhs      Verma     &
      PS Chittranjan ESS Enterprises)            Enterprises            Ors.
      Park,       u/s
      420/406/120B
      IPC
2.    FIR No.241/02    Lokesh Chopra Unnamed     M/s.        Rs.15.40   Ajay
      dated 20.04.02   (M/s.    Lokesh           Bajrang     Lakhs      Verma     &
      PS Connaught     Garments    Pvt.          Enterprises            Ors.
      Place,     u/s   Ltd.)
      420/406/120B
      IPC
3.    FIR             M/s. High Ami Pl. Ref to N.A.         N.A.        Ajay
      No.268/2005     Exports       Charge                              Verma
      PS        Tilak               Sheet
      Nagar, Delhi
      u/s
      467/471/477/
      420/406 IPC
4.    FIR No.773/07 Sudhir       Sekri NEGO C8   M/s.       Rs.4.06     Ajay
      dated 20.12.07 (M/s.   Fabritex            Yogesh     Crores      Verma
      PS Hauz Khas, Exports Pvt. Ltd.)           Trading
      u/s                                        Co.
      420/406/120B
      IPC
5.    FIR No.139/08 M/S.        DKA NEGO C8      M/s.       Rs.2.75     Ajay
      dated 19.08.08 Exports                     Yogesh     Crores      Verma     &
      PS Hauz Khas, (Chennai)                    Trading                Ors.
      u/s                                        Co.
      420/406/129B
      IPC





  S.       FIR/       COMPLAINANT        SO      SO    AMOUNT ACCUSED
NO.      POLICE                       CALLED  CALLED     OF
        STATION                       FOREIGN FABRIC   FRAUD
                                       BUYER SUPPLIER

6.    Complaint      M/s.    Lakshmi NEGO C8     M/s.        Rs.4       Ajay
      No.2370/08     Graha Apparels              Yogesh      Crores     Verma
      dated 21.04.08 Ltd.                        Trading
                     (Coimbatore)                Co.

11. It was submitted that the petitioner had already suffered a conviction in

the last case while the remaining cases were still pending against him. It was

also submitted, relying upon the judgment of the Hon'ble Supreme Court in

Lalmuni Devi vs. State of Bihar & Ors. JT 2001 (1) SC 150, that it is settled

law that merely because a civil claim is maintainable it does not mean that the

criminal complaint cannot be maintained. Finally, as regards the long

incarceration of the petitioner in judicial custody, it was submitted that the fact

that the petitioner was in jail for a long time though is germane in granting

bail for offences of this nature, long detention in jail could not be the sole

criteria for arriving at the conclusion that the grant of bail was merited.

12. Having heard the learned counsel for the parties and examined the

record, I have no hesitation in stating that though ordinarily, keeping in view

the cumulative facts and circumstances of the case, I would have been inclined

to admit the petitioner to bail albeit on stringent terms and conditions, in the

present case I am constrained to reject the prayer for bail for the reason that the

petitioner appears to have a propensity for committing such like offences as in

the instant case. The cases enumerated hereinabove in which the petitioner is

involved are of like nature and clearly indicate his modus operandi. I find

substance in the contention of the learned counsel for the State that had the

petitioner not been granted interim bail in FIR No.98/02 and FIR No.241/02,

the present case bearing FIR No.773/07, as well as two more cases of like

nature, being FIR No.268/05 and FIR No.139/08 as well as Complaint

No.2370/08 dated 21st April, 2008 would not have been registered against the

petitioner. In a sense, therefore, the petitioner abused the liberty of bail

granted to him in the aforesaid cases and it cannot be lost sight of that once

bail is granted to the petitioner, he may again trap unwary manufacturers into

losing large sums of money. It is, therefore, considered expedient to reject the

bail plea of the petitioner.

13. The present application is accordingly dismissed placing it on record

that any observations made in the present case are solely for the purpose of

consideration of the bail plea and will have no bearing on the merits of the case

upon the trial of the petitioner.

REVA KHETRAPAL, J.

FEBRUARY 10, 2009 km