Delhi High Court
Vinod Goenka vs C.B.I. on 23 May, 2011
Author: Ajit Bharihoke
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: May 09, 2011
Decided on: May 23, 2011
+ BAIL APPLICATION NO.508/2011
SANJAY CHANDRA ....PETITIONER
Through: Mr. Ram Jethmalani, Sr. Advocate
with Mr. K.T.S. Tulsi, Sr. Advocate, Mr.
Pinaki Mishra, Sr. Advocate, Ms. Ritu
Bhalla, Advocate, Mr. Sushil Bajaj,
Advocate & Ms. Rebecca M. John,
Advocate
Versus
C.B.I. .....RESPONDENT
Through: Mr. Uday Lalit, Sr. Advocate/Special
Public Prosecutor with Ms. Sonia
Mathur, Advocate, Mr. Narender Mann,
Advocate, Mr. A.K. Singh, Advocate,
Mr. Shubharanshu Padhi, Advocate,
Mr. Sangram Singh Saron, Advocate &
Mr. Siddhesh Kotwal, Advocate.
+ BAIL APPLICATION NO.509/2011 & CRL.M.A. 653/2011
VINOD GOENKA ....PETITIONER
Through: Mr. Mukul Rohtagi, Sr. Advocate with
Mr. Vijay Aggarwal, Advocate, Mr.
Gurpreet Singh, Advocate, Ms. S.
Swarna, Advocate & Mr. Sanjay
Abbot, Advocate.
Versus
C.B.I. .....RESPONDENT
Bail Applications No.508/2011, 509/2011, 510/2011, 511/2011 & 512/2011 Page 1 of 34
Through: Mr. Uday Lalit, Sr. Advocate/Special
Public Prosecutor with Ms. Sonia
Mathur, Advocate, Mr. Narender Mann,
Advocate, Mr. A.K. Singh, Advocate,
Mr. Shubharanshu Padhi, Advocate,
Mr. Sangram Singh Saron, Advocate &
Mr. Siddhesh Kotwal, Advocate.
+ BAIL APPLICATION NO.510/2011
GAUTAM DOSHI ....PETITIONER
Through: Mr. Soli Sorabjee, Sr. Advocate with
Mr. Ranjit Kumar, Sr. Advocate , Mr.
Rajiv Nayar, Sr. Advocate with Mr. Shri
Singh, Advocate.
Versus
C.B.I. .....RESPONDENT
Through: Mr. Uday Lalit, Sr. Advocate/Special
Public Prosecutor with Ms. Sonia
Mathur, Advocate, Mr. Narender Mann,
Advocate, Mr. A.K. Singh, Advocate,
Mr. Shubharanshu Padhi, Advocate,
Mr. Sangram Singh Saron, Advocate &
Mr. Siddhesh Kotwal, Advocate.
+ BAIL APPLICATION NO.511/2011
HARI NAIR ....PETITIONER
Through: Mr. Rajiv Nayar, Sr. Advocate with Ms.
Sima Gulati, Advocate.
Versus
C.B.I. .....RESPONDENT
Bail Applications No.508/2011, 509/2011, 510/2011, 511/2011 & 512/2011 Page 2 of 34
Through: Mr. Uday Lalit, Sr. Advocate/Special
Public Prosecutor with Ms. Sonia
Mathur, Advocate, Mr. Narender Mann,
Advocate, Mr. A.K. Singh, Advocate,
Mr. Shubharanshu Padhi, Advocate,
Mr. Sangram Singh Saron, Advocate &
Mr. Siddhesh Kotwal, Advocate.
+ BAIL APPLICATION NO.512/2011
SURENDRA PIPARA ....PETITIONER
Through: Mr. Neeraj Kishan Kaul, Sr. Advocate
with Mr. N. Hariharan, Advocate.
Versus
C.B.I. .....RESPONDENT
Through: Mr. Uday Lalit, Sr. Advocate/Special
Public Prosecutor with Ms. Sonia
Mathur, Advocate, Mr. Narender Mann,
Advocate, Mr. A.K. Singh, Advocate,
Mr. Shubharanshu Padhi, Advocate,
Mr. Sangram Singh Saron, Advocate &
Mr. Siddhesh Kotwal, Advocate.
CORAM:
HON'BLE MR. JUSTICE AJIT BHARIHOKE
1. Whether Reporters of local papers
may be allowed to see the judgment?
2. To be referred to the Reporter or not ?
3. Whether the judgment should be
reported in Digest ?
Bail Applications No.508/2011, 509/2011, 510/2011, 511/2011 & 512/2011 Page 3 of 34
AJIT BHARIHOKE, J.
1. Accused Sanjay Chandra, Vinod Goenka, Gautam Doshi, Hari Nair
and Surendra Pipara vide above referred applications under Section
439 Cr.P.C. are seeking bail in case FIR No.RC-DAI-2009-A-0045 P.S.
ACB, CBI New Delhi under Section 420, 468, 471 IPC and 13(2) read
with Section 13(1)(d) P.C. Act.
2. Briefly stated, allegations in the charge sheet are that during May
2007-2008, the petitioners and public servants, namely, A.Raja,
Minister of Communications and Information Technology, his P.S. R.K.
Chandolia and the then Telecom Secretary Siddhartha Behura entered
into a criminal conspiracy to cause undue advantage to the petitioners
or their companies, namely, Swan Telecom Pvt. Ltd. and Unitech Group
of Companies and caused corresponding loss to the State exchequer by
abuse of their official position.
3. Learned Sh. Ram Jethmalani and learned Sh. K.T.S.Tulsi, Sr.
Advocates appearing for the accused Sanjay Chandra submitted that
he has been unfairly roped in as an accused on unsubstantiated
allegation of conspiracy. There is no evidence of meeting of mind
between the petitioner Sanjay Chandra and either of the co-accused
persons. Unitech Group of Companies were innocent applicants for
UAS Licences and the petitioner had nothing to do with the decision of
the public servants to change the policy of first cum first serve or to
change the cut off date. It is submitted that Unitech Group of
Companies were not the last applicants. M/s. Shyam Telelink Pvt. Ltd.
which also got UAS Licence applied for licence subsequent to the
petitioner's companies on 25th September, 2007. It is argued that the
Unitech Group of Companies are the not the gainers because of change
of policy for the reason that they have paid the requisite amount of
entry fee, which other licensees have paid. Learned counsels argued
that the theory of conspiracy is negated by the fact that till date,
despite of depositing the entry fee and complying with the condition,
Unitech Group of Companies have not received spectrum for Delhi and
28 other key districts. It is also argued on behalf of the accused Sanjay
Chandra that admittedly, he joined the investigation and was not
arrested during investigation. He was not produced in custody along
with charge sheet as envisaged under Section 170 CrPC. Therefore, in
view of Section 88 CrPC, the petitioner ought to have been released on
bail by taking a bond with or without sureties for his appearance during
trial. It is also submitted that the refusal of bail to the petitioner by
learned Special Judge is in contravention of the direction given by this
court in the matter of Court on its Own Motion Vs. CBI, 2004(1) JCC
308. Learned counsels further argued that since the charge sheet has
already been filed, there is no possibility of the petitioner interfering
with the investigation. The petitioner voluntarily appeared in the court
pursuant to the summons which rules out any possibility of his fleeing
from justice. Therefore, taking into account the facts and the nature of
offence for which the petitioner has been charge sheeted, the
petitioner is entitled to be released on bail.
4. Learned Sh. Mukul Rohtagi, Sr. Advocate appearing for the
accused Vinod Goenka submitted that he has been unfairly arrayed as
an accused. There is no evidence to show his complicity in the
conspiracy. Learned counsel submitted that accused Shahid Balwa and
Vinod Goenka were examined during investigation wherein both of
them stated that they were partners in DB Realty Group. However,
Vinod Goenka had nothing to do with telecom business of the above
company and as per the arrangement between him and Shahid Balwa,
he was exclusively looking after the work of hospitality and realty
business of the company. No application or document relating to issue
of UAS Licence to M/s. Swan Telecom Pvt. Ltd. was signed by accused
Vinod Goenka. This rules out any possibility of his complicity in the
conspiracy. Learned counsel further argued that M/s. Swan Telecom
Pvt. Ltd. had applied for UAS Licence on 02nd March, 2007 and it
already had a highest priority under the earlier policy of first cum first
serve. Thus, M/s. Swan Telecom Pvt. Ltd. had nothing to gain from the
change in policy which is the bedrock of theory of conspiracy. It is
further argued that the petitioner has been charged for the offences
entailing maximum punishment upto seven years imprisonment.
Therefore, the offence allegedly committed by him cannot be termed
as the offence of grave magnitude calling for severest of punishment,
as such, the other factors being in favour of the petitioner, he is
entitled to bail. Petitioner Vinod Goenka has relied upon the judgment
of Supreme Court in Gurcharan Singh Vs. State (Delhi
Administration), 1978, 1SCC 118 and Anil Mahajan Vs.
Commissioner of Customs & Anr., 2000(2) JCC 302. Accused Vinod
Goenka has also argued the defence taken on behalf of accused Sanjay
Chandra regarding the interpretation of Section 88 Cr.P.C. and the
directions issued by this Court in Court on its Own Motion Vs. CBI,
2004(1) JCC 308.
5. Learned Shri Soli Sorabjee and learned Shri Ranjit Kumar, Sr.
Advocates for accused Gautam Doshi, learned Shri Rajiv Nayar, Sr.
Advocate for accused Hari Nair and learned Shri Neeraj Kishan Kaul, Sr.
Advocate for accused Surendra Pipara have adopted legal arguments
advanced on behalf of accused Sanjay Chandra and Vinod Goenka. It
is argued on behalf of the above three petitioners that a well-
established principle of criminal jurisprudence in India is "bail not jail"
and the court while deciding bail application is required to be guided by
the aforesaid philosophy. It is further contended that case of the
respective petitioners is distinct from the other co-accused persons for
the reason that they are neither the promoters nor shareholders of the
companies which are allegedly benefited by the act of public servants.
They were merely the employees and have not received any personal
gain from the alleged conspiracy. It is argued that absurdity of
prosecution case is apparent from the fact that loss ascribed to the
State is alleged to be `30,000/- crores, whereas Reliance Telecom
Ltd.(accused No.12) is alleged to have made profit of `10 crores by
sale of its holding in Swan Telecom Pvt. Ltd. It is further argued that
the witnesses have already been examined under Section 161/164
Cr.P.C. without any obstruction from the petitioners which shows that
they did not try to influence them. Learned counsels further contended
that admittedly the petitioners are not arrested during investigation
and they appeared in the court pursuant to the summons. Therefore,
it can be safely assumed that there is no possibility of the petitioners
interfering with the process of justice by tampering with the witnesses
or fleeing from justice. Thus, taking into account the nature of the
offences alleged to have been committed by the petitioners, which is
not of extreme gravity and the other factors, the petitioners are
entitled to bail. In support of their contentions, petitioners have relied
upon the judgment in Babu Singh Vs. State of Uttar Pradesh,
(1978) 1 SCC 579 and State of Rajasthan Vs. Balchand, (1977) 4
SCC 308.
6. Additional submission in support of bail plea on behalf of accused
Surendra Pipara is that he is suffering from multiple ailments-like
diabetes, heart problem, hypertension, chronic kidney disease,
hyperparathyroidism and Arthritis etc.
7. Learned Sh. U.U.Lalit, Sr. Advocate/Special Public Prosecutor for
CBI has strongly opposed the bail applications. He referred to the
charge sheet and highlighted the facts detailed hereinafter to prima
facie show the complicity of the petitioners in the offence. Learned
Special Public Prosecutor submitted that offence committed by the
petitioners is of highest magnitude resulting in huge loss of almost
`30,000/- crores to the State exchequer, as such they are not entitled
to bail. He further submitted that the petitioners are either controlling
the benefited companies as hold high positions of power. Therefore,
there is a reasonable apprehension that if they are freed on bail, they
will use their influence to tamper with the witnesses. Learned Special
PP further contended that plea of accused Vinod Goenka that he had
nothing to do with the telecom affairs is of no avail to him as he being
substantial stakeholder is the direct beneficiary of the scam.
8. I have considered the rival submissions and perused the record.
9. Briefly put, case of the prosecution is that in order to achieve the
end of conspiracy, accused R.K. Chandolia on 24th September 2007
inquired from the concerned officer of "Access Services Cell" of
Department of Telecommunication if the applications of Unitech Group
of Companies for grant of UAS Licences were received and instructed
that after the receipt of their applications, no further applications be
accepted. PW Avdesh Kumar Srivastava, DDG(AS-I) told R.K.
Chandolia that it may not be proper/fair to abruptly refuse to receive
the applications. A note dated 24th September, 2007 in this regard was
initiated by the Department on instructions of R.K. Chandolia. Accused
A.Raja approved the note and ordered issue of press note informing
public about the cut off date 01.10.2007 for acceptance of the
applications for UASL. A Press Release was accordingly published in
Newspapers on 25th September, 2007. Though hundreds of
applications were received after 25th September, 2007, those
applications were not considered for issue of UAS Licence.
10. Charge sheet also disclose that as per the existing policy, the
allottees of Letters of Intent (LOI) were given sufficient time to comply
with the conditions of LOI. The licences were issued on the basis of
seniority of the date of applications and after the issue of UAS
Licences, the licensee could apply for allocation of spectrum.
11. On 2nd November, 2007, Director (AS-I) DOT initiated a note
seeking for issue of Letters of Intent as per the existing policy of first
come first served. The then Telecom Secretary returned the file with
the noting, "action may be initiated after orders of MOC & IT are
obtained on the issue. He had expressed his desire to discuss this
further." A fresh note was put up by Director (AS-I) of DOT on 7th
November, 2007 highlighting the existing policy and pointing out that a
policy statement in that regard was made in Rajya Sabha on 23rd
August, 2007. A draft Letter of Intent was also put up along with the
note for approval of the Minister. Accused A.Raja approved the note,
but deliberately replaced Para 3 of the draft LOI with the following: "the
date of payment of entry fee would be priority date for signing the
licence agreement. If the date of payment of entry fee in more than
one case is the same, then the licence will be first signed with the
applicant whose application was received earlier."
12. It is alleged that on 23rd November, 2007, the Licensing Finance
Branch of DOT objected to change made in LOI by accused A.Raja and
suggested that it appears logical to keep the date of applications as
date of priority for issue of licence provided the applicant is able to
establish that he is eligible on the date of application and is also
eligible when the LOI is issued. This note was endorsed by
Member(Finance), Telecom Commission and Secretary(Telecom) also
suggesting the revision of entry fee for new licences in line with
revision of fee for dual technology spectrum as suggested by Ministry
of Finance in its letter. Accused A.Raja, however, ignored the advice to
keep the date of application as date of priority for issue of licence or to
review and enhance the licence fee and this resulted in a loss to the
tune of almost of 30000 crores to the State exchequer.
13. That while putting up a note dated 7th January, 2008 for
processing UASL application received upto 25th September, 2007,
Director (AS-I) reiterated the existing policy and noted, "sequence of
granting of LOIs/UAS Licence has been maintained till now to the date
of respective application for a particular service area." In his note
DDG(AS-I) raised the issue of eligibility and clarified that the eligibility
on the date of application needs to be considered. When the matter
was put up before accused Siddhartha Behura, he attached a draft
press release for the approval of the Minister. Accused A.Raja, MOC &
IT asked Secretary (Telecom) to show the draft press release to the
Solicitor General and seek his legal opinion. Accused Siddhartha
Behura personally took the file to the Solicitor General of India, who
advised "I have seen the matter. Issues regarding new LOIs are not
before any court. What is proposed is fair and reasonable. The press
release makes for transparency. This seems to be in order." However,
after obtaining the advice of Solicitor General, accused A.Raja in
conspiracy with accused Siddhartha Behura dishonestly deleted the
last paragraphs of the approved press release shown to the Solicitor
General which recorded, "However, if more than one applicant
complies with LOLI condition on the same date, the inter-se seniority
would be decided by the date of application" and approved the
amended draft of press release. This was done to portray as if the
amended draft had the approval of the Solicitor General.
14. On 10th January, 2008, the Press Release was put on the website
of DOT calling upon the applicants to collect the LOIs from Siddhartha
Behura at 3:30 pm. Four counters were created for collection of LOIs.
The LOIs were, however, distributed in a disorderly manner and not as
per the seniority of applicants. This resulted in shuffling of priority of
the applicants as against the seniority of date of application and
provided them opportunity to deposit entry fee prior to the applicants
who had applied for licence before them. It is alleged that in aforesaid
manner, the accused public servants managed to disturb the seniority
of applicants as per the date of application and caused undue
advantage to the petitioners/their companies, who managed to get
UAS Licence which they otherwise would not have got but for change
in policy of first come first served with dishonest intention by the public
servants.
ROLE OF ACCUSED SANJAY CHANDRA:
15. Accused Sanjay Chandra was Managing Director of M/s Unitch
Ltd. and was authorised to look after the telecom affairs of the
company. He caused to move applications for UAS Licences on 24th
September, 2007 by eight Unitech Group of Companies which were
subsequently merged with M/s Unitech Wireless (Tamil Nadu) Pvt. Ltd.
On 24th September, 2007, accused R.K. Chandolia, P.S. to the Minister
showed undue interest in Unitech Group of Companies by enquiring
about their applications and also directing the concerned officer of the
Department to stop accepting applications for UAS Licences after the
receipt of the applications by Unitech Group of Companies. The
complicity of the petitioner in the conspiracy is also obvious from the
fact that though Press Release dated 24th September, 2007 provided
cut off date for applications as 1st October, 2007, yet applications
received after 25th September, 2007 till 1st October, 2007 were not
even considered by the Department. The first come first served policy
was tinkered with by accused A.Raja in furtherance with the other
public servants and it was converted into a highly unfair policy that the
seniority of the applicants for issue of licence shall be determined by
the date and time at which respective allottees complied with the
terms and conditions of LOI and deposit the entry fee. Charge sheet
disclose that by adopting such unfair policy, the accused persons
managed that M/s Unitech Group of Company could get the seniority
for UAS Licence and allotment of spectrum for various circles at Serial
No.33 to 54 which seniority Unitech Group of Company could not have
got if the existing policy of first come first serve was followed. The
charge sheet also disclose that total equity investment of the Unitech
Group of Companies who had applied for UAS Licences was `138
Crores. However, after the grant of the Letter of Intents, Unitech Group
of Companies entered into an investment agreement dated 28th
October, 2008 with M/s. Telenor Asia Pvt. Ltd. and M/s Telenor Mobile
Communications vide which the Telenor agreed to infuse extra equity
into those companies to acquire 65% stake. The enterprise value of
Unitech Group of Companies was pegged at `4400 Crores of which
`1146.7 Crores was shown external debt and `773 Crores was
shareholders loan and net equity worth of promoters as against the
actual investment of `138 Crores was treated as `2480 Crores. Thus,
with the grant of Letter of Intents, the promoters of the Unitech Group
of Companies got monetary gain of `2342 Crores.
ROLE OF ACCUSED GAUTAM DOSHI, HARI NAIR AND SURENDRA
PIPARA:
16. At the relevant time, accused Gautam Doshi and Surendra Pipara
were Group Presidents and Hari Nair was Group Vice President of
Reliance ADA Group. Charge sheet reveals that they entered into a
criminal conspiracy with the object to enable Reliance ADA Group
Companies to get UAS Licences for 13 circles which they were not
eligible to get in view of Clause 8 of UASL guidelines. In order to
circumvent the aforesaid ineligibility clause and to cheat the
Department, the petitioners Gautam Doshi Hari Nair and Surendra
Pipara created and structured a new company M/s Swan Telecom Pvt.
Ltd which applied for UASL Licence on 2nd March, 2007. The above
referred accused persons has structured M/s Swan Telecom Pvt. Ltd. in
such a manner that its equity holding was shown as 90.1% with M/s
Tiger Traders Pvt. Ltd. and 9.9% with M/s Reliance Telecom Ltd. The
investigation into holding structures of M/s Tiger Traders Pvt. Ltd.
revealed that aforesaid company was actually funded by the Group
Companies of M/s Reliance ADA Group. It was revealed that `3 crores
utilized by M/s Tiger Traders Pvt. Ltd. in January 2007 and `95.51
crores used by said company in March, 2007 to subscribe to majority
equity shares of M/s Swan Telecom Pvt. Ltd. was arranged through
Group Companies of Reliance ADA Group. Besides that, a sum of `992
crores which constituted the bulk of networth of M/s Swan Telecom Pvt.
Ltd. was also provided by Reliance Telecom Ltd. under the garb of
subscribing to preferential shares to M/s Swan Telecom Pvt. Ltd. Those
preferential shares were purchased by Reliance Telecom Ltd. at
abnormally high premium of `999/- per share of face value `1/-
although M/s Swan Telecom Pvt. Ltd. had no business history at that
time. Aforesaid amount was immediately returned by M/s Swan
Telecom Pvt. Ltd to M/s Reliance Communications Ltd. on the pretext
of advance against a purchase order. These transactions were carried
out on the instruction of Gautam Doshi and Hari Nair.
17. Charge sheet also disclose that in order to achieve the end of
conspiracy, above three accused persons created two other companies
M/s Zebra Consultancy Services Pvt. Ltd. and M/s Parrot Consultants
Pvt. Ltd. The equity holding of aforesaid two companies and M/s Tiger
Traders Pvt. Ltd. was structured by Gautam Doshi, Hari Nair and
Surendra Pipara insuch a manner that those companies were cross-
holding each other in interlocking structure during the period w.e.f.
March, 2006 to 4th April, 2007. This interlocking was done in such a
manner that 50% equity shares of M/s Zebra Consultancy Services Pvt.
Ltd. and M/s Parrot Consultants Pvt. were purchased by M/s Tiger
Traders Pvt. Ltd., 50% equity shares of Parrot Consultants Pvt. Ltd. and
Tiger Traders Pvt. Ltd. were purchased by M/s Zebra Consultancy
Services Pvt. Ltd. and 50% equity shares of Zebra Consultancy Services
Pvt. Ltd. and Tiger Traders Pvt. Ltd. was purchased by M/s Parrot
Consultants Pvt. Ltd. This arrangement ensured that neither of those
three companies was absolute owner of any company and this
practically left the control of all the three companies in the hands of
the Directors i.e. the petitioners. In order to achieve the end of
conspiracy, Hari Nair in league with Gautam Doshi and Surendra Pipara
falsified the records of Board Meetings of Swan Telecom Pvt. Ltd. and
Tiger Traders Pvt. Ltd to show that M/s. Tiger Traders Pvt. Ltd. was held
by India Telecom Infrastructures Fund of Ashok Wadhwa Group and
also to show the appointment of Ashok Wadhwa as Director of those
companies and his presence during the meetings.
18. Before the LOI could be granted, M/s Reliance Communications
Ltd., a group of Reliance ADA Group got GSM spectrum in those 13
circles pursuant to its applications under dual technology policy. Thus,
the application dated 2nd March, 2007 moved through M/s Swan
Telecom Pvt. Ltd was of no use to Reliance ADA Group. Accordingly,
Reliance ADA Group withdrew its holding from M/s Swan Telecom Pvt.
Ltd. and the accused Gautam Doshi, Hari Nair and Surendra Pipara
transferred the control of M/s Swan Telecom Pvt. Ltd. to the co-accused
Shahid Balwa and Vinod Goenka in order to facilitate them to cheat
DOT by getting UAS Licence in the name of M/s Swan Telecom Pvt. Ltd.
which company till 18th October, 2007 was ineligible for UAS Licence in
view of Clause 8 of policy guideline.
ROLE OF ACCUSED VINOD GOENKA:
19. The role assigned to accused Vinod Goenka is that he is the
Director of M/s Swan Telecom Pvt. Ltd. along with his co-Director
accused Shahid Balwa since 01.10.2007. They took over majority
stake in Swan Telecom Pvt. Ltd. on 18.10.2007 through their company
M/s. D.B. Infrastructures Pvt. Ltd., a company of Dynamix Balwa Group.
This was done with a view to illegally take advantage of the application
for grant of UAS licence submitted by Swan Telecom Pvt. Ltd on
02.03.2007 which was left of no use to M/s Reliance ADA Group. On
18.10.2007, Reliance Telecommunication Group got GSM spectrum in
13 circles under the dual technology policy of the Government. Thus,
the application moved by them through M/s Swan Telecom Company
Pvt. Ltd remained of no use to Reliance ADA Group. In order to take
advantage of the aforesaid situation, the petitioner Vinod Goenka and
his co-accused Shahid Balwa joined the party and in furtherance of
conspiracy, they took over the majority stake in Swan Telecom Ltd. on
18.10.2007 through their company M/s. DB Infrastructures Pvt. Ltd., a
company of Dynamix Balwa Group. Before taking over majority stakes,
the petitioner and Shahid Balwa joined as Directors of Swan Telecom
Pvt. Ltd . The object of this exercise was to cheat DOT and obtain UAS
licence. In order to achieve this end, the petitioner and Shahid Balwa
falsified the record pertaining of Board Meeting of M/s Giraffe
Consultancy Pvt. Ltd. fraudulently showing transfer of its shares by
Reliance ADA Group to itself. The petitioner Vinod Goenka in
conspiracy with Shahid Balwa also concealed true facts and furnished
false information to DOT regarding share holding pattern of Swan
Telecom Pvt. Ltd. as on date of application and thereby misrepresented
that STPL was an eligible company to get UAS Licence on the date of
application i.e. 02.03.2007, whereas the company was not eligible as
per UAS guidelines. The charge sheet further discloses that petitioner
Vinod Goenka along with Shahid Balwa is overall beneficiary of getting
UAS licence and valuable and scarce spectrum in 13 telecom circles
including Delhi. This is apparent from the fact that within slightly more
than two months of issue of UAS Licence to M/s Swan Telecom Pvt.
Ltd., a UAE company M/s Emirates Telecommunications Corporation
(ETISALAT) subscribed to 11,29,94,228 shares of M/s Swan Telecom
Pvt. Ltd. of face value `10/- at a huge premium of `275.7178 per share
for a total consideration of `3228 crores. And M/s Genex Exim
Ventures Pvt. Ltd. also subscribed to 1,33,17,245 shares of M/s Swan
Telecom Pvt. Ltd. at the same premium for a total consideration of
`380,49,73,846/-. This gives a glimpse of quantum of monetary gain
reaped by the accused Shahid Balwa and Vinod Goenka. Therefore,
prima facie, it cannot be said that he was not aware of the huge
investments done by the company in respect of deposit of the entry fee
pursuant to the LOI for issue of UAS licence. Thus, complicity of Vinod
Goenka in the conspiracy is, prima facie, disclosed by the charge sheet
and the supporting evidence.
20. Learned Shri Ram Jethmalani and learned Shri K.T.S. Tulsi, Sr.
Advocates appearing for accused Sanjay Chandra, learned Shri Mukul
Rohtagi, Sr. Advocate appearing for accused Vinod Goenka, learned
Shri Soli Sorabjee and learned Shri Ranjit Kumar, Sr. Advocates
appearing for accused Gautam Doshi, learned Shri Rajiv Nayar, Sr.
Advocate appearing for accused Hari Nair and learned Shri Neeraj
Kishan Kaul, Sr. Advocate appearing for accused Surendra Pipara, at
the outset, have contended that the order of learned Special Judge
dated 20th April, 2011 rejecting the bail of the petitioners is violative of
the mandate of Section 88 Cr.P.C. It is contended that admittedly the
petitioners were neither arrested during investigation nor they were
produced in custody along with the charge sheet as envisaged under
Section 170 Cr.P.C. Therefore, the trial court was supposed to release
the petitioners on bail by seeking bonds with or without sureties in
view of Section 88 Cr.P.C. Thus, it is urged that on this count alone,
the petitioners are entitled to bail.
21. The interpretation sought to be given by the petitioners is
misconceived and based upon incorrect reading of Section 88 Cr.P.C.,
which is reproduced thus:
"88. Power to take bond for appearance.---When any
person for whose appearance or arrest the officer presiding in
any Court is empowered to issue a summons or warrant, is
present in such court, such officer may require such person to
execute a bond, with or without sureties, for his appearance
in such court, or any other court to which the case may be
transferred for trial"
22. On reading of the above, it is obvious that Section 88 Cr.P.C.
empowers the court to seek bond for appearance from any person
present in the court in exercise of its judicial discretion. The Section
also provides that aforesaid power is not unrestricted and it can be
exercised only against such persons for whose appearance or arrest
the court is empowered to issue summons or warrants. The words
used in the Section are "may require such person to execute a bond"
and any person present in the court. The user of word "may" signifies
that Section 88 Cr.P.C. is not mandatory and it is a matter of judicial
discretion of the court. The word "any person" signifies that the power
of the court defined under Section 88 Cr.P.C. is not accused specific
only, but it can be exercised against other category of persons such as
the witness whose presence the court may deem necessary for the
purpose of inquiry or trial. Careful reading of Section 88 Cr.P.C. makes
it evident that it is a general provision defining the power of the court,
but it does not provide how and in what manner this discretionary
power is to be exercised. Petitioners are accused of having committed
non-bailable offences. Therefore, their case for bail falls within Section
437 of the Code of Criminal Procedure which is the specific provision
dealing with grant of bail to an accused in cases of non-bailable
offences. Thus, on conjoint reading of Section 88 and 437 Cr.P.C., it is
obvious that Section 88 Cr.P.C. is not an independent Section and it is
subject to Section 437 Cr.P.C. Therefore, I do not find merit in the
contention that order of learned Special Judge refusing bail to the
petitioners is illegal being violation of Section 88 Cr.P.C.
23. Before adverting to the further submissions made on behalf of
respective petitioners, it would be appropriate to have a proper look on
the law on bail.
24. In Gudikanti Narasimhulu Vs. Public Prosecutor, (1978) 1
SCC 240, Supreme Court has highlighted the importance of personal
liberty of an accused. In the said judgment, the Supreme Court has
emphasized on creating a balance between the right and liberty
guaranteed under Article 21 of the Constitution of India and the
interest of justice as well as the society which is sought to be protected
by Section 437 Cr.P.C., wherein it is, inter alia, observed thus:
10. The significance and sweep of Article 21 make the deprivation of
liberty a matter of grave concern and permissible only when the law
authorising it is reasonable, even-handed and geared to the goals of
community good and State necessity spelt out in Article 19. Indeed, the
considerations I have set out as criteria are germane to the
constitutional proposition I have deduced. Reasonableness postulates
intelligent care and predicates that deprivation of freedom by refusal of
bail is not for punitive purpose but for the bi-focal interests of justice--to
the individual involved and society affected."
25. In Gurcharan Singh Vs. State (Delhi Administration), 1978,
1SCC 118, the Supreme Court observed thus:
"18. Chapter XXXIII of the new Code contains provisions in respect of
bail sad tends. Section 436, Cr. P.C., with which this Chapter opens
makes an invariable rule for bail in case of bailable offences subject to
the specified exception under Sub-section (2) of that section.
Section 437, Cr. P.C. provides as to when bail may be taken, in case of
non-bailable offences. Sub-section (1) of Section 437, Cr. P.C. makes a
dichotomy in dealing with non-bailable offences. The first, category
relates to offences punishable with death or imprisonment for life and
the rest are all other non-bailable offences. With regard to the first
category, Section 437(1), Cr. P.C. imposes a bar to grant of bail by the
Court or the officer incharge of a police station to a parson accused of
or suspected of the commission of an offence punishable with death or
imprisonment for life, If there appear reasonable. grounds for believing
that he has been so guilty. Naturally, therefore, at the stage of
investigation unless there are some materials to justify an officer or
the court to believe that there are no reasonable grounds for believing
that the person accused of or suspected of the commission of such an
offence has 'been guilty of the same, there is a bam imposed under
Section 437(1), Cr. P.C. against granting of bail. On the other hand, if
to either the officer in charge of the police station or to the court there
appear to be reasonable grounds to believe that the accused has been
guilty of such an offence there will be no question of the court or the
officer granting bail to him. In all other non-bailable cases Judicial
discretion will always be exercised by the court in favour of granting
bail subject lo Sub-section (3) of Section 437. Cr. P.C. with regard to
imposition of conditions, if necessary. Under Sub-section (4) of
Section 437, Cr. P.C. an officer or a court releasing any person on bail
under Sub-section (1) or Sub-section (2) of that section is required to
record in writing his or its reasons for so doing. That is to say, law
requires that in non-bailable offences punishable with death or
imprisonment for life, reasons have to be recorded for releasing a
person on bail, clearly disclosing how discretion has been exercised in
that behalf.
......
22. In other non-bailable cases the court will exercise its judicial
discretion In favour of granting bail subject to Sub-section (3) of
Section 437, Cr. P.C. if it deems necessary to act under it. Unless
exceptional circumstances are brought to the notice of the court which
may defeat appropriate investigation and a fair trial, the court will not
decline to grant bail to a person who is not accused of an offence
punishable with death or imprisonment for life. It is also clear that
when an accused is brought before the court of a Magistrate with the
allegation against him of an offence punishable with death or
imprisonment for life, he has ordinarily no option in the matter tout to
refuse bail subject, however, to the first proviso to Section 437(1), Cr.
P.C. and in a ease where the Magistrate entertains a reasonable belief
on the materiale that the accused has not been guilty of such an
offence. This will, however, be an extraordinary occasion since there
will be some material); at the stage of initial arrest, for the accusation
or for strong suspicion of commission fry the persons of such an
offence.
......
30. In dealing with the question of bail under Section 498 of the old
Code under which the High Court in that case had admitted the
accused to bail, this Court in the State v. Captain Jagjit
Singh(supra) while setting aside the order of the High Court granting
bail, made certain general observations with regard to the principles
that should govern in granting bail in a non-bailable case as follows:
It (the High Court) should then have taken into account the various
considerations, such as, nature and seriousness of the offence, the
character of the evidence, circumstances which are peculiar to the
accused, a reasonable possibility of the presence of the accused not
being secured at the trial, reasonable apprehension of witnesses being
tampered with, the larger interests of the public or the State, and
similar other considerations, which arise when a court is asked for bail
in a non-bailable offence. It is true that under Section 498 of the CrPC,
the powers of the High Court in the matter of granting bail are very
wide; even so where the offence is non-bailable, various considerations
such as those indicated above have to be taken into account before
bail is granted in a non-bailable offence.
We are of the opinion that the above observations equally apply to a
case under Section 439 of the new Code and the legal position is not
different under the new Code."
26. In State Vs. Jaspal Singh Gill, AIR 1984 SC 1503, the Supreme
Court expressed the view that the court before granting bail in cases
involving non-bailable offences, particularly where the trial has not yet
commenced should take into consideration various factors such as the
nature and seriousness of the offence, character of the evidence,
circumstances peculiar to the accused, a reasonable possibility of the
accused not presenting himself during trial and reasonable
apprehension of witnesses being tampered with and the larger interest
of the society or the State.
27. In CBI, Hyderabad Vs. B. Ramaraju, 2011 Crl.L. J. 301,
Supreme Court cancelled the bail of accused Ramaraja purely on the
basis of the enormity and gravity of the offence observing thus:
"4. According to the allegations of the appellant, the respondents-
accused are involved in one of the greatest corporate scams of the
commercial world. It has caused a financial storm throughout the
country and the world over. Lakhs of shareholders and others have
been duped and the corporate credibility of the nation has received a
serious setback. We are deliberately refraining from making a
detailed observation regarding the conduct of the respondents-
accused because the trial is still pending and we do not want the trial
to be prejudiced in any manner.
5. Ordinarily this Court would be slow in cancelling the bail
already granted by the High Court but in the extraordinary facts and
circumstances of these cases, we are of the considered view that the
impugned orders passed by the High Court granting bail to the
respondents, cannot be sustained in law and the same are
accordingly set aside.
...........
7. We are informed that charges have been framed on 25th
October, 2010 and trial is scheduled to commence with effect from
2nd November, 2010. In these circumstances, we deem it appropriate
to direct the Trial Court to take up the case on day-to-day basis and
conclude the trial of this case as expeditiously as possible, in any
event, on or before 31st July, 2011."
28. In a recent judgment in the matter of Prasanta Kumar Sarkar
Vs. Ashis Chatterjee & Anr., 2010(11) Scale 408, Supreme Court
observed thus:
"11. We are of the opinion that the impugned order is clearly
unsustainable. It is trite that this Court does not, normally,
interfere with an order passed by the High Court granting or
rejecting bail to the accused. However, it is equally incumbent
upon the High Court to exercise its discretion judiciously,
cautiously and strictly in compliance with the basic principles laid
down in a plethora of decisions of this Court on the point. It is
well settled that, among other circumstances, the factors to be
borne in mind while considering an application for bail are: (i)
whether there is any prima facie or reasonable ground to believe
that the accused had committed the offence; (ii) nature and
gravity of the accusation; (iii) severity of the punishment in the
event of conviction; (iv) danger of the accused absconding or
fleeing, if released on bail; (v) character, behaviour, means,
position and standing of the accused; (vi) likelihood of the
offence being repeated; (vii) reasonable apprehension of the
witnesses being influenced; and (viii) danger, of course, of
justice being thwarted by grant of bail".
29. The legal position which emerges from the aforesaid judgments is
that the important factors for consideration while deciding the
applications for grant of bail, the court must take into account various
factors, namely, nature and gravity of accusation; nature of evidence
against the accused; severity of punishment in the event of conviction;
danger of accused fleeing from justice; the danger of accused trying to
influence the witnesses or thwarting the course of justice and the
character and antecedents of the accused etc. And the court will
decide on refusal or grant of bail on cumulative consideration of the
existence or non-existence of aforesaid factors.
30. Coming to the next common submission made on behalf of the
petitioners. Learned counsels for the petitioners have placed strong
reliance upon the judgment of this Court in Court on Its own Motion
Vs. CBI, 2004(1) JCC 308 whereby certain directions were issued to be
followed by subordinate criminal courts, including the following
direction:
"(v) The Court shall on appearance of an accused in non-
bailable offence who has neither been arrested by the
police/Investigating agency during investigation nor produced in
custody as envisaged in Section 170 Cr.P.C. call upon the
accused to move a bail application if the accused does not
move it on his own and release him on bail as the circumstance
of his having not been arrested during investigation or not
being produced in custody is itself sufficient to entitle him to be
released on bail. Reason is simple. If a person has been at large
and free for several years and has not been even arrested
during investigation, to send him to jail by refusing bail
suddenly, merely because chargesheet has been filed is against
the basic principles governing grant or refusal of bail."
31. It is submitted on behalf of the petitioners that admittedly they
were neither arrested nor produced in custody along with charge sheet
as envisaged under Section 170 Cr.P.C. Therefore, in view of the
direction issued vide said judgment, learned Special Judge ought to
have released them on bail.
32. I do not find merit in this contention. No doubt, the
circumstances pointed out in the above direction are vital for deciding
the application for bail to a person accused of a non-bailable offence,
but it is not the only factor for granting bail in case of a non-bailable
offence. It is well settled by various pronouncements of Supreme Court
that while dealing with a bail application, the court must take into
account various factors, namely, nature and gravity of accusation;
nature of evidence against the accused; severity of punishment in the
event of conviction; danger of accused fleeing from justice; the danger
of accused trying to influence the witnesses or thwarting the course of
justice and the character and antecedents of the accused etc. Thus, it
is clear that while deciding a bail application, the court must take into
consideration all important factors and the non-arrest of the accused
during investigation and failure of Investigating Officer to produce him
in custody while filing the charge sheet cannot be the sole determinant
for deciding whether to grant or refuse bail to the petitioner. Of
course, it is an important factor which should weigh in the mind of the
court. Further, the above direction of the coordinate Bench is in
conflict with the mandate of section 437(4) Cr.P.C. which requires that
if the court decides to grant bail to a person in a non-bailable offence,
it has to record the reasons in writing for doing so. Those reasons,
obviously are required to be based upon the cumulative assessment of
the above detailed parameters for grant of bail. Thus, in my view,
above referred direction of this Court cannot be taken as a binding
precedent. Otherwise also, if the above direction of the Coordinate
Bench of this court is to be taken as an absolute rule, it has a potential
to subvert the course of justice and make Section 437 CrPC which
deals with bail to person accused of non-bailable offence redundant. In
such a situation, if the Investigating Officer decides to show favour to a
person accused of non-bailable offence, he would neither arrest the
accused during investigation nor he would produce him in custody as
envisaged under Section 170 CrPC. Does it means that in such a
situation, the court would be helpless to exercise his judicial discretion
conferred upon him under Section 437 CrPC and subjudicate his judicial
powers to the whims and fancies of the Investigating Officer? Answer
to this question is in the negative. The aforesaid directions, if treated
as an absolute rule, has a potential to breed corruption. Therefore, I do
not find any merit in the submission and I am of the view that the bail
applications of the petitioners are to be dealt with on merits in the
background of the facts and circumstances of the case.
33. Above-noted factual matrix detailing the role played by
respective petitioners, prima facie show the complicity of the
petitioners in the conspiracy to obtain wrongful gain to them or their
companies represented by them by abuse of their office and official
position by the public servants, namely, the Minister of
Communications and Information Technology, his Private Secretary and
Secretary(Telecom) in the matter pertaining to issue of UAS Licences
and 2G spectrum by arbitrarily changing the existing policy of first
come first served. Charge sheet also, prima facie disclose that in
furtherance of conspiracy M/s Swan Telecom Pvt. Ltd. in which
petitioner accused Vinod Goenka had substantial financial stakes and
M/s Unitech Group of Companies in which petitioner accused Sanjay
Chandra has substantial stakes, managed to get UAS Licences for their
respective companies which they otherwise could not have got under
the policy of first come first serve and, in the process, they reaped
huge financial gains running into thousands of crores of rupees by
selling the equity of their companies at huge premium. The charge
sheet, prima facie disclose that the petitioners Gautam Doshi, Hari Nair
and Surendra Pipara facilitated the commission of offence by creating a
web of companies with a view to conceal the fact that M/s Swan
Telecom Pvt. Ltd., which was floated with the object to achieve the end
of the company, was ineligible go get UAS Licences on the date of
application i.e. 02.03.2007 as on the said day, it was controlled by M/s
Reliance ADA Group and, as such ineligible for licenses in view of
Clause 8 of the policy guidelines. The charge sheet also, prima facie
disclose that above three accused persons also indulged in
concealment and fabrication of records of board meetings to facilitate
the crime. Thus, the charge sheet disclose complicity of all the
petitioners in the offence complained of which is of extreme gravity
involving thousands of crores of rupees, which itself is sufficient to
deny bail to the petitioners at the initial stage when further
investigation under Section 173(8) Cr.P.C. is under progress and the
trial is still to commence.
34. It is submitted by the petitioners that the allegations against the
petitioners are of civil nature and the offence purported to have been
committed by them cannot be termed as a grave offence. Learned
counsels appearing for the petitioners contended that Section 437(1)
gives an insight as to which offences are of extreme gravity. It is
submitted that the Legislature by restricting the powers of the
Magistrate to grant bail under Section 437 Cr.P.C. to a person accused
of a non-bailable offence with death or life has clearly made a
distinction between the offences of ordinary nature and grave nature.
It is submitted that aforesaid restriction of powers of the Magistrate is a
clear indication that only those offences which are punishable with life
or death fall within the category of grave offences in which the court
can deny bail to a person accused of a non-bailable offence by
deviating from the guiding principle of "bail not jail."
35. I do not agree with above contention. Of course, Section 437(1)
puts a restriction on the power of a Magistrate to release a person on
bail against whom there exists reasonable ground to believe that he
has committed an offence punishable with death or life imprisonment.
This however, does not mean that for the purpose of deciding the bail
applications, only the offence punishable with death or life
imprisonment shall be treated as offences of grave magnitude. To my
mind, quantum of sentence alone cannot be yardstick for measuring
the gravity of offence. Another parameter to measure the gravity of
offence is the impact of the offence on the society. The offences
against body or property generally affect one or few victims, but the
economic offences involving exploitation of public offices have a
potential to impact the society at large. When a loss is caused to the
State exchequer, every citizen suffers because the money could have
been used for the development of the country or for public welfare
measures like food, health, education etc. In the instant case, the
petitioners have been shown to be prima facie involved in criminal
conspiracy resulting in a financial loss to the tune of around ` 30,000/-
Crores and corresponding gains to their companies running into
thousands of crores of rupees. This is an offence of highest magnitude
which not only impacts the society at large but also puts a question
mark on the governance in the country which can adversely affect the
economy of the country. Therefore, in my view, the gravity of the
offence itself is sufficient to deny bail to the petitioners. For my
conclusion, I draw strength from the following observations of Supreme
Court in the matter of CBI, Hyderabad Vs. B. Ramaraju, 2011 Crl.L.
J. 301, while cancelling the bail granted to the accused:
"4. According to the allegations of the appellant, the respondents-
accused are involved in one of the greatest corporate scams of the
commercial world. It has caused a financial storm throughout the
country and the world over. Lakhs of shareholders and others have
been duped and the corporate credibility of the nation has received a
serious setback. We are deliberately refraining from making a
detailed observation regarding the conduct of the respondents-
accused because the trial is still pending and we do not want the trial
to be prejudiced in any manner".
36. It is submitted on behalf of the petitioners that the conduct of the
petitioners during investigation have been cooperative. There is no
allegation that they tried, interfered with the investigation or
influenced the witnesses and they appeared in the court pursuant to
the summons. Therefore, there is no possibility of their fleeing away
from justice or tampering with the judicial process by influencing the
witnesses. Learned counsels submitted that only on the basis of
accusation, which is yet to be established in trial, the petitioners ought
not be detained in custody.
37. At the first blush, arguments of the petitioners appears to be
attractive. However, one cannot ignore the history of this case. From
the record, it is evident that despite of having collected prima facie
evidence of involvement of petitioners in deep rooted conspiracy
involving corrupt practice by the public servants to cause huge
wrongful gains to the favoured companies of the petitioners running
into thousands of crores of rupees, neither of the petitioners were
arrested by the CBI nor they were taken into custody and produced
before the court along with the charge sheet as envisaged under
Section 170 CrPC. This circumstance, in itself, gives an insight into the
influence wielded by the petitioners during investigation. The fact that
the charge sheet against the petitioners have been filed and there is no
allegations that the petitioners tried to influence the witnesses during
investigation, cannot be a guarantee that during trial, the petitioners
would not try to interfere with the process of justice by tampering with
the witnesses. It cannot be ignored that during investigation the
petitioners could not have known the identity of the witnesses
examined during investigation. The situation has changed after the
filing of charge sheet. Petitioners are now aware of the identity of the
witnesses and incriminating statements made by them during
investigation. Therefore, given the magnitude of the offence and the
role played by the petitioners in the scam, there is a reasonable
likelihood of the petitioners tampering with the witnesses, particularly
when employed in the companies controlled by them.
38. Learned counsel for the accused Surendra Pipara has strongly
urged for his release on bail because of his medical condition. The
report of Medical Board of Dr. Ram Manohar Lohia Hospital dated 4th
May, 2011 records that Surendra Pipara is a known case of Diabetes
Mellitus, Coronary artery disease, Hypertension and kidney disease,
presently he is stable and he can be managed in OPD of DDU Hospital.
In view of the aforesaid report, I do not find merit in the plea of
petitioner Surendra Pipara for bail, particularly in view of the gravity of
the accusation against him and a possibility of his tampering with the
witnesses if freed on bail. Jail Superintendent is, however, directed to
ensure that Surendra Pipara is provided proper treatment at DDU
Hospital as per the medical advice.
39. In view of the discussion above, taking into account the gravity of
the accusation against the petitioners a reasonable possibility of their
interfering with the process of justice by tampering with the evidence, I
do not deem it appropriate to release the petitioners on bail at this
stage when the further investigation in the matter is going on and the
trial is yet to begin.
40. Bail applications are, therefore, dismissed.
41. It is clarified that nothing contained in this order shall be treated
as finding on the merits of the case.
(AJIT BHARIHOKE)
JUDGE
MAY 23, 2011
pst/akb
