Delhi High Court

Naresh Kharab vs State on 13 November, 2014

Author: Sunita Gupta

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*    IN THE HIGH COURT OF DELHI AT NEW DELHI
                        Date of Decision: 13th November, 2014
+    BAIL APPLN. 1660/2014
     NARESH KHARAB                                              ..... Petitioner
                     Through:                Ms. Geeta Luthra, Senior Advocate and
                                             Mr. Sanjeev Sahay, Mr. Narendra Goyal
                                             and Mr. Priyesh Mishra, Advocates
                                versus

     STATE                                                       ..... Respondent
                                Through:     Mr. Pramod Kumar Dubey, Special
                                             Public Prosecutor for the State with Mr.
                                             S.K. Jha Investigating Officer and Mr.
                                             Pulkit Misra, Advocate.
+    BAIL APPLN. 1922/2014
     NITIN SINHA @ NITIN SINGH @ NITIN BIHARI             ..... Petitioner
                     Through:  Mr. Sunil K. Mittal and Mr. Vipin K.
                               Mittal, Advocates.
                     versus
     STATE
                                                    ..... Respondent
                     Through:  Mr. Pramod Kumar Dubey, Special
                               Public Prosecutor for the State along
                               with SI SK Jha, PS EOW/Crime Branch

+    BAIL APPLN. 1923/2014

     NITIN SINHA @ NITIN SINGH @ NITIN BIHARI              ..... Petitioner
                    Through:   Mr. Sunil K. Mittal and Mr. Vipin K.
                               Mittal, Advocates.
                    versus
     STATE                                         .....Respondent
                    Through:   Mr. Pramod Kumar Dubey, Special
                               Public Prosecutor for the State along
                               with SI SK Jha, PS EOW/Crime Branch

     CORAM:
     HON'BLE MS. JUSTICE SUNITA GUPTA
                                           JUDGMENT

: SUNITA GUPTA, J.

1. By these bail applications, the petitioners/applicants seek bail in

case FIRNo.152/2011, P.S.Moti Nagar u/s 406 /409/420 /467/468/471

/120B and 34 IPC and Section 3, 4 & 5 of Prize Chits & Money

Circulation Schemes (Banning) Act, 1978. Petitioner - Nitin Sinha

also seeks bail in FIR No.84/2011, Police Station Moti Nagar under

Sections 406/420 of Indian Penal Code.

2. Ms. Geeta Luthra, learned senior counsel for the petitioner

Naresh Kharab submitted that the charge sheet has been submitted on

16th August, 2013. A bare perusal of the charge sheet filed by the

prosecution reflects that the money siphoned by the petitioner herein

is not more than Rs.1,10,21,816/-. There is no allegation of the

prosecution that the aforesaid amount has been transferred to the

account of the petitioner or has been misappropriated by him. The

two directors, namely, Lokeshwar Dev @ Ullas Prabhakar Khare and

Raksha J Urs @ Priyanka Saraswat Dev incorporated and started a

company under the name and style of M/s. Stock Guru India. The

said company was a non-banking financial company. These two main

accused floated various active plans to dupe innocent investors. The

petitioner himself is a victim and his family members are bonafide

investors. He has been duped of his hard earned money. Pursuant

thereto he had filed a complaint under Section 200 Cr. P.C. and sent a

legal notice.

3. The petitioner was arrested on 6th May, 2013. His police

remand was taken till 13th May, 2013, however, police presented him

before the learned Trial Court on 12th May, 2013 with a request that

he be sent to judicial custody. During the remand, the police could

not find any incriminating document or evidence against the

petitioner. In the remand application, prosecution has alleged that the

petitioner has purchased properties at Indore and Haridwar from the

alleged gotten money. From the investigation and charge sheet filed,

it is evident that these lands were purchased much prior to 2009 and

incorporation of the SGI. However, no document was found by the

police to substantiate their allegation. The petitioner has cooperated

with the prosecution in the investigation of the said FIR. Statements

of all the witnesses under Section 161 Cr.P.C., if perused, make

specific allegations against SGI and its two directors, namely,

Lokeshar Dev and Priyanka Saraswat. Against the petitioner it is a

vague, generic and omnibus allegation. On the complaint of Sunil

Kumar, present FIR has been registered. Perusal of the complaint

reflects that the money was paid by Sunil Kumar to the said two

directors. The said directors issued several documents in favour of

Sunil Kumar to falsely assure him that his money is safe and secure

with the SGI. None of the documents like cheques, promissory note,

undertakings, agreements and invoices etc. have been signed or

executed by the petitioner. This fact holds truth for all the complaints

which have been lodged by investors against SGI and the said two

directors. The case of prosecution is also that money has been

siphoned by the said two directors. Money and assets to the tune of

more than Rs.100 crores have already been recovered from the said

two directors, namely, Lokeshwar Dev and Priyanka Saraswat Dev.

4. The prosecution has filed the alleged bank statement of the

petitioner and that of his brother which establishes that the entire

allegations made by the prosecution with respect to money siphoning

are false. Present is a classical example where everyone including the

petitioner has been duped by the said two directors. Petitioner himself

was induced by the said two directors to invest his and his family's

hard earned money with SGI. Petitioner fell prey to the stratagem

adopted by the said two directors. Several people were induced by

the said two directors to not only invest but they in turn brought

several other investors. In fact, the complainant Sunil Kumar himself

was introduced by a person, namely, Vinod who had himself invested

with SGI. Sunil Kumar himself introduced several other people to

invest in SGI. The list of investors which has been filed along with the

charge sheet will reflect that every investor has introduced other

people to invest their money. The guiding greed behind these

investors was that they were going to receive unprecedented return of

20% per month. When the entire criminal conspiracy hatched by the

said two directors came to the knowledge of the petitioner, he lodged

several complaints against the SGI and two directors. In fact, many

investors have lodged complaint against Sunil Kumar wherein it was

alleged that Sunil Kumar was one of the persons who introduced them

to invest money with SGI. Petitioner along with 25 other investors

filed a complaint under Section 200 Cr.P.C. r/w Section 156 (3)

Cr.P.C. for registration of FIR against Sunil Kumar and others

including two directors. In the said complaint, the complainant Sunil

Kumar filed an application under Section 340 Cr.P.C. which was

dismissed being not maintainable. However, the Court held that since

the petitioner is one of the accused in the complaint lodged by Sunil

Kumar, hence no direction was given in the complaint filed by him. It

was further submitted that prosecution has made allegations that the

petitioner has two PAN Cards. No investigation has been done by the

prosecution in this respect. There was no criminal motive behind

taking the second PAN Card. It was inadvertent act of third person

which led to the issuance of the PAN Cards. Moreover, at best, it is

an offence under the Income Tax Act for which the penalty is fine

only. The petitioner did not earn any financial benefit. The

complainant/investors are also responsible for the crime. They

invested money in SGI without due diligence. The petitioner, who

had been supporting the prosecution case throughout by lodging

complaints; by moving to the Court seeking appropriate direction, has

been made an accused in the present case because of faulty

investigation conducted by the police. The petitioner and other

persons did not receive cash or money in the form of demand draft,

pay orders etc. for their alleged commission. The said two directors

had crafted the concept of e-wallet. Under e-wallet scheme, the

money was to be deposited in the e-account allegedly maintained in

the name of these investors because they brought investment but these

e wallets were never encashed and converted into actual money. The

net result is that the said two directors siphoned most of the funds. It

was further submitted that the charge sheet is running into more than

25000 pages with more than 2300 witnesses. The charge has yet not

been framed. Hence, after framing of the charge, the trial is going to

take long time. Almost a year has elapsed since the filing of the

charge sheet. It will take several years to complete the trial. The

petitioner is in custody since 13th May, 2013. The incarceration of the

petitioner in jail is like a pre-conviction punishment with sole

intention to punish the petitioner before actually being convicted. The

petitioner has not tampered with evidence. He has never tried to flee

from trial. He has roots in the society and is living with his family

which constitutes daughter, wife and parents. The petitioner is

suffering from medical problems like enlargement of liver, spinal cord

pain, extremely hyper thyroid and is suffering from psychiatric

disorder and has also been advised conservative treatment of his

medical condition. The jail hospital is not equipped to provide proper

medical care to the applicant.

5. Reliance was placed on Sanjay Chandra v. CBI, AIR 2012 SC

830; H.B. Chaturvedi v. CBI, 2010 (3) JCC 2109; Suresh Kalmadi v.

CBI, 187 (2012) DLT 575 & Nanjappa v. UOI, (2007) 4 SCC 350

for submitting that right to bail is not to be denied merely because of

the sentiments of the community against the accused. Keeping in

view the period of incarceration in jail, his continuous detention

during pre-trial stage is not in the interest of justice. Since the

investigation is already complete, therefore, bail is not to be denied.

6. The submissions made by Sh. Sunil K. Mittal, Advocate for the

petitioner-Nitin Sinha were also substantially the same. It was

submitted that the petitioner himself was one of the investors in the

scheme floated by the two directors and he has nothing to do with the

management of the same. The Investigating Officer has adopted the

policy of pick and chose. Not a single investor introduced by the

petitioner made any complaint against him. Exact role of the

petitioner is not specified by the police and very conveniently the

respondent is using the term "they" in order to involve the petitioner

in the crime. The petitioner was also arrested in FIR No. 156/2008 in

which he has already been ordered to be released on bail vide order

dated 7th October, 2013 passed by learned CMM. The charge sheet is

running into voluminous pages with more than 2100 witnesses and,

therefore, trial is not likely to conclude within a reasonable time.

Trial is at threshold. Even the charge has not been framed. Referring

to the order of the learned Trial Court, it was submitted that the

application was dismissed on the ground that the petitioner has earned

Rs.5 crores which is against the status report submitted by the State

according to which the petitioner has received 1,02,67,189/-. The

figure has been exaggerated in order to prejudice the Court. It was

also alleged that the petitioner is having two PAN Cards but that is

not a criminal offence. The same attracts the provisions of Income

Tax Act. The petitioner is in custody since 30th September, 2013. The

petitioner has roots in society and is not likely to flee. He is a chronic

diabetic patient who has been medically advised to take regulated

insulin injections as his sugar levels shoot up to 400 at times. Further

detention of the petitioner would amount to punishing him without

affording a fair chance to defend himself against the false and

fictitious allegations. As such, he be released on bail.

7. Countering the submissions made by the learned counsels for

the petitioners, Sh. Pramod Kumar Dubey, Special PP for the

respondent/State submitted that accused Nitin Sinha has been

continuously misleading the Court. He was not joining the

investigation. Hence non-bailable warrants were issued against him.

He was arrested on 30th September, 2013 in case FIR No. 152/2011

Police Station Moti Nagar and thereafter in this case on 4th October,

2013. Seeing the past conduct of the applicant and his influence,

there is a great apprehension and reasonable belief that applicant shall

not be available during the course of further proceedings and he shall

flee from justice. It was further submitted that the accused was

actively involved in the scheme of Stock Guru India as a promoter

and agent and was introducing more and more people to invest in the

firm. The complainant-Sunil Kumar and most of the investors in their

statements named accused Nitin Sinha also who introduced them in

the scheme. Prima facie, it is established that accused Nitin was an

active participant in the inducement of investors into Stock Guru India

and he was hand in glove with other accused. He got issued two PAN

Cards by giving two different date of births, one in the name of Nitin

Sinha and other in the name of Nitin Behari on the basis of forged

documents. During the period of police custody remand of accused

Nitin Sinha, incriminating documents and a bunch of papers

pertaining to Stock Guru India, i.e., Registration Certificate (ISO

Certificate), Certificate of Incorporation were recovered at his

instance. It was also found that he was an initial member of Stock

Guru India and has taken SGI ID Nos. 115 to 130 in his name and the

name of his family members. IDs in Stock Guru India started from

serial number 111 and SGI ID Nos. 111 to 114 belonged to accused

Ulhas Prabhakar Khaire @ Lokeshar Dev, Raksha J. Urs @ Priyanka

Saraswat Dev and their daughters. Accused Nitin earned crores of

rupees by inducing general public to invest money in M/s. Stock Guru

India. He got invested Rs.489 crores of innocent investors through

SGI ID 115 to 130 down the line and the accused received

Rs.1,02,67,189/- as commission. On 18th January, 2011, Income Tax

Department conducted raid and Rs.2.93 crores were recovered from

the residence of accused Nitin Sinha. Investigation revealed that there

are 2,05,062 investors all over the country who have invested money

in Stock Guru India and joined as member of Stock Guru India. Total

amount involved in the matter is more than Rs.494 crores. More than

13,500 complaints have been received in Delhi only. As regards the

delay in trial is concerned, it was submitted that the delay is not

attributable to prosecution. One of the co-accused Ulhas Prabhakar

Khaire @ Lokeshar Dev is delaying the trial. Till date even the

scrutiny of the documents is not complete. Moreover, prosecution will

be dropping certain witnesses. It was further submitted that the order

passed in the bail application of Suresh Kalmadi or Sanjay Chanra

are not applicable to the present case inasmuch as those cases pertains

to the Government exchequer and to the policy decisions whereas

present is a case where public at large has been defrauded.

8. Reliance was placed on Sunil Grover v. State, Bail Application

No. 104/2012; Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439.

9. Substantially similar pleas were taken while opposing the bail

application of Naresh Kharab and it was submitted that the accused

was not available for investigation as he deliberately absconded,

ultimately he was arrested. Seeing his past conduct as absconder and

his influence, there is grave apprehension and reasonable belief that

he will not be available during the course of further proceedings and

shall flee from justice. He had stated before the Income Tax

Authorities that he had been working with Stock Guru India as

Relationship Manager and was an agent of the firm. During the raid

of Income Tax Department at his residential premises, Rs.4.88 crore

have been found in cash and the same was seized from him. He got

issued two PAN Cards by providing two different dates of birth, one

in the name of Naresh Kumar Kharab and another in the name of

Naresh Kharab. He used the forged PAN Card No.BGLPK5180R to

open an account with Axis Bank and this amount was used to receive

the money/commission related to the accused company-Stock Guru

India. Rs.1,25,82,348/- have been credited in this account which was

opened on the basis of fake PAN Card. Seven video tapes were

recovered at his instance from his residential premise captioned SGI

Conference which clearly reveals his involvement in the scam. It was

further revealed that SGI ID 354 actually belonged to Naresh Kharab

although it was in the name of his brother. Through this ID, there are

95,714 investors. The total money invested under this ID was about

248.35 crores. Accused earned crores of rupees as commission. It is

an economic offence involving the huge loss of public funds and has

to be viewed seriously and, therefore, the petitioner is not entitled to

the indulgence of the Court.

10. Rebutting the submissions of learned Special Public Prosecutor

for the State, it was submitted by the learned counsel for the

petitioners that the case of Sunil Grover (supra) is not applicable in

the instant case, inasmuch as, he was the main accused. Moreover,

interim bail was granted to him to settle the matter, however, he

misused the concession of bail and did not take any step for settling

the matter. As such, his bail application was dismissed whereas the

petitioners themselves are victims and not the main accused.

Moreover, there are no allegations of coercing or threatening any

witness. Y.S. Jagan Mohan Reddy (supra) is also not applicable,

inasmuch as, in that case bail application was dismissed as the charge

sheet was yet not submitted and the investigation was still in progress.

11. I have heard learned counsel for parties and perused the record.

12. Before proceeding to consider the rival submissions of the

learned counsel for the parties, it will be relevant to extract the

proposition of law laid down by Hon'ble Supreme Court in Sanjay

Chandra(supra) wherein it was held:-

"14. In bail applications, generally, it has been laid down from the earliest times that the object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Deprivation of liberty must be considered a punishment, unless it can be required to ensure that an accused person will stand his trial when called upon. The courts owe more than verbal respect to the principle that punishment begins after conviction, and that every man is deemed to be innocent until duly tried and duly found guilty. From the earliest times, it was appreciated that detention in custody pending completion of trial could be a cause of great hardship. From time to time, necessity demands that some un-convicted persons should be held in custody pending trial to secure their attendance at the trial but in such cases, 'necessity' is the operative test. In this country, it would be quite contrary to the concept of personal liberty enshrined in the Constitution that any person should be punished in respect of any matter, upon which, he has not been convicted or that in any circumstances, he should be deprived of his liberty upon only the belief that he will tamper with the witnesses if left at liberty, save in the most extraordinary circumstances. Apart from the question of prevention being the object of a refusal of bail, one must not lose sight of the fact that any imprisonment before conviction has a substantial punitive content and it would be improper for any Court to refuse bail as a mark of disapproval of former conduct whether the accused has been convicted

for it or not or to refuse bail to an un-convicted person for the purpose of giving him a taste of imprisonment as a lesson.

15. In the instant case, as we have already noticed that the "pointing finger of accusation" against the Appellants is 'the seriousness of the charge'. The offences alleged are economic offences which has resulted in loss to the State exchequer. Though, they contend that there is possibility of the Appellants tampering witnesses, they have not placed any material in support of the allegation. In our view, seriousness of the charge is, no doubt, one of the relevant considerations while considering bail applications but that is not the only test or the factor: The other factor that also requires to be taken note of is the punishment that could be imposed after trial and conviction, both under the Indian Penal Code and Prevention of Corruption Act. Otherwise, if the former is the only test, we would not be balancing the Constitutional Rights but rather "recalibration of the scales of justice." The provisions of Cr.P.C. confer discretionary jurisdiction on Criminal Courts to grant bail to accused pending trial or in appeal against convictions, since the jurisdiction is discretionary, it has to be exercised with great care and caution by balancing valuable right of liberty of an individual and the interest of the society in general. In our view, the reasoning adopted by the learned District Judge, which is affirmed by the High Court, in our opinion, a denial of the whole basis of our system of law and normal rule of bail system. It transcends respect for the requirement that a man shall be considered innocent until he is found guilty. If such power is recognized, then it may lead to chaotic situation and would jeopardize the personal liberty of an individual. This Court, in Kalyan Chandra Sarkar v. Rajesh Ranjan, (2005) 2 SCC 42, observed that "under the criminal laws of this country, a person accused of offences which are non-bailable, is liable to be detained in custody during the pendency of trial unless he is enlarged on bail in accordance with law. Such detention cannot be questioned as being violative of Article 21 of the Constitution, since the same is authorized by law. But even persons accused of non- bailable offences are entitled to bail if the Court concerned comes to the conclusion that the prosecution has failed to establish a prima facie case against him and/or if the Court is satisfied by reasons to be recorded that in spite of the existence of prima facie case, there is need to release such accused on bail, where fact situations require it to do so.

16. This Court, time and again, has stated that bail is the rule and committal to jail an exception. It is also observed that refusal of bail is a restriction on the personal liberty of the individual guaranteed under Article 21 of the Constitution. In the case of State of Rajasthan v. Balchand, (1977) 4 SCC 308, this Court opined:

" 2. The basic rule may perhaps be tersely put as bail, not jail, 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, by the Petitioner who seeks enlargement on bail from the Court. We do not intend to be exhaustive but only illustrative.

3. It is true that the gravity of the offence involved is likely to induce the Petitioner to avoid the course of justice and must weigh with us when considering the question of jail. So also the heinousness of the crime. Even so, the record of the Petitioner in this case is that, while he has been on bail throughout in the trial court and he was released after the judgment of the High Court, there is nothing to suggest that he has abused the trust placed in him by the court; his social circumstances also are not so unfavourable in the sense of his being a desperate character or unsocial element who is likely to betray the confidence that the court may place in him to turn up to take justice at the hands of the court. He is stated to be a young man of 27 years with a family to maintain. The circumstances and the social milieu do not militate against the Petitioner being granted bail at this stage. At the same time any possibility of the absconsion or evasion or other abuse can be taken care of by a direction that the Petitioner will report himself before the police station at Baren once every fortnight."

13. Thus the requirements that have to be balanced at this stage are

the seriousness of the accusations, whether the witnesses are likely to

be influenced by the petitioners being enlarged on bail during trial and

whether the accused are likely to flee from justice if released on bail.

14. The thrust of the arguments of learned Special Public

Prosecutor for the State opposing the bail application is that the

offence committed by the petitioner is the result of deep rooted

conspiracy involving huge loss of public funds and affecting the

public at large. Sunil Grover (supra) relied upon by the learned

Special Public Prosecutor is, however, distinguishable as in that case

the petitioner floated advertisement and invited the offers from the

members of the public to invest money in their scheme by promising

them lucrative returns at regular intervals. He was able to gain their

confidence and cheated them of their hard earned money which

ranged from Rs.1 lac to Rs. 10 lacs. Moreover, he obtained interim

bail from the Court by saying that he had the intention of selling his

property erected from ill gotten money and that he would deposit the

sale proceeds with the Court. However, that was only a ploy to come

out on bail. He did not take any step to sell the property or deposit the

sale proceeds with the Court. As such, keeping in view the gravity of

the offence coupled with his conduct before the Court, the application

was dismissed. In the instant case, as per the case of prosecution

itself, the scheme of Stock Guru India was floated by its two directors,

namely, Lokeshwar Dev @ Ullas Prabhakar Khare and Raksha J Urs

@ Priyanka Saraswat Dev. As per the scheme, 20% return per month

was to be given to the investors up to 6 months on the principal

amount and the principal amount was to be refunded in 7 months by

generation of money from share market. It is the case of the petitioner

that like the complainant and other investors, they had also invested

their money and did not receive any financial gain. Likewise, Y.S.

Jagan Mohan Reddy (supra) is also distinguishable, inasmuch as, in

that case, the application for bail was moved when the investigation

was still in progress. However, things are different in the instant case.

The investigation is already complete. Charge sheet has already been

filed. As per the charge sheet, the statement of witnesses runs to

several hundred pages and the documents on which the prosecution

relies are voluminous. The case is at its threshold as even scrutiny of

the documents is yet not completed. The trial may take considerable

time. In Sanjay Chandra (supra), this was one of the factors which

was considered by their Lordships while granting bail by observing

that it is not in the interest of justice that accused should be in jail for

any indefinite period. It was also observed that no doubt, the offence

alleged against the appellant is a serious one in terms of alleged huge

loss to the State Exchequer, that, by itself, should not deter from

enlarging the appellants on bail when there is no serious contention

that the accused, if released on bail, would interfere with the trial or

tamper with evidence. There is no good reason to detain the accused

in custody, that too, after the completion of the investigation and

filing of the charge sheet.

16. In the instant case, the petitioners are in custody for over more

than 1 year. There is no evidence of the petitioners threatening the

witnesses or interfering with the evidence during investigation. As

regards the petitioners having two PAN Cards, it is alleged that it

attracts the provisions of Income Tax Act and the Income Tax

Authorities have not initiated any proceedings against the petitioners

regarding two PAN Cards. The question whether the PAN Cards

were obtained deliberately or it was by inadvertence is still required to

be gone into during the course of trial.

17. Having regard to the entire facts and circumstances of the case,

the bail applications are allowed and the petitioners are ordered to be

released on bail on furnishing personal bond in the sum of

Rs.5,00,000/- each with two sureties in the like amount to the

satisfaction of the learned Trial Court, subject to the condition that:-

a) The appellants shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him to disclose such facts to the Court or to any other authority.

b) They will not dispute their identity as the accused in the case.

c) They shall surrender their passport, if any (if not already surrendered), and in case, they are not a holder of the same, they shall swear to an affidavit. If they have already surrendered, that fact should also be supported by an affidavit.

d) They shall not leave the country without the prior permission of the Trial Court.

e) Liberty is reserved to the State to make an appropriate application for modification/recalling the order passed, if for any reason, the appellants violate any of the conditions imposed by this court.