Jharkhand High Court
Gyan Prakash Sarawgi vs The Directorate Of Enforcement ... on 21 November, 2022
1 B.A.No.8470 of 2022
IN THE HIGH COURT OF JHARKHAND, RANCHI
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B.A. No. 8470 of 2022
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Gyan Prakash Sarawgi, aged about 55 years son of late Tej Pal Sarawgi,
resident of Sky Villa Apartment, Kanke Road, Ranchi, P.S. Gonda, P.O.
Ranchi University, District-Ranchi-834008 (Jharkhand)..... Petitioner
-- Versus --
The Directorate of Enforcement (Government of India), represented
through its Assistant Director, Ranchi Zonal Office, having its office at Plot
No.1502/B, Airport Road, Hinoo, P.O.Hinoo, P.S.Doranda, District Ranchi,
PIN 834002 (Jharkhand) ...... Opposite Party
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CORAM: HON'BLE MR. JUSTICE SANJAY KUMAR DWIVEDI
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For the Petitioner :- Mr. Sumeet Gadodia, Advocate
Mr. Ritesh Gupta, Advocate
Mr. Aditya Kumar, Advocate
For the E.D. :- Mr. A.K.Das, Advocate
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8/21.11.2022 Heard Mr. Sumeet Gadodia, the learned counsel appearing
on behalf of the petitioner and Mr. A.K.Das, the learned counsel
appearing on behalf of the respondent-Enforcement Directorate (in short,
„E.D.‟).
The petitioner is seeking regular bail in connection with
E.C.I.R. Case No.01 of 2022 for the alleged offence under section 3 read
with section 70 of the Prevention of Money Laundering Act, 2002
(hereinafter referred to as „PMLA‟, for short) and punishable under section
4 of the PMLA, and the case is pending before the learned Special Judge,
C.B.I.-cum-Special Judge under the PMLA, at Ranchi.
The C.B.I. has registered the case alleging therein that :-
(i) It has been stated that CBI, Economic Offence Wing, Ranchi
lodged following three F.I.Rs, namely:-
(a) FIR No.RC0932018S0007 dated 16.07.2018 u/s 120-B
r/w 420, 467 and 471 of the IPC for committing fraud
amounting to Rs.10.37 crores with the Bank of India
against Amit Sarawgi, M/s Sarawgi Builders and
promoters Pvt. Ltd., Swati Sarawgi, M/s Shriram
Comtrade Pvt. Ltd. and unknown others through their
company M/s Sunbeam Dealers Pvt. Ltd.
(b) FIR No.RC0932018S0008 dated 20.08.2018 u/s 120-B
r/w 420, 467 and 471 of the IPC for committing fraud
amounting to Rs.8.03 crores with the Bank of India
against Vikash Khetawat, M/s Sarawgi Builders and
Promoters Pvt. Ltd., Swati Sarawgi, M/s Shriram
Comtrade Pvt. Ltd. and others through their firm M/s
Global Traders.
(c) FIR No.RC0932019S0001 dated 10.01.2019 u/s 120-B
r/w 420, 467, 468 and 471 of the IPC, against M/s Badri
Kedar Udyog Pvt.Ltd., Amit Sarawgi, Swati Sarawgi, M/s
Sarawgi Builders and Promoters Pvt. Ltd. and unknown
others for committing fraud amounting to Rs.12.84
crores with the Bank of India through their company
M/s Shree Badri Kedar Udyog Pvt. Ltd.
(ii) It has been further alleged that the amounts of fraud
alleged in the aforesaid three FIRs amounted to Rs.31.24
crores, which were committed with the Bank of India, and
in respect of all the aforesaid three FIRs, C.B.I filed its
charge sheets bearing Charge Sheet Numbers, as under :-
(a) Charge sheet No.20/2021 dated 16.07.2018 in FIR
No.RC0932018S0007 dated 30.06.2021;
(b) Charge Sheet No.24/2021 dated 30.09.2021 in FIR
No.RC0932018S0008 dated 20.08.2018 and
(c) Charge Sheet No.22/2021 dated 31.8.2021 in FIR
No.RC0932019S0001 dated 10.01.2019
(iii) Since offences u/s 120-B read with sections 420, 467, 471
of the Indian Penal Code, 1860, for which CBI registered
FIRs were scheduled offences under the PMLA, 2002,
Enforcement Directorate initiated inquiries against the
accused persons and their associates after recording brief
facts of scheduled offences in ECIR/RNSZO/02/2019 dated
06.02.2019
(iv) It has been further alleged that during the course of the
investigation under the PMLA 2002, it revealed that
petitioner along with Amit Sarawgi with the help of their
associates, namely, Vikash Khetawat, Abhishek Agarwal and
others, not only defrauded Bank of India but defrauded
other Banks too and the quantum of total runs over
Rs.77.36 crores,
(v) It has been alleged that accused persons formed five
companies and cheated Bank of India and United Bank of
India (now merged with Punjab National Bank) and
investigation reveals that different third-party guarantors
were given to the banks against the loans, and different
properties both in movable as well as immovable form,
were given as mortgages or collateral securities to the
Banks against the loans, and, loans were sanctioned in the
form of cash credit loans and/or term loans.
(vi) It has been further alleged that the petitioner, along with
one Amit Sarawgi, controlled the operations and
management of the companies in whose name loans were
availed.
(vii) It has been further alleged that investigation reveals that
once the loans were sanctioned to the companies, the
petitioner along with Amit Sarawgi used to transfer them to
various companies under their control and management,
and these Bank funds were placed into several accounts
which were finally pooled into the accounts of M/s Sarawgi
Builders and Promoters.
(viii) It has been further alleged that funds of the Banks, which
were obtained for trading in textiles and garments,
construction items and for other purposes, were finally
integrated into the accounts of M/s Sarawgi Builders and
promoters Pvt. Ltd. which was engaged in Real Estate
business, and funds were diverted and transferred to the
said company.
(ix) On the strength of the above, complaint under section 45
read with section 44 of the PMLA 2002 for commission of
offences defined under section 3 of the PMLA 2002 read
with section 70 and punishable under section 4 of the PMLA
was filed, being ECIR Case No.01/2022, by the Opposite
Party. Said complaint was filed against following accused
persons, namely-
(i) Gyan Prakash Sarawgi (petitioner)
(ii) Amit Sarawgi, son of Suresh Kumar Sarawgi
(iii) Abhishek Agarwal, son of Ramesh Agarwal,
(iv) Anish Agarwal, son of late Dhanranj Agarwal
(v) Sarawgi Builder and Promoter Pvt. Ltd., represented
through the petitioner-Gyan Prakash Sarawgi
(Director)
(vi) Sunbeam Dealers Pvt. Ltd., represented through Amit
Sarawgi
(vii) Sriram Comtrade Pvt. Ltd., represented through Gyan
Prakash Sarawgi (petitioner)
(viii) M/s Global Traders (proprietorship firm), represented
through Gyan Prakash Sarawgi (petitioner);
(ix) Badri Kedar Udyog Pvt. Ltd., represented through
Amit Sarawgi, and
(x) M/s Dwarikadhish Udyog Pvt. Ltd., represented
through Gyan Prakash Sarawgi (petitioner).
Subsequently, the ECIR Case on the basis of the said CBI case was
registered by the E.D. and the complaint petition was filed in
which the cognizance has been taken under section 3 read with 70
of PMLA, 2002, and punishable under section 4 of the Act.
Mr. Gadodia, the learned counsel appearing on behalf
of the petitioner submits that three cases have been registered by
the C.B.I. in which charge sheet has been submitted and
allegation is made that 31.24 crores of the Bank amount are the
proceeds of crime in terms of the section 2(1)(u) of the Act. He
submits that the E.D. has registered ECIR Case on 06.02.2019 and
the petitioner was taken into custody on 29.03.2022. The
petitioner was produced before the Special Judge, PMLA seeking
remand of the petitioner on 30.03.2022 for 15 days and he was
remanded by the court for 7 days. He submits that thereafter no
remand was sought by the E.D. He submits that under section 15
of the Act before the arrest the statement of the petitioner was
taken by the E.D. and subsequently again the statement has been
taken and according to him, the petitioner has cooperated in the
investigation and other accused persons are not taken into
custody. He further submits that the petitioner by way of valid
security, collateral documents have been able to obtain the loan
from Bank of India and United Bank of India which has been
merged with the Punjab National Bank. He further submits that
the petitioner is Director of five of the companies, namely,
M/s Dwarikadhish Udyog Pvt. Ltd., Sriram Comtrade Pvt. Ltd.,
represented through Gyan Prakash Sarawgi (petitioner), M/s
Global Traders (proprietorship firm), Badri Kedar Udyog Pvt. Ltd.
and Sunbeam Dealers Pvt. Ltd., represented through Amit
Sarawgi. He further submits that the C.B.I. registered the case
under section 420, 467, 471 of the IPC. He elaborated his
argument by way of submitting that the ingredients of section 420
IPC is not made out as from the very beginning the intention is not
there as the loan has been obtained after providing proper
security and collateral purposes. According to him, the petitioner
was returning the amount with interest and was paying
the E.M.I with interest and due to certain exigency he has not
been able to pay the same and the case has been registered and
the E.D. has taken over the case. He further submits that in the
case in hand, Prevention of Corruption Act is not alleged as there
is no FIR by the C.B.I under the P.C. Act and bank officials have
also not been made accused. He submits that the Bank has not
alleged against the petitioner. However, for recovery, the bank has
already initiated proceeding before the Debts Recovery Tribunal
under the Securitization, Reconstruction of Financial Assets and
Enforcement of Securities Interest Act, 2002. He further submits
that the allegation with regard to diversion of the loan amount to
another company and that could not amount mere
misappropriation. He further submits that only the bank loan
amounts have been utilized. Thus, there is no involvement of any
tainted money and at best it is the case of fund diversion by the
petitioner. He further submits that the rigors of section 45 of the
Act is not attracted so far as this petitioner is concerned as he has
cooperated in the investigation. He further submits that this Court
while considering the bail application in another case has dealt
elaborately about the section 45 of the Act as well as considering
the other judgments have been pleased to grant bail on certain
terms and conditions. He submits that in that case, the case of "P.
Chidambaram Versus Directorate of Enforcement", reported in
(2020) 13 SCC 791, was taken into consideration. He further
submits that the Hon‟ble Supreme Court recently in the case of
„Siddharth v.State of U.P. & Another‟ reported in (2022)1 SCC 676
has said that if the accused has cooperated in the investigation,
there is no need of taking into custody at the time of filing of the
charge sheet. Further he put much emphasis on custody period of
the petitioner and submits that the petitioner is in custody since
last about 8 months with effect from 29.03.2022. On these
grounds, he submits that the petitioner may kindly be enlarged on
regular bail as the petitioner is not having any flight risk.
Per contra, Mr. A.K.Das, the learned counsel
appearing on behalf of the respondent Enforcement Directorate-
E.D., submits that the petitioner is the main accused and he is the
Director of five companies. By way of inviting attention of the
Court to the complaint at page 36 and 37, he submits that the
loan has been taken against the name of Vikash Khetawat, Amit
Sarawgi and Abhishek Agarwal and others who were the employee
or the close relative of this petitioner which suggest that the
petitioner was having intention from very beginning of cheating.
He submits that in that view of the matter the contention of the
petitioner of not having intention of cheating from the very
beginning is fit to be rejected. He further submits that the loan
has been taken for other purposes like, doing business of textiles
and other trading business, however, the said amount of loan has
been diverted and utilized in the company of the petitioner which
is engaged in real estate business. He further submits that rigors
of section 45 of the said Act is there and it has been held by the
Hon‟ble Supreme Court in the case of „Vijay Madanlal Choudhary &
Ors. Versus Union of India & Ors.‟, reported in 2022 SCC Online SC
929, that while considering the bail in the economic offences, the
rigors of section 45 of the said Act is required to be considered by
the Court which is a heinous crime. He placed reliance on
paragraph nos.401, 402, 410 and 419 of the said judgment which
are quoted hereinbelow:
"401. We are in agreement with the observation
made by the Court in Ranjitsing Brahmajeetsing Sharma .
The Court while dealing with the application for grant of
bail need not delve deep into the merits of the case and
only a view of the Court based on available material on
record is required. The Court will not weigh the evidence to
find the guilt of the accused which is, of course, the work of
Trial Court. The Court is only required to place its view
based on probability on the basis of reasonable material
collected during investigation and the said view will not be
taken into consideration by the Trial Court in recording its
finding of the guilt or acquittal during trial which is based
on the evidence adduced during the trial. As explained by
this Court in Nimmagadda Prasad the words used in
Section 45 of the 2002 Act are "reasonable grounds for
believing" which means the Court has to see only if there is
a genuine case against the accused and the prosecution is
not required to prove the charge beyond reasonable doubt.
402. Sub-section (6) of Section 212 of the Companies
Act imposes similar twin conditions, as envisaged under
Section 45 of the 2002 Act on the grant of bail, when a
person is accused of offence under Section 447 of the
Companies Act which punishes fraud, with punishment of
imprisonment not less than six months and extending up
to 10 years, with fine not less than the amount involved in
the fraud, and extending up to 3 times the fraud. The
Court in Nittin Johari , while justifying the stringent view
towards grant of bail with respect to economic offences
held that-
"24. At this juncture, it must be noted that even as
per Section 212(7) of the Companies Act, the limitation
under Section 212(6) with respect to grant of bail is in
addition to those already provided in the CrPC. Thus, it is
necessary to advert to the principles governing the grant
of bail under Section 439 of the CrPC. Specifically, heed
must be paid to the stringent view taken by this Court
towards grant of bail with respect of economic offences.
In this regard, it is pertinent to refer to the following
observations of this Court in Y.S. Jagan Mohan Reddy :
(SCC p.449, paras 34-35)
"34. Economic offences constitute a class apart and
need to be visited with a different approach in the matter
of bail. The economic offences having deep-rooted
conspiracies and involving huge loss of public funds need
to be viewed seriously and considered as grave offences
affecting the economy of the country as a whole and
thereby posing serious threat to the financial health of
the country.
35. While granting bail, the court has to keep in mind
the nature of accusations, the nature of evidence in
support thereof, the severity of the punishment which
conviction will entail, the character of the accused,
circumstances which are peculiar to the accused,
reasonable possibility of securing the presence of the
accused at the trial, reasonable apprehension of the
witnesses being tampered with, the larger interests of
the public/State and other similar considerations."
410. Therefore, as noted above, investigation in an
economic offence, more so in case of money-laundering,
requires a systematic approach. Further, it can never be the
intention of the Parliament to exclude the operation of Section
45 of 2002 Act in the case of anticipatory bail, otherwise, it will
create an unnecessary dichotomy between bail and
anticipatory bail which not only will be irrational but also
discriminatory and arbitrary. Thus, it is totally misconceived
that the rigors of Section 45 of the 2002 Act will not apply in
the case of anticipatory bail.
419. Section 436A of the 1973 Code, is a wholesome
beneficial provision, which is for effectuating the right of
speedy trial guaranteed by Article 21 of the Constitution and
which merely specifies the outer limits within which the trial is
expected to be concluded, failing which, the accused ought not
to be detained further. Indeed, Section 436A of the 1973 Code
also contemplates that the relief under this provision cannot
be granted mechanically. It is still within the discretion of the
Court, unlike the default bail under Section 167 of the 1973
Code. Under Section 436A of the 1973 Code, however, the
Court is required to consider the relief on case-to-case basis. As
the proviso therein itself recognises that, in a given case, the
detention can be continued by the Court even longer than one-
half of the period, for which, reasons are to be recorded by it in
writing and also by imposing such terms and conditions so as
to ensure that after release, the accused makes himself/herself
available for expeditious completion of the trial."
He further submits that so far as the case of one of
the petitioner in which bail has been granted, that was on the
facts and circumstances of that case. In that case, the amount
was only about rupees Fifty lacs whereas in the case in hand the
amount is to the tune as against Rs.77 Crores. He submits that in
view of rigors of section 45 of the said Act, the petitioner does not
deserve bail at this stage.
In view of the above facts and submission of the
learned counsels appearing for the parties, the Court has gone
through the materials on record and finds that admittedly the
petitioner is Director of five companies namely, M/s Dwarikadhish
Udyog Pvt. Ltd., Sriram Comtrade Pvt. Ltd., represented through
Gyan Prakash Sarawgi (petitioner), M/s Global Traders
(proprietorship firm), Badri Kedar Udyog Pvt. Ltd. and Sunbeam
Dealers Pvt. Ltd., represented through Amit Sarawgi and the C.B.I.
has registered the case and subsequently the E.D. has come into
the picture and registered the ECIR complaint against the
petitioner and others. In the investigation it has come that the
petitioner has taken loan in the name of Vikash Khetawat, Amit
Sarawgi and Abhishek Agarwal and others. It is strange that when
the petitioner was having the company why the loan in question
was not taken in the name of the said company whereas the
private persons have been involved who are alleged to be the
employee and close relatives of the petitioner. However, this fact
has been disputed by the learned counsel appearing on behalf of
the petitioner and has submitted that the loan in question was
taken in the name of the company itself. However, looking into
page 42 of the complaint, it transpires that the petitioner is the
Director of 2 companies and 3 close relative and staff are the
Directors in whose name the loan has been taken. There is no
doubt as has been discussed by the Hon‟ble Supreme Court in the
case of "P.Chidambaram Versus Directorate of Enforcement"
(supra), that even in economic offences the bail is a rule, however,
the Court before granting the bail is required to come to the
definite conditions and look into the graveness of the nature of the
crime. Section 45 of the Act speaks as under:
"45. Offences to be cognizable and non-
bailable.--(1) [Notwithstanding anything contained in the
Code of Criminal Procedure, 1973 (2 of 1974), no person
accused of an offence [under this Act] shall be released
on bail or on his own bond unless--]
(i) the Public Prosecutor has been given an opportunity
to oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application,
the court is satisfied that there are reasonable
grounds for believing that he is not guilty of such
offence and that he is not likely to commit any
offence while on bail:
Provided that a person, who, is under the age of
sixteen years, or is a woman or is sick or infirm [or is
accused either on his own or along with other co-
accused of money-laundering a sum of less than one
crore rupees], may be released on bail, if the Special
Court so directs:
Provided further that the Special Court shall not take
cognizance of any offence punishable under Section 4
except upon a complaint in writing made by--
(i) the Director; or
(ii) any officer of the Central Government or a State
Government authorized in writing in this behalf by the
Central Government by a general or special order made in
this behalf by that Government.
[(1-A) Notwithstanding anything contained in the Code
of Criminal Procedure, 1973 (2 of 1974), or any other
provision of this Act, no police officer shall investigate into
an offence under this Act unless specifically authorized, by
the Central Government by a general or special order, and,
subject to such conditions as may be prescribed.]
(2) The limitation on granting of bail specified in [* * *]
sub-section (1) is in addition to the limitations under the
Code of Criminal Procedure, 1973 (2 of 1974) or any other
law for the time being in force on granting of bail.
[Explanation.--For the removal of doubts, it is clarified
that the expression "Offences to be cognizable and non-
bailable" shall mean and shall be deemed to have always
meant that all offences under this Act shall be cognizable
offences and non-bailable offences notwithstanding
anything to the contrary contained in the Code of Criminal
Procedure, 1973 (2 of 1974), and accordingly the officers
authorized under this Act are empowered to arrest an
accused without warrant, subject to the fulfillment of
conditions under section 19 and subject to the conditions
enshrined under this section.]"
Looking into section 45 of the said Act, two
conditions are required to be complied while considering the bail
of the accused under the said Act. Admittedly the petitioner is not
under the age of sixteen years or is a woman or is sick or infirm
and the proviso thereof speaks that if the money is below
Rs.One crore the rigor can be relaxed. In the case in hand, there
is allegation of Rs.77 crores of diversion of the loan amount. In the
case of "Rohit Tandon v. Directorate of Enforcement", reported in
(2018) 11 SCC 46, it is said that economic offence is said to be
white collar crime/ the economic offenders are having deep-rooted
conspiracies and involving huge loss of public funds needs to be
viewed seriously and considered as grave offences affecting the
economy of the country as a whole. It is a white collar crime
which is done in a well-planned manner and they are grievous in
nature and against the society.
In view of the above facts and reasons, the Court is
not inclined to grant regular bail to the petitioner, and accordingly,
the prayer for bail is rejected and B.A. No.8470 of 2022 is
dismissed.
( Sanjay Kumar Dwivedi, J.)
SI/;
