Lakshman Srinivasan vs Republic Of India (C.B.I.)
2023 Latest Caselaw 6560 Ori

     IN THE HIGH COURT OF ORISSA AT CUTTACK

               BLAPL No.2509 of 2023
  (In the matter of applications under Section 439 of the
  Code of Criminal Procedure).


  Lakshman Srinivasan                        ....    Petitioner

                        -versus-
  Republic of India (C.B.I.)                 ... Opposite Party

  For Petitioner                 :   Mr.M.Kanungo,Sr.Advocate
  For Opposite Party             :   Mr. S.Nayak, Advocate
                                     (C.B.I.)

       CORAM:
                         JUSTICE G. SATAPATHY

                  DATE OF ARGUMENT: 10.05.2023
                  DATE OF JUDGMENT: 19.05.2023

G. Satapathy, J.

1. This is an application U/S. 439 of Cr.P.C. by

the Petitioner for grant of bail in connection with FIR

No. RC. 30/S/2014-Kol. corresponding to T.R. Case

No. 03 of 2023 pending in the Court of learned

Special Judge (CBI) Court No.I-cum-Additional

Sessions Judge, Bhubaneswar for commission of

offence punishable U/Ss. 409/411/414/420/471/120-

B/34 of IPC read with Sections 4, 5 & 6 of the Prize

Chits and Money Circulation Scheme (Banning) Act,

1978 (in short, "the Act").

2. The allegations against the petitioner arise

out of an FIR lodged by one Ashok Kumar Panda (ASI

of Police) in Baliapal FIR No. 82 dated 14.05.2013 for

commission of offence punishable U/Ss.420/120-B/34

of IPC read with Sections 4, 5 & 6 of the Act stating

therein that one company namely, Infinity Realcon

Limited (in short, 'IRL') is not being listed with

Reserve Bank of India as a Non-Banking Financial

Company having its registered office at 176, A.J.C.

Road, 4th Floor Kolkata was engaged in collecting

public deposits throughout Orissa by accepting fixed

deposits and other deposits in the shape of RD

scheme (APS) by alluring depositors with promise of

high rate of interest and the company was run by

Board of Directors. Mr.Pranab Mukherjee as CMD,

Mrs. Sarbari Mukherjee, Mr.Prabir Mukherjee and

Mr.Soumen Mallick as Directors and Mr.Ganesh Kar

Branch Manager of Baliapal Branch and the company

was giving 5.3% to 15.80% of the deposit as a

commission to its agents which was economically not

feasible and it was paying to the old depositors from

the money collected from the new depositors and

thereby, cheating the general public and the Board of

Directors of the Company were actively involved in

such cheating. On the basis of this FIR, the

investigation ensued, but subsequently in obedience

to the direction of the Apex Court passed in Writ

Petition (Civil) No. 401 of 2013 and Writ Petition

(Civil) No. 413 of 2013, C.B.I. took up the case by

registering it as RC No. 30/S/2014-Kol. Accordingly,

on 31.12.2016, CBI filed first charge sheet against

Pranab Mukherjee, CMD and Prabir Kumar Mukherjee

and Soumen Mallick, both Directors and the accused

company namely, M/s. IRL for offence U/Ss. 120-B

read with 409/420 of IPC and Sections 4, 5 & 6 of the

Act, but kept the investigation open U/s. 173(8) of

Cr.P.C. considering the larger criminal conspiracy and

monetary trail of regulatory authorities and others. In

the course of investigation, it was also alleged that

accused company M/s. IRL raised funds from the

public under FD, RD, MIS etc. in the garb of secured

debentures, preference shares and towards product

advance and it was found from Form-2 (Return of

Allotment) filed by the accused company showing

issue of preference shares of Rs.19,81,55,380/- and

number of persons/allottee to be 25,326 which is

above 49, but as per Section 67(3) of Companies Act,

1956 since offer was to more than 49 persons, the

provision of public issue would have applied and

thereby, the company was alleged for illegal money

collection business. Since there was public outcry

with respect to illegal activities of chit fund

companies, the accused company by end of year

2012 tried to change its face and got two Multi State

Credit Co-operative Societies formed in the name of

M/S. Golden Multi State Credit Co-operative Society

(in short, M/S. Golden Society) and M/S. Pride Multi

State Credit Co-operative Society (in short, M/S.

Pride Society) with the help of highly qualified

professionals such as petitioner and another and it

was found in investigation that the petitioner was the

founder Chairman of M/S. Golden Society which was

registered with Central Registrar of Co-operative

Societies and got the permission to operate in four

states namely, Assam, Bihar, Jharkhand and West

Bengal and initially 213 persons were shown to be

the members of the society and the petitioner also

associated his family members in the affairs of the

society. The petitioner also handed over the

management to the CMD and others of M/S. IRL on

papers by electing them as new members and

Directors of the society and subsequently, the CMD

M/s. IRL increased the area of operation from four to

twelve states. Since M/s. IRL could not do any

business in the name of M/s. Golden Society, it again

formed a new society in the name of M/s. Pride

Society through the petitioner and got permission to

operate in sixteen states throughout the country

including the State of Orissa and accordingly, the

agreed amount of Rs.4.15 crores was paid to the

petitioner and his companies in later stage in

between September, 2012 to July, 2013, out of

which, the petitioner received Rs.3 crores in his

personal account and M/s. Pride Society collected

near about 8.74 crores approximately from 40

branches of different States. Finding the involvement

of the petitioner in this way, the CBI arrested the

petitioner on 26.09.2022 and later on produced

before the Court. Accordingly, a supplementary

charge sheet was filed against the petitioner for

offence U/Ss. 411/414/471/120-B read with Section

420/409 of IPC and 4, 5 & 6 of the Act. The

petitioner, however, has unsuccessfully moved an

application for bail before the learned Special Judge,

C.B.I., Bhubaneswar on 20.02.2023.

3. In the course of haring of bail application,

Mr.Milan Kanungo, learned Senior Counsel appearing

for the petitioner has submitted that the petitioner is

a law abiding citizen and he has cooperated the entire

investigation, but all of a sudden without explaining

any grounds, the CBI arrested the petitioner on

26.09.2022 and three others and produced them

before the learned C.J.M. (CBI), Bhubaneswar by

taking transit remand from A.C.J.M., Bidhannagar

Kolkota. It is further submitted that in the meanwhile

after completion of investigation on 21.01.2023, the

CBI submitted charge sheet against the petitioner,

but his application for bail was rejected by the

learned Special Judge, C.B.I., Bhubaneswar without

any justification, since no case U/Ss. 409/411/414 of

IPC is made out against the petitioner. It is further

submitted that the petitioner was neither the Director

nor an employee of the company and he is no way

connected with the day-today operation of business

of accused company M/S. IRL and the petitioner even

was also not named in the FIR. It is also submitted

that Section 409 of IPC has been incorporated against

the petitioner only to prevent him from taking benefit

of notice U/S. 41(A) of the Cr.P.C. On the above

grounds, learned Senior Counsel prays to grant bail

to the petitioner.

4. In seriously opposing the bail application

of the petitioner Mr.S.Nayak, learned counsel for

Republic of India (CBI) has submitted that in the

course of investigation, the role played by the

petitioner as the erstwhile Director M/S. Finshore

management Services Limited and M/S. Biomax

Traders Private Limited discloses hatching of criminal

conspiracy with the directors of accused company

M/S IRL and others consciously for misappropriating

ill-gotten funds of such company. It is also submitted

by Mr. Nayak that the petitioner connived with the

office bearers of accused company M/S. IRL to form

M/S. Pride Society and M/s. Golden Society with a

motive to directly aid and abet as well as assists M/S.

IRL and its Directors to continue in their illegal

deposit collection business and the petitioner,

thereby, received pecuniary gains for himself and his

companies & trusts for a total amount of

Rs.5,12,85,000/-. It is also submitted that FIR is not

an encyclopedia of entire events containing the

names of all the accused persons at the inception,

but when in the course of investigation the complicity

of a person is found, he can undoubtedly be charge

sheeted for the commission of offence and here in

this case although the name of petitioner does not

figure out in the FIR at the time of its lodging, but

subsequently the complicity of the petitioner having

been found, he has been rightly charge sheeted in

consonance with law. It is further advanced that in

obedience to the kind direction of the Apex Court, the

CBI took up investigation in this case and on finding

prima facie materials against the petitioner for

offences punishable with life imprisonment, there is

no requirement to let off the petitioner with prior

notice U/S. 41(A) of Cr.P.C. While summing up his

argument, Mr.Nayak has submitted that the

petitioner has one criminal antecedent of similar

nature in CBI Case No. 115 of 2017 which is pending

in the file of learned Metropolitan Magistrate, 21st

Court, Calcutta for committing forgery and cheating

one branch of State Bank of India located at Calcutta

and the petitioner is a part of the financial fraud

committed by M/S. IRL to the tune of Rs.342 crores

by illegally operating investment schemes in the

name of accused company and the petitioner,

therefore, should not be granted bail.

5. After having considered the rival

submissions upon perusal of record, there appears

allegation against the petitioner for committing

economic offence, besides being allegedly associated

with accused company M/S. IRL, which company was

allegedly engaged in collection of funds from innocent

depositors in the guise of floating different schemes

and it is alleged that a sum of Rs. 4.15 Crores was

paid to the petitioner in the year 2012 and 2013 by

the accused company M/S. IRL. In the matter of

grant or refusal of bail to accused persons involved in

economic offences, the Court has to keep in mind,

inter alia, the larger interest of public and State. The

nature and seriousness of economic offence and its

impact on society are always important consideration.

Law is well settled that while considering the bail

application in such cases of economic offences,

factors like (i) nature of accusations, (ii) enormity of

punishment that entail in conviction of the case, (iii)

material evidence in support of the charge, (iv)

criminal antecedent if any, (v)reasonable

apprehension of accused tampering with witnesses or

absconding and (vi) reasonable possibility of securing

the presence of accused in the course of trial are

required to be considered.

6. Further, while considering the bail

application, the Court is also required to see whether

there is any prima facie case or reasonable ground

appears against the accused and the likelihood of the

offence being repeated by him. In this case, the

petitioner never disputes pendency of another case

against him for similar type of offence in the State

West Bengal, which is brought to the notice of this

Court by an affidavit sworn in by the wife of the

petitioner. It is, however, true that the petitioner had

left out to mention the pendency of another criminal

case against him in the bail application, but

subsequently took a plea that non-disclosure of

criminal antecedent was due to inadvertence as

stated in the affidavit of his wife, who is a charge

sheet witness in this case and thereby, a reasonable

apprehension evokes in the mind of the Court about

capacity of the petitioner to tamper prosecution

material. In both the case, the petitioner has been

alleged for committing cheating and forgery involving

crores of rupees. Besides, while considering the bail

application of an accused for commission of economic

offence, one of the dominant consideration is to

prevent repetition of such offence, but the petitioner

in this case having undeniably found implicated in

another case in the State of West Bengal for similar

offences, prima facie the same appears against the

petitioner for grant of bail to him.

7. In the present case, the financial fraud

as alleged against the petitioner and others including

the M/S. IRL are assessed at more than Rs.342

crores as per the CBI investigation, of course no

precise calculation of individual financial liability of

the petitioner has been revealed. It is needless to say

that what should be the consideration of bail in case

of commission of economic offence by the accused

has been laid down by Apex Court in Y.S.Jagan

Mohan Reddy Vrs. Central Bureau of

Investigation; (2013) 7 SCC 450, wherein it has

been held as under:-

"34.Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence 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 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."

8. In view of the discussions made

hereinabove and taking into consideration the rival

submissions made by the respective parties and

keeping in view the enormity of allegation levelled

against the petitioner for cheating and

misappropriating huge sum of money of innocent

depositors and taking into account the manner and

mode of operating alleged illegal business company

and the role allegedly played by the petitioner and his

involvement in two cases of similar nature in two

States and last, but not the least the magnitude and

gravity of economic offence as alleged in this case

with petitioner being allegedly part of larger

conspiracy in duping innocent depositors for hundred

of crores of rupees, this Court does not find any

justification to grant bail to the petitioner, especially

when the trial is yet to commence.

Hence, the bail application of the petitioner

stands rejected.

Accordingly the BLAPL stands disposed of.

(G. Satapathy) Judge

Orissa High Court, Cuttack, Dated the 19th of May, 2023/Kishore

Signature Not Verified Digitally Signed Signed by: KISHORE KUMAR SAHOO Designation: Secretary Reason: authentication Location: HIGH COURT OF ORISSA Date: 20-May-2023 15:46:55