Telangana High Court
Kishore Kumar Tapadia vs The State Of Telangana on 5 December, 2023
1
HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
*****
CRIMINAL PETITION Nos.11332 and 11515 of 2023
CRIMINAL PETITION NO.11332 OF 2023
Between:
Mr.Nirmal Kumar Kotecha
... Petitioner/Accused No.1
And
Directorate of Enforcement, Rep. by
Assistant Director, Hyderabad Zonal
Office, Basheerbagh, Hyderabad.
... Respondent/Complainant
CRIMINAL PETITION NO.11515 OF 2023
Between:
Kishore Kumar Tapadia
... Petitioner/Accused No.3
And
1. The State of Telangana,
Rep. by its Public Prosecutor,
High Court for the State of Telangana.
2. Directorate of Enforcement, Rep. by
its Deputy Director, Hyderabad Zonal office
Basheerbagh, Hyderabad, rep. through
its Standing Counsel.
...Respondents/Complainants
DATE OF JUDGMENT PRONOUNCED: 05.12.2023
2
Submitted for approval.
THE HON'BLE SRI JUSTICE K.SURENDER
1 Whether Reporters of Local
newspapers may be allowed to see Yes/No
the Judgments?
2 Whether the copies of judgment
may be marked to Law Yes/No
Reporters/Journals
3 Whether Their Ladyship/Lordship
wish to see the fair copy of the Yes/No
Judgment?
__________________
K.SURENDER, J
3
* THE HON'BLE SRI JUSTICE K. SURENDER
+ CRIMINAL PETITION Nos.11332 and 11515 of 2023
% Dated 05.12.2023
CRIMINAL PETITION No.11332 of 2023
# Mr.Nirmal Kumar Kotecha
... Petitioner/Accused No.1
And
$ Directorate of Enforcement, Rep. by
Assistant Director, Hyderabad Zonal
Office, Basheerbagh, Hyderabad.
... Respondent/Complainant
CRIMINAL PETITION NO.11515 OF 2023
# Kishore Kumar Tapadia
... Petitioner/Accused No.3
And
$ 1. The State of Telangana,
Rep. by its Public Prosecutor,
High Court for the State of Telangana.
2. Directorate of Enforcement, Rep. by
its Deputy Director, Hyderabad Zonal office
Basheerbagh, Hyderabad, rep. through
its Standing Counsel.
...Respondents/Complainants
! Counsel for the Petitioner in Crl.P.No.11332/2023: Ms.Lakshmi Aiswarya
! Counsel for the Petitioner in Crl.P.No.11515/2023: Sri G.Ashok Reddy
^ Counsel for the respondent in Crl.P.No.11332/2023:
Sri B.Narasimha Sharma,
Deputy Solicitor General appearing for the respondent
^ Counsel for the Respondents in Crl.P.No.11515/2023:
Sri B.Narasimha Sharma,
Deputy Solicitor General appearing for R2
Sri D.Narender Naik,
Learned Asst.Public Prosecutor for R1-State.
>HEAD NOTE:
? Cases referred
1. 2022 SCC OnLine SC 929 (2008)
2. 2023 SCC OnLine SC 1244
3. 2022 SCC OnLine SC 825
4
THE HONOURABLE SRI JUSTICE K.SURENDER
CRIMINAL PETITION NOS.11332 AND 11515 OF 2023
COMMON ORDER:
Criminal Petition No.11332 of 2023 is filed by Accused No.1
and Criminal Petition No.11515 of 2023 is filed by Accused No.3,
seeking regular bail in connection with the Enforcement Case
Information Report (ECIR) No. ECIR/HYZO/08/2023 dated
15.02.2023.
2. Since the petitioners in both the criminal petitions are
accused No 1 and 3 in the said ECIR, both the petitions are
disposed by this common order.
3. Briefly, the case of Enforcement Directorate (ED) is that
M/s.Taksheel Solutions Limited (for short "TSL") Company made
various mis-statements and failed to disclose information in the
offer document. The Securities and Exchange Board of India (for
short "SEBI") inquired and conducted preliminary investigation.
Thereafter, an ad-interim exparte order dated 28.12.2011 was filed
against TSL and its Management. Consequently, SEBI passed a
levying order dated 30.06.2014 levying penalty of Rs.76,00,00,000/-
against 16 different entities which were involved, for various
violations under the SEBI Act. The said adjudication order was
challenged by most of the entities. The SEBI Appellate Tribunal (for
short "SAT") remanded the case back to the adjudicating authority
since opportunity was not given and the orders were passed ex-
parte.
4. In the preliminary investigation conducted by SEBI it was
found that one Pavan Kumar Kuchana (A2)-MD & CEO of TSL
company and others, created different entities showing them as
vendors of TSL in the USA and siphoned off Initial Public Offering
(for short "IPO") proceeds to create an impression of business
transactions for software development. However, no such software
development had taken place but, the funds were rotated.
5. The said company was run by Pavan Kumar Kuchana (A2) as
Managing Director. The funds which were garnered through IPO
was transferred to its vendors in the USA and they again were
routed back to TSL in the names of different entities.
6. After investigation conducted by SEBI, a complaint was filed
on 28.01.2016 under Section 12-A(a) to (c) r/w.24 of Securities &
Exchange Board of India Act, 1992 (Act 15 of 1992) (herein after
referred to as"SEBI Act") against TSL company.
7. On the basis of the said complaint, Enforcement Directorate
registered the ECIR for committing irregularities in respect of IPO.
Since the TSL raised 82.50 crores through IPO by adopting
fraudulent methods, the said amount was considered as proceeds of
crime.
8. Pursuant to the ECIR registered by the Enforcement
Directorate, the premises of A2 was searched on 22.09.2023 and
various incriminating documents were found. In the statement of
A2, the role of these petitioners was informed. The petitioners had
inflated the market value and raised IPO by misleading the facts.
Initially funds of Rs.34.50 crores were arranged as Inter Corporate
Deposits (for short "ICD") and the Initial Public Offer (IPO) proceeds
to the extent of 53.50 crores received, was also siphoned off.
9. The officials of the Enforcement Directorate conducted search
in the premises of these petitioners. Statements were recorded
under Section 50 clause 2 & 3 of the PMLA Act, 2002, on
10.10.2023 and 11.10.2023. According to the Enforcement
Directorate, A3 was acting as an intermediary in between A1 and
A2. The understanding was that A1 would arrange for ICD in the
year 2011 to an extent of 34.50 crores. The said amounts were
arranged from different entities by A1. The said funds were used by
TSL for increase in turnover in its books. No interest was paid by
TSL for the amount of 34.50 crores received. Having examined the
petitioners, the Enforcement Directorate came to know that A1 to
A3 have conspired and planned to inflate the revenue of TSL for
bringing ICDs and later siphoning off the IPO proceeds. As already
said A1 arranged for ICD of Rs.34.50 crores for the purpose of
inflating the revenue of TSL before the IPO. After IPO proceeds were
received, the initial ICD payment of Rs.34.50 crores was returned to
A1 and commission was also paid to both A1 and A2. The remaining
amounts were also siphoned off to offshore entities which are under
the control of A1. Out of the IPO proceeds, Rs.18 crores was used
for the expenses of TSL and also for payments to various vendors.
However, the said payments to vendors were found to be bogus. The
said circular movement of funds in between TSL and its clients
which were in fact created by A2 and shown as entities in the USA,
resulted in inflation of revenue and the corresponding profitability.
10. The said criminal acts committed by the petitioners and A2,
attracts the offence under Section 3 of PML Act.
11. On the basis of the said information during the course of
investigation the Enforcement Directorate effected the arrest of
these petitioners and also A2 on 11.10.2023 and grounds of arrest
was also served.
12. The Special Court for PMLA remanded the petitioners to
judicial custody by a detailed order dated 12/13.10.2023.
Thereafter, the petitioners and also A2 were given to ED custody.
13. During investigation, the Enforcement Directorate has
identified the entities and persons who have received the ICD
amount.
14. Sri T.Niranjan Reddy, learned Senior Counsel appearing for A1
would submit that the Enforcement Directorate officials have
adopted illegal methods during investigation. They detained the
accused illegally and arrested them without basis and in violation of
the twin requirements "reason to believe" which reasons have to be
recorded in writing and such person is "guilty" of an offence under
the Act. A1 was illegally taken into custody and served noticed
under Section 50 of the PMLA Act, 2002. If the authorities have
identified the petitioners as witnesses, summons should have been
served. However, the Enforcement Directorate officials served
summons under Section 50 of the PMLA Act, took him into custody
and arrested him on 11.10.2023. The Special Court while ordering
remand of the accused has not applied its mind which is evident
from the docket order passed on 12/13.10.2023.
15. In the docket order dt.12/13.10.2023 passed by the Special
Court, it is stated that;
"Thus, A1, A2 and A3 were involved in the generation of proceeds of
crime by commission of scheduled offence under Section 12A read with
24 of SEBI Act. Further, A1 and A2 were actually involved in the
various processes and activities connected with the said proceeds of
crime including its possession and acquisition in entities under their
control, use of POC in the business activities of TSL and other entities,
and projection of POC as untainted in the guise of proceeds from
genuine business transactions. A3 also knowingly assisted A1 and A2
in the transfer of POC to entities within India and abroad. A3 also
possessed and acquired POC in the form of 2.5 lakh shares of TSL
which he admittedly sold to A1 for Rs.80 lakhs."
16. Non application of mind is apparent from the fact that A1 or
A3 were not shown as accused in the complaint of SEBI. The said
fact of petitioners-A1 and A3 not being involved in the SEBI
complaint is not disputed. It is not the case of the Enforcement
Directorate that the petitioner-A1 had anything to do either with the
accounts of Taksheel or other bank accounts of M/s.Genex
Technologies Private Limited maintained in Royal Bank of Scotland.
17. The reason for arrest is the statement which was recorded
under Section 50 of the PMLA Act, 2002 which is under duress, has
formed basis for the arrest. According to the grounds of arrest the
allegation is that A1 and his family members were associated with
the 3 entities namely i) M/s.Asia Rich Ventures Limited, Singapore
ii) M/s.East Fortune Industries Limited, Hong Kong iii) M/s. KTP
Exports Limited, Singapore. The said companies were shell
companies utilized and provided by Angandias to transfer the
money and the amounts were utilized to transfer the funds.
18. Learned Senior Counsel further submits that immediately
after remand, the petitioner filed a statement retracting the version
in the section 50 statement. A retracted statement cannot form
basis to arrest the accused. He relied on the Judgments of
Honourable Supreme Court in;
i) Vijay Madanlal Choudhary v. Union of India and others
2022 SCC OnLine SC 929
ii) V.Senthil Balaji v. The State represented by Assistant
Director and others 2023 SCC OnLine SC 934
iii) Pankaj Bansal v. Union of India and others
2023 SCC OnLine SC 1244
Learned Counsel relied on the Judgments rendered by this
Court in;
i) Khagesh Kachiwal v. Directorate of Enforcement in
Crl.P.No.6354 of 2022 dt.08.08.2022
ii) Pradeep Kumar and others v. Assistant Director,
Directorate of Enforcement in WP.No.35434 of 2022
dated 06.07.2023
iii) Venkatram Reddy v. Union of India
WP.No.19163 of 2023 dated 08.09.2023
iv) M/s. Satyam Computer Services Limited v.
Directorate of Enforcement and others in WPMP
No.47572 of 2012 in WP.No.37487 of 2012, dated
11.12.2012
v) Directorate of Enforcement v. M/s. Satyam Computer
Services Limited in WA.No.133 of 2013, dated
31.12.2014.
19. Sri G.Ashok Reddy, learned Counsel appearing for petitioner
(A3) in Crl.P.No.11515 of 2023 would submit that the alleged
offence was in October, 2011. Inquiry was conducted by SEBI and
complaint was filed. However, the petitioner is not named in the
said complaint. The only evidence connecting the petitioner is one
E-Mail which was allegedly found during the course of investigation.
The said E-Mail was in the month of March, 2011. If a person has to
be prosecuted under PML Act, 2002 he should have dealt with
criminal proceeds. Even according to the Enforcement Directorate,
the transactions of petitioner pertaining to March, 2011, whereas
the alleged IPO was in the month of October, 2011 which is six
months after the alleged communication (E-Mail). Even assuming
that this petitioner had asked for 2% as commission during the
course of business, it does not amount to any criminal offence since
an agent for his services can always raise bills for rendering his
services. It is legitimate that 2% can be collected as his fee.
20. Learned counsel further submitted that no notice was given to
the petitioner-A3 under Section 50 of PML Act. However, he was
arrested. The documents shown to have been relied upon and filed
into the Court do not in any manner make out case against the
petitioner-A3. Neither the grounds nor eight enclosures which were
filed along with remand report make out a case against the
petitioner, leave alone the satisfaction of the authorities that the
petitioner is guilty of the offence.
21. Learned Counsel further submits that it is not the case of the
Enforcement Directorate that TSL and petitioner-A3 have any link
so as to infer the complicity of A3. Even the case of Enforcement
Directorate is that A1 has arranged for Rs.35 crores before the IPO.
Even with respect to 35 crores, A3 has nothing to do with it.
Neither the funds of Rs.35 crores arranged prior to the IPO, nor the
amount raised through IPO which is around Rs.50 crores was dealt
with by the petitioner in any manner. The provisions of Section
19(3) of the PML Act are not complied with and there is no
indication by the Enforcement Directorate that the material
available is enough to prima facie conclude that A3 was guilty. The
arrest itself is illegal since the petitioner-A3 was kept in custody
after issuance of section 50 notice and there after arrested without
basis.
22. Learned Counsel for A3 relied on the very same Judgments
relied on by the learned counsel for A1.
23. Sri B.Narasimha Sharma, learned Assistant Solicitor General
appearing for Enforcement Directorate would submit that the
procedure laid down under the PML Act, 2002 was scrupulously
followed. From the scheme of the act it is evident that Enforcement
Directorate can register cases once it is found that criminal offences
under the schedule were committed. Further, the investigation can
go on against the persons who are involved in generating the said
criminal proceeds and also the persons who subsequently handled
the crime proceeds. It is necessary that prima facie case is made out
to the satisfaction of the authorities. The grounds of arrest and the
remand report clearly indicate the modus operandi adopted by the
accused in generating crime proceeds. Without there being any kind
of business, the company TSL which was run by A2 had pumped in
35 crores through A1, only to jack-up the figures of the company
and thereby went into IPO. The amounts of nearly 50 crores that
were generated from the IPO were again routed back through the
Companies of A2 and A1. The amount was only going in circular
direction and there was no business dealings that were done with
any of the entities to which the moneys transferred.
24. Learned Assistant Solicitor General submitted that the
Honourable Supreme Court in Vijay Madanlal Choudhary and
others v. Union of India and others1 held that the rigors of
Section 45 of the PML Act are not arbitrary or unreasonable. The
economic offences constitute a class apart and have to be
approached differently. The Honourable Supreme Court in
Y.S.Jaganmohan Reddy's case and P.Chidambaram's case further
held that economic offences have deep rooted conspiracies involving
huge loss of public funds and need to be viewed seriously and
considered as grave offences affecting the economy and the country.
25. Learned Assistant Solicitor General further submits that
Accused No.2 had floated 8 to 9 companies in the USA. When A2
was searched, incriminating material against A1 and A3 came to
light. The said material seized, formed basis to make out the case
against A1 and A3. In fact there was a tripartite agreement in
between A1 to A3 and the monies were received by the company of
A1. Further, there is no illegality committed in the process of
recording statement under Section 50 of the PML Act and the
consequent arrests. Due procedure has been followed and within 24
hours of the arrest, they were remanded to custody.
2022 SCC OnLine SC 929
26. Further, petitioner-A1 is citizen of another country and he is
at flight risk. Learned counsel relied on the following Judgments;
i) Directorate of Enforcement v. Deeepak Mahajan & others
(1994) 3 SCC 440
ii) Sundeep Kumar Bafna v. State of Maharashtra & others
(2014) 16 SCC 623
iii) Manubhai Ratilal Patel Tr.Ushaben v. State of Gujrat & others
(2021) 1 SCC 314
iv) Roshan Beevi and others v. Joint Secretary to Government of Tamil
Nadu & others (1984) Cri LJ 134
v) Harbansingh Sardar Lenasingh and others v. The State
AIR 1970 Bom 79
vi) Kanu Sanyal v. Distt.Magistrate Darjeeling & others
(1974) 4 SCC 141
vii) Serious Fraud Investigation Office and others v. Rahul Modi and
others (2019) 5 SCC 266
viii) The State of Maharashtra and others v. Tasneem Rizwan Siddiquee
(2018) 9 SCC 745
ix) Naranjan Singh Nathawan v. The State of Punjab
(1952) 1 SCC 11
x) B.Ramachandra Rao v. The State of Orissa and others
(1972) 3 SCC 256
xi) Tarun Kumar v. Assistant Director, Directorate of Enforcement
Criminal Appeal No. of 2023 (SLP (Crl.) No.9431 of 2023).
27. Learned Assistant Solicitor General argued that custody and
arrest are not synonymous. The presence of Enforcement
Directorate officials during the search and seizure cannot be said to
be arbitrary. Once the competent Court passes an order remanding
the accused, the legality or otherwise of the arrest would become
immaterial, since the Court takes note of the material that is
produced by the prosecution and applies its mind to decide whether
to send the person produced, to judicial custody or police custody.
28. The learned Assistant Solicitor General had passed a sealed
cover stating that it contained incriminating documents collected
during the course of investigation. Firstly, this Court has not sought
for any information in a sealed cover or asked to provide documents
to ascertain any factual claims by the Enforcement Directorate.
Having perused the grounds of arrest and remand report, all the
transactions are pertaining to the year 2011 and it is clearly
mentioned as to what are the alleged transactions of money rotation
done. All the transactions of rotating the money and generation of
alleged crime proceeds are already mentioned and argued. The
documents which cannot be supplied to the accused, the accused
will not have an opportunity to explain or defend himself. Since
there is no direction for production of any documents touching
upon any factual aspects of the case or investigation, I deem it
appropriate not to open the cover and return it to the Investigating
Officer.
29. The events that transpired culminating in the arrest of the
petitioners are that, on 10.10.2023, three officers of the
Enforcement Directorate go to the residence of A1 around 7.30 a.m.
and start search at around 9.30 a.m. The search continued till early
hours of 11.10.2023 and at 4.20 a.m., the Officers informed the
petitioner-A1 that he has to travel to Hyderabad. Flight tickets were
arranged for A1, his brother and also the Officers at 4.20 a.m. At
5.00 a.m. summons dated 10.10.2023 was handed over on
11.10.2023. A1 was taken by the Officers to Hyderabad and was
interrogated till late night of 11.10.2023. At 6.30 p.m. on
12.10.2023 A1 and A3 were produced before the Special Court and
remanded to judicial custody. Both the accused filed a statement
retracting the alleged statements given under Section 50 of the PML
Act, 2002. From 8.30 to 11.00 p.m. arguments were heard by the
Special Judge and around at 3.00 a.m. on 13.10.2023 remand
orders were passed.
30. The learned Assistant Solicitor General did not dispute the
sequence of events narrated by the counsel for the petitioners,
however, he submits that the conduct of A1 would be relevant. Once
the Officers arrived at residence in Mumbai, the door was not
opened and in the meanwhile A1 tried to destroy the evidence. Since
the summons were signed and taken at Hyderabad, it is dated
10.10.2023 and the same was served on 11.10.2023. It cannot be
said that the summons are ante-dated.
31. The transactions in question are admittedly of the year 2011
and nearly 12 years have passed. The Agency having registered the
case on 15.02.2023, searched the premises of A2 in accordance with
Section 17(1) of the PML Act, 2002. The statement of A2 was
recorded on 22.09.2023, 23.09.2023, 25.09.2023 and finally on
11.10.2023 under Section 50 clause 2 and 3 of the PML Act, 2002.
As already stated, these petitioners A1 and A3 were investigated and
statements recorded on 10/11.10.2023 and thereafter, the
petitioners and A2 were remanded to judicial custody. During the
course of recording statement of A2 and investigating into the
matter, the Enforcement Directorate was informed by A2 that these
petitioners were allegedly involved in the transactions and on their
instructions to inflate the revenue of TSL, the alleged circular
movement of money was done. A1 had prepared the road map
towards IPO and instructed to open paper based companies in the
USA for rotation of funds. Further, the amount of Rs.30.50 crores
was transferred to the entities operated by A1. Several details of acts
committed by these petitioners was revealed during the statements
of A2. The information given by A2 is at para-9 of the remand
report. The details are from para-9(a) to 9(t) of the remand report.
The statement of A3 is at para-11(i) to 11(xxi). The information given
by A1 is at para-12(i) to 12(xiv) and para-14(i) to 14(xii). It is
abundantly clear that the acts allegedly committed by these
petitioners-A1 and A3 were informed to the Enforcement Directorate
by A2 and they had knowledge about all the alleged acts done by
these petitioners in September, when A2 was interrogated and his
statements were recorded on three days in September.
32. The Enforcement Directorate officials having information
about the petitioners went to Mumbai. From 7.30 a.m. on
10.10.2023 till they were produced before the Special Judge, the ED
officials were with the petitioners all through in the house, while
travelling from Mumbai to Hyderabad and taken to the ED office.
33. To effect arrest, it is not mandatory that a statement under
Section 50 should be recorded. Section 50 of the PML Act, 2002
authorizes the officials to inspect, enforce attendance of person,
compel production of records, receive evidence on affidavits and do
all such other acts during investigation. "Any person" mentioned in
Section 50 clause 2 of PML Act, 2002 would include an accused.
34. A reading of Section 50 of the PML Act, 2002 would clearly
indicate that the purpose of Section 50 of PML Act, 2002 is to gather
evidence in the process of investigation. Under Section 50(2) and (3)
the person summoned has an opportunity to state the facts known
to him, produce records as may be required in their support or the
documents required and sought for by the authorities. The
opportunity given to a person summoned, to explain and produce
any documents or evidence in support of his statement is writ large
in the provisions.
35. The Enforcement Directorate officials having incriminating
evidence against these petitioners which was collected and known
through A2 had gone to Mumbai. The moment they went to the
house of the petitioners, the ED officials have accosted the
petitioners and stayed with them throughout, till production before
the Special Court. The officials are persons-in-authority who had
restricted the petitioners and confronted with the facts informed by
A2 during his statement under section 50 PML Act, on three days in
September. It is apparent that A2 was arrested on the basis of
information provided by him in September and arrested on 11-10-
2023.
36. In the said circumstances, the ground raised by the
petitioners that they were not given opportunity of explanation and
their statements being taken under duress, appears to be probable.
37. There is nothing new which had come to the knowledge of the
Enforcement Directorate authorities pursuant to the examination of
the petitioners-A1 & A3, which information they did not have at the
instance of A2. It is not the case that after the examination of
petitioners-A1 & A3 any new facts were discovered or had collected
any new documents which were not known when A2 was examined.
38. The Enforcement Directorate is a premier Investigating Agency
which has been given the powers to investigate serious economic
offences under the PML Act, 2002. There is any amount of
responsibility while discharging their duties and not to adopt any
such methods affecting the rights of accused. The narration in the
remand report and the grounds of arrest, it is mentioned that what
all information was gathered from A2 was accepted by the
petitioners. The statement appears to be more in the form of
confession of the facts already known to Officers.
39. The Honourable Supreme Court in Pankaj Bansal v. Union
of India and others 2 held at para-21 that the Enforcement
Directorate is expected to be transparent and conform to pristine
standards of fair play in action. The Enforcement Directorate
mantled with far-reaching powers under stringent Act of 2002 is not
expected to be vindictive in its conduct and must act with utmost
probity and with the highest degree of dispassion and fairness.
2023 SCC OnLine SC 1244
40. The petitioners have been complaining about the misuse of the
powers of the Enforcement Directorate and the mode adopted was
abuse of power and authority. Having the alleged information about
the involvement of the petitioners, the ED authorities have resorted
to keeping the petitioners under their control restricting the
movements and statements allegedly recorded under Section 50 of
the PML Act, 2002 and immediately arrested them. The Ed officials
have acted arbitrarily.
41. As already discussed, there is nothing new which was found
during the examination of these petitioners, which was not known
earlier to the Agency through A2. The evidence collected is
circumstantial. Even without a statement under section 50 of the
Act, case can be proved against an accused.
42. The Honourable Supreme Court in Vijay Madanlal
Choudhary's case (supra 1) held that though twin conditions
restrict the right of the accused for grant of bail, it does not impose
an absolute restraint on the grant of bail.
43. In Satender Kumar Antil v. Central Bureau of
Investigation 3, the Honourable Supreme Court held that arrest is
not mandatory in every case. Before arrest is made, curtailing the
2022 SCC OnLine SC 825
personal liberty on the basis of the relevant facts should be
considered.
44. In the case of P.Chidambaram v. Directorate of Enforcement
reported in (2020) 13 SCC 791, the rule of bail was discussed at
paragraph 23:
"23. Thus, from cumulative perusal of the judgments cited on either
side including the one rendered by the Constitution Bench of this
Court, it could be deduced that the basic jurisprudence relating to bail
remains the same inasmuch as the grant of bail is the rule and
refusal is the exception so as to ensure that the accused has the
opportunity of securing fair trial. However, while considering the
same the gravity of the offence is an aspect which is required to be
kept in view by the Court. The gravity for the said purpose will have
to be gathered from the facts and circumstances arising in each case.
Keeping in view the consequences that would befall on the society in
cases of financial irregularities, it has been held that even economic
offences would fall under the category of "grave offence" and in such
circumstance while considering the application for bail in such
matters, the Court will have to deal with the same, being sensitive to
the nature of allegation made against the accused. One of the
circumstances to consider the gravity of the offence is also the term of
sentence that is prescribed for the offence the accused is alleged to
have committed. Such consideration with regard to the gravity of
offence is a factor which is in addition to the triple test or the tripod
test that would be normally applied. In that regard what is also to be
kept in perspective is that even if the allegation is one of grave
economic offence, it is not a rule that bail should be denied in every
case since there is no such bar created in the relevant enactment
passed by the legislature nor does the bail jurisprudence provide so.
Therefore, the underlining conclusion is that irrespective of the nature
and gravity of charge, the precedent of another case alone will not be
the basis for either grant or refusal of bail though it may have a
bearing on principle. But ultimately the consideration will have to be
on case-to-case basis on the facts involved therein and securing the
presence of the accused to stand trial."
45. All the transactions are of the year 2011 and it appears that
all the transactions are to the knowledge of the Investigating
Agency. The transactions are borne by record and the evidence is
circumstantial in nature. Complicity or otherwise of the petitioners
can be inferred from the transactions during trial, which is unlikely
in the near future. Detention cannot be by way of punishment at the
stage of investigation. The apprehension of the learned Assistant
Solicitor General that the petitioners are at flight risk can be dealt
with by imposing conditions.
46. In the said background of arbitrariness and also that the
petitioners being taken into Enforcement Directorate custody for the
purpose of investigation and having investigated the case, taking the
petitioners into custody, this Court deems it appropriate to grant
the relief of Regular Bail to the petitioners-A1 & A3, on the following
conditions.
i) The petitioners/A1 & A3 shall execute personal bonds for
a sum of Rs.2,00,000/- (rupees Two Lakhs only) each with
two sureties for a like sum each to the satisfaction of the
Metropolitan Sessions Judge-cum-Spl.Court constituted
under PML Act, 2002, at Hyderabad.
ii) Passports of the petitioners/A1 & A3 shall be
surrendered before the Special Court. They shall not leave
Hyderabad without permission of the Special Court,
pending investigation.
iii) The address of the petitioners/A1 & A3 in Hyderabad
and other details shall be furnished to the Enforcement
Directorate.
iv) The petitioners/A1 & A3 shall abide by the other
conditions stipulated in Section 437(3) of Cr.P.C.
47. Accordingly, both the criminal petitions are allowed.
Miscellaneous applications, pending if any, shall stand closed.
_________________
K.SURENDER, J
Date: 05.12.2023
Note: L.R. Copy to be marked.
tk
