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Petitioner: SANJAY CHANDRA and others VS Respondent: CENTRAL BUREAU OF INVESTIGATION and JUDGMENT
Court Name: Supreme Court of India Judge(s): H. L. Dattu, G.S. Singhvi, G. S. Singhvi Title:SANJAY CHANDRA and others vs CENTRAL BUREAU OF INVESTIGATION and
JUDGMENT
Reported As: 2012 SCMR 1732 Result: Order accordingly Judgment JUDGMENT ' H. L. DATTU, J.---Leave granted in all the Special Leave Petitions. 2. These appeals are directed against the common Judgment and Order of the learned Single Judge of the High Court of Delhi, dated 23rd May, 2011 in Bail Application No,508 of 2011, Bail 'Application No,509 of 2011 and Criminal Miscellaneous Application No,653 of 2011, Bail Application No,510 of 2011, Bail Application No,511 of 2011 and Bail Application No,512 of 2011, by which the learned Single Judge refused to grant bail to the accused-appellants. These cases were argued together and submitted for decision as one case. 3. The offence alleged against each of the accused, as noticed by the learned Special Judge, CBI, New Delhi, who rejected bail applications of the appellants, vide his order dated 20-4-2011, is extracted for easy reference: Sanjay Chandra (A7) in Criminal Appeal No,2178 of 2011 [arising out of SLP (Cri.) No,5650 of 20111:- "(6) The allegations against accused Sanjay Chandra are that he entered into criminal conspiracy with accused A. Raja, R. K. Chandelier and other accused persons during September 2009 to get UAS license for providing telecom services to otherwise an ineligible company to get UAS licenses. He, as Managing Director of Messrs Unitech Wireless (Tamil Nadu) Limited, was looking after the business of telecom through 8 group companies of Unitech Limited. The first-come-first-served procedure of allocation of UAS Licenses and spectrum was manipulated by the accused persons in order to benefit Messrs Unitech Group Companies. The cut-off date of 25-9-2007 was decided by accused public servants of DoT primarily to allow consideration of Unitech Group applications for UAS licences. The Unitech Group Companies were in business of realty and even the objects of
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companies were not changed to 'telecom' and registered as required before applying. The companies were ineligible to get the licenses till the grant of UAS licenses. The Unitech Group was almost last within the applicants considered for allocation of UAS licenses and as per existing policy of first-come-first-served, no licence could be issued in as many as 10 to 13 circles where sufficient spectrum was not available. The Unitech companies got benefit of spectrum inasmany as 10 circles over the other eligible applicants. Accused Sanjay Chandra, in conspiracy with accused public servants, was aware of the whole design of the allocation of LOIs and on behalf of the Unitech group companies was ready with the drafts of Rs,1658 crores as early as 10th October, 2007." Vinod Goenka (A5) in Criminal Appeal No,2179 of 2011 arising out of SLP (Cri) No,5902 of 2011]:-- "(5) The allegations against accused Vinod Goenka are that he was one of the directors of messes Swan Telecom (P) Limited in addition to accused Shahid Usman Balwa w,e,f, 1-10-2007 and acquired majority stake on 18-10-2007 in Messrs.' Swan Telecom (P) Limited (STPL) through. DB Infrastructure (P) Limited. Accused Vinod Goenka carried forward the fraudulent applications of STPL dated 2-3-2007 submitted by previous management despite knowing the fact that STPL was ineligible company to get UAS licenses by virtue of clause 8 of UASL Guidelines 2005. Accused Vinod Goenka was an associate of accused Shahid Usman Balwa to create false documents including Board Minutes of Messrs.' Giraffe Consultancy (P) limited fraudulently showing transfer of its shares by the companies of Reliance ADA Group during February, 2007 itself. Accused/applicant in conspiracy with accused Shahid Usman Balwa concealed or furnished false information to DoT regarding shareholding pattern of STPL as on the date of application thereby making STPL an eligible company to get license on the date of application, that is, 2-3-2007. Accused/applicant was an overall beneficiary with accused 'Shahid Usman Balwa for getting license and spectrum in 13 telecom circles. (12) Investigation has also disclosed pursuant to TRAI recommendations dated 28-8-2007 when Messrs Reliance Communications Ltd. Got the GSM spectrum under the Dual Technology policy, accused Gautam Doshi, Hari Nair and Surendra Pipara transferred the control of Messrs Swan Telecom Pvt. Ltd., and said structure of holding companies, to accused Shahid Balwa and Vinod Goenka. In this manner they transferred a company which was otherwise ineligible for grant of UAS license on the date of application, to the said two accused persons belonging to Dynamix Balwa (DB) Group and thereby facilitated them to cheat the DoT by getting issued UAS Licences despite the ineligibility on the date of application and till 18-10-2007. (13) Investigation has disclosed that accused Shahid Balwa and Vinod Goenka joined Messrs Swan Telecom Pvt. Ltd. And Messrs Tiger Traders Pvt. Ltd. As directors on 1-10-2007 and DB group acquired the majority stake in TTPL/Messrs Swan Telecom Pvt. Ltd. (STPL) on 18-10-2007. On 18-10- 2007 a fresh equity of 49.90 lakh shares was allotted to Messrs DB Infrastructure Pvt. Ltd. Therefore, on 1-10-2007, and thereafter, accused Shahid Balwa and Vinod Goenka were in-charge of and were responsible to, the company Messrs Swan Telecom Pvt. Ltd. For the conduct of business. As such on this date; majority shares of the company were held by D.B. Group." Gautam Doshi (A9), Surendra Pipara (A 10) and Hari Nair (A 11) in Criminal Appeals Nos. 2180, 2182 and 2181 of 2011 [arising out of SLP (Cri) Nos.6190, 6315 and 6288 of 2011]:- "(7) It is further alleged that in January - February, 2007 accused Gautam Doshi, Surendra Pipara and Hari Nath in furtherance of their common intention to cheat the Department of Telecommunications, structured/created net worth of messes Swan Telecom Pvt. Ltd., out of funds arranged from messes Reliance Telecom Ltd. Or its associates, for applying to DoT for UAS Licenses in 13 circles, where messes Reliance Telecom Ltd. Had no GSM spectrum, in a manner that its associations with messes Reliance Telecom Ltd. May not be detected, so that DoT could not reject its application on the basis of clause 8 of the UASL Guidelines dated 14-12-2005.
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(8) In pursuance of the said common intention of accused persons, they structured the stake- holding of Messrs Swan Telecom Pvt. Ltd. In a manner that only 9.9% equity was held by Messrs Reliance Telecom Ltd. (RTL) and rest 90.1% was shown as held by Messrs Tiger Traders Pvt. Ltd. (later known as Messrs Tiger Trustees Pvt. Ltd. - TTPL), although the entire company was held by' the Reliance ADA Group of Companies through the funds. Raised from Messrs Reliance Telecom Ltd.. Etc. (9) It was further alleged that Messrs Swan Telecom Pvt. Ltd. (STPL) was, at the time of application dated 2-3-2007, an associate of Messrs Reliance ADA Group/Messrs Reliance Communications Limited/Messrs Reliance Telecom Limited, having existing UAS Licences in all telecom circles. Investigations have also disclosed that Messrs Tiger Traders Pvt. Ltd., which held majority stake (more than 90%) in Messrs Swan Telecom Pvt. Ltd. (STPL), was also an associate company of Reliance ADA Group. Both the companies has no business history and were activated solely for the purpose of applying for UAS Licenses in 13 telecom circles, where messes Reliance Telecom Ltd. Did not have GSM spectrum and Messrs Reliance Communications Ltd. Had already applied for dual technology spectrum for these circles. Investigation has disclosed that the day-to-day affairs of messes Swan Telecom Pvt. Ltd. And messes Tiger Traders Pvt. Ltd. Were managed by the said three accused persons either themselves or through other officers/consultants related to the Reliance ADA group. Commercial decisions of Messrs Swan Telecom Pvt. Ltd. And messes Tiger Traders Pvt. Ltd. Were also taken by these accused persons of Reliance ADA Group. Material intercompany transactions (bank transactions) of messes Reliance Communications/Messrs Reliance Telecommunications Ltd. And messes Swan Telecom Pvt. Ltd. (STPL) and Messrs Tiger Traders Pvt. Ltd. Were carried out by same group of persons as per the instructions of said accused Gautam Doshi and Hari Nair. (10)Investigations about the holding structure of Messrs Tiger Traders Pvt. Ltd. Has revealed that the aforesaid accused persons also structured two other companies i,e, messes Zebra Consultancy Private Limited and Messrs Parrot Consultants Private Limited. Till April, 2007, by when messes Swan Telecom Pvt. Ltd. Applied for telecom licenses, 50% shares of messes Zebra Consultancy Private Limited and messes Parrot Consultants Private Limited, were purchased by Messrs Tiger Traders Pvt. Ltd. Similarly. 50% of equity shares of messes Parrot Consultants Private Limited and Messrs Tiger Traders Private Limited were purchased by Messrs Zebra Consultancy Private Limited. Also, 50% of equity shares of Messrs Zebra Consultancy Private Limited and Messrs Tiger Traders Private Limited were purchased by Messrs Parrot Consultants Private Limited. These 3 companies were, therefore, cross holding each other in an interlocking structure w,e,f, March 2006 till 4th April, 2007. (11) It is further alleged that accused Gautam Doshi, Surendra Pipara and Hari Nair instead of withdrawing the fraudulent applications preferred in the name of Messrs Swan Telecom (P) Limited, which was not eligible at all, allowed the .Transfer of control of that company to the Dynamix Balwa Group and thus, enabled perpetuating and (sic.) illegality. It is alleged that TRAI in its recommendations dated 28-8-2007 recommended the use of dual technology by UAS Licencees. Due to this reason Messrs Reliance Communications Limited, holding company of Messrs Reliance Telecom Limited, became eligible to get GSM spectrum in telecom circles for which STPL had applied. Consequently, having management control of STPL was of no use for the applicant/accused persons and Messrs Reliance Telecom Limited. Moreover, the transfer of management of STPL to DB Group and sale of equity held by it to Messrs Delphi Investments (P) Limited, Mauritius, Messrs Reliance Telecom Limited has earned a profit of around Rs, 10 crores which otherwise was not possible if they had withdrawn the applications. Messrs Relianc Communications Limited also entered into agreement with Messrs Swan Telecom (P) Limited for sharing its telecom infrastructure. It is further alleged that the three accused persons facilitated
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the new management of Messrs Swan Telecom (P) Limited to get UAS licences on the basis of applications filed by the former management. It is further alleged that Messrs Swan Telecom (P) Limited on the date of applicatidn, that is, 2-3-2007 was an associate company of Reliance ADA Group, that is, Messrs Reliance Communications Limited/Messrs Reliance Telecom Limited and therefore, ineligible for UAS licences. (12) Investigation has also disclosed pursuant to TRAI recommendations dated 28-8-2007 when Messrs Reliance Communications Ltd. Got the GSM spectrum under the Dual Technology policy, accused Gautam Doshi, Hari Nair and Surendra Pipara transferred the control of Messrs Swan Telecom Pvt. Ltd., and said structure of holding companies, to accused Shahid Balwa and Vinod Goenka. In this manner they transferred a company which was otherwise ineligible for grant of UAS license on the date of application, to the said two accused persons belonging to Dynamix Balwa (DB) Group and thereby facilitated them to cheat the DoT by getting issued UAS Licences despite the ineligibility on the date of application and till 18-10-2007." 4. The Special Judge, CBI, New Delhi, rejected Bail Applications filed by the appellants by his order dated 20-4-2011. The appellants moved the High Court by filing applications under section 439 of the Code of Criminal Procedure (in short, "Cr.P.C."). The same came to be rejected by the learned Single Judge by his order dated 23-5-2011. Aggrieved by the same, the appellants are before us in these appeals. 5. Shri Ram Jethmalani, Shri Mukul Rohatgi, Shri Soli J. Sorabjee and Shri Ashok H. Desai. Learned senior counsel appeared for the appellants and Shri Harin P. Raval, learned Additional Solicitor General, appears for the respondent-CBI. 6. Shri Ram Jethmalani, learned senior counsel appearing for the appellant-Sanjay Chandra, would urge that the impugned Judgment has not appreciated the basic rule laid down by this Court that grant of bail is the rule and its denial is the exception. Shri Jethmalani submitted that if there is any apprehension of the accused of absconding from trial or tampering with the witnesses, then it is justified for the Court to deny bail. The learned senior counsel would submit that the accused has co- operated with the investigation throughout and that his behavior has been exemplary. He would further submit that the appellant was not arrested during the investigation, as there was no threat from him of tampering with the witnesses. He would submit that the personal liberty is at a very high pedestal in our Constitutional system and the same cannot be meddled with in a causal manner. He would assail the impugned Judgment stating that the learned Judge did not apply his mind, and give adequate reasons before rejecting bail, as is required by the legal norms set down by this Court. Shri Jethmalani further contends that it was only after the appellants appeared in the Court in pursuance of summons issued, they were made to apply for bail, and, thereafter, denied bail and sent to custody. The learned senior counsel states that the trial Judge does not have the power to send a person, who he has summoned in pursuance of section 87, Cr.P.C. To judicial custody. The only power that the trial Judge had, he would contend, was to ask for a bond as provided for in section 88, Cr.P.C. To ensure his appearance. Shri Jethmalani submits that when a person appeared in pursuance of a bond, he was a free man, and such a free man cannot be committed to prison. By making him to apply for bail and thereafter, denying him the same. Shri Jethmalani further submits that if it was the intention of the Legislature to make a person, who appears in pursuance of summons to apply for bail, it would have been so legislated in section 88, Cr.P.C. The learned senior counsel assailed the Judgment of the Delhi High Court in the 'Court on its own motion v. CBI', 2004 (I) JCC 308, by which the High Court gave directions to Criminal Courts to call upon the accused who is summoned to appear to apply for bail, and then decide on the merits of the bail application. He would state that the High Court has ignored even the CBI Manual before issuing these directions, which provided for bail to be granted to the accused, except in the event of there being commission of heinous crime. The learned senior counsel would also argue that it
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was an error, to have a "rolled up charge", as recognized by the Griffiths' case (R v. Griffiths and others, (1966) 1 QB 589). Shri Jethmalani submitted that there is not even a prima facie case against the accused and would make references to the charge-sheet and the statement of several witnesses. He would emphatically submit that none of the ingredients of the offences charged with were stated in the charge-sheet. He would further contend that even if, there is a prima facie case, the rule is still bail, and not jail, as per the dicta of this Court in several cases. 7. Shri Mukul Rohatgi, learned senior counsel appearing for the appellant-Vinod Goenka, while adopting the arguments of Shri Jethmalani, would further supplement by arguing that the learned Trial Judge erred in making the persons, who appeared in pursuance of the summons, apply for bail and then denying the same, and ordering for remand in judicial custody. Shri Rohatgi would, further contend that the gravity of the offence charged with, is to be determined by the maximum sentence prescribed by the Statute and not by any other standard or measure. In other words, the learned senior counsel would submit that the alleged amount involved in the so- called Scam is not the determining factor of the gravity of the offence, but the maximum punishment prescribed for the offence. He would state that the only bar for bail pending trial in section 437 is for those persons who are charged with offences punishable with life or death, and there is no such bar for those persons who were charged with offences with maximum punishment of seven years. Shri Rohatgi also cited some case-laws. 8. Shri Ashok H. Desai, learned senior counsel appearing for the appellants-Han Nair and Surendra Pipara, adopted the principal arguments of Shri. Jethmalani. In addition, Shri Desai would submit that a citizen of this country, who is charged with a criminal offence, has the right to be enlarged on bail. Unless there is a clear necessity for deprivation of his liberty, a person should not be remanded to judicial custody. Shri Desai would submit that the Court should bear in mind that such custody is not punitive in nature, but preventive, and must be opted only when the charges are serious. Shri Desai would further submit that the power of the High Court and this Court is not limited by the operation of section 437. He would further contend that Surendra Pipara deserves to be released on bail in view of his serious health conditions. 9. Shri Soli J. Sorabjee, learned senior counsel appearing for Gautam Doshi, adopted the principal arguments of Shri Jethmalani. Shri Sorabjee wouldassail the finding of the learned Judge of the High Court in the impugned Judgment that the mere fact that the accused were not arrested during the investigation was proof of their influence in the society, and hence, there was a reasonable apprehension that they would tamper with the evidence if enlarged on bail. Shri Sorabjee would submit that if this reasoning is to be accepted, then bail` is to be denied in each and every criminal case that comes, before the Court. The learned senior counsel also highlighted that the accused had no criminal antecedents. 10. Shri Haren P. Raval, the learned. Additional Solicitor General, in his reply, would submit that the offences that are being charged, are of the nature that the economic fabric of the country is brought at stake. Further, the learned ASG would state that the quantum of punishment could not be the only determinative factor for the magnitude of an offence. He would state that one of the relevant considerations for the grant of bail is the interest of the society at large as opposed to the personal liberty of the accused, and that the Court must not lose sight of the former. He would submit that in the changing circumstances and scenario, it was in the interest of the society for the Court to decline bail to the 'appellants. Shri Raval would further urge that consistency is the norm of this Court and that there was no reason or change in circumstance as to why this Court should take a different view from the order of 20th June, 2011 in Sharad Kumar and others v. Central Bureau of Investigation [in SLP (Cri) Nos.4584-4585 of 2011] rejecting bail to some of the co-accused in the same case. Shri Raval would 2 further state that the investigation in these cases is monitored by this Court and the trial is proceeding on a day- to-day basis and that there is absolutely no delay
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on behalf of the prosecuting agency in completing the trial. Further, he would submit that the appellants, having co-operated with the investigation, is no ground for grant of bail, as they were expected to co-operate with the investigation as provided by the law. He would further submit that the test to enlarge an accused on bail is .Whether there is a reasonable apprehension of tampering with the evidence, and that there is an apprehension of threat to some of the witnesses. The learned ASG would further submit that there is more reason now for the accused not to be enlarged on bail, as they now have the knowledge of the identity of the witnesses, who are the employees of the accused, and there is an apprehension that the witnesses may be tampered with. The learned ASG would state that section .437 of the Cr.P.C. Uses the word "appears", and, therefore, that the argument of the learned senior counsel for the appellants that the power of the trial Judge with regard to a person summoned under section 87 is controlled by section 88 is incorrect. Shri Raval also made references to the United Nations Convention on Corruption and the Report on the Reforms in the Criminal Justice System by Justice Malimath, which, we do not think, is necessary to go into. The learned ASG also relied on a few decisions of this Court, and the same will be dealt with in the course of the judgment. On a query from the Bench. The learned ASG would submit that in his opinion, bail should be denied in all cases of corruption which pose a threat to the economic fabric of the country, and that the balance should tilt in favor of the public interest. 11. In his reply, Shri Jethmalani would submit that as the presumption of innocence is the privilege of every accused, there is also a presumption that the appellants would not tamper with the witnesses if they are enlarged on bail, especially in the facts of the case, where the appellants have cooperated with the investigation. In recapitulating his submissions, the learned senior counsel contended that there are two principles for the grant of bail - firstly, if there is no prima facie case, and secondly, even if there is a prima facie case, if there is no reasonable apprehension of tampering with the witnesses or evidence or absconding from the trial, the accused are entitled to grant of bail pending trial. He would submit that since both the conditions are satisfied in this case, the appellants should be granted bail. 12. Let us first deal with a minor issue canvassed by Mr. Raval, learned ASG. It is submitted that this Court has refused to entertain the Special Leave Petition filed by one of the co-accused. [Sharad Kumar v. CBI (supra)] and, therefore, there is no reason or change in the circumstance to take a different view in the case of the appellants who are also charge-sheeted for the same offence. We are not impressed by this argument. In the aforesaid petition, the petitioner was before' this Court before framing of charges by the Trial Court. Now the charges are framed and the trial has commenced. We cannot compare the earlier and the present proceedings and conclude that there are no changed circumstances and reject these petitions. 13. The appellants are facing trial in respect of the offences under sections 420-B, 468, 471 and 109 of Indian Penal Code and section 13(2) read with 13(i)(d) of Prevention of Corruption Act, 1988. Bail has been refused first by the Special Judge, CBI, New Delhi and subsequently, by the High Court. Both the courts have listed the factors, on which they think, are relevant for refusing the Bail applications filed by the applicants as seriousness of the charge; the nature of the evidence in support of the charge; the likely sentence to be imposed upon conviction; the possibility of interference with witnesses; the objection of the prosecuting authorities; possibility of absconding from justice. 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
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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…
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