Brij Raj Singh, J.
1. Supplementary affidavit filed today is taken on record.
2. The present anticipatory bail application has been filed on behalf of the applicant in Criminal Case No.87600 of 2021 (CBI V. Globiz Exim Pvt. Ltd. & Ors.) pending in the Court of Special Judicial Magistrate – CBI, Lucknow arising out of F.I.R. No.RC0532020E0004 of 2020, under Sections 120-B, 420, 467, 468, 471 I.P.C. registered at Police Station CBISCB Lucknow, District Lucknow with a prayer to enlarge him on anticipatory bail.
3. The F.I.R. was lodged on 11.06.2020 bearing F.I.R. No.RC0532020E0004 of 2020, registered by complainant, Sri Niranjan Panda, Chief Regional Manager, Indian Overseas Bank, Regional Office, Lucknow, under Sections 120B, 420, 467, 468, 471 I.P.C. at Central Burau of Investigation, Special Crime Branch, Lucknow (hereinafter referred to as “CBI”).
4. As per F.I.R., it is stated that M/s Globiz Exim Private Limited had entered into criminal conspiracy and the verbatim of FiR is quoted below:-
“A complaint No.RO/CRM/2019-2020 dated 05.06.2020 have been received from Sh. Niranjan Panda, Chief Regional Manager, Indian Overseas Bank, Regional Office, Lucknow requesting therein to register FIR against M/s Globiz Exim Pvt. Ltd, 402-403, Kalpana Plaza, 24/147B, Birhana Road, Kanpur, Shri Arvind Srivastava, Independent Director , M/s Globiz Exim Pvt. Ltd., R/o BM 783, Malviya Nagar-1st Floor, New Delhi; Sri Saral Verma, Director, M/s Globiz Exim Pvt. Ltd., R/o 3a/2017, Azad Nagar, Kanpur and other unknown third parties which is enclosed as Annexure of FIR Gist of the allegations are that M/s Globiz Exim Pvt. Ltd., Kanpur and it’s Promoters/Directors entered into a criminal conspiracy among themselves and cheated the Indian Overseas Bank to the tune of Rs.10.01 Crores by way of misrepresenting the facts and diverting the funds extended by the Bank in the form of loans/Letter of Credits.
Information discloses that M/s Globiz Exim Pvt. Ltd. Having its registered office at Kalpna Plaza, 24/147 B, Birhana Road, Kanpur (UP) was enjoying various credit facilities with Indian Overseas Bank under multiple banking arrangements viz. Letter of Credit (foreign) to the tune of Rs.2,000 crores; Letter of Credit on DP/180 days comes for purchase of goods for trading to the tune of Rs.128 crores etc. All the said facitilites were sanctioned by the Indian Overseas Bank, MCB, Central Office in the year 2014 and 2016. M/s Globiz Exim Pvt. Ltd. was incorporated as S.N.V. Trading Pvt. Ltd. On 14 July, 2005, however, the company later changed its name to M/s Globiz Exim Pvt. Ltd. On 2.9.2009. Initially, the company was engaged in manufacturing of leather items from its manufacturing plant at Jajmau at Kanpur but later on, it concentrated in trading of pluses and other commodities like Laptop/Computers, Coal, Copper Cathode etc.
M/s. Globiz Exim Pvt Ltd. and it’s Promoters/Directors with intent to cheat the Bank, while availing the credit facilities from the IOB, had fraudulently siphoned off its funds through unsecured loans and advances to as many as 34 parties without any loan agreements or entering into any formal contract with such parties. The company duped the Bank by showing false Merchanting Trade Transactions amongst known companies/customers. The documents purportedly issued by different purchasers/suppliers were prepared by one and the same person related to the suspicious Merchanting Trade Transactions. The borrower company has further shown bogus local trades without support of related documents to falsify its Balance Sheet and mislead the Bank by way of showing false inflated stock. The account of the Company was classified Non Performing Asset (NPA) on 30.9.2018 and as on the date of NPA the total loss to the Bank was Rs.10.01 crores.
The contents of the complaint dated 05.06.2020 prima facie discloses commission of cognizable offences u/s 120-B, 420, 467, 468, 471 I.P.C. and substantive offences thereof against the aforesaid accused persons. Hence, a Regular Case is registered and investigation entrusted to Sh. Sanjay Sharma, ASP, CBI, SCB, Lucknow.”
5. Learned counsel for the applicant has submitted that though the charge sheet has been filed in the present case but the anticipatory bail application filed by the applicant is maintainable in view of the decision of the Hon’ble Supreme Court in the case of Bharat Chaudhary and another Vs. State of Bihar and another, (2003) 8 SCC 77 [LQ/SC/2003/1007] .
6. It has been further submitted that the applicant is innocent and has not committed the offence and he is not named in the FIR. It has been next submitted by learned counsel for the applicant that the applicant was not arrested during investigation, therefore, after filing of the charge sheet, the applicant should not be remanded to judicial custody and there is no purpose to remand him because he had cooperated in the investigation.
7. It has been further submitted on behalf of the applicant that the goods was transferred between the foreign seller, Globiz and foreign buyer in that sequence of the transaction of the business. The transfer of title in goods was done by way of endorsement in the bill of lading which is the prevaling practice. On the import of the transactions the bill of lading was provided to Globiz by the foreign supplier.
8. Learned counsel for the applicant has further submitted that in same subject matter in respect of Flagship Company of the Frost Group i.e. Frost International Limited (FIL), SFIO and ED had initiated proceedings and the applicant was arrested by both SFIO and ED. In both cases, applicant had been granted regular bail by the Hon’ble Supreme Court and by this High Court respectively. It has been further submitted that the applicant did not play any role in preparation of document relating to merchanting trade and allegation of forgery cannot be attributed to the applicant. It has been further submitted that the merchanting documents were prepared by the foreign parties and sent to Globiz in India through the banks on acceptance. After acceptance by Globiz, these documents were then forwarded by the banks to the foreign buyer for their acceptance. Merchanting trade documents were approved by multiple banks once on the import leg of transaction and again on the export leg of transaction but the applicant did not prepare the document.
9. It has been further submitted that the bank officials are not named as accused in the present case. It has been submitted that bank officials have checked and verified the documents but they are not made accused. It has been submitted that there is no possibility of tampering with evidence or influencing witnesses because the documents have already been collected. There is no question to influence the witnesses in any manner, therefore, the applicant may be enlarged on bail. Learned counsel for the applicant has submitted that the business was carried out as per RBI guidelines. The transaction was done after approving the multiple level cheques done by the bank. In this regard, paragraph 44 of the submission of the bail application is quoted below:-
“44. That it is also submitted that the MT business was carried out in line with the extant RBI guidelines. As mentioned earlier, these guidelines are issued under FEMA, and banks, being authorized persons under such law, are required to ensure compliance. Once the entire business details and documentation required for obtaining the credit facilities were submitted to the banks, and the banks, approved of the same and granted sanction, it would be accurate to presume that the RBI guidelines were satisfied. Further, no show cause notice was ever issued by RBI to the company regarding any non-compliance with the RBI guidelinses.”
10. It has been further submitted that there is no common directorship or any shareholding between Globiz and the foreign buyers ans sellers and merely because the foreign parties were known to each other as they worked with each, therefore, it cannot be the basis of alleging connivance.
11. Learned counsel for the applicant has further submitted that the multiple levels of scrutiny is not done through the Foreign Bank and then Indian AD Bank and as per the guidelines of the R.B.I. documents were verified and then the transaction has been completed. In this regard, Paragraphs 48 and 49 of the bail application are quoted below:-
“48. That it is also noteworthy that all documents pertaining to MT transactions undergo multiple levels of scrutiny, first through the Foreign Bank and then through the Indian AD Bank. While executing the MT transactions, the Indian AD banks are required to ensure that the terms and conditions for LCs have been satisfied and the MT documents presented by the contracting parties are in compliance with the said terms and conditions. As per the guidelines of RBI, the Authorized Dealer (‘AD’) Banks have to satisfy itself on the genuineness of the trade (provided under RBI Guidelines bearing reference “Master Circular on Import of Goods and Services (RBI/2013-14/13)” dated 01 July 2013 under instruction C.15). In case of MT transactions of Globiz as well, the Complaint Bank had duly verified the documents and only upon being satisfied that the documents are proper, processed the payments to the foreign suppliers.
49. Thus, it is submitted that the MT business of Globiz was perfectly legal, bona fide and had commercial substance. As explained above, the MT business involved the buying and selling of goods from genuine foreign parties without the goods entering India. Over the years, Globiz made substantial profits from such business and paid substantial amounts towards income-tax. In light of the above, it is submitted that the allegations raised in the FIR that the MT business of Globiz was not genuine are completely erroneous and baseless.”
12. Learned counsel for the applicant has further submitted that the discrepencies, if any, were merely technical and procedural in nature, therefore, it is no ground to doubt the genuineness and veracity of the transaction of the Globiz. In this regard learned counsel for the applicant has made averment in paragraph 80 of the bail application.
13. Learned counsel for the applicant has submitted that the contents of the certificate of origin were correct. Regarding the origin of the goods, it has been further submitted that the certificate of origin was issued by the foreign supplier and the same was accepted by the banks and this discrepancy was never considered a major one. Once the certificate of origin was issued by the foreign supplier can at best be treated as a technical non-compliance and cannot be veracity of transaction.
14. Learned counsel for the applicant has further submitted that no offence under Sections 120B, 420, 467, 468, 471 I.P.C. is made out in the present case. It has been further submitted that the business of Globiz was a genuine and profitable business which involved movement of goods and transfer of title in the goods between the goods and contracting parties. It has been further submitted that funds were utilized solely for the business transaction and for the purpose for which they were sanctioned by the banks. It has been submitted by learned counsel for the applicant that there is no evidence which indicate that the bank funds were siphoned or diverted.
15. It has been further submitted by learned counsel for the applicant that the business was regulated and the documents were thoroughly scrutinized by the multiple banks, hence, it can be concluded that the transactions were executed with the approval of all banks.
16. Learned counsel for the applicant has relied upon the judgment of Siddharth Vs. State of Uttar Pradesh and another reported in (2022) 1 SCC 676 [LQ/SC/2021/2934 ;] ">(2022) 1 SCC 676 [LQ/SC/2021/2934 ;] [LQ/SC/2021/2934 ;] ; Aman Preet Singh Vs. C.B.I. through Director (Criminal Appeal No.929 of 2021); Satender Kumar Antil Vs. Central Bureau of Investigation & another, (AIR 2022 SC 3386 [LQ/SC/2022/823 ;] ">AIR 2022 SC 3386 [LQ/SC/2022/823 ;] [LQ/SC/2022/823 ;] ); Satender Kumar Antil Vs. Central Bureau of Investigation & another; (2021 10 SCC 773) [LQ/SC/2021/3291 ;] ">(2021 10 SCC 773) [LQ/SC/2021/3291 ;] [LQ/SC/2021/3291 ;] .
17. He has also relied some judgments in paragraph nos.92, 93, 94 & 96 in the bail application which are pertaining to different sections of the Indian Penal Code, which has been invoked against the applicant and as per his argument the offence under Sections 120B, 420, 467, 468, 471 I.P.C. is not made out in view of the aforementioned law by the applicant.
18. On the other hand, Sri Anurag Kumar Singh, learned counsel for the C.B.I. has made following submissions on the basis of instructions:-
19. It has been submitted that the applicant is the Director and CEO of Frost International Ltd. M/s Globiz Exim Pvt. Ltd. is a company of the Frost Group wherein the applicnat is a Shareholder, Promoter and Incharge of the day-to-day operations of company at Kanpur. The Frost Group of companies are:-
(i) M/s Frost International Pvt. Ltd.
(ii) M/s Frost Infrastructure Pvt. Ltd.
(iii) M/s Globiz Exim Pvt. Ltd.
(iv) M/s Olympic Oil Industries Pvt. Ltd.
(v) M/s Viva Merchant Pvt. Ltd.
20. The F.I.R. has been lodged in the present case on the basis of the complaint of Indian Overseas Bank.
21. It has been submitted that the allegation in the FIR is that M/s Globiz Exim Pvt. Ltd. was enjoying credit facilities including an arrangement known as Letter of Credit (hereinafter referred to as “LC”).
22. It has been further submitted that it is admitted case of the applicant that the total amount of defrauded by the Frost Group of Companies is approximately Rs.4000 crores. In the present case, M/s Globiz Exim Pvt. Ltd. Rs.10.01 Crores and M/s Olympic Oil Industries Pvt. Ltd. Rs.6.67 Crores. It has been submitted that investigation by CBI in respect of the fraudulent activities done by other two companies involving the credit facilities availed are in progress.
23. Learned counsel for the CBI has further made submission that as to how Letter of Credit (LC) works:-
A. For availing LC, bank takes securities from companies to the extent of 85-90% of the amount of which LC is applied.
B. For merchanting business, there has to be an exporter situated in a foreign country from which the Indian Company purchases the goods and there also has to be an importer situated in a foreign country that purchases the goods from the Indian merchanting company.
C. After LC is established, the information is given by the bank of the applicant company to the bank of the exporter company.
D. There is a facility called as SWIFT messaging by means of which the banks communicate.
E. For the release of the payment of LC, the foreign bank has to sent certain documents pertaining to the shipment to the Indian Bank, i.e. Indian Overseas Bank (IOB) in this case.
F. These documents certify the genuineness of the transaction and in case there is some discrepancy, the documents are provided to the Indian party.
G. Documents contain Container No., Name of the Shipping Co., Name of the Ship, Name of Port of Dispatch, Description of goods, etc.
H. When the exporter dispatches consignment, he provided the documents to his own bank to be sent to the Indian Bank.
I. The Indian bank examines the documents and if they are in order, LC is released and if there is some discrepancy, they are provied to the Indian party for verification.
Submissions of Counsel for C.B.I.:-
24. Sri Anurag Kumar Singh, learned counsel for CBI has explained as to how the transaction has been done in the present case:-
A. Documents were found discrepant by Indian Overseas Bank.
B. The applicant’s party accepted the discrepancy/forged documents and asked the bank to release the payment to the Foreign Bank which in turn would release it to the alleged exporter based at Singapore. This is despite the fact that the documents on the face of it are forged. (page 135 of bail application).
C. The goods were directly shipped to Hong Kong.
D. Ironically, M/s Fareast Distribution based at Singapore and M/s Gulf Distribution Ltd. based in Hong Kong are both controlled by one person named Rajesh Bothra.
E. So, the same person cannot sell the goods at a lower rate and purchase the same goods at a higher rate through the company of the applicant.
F. In the present case, there was no transaction, and no goods were exported or imported.
G. Therefore, no payment was made from M/s Gulf Distribution Pvt. Ltd. to the applicant as in fact no export or import took place.
H. Since, the bank takes only 85-90% securities against LC, therefore, loss of 15-10% has been caused to the bank because of the false transaction and forgery of the documents.
I. Shiphoning of public money has been done in systematic manner by all the member companies of the Frost Group controlled by the applicant, causing a planned theft of public money.
J. The offences committed by:
(i) M/s Frost International Pvt. Ltd. are being investigated by Delhi Banking Securities and Fraud Branch);
(ii) M/s Frost Infrastructure Pvt. Ltd. are being investigated by CBI/ACB, Lucknow; and
(iii) M/s Globiz Exim Pvt. Ltd.; M/s Olympic Oil Pvt. Ltd. and M/s Viva Merchant Pvt. Ltd. are being investigated by CBI/SCB, Lucknow.
K. It is the admitted case of the applicant that he was looking after the financial affairs of the company.
L. PMLA case has also been registered against the applicant in which he has been granted regular bail. (order page 95 of bail application).
M. SFIO also registered a case against the applicant for offences committed under Companies Act in which he has been granted regular bail. (order page 117 of bail application).
N. Payment adjustment window is 180 days, that has been exploited by the applicant for making huge amount of loss by making several transactions one after the other.
O. The offence is grave and such offenders have fled the country in the past, as such the applicant is not entitled to bail.
P. The applicant has been charge-sheeted under Sections 120-B, 420, 467, 468 and 471 I.P.C. in the present case.
Q. The Hon’ble Supreme Court in the case of Satender Kumar Antil Vs. Central Bureau of Investigation and another, reported in 2022 SCC online 825 has issued some guidelines for granting bail in cases where charge sheet has already been filed and accused was not arrested during investigation. According to these guidelines, the present case falls under category B/D. For the category B/D which involves the offences punishable with imprisonment for life, the Hon’ble Supreme Court has directed that “on appearance of the accused in court pursuant to process issud bail application to be decided on merits”.
R. It is well settled that economic offences stand as a different class as they affect the economic fabric of the society and poses a serious threat to the nation’s economy and financial integrity, and therefore in economic offences, the accused is not entitled to anticipatory bail, as observed by the Hon’ble Supreme Court in P. Chidambaram Vs. Directorate of Enforcement reported as (2019) 9 SCC 24 [LQ/SC/2019/1387] .
25. The charge sheet filed by C.B.I. has been annexed by the applicant as Annexure no.7 to the bail application. The relevant portion of the charge sheet regarding Letter of Credit no.148/18 is extracted here-in-below:-
“After establishment of LC, the IOB Mall Road Branch, Kanpur had received documents viz. Bill of Lading; Certificate of Origin; Packing List; Beneficiary Certificate and Pre Shipment Certificate from Bank of India, Singapore. The Branch on receipt of documents had scanned the copies of the said document and transmitted the same to the CFEPC Chennai on 24.11.2017 for import lodgement under LC 148/2017. Since the Bill of Lading and Certificate of Origin were discrepant in terms of the conditions of the LC, the CFEPC Chennai issued an Advise of Refusal (SWIFT 734) dated 27.11.2017 and refused to honour the documents on the grounds that the BL was issued prior to LC and the Certificate of Origin was issued by the Beneficiary iteself instead of Chamber of Commerce. The CFEPC had further observed that they were holding the documents until it receive waiver from the applicant or receives further instructions from the Bank of India, Singapore.
In the meantime, the Branch had supplied a set of documents to the company, received from Bank of India, Singapore. The company vide letter dated 24.11.2017 accepted the documents despite of discrepancies and given an undertaking to make the payment under the said LC by its due date. After accpetance of documents by the Company, the CFEPC had accepted the import under LC No.148/2017 vide SWIFT 754 ON 29.11.2017.
Before the due date of payment, the company vide letter dated 21.05.2018 had requested the Branch to make payment of USD 3232174 to M/s Fareast Distribution & Logistics Pte. Ltd., Singapore by way of creating a Temporary Over Draft (TOD) as there was a short fall in its current account. The company had also given an undertaking that the TOD would be cleared by the next 10 days.
After creating a TOD, a payment of USD 3232174 (equivalent Rs.21.15 Crores) was made to the Bank of India, Singapore for crediting the account of M/s Fareast Distribution & Logistics Pte. Ltd., Singapore as per the terms and conditions of the LC. However, the company as per its undertaking did not adjust the TOD.
Facts emerged during the course of investigation.
1. As per IOB circular No. FX/96/2014-15 dated 20.02.2015, an insurance policy should not be later than the date of issuance of Bill of Lading. However in the present case, the Insurance Certificate dated 21.11.2017 was issued after the issuance of Bill of Lading dated 18.11.2017 which is contrary to the guidelines of the Bank.
2. As per the terms and conditions of the Letter of Credit No.148/2017 as mentioned in SWIFT 700 (Issueance of a Documentary Credit) bearing Sequence No.288796 dated 21.11.2017 (Page No.44-48 MR No. 17/20 SL No.15), at Additional conditions No.47-A’ transport documents must not be dated prior to the date of this Credit”. Further, as per the guidelines as well as procedure laid down by the bank, a Bill of Lading under an LC, is issued after execution of a Contract between the Seller and the Buyer as well as establishment of an LC by the concerned bank. In the instance case, the Bill of Lading dated 18.11.2017 was issued earlier than the Contract No. FEGE2111/17487 dated 21.11.2017. It is pertinent to mention here that as per the Bill of Lading dated 18.11.2017, the freight was “shipped on board” on 13.11.2017 meaning thereby that the goods under the said Contract were dispatched on 13.11.2017 i.e. much before the commencement of the Contract dated 21.11.2017 as well as establishment of LC No.148/2017 dated 21.11.2017. It is therefore apparent that the freight dated 13.11.2017 under Bill of Lading dated 18.11.2017 was not covered under the contract No. FEGE2111/17487 dated 21.11.2017 and LC No.148/2017 dated 21.11.2017.
3. The Bill of Lading No. SZAELM11221394/1F dated 18.11.2017 issued by the Landmark Clearing & Forwarding LLC, Dubai in favour of M/s Globiz Exim Pvt. Ltd., Kanpur is having a reference of Sales Contract No.FAGE2111/17487 (IOB) dated 21.11.2017 and also the documentary credit No.047860117000148 dated 21.11.2017. Thus, the BL issued on 18.11.2017 was having references of such documents i.e. sales contract and documentary credit which were not in existeance as on 18.11.2017. Therefore, the bill of lading dated 18.11.2017 issued by the Landmark Clearing & Forwarding LLC in favor of M/s Globiz Exim Pvt. Ltd., Kanpur is a bogus document.
4. Likewise, a Pre Shipment Certificate dated 13.11.2017 shown to have been issued by M/s Enlight Corporation Ltd., Hong Kong, received by the IOB, Mall Road Branch, Kanpur alngwith the transport documents is having reference of Contract No. FEGE2111/17487 dated 21.11.2017 (not in existence as on 13.11.2017). Therefore, the said document cannot be termed as a genuine document rather the same was bogus document.
5. As per the terms & conditions of the Letter of Credit No.148/2017 as mentioned in SWIFT 700 (Issue of a Documentary Credit) bearing Sequence No.288796 dated 21.11.2017 (Page No.44-48 MR No.17/20 SL No.15), at Additional Conditions No.46-A “Certificate of Origin in duplicate issued by a Chamber of Commerce or Attested by a Chamber of Commerce” was to be forwarded by Bank of India, Singapore to the IOB, Mall Road Branch, Kanpur. In the instant case, a Certificate of Origin dated 21.11.2017 (Page No.27 MR No.17/20 SL No.15) was not issued by a Chamber of Commerce or Attested by a Chamber of Commerce rather the same was issued by the Seller M/s Fareast Distribution & Logistic Pte Ltd. Singapore itself
6. As per the Bill of Lading No. SZAELM11221394/1F dated 18.11.2017, the Shipment was shipped on board on 13.11.2017 in a Vessel “Cape Artemisio/004W” at Shekou port, China in a container bearing No. NYKU9819056. The said Bill of Lading was shown to have been issued by M/s Landmark Clearing & Forwarding LLC on behalf of the carrier “NYK”. During the course of investigation, a copy of the said Bill of Lading was sent to M/s NYK Line (India) Pvt. Ltd., Mumbai to confirm whether the said Bill of Lading was issued by it or M/s Landmark Clearing & Forwarding LLC on behalf of M/s NYK Line (India) Pvt. Ltd. With reference to the letter No.1832 dated 21.09.2020 of the CBI, SCB, Lucknow, M/S NYK Line (India) Pvt. Ltd., Mumbai vide letter dated 06.10.2020 has informed that the Bill of Lading No. SZAELM11221394/1F dated 18.11.2017 covering container NYKU9819056 was not an NYK document. This fact further establish that the bill of lading No.SZAELM11221394/1F dated 18.11.2017 shown to have been issued on behalf of M/s NYK was not a genuine document.
7. As per the documents submitted by the company with the IOB, Mall Road Branch, Kanpur for establishment of a Letter of Credit, the company had to import the goods viz computer accessories from M/s Fareast Distrbution & Logistic Pte Ltd., Singapore and to export the same consignment to M/s Gulf Distribution Ltd., Hong Kong at Dubai.
Investigation in respect of M/s Fareast Distribution & Logistic Pte Ltd., Singapore has revealsed that the said company was incorporated under the Territory of the British Virgin Islands on 31.08.2012 by Ms. Ooi Ai Ling. The said company has been maintaining an account No.JPY7111000197 with Punjab National Bank, Des Voeux Road, Central, Hong Kong since December, 2012. Since, opening of the said account, the authorized signatory to the said bank account was Shri Rajesh Bothra, General Manager having Passport Number E0614726E. By virtue of being General Mangar having Passport Number E0614726E. By virtue of being General Manager and single Authorized Signatory of the said company Shri Rajesh Bothra was looking after the overall activities of M/s Fareast Distribution & Logistic Pte Ltd Singapore. As per the bank records, M/s Fareast Distribution & Logistic Pte Ltd was having a correspondence address at 13/F, Block-A, Wah Kit Commercial Centre, 302, Des Voeux Road, Central Hong Kong.
Investigation in respect of M/s Gulf Distribution Ltd, Hong Kong has revealed that the company was maintaining a JPY account no.7111000198 with Punjab National Bank, Des Voeux Road, Central, Hong Kong. The Charirman of the said company as well as Authorized Signatory to the account no.JPY7111000198 of PNB, Hong Kong was Shri Rajesh Bothra. He was holding a Singapore passport No.E0614726E. The said account was opened on 03.05.2011. As per the Bank records, M/s Gulf Distribution Ltd, Hong Kong was having a correspondence address at 13/F, Block-A, Wah Kit Commercial Centre, 302, Des Voeux Road, Central Hong Kong.
In view of the facts mentioned above it is established that M/s Fareast Distribution & Logistic Pte Ltd, Singapore and M/s Gulf Distribution Ltd, Hong Kong are not only the sister concern companies but also owned by the same person namely Shri Rajesh Bothra. Further both the companies were having the same common address i.e. 13/F, Block-A, Wah Kit Commercial Centre, 302, Des Voeux Road, Central Hong Kong. Therefore, the claim of the company that it had purchased/imported the goods from M/s Fareast Distribution & Logistic Pte. Ltd, Singapore and sold/exported the same to M/s Gulf Distribution Ltd, Hong Kong was just an adjustment of the entries/funds.”
26. The fact which has emerged during the course of investigation and which is part of charge sheet is also important which is quoted below:-
“As per the terms and conditions of the Letter of Credit No.05/2018 as mentioned in SWIFT 700 (Issue of a Documentary Credit) bearing Sequence No.304176 dated 08.01.2018 (Page No.48-53 MR No.17/20 SL No.16), at Additional Conditions No.46-A “Certificate of Origin in duplicate issued by a Chamber of Commerce or Attested by a Chamber of Commerce” was to be forwarded by Canara Bank, Hong Cong to IOB, Mall Road Branch, Kanpur. In the instant case, a Certificate of Origin dated 21.11.2017 (Page No.44 MR No.17/20 SL No.16) was not issued by a Chamber of Commerce or Attested by a Chamber of Commerce rather the same was issued by the Seller M/s Fareast Distribution & Logistic Pte Ltd., Singapore itself
A Packing List for export of a consignment is always issued before the shipment of that particular consignment. Whereas, in the instant case, a Packing List was issued on 09.01.2018 (Page No.31 MR No.17/20 SL No.16) i.e. after the issuance of a Bill of Lading dated 08.01.2018.
As per the documents submitted by the company with the IOB, Mall Road Branch, Kanpur for establishment of a Letter of Credit, the company had to import the goods viz computer accessories from M/s Fareast Distribution & Logistic Pte Ltd, Singapore and to export the same consignment to M/s Gulf Distribution Ltd, Hong Kong at Dubai.
Investigation in respect of M/s Fareast Distribution & Logistic Pte Ltd, Singapore has revealed that the said company was incorporated under the Territory of the British Virgin Islands on 31.08.2012 by Ms. Ooi Ai Ling. The said company have been maintaining an account No.JPY7111000197 with the Punjab National Bank, Des Voeus Road, Central, Hong Kong since December, 2012. Since, opening of the said account, the authorized signatory to the said bank account was Shri Rajesh Bothra, General Manager having Passport Number E0614726E. By virtue of General Manager, Shri Rajesh Bothra being single authorize signatory was looking after the overall activities of M/s Fareast Distribution & Logistic Pte Ltd, Singapore. As per the Bank records, M/s Fareast Distribution & Logistic Pte Ltd was having a correspondence address at 13/F, Block-A, Wah Kit Commercial Centre, 302, Des Voeus Road, Central Hong Kong.
Investigation in respect of M/s Gulf Distribution Ltd, Hong Kong has revealed that the company was maintaining a JPY account no.71110001998 with Punjab National Bank, Des Voeux Road, Central Hong Kong. The Chairman of the said company as well as authorized signatory to the account no.JPY7111000198 of PNB, Hong Kong was Shri Rajesh Bothra. He was holding a Singapore passport No.E0614726E. The said account was opened on 03.05.2011. As per the Bank records, M/s Gulf Distribution Ltd, Hong Kong was having a correspondence address at 13/F, Block-A, Wah Kit Commercial Centre, 302, Des Voeus Road, Central Hong Kong.
It is therefore established that M/s Fareast Distribution & Logistic Pte Ltd, Singapore and M/s Gulf Distribution Ltd, Hong Kong are sister concerns companies owned by Shri Rajesh Bothra. Further both the companies were having the same common address i.e. 13/F, Block-A, Wah Kit Commerical Centre, 302, Des Voeus Road, Central Hong Kong. Therefore, the claim of the company that it had purchased/imported the goods from M/s Fareast Distribution Logistic Pte Ltd, Singapore and sold/exported to M/s Gulf Distribution Ltd, Hong Kong was just an adjustment of the entries/funds.
In view of the facts and circumstances of the case, it is established that M/s Globiz Exim Pvt. Ltd and its directors namely Arvind Srivastava and Saral Verma were the actual benericiary out of the defrauded amount of Rs.10.01 Crores. The company through its directors in criminal conspiracy with each other as well as Sujay Desai in order to cheat the IOB had accepted discrepant/bogus document knowing fully well that the same were bogus and that there was no movement of the goods as reflected in the documents presented before the IOB, Kanpur. Further , the company with malafide intention and with intent to cheat the bank had accepted that discrepant papers received under the alleged LCs despite of the facts that the same were not in accordance with terms of the contracts/LCs which is evident from the Bill of Lading; Certificate of Origin; Packing List; Pre Shipment Certificate etc. More so, the documents like Bill of lading and Pre Shipment Certificate were bearing the references of alleged LCs which were in existence as on the dates of issuance of such Bls/Pre Shipment Certificates.
As regard the role of Sujay Desai is concerned, he was looking after the overall trade and financial activities of the Frost Group of Companies including M/s Globiz Exim Pvt. Ltd. He used to contact Sujay Desai, a citizen of Singapore for imports of goods from M/s Fareast Distribution & Logistic Pte. Ltd, Singapore and export of the same goods to M/s Gulf Distribution Ltd. under alleged LCs. Sujay Desai in India and Rajesh Bothra in Hong Kong/Singapore used to play pivotal role in the questioned matter. He was also aware that LCs were got realized without any actual import/export business.
M/s Fareast Distribution & Logistic Pte. Ltd is based at Hong Kong and was responsible for procuring the alleged documents viz. Bill of lading, Packing List, Certificate of Origin, Invoice, Pre Shipment Certificate etc. under both the alleged Letters of Credit no.148/2017 and 05/2018, which were found to be bogus.
M/s Gulf Distribution Ltd. is based at Hong Kong. The export under the alleged Letters of Credit shown to have been made to this company. As per the investigation, both M/s Gulf Distribution Ltd. (Importer of goods under alleged LCs) and M/s Fareast Distribution & Logistic Pte. Ltd, Hong Kong (Exporter of goods under alleged LCs) were controlled by one and the same person namely Rajesh Bothra.
M/s Landmark Clearing & Forwarding LLC is based at Dubai. This company alleged to have issued Bills of Lading under the alleged Letters of Credit. As per the investigation, the Bills of Lading purportedly issued by the said company were bogus.
Further investigation is kept open u/s 173(8) Cr.P.C. to ascertain the role of overseas companies M/s Fareast Distribution & Logistic Pvt. Ltd.; M/s Gulf Distribution Ltd.; M/s Landmark Clearing & Forwarding LLC and Shri Rajesh Bothra.
Further investigation is also kept open u/s 173(8) Cr.P.C. to ascertain the role of Bank Officials, IOB, Mall Road, Kanpur and CFEPC Officials of IOB, Chennai who had processed and accepted the discrepant documents under the alleged LCs.
Therefore, M/s Globiz Exim Pvt. Ltd.; its directors namely Arvind Srivastava; Saral Verma and Sujay Desai had cheated the Indian Overseas Bank, Mall Road Branch to the tune of Rs.10.01 Crores in respect of both the alleged Letters of Credit. The above mentioned facts prima facie discloses commission of cognizable offences punishable u/s 120 B, 420, 467, 468 & 471 I.P.C. against M/s Globiz Exim Pvt. Ltd, Kanpur; Arvind Srivastava; Saral Verma and Sujay Desai.”
27. Heard Sri Anurag Khanna, learned Senior Advocate assisted by Sri Nadeem Murtaza, Sri Raghav Deo Garg and Sri Amar Ghelot, learned counsel for the applicant and Sri Anurag Kumar Singh, learned counsel for the opposite party-C.B.I.
28. Learned counsel for the applicant has relied upon the judgment of Siddharth (supra), Aman Preet Singh (supra), Satender Kumar Antil (supra).
29. Satender Kumar Antil Vs. Central Bureau of Investigation & another decided on 11.07.2022 is landmark judgment which has categorized the type of offences. It is further relevant to mention here that the case of Siddharth (supra) has been considered by Hon’ble Supreme Court in the case of Satender Kumar Antil (supra) which is latest judgment decided on 11.07.2022. The relevant portion of the judgment is quoted below:-
“We are inclined to accept the guidelines and make them a part of the order of the Court for the benefit of the Courts below. The guidelines are as under:
Categories/Types of Offences
A) Offences punishable with imprisonment of 7 years or less not falling in category B & D.
B) Offences punishable with death, imprisonment for life, or imprisonment for more than 7 years.
C) Offences punishable under Special Acts containing stringent provisions for bail like NDPS (S.37), PMLA (S.45), UAPA (S.43D(5), Companies Act, 212(6), etc.
D) Economic offences not covered by Special Acts.
REQUISITE CONDITIONS
1) Not arrested during investigation.
2) Cooperated throughout in the investigation including appearing before Investigating Officer whenever called.
(No need to forward such an accused along with the chargesheet (Siddharth v. State of UP, 2021 SCC Online SC615).
CATEGORY A
After filing of chargesheet/complaint taking of cognizance.
a) Ordinary summons at the 1st instance/ including permitting appearance through Lawyer.
b) If such an accused does not appear despite service of summons, then Bailable Warrant for physical appearance may be issued.
c) NBW on failure to failure to appear despite issuance of Bailable Warrant.
d) NBW may be cancelled or converted into a Bailable Warrant/Summons without insisting physical appearance of accused, if such an application is moved on behalf of the accused before execution of the NBW on an undertaking of the accused to appear physically on the next date/s of hearing.
e) Bail applications of such accused on appearance may be decided w/o the accused being taken in physical custody or by granting interim bail till the bail application is decided.
CATEGORY B/D
On appearance of the accused in Court pursuant to process issued bail application to be decided on merits.
CATEGORY C
Same as Category B & D with the additional condition of compliance of the provisions of Bail under NDPS S.37, 45 PMLA, 212(6) Companies Act 43 d(5) of UAPA, POSCO etc.”
Needless to say that the category A deals with both police cases and complaint cases.
The trial Courts and the High Courts will keep in mind the aforesaid guidelines while considering bail applications. The caveat which has been put by learned ASG is that where the accused have not cooperated in the investigation nor appeared before the Investigating Officers, nor answered summons when the Court feels that judicial custody of the accused is necessary for the completion of the trial, where further investigation including a possible recovery is needed, the aforesaid approach cannot give them benefit, something we agree with.
We may aslo notice an aspect submitted by Mr. Luthra that while issuing notice to consider bail, the trial Court is not precluded from granting interim bail taking into consideration the conduct of the accused during the investigation which has not warranted arrest. On this aspect also we would give our imprimature and naturally the bail application to be ultimately considered, would be guided by the statutory provisions.
The suggestions of learned ASG which we have adopted have categorized a separate set of offences as “economic Offences” not covered by the special Acts. In this behalf, suffice to say on the submission of Mr. Luthra that this Court in Sanjay Chandra v. CBI, (2012) 1 SCC 40 [LQ/SC/2011/1492] has observed in para 39 that in determining whether to grant bail both aspects have to be taken into account:
a) seriousness of the charge and.
b) severity of punishment.
Thus, it is not as if economic offences are completely taken out of the aforesaid guidelines but do form different nature of offences and thus the seriousness of the charge has to be taken into account but simultaneously, the severity of the punishment imposed by the statute would also be a factor.”
30. The case of economic offences stand on a different footing which affect the economic fabric of the society and poses a serious threat to the nation’s economy and financial integrity, which has been upheld by the Hon’ble Supreme Court in the case of P. Chidambaram (supra) is quoted below:-
“78. Power under Section 438 CrPC being an extraordinary remedy, has to be exercised sparingly; more so, in cases of economic offence. Economic offences stand as a different class as they affect the economic fabric of the society . In Directorate of Enforcement v. Ashok Kumar Jain [Directorate of Enforcement v. Ashok Kumar Jain, (1998) 2 SCC105 : 1998 SCC (Cri) 510] [LQ/SC/1998/26 ;] ">1998 SCC (Cri) 510] [LQ/SC/1998/26 ;] [LQ/SC/1998/26 ;] , it was held that in economic offences, the accused is not entitled to anticipatory bail.”
31. Again the matter of economic offence has been decided by Hon’ble Suprement Court in the case of Y.S. Jagan Mohan Reddy Vs. CBI reported in (2013) 7 SCC 439 [LQ/SC/2013/568] . Paragraph nos.34 and 35 of the said judgment is quoted below:-
“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 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.”
32. In the case of Aman Preet (supra) the Hon’ble Supreme Court has observed that earlier direction in Criminal Appeal No.668 of 2021 was given on 06.05.2021 with observation which is quoted below:-
“A reading of the aforesaid thus makes it clear that custodial interrogation of the appellant was not required during investigation and charge sheet having been filed, there was really no occasion to arrest the appellant. We thus granted liberty to the appellant to appear before the trial Court and apply for regular bail while protecting him during the interregnum period. The present proceedings have arisen out of the requirement of the appellant to seek regular bail in terms aforesaid. Suffice to say that the special Chief Judicial Magistrate (CBI), Bhubaneshwar, vide order dated 22.07.2019 noticed that since the accused persons had been charge sheeted for Economic offences, it was appropriate to issue non-bailable warrants of arrest against the accused, including the appellant before us.”
33. It is thus clear that in the said case, the Hon’ble Supreme Court had granted interim protection for the period of eight weeks and directed Aman Preet to apply for regular bail before the trial court.
34. In the judgment of Satender Kumar Antil (supra), the guideline applicable in the present case is category B/D wherein it is provided that on appearance of the accused in the court pursuant to process issued bail application to be decided on merit. The present matter is pertaining to the defrauded huge amount of Rs.10.01 crores and specific allegation is levelled in the charge sheet against the applicant that he was looking after the overall trade and financial activities of the Frost Group of Companies including M/s Globiz Exim Private Limited and used to contact Rajesh Bothra and they were involved for imports of goods from M/s Fareast Distribution based at Singapore and export of the same goods of M/s Gulf Distribution Ltd. under the alleged (LC). M/s Globiz Exim Private Limited and its direcotr, namely, Arvind Srivastava and Saral Verma actually defrauded the amount of Rs.10.01 crores. The company through its directors in criminal conspiracy as well as Sujay Desai, had accepted the bogus document knowing fully well that the same were bogus as reflected in the documents presented before IOB, Kanpur.
35. Looking into the overall facts and circumstances of the above discussion, on the issue of economic offence up to the tune of Rs.10.01 crores, and the role of the applicant who was looking after day to day affairs of the Company, I do not find that it is a fit case for anticipatory bail.
36. Accordingly, the anticipatory bail application is rejected.
37. However, the court below will not be influenced, in any manner, by the observations made by this Court.
