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