Bail in foreign exchange investigation refused where ongoing evidence collection and risk of frustrating the inquiry weighed against release.

Bail in a foreign exchange investigation was considered against the seriousness of the alleged violations, including sale of shares outside the stock exchange, absence of Reserve Bank approval, and non-compliance with summons. The Court treated the continuing stage of investigation, the incompleteness of evidence gathering, and the need to examine material outside India as significant factors. It held that the usual preference for bail could be displaced where release was likely to prejudice or frustrate the inquiry, and the bail application was rejected.

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Issues: Whether bail should be granted to the accused during the pendency of investigation in a case involving alleged violations of foreign exchange law.

Analysis: The allegations related to sale of shares outside the stock exchange, alleged absence of necessary Reserve Bank approval, and non-compliance with summons were treated as serious. The material before the Court indicated that investigation was still continuing and that the agency had not concluded collection of evidence, including material requiring scrutiny beyond India. In deciding the bail request, the Court emphasised that the nature of the accusations, the stage of investigation, and the potential prejudice to the inquiry were relevant considerations, and that the usual rule favouring bail could not prevail where release was likely to frustrate the investigation.

Conclusion: Bail was refused and the application was rejected.

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