TaxTMI 
TaxTMI 
2022 (6) TMI 207
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....e Act. The petitioner was arrested for the case on 09.08.2021 and since then is continuing in judicial custody. 2. According to the petitioner, initially he was arrested on 29.08.2020 by Konny police in Crime No. 1740/2020 alleging various offences under Sections 406, 420 read with 34 of the IPC. Later he was granted bail under various common orders passed by this Court. Similarly, bail was granted to him by the Additional Sessions Court-III, Alappuzha which is the Special Court for the trial of offences under the Banning of Unregulated Deposit Schemes Act, for short the BUDS Act. Similarly various crimes registered against him for cheating and criminal breach of trust by the local police were transferred for investigation to the CBI. In some cases, the Special Court for the trial of CBI cases also granted him bail. All such bail orders were passed imposing stringent conditions, restricting his movements and also with direction for periodical report before the Investigating Officer. During all these times, he was subjected to interrogation by the respondent on several occasions and was arrested on 09.08.2021, after releasing him from judicial custody in the other cases. According ....
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....he crime, the Enforcement Crime Information Report (ECIR) was registered and investigation was commenced by the respondent. The claims made by the petitioner are baseless. Incriminating materials have been collected by the respondent and there are materials to indicate that he has committed offence under Section 3 read with Section 4 of the Act. If he is released on bail, possibility of him tampering with evidence and influencing the witnesses cannot be ruled out. The primary witnesses of the case are the employees of the Popular group. Similarly, even though he was interrogated on different occasions, he has not divulged the true state of affairs and has not co-operated with the investigation. He was evasive and non co-operative. After collecting huge amounts from the depositors, he has laundered the money in Australia and Dubai on the pretext of imports through banking channels and through hawala. Materials have been collected to show that sale proceeds of the properties disposed of by him have been received in his Savings Bank account through the bank accounts of unknown persons and ultimately used for his personal benefits. 4. In the objection, statements of Sri.Koshy Mathew, ....
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....higher education of his daughters and son-in-law from the bank account of Popular Finance, but details of which are not yet revealed. They have also expended huge amount of money for the interior designing of 270 branches opened by the Popular group, that everything was done on collusion with the managerial staff and the contractor. Moreover, very many accomplices of the petitioner also have been interrogated. He has also purchased twenty vehicles, most of them are premium luxury vehicles like Mercedes Benz etc. Having regard to the gravity and nature of the offence alleged against the petitioner, it is not in the interest of justice to release him on bail. 5. I heard Sri. C.S. Manu, the learned counsel for the petitioner and Sri. S.V. Raju, learned Additional Solicitor General of India, in detail. The respective contentions were reiterated by the learned counsel on both sides. 6. According to the learned counsel for the petitioner, now from the version of the learned Additional Solicitor General, it has come out that the respondent has already laid a complaint before the Special Court, a copy of which has since been served on him; since the investigation is over, there is no mea....
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....while granting bail. Relying on the decision reported in Nikesh Tarachand Shah v. Union of India and another [AIR 2017 SC 5500] the learned counsel pointed out that since the Supreme Court has struck down Section 45 of the Act there is no meaning in insisting to comply the twin conditions. 7. According to the learned counsel for the petitioner amendments were made to the Act to undo the decision of the Hon'ble Supreme Court in Nikesh Tarachand Shah, quoted supra. However, all the defects highlighted by the Supreme Court in the above decision have not been cured by the Parliament. According to him, still the adage, bail is the rule and jail is the exception, has to be considered by this Court. 8. In his elaborate reply, the learned Additional Solicitor General Sri. S.V. Raju said that the principle, bail is the rule and jail is the exception, is not applicable to a case falling under the Act especially when huge amounts were laundered by the accused persons. Relying on various decisions, Ajay Kumar v. Directorate of Enforcement, Criminal Application (B.A.) No.1149/2021 of the Bombay High Court, B.A.No.4295/2021 of Delhi High Court in Raj Singh Gehlot v. Directorate of Enforcement,....
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....f the BUDS Act. The sum and substance of the allegations is that he as the Managing Director of the Company by name Popular Finance, which has branches all over the State and also in some of the southern States of the country, had collected huge amounts as deposits promising to pay attractive interest. He is also having money lender licence under the Kerala Money Lenders Act and is lending money on the security of gold pledged by the customers. The head office of the Popular Finance and sister concerns is in Vakayar in Pathanamthitta district. Alleging that amounts deposited by the defacto complainant in Crime No.1740/2020 of Konni police station were not paid back, she approached the police and registered the first crime, followed by a flood of cases registered against the petitioner, his wife and three daughters and some near relatives. It is stated that so far 1368 cases have been registered in different police stations of the State besides a crime registered by the CBI on the directions of this Court. The estimation of the prosecution is that they have defrauded nearly Rs.1,600 crores from a large number of depositors estimated to be 30,000, who were dealing with the petitioner....
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....cutor 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 State Government authorised in writing in this behalf by the Central Government by a general or a 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 author....
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....ad earned a name in central Travancore for sometime. Earlier, when a bail application was taken up for consideration, this Court had occasion to hear a learned counsel saying that the financial institution had a very humble beginning founded by the fore-fathers of the petitioner on whom people in the area had great trust and confidence. It appears that the petitioner also could run the business for sometime in good stead. But the materials produced by the parties clearly indicate that everything has gone out of his hands. He is a registered money lender under the Kerala Money Lenders Act. He had also obtained permit from the Reserve Bank of India for collecting deposits. But after 1997, he has not approached the RBI and the RBI had occasion to proceed against him before the Court at Pathanamthitta. Documents clearly reveal that the petitioner had indulged in collecting large amounts as deposits offering high rate of returns; everything was done illegally. There are large number of instances in which, after collecting money in deposit in Popular Finance, receipts used to be issued in the name of other entities launched by the petitioner and his wife and children themselves. He had c....
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.... the same, the prime witnesses in the case are the staff members of the petitioner. If he is released on bail, the possibility of him influencing and winning over them cannot be ruled out. Having regard to the gravity of offence and the huge amounts involved, the expectation of the petitioner that he would be able to revive and resurrect the business, is only just like the dream of the milkmaid. 18. Even though the learned counsel described it as illadvised, it is a fact that the petitioner had moved the Sub Court, Pathanamthitta with a petition for declaring him insolvent. 19. The learned counsel is not justified in placing reliance on the decisions reported in P. Chidambaram and Krishna Mohan Tripathi, quoted supra. There are no factual comparison of these cases. The amount involved in Krishna Mohan Tripathi is only Rs.1,38,63,445/- where the Apex Court was granting bail taking into account the facts of the case. Similarly, in P. Chidambaram's case, the total amount allegedly laundered comes only Rs.3 odd crores, the said petitioner is the former Finance Minister of the country; he was 74 years old and was suffering from some ailments. Therefore, these two decisions cannot ....