TaxTMI 
TaxTMI 
1998 (8) TMI 650
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....n its application prayed for issuance of non-bailable warrants of the petitioner's arrest, alleging that the aforementioned case (RC1(A)/ 90-ACU-IV SPE, C.B.I. New Delhi) was registered on 22.1.1990 on the basis of sources, certain facts and circumstances that became available, media reports, report of the Swedish National Audit Bureau, certain facts contained in the report of the Joint Parliamentary Committee and the report of Comptroller and Auditor General of India. It was alleged therein that during 1982-87 certain public servants entered into a criminal conspiracy with certain private persons/others, in India and abroad and in pursuance thereof committed offences of bribery, cheating, swindling and forgery, in respect of a contract dated 24.3.1986, entered into between Government of India and AB Bofors of Sweden, for supply of guns, towed vehicles and ammunition by AB Bofors to Government of India. A percentage of the said amount of contract was remitted by Bofors in a clandestine manner to certain Public Bank accounts in Switzerland, as illegal gratification, for the benefit of certain public servants of Government of India and their nominees. The Government of India had ....
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....ents through the Bank accounts, which could be operated and controlled by the petitioner and his wife individually. While Letter Rogatory was under process of execution, US$ 200,000.00 were again transferred from the account of M/s. Wetelsen Overseas SA in UBS Geneva to Inter Investment Development Company for the benefit of Ansbbacher Ltd. St. Peter Port Guernsey on 21.5.1990. The application further says that efforts are on to trace the further proceeds of the fraudulent transaction spread across several countries. The investigation conducted so far thus prim a facie revealed that the entire transaction of payment by AB Bofors to M/s. AE Services and other was intended to masquerade the ill-gotten payment/commission/bribe and thus the Government of India was defrauded and put to loss. The investigation had revealed that the petitioner, the holder of Italian Passport was in India from 1967 onwards and left India abruptly only in July, 1993, after revelation of his name, as one of the appellants before the Swiss Courts. The investigation prima facie reveals that the petitioner was the recipient of the fruits of frauds committed in the Bofors gun deal, which he used for himself and ....
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....cation moved by the respondent no provision of law was mentioned. Non-bailable warrants could be issued for the arrest of a person under Section 73 of the Code, if the said person (a) is an escaped convict; or (b) is a proclaimed offender; or (c) is a person accused of a non-bailable offence and is evading arrest. The petitioner alleged that he does not fall under any of the three categories. Team of C.B.I. Officers had in fact taken the warrants of arrest to Malaysia. The same was returned back unexecuted by police agencies at Malaysia. At the behest of the respondent red alert had been issued against the petitioner by the Interpol, which had not been removed despite the return of the warrants unexecuted from Malaysia, on the ground of insufficient incriminating material. Thus according to the petitioner, the act of procuring a Red Alert from Interpol was illegal. The same had no sanction in the eyes of law. On account of Red Alert, the petitioner was facing difficulty, affecting his right to freely move about in connection with his business. The petitioner also questioned the legality of issuance of warrants and passing of the impugned order, on the ground that although eight yea....
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.... entered into between the Government of India and M/s. Abbofors on 24.3.1986. M/s. AB Bofors on 24.4.1987 in reply addressed to the Indian Ambassador in Sweden, in response to a communication from the Ministry of defense, Government of India, after the allegations were made in the broadcast by Swedish Radio, that there was kick back in the entire deal, inter alia, stated that payments referred to by Swedish Radio were completely legal, in accordance with Swedish currency regulations and other relevant Swedish regulations. It was asserted that the payments were not made to any Indian company or Indian citizen and had no connection with the obtaining of the contract of 1986. Prior to their examination by the Joint Parliamentary Committee, a representative of Bofors admitted before the officers of Government of India that a total sum of SEK 319.40 million was paid to three companies registered outside India, which included Svenska Inc. Panama and M/s. AE Services Ltd., U.K. towards winding up charges. When examined by the Joint Parliamentary Committee, the Bofors finally confirmed having made payments to three companies but refused to divulge their names. The Swedish National Audit Bu....
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....rs had remitted a sum of SEK 50,463,966.00 (equivalent to US $ 7,343,941.98) on September 3, 1986 from the account with Skandin aviska Enskilda Banken, Stockholm to account number 18051-53 of M/s. A.E. Services Limited at Nordfinanz Bank, Zurich. This account of A.E. Services Limited c/o Mayo Associates SA, Geneva, was opened only a fortnight ago, on August 20, 1986 by Myles Tweedale Stott as Director. From this account of M/s. AE Services an amount totaling US $ 7,123,900 ($ 7,000,000 on 16th September, 1986, and $ 1,23,900 on 29th September, 1986) was transferred to account No. 254.561.60 W of M/s. Colbar Investments Limited Inc., Panama with Union Bank of Switzerland, Geneva. An amount of US $ 7,943,000 from this account of M/s. Colbar Investments Ltd. Inc. was further transferred on 25.7.1988 to account No. 488 320.60 x of M /s. Wetelsen Overseas SA at Union Bank of Switzerland, Geneva. Thereafter, on 21st May, 1990 an amount of US $ 9,200,000 from the said account of M/s. Wetelsen Overseas was transferred to account No. 123893 of International Investments Development Co., in Ansbbacher (CI) Limited, St. Peter Port, Guernsey (Channel Islands). These accounts of M/s. Colbar Inve....
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....986 and virtually the entire amount was transferred by A Services to the petitioner's Colbar Investment Ltd. Inc. in UBS, Geneva on 16.9.1986 and 29.9.1986. As per the terms of contract with M/s. Bofors, the Government of India had released 20% advance amount of SEK 1,682,132,196.80 on 2.5.1986 to M/s. Bofors. The amount of commission received by M/s. AE Services SEK 50,463,966 works out to be exactly 3% of the amount of advance paid by Government of India to M/s. Bofors, as stipulated in the 15th November, 1985 agreement between Bofors as AE Services. 17. The reply further states that process of negotiations was started in 1984. The first meeting of the Negotiating Committee as per the Minutes available was held on 7.6.1984, The Committee thereafter met on about 17 occasions. The first preference of the Army all along had been for Sofma gun. The preference shown for the first time in its report dated 17.2.1986 of the Army Headquarters was for Bofors gun. There has been undue haste thereafter. Suddenly the process of negotiations picked up after the Army Headquarters report dated 17.2.1986 rating the Bofors gun as number one. The Committee on 12.3.1986 showed unusual haste i....
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....mpetitive offers. Hurried decision for a letter of intent, despite pending offers was an act to circumvent the process with the sole motive to communicate to the Swede that the contract had already been awarded to them. 20. Reply also states that the petitioner's name for the first time came to light in this case only on 23.7.1993 when the Interpol-Switzerland informed that the appeals filed by seven appellants including the petitioner had been dismissed by the Swiss Supreme Court. Within six days of this information coming to the notice of C.B.I. the petitioner left from India i.e. on 29.7.1993 and did not come back. The very act of the petitioner leaving India all of a sudden in July, 1993, when his name was disclosed, as one of the appellants in the Swiss Court, who tried to stop the execution of Letter Rogatory sent by Government of India points to prima facie petitioner's involvement in the crime. 21. It is also stated in the reply that the respondent had been able to receive documents only in January, 1997 from Swiss Authorities, from which it became clear that the petitioner is a beneficiary of the money paid into the account of M/s. AE Services, the first Inst....
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....en obtained by AB Bofors except for the influence wielded by him. It is stated that public servants concerned are guilty of offences coming under Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act, 1947 as well Along with may offences, which are still under investigation. Prima facie an offence under Section 120B read with Section 420, I.P.C. is made out on the facts brought out from the material gathered. Agreement dated 15,11.1985, which is a secret agreement, contrary to the clear understanding, which emerged at the meeting of the defense Secretary with the President of AB Bofors. In fact the agreement dated 15.11.1985 is an agreement to commit the offence of cheating because the two parties to the agreement conspired to deceive the Government of India and dishonestly induced it to part with money, which included the element of commission, contrary to the understanding and undertaking. The fact that the commission of 3% of the first Installment was paid would mean that the petitioner had kept his part of the agreement to negotiate the deal and to support the bid of AB Bofors, from which it would further follow that the petitioner had been able to successf....
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....f warrant of arrest was furnished to them and is still in force. There is no reason to revoke the Red Corner Notice, 25. In the light of the aforementioned pleadings, learned Counsel for the pasties were heard at length. 26. Mr. Dinesh Mathur, learned Counsel for the petitioner while reiterating, what is alleged in the petition, contended that as the application did not disclose any offence having been committed by the petitioner, the Court could not have issued warrants. The same which could be issued only for the purpose of producing a person, who is accused of a non-bailable offence and is evading arrest, before the Court and not before the Investigating Agency. No effort was made by the Investigating Agency to call the petitioner to join investigation. Special Judge could not have exercised jurisdiction under Section 73 of the Code of Criminal Procedure in issuing warrants, which could be issued only in the circumstances mentioned in the said provisions, which were non-existent. The application on the face of it suggested that the petitioner was not residing within the local limits of its jurisdiction. He was also not residing in India. Warrants, if directed to be issued ....
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....ces. He had no links with AE Services. Subsequent transfer of the amount by AE Services to Colbar and others had no relevance in the case. Satisfaction recorded by the Special Judge in the impugned order was not the satisfaction, as envisaged under Section 73 of the Code inasmuch the impugned order otherwise is bad in law. 28. On behalf of the respondent Mr. Venugopal vehemently opposed the petitioner's stand contending that documents were duly considered by the Special Judge before ordering issuance of non-bailable warrants. The material produced before the Magistrate was sufficient, in order to come to a conclusion that there was a reason to believe about the petitioner's involvement in the commission of the offences. The petitioner's role was self evident when for the first time the petitioner's name surfaced being one of the appellants having made unsuccessful attempt in preventing the execution of Letter Rogatory. The petitioner's conduct in having left India abruptly, not to come back again obviously leads to an inference that he was evading arrest and was not prepared to subject himself to the jurisdiction of the Court. No discretion deserves to be exe....
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....uestion is concerned, the Apex Court had an occasion to deal with the same in The Janta Dal v. M.S. Chowdhary & Ors., 1993 CriLJ 600. Facts in detail leading to the registration of F.I.R. need not be stated by us as the same are to be found in the judgment of the Supreme Court. Reasons, which necessitated the respondent to file an application requesting to issue Letter Rogatory/request to Switzerland urgently for getting the necessary assistance s') that the investigation can be conducted in Switzerland are to be found in another order of the Supreme Court dated 27.8.1991 reported in Janta Dal v. H.C. Chowdhary and Ors., 1991 CriLJ 838. Application of the respondent was allowed on 5.2.1990 by the Special Judge. Letter Rogatory was issued. At the stage when the same was received back by the order of Cantonal Court of Geneva for compliance of certain procedural or formalities, Shri Harinder Singh Chowdhary, an Advocate, claiming to be the General Secretary of an Organization named 'Rashtrya Jan Perished' filed Criminal Miscellaneous Application No. 12 of 1990 before the Special Court seeking direction that no Letter Rogatory be issued on the formal request of C.B.I, unles....
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....ad with Section 482 of the Code issuing show cause notice to the C.B.I, and State was set aside, 34. There is yet another decision of the Supreme Court dealing with the F.I.R. in question. After the first round of the aforementioned Public Interest Litigation was lost by which an effort was made to knock down the F.I.R., another attempt was made in the second round by Shri W.N. Chadha, one of the named accused in the F.I.R., who preferred Criminal Writ Petition No.501/91 in this Court challenging the legality and validity of F.I.R. and the Letter Rogatory issued by the Special Court, including the amended Letter Rogatory, praying that F.I.R. Along with all other proceedings arising thereon including Letter Rogatory be quashed. The writ petition was allowed on 2.9.1992. F.I.R. and Letter Rogatory issued on two occasions and all other proceedings taken thereon were quashed. We need not take note of the facts in detail leading to the filing of the writ petition or further appeal to the Supreme Court by Union of India and C.B.I. The net result being that the appeal of Union of India and C.B.I, was allowed and the decision rendered by the High Court was set aside. The judgment of the....
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....ther positive pronouncement on the merits of the serious and cloudy issues involved in this case de horse the findings recorded in his judgment. However, as we feel that there may be a battle to be waged on a later occasion by the litigants if the matter comes up for trial, we do not propose to make any further observations," 37. As there is no challenge in the instant case and learned Counsel for the petitioner frankly and rightly so conceded that there is no prayer made to quash the F.I.R., we need not to say any more on this aspect except that it is not a stage where it would be proper for us to examine the F.I.R. from that point of view that it discloses no cognizable offence or that it is liable to be quashed and set aside qua the petitioner, in the manner in which it is sought to be done. We have in extenso quoted the averments, which the respondent made in the application seeking issuance of the warrants. The same on the face of it do constitute making of sufficient allegation pointing out that the evidence so far collected prima facie reveal that the petitioner was recipient of fraud committed in Bofors gun deal, which he received for himself and on behalf of certain pub....
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.... Judge so that the Investigating Officer may join him in investigation was held to be without jurisdiction. Interpreting Section 73 of the Code, learned Single Judge of this Court held that warrants can be issued by a Court against a person who is accused of non-bailable offence and is evading his arrest. The question whether the petitioner was evading arrest as an accused in the said case was answered in negative. Taking note of the submission of learned Additional Solicitor General that at that stage Washeshar Nath Chadha was required only for interrogation and not to be arrested as an accused, issuance of non-bailable warrants against him by Special Judge for the purpose of joining investigation was held to be without jurisdiction. It was held that issuance of warrants against a person named in the F.I.R. where the Investigating Officer could not avail benefit of Section 160 for interrogation of person as he was living abroad and not within the limits of his own or adjoining station, an order by the issuing non-bailable warrants of arrest under Section 73 of the Code against him for being produced before the Court so that the Investigating Officer could join him in the investiga....
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.... arrest was made to initiate further proceedings in the matter and to apprehend them or to take further action to declare them proclaimed offenders. Two other applications were made for publication of written proclamation as also for issuance of open dated non-bailable warrants of arrest. According to C.B.I, such notices were required to be got issued by Interpol to seek police assistance in foreign country to locate and apprehend fugitives. Applications were rejected by the Designated Court. The order was challenged in the Supreme Court by C.B.I. 44. The Supreme Court considered the question that whether a Court can issue a warrant to apprehend a person during investigation for his production' before police in aid of the Investigating Agency. This question was answered by the Supreme Court holding that Section 73 of the Code confers a power upon a Magistrate to issue a warrant and that it can be exercised by him during investigation also. It was further held that Section 73 of the Code is of general application and that in course of the investigation a Court can issue a warrant in exercise of power there under to apprehend, inter alia, a person who is accused of a non-baila....
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.... arrest and that too during investigation is evident from the provisions of part 'C' of Chapter VI of the Code, which we have earlier adverted to. Needless to say the provisions of proclamation and attachment as envisaged therein is to compel the appearance of a person who is evading arrest. Now, the power of issuing a proclamation under Section 82 (quoted earlier) can be exercised by a Court only in respect of a person 'against whom a warrant has been issued by it'. In other words, unless the Court issues a warrant the provisions of Section 82, and the other sections that follow in that part, cannot be invoked in a situation where inspire of its best efforts the police cannot arrest a person under Section 41. Resultantly, if it has to take the coercive measures for the apprehension of such a person it has to approach the Court to issue warrant of arrest under Section 73; and if need be to invoke the provisions of part 'C of Chapter VI. (Section 8(3) in case the person is accused of an offence under TADA). 23. Lastly, we may refer to Section 90, which appears in part 'D' of Chapter VI of the Code and expressly states that the provisions containe....
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.... the Special Judge exercised his judicial discretion based on material placed before him and directed issuance of non-bailable warrants of arrest with further direction of posting the case for the adjourned date. In other words on production of the petitioner, pursuant to the execution of warrant, in terms of the ratio of decision in Dawood Ibrahim Kaskar's case (supra), it would be within the sole discretion of the Special Judge, which is to be exercised by him judicially either to release him on bail under Section 439 of the Code or authorise his detention in custody (either police or judicial) under Section 167 of the Code. Whether the Special Judge, on being moved by the Investigating Agency, will entertain its prayer for police custody will also be at his sole discretion in accordance with Section 167(3) of the Code. The Supreme Court in Dawood Ibrahim Kaskar's case (supra) also observed that under the Code investigation consists generally of the following steps : (1) Proceedings to the spot; (2) Ascertainment of the facts and circumstances of the case; (3) Discovery and arrest of the suspected offender ; (4) Collection of evidence r....
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....f India, who forwarded it to the High Commissioner for India in Hong Kong, who in his turn, requested the Colonial Secretary, Hong Kong for an order extraditing More under the Fugitive Offenders Act, 1881 to India for trial. The Central Magistrate, Hong Kong made an endorsement on the warrant to arrest More. More was arrested. His objection was turned down by the Central Magistrate that the Court had no jurisdiction to proceed in the matter under the Fugitive Offenders Act, 1881. More's father approached Calcutta High Court for an order quashing the warrant of arrest against More and all proceedings taken thereunder. There was difference of opinion by the Division Bench. The matter was referred to the third Judge, who formed an opinion that the Chief Presidency Magistrate had no power to issue warrant of arrest in the manner he had done. In view of the majority opinion, warrant of arrest and all proceedings taken by the Chief Presidency Magistrate were ordered to be quashed. State of West Bengal preferred an appeal. The Supreme Court held that Form II of the warrant prescribed in Schedule V of the Code of Criminal Procedure, 1898 (now Form II in Second Schedule VI of Criminal P....
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....ubtedly to secure the extradition of More. Pursuant to the warrant the Ministry of External Affairs, Government of India, moved through diplomatic channels, and persuaded the Colonial Secretary of Hong Kong to arrest and deliver More. Issue of warrant and the procedure followed in transmitting the warrant were not illegal, not even irregular." 50. Relying on the aforementioned decisions, we are of the view that in the instant case the Special Judge was justified and had jurisdiction in having issued the non-bailable warrant. He had the power to issue warrant for the arrest of the petitioner because the satisfaction recorded by him that there was prima facie evidence before him that the petitioner was concerned with the commission of the offence, which he was competent to try. The warrant v/as issued in Form II of the Second Schedule of the Code. 51. In case such a warrant is to be successfully executed, there is no doubt in view of the ratio in Jugal Kishore's case (supra) that the respondent could approach diplomatic channels in order to secure arrest of the petitioner and for his production before the Special Judge. 52. We have another reason for our view for support....