Subhash Vidyarthi, J
1. Heard Sri Gopal Swaroop Chaturvedi, Sri. Satish Chandra Misra and Sri Nandit Kumar Srivastava Senior Advocates assisted by Ms. Soumya Chaturvedi, Sri Pranjal Krishna, Sri Samarth Agarwal, Smt. Pooja Kothari and Ms. Urvi Purve, Advocates, the learned Counsel for the applicant and Sri Anurag Kumar Singh Advocate, the learned counsel representing the Central Bureau of Investigation (C.B.I.).
2. The instant application has been filed seeking release of the applicant on bail in Criminal Case No. 370 of 2020, arising out of Crime No. RC0062020A0005, registered at Police Station CBI/ACB, Lucknow, under Section 120-B read with Section 409, 420, 467, 468 and 471 I.P.C. and Sections 7-A, 8 & 13 (2) read with 13 (1) (d) of the Prevention of Corruption Act, 1988, pending in the court of learned Additional District Judge/Special Judge, Anti Corruption, C.B.I. (West), Lucknow.
3. On 02.11.2019, a First Information Report bearing Case Crime No. 540 of 2019 for commission of offences under Sections 409, 420, 467, 468 and 471 IPC was lodged in Police Station Hazaratganj, Lucknow by Sri. I. M. Kaushal, Secretary of Uttar Pradesh Power Corporation Contributory Provident Fund Trust against (1) Praveen Kumar Gupta, the then Secretary of the Trust and (ii) Sudhanshu Dwivedi, the then Director Finance, stating that on 09.05.2013, the Board of Trustees of the Trust had decided that the amount of General Provident Fund will be invested in Fixed Deposit Schemes of Nationalized Banks for 1 to 3 years. On 21.04.2014, a decision was taken by the Board of Trustees to consider other options, which are secured like investments made in the bank and which give higher assured interest and the Director Finance was authorized to take the services of a Financial Consultant, if necessary. Till October 2016, the amount of Provident fund was invested in fixed deposit schemes of Nationalized Banks. In December 2016, on a proposal made by Praveen Kumar Gupta, Secretary of the trust, which was approved by Sudhanshu Dwivedi, the then Director Finance and A. P. Mishra, the then Managing Director, amounts of General Provident Fund and Contributory Provident Fund were started being invested in Fixed Deposit Schemes of PNB Housing. In March 2017, the aforesaid named accused persons Praveen Kumar Gupta and Sudhanshu Dwivedi started investing the amounts of GPF and CPF in DHFL in violation of the procedure laid down by the Notification dated 02.03.2015 issued by the Ministry of Finance, Government of India, as per which a maximum of 50% of non-government Provident fund can be invested in Scheduled Commercial Banks.
4. The F.I.R. further states that in a meeting of the Board of Trustees held on 24.03.2017, it was agreed to consider the investment proposals as per Government Notification dated 02.03.2015 in securities other than deposits of Nationalized Banks, in AAA rated companies giving higher security and high interest rates. In contravention of the clear guidelines of the government of India contained in the notification dated 02.03.2015 prohibiting investment of amounts of the employees Provident Fund in institutions other than Scheduled Commercial Banks, Secretary of the Trust Praveen Kumar Gupta invested Rs. 2,631.90 Crores in DHFL, after obtaining approval from Director Finance Sudhanshu Dwivedi, knowing fully well that DHFL is not a scheduled commercial Bank and it is an unsecured private institution. Out of the aforesaid amount, Rs. 1185.50 Crores had been received back by the trust and Rs. 1445.70 Crores were yet to be received. Similarly, an amount of Rs. 1491.50 Crores was invested in DHFL from the Contributory Provident Fund amount, out of which Rs. 669.30 Crores had been repaid and Rs. 822.20 Crores were pending. Thus a total of Rs. 2267.90 Crores principal amount was to be received from DHFL. The FIR alleged that the named accused persons Praveen Kumar Gupta and Sudhanshu Dwivedi had committed the offence of criminal breach of trust.
5. After registration of the case, the investigation was transferred to the Economic Offences Wing (EOW) of Uttar Pradesh Police on the same day, i.e., 02.11.2019. The EOW filed a charge-sheet on 01.02.2020 against Praveen Kumar Gupta, Sudhanshu Dwivedi and Ayodhya Prasad Misra, the then Managing Director of UPPCL. Thereafter the EOW filed the First supplementary charge-sheet on 11.02.2020 against Abhinav Gupta, son of Naveen Kumar Gupta and his friend Ashish Chaudhary. The second supplementary charge-sheet was filed by EOW on 02.03.2020 against seven other persons. The third supplementary charge-sheet was filed by EOW on 05.03.2020 against four more persons.
6. The matter was subsequently transferred to CBI and on 05.03.2020 the CBI registered a fresh First Information Report No. RC 00620208A0005 for commission of offences under Sections 409, 420, 467, 468 and 471 IPC. Thereafter CBI conducted investigation in furtherance of the aforesaid FIR and it filed the fourth supplementary charge-sheet on 29.12.2020 against another accused person.
7. The applicant was not named in the FIR lodged by the informant and in the charge-sheet or the three supplementary charge-sheets filed by the EOW. He was also not named in the FIR lodged by the CBI and in the fourth supplementary charge-sheet submitted by the CBI.
8. The Trial Court took cognizance of the offences against all the charge-sheeted accused persons.
9. On 22.08.2022, the CBI submitted another charge-sheet against (i) Kapil Wadhawan, (ii) Dheeraj Wadhawan (the applicant) and (iii) M/s Dewan Housing Finance Ltd. (DHFL) alleging commission of offences under Sections 120 B read with 420, 409, 467, 468, 471 IPC and Section 7 A, 8, 13 (2) read with 13 (1) (d) of Prevention Of Corruption Act, 1988 and substantive offences thereof. The charge-sheet states the huge amounts of General Provident Fund and Contributory Provident Fund were transferred in the bank accounts of DHFL for the creation of fixed deposits illegally and the co-accused Kapil Wadhawan was the Chairman and Managing Director of DHFL and the applicant Dheeraj Wadhawan was a Director of the Company during the relevant period and both of them entered in a criminal conspiracy with co-accused persons Praveen Kumar Gupta, Amit Prakash, Mahesh Gupta, and Alok Garg in and around March 2017 and in furtherance of the said criminal conspiracy, the applicant and Kapil Wadhawan dishonestly and fraudulently obtained the investments of surplus funds of UPPCL trust in fixed deposits of DHFL in contravention of investment guidelines dated 02.03.2015 issued by the Ministry of Finance, Government of India 02.03.2015.
10. The charge-sheet further states that the accused persons dishonestly and fraudulently obtained higher ratings from rating agencies on the basis of false and bogus audited balance sheets and bogus financial statements and thereby dishonestly and fraudulently obtained investments to the tune of Rs. 4,122 Crores of UPPCL funds in fixed deposits of DHFL during March 2017 to December 2018, out of which surplus funds to the tune of Rs. 2267.9 Crores were misappropriated by the applicant and co-accused Kapil Wadhawan in criminal conspiracy with other co-accused persons and they diverted the said funds from the bank accounts of DHFL to bank accounts of other companies by way of sanctioning bogus project loans and further diverted the said funds to their own companies and used the said funds.
11. The applicant was arrested in another case by CBI as well as ED and he was remanded to judicial custody and was lodged in Taloja jail since May 2020. The Enforcement Directorate registered ECIR/MBZO-I/02/2020 dated 03.02.2020 (arising out of the present case) and filed a complaint. Bearing Special Case No. 1389 of 2021 in the Special Court PMLA, Mumbai, naming the applicant also as an accused, whereas till that time, the applicant was not made an accused in the present case. The applicant as released on furnishing a bond under Section 188 Cr.P.C. by order dated 14.02.2022 While the applicant was already in judicial custody in another case, on 24.05.2020, the applicant was taken from Taloja Jail and he was produced before the Special Judge, CBI, Lucknow on 26.05.2020, from where he was initially remanded to the custody of CBI for 14 days and thereafter he was sent to judicial custody and since then the applicant is languishing in jail in the present case.
12. Sri Gopal Swaroop Chaturvedi Senior Advocate has submitted that even as per the prosecution case, Rs. 4,122 Crores were invested in fixed deposit schemes of DHFL during the period March 2017 to December 2018 and the company repaid Rs. 1,854.8 Crores. Repayments were being made regularly in quarterly installments without any break and without any complaint. On 30.09.2019, the High Court of Bombay passed an interim order in Commercial Suit (L) number 134 of 2019 titled Reliance Nippon Life Asset Management Ltd versus Dewan Housing Finance Corporation Ltd and two others restraining DHFL from making further payments to any unsecured creditor and secured creditor, except in cases where payments were made on pro rata basis to all secured creditors including the plaintiff including out of its current and future receivables, in preference to the payments owed to the plaintiff, without the sanction of the court. It was after passing of the aforesaid order by the Bombay High Court, that DHFL became incapacitated from making due payments to the trust. The aforesaid interim order was made absolute by means of an order dated 10.10.2019. DHFL had informed about the aforesaid order by sending a letter dated 08.11.2019 to the trust.
13. On 18.11.2019, the Trust filed an intervention application in the aforesaid suit before the Bombay High Court stating that pursuant to the orders dated 30.09.2019 and 10.10.2019 passed by the High Court, DHFL has refused to release the amounts due to the trust and the order passed by the High Court had caused grave injustice to the employees of UPPCL and it would continue to do so if not varied. It was stated in the application that since March 2017, Rs. 2631,20,00,000/- in the form of 319 fixed deposits, out of which 158 fixed deposit worth Rs. 1185,50,00,000/- had been measured and paid and 41 fixed deposits worth Rs. 352,00,00,000/- had matured and were outstanding. Until 30.09.2019, as and when of fixed deposit matured all the interest payable under became due, the maturity amount/interest was paid by DHFL. After passing of the interim order, DHFL did not pay any amount to the trust and the trust and it is stated that the only thing to impeding the release of the amounts to the trust was the order passed by the High Court. The trust requested the High Court to pass an order directing DHFL to release the amounts due to it.
14. Based on the aforesaid factual situation, the first submission of Sri Gopal Swaroop Chaturvedi is that there is no dispute that DHFL continued to make payments to the trust till passing of the interim order by the Bombay High Court restraining it from making the payments and the repayment could not be made thereafter only because of the order passed by the Bombay High Court. The dispute started only when DHFL could not make payments to the trust in compliance of the order passed by the Bombay High Court. He has submitted that since the payments were stopped in compliance of the order passed by the Bombay High Court, the non-payment of amount would not be an offence, as provided by section 78 I.P.C., which reads as follows: -
"78. Act done pursuant to the judgment or order of Court.--Nothing which is done in pursuance of, or which is warranted by the judgment or order of, a Court of Justice, if done whilst such judgment or order remains in force, is an offence, notwithstanding the Court may have had no jurisdiction to pass such judgment or order, provided the person doing the act in good faith believes that the Court had such jurisdiction."
15. Sri. Chaturvedi has next submitted that the offence of criminal breach of trust is not made out by the allegations leveled by the prosecution itself, as it is an admitted case that the amounts had been invested by the trust in fixed deposits with DHFL and such a deposit does not amount to ''entrustment' of the amount. In support of the aforesaid submission Sri. Chaturvedi has relied upon decisions of the Hon'ble Supreme Court in the case of Shanti Prasad Jain v. Director of Enforcement, FERA, (1963) 2 SCR 297 and Anumati v. Punjab National Bank, (2004) 8 SCC 498.
16. Sri. Chaturvedi has submitted that as the relationship between DHFL and the Trust is one of debtor and creditor and not trustee and beneficiary, there is no occasion for commission of the offence as defined in Section 405 IPC and punishable in Section 409 I.P.C.
17. Sri. Chaturvedi has further submitted that the offence of cheating is also not made out, as the Trust itself had made investments in fixed deposits with DHFL. He has further submitted that it was not for the first time that the Trust had made such investments. Prior to making investments with DHFL, the Trust had made similar deposits with LIC Housing Finance Ltd. and PNB Housing in the year 2016. The Trust had willingly made the investments in fixed deposits in DHFL for obtaining better returns and the investments were not obtained by deceiving any person by fraudulently or dishonestly inducing him to make the investments. He has submitted that there is no allegation that the applicant has made any false document or has forged the same and, therefore, no case is made out for punishment of the applicant under Sections 467 or 468.
18. Sri. Chaturvedi has submitted that Sections 405 and 415 IPC operate in two different fields and both cannot be applied together. For attracting an offence of Criminal Breach of trust, entrustment of the property is necessary, which means that the person complaining had himself entrusted the property willingly, whereas for attracting an offence of cheating, it is necessary that the offender had fraudulently or dishonestly induced the victim to deliver the property to him.
19. Sri. Chaturvedi has further submitted that there is no evidence to prima facie establish the allegation of Criminal Conspiracy. He has placed reliance on a decision of the Hon'ble Supreme Court in Baliya v. State of M.P., (2012) 9 SCC 696, in which the Hon'ble Supreme Court held that: -
"17. The offence of criminal conspiracy has its foundation in an agreement to commit an offence or to achieve a lawful object through unlawful means. Such a conspiracy would rarely be hatched in the open and, therefore, direct evidence to establish the same may not be always forthcoming. Proof or otherwise of such conspiracy is a matter of inference and the court in drawing such an inference must consider whether the basic facts i.e. circumstances from which the inference is to be drawn have been proved beyond all reasonable doubt, and thereafter, whether from such proved and established circumstances no other conclusion except that the accused had agreed to commit an offence can be drawn. Naturally, in evaluating the proved circumstances for the purposes of drawing any inference adverse to the accused, the benefit of any doubt that may creep in must go to the accused."
20. Sri. Chaturvedi has submitted that there was no meeting of mind of the applicant with that of any other accused person as there is no material to even prima facie establish that the applicant played any role in the decision making process of UPPCL whereby it was decided to make investments in PNB HFL, LIC HFL and DHFL and in payment of brokerage to the brokers.
21. Sri. S. C. Misra, Senior Advocate has also advanced submissions on behalf of the applicant and he has submitted that the charge-sheet states that one of the co-accused persons Lalit Goel Chartered Accountant had entered into a criminal conspiracy with Alok Garg, Associate Vice President, Distribution, (Accounts and Operations), SMC Global Securities Ltd and also with Mahesh Kumar Gupta, Senior Vice President, Distribution, SMC Global Securities Ltd and in pursuance to the said criminal conspiracy, investments were made for the first time in PNB Housing Finance Ltd in December 2016 through broker SMC Global Securities Ltd. Lalit Goel had referred UPPCL to M/s SMC Global Securities Ltd. for investments in PNB HFL, DHFL and LIC HFL. The investments in PNB HFL were made in the year 2016, wherein the applicant had no role to play. In the initial FIR lodged by the Secretary of the trust, the only allegation was that the two named co-accused persons, who were officers of UPPCL, had made investments in violation of the Government guidelines and there was no allegation against the applicant. The allegation against the applicant was made for the first time in the 5th additional charge-sheet alleging that he had wrongfully obtained investments. The investments made in DHFL were not the first of its kind and similar investments were made in PNB HFL in the year 2016 and also in LIC HFL.
22. Sri. Misra has submitted that the applicant was not an accused till filing of the 4th additional charge-sheet in the case and nobody had any grievance against DHFL or against the applicant. During the year 2017-18, the total Treasury flow into DHFL was over Rs. 34,000 Crores and in the year 2018 19, it was over Rs. 38,000 Crores. The investments made by UPPCL constituted a very small fraction of the total investment received by DHFL. The applicant was the Chairman and Managing Director of DHFL, which had more than 15,000 employees and the Fixed Deposit Department was managed by one Pradeep Bhadouria, who used to report to the Joint Managing Director Sri. Harshil Mehta. UPPCL has made investments in DHFL through SMC Brokers and even on earlier occasions, similar investments were made by UPPCL in PNB Housing Finance and LIC Housing Finance, which are also non-banking financial institutions.
23. Sri. Misra has further submitted that when DHFL became incapacitated to make repayments because of the interim order passed by the Bombay High Court, the RBI superseded its Board of Directors on 20.11.2019 and appointed an Administrator of the company, after which the applicant did not have any say in the affairs of the company. RBI filed Company Petition No. 4 to 58 of 2019 before the National Company Law Tribunal, Mumbai to initiate corporate insolvency resolution process for DHFL under the Insolvency And Bankruptcy Code 2016 and in furtherance of the aforesaid process, Piramal Housing Finance Capital Ltd. has taken over the management and control of DHFL under an order dated 07.06.2021 passed by the National Company Law Tribunal Mumbai. Piramal Housing Finance Capital Ltd was a business rival of DHFL and it was only after that it took control of DHFL, that two employees of the Company, namely Pradeep Bhadauria and Govindan Srinivasan have made a reference to an alleged conversation between the applicant and co-accused Praveen Kumar Gupta, the then Secretary of the Trust. However, none of the officials of the Trust have stated anything regarding involvement of the applicant in commission of the offences.
24. Sri. Misra has further submitted that except for the applicant and his brother - Co-accused Kapil Wadhawan, all the other co-accused persons have been granted bail in the present case and, therefore, the applicant is also entitled to be released on bail on the ground of parity.
25. Sri. Misra has placed reliance of the judgments of the Hon'ble High Court in Sanjay Chandra v. CBI, (2012) 1 SCC 40, Satender Kumar Antil v. CBI, (2022) 10 SCC 51, Mahesh Kumar & Ors Versus Central Bureau of Investigation, SCC OnLine Del 3903 and Praveen Kumar Agarwal versus CBI, 2022 SCC OnLine Del 1768.
26. Sri. Nandit Kumar Srivastava Senior Advocate has also advanced submissions in support of the applications and he has submitted that the applicant was sent to Delhi, which shows that the custody of the applicant is not required in connection with the present case and, for this reason also, the applicant is entitled to be enlarged on bail in the present case.
27. Per contra, Sri Anurag Kumar Singh Advocate has submitted on behalf of the respondent - CBI that the conspiracy in the present case was hatched in two parts the first being at the office of UPPCL, where a decision was taken to invest the amount of Provident fund in companies other than Nationalised Banks and the second part being performed by the applicant and co-accused Kapil Wadhawan by obtaining AAA rating by CARE (Credit Analysis and Research Ratings) and BWR (Brick Works Ratings) on the strength of bogus documents showing loans to the tune of Rs. 15,000 crore given to 2.5 lakh fictitious persons, which amount actually was the non-performing asset of DHFL and the fictitious loans were shown in the books of account to hide the NPA for obtaining AAA rating.
28. Sri. Singh has further submitted that DHFL had made a proposal to UPPCL for paying 8.05% interest on the deposits. Forged minutes of meeting dated 24.03.2017 of the Trustees of UPPCL Contributory Provident Fund Trust were prepared wherein it was recorded that the Board of Trustees had agreed to consider the investment proposals as per government notification dated 02.03.2015 in the securities with higher security and higher interest rate other than term deposits of Nationalised Banks and AAA rated companies and it was further resolved that further investments in securities will be decided by Secretary (Trust) on case to case basis with the consent/approval of Director (Finance), UPPCL and the trustee. In furtherance of the aforesaid forged resolution the Secretary / Director engaged brokers. Abhinav Gupta, the then Secretary of the Trust, was in regular touch with Amit Prakash, Regional Manager of DHFL through emails. Brokerage was paid to several non-existent broker firms and the amount paid as brokerage was withdrawn from the banks in cash. The call detail records of Abhinav Gupta and Amit Prakash establish their connection.
29. Sri. Singh has further submitted that it has come to light in investigation that huge amounts were transferred from the accounts of DHFL as unsecured loans to various other companies, which are sister concerns of DHFL and are controlled by the applicant and co-accused Kapil Wadhawan. The loans were granted without carrying out any paper work.
30. Sri. Singh has taken the Court through the statements of some employees of DHFL recorded during investigation, who have stated that it was common practice of the group to make their employees as the authorized signatories in the bank accounts and Directors in other companies. He has also submitted that false entries used to be made in the accounts of the company for showing its false financial condition of the company and it obtained AAA credit rating on the basis of false documents and false accounts.
31. Sri. Singh has further submitted that the applicant is involved in and is in custody in connection with two other cases (i) FIR No. RC2102020E0004 dated 07.03.2020 lodged by CBI under Sections 120 B, 409, 420 and 477 A IPC and Section 13 (2) read with 13 (1) (d) of the Prevention of Corruption Act and substantive offences thereof and (ii) FIR No RC2242022A0001 dated 20.06.2022 lodged by CBI under Sections 120 B read with Section 420 IPC and Sections 7, 12 and 13 (2) read with 13 (1) (d) of the Prevention of Corruption Act. The applicant is involved in several other cases, which have not been disclosed in the affidavit filed in support of the bail application.
32. Sri. Anurag Kumar Singh has relied upon Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439, State of Bihar v. Amit Kumar, (2017) 13 SCC 751, Rohit Tandon v. Directorate of Enforcement, (2018) 11 SCC 46, Mahipal v. Rajesh Kumar, (2020) 2 SCC 118 and Shivnarayan Laxminarayan Joshi v. State of Maharashtra, (1980) 2 SCC 465.
33. The applicant's criminal history has been explained by filing the second supplementary affidavit, as per which he is involved in a total of nine cases apart from the present case and he has been granted bail in the following eight cases: -
(i) In ECIR / MBZO-I/08/2019 registered by the Enforcement Directorate under Sections 3 and 4 of PMLA, the applicant has been granted bail by means of an order dated 21.02.2020 passed by the Additional Sessions Judge, City Sessions Court/Special Court, C.R.No. 16, Mumbai.
(ii) In ECIR / MBZO-I/03/2020 registered by the Enforcement Directorate in connection with FIR No. RC2192020E0004 under Sections 3 and 4 of PMLA, the applicant has been granted default bail by means of an order dated 20.08.2020 passed by the Bombay High Court, and by means of the aforesaid order, the applicant has been directed to surrender his passport before the Enforcement Directorate. This order has been affirmed by the Hon'ble Supreme Court by means of the judgment and order dated 27.03.2023 passed in Criminal Appeal Nos. 701-702 of 2020.
(iii) FIR No. RC2242022A0001 dated 22.06.2022 registered by CBI Delhi under Sections 120 B, 409, 420, 477A IPC and Sections 13 (2) and 13 (1) (d) of Prevention of Corruption Act, in which the applicant has been granted default bail be means of an order dated 03.12.2022 passed by the Sessions Court.
(iv) FIR No. 66 of 2017 registered by the EOW Delhi, under Sections 420, 406, 409 and 120 B IPC, in which the applicant has been granted bail by means of an order dated 13.05.2022 passed by the Sessions Court.
(v) FIR No. 9 of 2020 registered by EOW Chennai, under Sections 120 B, 420, 409 IPC and Section 5 of the Tamil Nadu Protection of Interest Depositors Act, in which the applicant has been granted bail by means of an order dated 12.10.2020 passed by the Sessions Court.
(vi) In ECIR / MBZO-I/02/2020 registered by the Enforcement Directorate under Sections 3 and 4 of PMLA, in connection with FIR No. RC 0062020A0005/2020 (erstwhile CR No. 540 of 2019 registered by EOW Lucknow), in which the applicant was summoned and was released on bond under Section 88 Cr.P.C. by means of an order dated 14.02.2022 passed by the Special Court.
(vii) In cc No. 312/PW/2021 arising out of C.R> registered by the DCB CID, Mumbai, the applicant is named in the CR, but he has not been arrested and a charge-sheet has already been filed.
(viii) CR No. 84 of 2021 dated 25.03.2021 registered by EOW, Mumbai under Sections 465, 467, 468, 471, 406, 409, 420 and 120 B IPC, in which the applicant was summoned and was released on bond under Section 88 Cr.P.C. by means of an order dated 2.04.2022 passed by the Special Court.
34. Apart from the present case, the applicant is yet to be released on bail in FIR No. RC 209 2020 E 0004 dated 07.03.2020 registered by CBI Delhi under Sections 120 B, 409 ad 420 IPC.
35. I have considered the facts and circumstances of the case and the elaborate submissions advanced on behalf of the learned Counsel for the respective parties.
36. Since the allegation is of commission of economic offences, it would be appropriate to have a look at the law regarding grant of bail in such offences before proceeding to deal with the submissions. I will first mention the case-laws cited by the learned Counsel for the respondent in this regard.
37. In Sanjay Chandra v. CBI, (2012) 1 SCC 40, the Hon'ble Supreme Court held that: -
"21. In bail applications, generally, it has been laid down from the earliest times that the object of bail is to secure the appearance of the accused person at his trial by reasonable amount of bail. The object of bail is neither punitive nor preventative. Deprivation of liberty must be considered a punishment, unless it is required to ensure that an accused person will stand his trial when called upon. The courts owe more than verbal respect to the principle that punishment begins after conviction, and that every man is deemed to be innocent until duly tried and duly found guilty.
22. From the earliest times, it was appreciated that detention in custody pending completion of trial could be a cause of great hardship. From time to time, necessity demands that some unconvicted persons should be held in custody pending trial to secure their attendance at the trial but in such cases, "necessity" is the operative test. In this country, it would be quite contrary to the concept of personal liberty enshrined in the Constitution that any person should be punished in respect of any matter, upon which, he has not been convicted or that in any circumstances, he should be deprived of his liberty upon only the belief that he will tamper with the witnesses if left at liberty, save in the most extraordinary circumstances.
Apart from the question of prevention being the object of refusal of bail, one must not lose sight of the fact that any imprisonment before conviction has a substantial punitive content and it would be improper for any court to refuse bail as a mark of disapproval of former conduct whether the accused has been convicted for it or not or to refuse bail to an unconvicted person for the purpose of giving him a taste of imprisonment as a lesson.
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39. Coming back to the facts of the present case, both the courts have refused the request for grant of bail on two grounds: the primary ground is that the offence alleged against the accused persons is very serious involving deep-rooted planning in which, huge financial loss is caused to the State exchequer; the secondary ground is that of the possibility of the accused persons tampering with the witnesses. In the present case, the charge is that of cheating and dishonestly inducing delivery of property and forgery for the purpose of cheating using as genuine a forged document. The punishment for the offence is imprisonment for a term which may extend to seven years. It is, no doubt, true that the nature of the charge may be relevant, but at the same time, the punishment to which the party may be liable, if convicted, also bears upon the issue. Therefore, in determining whether to grant bail, both the seriousness of the charge and the severity of the punishment should be taken into consideration.
40. The grant or refusal to grant bail lies within the discretion of the court. The grant or denial is regulated, to a large extent, by the facts and circumstances of each particular case. But at the same time, right to bail is not to be denied merely because of the sentiments of the community against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction, to assure that he will submit to the jurisdiction of the court and be in attendance thereon whenever his presence is required.
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42. When the undertrial prisoners are detained in jail custody to an indefinite period, Article 21 of the Constitution is violated. Every person, detained or arrested, is entitled to speedy trial, the question is: whether the same is possible in the present case.
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46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge-sheet is already filed before the Special Judge, CBI, New Delhi. Therefore, their presence in the custody may not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI."
38. In Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439 relied upon by the learned Counsel for the respondent - CBI, the Hon'ble Supreme Court held that: -
"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.
39. In State of Bihar v. Amit Kumar, (2017) 13 SCC 751, the Hon'ble Supreme Court was pleased to hold that: -
"It is well settled that socio-economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. Usually socio-economic offence has deep-rooted conspiracies affecting the moral fibre of the society and causing irreparable harm, needs to be considered seriously."
40. Rohit Tandon v. Directorate of Enforcement, (2018) 11 SCC 46, which was a case arising out of Prevention of Money Laundering Act, Section 45 whereof lays down certain additional conditions regarding grant of bail, including the Court's satisfaction that there are reasonable grounds for believing that he is not guilty of the offence and that he is not likely to commit any offence while on bail, However, the present case does not involve allegation of any offence under the Prevention of Money Laundering Act and, therefore, the aforesaid judgment is not relevant for the case in hand.
41. In Mahipal v. Rajesh Kumar, (2020) 2 SCC 118, cited by Sri. Anurag Kumar Singh, the Hon'ble Supreme Court was examining the validity of an order passed by the High Court of Rajasthan granting Bail to an accused person by merely recording that "Considering the contentions put forth by the counsel for the petitioner and taking into account the facts and circumstances of the case and without expressing opinion on the merits of the case, this Court deems it just and proper to enlarge the petitioner on bail." The Hon'ble Supreme Court held that: -
"25. Merely recording "having perused the record" and "on the facts and circumstances of the case" does not subserve the purpose of a reasoned judicial order. It is a fundamental premise of open justice, to which our judicial system is committed, that factors which have weighed in the mind of the Judge in the rejection or the grant of bail are recorded in the order passed. Open justice is premised on the notion that justice should not only be done, but should manifestly and undoubtedly be seen to be done. The duty of Judges to give reasoned decisions lies at the heart of this commitment. Questions of the grant of bail concern both liberty of individuals undergoing criminal prosecution as well as the interests of the criminal justice system in ensuring that those who commit crimes are not afforded the opportunity to obstruct justice. Judges are duty-bound to explain the basis on which they have arrived at a conclusion."
42. In the above mentioned backdrop, the Hon'ble Supreme Court held that:
"12. The determination of whether a case is fit for the grant of bail involves the balancing of numerous factors, among which the nature of the offence, the severity of the punishment and a prima facie view of the involvement of the accused are important. No straitjacket formula exists for courts to assess an application for the grant or rejection of bail. At the stage of assessing whether a case is fit for the grant of bail, the court is not required to enter into a detailed analysis of the evidence on record to establish beyond reasonable doubt the commission of the crime by the accused. That is a matter for trial. However, the Court is required to examine whether there is a prima facie or reasonable ground to believe that the accused had committed the offence and on a balance of the considerations involved, the continued custody of the accused subserves the purpose of the criminal justice system. Where bail has been granted by a lower court, an appellate court must be slow to interfere and ought to be guided by the principles set out for the exercise of the power to set aside bail."
43. In the case of Dataram Singh v. State of Uttar Pradesh, (2018) 3 SCC 22, the Hon'ble Supreme Court was pleased to reiterate the law of bail in the following words:--
"2. A fundamental postulate of criminal jurisprudence is the presumption of innocence, meaning thereby that a person is believed to be innocent until found guilty. However, there are instances in our criminal law where a reverse onus has been placed on an accused with regard to some specific offences but that is another matter and does not detract from the fundamental postulate in respect of other offences. Yet another important facet of our criminal jurisprudence is that the grant of bail is the general rule and putting a person in jail or in a prison or in a correction home (whichever expression one may wish to use) is an exception. Unfortunately, some of these basic principles appear to have been lost sight of with the result that more and more persons are being incarcerated and for longer periods. This does not do any good to our criminal jurisprudence or to our society.
* * *
5. The historical background of the provision for bail has been elaborately and lucidly explained in a recent decision delivered in Nikesh Tarachand Shah v. Union of India [(2018) 11 SCC 1] going back to the days of the Magna Carta. In that decision, reference was made to Gurbaksh Singh Sibbia v. State of Punjab [(1980) 2 SCC 565] in which it is observed that it was held way back in Nagendra v. King-Emperor [AIR 1924 Cal 476] that bail is not to be withheld as a punishment. Reference was also made to Emperor v. Hutchinson [AIR 1931 All 356] wherein it was observed that grant of bail is the rule and refusal is the exception. The provision for bail is therefore age-old and the liberal interpretation to the provision for bail is almost a century old, going back to colonial days."
44. After considering the earlier judgments dealing with the question of grant of bail to a person accused of commission of an economic offence, in P. Chidambaram v. Directorate of Enforcement (2020) 13 SCC 791, the Hon'ble Supreme Court held that: -
"23. Thus, from cumulative perusal of the judgments cited on either side including the one rendered by the Constitution Bench of this Court, it could be deduced that the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of "grave offence" and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provide so. Therefore, the underlining conclusion is that irrespective of the nature and gravity of charge, the precedent of another case alone will not be the basis for either grant or refusal of bail though it may have a bearing on principle. But ultimately the consideration will have to be on case-to-case basis on the facts involved therein and securing the presence of the accused to stand trial."
(Emphasis supplied)
45. In its recent decision in Satender Kumar Antil v. Central Bureau of Investigation, 2022 SCC OnLine SC 825, the Hon'ble Supreme Court has summarized and reiterated the law regarding grant of bail in economic offences, as laid down in its earlier decisions, in the following words:--
"66. What is left for us now to discuss are the economic offences. The question for consideration is whether it should be treated as a class of its own or otherwise. This issue has already been dealt with by this Court in the case of P .Chidambaram v. Directorate of Enforcement (2020)13SCC791, after taking note of the earlier decisions governing the field. The gravity of the offence, the object of the Special Act, and the attending circumstances are a few of the factors to be taken note of, along with the period of sentence. After all, an economic offence cannot be classified as such, as it may involve various activities and may differ from one case to another. Therefore, it is not advisable on the part of the court to categorise all the offences into one group and deny bail on that basis."
(Emphasis supplied)
46. Thus the legal position which emerges from the aforesaid cases, has been summarized by this Court in Peeyush Kumar Jain versus Union of India, (2022) 121 ACC 448 = (2023) 1 All LJ 10, in the following words: -
"31. The position of law regarding grant of bail which emerges from the judgments of the Supreme Court referred to above, is that the basic jurisprudence relating to bail in economic offences remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. It is not advisable to categorize all the economic offences into one group and deny bail on that basis. One of the circumstances to consider the gravity of the offence is the term of sentence that is prescribed for the offence the accused is alleged to have committed. Even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provide so. While considering the prayer for grant of bail in any offence, including an economic offence, the Court has to consider:--
(i) the nature of accusation and the severity of the punishment to which the party may be liable in the case of conviction and the nature of the materials relied upon by the prosecution;
(ii) reasonable apprehension of tampering with the witnesses or apprehension of threat to the complainant or the witnesses;
(iii) reasonable possibility of securing the presence of the accused at the time of trial or the likelihood of his abscondence;
(iv) character, behaviour and standing of the accused and the circumstances which are peculiar to the accused;
(v) larger interest of the public or the State and similar other considerations.
32. A prayer for bail is not to be denied merely because of the sentiments of the community are against the accused. The primary purposes of bail in a criminal case are to relieve the accused of imprisonment, to relieve the State of the burden of keeping him, pending the trial, and at the same time, to keep the accused constructively in the custody of the court, whether before or after conviction, to assure that he will submit to the jurisdiction of the court and be in attendance thereon whenever his presence is required."
47. When we examine the facts of the case as the same appear from the material placed before the Court at this stage, the accusation against the applicant is that (i) he entered in a criminal conspiracy with other co-accused persons and in furtherance of the said criminal conspiracy, the surplus funds of UPPCL trust were got invested in fixed deposits of DHFL in contravention of investment guidelines dated 02.03.2015 issued by the Ministry of Finance, Government of India, (ii) the accused persons had dishonestly and fraudulently obtained higher ratings from rating agencies on the basis of false and bogus audited balance sheets and bogus financial statements, (iii) the applicant and co-accused Kapil Wadhawan in criminal conspiracy with other co-accused persons diverted funds from the bank accounts of DHFL to bank accounts of other companies by way of sanctioning bogus project loans and further diverted the said funds to their own companies and used the said funds.
48. The Trust had made investments in fixed deposits of DHFL, which have not been repaid after DHFL was restrained by an order passed by the Bombay High Court.
49. The learned Counsel for the applicant have made elaborate submissions on various points, including the point that the offences are not made out against the applicant. However, at this stage, the Court is concerned with the question of grant or refusal of bail to the applicant and the Court cannot hold a mini-trial at this stage. These pleas are left open for being decided by the Trial Court at the appropriate stage. In Shanti Prasad Jain v. Director of Enforcement, FERA, (1963) 2 SCR 297, the Hon'ble Supreme Court has held that: -
"37. Now the law is well settled that when moneys are deposited in a bank, the relationship that is constituted between the banker and the customer is one of debtor and creditor and not trustee and beneficiary. The banker is entitled to use the monies without being called upon to account for such user, his only liability being to return the amount in accordance with the terms agreed between him and the customer."
50. In Anumati v. Punjab National Bank, (2004) 8 SCC 498, the Hon'ble Supreme Court reiterated that "The bank is thus a debtor to the account-holders in respect of the amount deposited -- a debt which is repayable by the bank to the account-holders with interest on the expiry of an agreed period."
51. Per Contra, Sri. Anurag Kumar Singh, the learned Counsel for the CBI has placed reliance on Shivnarayan Laxminarayan Joshi v. State of Maharashtra, (1980) 2 SCC 465. The facts of the case were that the Appellant 1 had resigned from the office of the managing director of Laxmi Bank and it was contended that he could not be held liable for misappropriation committed after he had relinquished his office. The High Court found that even though he acted as Chairman of the bank and had relinquished the office as managing director, he was for all practical purposes functioning as managing director of the Bank throughout the material period. The Hon'ble Supreme Court held that "This finding is based on a thorough analysis and consideration of the evidence adduced before the court. In view of this finding it is manifest that even though the first appellant may have relinquished his office as managing director still he had full control over the affairs of the bank and virtually acted as de facto managing director."
52. In the aforesaid factual Background, the Hon'ble Supreme Court held that "a director was clearly in the position of a trustee and being a trustee of the assets which has come into his hand he had dominion and control over the same." Thus it was held that the Director of the Bank was a trustee of the assets of the Bank, which had come into his hands and he had dominion and control over the same. However, the relationship of an investor and a bank was not in question in the aforesaid case.
53. Thus it prima facie appears that the deposit of amounts in fixed deposits with DHFL would create a relationship of creditor and debtor between the Trust and DHFL and it would not amount to entrustment, so as to attract the offence of breach of trust. So far and the offences under 420, 467, 468 and 471 I.P.C. are concerned, it is not alleged that the aforesaid acts were committed by the applicant himself and it is alleged that he conspired and got it done through certain officials of DHFL, and those officials have already been granted bail. However, as the Court is concerned with the applicant's prayer for grant of bail only, it is not permissible to hold a mini trial and record any conclusive finding, and the same will be done by the trial Court at the appropriate stage.
54. Charge-sheet and as many as 5 supplementary charge-sheets have already been filed in the matter and the trial Court has already taken cognizance of the case.
55. The charge-sheet mentions the names of as many as 57 witnesses of the case and the trial is yet to commence and it would certainly take a very long time to conclude and keeping the applicant incarcerated without his guilt having been established would not be proper, unless his case falls within any exception disentitling him to be enlarged on bail.
56. When the applicant was already in judicial custody in another case, on 24.05.2020, the applicant was taken from Jail and was produced before the Special Judge, CBI, Lucknow on 26.05.2020, from where he was initially remanded to the custody of CBI for 14 days and his custodial interrogation has already been done. Thereafter he was sent to judicial custody and since then the applicant is languishing in jail in the present case.
57. Nothing has been placed on record to give rise to a reasonable ground of apprehension that in case the applicant is released on bail, he would influence the witnesses or tamper with the evidence.
58. The applicant has already been ordered to surrender his passport before the Investigating Officer by means of the order dated 21.02.2020 passed by the Additional Sessions Judge, City Sessions Court/Special Court, C.R.No. 16, Mumbai, in Remand Application No. 107 of 2020 and, therefore, he does not appear to be at flight risk.
59. As all other accused persons, against whom there is allegation of commission of the offences, have been granted bail in the present case, the applicant, against whom there is an allegation of entering into conspiracy with the other co-accused persons, is also entitled to be granted bail on the ground of parity.
60. There is no other material which outweighs the considerations for grant of bail keeping in view the law laid down by the Hon'ble Supreme Court in the above referred cases.
61. In view the aforesaid discussion and without making any observations which may affect the merits of the case, I am of the view that the applicant is entitled to be released on bail pending conclusion of the trial. The bail application is accordingly allowed.
62. Let the applicant - Dheeraj Wadhawan, be released on bail in Criminal Case No. 370 of 2020, arising out of Crime No. RC0062020A0005, registered at Police Station CBI/ACB, Lucknow, under Section 120-B read with Section 409, 420, 467, 468 and 471 I.P.C. and Sections 7-A, 8 & 13 (2) read with 13 (1) (d) of the Prevention of Corruption Act, 1988, pending in the court of learned Additional District Judge/Special Judge, Anti Corruption, C.B.I. (West) Lucknow, on his furnishing a personal bond and two reliable sureties for Rupees Ten Lakhs ( Rs. 10,00,000/-) each to the satisfaction of the trial Court, subject to following conditions:--
(i) The applicant will not tamper with the evidence during the trial.
(ii) The applicant will not influence any witness.
(iii) The applicant will appear before the trial court on the dates fixed, unless his personal presence is exempted.
(iv) The applicant shall not directly or indirectly make inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court to any police officer or tamper with the evidence.
63. In case of breach of any of the above conditions, the prosecution shall be at liberty to move an application before this Court seeking cancellation of bail.
