Bail was sought over alleged involvement in diversion of depositors’ funds through a film-rights agreement. The court rejected bail, considering the prima facie involvement, gravity of the economic offence, ongoing money-trail investigation, risk of evidence tampering and larger societal interest.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF ORISSA, CUTTACK BLAPL NO. 1983 Of 2019
An application under section 439 of the Code of Criminal Procedure in connection with R.C. Case No. 39(S) of 2014 corresponding to SPE Case No. 34 of 2014 pending on the file of Special C.J.M. (C.B.I.), Bhubaneswar.
| Shrikant Mohta | …..… | Petitioner |
|---|---|---|
Republic of India |
-Versus- ……. |
Opp. Party |
For Petitioner: |
- | Mr. Suresh Tripathy |
| For Opp. party: ---- |
- ---------------------- |
Mr. Anup Kumar Bose (Asst. Solicitor General) Mr. Kali Charan Mishra Special P.P., C.B.I. ------- |
P R E S E N T:
THE HONOURABLE MR. JUSTICE S.K. SAHOO
--------------------------------------------------------------------------------------------------------Date of Order: 13.05.2019 ---------------------------------------------------------------------------------------------------------
S. K. SAHOO, J . The petitioner Shrikant Mohta who is an accused in R.C.
Case No. 39(S) of 2014 corresponding to SPE Case No. 34 of 2014 pending on the file of Special C.J.M. (C.B.I.), Bhubaneswar for offences punishable under sections 420, 408, 409, 120-B/34 of the Indian Penal Code read with sections 4, 5 and 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (hereafter
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‘1978 Act’), has filed this application under section 439 of Code of Criminal Procedure seeking for bail as his bail application has been rejected by the learned Sessions Judge, Khurda at Bhubaneswar in Bail Application No.200 of 2019 vide order dated 14.02.2019.
According to the prosecution case, Rose Valley Group of Companies (hereafter for short ‘Rose Valley’) collected huge amount of money from public enticing them with false promise of paying higher rates of interest although Rose Valley was not having any authorization from the Reserve Bank of India (hereafter for short ‘RBI’) or the Securities and Exchange Board of India (hereafter for short ‘SEBI’) for carrying out such activities and therefore, the company cheated the public.
Investigation revealed that ‘Rose Valley Resorts and Plantations Limited, Kolkata’ was founded in the year 1997 and in the year 2002, SEBI imposed ban on the teak based investment schemes which the company was carrying out, for which the
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schemes floated were stopped. The company was renamed as ‘Rose Valley Hotel and Entertainment Limited’ in the year 1999. Two more companies in the name of ‘Rose Valley Real Estates Constructions Limited’ and ‘Real Estate and Landbank India Ltd.’ were founded subsequently in the year 1999 and 2001 which were registered with the Registrar of Companies (hereafter for short ‘ROC’). Rose Valley started expanding its spheres and a lot of new companies were formed in between 1997 to 2012. The accused persons, namely Goutam Kundu, Chairman of Rose Valley, Shibamoy Dutta, Managing Director, Ashok Kumar Saha and Ram Lal Goswami, Directors of Rose Valley in furtherance of criminal conspiracy by establishing branches of the companies in different parts of India, collected money from the public through multi-level agent network system. They cheated the investors/depositors by way of camouflaged schemes and false assurance about legal sanctity and false promise of higher rates of interest. The accused persons also cheated the depositors as well as the agents by making false assurance that the accused companies were legally empowered to collect money from the public. They were running ponzi schemes and circulating the money collected from the depositors which was not disclosed to the depositors and agents. The accused persons made false propaganda that Rose Valley is having a big business empire and diversified business. They fraudulently claimed that the money collected from the depositors would be invested in those businesses and with the
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help of high returns from those companies; they would be able to pay back to the depositors their invested money with interest on maturity. The accused persons deceived the depositors and deliberately induced them to invest their hard-earned money in the accused companies. It further revealed from the scrutiny of the balance sheet of all the companies of Rose Valley that almost all the companies were making loss and old depositors were paid by using money of the new depositors since there was no income generated by the companies from any source. It further revealed that the total business model of Rose Valley was commercially unrealistic/unviable and it was not in a position to pay to its depositors the promised higher rates of interest and therefore, it was just rotating the money. Rose Valley not only collected thousand of crores of rupees illegally from the depositors by cheating them but they did not utilize the same for the purpose for which the money was invested. The accused persons did not return the money of lakh of depositors and thereby committed criminal breach of trust. The total money collection of Rose Valley according to the database up to the financial year 2012-13 was Rs.1471,18,81724/- (rupees fourteen hundred seventy one crores eighteen lakhs eighty one thousand seven hundred twenty four only).
On 06.01.2016 first charge sheet was submitted against accused Goutam Kundu, Shibamoy Dutta, Ashok Kumar Saha, Ram Lal Goswami and three Rose Valley Companies under sections 420,
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408, 409, 120-B/34 of the Indian Penal Code and sections 4, 5 and 6 of 1978 Act keeping the further investigation open under section 173(8) of Cr.P.C. for ascertaining the role of regulatory agencies like SEBI, ROC and RBI and other agencies and also other influential persons involved in it and for probing the larger criminal conspiracy and money trailing.
During course of further investigation, the roles of Tapas Paul and Shri Sudeep Bandyopadhyay, both Members of Parliament were examined and it was found that both the accused allowed their stature to be used to allure the investors, agents and in return, they also gained wrongfully. In order to promote the illegal money collection business of Rose Valley, they grossly abused their respective official positions and overtly certified the business of Rose Valley and their presence with the company bestowed confidence in the minds of agents and investors about the credential of the company. Thus, the two accused M.Ps. also deceived the investors to deposit money in the Rose Valley, cheated them and misappropriated the money in conspiracy with other accused persons.
On 26.04.2017 second charge sheet was submitted under section 120-B read with sections 420 and 409 of the Indian Penal Code and sections 4 and 6 of 1978 Act and section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act, 1988
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against the M.Ps. Tapas Paul and Shri Sudeep Bandyopadhyay and others keeping the further investigation open to look into the role of the regulatory authorities, larger criminal conspiracy and money trailing.
During course of further investigation, materials were found against accused Ramesh Gandhi, who was the Managing Director of M/s. Rainbow Productions Limited. It was found that having full knowledge that Rose Valley was collecting money from the general public in an illegal manner and their activities were under the scanner of law enforcement agencies, accused Ramesh Gandhi, who was a producer of T.V. programmes and was in electronic media business entered into business relation with accused Gautam Kundu and an agreement was executed to protect illegal money collection business of Rose Valley and to gain wrongfully. The said accused Ramesh Gandhi projected himself to be keeping control over the media channels/ newspapers of Assam for protecting the business of Rose Valley. Huge amount was paid to M/s. Rainbow Productions Ltd. towards the release of advertisements of the company from the account of Rose Valley.
On 15.05.2018 third charge sheet was submitted against
accused Ramesh Gandhi, M/s. Rainbow Productions Ltd. and M/s. Aarambh Advertising and Marketing Ltd. under section 120-B read
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with sections 420 and 409 of the Indian Penal Code and sections 4 and 6 of 1978 Act keeping the further investigation open.
During course of further investigation, it was found that the petitioner is the Founder Director of M/s. Shree Venkatesh Films Private Limited (hereafter ‘SVFPL’). SVFPL entered into an agreement with a sister concern of Rose Valley, namely, M/s. Brand Value Communication Ltd. (hereafter ‘BVCL’) on 07.04.2010 for supplying the telecast rights of 70 Bengali films for an amount of Rs.25 crores to be broadcasted through the satellite channel of BVCL namely ‘Rupashi Bangla’. During telecast of Bengali films, publicity of Rose Valley was made in the T.V. channel owned by Rose Valley for alluring the investors to make investment which reflects the real purpose behind the agreement for supply of 70 Bengali films to BVCL. Nineteen films supplied by SVFPL to BVCL amounting to Rs.6.84 crores were found to be technically not viable and as such those films were returned to SVFPL but the amount of Rs.6.84 crores was not returned back by SVFPL to BVCL.
Investigation further revealed that BVCL lodged a First Information Report against SVFPL and its employees on 16.11.2011 at Baguiati Police Station, Kolkata in which charge sheet was submitted against all the F.I.R. named accused persons including the petitioner. The said charge sheet was challenged by the petitioner and other accused persons before the Hon’ble Calcutta High Court
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and the Hon’ble Court quashed the charge sheet. BVCL challenged the matter before the Hon’ble Supreme Court which upheld the decision of the Hon’ble Calcutta High Court. Finally, as it was found that the SVFPL had not supplied nineteen technically feasible films to BVCL, in an arbitration proceeding, the learned Arbitrator vide order dated 13.06.2018 awarded a payment of Rs.6.84 crores by SVFPL to BVCL. The award amount of Rs.6.84 crores passed by the learned Arbitrator was not paid by SVFPL. Investigation further revealed that the petitioner and accused Gautam Kundu, Chairman of Rose Valley entered into a criminal conspiracy amongst themselves to misappropriate the public fund illegally collected by the Rose Valley on the garb of an agreement for telecast right of films to the BVCL. The illegal financial business activities of the Rose Valley Group of companies namely Rose Valley Real Estates & Constructions Ltd., Rose Valley Resorts & Plantations Ltd. (subsequently renamed as ‘Rose Valley Hotels and entertainments Ltd.’), Real Estates & Landbank India Ltd. were banned by SEBI by its orders in the year 2002 and during 2010-11 respectively. The same was widely publicised through media. The petitioner having full knowledge of banning of the activities of Rose Valley by the regulatory authority SEBI, entered into an agreement with BVCL. The petitioner through his company SVFPL purchased paintings from an exhibition held in Kolkata during 2011-13 for a declared amount of Rs.15 lakhs from ‘Jago Bangla’. According to the prosecution, the amount which was
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received by SVFPL from BVCL was the money collected by the Rose Valley Group of companies from the depositors by deceiving them with assurance of getting higher returns without the permission of RBI. The money so collected has been diverted by the Rose Valley to its sister concern BVCL which was further diverted to the accounts of SVFPL. It is the case of the prosecution that the petitioner belonged to the community of media and he was supposed to have the knowledge of the banning of the activities of the Rose Valley by the regulatory authority SEBI and in spite of that the petitioner’s company SVFPL entered into an illegal agreement with BVCL. During course of investigation, as the petitioner did not cooperate with the investigation and prima facie case relating to his involvement in the crime was made out, he was arrested and forwarded to Court.
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rights of 70 feature films to the assignee to be broadcasted through the satellite channel of BVCL namely ‘Rupashi Bangla’ and the total consideration of the assigned films was Rs.25 crores. Dispute arose between BVCL and SVFPL when some of the films supplied to BVCL by SVFPL were found to be not technically feasible for telecast and those were not replaced by SVFPL. BVCL launched criminal prosecution against the petitioner and other Directors of SVFPL at Baguiati police station and after completion of investigation, charge sheet was submitted under sections 403, 405, 406, 408, 418, 420 of the Indian Penal Code. The matter was challenged before Calcutta High Court in CRR No.2927 of 2012 and CRAN No.1887 of 2013 by the petitioner and others and the Hon’ble Court vide judgment and order dated 15.01.2014 quashed the charge sheet. BVCL challenged the order of the Calcutta High Court before the Hon’ble Supreme Court in SLP Crl. No.4271-4272/2014 which was dismissed vide order dated 30.11.2015. Justice A.K. Ganguly, a retired Judge of the Hon’ble Supreme Court adjudicated the dispute between the parties in an Arbitration Proceeding and passed the award on dated 13.06.2018 and directed SVFPL to pay Rs.6.84 crores to BVCL with interest @ 8% per annum from 06.08.2013 till 13.06.2018 and the said award has been challenged by SVFPL before the learned District Judge, Barasat taking recourse to section 34 of the Arbitration and Conciliation Act, 1996 which was filed on 12.09.2018. It is contended that merely because the arbitral award amount of Rs.6.84
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crores plus interest which comes to Rs.9.98 crores has not been paid by SVFPL to BVCL since the impugned award is under challenge before the proper forum, it cannot be said that the non-refund of balance amount constitutes any criminal offence. According to Mr. Tripathy, the allegations levelled against the petitioner and SVFPL relating to cheating, misappropriation and conspiracy have been adjudicated conclusively by Hon’ble Calcutta High Court and by Hon’ble Supreme Court and proceeding against the petitioner is contemptuous on the face of the orders passed by both the Courts. It is contended that the investigating agency is not fair and impartial and it is indirectly trying to defend BVCL what BVCL could not achieve directly and merely because the price of the painting is Rs.15 lakhs which was paid by way of a cheque and duly reflected in the books of accounts of SVFPL, it cannot be said that the petitioner has committed any criminal offence. It is strenuously argued that the petitioner had neither collected any money from the public either himself nor as an agent of Rose Valley and he had no concern with Rose Valley as he and the company that he formed are independent entities engaged in altogether different business activities. The petitioner had not assured the public to refund money with higher interest. Therefore, the accusation levelled by the C.B.I. against the petitioner that he had cheated the public by not refunding the public money is fallacious and lacks commonsense. The business carried out by the petitioner was neither illegal nor forbidden by law and the
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agreement was also lawful. Once the agreement is recognised as a legally valid document, the non-refund of amount as alleged has to be dealt with in accordance with the said agreement which is basically civil in nature. The learned counsel further contended that the finding of the investigating agency that the petitioner was aware of the illegal activities of Rose Valley is based on no material. The commercial transaction of SVFPL was with BVCL by way of an agreement and it was not expected on the part of the petitioner to enquire in detail as to from which source the money came to BVCL or to verify the status of BVCL. It is contended that the petitioner and his company were in film business since 1995 and Rose Valley came at a later point of time and there was no occasion on the part of the petitioner to know that the money which was received by SVFPL by virtue of a valid agreement from BVCL had flown from Rose Valley. It is further contended that in pursuance of the notices under sections 160 and 91 of Cr.P.C., the petitioner appeared before the investigating agency on 29.08.2018, 27.11.2018 and 04.12.2018 and produced all the relevant documents including judgment, order and award and the arrest of the petitioner is quite illegal, capricious, unjustified and reflects abuse of power. Learned counsel emphasised that it was not a case of money trailing which means money parked unlawfully and whose identity is undisclosed rather it is a case of valid contract between the two parties. According to the learned counsel, since there is no chance of
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absconding or tampering with the evidence and in the three charge sheets submitted so far, there is no allegation against the petitioner, the bail application of the petitioner may be favourably considered. He placed reliance in case of Sanjay Chandra -Vrs.- C.B.I. reported in (2012) 51 Orissa Criminal Reports (SC) 128 .
Mr. Anup Kumar Bose, learned Assistant Solicitor
General being ably assisted by Mr. Kali Charan Mishra, learned Special Public Prosecutor for C.B.I. produced the three charge sheets submitted so far and fairly contended that in all the three charge sheets, there is nothing against the petitioner. He however submitted that during course of further investigation, it was revealed as to how the petitioner being a Director of SVFPL entered into a criminal conspiracy with accused Shri Gautam Kundu, Chairman of Rose Valley and others to misappropriate the public fund illegally collected by the Rose Valley on the garb of an agreement for telecast right of Bengali feature films to the BVCL. He argued that during telecast of Bengali films, publicity of Rose Valley was made in the T.V. channel ‘Rupashi Bangla’ owned by Rose Valley for alluring the investors to make investment which reflects the real purpose behind the agreement. He placed the statement of one Kranti Kumar, the then AGM Operations, BVCL which reveals as to how the accused Goutam Kundu wanted to meet the petitioner in connection with production of some feature films under the banner of Rose Valley and how he organised the meeting in the office of BVCL, where a
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detailed discussion took place and the accused Goutam Kundu wanted that the Bengali films produced by a top Director like the petitioner should be telecasted in the channels of BVCL for capturing more and more audience and advertisements of Rose Valley were shown on regular basis during such telecast and in all the films produced by Rose Valley, details of producer i.e. Rose Valley was used to be shown at the beginning or end during casting. It is the contention of Mr. Bose that the petitioner had knowledge regarding the illegal fund collection business of Rose Valley and he even attended a party hosted at Hotel Chrome (owned by Rose Valley) being invited by the prime accused Gautam Kundu. Even though the learned Arbitrator passed an award for payment of Rs.6.84 crores with interest vide order dated 13.06.2018 but SVFPL has not paid the award amount so far. No efforts were also made from the side of BVCL for the recovery of the amount from SVFPL. Therefore, an amount of Rs.6.84 crores which is the public money and collected from the gullible investors remained unrefunded by SVFPL. It is contended that the petitioner through his company SVFPL utilized the funds received from BVCL to purchase paintings from an exhibition organized by ‘Jago Bangla’ held in Kolkata during the year 2011-13 for a declared amount of Rs.15,00,000/- (rupees fifteen lakhs) and those paintings were drawn by a powerful political leader of West Bengal and the political party to which such leader belonged also made declaration regarding receipt of such amount from SVFPL.
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The seizure list of the paintings and the declaration so made were produced in sealed cover. It is argued that further investigation is under progress and the petitioner is involved in offences which have got serious social ramifications. SVFPL has got several bank accounts and after scrutiny of all the bank accounts, it can be known as to what more money has come from Rose Valley or its sister concerns. The defrauded amount is yet to be traced out and once the petitioner who is a very influential person is released on bail, he is likely to influence the witnesses utilizing such defrauded amount, derailing the ongoing investigation and tampering with the evidence which is yet to be collected. It is contended that when the Investigating Officer went to the office of the petitioner and requested him to join the investigation by visiting the C.B.I. office as the petitioner did not turn up in spite of receipt of the notices under section 160 of Cr.P.C., instead of cooperating with C.B.I., he lodged a false case that some unknown persons visited his office. The conduct of the petitioner in not cooperating with the C.B.I. was questionable. The learned counsel placed reliance in the case of Nimmagadda Prasad -Vrs.- C.B.I. reported in (2013) 55 Orissa Criminal Reports (SC) 833 , C.B.I. -Vrs.- V. Vijay Sai Reddy reported in (2013) 7 Supreme Court Cases 452 and Ram Chandra Hansdah -Vrs.- Republic of India reported in (2015) 62 Orissa Criminal Reports 219 . Some important documents were submitted in a sealed cover for perusal and it is
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contended that on many important aspects relating to the activities of the petitioner, the investigation is under progress and therefore, at this stage it would not be proper to release the petitioner on bail.
In case of Y.S. Jagan Mohan Reddy -Vrs.- CBI reported in (2013) 55 Orissa Criminal Report (SC) 825 , it is
held as follows:-
"15. 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.
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tampered with, the larger interests of public/State and other similar considerations."
In case of State of Gujarat -Vrs.- Mohan Lal Jitamal Torwal reported in A.I.R. 1987 S.C. 1321 , it is held as follows:-
"5………The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white colour crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest".
In the case of Nimmagadda Prasad (supra), it was held that economic offences have serious repercussions on the development of the country as a whole. Such offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting the
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economy of the country as a whole and thereby posing serious threat to the financial health of the country.
In the case of Ram Chandra Hansdah (supra), it is held that economic offences are considered grave offences as it affects the economy of the country as a whole and such offences having deep rooted conspiracy and involving huge loss of public fund are to be viewed seriously. Economic offence is committed with cool calculation and deliberate design solely with an eye on personal profit regardless of the consequence to the community. In such type of offences, while granting bail, the Court has to keep in mind, inter alia, the larger interest of public and State . The nature and seriousness of an economic offence and its impact on the society are always important considerations in such a case and those aspects must squarely be dealt with by the Court while passing an order on bail applications.
(i) The investigation of the case commenced in the year 2014 after the order dated 09.05.2014 was passed by the Hon’ble Supreme Court in W.P. (Civil) No.401 of
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2013 and W.P. (Civil) No.413 of 2013. First charge sheet was submitted on 06.01.2016, second charge sheet was submitted on 26.04.2017 and third charge sheet was submitted on 15.05.2018 but there is nothing against the petitioner in those three charge sheets.
(ii) The SEBI in its order dated 24.12.2002, in exercise of its powers conferred under section 11B read with section 4(3) of the Securities and Exchange Board of India Act, 1992 (hereafter ‘SEBI Act’) and regulation 65 of SEBI (Collective Investment Schemes) Regulations, 1999 (hereafter ‘CIS Regulations’), directed M/s. Rose Valley Resorts and Plantations Ltd., Kolkata to refund the money collected under the collective investment schemes with returns which was due to the investors as per the terms of the offer within a period of one month from the date of order, failing which consequential actions, inter alia, like initiation of prosecution proceedings under section 24 of the SEBI Act would be taken against the company.
(iii) The SEBI in exercise of its powers conferred under section 11B of the SEBI Act and regulation 65 of CIS Regulations in its order dated 03.01.2011 directed M/s. Rose Valley Real Estates and Constructions Ltd. not to collect any money from the investors or to launch any
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scheme, not to dispose of any of the properties or delineate assets of the Ashirbad Scheme and not to divert any fund raised from public at large kept in bank account and/or at the custody of the company.
(iv) SEBI published an advertisement in the Times of India on dated 19.05.2013 in the public interest by cautioning the general public that none of the companies of Rose Valley Group had obtained a certificate of registration from the SEBI to run a collective investment scheme to raise money from the investors.
(v) The whole time Member of SEBI in exercise of the powers conferred under sections 11(1), 11B and 11(4) of the SEBI Act read with regulation 65 of CIS Regulations in the order dated 10.07.2013 directed M/s. Rose Valley Hotels and Entertainments Ltd. and its Directors not to collect any more money from the investors under the existing schemes, not to launch any new schemes, not to dispose of any of the properties or alienate any of the assets of the schemes and not to divert any funds raised from public which are kept in bank accounts and/or in the custody of the company.
(vi) A film assignment agreement was executed between SVFPL as assignor and BVCL, a sister concern of Rose Valley as assignee on 07.04.2010, by virtue of
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which the assignor assigned the sole and exclusive satellite television broadcasting rights of 70 feature films to the assignee to be broadcasted through the satellite channel of BVCL namely ‘Rupashi Bangla’ and the total consideration of the assigned films was Rs.25 crores.
(vii) Dispute arose between BVCL and SVFPL when some of the films supplied to BVCL by SVFPL were found to be not technically feasible for telecast which were not replaced by SVFPL. BVCL launched criminal prosecution against the petitioner and other Directors of SVFPL at Baguiati police station, in which after completion of investigation, charge sheet was submitted.
(viii) Submission of charge sheet was challenged by the petitioner and others before Calcutta High Court in CRR No.2927 of 2012 and CRAN No.1887 of 2013 and the Hon’ble Court quashed the charge sheet as per judgment and order dated 15.01.2014. BVCL challenged the order of the Calcutta High Court before the Hon’ble Supreme Court which was dismissed as per order dated 30.11.2015.
(ix) Justice A.K. Ganguly, a retired Judge of the Hon’ble Supreme Court adjudicated the dispute between the parties in an Arbitration Proceeding and passed the award on dated 13.06.2018 and directed SVFPL to pay
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Rs.6.84 crores to BVCL with interest @ 8% per annum from 06.08.2013 till 13.06.2018.
(x) The total outstanding amount to be paid by SVFPL to BVCL as per the award passed in the Arbitration proceeding is Rs.9.98 crores. The arbitral award has been challenged by SVFPL before the learned District Judge, Barasat taking recourse to section 34 of the Arbitration and Conciliation Act, 1996 which is subjudiced.
(xi) The petitioner through his company SVFPL purchased paintings drawn by a powerful political leader of West Bengal from an exhibition organized by ‘Jago Bangla’ held in Kolkata during the year 2011-13 for a declared amount of Rs.15,00,000/- (rupees fifteen lakhs), which according to the C.B.I. came from the funds received from BVCL.
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the larger interests of the public/State and other similar considerations. It has also to be kept in mind that for the purpose of granting bail, the Legislature has used the words "reasonable grounds for believing" instead of "the evidence" which means the Court dealing with the grant of bail can only satisfy itself as to whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt.
Even though till the third charge sheet was submitted, there was no material against the petitioner but thereafter during course of further investigation, it was found out as to how huge amount of money collected illegally by Rose Valley from the gullible depositors without any authorisation from RBI and in spite of ban imposed by the regulatory authority SEBI with false promise of paying higher rates of interest, was diverted to its sister concern BVCL, out of which Rs. 25 crores was given to petitioner’s SVFPL. Whether the petitioner had knowledge regarding the illegal activities of Rose Valley or not, about the diversion of illegally acquired money by Rose Valley to its sister concern BVCL, whether it was necessary on the part of the petitioner to enquire in detail as to from which source the money came to BVCL and to verify the status of BVCL before entering into a commercial transaction with BVCL by way of an agreement, whether he knowingly entered into such agreement
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for his personal illegal gain and thereby the Bengali feature films produced by him were utilised by Rose Valley for its publicity through the satellite channel of BVCL namely ‘Rupashi Bangla’ for alluring the investors to make investment and whether the role of the petitioner was just for producing the feature films for BVCL under the agreement or it has got any nexus with the illegal activities of Rose Valley are the matters which is still under investigation. Recording any finding over such issues at this stage and that to while considering the bail application, in my humble opinion, would not be proper and justified. Though the arguments advanced by Mr. Tripathy that since the criminal proceeding instituted by BVCL has been quashed and the arbitral award is still under challenge before the proper forum, it cannot be said that the petitioner has committed any criminal offence by accepting money under an agreement, seems to be attractive, I am afraid there are many more important aspects in between which prima facie raises accusing fingers against the petitioner. The documents submitted in sealed cover by C.B.I. shows that there was close acquaintance between the petitioner and the main accused Gautam Kundu. Accused Goutam Kundu met the petitioner in connection with production of some feature films under the banner of Rose Valley and he was aware that the petitioner was a top producer of Bengali film industry known for production of quality films and wielding considerable clout and influence on the television audience and he
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wanted the Bengali films produced by the petitioner to be telecasted in the channels of BVCL for capturing more and more audience. During telecast of Bengali films in the T.V. channel ‘Rupashi Bangla’ owned by Rose Valley, publicity of Rose Valley was made on regular basis for alluring the investors to make investment which according to the investigating agency was the real purpose behind the agreement. In all the films produced by Rose Valley, details of producer i.e. Rose Valley was used to be shown at the beginning or end during casting. The petitioner also attended a party hosted by Gautam Kundu at Hotel Chrome in the year 2013 even when SVFPL was fighting litigation with BVCL and SEBI had published advertisement in the Times of India against Rose Valley. The contentions raised by Mr. Bose that litigation fought between SVFPL and BVCL prima facie appears to be a friendly fight dragged on in different forums since 2013 and that both were having close proximity with each other and the ultimate looser in the transaction was the innocent depositors, has got sufficient force. The funds received from BVCL was utilised by SVFPL to purchase paintings drawn by a powerful political leader of West Bengal from an exhibition organized by ‘Jago Bangla’ for an amount of Rs.15,00,000/- (rupees fifteen lakhs) and how and why the money collected from the investors of Rose Valley had gone to the accounts of a political party under the guise of purchase of paintings and what was the nexus between that political party and Rose Valley and real
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purpose behind execution of agreement requires a deeper probe. It prima facie appears that huge amount of money collected illegally by Rose Valley was diverted to SVFPL through BVCL for twin purpose, firstly, to produce some feature films which could be utilised for propaganda of investment benefits in the Rose Valley and secondly, money can be further diverted to a political party through SVFPL in the name of purchasing paintings to get patronage for flourishing illegal business activities. In the chain of events, the role of the petitioner cannot be said to be a negligible one.
The case of Sanjay Chandra (supra) which was placed by the learned counsel for the petitioner is not applicable to this case. In that case, it was held that merely because the offence alleged is a serious one in terms of huge loss to the State exchequer, that, by itself, should not deter the Court from enlarging the accused on bail when there is no serious contention of the respondent that the accused, if released on bail, would interfere with the trial or tamper with the evidence. It was further held that the investigating agency has already completed investigation and the charge sheet is already filed and therefore, the presence of the appellant in the custody may not be necessary for further investigation. In the present case, however, the investigation is still under progress and it has been ascertained that SVFPL has got several bank accounts and after scrutiny of all the bank accounts, it can be known as to what more money has come from Rose Valley or
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its sister concerns to the accounts of SVFPL. There is also apprehension by the investigating agency that the petitioner is a very influential person and if he is released on bail, he is likely to influence the witnesses utilizing such defrauded amount, derailing the ongoing investigation and tampering with the evidence which is yet to be collected.
Rose Valley was a bed of roses for its Promoters and Directors but it created a bed of thorns for the gullible investors. The spider web was designed in such a calculative devilish way by the business tycoons showing mirage of huge outturn with active support of politicians and film personalities that it trapped the
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depositors who were left only with tears in their eyes which never dried up. What could have been done to check/stop the illegal activities from its incipient, was not done seemingly for obvious reasons of political patronage till much water had flown under the bridge leaving incomprehensible pain and suffering for those hundreds and thousands of unfortunate guys.
Accordingly, the bail application sans merit and hence stands rejected.
Before parting, I would like to place it on record by way of abundant caution that whatever has been stated hereinabove in this order has been so said only for the purpose of disposing of the prayer for bail made by the petitioner. Nothing contained in this order shall be construed as expression of a final opinion on any of the issues of fact or law arising for decision in the case which shall naturally have to be done by the trial Court at the appropriate stage of the trial.
Urgent certified copy of this order be granted on proper application.
….……………………… S. K. Sahoo, J.
Orissa High Court, Cuttack The 13th May 2019/Pravakar/RKM
1 issue framed by the court
Should bail be granted in an alleged economic-offence conspiracy while money-trail investigation remained ongoing and evidence tampering was apprehended?
Colour shows how this judgement treated each authority
Sanjay Chandra -Vrs.- C.B.I.Distinguished¶97
Sanjay Chandra -Vrs.- C.B.I. reported in (2012) 51 Orissa Criminal Reports (SC) 128
Nimmagadda Prasad -Vrs.- C.B.I.Relied on¶63
Nimmagadda Prasad -Vrs.- C.B.I. reported in (2013) 55 Orissa Criminal Reports (SC) 833
C.B.I. -Vrs.- V. Vijay Sai ReddyRelied on¶87
C.B.I. -Vrs.- V. Vijay Sai Reddy reported in (2013) 7 Supreme Court Cases 452
Ram Chandra Hansdah -Vrs.- Republic of IndiaRelied on¶66
Ram Chandra Hansdah -Vrs.- Republic of India reported in (2015) 62 Orissa Criminal Reports 219
Y.S. Jagan Mohan Reddy -Vrs.- CBIRelied on¶55
Y.S. Jagan Mohan Reddy -Vrs.- CBI reported in (2013) 55 Orissa Criminal Report (SC) 825
State of Gujarat -Vrs.- Mohan Lal Jitamal TorwalRelied on¶61
State of Gujarat -Vrs.- Mohan Lal Jitamal Torwal reported in A.I.R. 1987 S.C. 1321 · Who else cites this
1 provisions across 1 enactments
Shrikant Mohta
Republic of India
S.K. SAHOO
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
