IN THE COURT OF SPECIAL JUDGE (CBI) FOR GREATER BOMBAY
CNR NO. : MHCC02­004229­2018
BAIL APPLICATION NO.233 OF 2018
IN
CBI REMAND APPLICATION NO.277 OF 2018
Hasmukh Lilachand Shah, aged about 62 yrs)
R/o. C­3/31, Manek Nagar, Near Ajanta
)
Theatre, Boriwali (W), Mumbai 400 092
)..Applicant/Accused
V/s.
The State (Through CBI, BS & FC, Mumbai.))
No. RC 15/E/2016 CBI/BS & FC/Mumbai,
)..Respondent/CBI/BS & FC
Appearance :
Ld.Adv. Mr. Tariq Khan for the applicant/accused.
SPP Mr. Limosin for the respondent/CBI, BS & FC, Mumbai.
CORAM : H.H. THE SPECIAL JUDGE (CBI)
SHRI VIVEK V. KATHARE
DATE : 11/04/2018 (C.R.NO.53)
ORAL ORDER
1.

The applicant/accused
Hasmukh Lilachand Shah, is
arrested by CBI in case No. RC 15/E/2016, CBI/BS & FC/Mumbai, for the
offences punishable u/s.120­B r/w Sec.420 of the IPC and u/s.13(2),
13(1)(d) of the Prevention of Corruption Act, 1988, has filed this
application for bail.
2.

The
applicant/accused
came
to
be
arrested
by
the
Investigating Agency on 12/03/2018 and was remanded to Police Custody
till 26/03/2018 and on lapse of Police custody, he is remanded to Judicial
Custody till date.
3.

The factual matrix of the case would reveal that one Mr. Anil
Manohar Rokade, Dy. General Manager, Circle Office, Canara Bank, filed
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a written complaint, alleging that M/s. Forever Precious Jewellery &
Diamond Ltd., borrowed from the consortium of various banks including
Canara Bank, led by Punjab National Bank various Credit Facilities.
4.

As per the prosecution case, on 19/03/2012, Management
Committee of Canara Bank sanctioned fund based limit of Rs.12 Crores
and non fund based limit of Rs.150 Crores including stand by limit of the
regular limits. Out of the sanction non fund based limit, company opened
various SBLC’s in favour of various bullions banks.

The company
purchased gold from these bullion banks abroad viz. the Bank of Nova
Scotia, Standard Bank Ltd. and Standard Chartered Bank against these
SBLC’s. Later this gold processed was sent to thirteen buyers in UAE.
However, the Company failed to made the payment for the gold imported
on the strength of SBLC’s, on the ground that the export proceeds have not
being received from foreign buyers resulted in invoking of SBLC’s by
bullion Bank which cost wrongful loss of Rs.146.35 Crores to the Canara
Bank.

It is alleged that the applicant/accused was the very close
confidante of Mr. Jatin Mehta, Promoter & guarantor of M/s. Forever
Precious Jewellery & Diamond Ltd. The accused was the former Director
of the company and one of the signatories. He allegedly instructed &
pressurized other employees for becoming authorized signatories of M/s.
Forever Precious Jewellery & Diamond Ltd. and that he signed the
documents relating to the opening of SBLC’s and obtained the signatures
on various documents to be submitted before banks for availing credit
facilities and subsequently co­ordinated with them. It is alleged that the
applicant/accused was co­ordinating all exports & imports being done
from Chennai & Cochin Unit of the company and giving directions to the
Unit’s Head.

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5.

It is contended that the Investigating Authority failed to
produce on record any such documentary evidence to suggest that the
applicant/accused was the former director of the company and also its
authorized signatory.

He is an innocent persons and has been falsely
implicated in the alleged offence and that he is nowhere concerned with
the alleged transactions.

6.

The respondent/CBI, BS & FC, Mumbai, has resisted the
application by filing Reply at Exh.2 by denying all adverse allegations. It
is contended that the investigation in the case is in progress and
sufficient documentary evidence has been gathered to substantiate the
specific role of the applicant/accused in the commission of offence. It is
contended that the applicant/accused had signed several SBLC’s in the
capacity of authorized signatory for M/s. Forever Precious Jewellery &
Diamond Ltd. and played major role in availing the banking credit
facilities. He was close associate of main absconding accused Jatin Mehta
and he was also threatening the other employees to sign the documents. It
is further contended that the accused is also the beneficiary of the loan
proceeds as he has purchased the flat worth Crore and sent his son for
studding abroad. He is an official person and would tamper the evidence.
Hence, prayed for rejection of the application.
7.

Heard the Ld. Counsel for the applicant/accused and the Ld.

SPP at length. The Ld. Counsel for the applicant/accused has submitted
that the applicant/accused at the relevant time was merely the Head Clerk
and was performing the clerical duties. He is not the beneficiary of the
alleged crime. The applicant/accused is not much educated to create or
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use any such documents as alleged in the complaint.
8.

It is further submitted that the applicant/accused was a
former director for the limited period for Su­Raj Diamond Industries Ltd.
He was appointed as an additional director of su­Raj Diamond Industries
Ltd.

on 28/02/2003 and later on resigned from the said post on
01/10/2005.
9.

The applicant/accused is not the part of Winsome Diamonds
and Jewelery and has no authority to sign or take any decision on behalf of
the company in any capacity. Similarly, he was appointed as an additional
director of M/s. Forever Precious Jewellery & Diamonds Ltd. in the year
1996.

But, later on he resigned from the directorship from the said
company dated 15/09/2005.
10.

It is further submitted that one Mr. Jai Begani, the CEO of
M/s. Forever Precious Jewellery & Diamonds Ltd. has suddenly resigned
on 20/03/2013, a day before the default of the first LC. Mr. Jai Begani,
was looking into the financial affairs of the company with the various
banks and therefore, he had made a scapegoat, as the company has been
unable to paid its dues to the non payment of a group of customers in
UAE.
11.

It is further submitted on behalf of the Ld. Counsel for the
applicant/accused that in fact now there is no need of any custodial
interrogation of the applicant/accused as there is nothing further to be
recovered from him. He had at no point of time induced the complainant
bank to deliver any valuable security or any property. Also, there is no
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possibility of tampering the prosecution witnesses and considering the
advance age and ailment of the applicant/accused, he deserves to be
released on bail on the conditions which the Court deems fit.
12.

Lastly, it is submitted that there is no criminal antecedents to
the discredit of the applicant/accused.
13.

In support of the contention, the Ld. Counsel for the
applicant/accused relied upon the Judgment of the Hon’ble Apex Court in
a case of, “Sanjay Chandra V/s. CBI, in a Criminal Appeal
No.2178/2011, arising out of SLP (Cri.) No.5650/2011”, wherein the
Hon’ble Apex Court has laid down the guidelines by referring its earlier
pronouncement and it is held that, “The further detention of the accused as
pre­trial prisoners would not serve any purpose”. In the similar way, further
the Ld. Counsel for the applicant/accused relied upon the Judgment of the
Hon’ble Apex Court in a case of, “Dattaram Singh V/s. State of Uttar
Pradesh & another, 2018 SCC Online SC 88”, wherein it is observed
that, “A humane attitude is required to be adopted by a Judge, while dealing
with an application”.

14.

The Ld. SPP for CBI/BS & FC, Mumbai, has seriously
objected the application by contending that the Investigating Agency
has collected overwhelming evidence both documentary as well as oral
to substantiate the implication of the applicant/accused in the
commission of offence.

He has further submitted that though the
applicant/ accused was formally working as a Head Clerk, nevertheless,
his status was at par with the prime absconding accused i.e. Director,
Jatin Mehta, in whose absence he was holding the reins of the company
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by way of giving necessary directions to the existing directors in respect
of passing of resolutions. It is further submitted that the applicant/
accused was the authorized signatory on behalf of the company which
had obtained SBLC’s worth crores of rupees. On all aforesaid counts, it
is submitted by the Ld. SPP that the application be rejected.
15.

On perusal of the record submitted by the Investigating
Agency, it reveals that the applicant/accused was close confidante of
Jatin Mehta, Promoter & Guarantor of M/s. Forever Precious Jewellery &
Diamond Ltd. He was also a former Director of the company and one of
the authorized signatories. The investigation reveals that the applicant/
accused had pressurized the other employees for becoming the authorized
signatories of M/s. Forever Precious Jewellery & Diamond Ltd. and signed
several documents relating to the opening of SBLC’s and also signed
various documents to be submitted before the Banks for availing credit
facilities and subsequently, co­ordinated with them. He was co­ordinating
all exports & imports being done from Chennai & Cochin Unit of the
company and was giving directions to the Unit’s Head. He was attending
the consortium meetings and also was present at the Board Meetings of the
Company. He had also attended the meetings of the Banks in Dubai with
Jatin Mehta. He was the only person to attend the meetings with the
Banks.
16.

The investigation so far reveals that the Investigating Officer
has examined the number of employees of M/s. Winsome Diamonds &
Jewellery & M/s. Forever Precious Jewellery & Diamond Ltd. and it came
to light that the applicant/accused was the key person after Jatin Mehta in
the operation of the export & import transactions of the company. The
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applicant/accused had signed number of documents related to export &
import of gold & diamond jewellery. The investigation further reveals that
the applicant/accused was aware of the fact that all the UAE, Dubai
buyer’s companies were under the control of Jatin Mehta. The applicant/
accused was co­ordinating with the employees of Jatin Mehta based
abroad.
17.

It is claimed
by
the
Investigating Agency that
the
applicant/accused has been influencing the witnesses called by the CBI
and used to instruct them not to disclose anything before the Investigating
Agency.
18.

During the investigation, it came to light that the younger son
of the applicant/accused pursued his MBA studies in UK and spent huge
amount of more than Rs.25 Lakhs there. Further, the applicant/accused
had also purchased a flat worth Rupees One Crore at Borivali during the
year 2013­2014 in addition to his existing flat. Both these aspects are
under investigation. The investigation further reveals that the applicant/
accused was always attending the consortium meetings of the Banks and
was the single point contact for the Banks.

All the letters/documents
drafted and signed by the applicant/accused revealed his grasp of business
and banking affairs and therefore, it is not possible to hold that the
applicant/accused was merely a Head Clerk having no crucial role to play
in the commission of alleged offence.
19.

Though the applicant/accused was a Head Clerk in Su­Raj
Diamonds Industries Ltd., but he was doing complete day­to­day
operational work of M/s. Winsome Diamonds & Jewellery Ltd. and M/s.

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Forever Precious Jewellery & Diamonds Ltd. During the Board Meeting
held on 30/01/2010 of M/s. Forever Precious Jewellery & Diamonds Ltd.,
it was resolved that, “company to borrow gold loan of USD 25 million
against SBLC’s and authorizes Jatin Mehta and present applicant/accused
to sign documents/agreements.

The applicant/accused was authorized
person to operate bank accounts mainained with Axis Bank, BOI, Canara
Bank, CBOI, HDFC Bank, J & K Bank, Laxshmi Vilas Bank, PNB, State Bank
of Mauritius, Syndicate Bank & Vijaya Bank. Thus, the applicant/accused
being the close confidante of prime accused Jatin Mehta, was entrusted
with the onerous responsibilities as above.

It further reveals that the
companies were controlled by Jatin Mehta but the applicant/accused in his
absence handling its affairs.
20.

The investigation further reveals that during the Police
Custody of the applicant/accused, certain documents have been asked by
CBI from the existing Directors and the employees of the company.
However, they shown their inability to produce them but, submitted that
all the documents are in possession and in knowledge of the
applicant/accused only.

In the event of his release, there is bonafide
apprehension that applicant/accused would tamper/destroy the same.
Thus, it prima facie reveals that the applicant/ accused was managing the
affairs of both the companies in absence of Jatin Mehta and giving
instructions to the Directors & company secretary in the matter of
resolutions to be passed in the Board Meeting. Therefore, even prima facie
it cannot be accepted that the applicant/accused is merely a Head Clerk &
innocent. The Investigating Agency claims the total financial loss to the
tune of Rs.4625.43 Crores.

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21.

It is seen that the main beneficiary of the fraud is Jatin
Mehta. The offence committed by the applicant/accused is the economic
offence which is against the society at large.

It adversely affect the
economic fiber of the society. The public money is swindled in crores
causing damage to the financial status of the nation at large.

In the
circumstance of the case, there is every reason to believe that the
applicant/accused if released on bail would tamper the vital documents
and would influence & threatened the witnesses as he had done earlier.
22.

The Judgment cited by the applicant/accused i.e. “Sanjay
Chandra V/s. CBI” (referred supra) is distinguishable from the case in
hand, in as much as the observations made by Their Lordship in “Sanjay
Chandra” case were post filing of the charge­sheet. However, in the case
in hand, the investigation is still in progress and the charge­sheet is yet to
be filed.
23.

Considering the nature of accusation and the severity of the
punishment in case of conviction and considering the nature of supporting
evidence placed on record, I am of the view that the applicant/accused
does not deserve to be enlarged on bail as there is a reasonable
apprehension of tampering of the witnesses or of the threat to the
witnesses.

24.

In view of the above, the application deserves to be
rejected, in terms of order below :­
ORDER
1.

Bail Application No.233/2018 in CBI Remand Application
No.277/2018, filed by the applicant/accused Hasmukh Lilachand
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Shah, is hereby rejected.
2.

Application is disposed off accordingly.
(Pronounced in open Court)
Mumbai:
Date: 11/04/2018
(VIVEK V. KATHARE)
Special Judge (CBI)
Court Room No.53, Gr. Bombay.

Dictated on
: 11/04/2018.
Transcribed on : 11/04/2018.
Signed on
:
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“Certified to be true and correct copy of the original signed order”.
12/04/2018
at about 11.10 a.m.

(Mrs. Vidya Abhijit Mande)
Stenographer (H.G.)
Court Room No.53
Name of the Hon’ble Judge
: Shri. Vivek V. Kathare
(Court Room No.53)
Date of pronouncement of Judgment/Order
: 11/04/2018
Judgment/Order signed by Hon’ble Judge on : 11/04/2018
Judgment/Order uploaded on
: 12/04/2018
at about 11.10 a.m.

….