1
Order on BA 179/2018
IN THE SPECIAL COURT FOR CBI AT GREATER BOMBAY
BAIL APPLICATION NO. 179 OF 2018
Rajesh Jindal
……. Applicant/
Accused no 4
Vs.
The State­CBI/EOW/Mumbai
……. Respondent
CORAM:
DATED:
HIS HONOUR JUDGE
SHRI S.R. TAMBOLI
(COURT ROOM NO.47)
26.03.2018.

Appearance:
SPP Mr. Nandode for the CBI, EOW.
Advocate Yogesh Rohira for the Applicant/ Accused 4
ORDER
In the instant application, applicant/accused no. 4 has
prayed for bail as per section 439 of Cr.P.C. He has been arrested in
connection with the FIR bearing No. RC 01(E)/2018 of CBI, BS and FC,
Mumbai for the offence u/s 120 – B r/w 409, 420 IPC and Sec 13(2)
r/w 13 (1) (d) PC Act , 1988.
2.

Ld counsel for applicant/accused no. 4 submitted that as
per the compliant dated 29.1.2018, which was registered as FIR by the
CBI on 31/01/2018 , the public servants Shri Gokulnath Shetty ( posted
in PNB, Brady House, Fort branch since 31/03/2010 in the import
section of the Foreign Exchange Department and Shri. Manoj Hanumant
Kharat, had fraudulently issued letter of undertaking ( LOU’s ) ( by swift
messages) without obtaining the required request applications,
documents and “approval” of the authorities thereto and without
2
Order on BA 179/2018
making entries in the bank system for avoiding detection of the
transactions, so made. The said complaint further alleges that a fraud
of Rs 280.70 Crores has been committed by fraudulently issuing 8
LOU’s.
3.

Ld. counsel for applicant/accused no. 4 further submitted
that in the background of about facts, the custodial interrogation of the
applicant is over. There is no real necessity of the applicant’s further
incarceration in judicial custody. That there is a presumption of
innocence till the accused is proved guilty in trial.

Humane and
Compassionate approach needs to be taken while considering
application of bail. Bail is rule and jail an exception. Neither the
applicant, nor his various successor Branch Heads, were arraigned as
accused in the FIR. In order to avoid detection of crime, the fraudulent
issuance of LOUs by Swift Messages was made by co–accused without
obtaining the required request applications, documents and “approval”
of the authorities thereto, and without making entries in the bank
system. The applicant admittedly acted as the branch head of the PNB,
Brady House, Fort branch only for a brief period since August, 2009 to
April, 2011, whereas issuance of fraudulent swift messages was
allegedly commenced and continued by said Mr. Shetty and/or Mr.
Kharat since 2010 to 2017. In the custodial interrogation, the applicant
has exhaustively explained the facts and has emphatically denied his
involvement in issuance of the fraudulent LOUs in any manner. He has
asserted his lack of any culpable knowledge or awareness regarding
such fraud even while he was the branch head. He has submitted that
no act amounting to any criminal conspiracy, cheating or criminal
misconduct can be attributed to him, as alleged or otherwise. Neither
any approval for issuance of any fraudulent LOU’s was granted by the
3
Order on BA 179/2018
Applicant, nor was he aware of any such fraudulent acts by the
aforesaid co­accused named in FIR. The applicant, in his tenure has not
sanctioned any buyer’s credit facility to any of the named three Nirav
Modi Group of Companies namely M/s. Diamonds R’US, M/s. Stellar
Diamonds and M/s. Solar Exports. Case is based on documents. The
Applicant is not having possession or access to any of the documents or
records generated during his tenure The suspicion raised to the effect
that the applicant may have destroying any documents is unfounded.
Search operations have already been carried out. Nothing incriminating
has been found qua the applicant herein. The applicant has no criminal
antecedents. Hence, he prayed that accused be released on bail.
4.

Per contra, Ld. SPP, CBI, BS and FC submitted that the case
RCBSM2018/E0001 was registered by CBI, BS and FC branch, Mumbai
on 31/01/2018, on a written complaint received from Shri. Avneesh
Nepalia, DGM, Punjab National Ban , Zonal office, Mumbai, against the
accused for commission of offence punishable under criminal
conspiracy, cheating abuse of official position by public servants etc.,
allegedly causing undue pecuniary advantage to M/s. Diamond R’US ,
M/s. Solar Exports and M/s. Stellar Diamonds and corresponding
wrongful loss of Rs 280.70 Crores to Punjab National Bank. During
tenure of the present accused at Brady house branch, Mumbai, as
branch manager, during the period from 2009 to 2011, several LOU’s
were issued on behalf of the group firms of Nirav Modi viz. M/s.
Diamond R’US, M/s. Stellar Diamond and M/s. Solar Exports.

The
LOU’s issued during the period of the applicant accused were issued
unauthorized i.e. without any sanction limit or without 100% margin.
These allegations are being investigated and that as the documents
pertain to a long period of time. The collection of documents is
4
Order on BA 179/2018
consuming considerable time. Moreover, the documents so collected till
date are also voluminous which are under scrutiny. The applications
received by the bank for issuance of LOU’s were surreptitiously returned
to the accused companies by accused bank officials in order to avoid
detection of the fraud which is also being investigated into. These facts
also increase the gravity of offences committed by the accused. Present
accused is the GM (Credit) of PNB and overseas i.e. the entire credit
portfolio of the bank as a whole. There is a every reason to believe that
he would tamper with the evidence and influence the witnesses most of
whom at some point of time have worked under him. There is every
likelyhood that the applicant/accused would abscond and thereby
frustrate the process of law. It was during the tenure of present accused
Shri. Rajesh Jindal that the practice of fraudulent LOU’s started. Hence,
he prayed to reject the application.
5.

To support his contention, Ld counsel for the accused
placed reliance on following decisions:
i
ii
iii
6.

Sushil Ansal vs. Central Bureau of Investigation reported
in MANU/DE/0730/1997.
Santosh vs. The State of Maharashtra, reported in
MANU/SC/1313/2017.
Nikesh Tarachand Shah vs. Union of India (UOI) and Ors.,
reported in MANU/SC/1480/2017.
On the other hand, Ld SPP for the CBI placed reliance on
following decisions to support his contentions:
i
ii
iii
iv
Prasanta Kumar Sarkar vs. Ashis Chatterjee and Anr.,
reported in MANU/SC/0916/2010.
Nimmagadda Prasad vs. Central Bureau of Investigation,
reported in MANU/SC/0485/2013.
Neeru Yadav vs. State of U.P, reported in
MANU/SC/1208/2014.
Gurcharan
Singh
and
Ors.
vs.
State
(Delhi
5
Order on BA 179/2018
Administration), reported in MANU/SC/0420/1978.
v
Deepak Khubchand Bajaj vs. The State of Maharashtra and
Ors., reported in MANU/MA/1685/2016.
vi Mehfuz Ali Khan vs. The State of A.P., reported in
MANU/AP/1592/2013.
vii Rajesh Ranjan Yadav @ Pappu Yadav vs. CBI through its
Director, reported in MANU/SC/5112/2006.
viii Ash Mohammad V/s. Shiv Raj Singh @ Lalla Babu and
Anr, reported in MANU/SC/0758/2012.
ix State vs. R. Vasanthi Stanley and Ors., reported in
MANU/SC/1028/2015.
x
Central Bureau of Investigation vs. Maninder Singh,
reported in MANU/SC/0936/2015.
xi The State of Bihar and Ors. vs. Amit Kumar, reported in
MANU/SC/0515/2017.
xii Central Bureau of Investigation vs. V. Vijay Sai Reddy,
reproted in MANU/SC/0487/2013.
xiii Y.S. Jagan Mohan Reddy vs. Central Bureau of
Investigation, reported in MANU/SC/0487/2013.
xiv Prasanta Kumar Sarkar vs Ashis Chatterjee and Anr,
reported in MANU/SC/0916/2010.
xv State through C.B.I. vs Amarmani Tripathi, reported in
MANU/SC/0677/2005.
xvi Vinod Bhandari vs State of M.P., reported in 2015 ALL
MR (Cri.) 1236(SC).
xvii Kalyan Chandra Sarkar etc. vs Rajesh Ranjan @ Pappu
Yadav and Anr, reported in MANU/SC/0214/2004.
xviii Farooq Abdul Gani Surve vs State of Maharashtra, reported
in MANU/MH/2152/2011.
xix Sanjay Mohan and etc. V/s. State of U.P., reported in
MANU/UP/2951/2012.
7.

In Nikesh Shah’s case, Hon’ble Apex court observed as under:
“ 13. What is important to learn from this history is that Clause 39 of
Magna Carta was subsequently extended to pre­trial imprisonment, so that
persons could be enlarged on bail to secure their attendance for the ensuing
trial. It may only be added that one century after the Bill of Rights, the US
Constitution borrowed the language of the Bill of Rights when the principle
of habeas corpus found its way into Article 1 Section 9 of the US
Constitution, followed by the Eighth Amendment to the Constitution which
expressly states that, “excessive bail shall not be required, nor excessive
fines imposed, nor cruel and unusual punishments inflicted”. We may only
add that the Eighth Amendment has been read into Article 21 by a Division
Bench of this Court in Rajesh Kumar v. State through Government of NCT
Order on BA 179/2018
6
of Delhi MANU/SC/1130/2011 : (2011) 13 SCC 706, at paragraphs 60 and
61.

8.

In
Gurbaksh
Singh
Sibbia
v.

State
of
Punjab,
MANU/SC/0215/1980 : (1980) 2 SCC 565 at 586­588, the purpose of
granting bail is set out with great felicity as follows:
“27. It is not necessary to refer to decisions which deal with the right to
ordinary bail because that right does not furnish an exact parallel to the
right to anticipatory bail. It is, however, interesting that as long back as in
1924 it was held by the High Court of Calcutta in Nagendra v. King­
Emperor [MANU/WB/0119/1923 : AIR 1924 Cal 476, 479, 480: 25 Cri LJ
732] that the object of bail is to secure the attendance of the Accused at the
trial, that the proper test to be applied in the solution of the question
whether bail should be granted or refused is whether it is probable that the
party will appear to take his trial and that it is indisputable that bail is not
to be withheld as a punishment. In two other cases which, significantly, are
the ‘Meerut Conspiracy cases’ observations are to be found regarding the
right to bail which deserve a special mention. In K.N. Joglekar v. Emperor
[MANU/UP/0060/1931 : AIR 1931 All 504: 33 Cri LJ 94] it was observed,
while dealing with Section 498 which corresponds to the present Section
439 of the Code, that it conferred upon the Sessions Judge or the High
Court wide powers to grant bail which were not handicapped by the
restrictions in the preceding Section 497 which corresponds to the present
Section 437. It was observed by the court that there was no hard and fast
Rule and no inflexible principle governing the exercise of the discretion
conferred by Section 498 and that the only principle which was established
was that the discretion should be exercised judiciously. In Emperor v.
Hutchinson [MANU/UP/0014/1931 : AIR 1931 All 356, 358: 32 Cri LJ
1271] it was said that it was very unwise to make an attempt to lay down
any particular Rules which will bind the High Court, having regard to the
fact that the legislature itself left the discretion of the court unfettered.
According to the High Court, the variety of cases that may arise from time
to time cannot be safely classified and it is dangerous to make an attempt to
classify the cases and to say that in particular classes a bail may be granted
but not in other classes. It was observed that the principle to be deduced
from the various Sections in the Code of Criminal Procedure was that grant
of bail is the Rule and refusal is the exception. An Accused person who
enjoys freedom is in a much better position to look after his case and to
properly defend himself than if he were in custody. As a presumably
innocent person he is therefore entitled to freedom and every opportunity
to look after his own case. A presumably innocent person must have his
freedom to enable him to establish his innocence……..”
9.

In Sushil Ansal’s case , Hon’ble Delhi High Court observed as
under:
7
Order on BA 179/2018
“ (8) Considering the facts emerging as above, the nature of accusation
and the evidence, following the Supreme Court decisions (supra), I am
inclined to exercise the discretion under Section 439, Criminal Procedure
Code . since it is not the apprehension expressed by the Counsel for the
CBI­ respondent that the petitioner­accused, if released on bail, would not
turn up to take trial of the accusation leveled against him. The
apprehension of likelihood of tampering with the prosecution evidence can
be taken care of by imposing necessary conditions and the breach whereof
may expose the petitioner to the consequence/risk of cancellation of bail. “
10..

In Santosh’s case (supra), Hon’ble Apex Court observed as
under
7. It appears, the IO was of the view that the custody of the Appellant is
required for recording his confessional statement in terms of what the co­
accused had already stated in the Statement Under Section 161 of the
Code of Criminal Procedure, 1973. The IO was of the opinion that the
Appellant was not cooperating because he kept reiterating that he had not
purchased the food­grains. The purpose of custodial interrogation is not
just for the purpose of confession. The right against self­incrimination is
provided for in Article 20(3) of the Constitution. It is a well settled
position in view of the Constitution Bench decision in Selvi and Ors. v.
State of Karnataka MANU/SC/0325/2010 : (2010) 7 SCC 263, that
Article 20(3) enjoys an “exalted status”. This provision is an essential
safeguard in criminal procedure and is also meant to be a vital safeguard
against torture and other coercive methods used by investigating
authorities. Therefore, merely because the Appellant did not confess, it
cannot be said that the Appellant was not cooperating with the
investigation. However, in case, there is no cooperation on the part of the
Appellant for the completion of the investigation, it will certainly be open
to the Respondent to seek for cancellation of bail.
8. Having regard to the peculiar facts and circumstances of the case, we
are of the view that the liberty as above should be left to the jurisdictional
Sessions Court, i.e., Sessions Court, Gondia.

11.

Relying on the ratio laid down in aforesaid cases, Ld counsel
for accused prayed to grant the bail to accused.
12.

There cannot be two opinions about the ratio laid down in
aforesaid cases. However, following are the circumstances which
propelled me to dismiss the application:
i)
Investigation is pending. The offence alleged against the
Order on BA 179/2018
8
accused is serious.

There is allegations of the defalcation of
public money for the amount of Rs.280.70 Crores.

The said
amount has been siphoned by fraudulently issuing LOU. Court
cannot overlook crucial stage of investigation.
ii)
Accused is coming with the case that he is not having
culpable criminal knowledge.

However, LOU has been issued
during the tenure of this accused. Therefore, at this stage it is
difficult to accept that the accused was not having knowledge
about the issuance of LOU. Admittedly, the accused was serving
as a Branch Manager in Punjab National Bank, Brady House, Fort
Branch during the period from 2009­11. Prior to that no LOU was
issued. Therefore, there is every possibility of the playing main
role by the accused in the present crime. Therefore, at this stage
it is difficult to accept that the accused was not having knowledge
about the offence.
iii)
The offence alleged against the accused is the economic
offence. It constitutes different class. It needs to be visited with
different approach. Huge loss of public money has been caused.
It has far reaching consequences. The court cannot overlook it.
iv)
The accused is coming with the case that he will not tamper
with the evidence. However, investigating officer has to search
and scrutinize various documents from year 2009 to year 2017.
The accused is serving as a General Manger. Therefore, he may
influence the witnesses who were working with him.

In such
scenario he may tamper with the evidence and influence the
witnesses. This possibility cannot be ruled out.
v)
Liberty of the accused is important. At the same time, the
court cannot overlook the public outcry and the involvement of
the accused in the present crime.

The crime was committed
9
Order on BA 179/2018
during the tenure of the accused. The ratio laid down in the case
of the Nikesh Shah (supra) is not helpful to support the
contentions of the accused. For the same reasons the ratio laid
down in Sushil Ansal’s case (supra) is not helpful to support the
contentions of the learned counsel of the accused.
13.

For the aforesaid reasons this court finds not substances in the
contentions of the learned counsel for the accused. In the result, this
court pass the following order:­
ORDER
Bail Application No. 179 of 2018 is rejected and stands disposed
of accordingly.
26.03.2018
Dictated on
Transcribed on
Checked on
Signed on
: 26.03.2018
: 27.03.2018.
: 27.03.2018.
: 31.03.2018.

(S.R. TAMBOLI)
Special Judge(CBI)
Gr. Bombay
10
Order on BA 179/2018
“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGEMENT/ORDER”
UPLOAD DATE
02.04.2018
Name of the Judge
TIME
05.05 p.m.

Date of Pronouncement of
Judgement/Order.
Judgement/order signed by P.O on
Judgement/order uploaded on
NAME OF STENOGRAPHER
Supriya Samit Girkar
HHJ Shri S.R. Tamboli
(CR No.47)
26.03.2018.
31.03.2018.
02.04.2018.