Bail Application No.736/2022.
MHCC020042392022
IN THE COURT OF ADDITIONAL SESSIONS JUDGE MUMBAI,
AT GR. MUMBAI
CRIMINAL BAIL APPLICATION NO. 736 OF 2022.
IN
C.R. NO. 86 OF 2019.
Rakesh Kumar Wadhawan
… Applicant.
Vs.
The State of Maharashtra,
(At the instance of EOW, UnitII, Vide C.R.No.
86/2019.)
…Respondent.
Appearances :
Ld. Adv. Mr. Harshad Nimbalkar a/w Adv. Mr. Sagar Shetty for the
applicant/accused.
Ld. Adv. Ms. Priyanka Gonbare i/b Jay & Co. for intervener.
Ld. SPP. Mr. Ajay Misar for the State/Respondent.
CORAM : H.H. THE ADDITIONAL SESSIONS JUDGE
DR. A. A. JOGLEKAR (C.R.NO.37)
DATED : 11TH OCTOBER, 2022.
ORAL ORDER
By
this
application
the
applicant
Rakesh
Kumar
Wadhawan being accused in C.R.No. 86/2019 registered with EOW,
BankingII Mumbai, for the offences punishable under Sections 406,
409, 420, 465, 467, 468, 471, 477(A), 201, read with 120(B) of the
Page 1 of 14
Bail Application No.736/2022.
Indian Penal Code, (hereinafter referred to as, “IPC”) seeks bail under
Section 439 of the Code of Criminal Procedure, 1973 (In short, “CrPC”).
THE CASE OF PROSECUTION IN SHORT ENSUES AS UNDER;
2.
PMC bank is a multistate cooperative bank and operates in
6 states and functions under the provisions of the banking regulation
act 1949 and directions/guidelines of reserve bank of India from time to
time. HDIL group of companies are the largest borrowers of PMC bank
and they have kept use to the tune of ₹ 4335.46 crores unpaid since
2008 until 2019. It is further alleged that, the managing director and
other functionaries including the board of directors, executives of the
PMC bank intentionally reported false records of accounts to the reserve
bank of India to suppress the material possession of loan amounts of
HDIL group of companies. In its advances master indent that is the
details of loan accounts for the year ended by 31 st of March 2018
submitted to RBI by the PMC bank, the bank has replaced 44 loan
accounts of HDIL and its group companies, whose individual balance
outstanding significantly higher that is (principal outstanding + interest
outstanding) with 21,049 fictitious loan accounts whose individual
balance outstanding was comparatively lower.
3.
It further revealed that these 21,049 accounts were actually
not created in the core banking solution of the bank, instead mere
entries were created in the advances master indent submitted to the RBI
for the purposes of conducting their inspection for the year ended 31
March 2018. And thus the managing director, the board, executives and
the defaulting borrowers camouflaged the actual loan accounts to the
detriment of the bank depositors interest. The preliminary assessment
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Bail Application No.736/2022.
conducted by and during the interim RBI inspection it has revealed that
10/44 borrower accounts belonging to HDIL group companies, qua the
balance outstanding as on 31st of March 2019 was to the tune of ₹
4355.46 crores. Thus, in this regard the managing director, other
directors and functionaries along with the Applicant/accused and other
such defaulters were arrayed in the crime, under the sections
punishable for the offences ibid and were put under arrest.
4.
The Ld. Advocate for applicant/accused states that, the
Applicant/accused is an ageold person having multiple comorbidities
including heart and lung ailments and also has undergone angioplasty.
Apart from the same the Applicant/accused is also suffered twice from a
severe
Covid
infection.
Further,
as
on
08.10.2021,
the
Applicant/accused underwent dual chamber permanent pacemaker
implantation and coronary artery angiography and during the said
procedure it revealed that the Applicant had 70% blockage is in the
proximal left anterior descending artery. Applicant/accused was also
granted with a relief for such medical treatment in surgery hospital,
Mumbai and such medical surveillance report was to be filed once a
week until discharge from such multiple medical ailments. Apart from
the multiple health issues and the deteriorating conditions of the
Applicant/accused, it is categorically agitated that as the chargesheet is
filed it is evident that adequate security is provided by the
Applicant/accused while availing loan/overdraft facilities from the
complainant bank. It is categorically stated that the chargesheet in
itself reveals that the loan disbursed of us to the tune of ₹ 2269 crores
while the colateral security furnished by the Applicant/accused is to the
tune of ₹ 3122.89 crores. It is further alleged that its the usual practice
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Bail Application No.736/2022.
of the complainant bank of inflating and manner plating the
loan/overdraft accounts. Apart from the same several such issues
pertaining to amalgamation of the bank with that of unity small finance
bank Ltd, propose delaying the trial as well as arbitration proceedings
qua the civil dispute are also agitated. Thus, upon such set of facts, the
learned advocate for Applicant/accused praise for enlargement of the
Applicant/accused on bail.
5.
In order to buttress his contentions Ld. advocate for
applicant/accused has filed and relied on various case laws which ensue
as under :
1. Dipak Shubhashchandra Mehta Vs. Central Bureau of
Investigation and Another, (2012) 4 Supreme Court
Cases 134.
2. Rajendra Govindrao Kunde and Anr. Vs. The State of
Maharashtra, 2016 SCC OnLine Bom 7627.
3. Sanjay Chandra Vs. Central Bureau of Investigation,
(2012) 1 Supreme Court Cases 40.
4. P. Chidabaram Vs. Directorate of Enforcement, (2020)
13 Supreme Court Cases 791.
5. Bhim Singh Vs. Union of India and Others, (2015) 13
Supreme Court Cases 605.
6. Hussainara Khatoon And Others (IV) Vs. Home Secre
tary, State of Bihar, Patna, (1980) 1 Supreme Court
Cases 98.
7. Supreme Court Legal Aid Committee Representing
Undertrial Prisoners Vs. Union of India And Others,
(1994) 6 Supreme Court Cases 731.
8. Hasan Ali Khan Vs. State of Maharashtra and Another,
2015 SCC OnLine Bom 8695.
9. Rashesh Mukesh Shah Vs. State of Maharashtra, 2018
SCC OnLine Bom 17551.
Page 4 of 14
Bail Application No.736/2022.
10. Ramchand Karunakaran Vs. Directorate Of Enforce
ment & Anr., Criminal Appeal No. 1650/2022 (Arising
out of SLP (Crl.) No. 6061/2020), decided on
23.09.2022.
6.
Per contra the Prosecution has filed their reply vide Exh.4
and inter alia have resisted the application on various grounds. It is
categorically stated that, it is the case of a huge financial fraud and the
Applicant/accused has played an active role in commission of the
offence along with his son who is also one of the key persons of HDIL
and its holding companies. It is further stated that during the course of
investigation, it has revealed that funds are weighed by HDIL from the
complainant bank in overdraft against mortgage facilities have not been
utilized for the designated purposes of borrowing. Further scrutiny of
the financial statements indicate diversions and misappropriation of
funds in large amount. It is also stated that the magnitude of amount
involved in the offence is huge and apart from the arrested 15 accused
persons several other persons are still absconding. So also during the
course of investigation it has categorically revealed that the managing
director of the complainant bank along with Chairman, executives and
the
Applicant/accused
have
acted
in
connivance.
Further
the
prosecution apprehends the tampering of evidence along with
threatenings to the prosecution witnesses at the hands of the
Applicant/accused. And lastly, Ld. Prosecutor prayed for rejection of
application as the offence committed by the Applicant/accused is an
economic offence which has affected the fiber of the country’s economic
structure.
Page 5 of 14
Bail Application No.736/2022.
7.
Per contra the Ld. SPP for the State/Respondent has also
filed various case laws which ensue as under :
1. Y. S. Jagan Mohan Reddy Vs. Central Bureau of Investiga
tion, Criminal Appeal No. 730/2013, (Arising out of SLP
(Crl.) No. 3404/2013), decided on 09.05.2013.
2. Nimmagadda Prasad Vs. Central Bureau of Investigation,
(2013) 7 Supreme Court Cases 466.
3. Central Bureau of Investigation Vs. Ramendu Chattopad
hyay, 2019 SCC OnLine SC 1491.
4. State of Bihar And Another Vs. Amit Kumar @ Bachcha
Rai, (2017) 13 Supreme Court Cases 751.
5. Anil Kumar Yadav Vs. State (NCT of Delhi) And Another,
(2018) 12 Supreme Court Cases 129.
6. Sunil Dahiya Vs. State (Govt. of NCT of Delhi), 2016 SCC
OnLine Del 5566.
7. Union of India Vs. Hasan Ali Khan And Another, (2011) 10
Supreme Court Cases 235.
8. Kalyan Chandra Sarkar Vs. Rajesh Rajan @ Pappu Yadav
And Another, (2004) 7 Supreme Court Cases 528.
9. Court On Its Own Motion Vs. Central Bureau of Investiga
tion, (2004) 72 DRJ 629.
10. Himanshu Chandravadan Desai and Ors. Vs. State of
Gujarat, Criminal Appeal No. 1526/2005 (Arising out of
SLP (Crl.) No. 1818/2004), decided on 16.11.2005.
11. Milind Vidyasagar Ghate Vs. The State of Maharashtra
And Another, Criminal Application No. 4137/2008, de
cided on 05.02.2009.
12. Virupakshappa Gouda And Another Vs. State of Kar
nataka And Another, Criminal Appeal No. 601/2017 (Aris
ing out of SLP (Crl.) No. 8781/2016), decided on
28.03.2017.
13. Champakbhai Amirbhai Vasana Vs. State, Criminal
Misc. Application No. 3136/2003, decided on 30.04.2001.
Page 6 of 14
Bail Application No.736/2022.
14. CBI, Hyderabad Vs. Subramani Gopalakrishnan & Anr.,
Criminal Appeal No. 985986/2011 (Arising out of SLP
(Criminal) Nos. 27722773/2011, decided on 21.04.2011.
15. Rizwan Mohammad Chaman Vs. The State of Maharash
tra, Bail Application No. 544/2020, decided on
19.03.2021.
8.
The learned advocate for intervener states that, erstwhile
PMC Bank Ltd., had 110 branches in 6 States and more than Rs.10
Crores deposits. It is stated that, the applicant/accused had sought for
such relief of bail on several occasions hereinbefore, and on every such
occasion he was refused such relief of enlargement on bail. Moreover,
even the medical aid pertaining to the preexisting ailments was also
provided to the applicant/accused by the orders of the Hon’ble Bombay
High Court. Therefore, the applicant is not entitled for any such relief
as there is no such substantial change in circumstances. It is also stated
that, the applicants claim that they have made efforts for monitization
of immovable assets is absolutely absurd. And lastly, the Ld. Advocate
for intervener states that the applicant/accused is not extending any co
operation or exhibiting intention in recovery of dues. Hence, the Ld.
Advocate for intervener prayed for rejection of application.
9.
Ld. Advocate for intervener has also filed various case laws
which ensue as under :
1. Suneel Kumar Singh Vs. State of U.P., 2019 SCC On
Line All 957.
2. Rekha Murarka Vs. State of West Bengal And Another,
(2020) 2 Supreme Court Cases 474.
Page 7 of 14
Bail Application No.736/2022.
3. Serious Fraud Investigation Office Vs. Nittin Johari &
Anr., Criminal Appeal No. 1381/2019 (@SLP (CRL.)
No. 7437/2019, decided on 12.09.2019.
4. Y. S. Jagan Mohan Reddy Vs. Central Bureau of Inves
tigation, Criminal Appeal No. 730/2013, (Arising out
of SLP (Crl.) No. 3404/2013), decided on 09.05.2013.
5. Nimmagadda Prasad Vs. Central Bureau of Investiga
tion, (2013) 7 Supreme Court Cases 466.
6. Anil Kumar Sharma Vs. Enforcement Directorate, Luc
know, Bail No. 5974/2020, decided on 09.12.2020.
7. Virupakshappa Gouda And Another Vs. State of Kar
nataka And Another, (2017) 5 Supreme Court Cases
406.
8. Mangesh S/o. Ranjit Vs. State, Criminal Application
(BA) 422/2020, decided on 16.10.2020.
10.
Heard
Ld.
Advocate
for
Applicant/accused,
learned
advocate for the intervener and learned prosecutor for the state.
Perused application and reply and other allied documents alongwith the
case laws filed by the either parties.
11.
On meticulous examination of case record it is evident that,
undoubtedly a huge financial transaction with several illegalities and
irregularities has occurred wherein the funds availed by HDIL from the
PMC Bank in overdraft against the mortgage facilities have not been
utilized for the designated purpose of borrowing. The Ld. Advocate for
applicant has vehemently stated that, the applicant/accused qua the
HDIL Group had furnished such securities more than that was
borrowed. Therefore, the very allegation pertaining to the fact that, the
applicant/accused has cause loses to the tune of 4335.46 Crores to the
PMC Bank cannot be attributed to the applicant/accused.
Page 8 of 14
In this
Bail Application No.736/2022.
regard, it evinces to myself that, as per the contention of the
applicant/accused the loan disbursed was to the tune of Rs.2269 Crores
and the collateral security to that effect was to the tune of Rs.3122.89
Crores.
12.
On perusal of the final report it evinces to myself that the
Advances Master Indent propels for the fact that the bank has replaced
44 loan accounts of HDIL and its group companies, whose individual
balance outstanding significantly higher with 21049 fictitious loan
accounts wherein individual balance outstanding was comparatively
lower.
Moreover, it has categorically revealed that the said 21049
accounts were actually not created in the core banking solution of the
bank and were mere entries in the Advances Master Indent submitted to
the RBI for conducting their inspection for the financial year ended by
March 31, 2018. So also, it is evident that the said collateral security
which was allegedly furnished was found to be under speculation.
Further, the applicant alleges that, it is the complainant bank’s usual
practice inflating the loan/overdraft accounts.
13.
Undoubtedly, in this regard the bank officials also are
arrayed as accused, but merely leveling such allegations against the
bank authorities will not absolve the applicant/accused from his role,
more especially in the light of the fact that the magnitude of amount
involved in the offence is huge. Also, that the factum of connivance
between PLMC Bank officials and the HDIL qua the applicant/accused
and his son alongwith other accused has been apparently established
during the course of investigation.
Page 9 of 14
Bail Application No.736/2022.
14.
The Ld. Prosecutor has raised an objection with regard to
the maintainability of the application at this juncture, more especially
when the earlier application for bail post filing of chargesheet has been
rejected and that no such substantial change in circumstances has been
propelled throughout the application.
It is evident that, the
applicant/accused had moved such application for grant of such relief of
enlargement on bail and the Ld. Predecessor in office had rejected the
same as on 09.07.2020. I have perused the said order and the grounds
agitated therein particularly with regard to the factum of collateral
security and the alleged irregularities committed by the bank officials.
So also, the very defence under the aforementioned contention was the
applicant/accused applied for loan and upon such scrutiny were
granted such loan.
Therefore, the role attributed pertaining to
conspiracy cheating, and forgery of documents cannot be considered
with regard to the applicant/accused.
15.
It was categorically observed that, the investigation papers
reveal for the HDIL Group of Companies have been awarded credit
facility in large scale and majority of such credit facility have remained
unpaid since 2008 until 2019 and it had remained sheltered
deliberately violating the RBI Norms. Thus, the apparent factum of
connivance can be well ascertained. Similar such contention is being
raised by way of the present application and therefore, with regard to
the merits of the case, I do not find any such substantial change in
circumstances post filing of chargesheet and rejection of the bail
application thereafter.
Page 10 of 14
Bail Application No.736/2022.
16.
The second limb of the arguments pertaining to the medical
ground, wherein the Ld. Advocate for applicant/accused states that, the
applicant/accused suffers from several such medical ailments and
therefore, considering the medical status report the applicant/accused
deserves to be extended with such relief of enlargement on bail. It
evinces to myself that while the applicant/accused is held under judicial
custody at the Aurthor Road Central Jail and then thereafter at Taloja
Central Prison, he was extended with appropriate medical treatment
and assistance as and when required including his treatment at KEM
Hospital.
17.
Further, the very apprehension of the applicant pertaining
to his medical treatment was well considered by the Hon’ble Bombay
High Court and was also allowed to undergo such surgery in a private
hospital of the choice of the applicant/accused.
Thus, the said
contention with regard to the medical ailment is well fortified by the
orders of the Hon’ble Bombay High Court and therefore, in my
considerate view it won’t be a reason for such enlargement on bail,
more especially when the Jail Authorities are well equipped with the
medical services which are made available to the applicant/accused
including such treatment at Government Hospitals as such.
Thus,
considering the same even the said ground as already agitated by the
applicant/accused is well fortified by the earlier orders.
Hence,
deserves no consideration.
18.
While deciding an application for bail it is settled that the
Court is required to see whether the primafacie case exists or not. It is
not necessary to make roving enquiry or examining the merits of
Page 11 of 14
Bail Application No.736/2022.
prosecution case. It is apposite to note that considering the quantum of
sum involved in the matter, and that the transaction being not rebutted
by the applicant/accused has bearing upon this application. Moreover,
as per the case of Y. S. Jagan Mohan Reddy Vs. Central Bureau of
Investigation, (2013) 7 Supreme Court Cases 439 (Supra), the
Hon’ble Supreme Court has settled the position with regard to the
economic offences or in the category thereof. It is observed 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.”
19.
So also, the Ld. Advocate for applicant has placed his
reliance on the case law of P. Chidambaram (Supra) and has referred
for the considerations while deciding the applications dealt under the
Economic Offences categorically, wherein it is settled that, 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. Suffice it to state that law, as laid down in the following
judgments, will govern the field.
20.
Therefore, the theory laid by the prosecution at this
juncture holds bearing more especially in the light of the fact that the
Page 12 of 14
Bail Application No.736/2022.
Applicant/accused is apparently found in connivance with that of the
bank officials although he has swayed the said responsibility upon the
bank officials. Apart from the same there is no explanation pertaining to
the alleged collateral securities which lie under speculation.
Thus,
considering the same, the role of the applicant/accused has been clearly
established and this ipsofacto disentitles the applicant/accused from
any such relief of enlargement on bail.
21.
So also, all such facts either on merits or on medical
grounds were well agitated hereinbefore and that no such substantial
change in circumstances is propelled throughout the application upon
facts or change in law, and that post filing of chargesheet the case of
the prosecution seems to be more strengthened. In view of the same, I
do not find this as a fit case for grant of bail, more especially in the light
of the fact that, recovery is pending and that enlarging the
applicant/accused on bail would also aid him to tamper with the
prosecution evidence. In the backdrop of the aforesaid facts, I hold
that, as the application deserves no consideration. Hence, order infra: –
ORDER
Bail Application No. 736/2022 stands rejected and
disposed of accordingly.
DR. ABHAY
AVINASH
JOGLEKAR
Date : 11.10.2022.
Digitally signed by
DR. ABHAY AVINASH
JOGLEKAR
Date: 2022.10.15
16:31:12 +0530
(DR. A. A. JOGLEKAR)
Additional Sessions Judge,
City Civil & Sessions Court,
Gr. Bombay (C.R.No.37)
Dictated on
: 11.10.2022.
Transcribed on : 12.10.2022.
HHJ signed on : 15.10.2022.
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Bail Application No.736/2022.
“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE
ORIGINAL SIGNED JUDGMENT/ORDER.”
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