Mumbai, Thane [Current Location] – April 15, 2025 – The Special Court for CBI at Greater Bombay has rejected the bail application of Rajesh Jindal, accused no. 4 in a significant fraud case (FIR No. RC 01(E)/2018) registered by the CBI’s Banking Security and Fraud Cell (BS and FC), Mumbai. The case involves allegations of criminal conspiracy, cheating, criminal breach of trust by public servants, and abuse of official position under the Indian Penal Code (IPC) and the Prevention of Corruption Act (PC Act), 1988, amounting to a staggering ₹280.70 Crores.

The order, dated March 26, 2018, was pronounced by His Honour Judge Shri S.R. Tamboli (Court Room No. 47) after hearing arguments from the Special Public Prosecutor (SPP) for the CBI and Advocate Yogesh Rohira, representing the applicant/accused Rajesh Jindal.

According to the CBI’s complaint, registered on January 31, 2018, based on information received on January 29, 2018, two public servants, Shri Gokulnath Shetty and Shri Manoj Hanumant Kharat, both posted in the Foreign Exchange Department of Punjab National Bank (PNB), Brady House, Fort branch, allegedly fraudulently issued Letters of Undertaking (LOUs) through SWIFT messages. These LOUs were reportedly issued without obtaining the necessary request applications, documents, and approvals, and without making entries in the bank’s system to avoid detection. The initial complaint alleged a fraud of ₹280.70 Crores through the fraudulent issuance of eight LOUs.

Advocate Yogesh Rohira, representing the applicant Rajesh Jindal, argued that his client’s custodial interrogation was complete, and there was no real necessity for his further incarceration. He emphasized the presumption of innocence until proven guilty and urged the court to adopt a humane and compassionate approach, reiterating the principle that bail is the rule and jail an exception.

Mr. Rohira pointed out that neither Jindal nor his successor Branch Heads were initially named as accused in the FIR. He argued that the fraudulent issuance of LOUs via SWIFT messages to evade detection was carried out by the co-accused without the required documentation and approvals and without bank system entries. Jindal served as the Branch Head of PNB, Brady House, Fort branch for a brief period from August 2009 to April 2011, whereas the alleged fraudulent SWIFT messages commenced and continued from 2010 to 2017 by the other accused.

The applicant claimed to have exhaustively explained the facts during custodial interrogation and vehemently denied any involvement in the fraudulent LOUs or any culpable knowledge of the fraud, even during his tenure as Branch Head. He asserted that no act amounting to criminal conspiracy, cheating, or criminal misconduct could be attributed to him. He stated that he neither granted approval for any fraudulent LOUs nor was aware of such acts by the co-accused named in the FIR. Furthermore, he claimed that during his tenure, he did not sanction any buyer’s credit facility to the Nirav Modi Group of Companies involved.

Mr. Rohira argued that the case was based on documents, and Jindal did not possess or have access to any records generated during his time as Branch Head. He deemed the suspicion of document destruction as unfounded, noting that search operations had already been conducted with nothing incriminating found against his client. He also highlighted Jindal’s lack of criminal antecedents, urging the court to grant bail.

Conversely, Ld. SPP Mr. Nandode for the CBI argued against the bail application, outlining the serious nature of the offenses, including criminal conspiracy, cheating, and abuse of official position, leading to a significant wrongful loss of ₹280.70 Crores to PNB and undue pecuniary advantage to the Nirav Modi group firms. The prosecution emphasized that during Jindal’s tenure as Branch Manager from 2009 to 2011, several unauthorized LOUs were issued on behalf of these firms without proper sanction limits or 100% margin.

The CBI contended that the investigation was ongoing and involved a long period, making document collection and scrutiny time-consuming. They alleged that applications for LOU issuance were surreptitiously returned to the accused companies by bank officials to avoid detection, further increasing the gravity of the offenses. The prosecution highlighted Jindal’s current position as General Manager (Credit) of PNB, overseeing the entire credit portfolio, raising concerns about potential evidence tampering and witness influence, as many witnesses would have worked under him at some point. The CBI also argued a likelihood of Jindal absconding, thereby frustrating the legal process. They specifically pointed out that the practice of fraudulent LOUs allegedly began during Jindal’s tenure as Branch Head.

Both sides presented various case law to support their arguments. The defense relied on precedents emphasizing the principle of bail being the rule and jail the exception, the purpose of bail being to secure attendance at trial, and the need for specific apprehension of flight risk or evidence tampering to deny bail. The prosecution cited cases highlighting the seriousness of economic offenses, the potential for influential accused to tamper with evidence, and the need to consider the gravity of the crime and public interest while deciding on bail.

After considering the arguments and the presented case law, Special Judge Tamboli acknowledged the principles laid down in the cited cases but found compelling reasons to reject Jindal’s bail application. The court highlighted the following crucial circumstances:

i) Pending Investigation and Seriousness of Offense: The investigation was still ongoing, and the alleged offense involved a massive defalcation of public money amounting to ₹280.70 Crores through the fraudulent issuance of LOUs. The court deemed it unable to overlook this crucial stage of the investigation.

ii) Accused’s Claim of Lack of Knowledge Contradicted by Tenure: While Jindal claimed no culpable criminal knowledge, the court noted that the fraudulent LOU issuances occurred during his tenure as Branch Manager from 2009 to 2011, a period preceding which no such LOUs were allegedly issued. This made it difficult for the court to accept his claim of ignorance at this stage, suggesting a potential “main role” in the crime.

iii) Economic Offense of a Different Class: The court emphasized that economic offenses constitute a distinct category that requires a different approach due to the huge loss of public money and its far-reaching consequences, which cannot be overlooked.

iv) Potential for Evidence Tampering and Witness Influence: Despite Jindal’s claim of not tampering with evidence, the court noted the ongoing search and scrutiny of documents from 2009 to 2017. Given Jindal’s current position as a General Manager, the court found a significant possibility of him influencing witnesses who had worked under him, thus posing a risk of evidence tampering.

v) Public Outcry and Accused’s Involvement: The court acknowledged the importance of the accused’s liberty but also considered the public outcry and the fact that the alleged crime occurred during Jindal’s tenure as Branch Head. The court found the ratio laid down in the defense’s cited cases, including Nikesh Shah and Sushil Ansal, not helpful in supporting the bail application under these specific circumstances.

For these reasons, the Special Court found no substance in the arguments presented by the defense and consequently rejected Bail Application No. 179 of 2018. The order was dictated on March 26, 2018, transcribed on March 27, 2018, checked on the same day, signed on March 31, 2018, and uploaded on April 2, 2018.

This order underscores the judiciary’s stringent stance against large-scale economic offenses, particularly those involving public funds, and the significant weight given to the stage of investigation, the gravity of the allegations, and the potential for interference in the legal process when considering bail applications in such cases. The fact that the alleged fraudulent activities reportedly commenced during Jindal’s leadership played a crucial role in the denial of his bail. The case is a significant one in the ongoing investigation into the PNB fraud involving Nirav Modi and others.