Mumbai, February 13, 2018 – The Special Court for CBI at Greater Bombay granted bail to Takashi Osamu Kuroda, a Japanese national and accused number 2 in a bribery case (RC 05(A)/2018-CBI, ACB, Mumbai). The order, passed by His Honour Judge Shri S.R. Tamboli (Court Room No. 47), came in response to Bail Application No. 103 of 2018.

Kuroda was arrested by the CBI, ACB, Mumbai on February 1, 2018, under Sections 7 and 12 of the Prevention of Corruption (PC) Act, in connection with an FIR registered on the same day. The prosecution alleged that Kuroda had raised a bill in favor of co-accused Sanjeev Malhotra (a Chartered Accountant, referred to as ‘accused no. 3’ for convenience) for the purpose of providing illegal gratification to co-accused Kalicharan Panda (Assistant Commissioner of Customs, referred to as ‘accused no. 1’ for convenience). This alleged bribe was intended to secure a favorable order regarding the acceptance of the declared value of goods imported by Kuroda’s company. The CBI claimed to have obtained this information from a source, leading to the registration of the FIR and the subsequent recovery of ₹2 lakhs from accused no. 1.

Advocate Ms. Yogini Abhay Ugale, representing Kuroda, argued that her client’s premises and office had already been searched on February 2, 2018, and the relevant documents, including the alleged bill, had been seized. She contended that further custody was unnecessary. Ms. Ugale emphasized that neither the FIR nor the remand application dated February 2, 2018, indicated that Kuroda had directly handed over any illegal gratification to accused no. 1. The recovered ₹2 lakhs was found in a polythene bag in accused no. 1’s cabin, and there was no evidence connecting the amount directly to Kuroda or proving that he had ever handed it over.

The defense also argued that there was no complaint of demand for illegal gratification from any party involved. The entire case, according to the defense, was based on alleged source information received by the CBI, ACB, Mumbai, at 11:00 hours on February 1, 2018, with Kuroda’s arrest occurring within five hours. This timeline, the defense suggested, contradicted the prosecution’s claim of a trap being laid in accused no. 1’s office based on reliable information or proper investigation of a demand. Furthermore, Ms. Ugale highlighted that Kuroda is a Japanese national residing in Mumbai with his family for the past five years.

The defense further argued that Sections 7 and 12 of the PC Act were not applicable to Kuroda, as he is a private individual, and his arrest under the Act constituted a misuse of law.

Special Public Prosecutor (SPP) Mr. J.K. Sharma, representing the CBI, EOW, Mumbai, countered that accused no. 1 had demanded illegal gratification from Kuroda through accused no. 3 to secure a favorable order. The alleged modus operandi involved Kuroda raising a bill in accused no. 3’s name, who would then encash the cheque and hand over the money to Kuroda for the bribe payment to accused no. 1. The CBI claimed to have learned that Kuroda was to hand over ₹2 lakhs to accused no. 1 on the afternoon of February 1, 2018, in the presence of accused no. 3, leading to the registration of the FIR and the laying of the trap. The ₹2 lakhs was seized from a bag inside accused no. 1’s cabin, and the prosecution claimed that recorded conversations between Kuroda and co-accused showed the demand for illegal gratification. The SPP argued that the investigation was ongoing and there was a possibility of witness tampering, urging the court to reject the bail application.

The defense relied on several Supreme Court and High Court judgments, including B. Jayaraj vs. State of A.P., Krishan Chander vs. State of Delhi, and P. Satyanarayana Murthy vs. The Dist. Inspector of Police and Ors., which emphasized that mere possession and recovery of currency notes without proof of demand would not constitute an offense under the relevant sections of the PC Act. They also cited cases like Shashikant vs. Central Bureau of Investigation and Ors. and S. Murali Mohan and Ors. vs. State, along with the guidelines in the CBI Manual as discussed in Vineet Narain and Ors. vs. Union of India (UOI) and Anr., arguing that the CBI had not followed mandatory procedures, particularly regarding the confirmation of source information and preliminary inquiry.

The SPP, while also citing Vineet Narain’s Case, submitted that the CBI unit had laid the trap after proper inquiry. However, Judge Tamboli noted that the prosecution was not alleging that Kuroda had actively handed over the ₹2 lakhs to accused no. 1. The money was found in accused no. 1’s cabin, and it was unclear whether this was the same amount allegedly intended as a bribe or if it was ever handed over by Kuroda.

Furthermore, the court pointed out that no one had complained about the demand for illegal gratification, and the prosecution was relying solely on source information. While acknowledging that disclosing the source was not mandatory, the court noted that it did not appear that the source information had been confirmed according to the guidelines in the CBI manual, as discussed in Vineet Narain’s Case. The FIR also lacked prima facie details of the steps taken by the CBI to verify the information.

The court also highlighted the defense’s reliance on B. Jayaraj’s Case, Krishan Chander’s Case, and P. Satyanarayana’s Case, which stressed the necessity of proving the demand for gratification, a crucial element that seemed to be lacking in the present case based on the information presented.

Additionally, the court noted that it had already passed an order releasing co-accused no. 1 on bail, suggesting that parity was another ground for granting bail to Kuroda. With Kuroda’s premises already searched and the money seized from accused no. 1, the court found that his presence was not required for further investigation.

While acknowledging the prosecution’s apprehension about potential tampering with evidence or influencing witnesses, the court stated that conditions could be imposed on Kuroda, and the prosecution could still seek cancellation of bail if any such attempts were made. This concern alone was not a sufficient ground for rejecting bail.

Considering that the alleged offense was punishable with imprisonment of up to ten years and taking into account all the presented facts, the court deemed it proper to release Kuroda on bail.

In the final order, the court granted Bail Application No. 103/18 with the following conditions:

1. Accused Takashi Osamu Kuroda is to be released on bail upon executing a Personal Recognizance (P.R.) Bond of ₹2,00,000/- (Rupees Two Lakhs Only) with one or two sureties of a like amount.
2. Kuroda shall attend the office of CBI once a week, every Sunday from 10:00 a.m. to 5:00 p.m., until the filing of the chargesheet.
3. Kuroda shall not leave the country of India without prior permission from the court.
4. Kuroda shall not interfere with the investigation in any manner.
5. Kuroda shall not tamper with prosecution witnesses or records related to the offense.
6. Kuroda shall deposit his passport with the office of CBI, EOW, Mumbai.

Bail Application 103/18 was disposed of accordingly.

This order underscores the importance of direct evidence and the establishment of demand in bribery cases, even at the stage of bail consideration. The court’s reliance on precedents emphasizing the need for proof of demand and the adherence to CBI manual guidelines highlights the judiciary’s scrutiny of the prosecution’s case, even in corruption matters involving foreign nationals. The granting of bail with specific conditions aims to balance the accused’s liberty with the requirements of the ongoing investigation and the integrity of the judicial process.