1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL APPLICATION NO. 5358 OF 2009 Sanjay Narayan Jalan ...Applicant. V/s The State of Maharashtra .... Respondent. Mr. Umesh Lalit, Sr. Counsel with Mr. A.H.H. Ponda i/b M/s Khaitan & Jaykar for the applicant. Mr. Amit Desai, Spl. P.P. With Mr. P.A. Pol, PP with Mr. S.A. Shaikh for the State. Mr. S.L. Maneshinde for the original complainant. CORAM: V. M. KANADE, J. DATE : 11TH DECEMBER, 2009 P.C.:- 1. Heard the learned Senior Counsel appearing on behalf of the applicant, the learned Senior Counsel appearing on behalf of the State and the learned Counsel appearing on behalf of the complainant. 2. The case of the applicant is that the FIR was lodged by the Complainant M/s Indiabulls Financial Services Ltd which is a financial company against the 15 accused. Accused No. 1 is Sanjay Dalmia and accused Nos. 2 to 15 are Private Limited Companies. In the complaint which was registered on 25/7/2009, it was alleged that Sanjay Dalmia made a representation to CEO of the complainant that accused Nos. 2 to 8 are controlled by him and asked for loan from the 2 complainant for these companies and actual loan arrangement was made by the complainant for Sanjay Dalmia and the said Companies. At that time, securities were given in the form of shares. Accordingly, between June, 2005 to June, 2008 the said arrangement continued between the complainant and Sanjay Dalmia. Since, there was default in making payment of instalments, the complainant informed Sanjay Dalmia that they would call back the said loan. However, assurance was given by the said Sanjay Dalmia that he would give additional security in the form of mortgage of land and, therefore, in view of that assurance the call-back notices were not issued. Certain properties were offered as securities belonging to accused Nos. 9 to 15 and certain lands at Najafgarh, New Delhi were mortgaged and letter of assurance about certain properties at Vile Parle was given. In the mortgage deed, an assurance was given that the said mortgaged land was free from encumbrances. Later on, the complainant came to know in December, 2008 that the said land which was mortgaged had been sold to two companies by unregistered sale deed. According to the complainant, therefore, on the basis of the representation made by Sanjay Dalmia and others, they had accepted the said land as security by executing a mortgage deed and, therefore, notice of calling back the loan from Sanjay Dalmia was not issued to him. It is, therefore, alleged that Sanjay Dalmia had cheated the complainant by giving false assurances that the land which was mortgaged was free from encumbrances though, in reality, it was not and though 3 the assurance was given that the land belonged to accused Nos. 9 to 15, in fact, it belonged to two other companies. 3. Shri Lalit, the learned Senior Counsel appearing on behalf of the applicant submits that the applicant was not concerned in any way with the said land transaction between Sanjay Dalmia and complainant or that he had not received any amount from the complainant in respect of the loan which was disbursed to Sanjay Dalmia. He submitted that the applicant was an auditor of Sanjay Dalmia till 2006 and, thereafter, he had resigned and, therefore, he was not concerned in any manner with the said companies of Sanjay Dalmia. He submitted that in the FIR it is categorically mentioned that the loan was given on account of financial standing of Sanjay Dalmia and after shares of two companies owned by Sanjay Dalmia viz. Golden Tobacco and Gujarat Chemicals were kept by way of security by the complainant. He submitted that even subsequently after the land was mortgaged, at that time also he was not concerned with any other company. As such no role could be attributed to the present applicant for the offence of cheating since the transaction was between Sanjay Dalmia and the complainant. 4. Shri Amit Desai, the learned Senior Counsel appearing on behalf of the State vehemently opposed the application for bail. He submitted that there is sufficient material on record to show that though the applicant had resigned as 4 auditor, he still had complete control over the companies namely other accused Nos. 2 to 15. He submitted that his employees were appointed as Directors in the said company who had made statement that they had signed the accounts at the behest of the present applicant. It is therefore submitted that the present applicant also was a partner in the said companies though he did not hold any shares. It is further submitted that during the course of investigation, it is transpired that initial loan also was obtained by fraudulent means and, therefore, cheating was not only in respect of mortgaging of land which was already encumbered but also in respect of the initial loan which was obtained. He invited my attention to the statement of CEO Banga dated 29/07/2009 in which he has stated that Sanjay Dalmia accompanied the present applicant and other associates. It is submitted that therefore the present applicant also is a co- conspirator who had conspired in the said conspiracy of mortgaging property which was encumbered and which did not belong to accused Nos. 9 to 15. He submitted that investigation is still going on and after procuring the assets of Sanjay Dalmia and other associates they wanted to confront them with the present applicant in order to find out further details of the said conspiracy. 5 Shri Maneshinde, the learned Counsel appearing on behalf of the complainant submitted that the complainant had been taken for a ride and the present applicant had played a major role in the said misrepresentation and the 5 assurance which was given in respect of the land which was mortgaged. 6. After having heard the learned Senior Counsel appearing on behalf of the applicant, the learned Senior Counsel appearing on behalf of the State and the learned Counsel appearing on behalf of the complainant, I am of the view that prima faice there is very little material on record to show the actual involvement of the present applicant in commission of the said offence. Applicant, admittedly, on paper, is not a Director in all these companies. In the first FIR which is lodged, no allegation has been made against him. It is no doubt true that in the statement of CEO Banga, it has been mentioned that Sanjay Dalmia had met the present applicant and others. However, no specific role has been attributed to the present applicant. Though it is vehemently urged that the applicant was controlling other companies and for that purpose the statements of some of the witnesses have been recorded, in my view, those statements would not establish that the applicant was either benefited by the said transaction of disbursal of loan to Sanjay Dalmia and/or that money was utilized by him. Applicant had resigned as auditor in 2006 and thereafter the aforesaid transaction of mortgage had taken place. The property which is mortgaged does not belong to the present applicant. Though it has been strenuously urged that the borrowing companies viz. accused Nos. 2 to 8 and 6 mortgaging companies viz. accused Nos. 9 to 15 are bogus and non-existent, the fact remains that when the initial loan was given to Sanjay Dalmia, it was given against valuable security viz. shares of two companies i.e Golden Tobacco and Gujarat Chemicals which were under the control of Sanjay Dalmia and, admittedly, at that point of time, value of the said shares was equal to the loan which was disbursed. Therefore, it cannot be said that by virtue of manipulation of documents Sanjay Dalmia was given loan and in this case the applicant was a co-conspirator. According to the complainant, there was no problem with the first loan agreement with Sanjay Dalmia but thereafter when the land was given as security by way of mortgage deed, it transpired that the said mortgaged property was not free from encumbrances as alleged in the mortgage agreement. It is a matter of record that the complainant – company has now recalled the entire loan and as per the loan agreement, the matter has to be referred to the arbitrator. The complainant has filed a Petition in the Delhi High Court for the purpose of appointment of arbitrator. Apart from that the applicant is in custody since last about two months. He was remanded to police custody for about 11 days and, thereafter, has been now transferred to judicial custody. Prima facie, therefore, there is no material on record to indicate involvement of the present applicant in the offence of cheating as alleged by the complainant. 7. In the result, the following order is passed:- 7 ORDER Applicant be released on bail in C.R. No.40 of 2009 (F.I.R. No.137/2009 dated 25/07/2009) registered with Colaba Police Station in the sum of Rs 25,000/- with one or two sureties in the like amount. He shall report report to the concerned Economic Offence Wing, Unit No.III, Mumbai as and when called. Initially, he shall report once in a week till filing of the charge-sheet and, thereafter once in a month. Till the charge-sheet is filed, if the Investigating Officer needs his presence, he may be called by the Investigating Officer after giving 48 hours’ notice to the applicant. Applicant/accused shall hand over his passport to the Investigating Officer and he shall co-operate with the police. Applicant shall initially furnish cash bail in the sum of Rs 25,000/- and within four weeks he shall furnish sureties as directed above. Applicant is directed to deposit his passport with the Investigating Officer before he is released on bail. All concerned to act on the copy of this order duly authenticated by the Sheristedar of this Court. Application is disposed of. (V.M. KANADE, J.)