1 BA : 1780/2011 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLAE JURISDICTION CRIMINAL BAIL APPLICATION NO. 1780 OF 2011 Masood Sayyed Jamadar a.k.a. Sayeed M. Masud Cuffe Parade, Mumbai .... Applicant. Vs. The State of Maharashtra .... Respondents & Anr.. Mr. Sanjay Kantawala a/w Mr.Mahesh Kotian, Sanjay Agrawal and Mr. Yogesh Rohira for applicant. Mrs. A.A. Mane APP for State. Mr. Mobin Solkar for respondent no.2. Coram : Smt. R.P. SondurBaldota, J. Date : 12th December 2011. PC : 1. The applicant herein seeks bail in C.R. No. 205 of 2010 registered on 6th June 2010 at Nagpada Police Station for the offences punishable under Sections 406, 420 120-B, Indian Penal Code read with Sections 4, 5 and 6 of Prize Chits & Money Circulation Act, 1978. Three years prior to the registration of the complaint herein, identical complaint vide C.R. No.74 of 2007 was registered against him. He was 2 BA : 1780/2011 arrested therein on 5th February 2010 and has been released on bail by the Sessions Court vide its order dated 7th April 2010. There are about 50 similar cases filed against the applicant at several places in the Country. He has been granted bail in all those cases. He has also availed himself of the bail in all the cases except one and is presently in judicial custody at Bangalore. Mr.Kantawala, the learned counsel for the applicant states that the applicant has not availed of the order of bail in the proceedings at Bangalore in view of pendency of the present proceedings. The application for bail is opposed by the prosecution as well as the complainant in C.R. No. 205 of 2010. 2. The applicant is one of the directors of M/s City Limouzines (India) Ltd., ( the Company” for short) “ incorporated in the year 2002, which carries on business in leasing and renting of Cars, amongst others. It had floated a scheme for investment in which an investor was to invest Rs. 1,31,010/- per car towards car financing. The scheme promised the investor monthly return of Rs7,000/- for a period of five years. At the end of five years, the investor was to either get the car purchased in his name, or 700 preferential shares of the company of the face value of Rs.100/- or Rs. 70,000/-. Thereafter there was another scheme launched by name Combo Plan scheme. Several persons invested money in 3 BA : 1780/2011 the schemes of the company. 3. During the period February 2007 to March 2009, the City group of companies had invested Rs.92.60 crores into shares of M/s Millenium Plaza Resorts & Hotels Ltd.,a project under Haryana Urban Development Authority. Around the same period, the inward cheques received by the City groups of companies to the extent of more than Rs.90 crores had dishonoured and the companies had to launch criminal prosecutions against the defaulters. In the process, the company was unable to maintain the schedule of payment to the investors. Consequently the first complaint i.e. C.R. No.74 of 2007 came to be registered at Cuffe Parade Police Station for the offence of cheating. The applicant had successfully challenged the proceedings by filing writ petition in this Court for quashing of the complaint. That order came to be set aside by the Hon'ble Supreme Court, giving certain directions regarding investigations, which included permission to the company to carry on its business without any hindrance whatsoever and direction to the investigating officer to take xerox copies of the books of accounts and other documents required for investigation duly certified by the applicant with an undertaking by the applicant to produce the originals in the court of law, as and when called upon. The investigating authority i.e. the Enforcement Directorate, however proceeded 4 BA : 1780/2011 to seize all the documents of the company and also attached its various properties and later filed supplementary charge sheet on 1st April 2010 alleging cheating qua 25,000 investors for the amount of about Rs.300 crores. Two months after the applicant was released on bail in that case, i.e. on 6th June 2010, the Enforcement Directorate registered the present complaint against the applicant. During investigation, it raided various premises of City group of companies and the residence of the applicant. It took charge of not only the records of the company, but also amount in cash, various cheques received by the City group of companies and the cheques to be issued by the City group of companies. 4. In the month of August 2009, City group of companies filed Company applications under Section 391 of Companies Act for settling the issues with the creditors of the company by proposing scheme for repayment of the dues of the creditors. A public notice for the purpose had been issued in the newspaper Indian Express. This court vide minutes of order dtd. 18th September 2009 allowed the company to hold meeting of all the creditors on 14th and 15th October 2009. The meeting however could not be conducted because the arrest by the police, of the officer presiding over the meeting and the staff of the company in the present complaint. 5 BA : 1780/2011 5. While granting bail to the applicant in C.R. No.74 of 2007, the Sessions Court in its order observed that the dispute is centered around repayment of the investors, as every investor obviously wants his returns from the company, as per the agreement. It noted that the seizure of computer server of the company and the other record has caused an obstacle in clearing the amounts of the investors. The record shows that the applicant and other directors desire to return the amount to the investors and in fact certain repayments had also been made. It further observed that the project undertaken by the company could not proceed further because of financial crunch and that the applicant was ready and willing to make the payment by liquidating his assets and cash seized by E.O.W. and Enforcement Directorate. It held that unless the applicant comes out of the jail, it would be difficult to work out any solution for repayment of the investors. Therefore while granting the order of bail, it gave following directions: d) “ He shall convene a meeting of investors including the complainant by taking aid of investigating agency and work out a plan for repayment of investors within two months from the date of release from the jail. 6 BA : 1780/2011 e) He shall report to the IO by every 15 days so that investigating agency must know the status of the workable solution and to facilitate for liquidating the assets seized by the E.O.W. And Enforcement Directorate.” 6. Mr. Kantawala, the learned counsel for the applicant submits that, there is sufficient material on record to indicate that there was no culpable intention right at the time of entering into agreements with the investors and bonafides of the applicant can be seen by his willingness to pay the investors by liquidating his assets and cash seized by E.O.W. and Enforcement Directorate. He points out that all the offences alleged against the applicant carry punishment of a maximum sentence of seven years, and submits that in view of the decision of the Apex Court in Gurcharan Singh Vs. State, reported in A.I.R. 1978, S.C., 179 and Gurbaksha Sibbia vs. State of Punjab, reported in (1980) 2 SCC page 565, the applicant is entitled to bail on imposition of conditions, if necessary. It has next been submitted by Mr. Kantawala that since the entire record has been seized by investigating agency, there is no real likelihood of any tampering with the evidences. Next there is no question of the applicant fleeing abroad, as his passport is already cancelled. He submits that therefore the applicant deserves to be released on bail in this case also. 7. Undoubtedly the record, particularly the application filed 7 BA : 1780/2011 by the company, indicates the desire of the company to repay its investors. That attempt by the Company failed because of untimely action of arrest by the investigating agency. Had the investigating agency held its hands for a while and allowed the meeting with the creditors of the company to take place probably, some solution for repayment of the dues of the creditors could have been found. 8. Mrs. Mane, the learned A.P.P. and Mr.Mobin Solkar, the learned counsel for the complainant oppose the application submitting that looking to the extent of the amount involved in the offence, and the number of investors spread over the country, release of the applicant on bail is fraught with the risk of the applicant either absconding or tampering with the witnesses and the record. I find no substance in the apprehensions expressed because the entire material has already been seized by the investigating agencies. The record also shows that the complaint herein is not by an individual but by an association of investors. This would mean that the investors are united in action and there would be hardly any chance of tampering with the individuals. Besides the applicant still desires to endeavour to have a meeting with the investors including the complainant, by taking aid of investigating agency and work out plan for repayment of investors. There can also be no fear of the applicant 8 BA : 1780/2011 absconding abroad in view of cancellation of his passport. Further, suitable conditions can always be imposed while granting bail to him to ensure his availability for trial. In all the above facts of the case, it is clear that no useful purpose would be served by detaining the applicant further in custody. Hence, the order: O R D E R i) The application is allowed. ii) The applicant be released on bail in the sum of Rs. 1,00,000/- (Rupees One lac only) with one or two local solvent surety/sureties in the like amount. iii) The applicant shall report his attendance once a week to Nagpada Police Station on every Saturday between 11 a.m.to 1.00 p.m. until further orders. (Smt. R.P.SondurBaldota, J.)