Crl. Misc. No.M-4921 of 2011 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. Date of Decision: August 8, 2011 1. Crl. Misc. No. M-4921 of 2011 Deeksha Puri …..Petitioner Vs. State of Haryana …..Respondent 2. Crl. Misc. No. M-9422 of 2011 Sanjay Gupta …..Petitioner Vs. State of Haryana …..Respondent 3. Crl. Misc. No. M-11311 of 2011 Raghuraj Puri …..Petitioner Vs. Crl. Misc. No.M-4921 of 2011 [2] State of Haryana …..Respondent 4. Crl. Misc. No. M-14074 of 2011 Rajender Chand …..Petitioner Vs. State of Haryana …..Respondent CORAM: HON’BLE MR. JUSTICE M.M.S. BEDI. -.- Present:- Mr. Chetan Mittal, Sr. Advocate with Mr. Vishal Garg, Advocate for the petitioners in Crl. Misc. No. M-4921 and M-11311 of 2011. Mr.A.P.S. Deol, Sr. Advocate with Ms. Jyoti Sareen, Advocate for the petitioner in Crl. Misc. No. M-9422 of 2011. Mr.R.N.Mittal, Sr. Advocate with Mr.Sumeet Goel, Advocate for the petitioner in Crl. Misc. No. M-14074 of 2011. Ms. Shalini Attri, DAG, Haryana. Mr.R.S. Cheema, Sr. Advocate with Mr. Arshdeep Cheema, Advocate for the complainant. -.- M.M.S. BEDI, J. Crl. Misc. No.M-4921 of 2011 [3] This order will dispose of four petitions bearing Crl. Misc. Nos. M-4921 of 2011 filed by Smt.Deeksha Puri, Crl. Misc. No. M-9422 of 2011 filed by Sanjay Gupta and Crl. Misc. No. M-11311 of 2011 filed by Raghuraj Puri and Crl. Misc. No. M-14074 of 2011 filed by Rajender Chand. Petitioners seek bail/ anticipatory bail in a case registered at the instance of Binu Soman, Assistant Vice President of Citibank alleging that Shivraj Puri was the Relationship Manager of the Citibank. An account No. 5011666247 was opened in September 2009 in Citibank Gurgaon in the name of Premnath, his wife Sheela Premnath and Deeksha Puri, jointly. The said persons are uncle, aunt and mother, respectively of Shivraj Puri. In December 2010, when bank accounts were examined, it was found that many transactions had been done in the said account. The examination was carried out as the bank had received information that bank had issued a scheme under which investors were getting enough rate of interest, whereas the bank had never issued any such scheme. On enquiry being made it was found that the Relationship Manager-Shivraj Puri by showing one circular issued by SEBI to the investors had got invested huge amounts in account No.5011666247. Enquiry revealed that no such circular has been issued in the name of Citibank by SEBI. It also transpired that Relationship Manager Shivraj Puri had issued forged deposit receipts, forged bank statements with intention to cheat the investors. The said Shivraj Puri in his personal capacity had Crl. Misc. No.M-4921 of 2011 [4] committed fraud with other investors on the pretext of investing their money in the brokerage Companies without disclosing true facts to the investors. Shivraj Puri had deposited their money in the accounts of his relatives which were opened in the brokerage Companies. Relationship Manager had kept the investors in dark by telling them that their money had been invested in their brokerage company account. The Bank had found during investigation that money was transferred from Account No.501166247 to the account of G2S Management Consultants. It was also found that huge money had been transacted through the said account to the other different accounts. These accounts were opened in other banks in the name of Relationship Manager, Shivraj Puri and his relatives and others by preparing forged documents and forged bank papers in the name of SEBI. Shivraj Puri got invested the money of the investors in the accounts opened by him by committing fraud. He had committed fraud with the bank as well as investors. During the course of investigation, it was found that Rajender Chand was Director in Normal Martin Brokers Pvt. Limited in the year 2007 and he was informed by Shivraj Puri and his father Raghuraj Puri that investment in the share market will be made through the said company and profit will be shared. Rajender Chand had allegedly taken money from Shivraj Puri on profit sharing basis. The allegations against Shivraj Puri is that money was transferred from account No.5011666247 to the account of G2S Crl. Misc. No.M-4921 of 2011 [5] Management Consultants and other accounts which were opened by Shivraj Puri in the name of his relatives. G2S Management Consultants is alleged to be owned by Sanjay Gupta and Gaurav Jain and huge amount of approximately ` 20 crores was collected from investors and transferred in the account of said firm. Shivraj Puri was arrested on December 30, 2010, Sanjay Gupta was arrested on January 2, 2011 and Gaurav Jain was arrested on February 17, 2011. Rajender Chand has claimed that he was not the Director or share-holder of Normal Marketing Brokers Pvt. Ltd. at any time. He claims that he himself is a victim as other investors in the fabricated scheme floated by Shivraj Puri and others, inasmuch as he had invested money on the allurement and inducement of main accused Shivraj Puri but the same stand refunded to him without any interest two times. He was fortunate enough to recover his principal amount as he had initially been trapped in a fake scheme floated by Shivraj Puri and others. Petitioner- Rajender Chand claimed that he and Deeksha Puri , mother of Shivraj Puri happens to be Directors of Metcam Holdings Pvt. Ltd. Petitioner Rajender Chand claims that in November 2009 Metcom Holdings Pvt. Limited had on allurement and inducement of Shivraj Puri invested ` 45 lacs from its account at Citibank, Gurgaon on the basis of the fabricated scheme floated. In order to make investigation from Metcom Holdings Pvt. Ltd., Rajender Chand transferred his personal earnings in the account of the company. It is claimed that the funds invested in the scheme were Crl. Misc. No.M-4921 of 2011 [6] ultimately returned on April 19, 2011 without any interest. Copy of the letter of the Citibank dated April 20, 2011 indicated that ` 45 lacs was returned without any profit. Thereafter in May 2010, Rajender Chand had invested money in the fabricated scheme. Petitioner had deposited ` 45 lacs through the same route but this time money was transferred on the request of Shivraj Puri on the account of Bonanza Portfolio Limited. The said money remained idle and was returned to the petitioner on June 7, 2010 without any interest or profit as is apparent from letter dated June 26, 2010 issued by Citibank. Apart from the abovesaid two transactions, Rajender Chand did not have any transaction with Shivraj Puri and others. Petitioner Rajender Chand claims that he has neither caused any wrongful loss to anyone and nor has got any wrongful gain from any of the transactions. So far as petitioner Sanjay Gupta is concerned, a perusal of the police file indicates that he held the post of Chief Financial officer of Hero Group. The allegation against him is that he was responsible for investment of the funds of the Corporate group as well as Munjal Family groups in the fraudulent accounts. Main accused Shivraj Puri had made a statement that he had been taking assistance of present petitioner (CFO of Hero Group) who had introduced to him to other Chief Financial Officers in the group, for a commission received by him through his personal company called G2S Management Consultants. Shivraj Puri has also disclosed that Sanjay Gupta had received a sum of ` 20 crores for his role played in the fraud. The Crl. Misc. No.M-4921 of 2011 [7] police file indicates that a sum of ` 20 crores has been used by him to purchase property in the name of his wife to the extent of ` 27 lacs, to invest in B.G. Financial services to the extant of ` 14.92 lacs which is owned by him and his wife, to purchase a car for ` 3.4 lacs; made payment of ` 1.8 lacs to Suzlon Energy Limited; paid a sum of ` 1.20 crores to his co-accused Gaurav Jain. Sanjay Gupta and Gaurav Jain are also shareholders in company called G2S Management Consultants. Said company had also held an account which was used for fraudulent purposes. Payment of ` 4.45 crores was made to G2S Management Consultants. Petitioner Raghuraj Puri is the father of main accused Shivraj Puri. He is attributed a part of defrauding the investors by offering his personal account as well as the account of the Company in which he was Managing Director. It was through his account the fraud was perpratrated as well as from the account of other defrauded investors of the Bank. Raghuraj Puri is alleged to have used the said accounts to remove money, received, as proceeds of the fraud which was without any consideration. He was the Managing Director of Normal Martins Brokers Pvt. Limited which had received ` 75 crores which was the proceed of the fraud. He alongwith Deeksha Puri hold 60% of the equity capital of Norman Martin Brokers Pvt. Limited. ` 75 crores was placed with four brokerage firms, namely, Bonanza, Religare, India Bulls and Indian Info line. He had maintained accounts in his own name in the said Companies. He used to pay Crl. Misc. No.M-4921 of 2011 [8] commission to B.G. Financials, which was run by Sanjay Gupta. He also used to pay back some of his investors. The investigation had revealed that Raghuraj Puri used the proceeds of the fraud by investing approximately ` 108 crores through the brokerage companies. He deposited amount of ` 108.55 crores in Bonanza Portfolio Limited, Religare and Indian Info line Limited and had also suffered losses to the extent of ` 85.90 crores. A perusal of the supplementary charge-sheet indicates the amounts received by Raghuraj Puri in his personal account or in NMB Account, which are the proceeds of the fraud. Since the fraud committed is an economic fraud and can be classified as a ‘White Collar Crime’, Lalit-Jatin and Company, a Chartered Accountants firm had been deputed by the police to get the details of the fraud. The report indicates that ` 5386 lacs were received by Raghuraj Puri in his HDFC account from the custodian account in his account with Citibank. He received money from Religare and Bonanza to the tune of ` 665 lacs and ` 100 lacs respectively. This account was used to pay the investors like OKS, Spantac, Spade Financial and Okaya Power. Petitioner Deeksha Puri who has sought the concession of pre- arrest bail, is mother of main accused Shivraj Puri. She was allegedly an instrumental in defrauding investors by opening and maintaining the permanent account which was the main conduit for fraudulent transactions. She held a joint account with Premnath and Sheela Crl. Misc. No.M-4921 of 2011 [9] Premnath. She is also Director of Norman Martins Brokerage firm through which money has been siphoned off. She held a joint account with Rajender Chand. Interestingly she has purchased gold from one Anushka Jewellers for a value far exceeding her financial status amounting to ` 13 crores. She had purchased gold jewellery worth ` 5.35 crores on November 8, 2010, ` 2 crores on November 16, 2010 and ` 6.30 crores on November 26, 2010 out of the money fraudulently obtained through her son Shivraj Puri. There has been substantial flow of money from account held by Deeksha Puri as is apparent from the report of C.A. and her personal account with Citibank indicates major flow of funds to Religare and Bonanza totaling to ` 318.25 lacs. Her account held with Rajender Chand at Citibank shows money moved to Poonam Laul to the extent of ` 40 lacs. She received ` 400 lacs from Pankaj Premnath. It is pertinent to observe here that SEBI has also prepared a supplementary charge- sheet indicating the role of Deeksha Puri. Para 7.6 indicates that she held 60% of paid-up equity capital of Normal Martins Brokerage Pvt. Limited alongwith petitioner Raghuraj Puri. She had an account with Bonanza Portfolio Limited where she had disclosed her annual income ranging from ` 1 lac to ` 5 lacs. Learned counsel for Mr.Rajender Chand has argued that the petitioner had been allured and induced by Shivraj Puri to invest ` 45 lacs from his account at Citibank, Gurgaon on the basis of the fabricated scheme. The petitioner Rajender Chand had transferred Crl. Misc. No.M-4921 of 2011 [10] his personal earnings in the account of the Company Metcam Holdings. The said money was ultimately returned on April 19, 2011. Again he was inducted and allured by Shivraj Puri to invest money in the fabricated Scheme in the good faith. He again deposited ` 45 lacs through the same route on the request of Shivraj Puri in the account of Bonanza Portfolio Limited. The said money was again refunded to the petitioner on June 7, 2010 without interest or profit. Out of the said two transactions, the petitioner had no other transaction with Shivraj Puri. The charge-sheet also does not show any other involvement of the petitioner. It is apparent that Rajender Chand had tried to invest ` 45 lacs through Shivraj Puri but he was not able to draw any profit. There are allegations against him that he connived with the main accused Shivraj Puri and his other family members. He may be attributed mens rea to earn profits through the scheme, in connivance with Shivraj Puri but act attributed to him indicates that it will be debatable whether he can be said to have duped anyone or persuaded anyone to be a major part of the corporate scam or having derived any wrongful gains from it. So far as part attributed to Sanjay Gupta is concerned, Mr.Deol has argued that he is Assistant Vice President, a Finance Bureau Corporate Services, having to no nexus with the main accused Shiv Raj Puri and he himself is a victim of fraud. Referring to the transactions in the custodian account No. 5011666247, it was Crl. Misc. No.M-4921 of 2011 [11] contended that the same was opened in October 2009, whereas Hero Corporate Services were approached for investment by Shivraj Puri and the company of petitioner was trapped by Shivraj Puri. Like other investors, the petitioner’s company fell in the trap as the SEBI Scheme appeared to be perfectly genuine scheme. Any commission paid to the petitioner was part of the scheme and was being paid by Citi Bank by cheques and drafts. He argued that similar commissions were paid to number of other companies like Aero Infrastructure, Rajiv Khanna and Bharat Goel but the petitioner has been falsely implicated. I have heard counsel for petitioner Sanjay Gupta and gone through various transactions. Statement of Shivraj Puri made during investigation indicates that he had taken assistance of the present petitioner. It was the petitioner who introduced him to other Chief Financial Officers. A sum of ` 20 crores apparently seems to have been used by petitioner Sanjay Gupta in purchase of property in the name of his wife and for investment in B.J. Financial Services to the tune of about ` 14.92 crores. The said company is owned by none else but by petitioner and his wife. He made payments of ` 1.08 crores to Suzlon Energy Limited and also paid a sum of ` 1.20 crores to another co-accused Gaurav Jain. He alongwith Gaurav Jain is shareholder in company G2S Management Consultants which also held an account which was used for fraudulent purpose. A sum of ` 4.45 crores was made to G2S Management Consultants. It will not be Crl. Misc. No.M-4921 of 2011 [12] feasible at this stage to go into the minute details of the transactions but the active part played by petitioner Sanjay Gupta reflects the grave economic offence committed by the petitioner which falls under the category of “corporate offence”. No ground is made out to grant the concession of bail to petitioner Sanjay Gupta. Raghuraj Puri and Deeksha Puri are the parents of Shivraj Puri, the main accused. A perusal of the police file indicates that Raghuraj Puri had defrauded, by offering his personal account as well as the account of the Companies in which he was the Managing Director. He was Managing Director of Norman Martins Brokers Private Limited which had received proceeds of the fraud to the extent of ` 75 crores. Deeksha Puri had also held 60% of equity capital in Norman Martins Brokers Private Limited. As per the report prepared by SEBI, a sum of ` 75 crores appears to have been placed with four brokerage firms, namely, Bonanza, Religare, Indiabulls and India Infoline Limited in the accounts maintained by Raghuraj Puri in his own name. Raghuraj Puri used to pay commission to B.G. Financials which was run by Sanjay Gupta and to pay back some of his investors. The active part played by petitioners Raghuraj Puri and Deeksha Puri as mentioned hereinbefore shows that petitioner Raghuraj Puri and his wife Deeksha Puri had actively connived with the main accused Shivraj Puri, therefore, no ground is made out for Crl. Misc. No.M-4921 of 2011 [13] grant of regular bail to Raghuraj Puri and pre-arrest bail to Deeksha Puri. The flow chart Nos. 3, 4, 7, 8,9, 10, 11 and 13 prepared by Chartered Accountants give details of various names of the investors, internal accounts and internal transactions. The total inflow and outflow of the money shown in the said flow charts reflect that Deeksha Puri and Raghuraj Puri alongwith other accused had been involved in a corporate scam. Corporate offences generally involve fraud in one form and other and it is often difficult to draw distinction between the business transactions which are legal and the transactions which are illegal. The large scale corporate crime otherwise known as ‘White Collar Crime’, which are being committed at large scale by large organizations as well as in smaller business deserve to be curbed with firm hand. Grant of bail to the petitioners will certainly convey a wrong message in the society. The petitions bearing Crl. Misc. No.M-4921 of 2011 filed by Smt.Deeksha Puri, Crl. Misc. No. M-9422 of 2011 filed by Sanjay Gupta and Crl. Misc. No. M-11311 of 2011 filed by Raghuraj Puri are hereby dismissed. However, it will be appreciated in case the trial is concluded expeditiously preferably within a period of six months. The petition filed by Rajender Chand bearing Crl. Misc. No. M-14074 of 2011 is allowed. He is ordered to be released on bail on his furnishing bail bonds/ surety bonds to the satisfaction of CJM/ Duty Magistrate, Gurgaon. Crl. Misc. No.M-4921 of 2011 [14] August 8, 2011 (M.M.S.BEDI) sanjay JUDGE