C.B.I vs V.Vijay Sai Reddy

Brief facts:

(b) V. Vijay Sai Reddy-the respondent herein was named as an accused at Sl. No. 2 in the FIR dated 17.08.2011 (after the chargesheet was framed, he was arrayed as A-2 and hereinafter, he will be referred to as A-2). The respondent herein was the founder Director of M/s Jagathi Publications and was the Financial Advisor for the group of companies of Y.S. Jagan Mohan Reddy (A-1).

(c) He was arrested on 02.01.2012 and was in police custody from 04.01.2012 to 09.01.2012 and again from 11.01.2012 to 17.01.2012. On 27.01.2012, he filed an application for grant of regular bail under Section 437 of the Code of Criminal Procedure, 1973 (in short ‘the Code’) before the Court of the Special Judge for CBI Cases at Hyderabad. The Special Judge, by order dated 21.03.2012, dismissed his application for bail.

(d) During investigation, it was revealed that M/s Jagathi Publications Pvt. Ltd. was originally incorporated as a private limited company on 14.11.2006 and later converted into a public limited company on 12.01.2009. At the relevant time, the respondent herein was the founder Director of the Company and Y.S. Jagan Mohan Reddy (A-1) was designated as the Authorised Signatory to operate the Bank accounts of the Company. He was appointed as a Director and Chairman with effect from 21.06.2007. It is alleged that A-1 floated M/s Jagathi Publications Pvt. Ltd. with an objective of conducting media business with the ill-gotten wealth. Most of the shareholders were alleged to be the benamis of Y.S. Jagan Mohan Reddy (A-1). Further, as a quid pro quo to these investments, the benefits were received by various investors including the companies/individuals from the decisions of the State Government in allotment of lands for Special Economic Zones (SEZs), contracts for irrigation projects, special relaxations/permissions for real estate ventures, mines etc. It is further revealed that Y.S. Jaganmohan Reddy (A-1) laundered the bribe money by routing it through various individuals and companies and getting investments made by them in his companies at a high premium.

(g) Aggrieved by the order dated 30.04.2012, the CBI filed Criminal Petition No. 4387 of 2012 before the High Court for cancellation of bail granted to A-2. In the meantime, the CBI filed third chargesheet with respect to the investment made by M/s Ramky Group of Companies. On 29.05.2012 and 30.05.2012, the Principal Special Judge for CBI Cases took cognizance of second and third chargesheet(s) which were numbered as CC Nos. 9 and 10 of 2012 respectively.

(h) The High Court, by order dated 13.06.2012, dismissed the petition filed by the CBI.

17) As mentioned earlier, five charge sheets have been filed so far and three more charge sheets are in the final stages and are yet to be filed. At the time of arguments, learned senior counsel for the CBI has brought to our notice that the last of the charge has been filed in the Dalmia Cements Ltd. issue on 08.04.2013 which is on the file of the Special Judge for the CBI Cases for taking cognizance. We have already noted the stand of the CBI insofar as the respondent herein is concerned, his relationship with the main accused Y.S. Jagan Mohan Reddy (A-1) his interest in M/s Jagathi Publications Private Limited etc. It is also seen and highlighted that respondent A-2 was engaged in Financial Consultant Company, namely M/s Deloitte Touche Tehmatsu India Private Limited and according to the CBI, he directed this Company to fudge and exaggerate fiscal status of M/s Jagathi Publications Private Limited. It is their claim that it is A-2 who was instrumental in soliciting the premium at Rs. 350 per share of M/s Jagathi publications Private Limited without any basis for actual share of Rs. 10 per share. It is pointed out that on the basis of this false rating of Jagathi Publications Private Limited of which A-2 was the Director, many more companies and individuals were made to invest their money by threat, intimidation, cheating and inducement. It is the specific stand of the CBI that these ratings were falsely projected by A-2.

23) Though the CBI has annexed certain documents in support of the above claim, we are not looking into the same at this stage and if the charge sheet(s) is filed with reference to the same, it is for the Special Court to consider merit and demerits of the claim of the prosecution.

30) Taking note of the fact that cancellation of bail necessarily involves the review of a decision already made, it should always be exercised very sparingly by the court of law. 31) In the light of the above discussion, we are of the view that the special Judge committed an error in granting bail and the same was erroneously affirmed by the High Court.

32) Taking note of all the aspects discussed above, without expressing any opinion on the merits, we set aside both the orders of the Special Judge and the High Court granting bail to A-2 and allow the appeal filed by the CBI with a direction to complete all the investigation relating to the remaining three charge sheets and file appropriate report before the trial Court within a period of four months from today. Thereafter, the respondent herein is free to renew his prayer for bail before the trial Court and if any such petition is filed, the trial Court is free to consider the prayer for bail independently on its own merits without being influenced by the present appeal. During the course of hearing, it is brought to our notice that the marriage of the daughter of the respondent has been fixed for 26.05.2013. Taking note of the said aspect, we direct the respondent herein to surrender on or before 5-6-2013 before the Special Court for being sent to the custody.

33) The appeal is allowed.