Cbi Hyderabad vs Subramani Gopalakrishnan And Anr

Chairman of M/s Satyam Computer Services Limited (in short "M/s SCSL") addressed a confessional letter to the Board of Directors revealing certain financial irregularities in M/s SCSL. As per this letter, the balance-sheet as on 30.09.2008 showed inflated (non-existent) cash and bank balances of Rs.

crores on account of funds arranged by him and an overstated debtors position of Rs. 490/- crores (as against Rs. 2,651/-

(b) He also revealed several frauds and cooking books of accounts ever happened in India's corporate history. Due to the fraud on the part of the persons in Management including the Financial Advisors, Auditors, etc., many investors suffered loss and on the complaint of one of such investors, a First Information Report (in short "FIR") was registered on 09.01.2009 by the Andhra Pradesh State Crime Investigation Department against the then Chairman, Directors and Auditors of M/s SCSL and others under Section 120-B read with Sections 409, 420, 467, 468, 471 and 477A of the Indian Penal Code (in short `IPC'). Considering the magnitude of the offence, investigation was entrusted to the CBI and a regular case being RC.No.4(S)/2009 was registered by the CBI, Anti-

(c) Due to fudging of the company accounts and manipulation of records by showing incorrect and inflated figures in the balance-sheets by the Chairman, M.D. and other Directors of the Company which were certified by the Auditors, the value of the shares of the Company suddenly dropped causing huge financial loss to the shareholders. The drop in the value of the 3 shares was due to dishonest and fraudulent acts committed by the aforesaid functionaries, who were managing the affairs of the Company and were associated with its functioning and day-to-day affairs.

4) With the above brief facts, let us consider the allegations leveled against the Respondents herein (A4 and A10) and the role played by them.

(ii) the trial Court would avoid granting undue adjournments, unless it becomes absolutely imperative;

(iii) the parties are directed to examine only material and most essential witnesses and fully cooperate with the trial Court;

(iv) the accused shall be produced before the trial Court on time, on every date of hearing, unless exempted by orders of the Court;

(vi) for any reason, trial is not concluded before 31.07.2011, the accused would be at liberty to approach the trial Court for grant of bail.

18) In view of the directions of this Court in the subsequent order dated 26.10.2010, the trial is proceeding on day-to-day basis and likely to be concluded by 31.07.2011. We are 1 satisfied that the reasons stated while granting bail for Talluri Srinivas (A5) by this Court on 04.02.2010 are not applicable to the respondents herein. Accordingly reliance on the basis of the bail order granted in favour of A5 cannot be applied to these respondents.

Though the appellant-CBI was not so diligent to bring the special leave petitions for orders immediately after filing of the same due to various reasons and compliance of the office report had taken some time, however, on this ground their challenge with regard to the order of the High Court granting bail cannot be rejected without going into the merits.

21) It is also relevant to note that there is difference between yardsticks for cancellation of bail and appeal against the order granting bail. Very cogent and overwhelming circumstances are necessary for an order directing the cancellation of bail already granted. Generally speaking, the grounds for cancellation of bail are, interference or attempt to interfere with the due course of administration of justice or evasion or attempt to evade the due course of justice or abuse of the concessions granted to the accused in any manner. These are all only few illustrative materials. The satisfaction of the Court on the basis of the materials placed on record of the possibility of the accused absconding is another reason justifying the cancellation of bail. In other words, bail once granted should not be cancelled in a mechanical manner without considering whether any supervening circumstances have rendered it no longer conducive to a fair trial to allow the accused to retain his freedom by enjoying the concession of bail during the trial.

We have already pointed out that the issue before us is not for cancellation of bail granted earlier, the question is whether in the facts and circumstances of the magnitude of the scam, the 1 bail granted in favour of all the main accused have been cancelled and the Respondent Nos. A4 and A10 being external and internal auditors respectively, their role being paramount in inflating processing assets and bank balances of M/s SCSL, we are of the view that the High Court is not justified in granting bail.

23) In the light of the above discussion, the impugned order of the High Court dated 25.06.2010 in Crl. Petition Nos. 4913 and 4972 of 2010 granting bail in favour of the respondents i.e., A4 and A10 is set aside. They are directed to surrender on or before 30.04.2011 otherwise the appellant shall take appropriate steps in accordance with law. All the observations and directions, as stated in the earlier order dated 26.10.2010, are also applicable to the respondents (A4 and A10). We also make it clear that the above said conclusion is for considering the grant of bail by the High Court and the trial Court is free to decide the case without being influenced by any of the observations made by the High court and by this Court in this order.