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Thursday, May 9, 2013

V. Vijay Sai Reddy- cancellation of bail granted to the respondent herein.= It is true that the Special Judge while granting bail imposed certain conditions and the High Court has also added some more additional conditions, however, taking note of few instances in which how the respondent has acted, it cannot be possible for the investigating agency to collect the remaining materials for the remaining three charge sheets to be filed. In such circumstances, we are satisfied firstly the Special Court took irrelevant materials for consideration for grant of bail and secondly, the High Court having arrived definite conclusion that several findings of Special court are unacceptable or irrelevant but ultimately affirmed the very same order of the special Judge granting bail. = While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations.= It has also to be kept in mind that for the purpose of granting bail, the Legislature has used the words "reasonable grounds for believing" instead of "the evidence"= whether there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. 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.


Page 1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 729 OF 2013
(Arising out of SLP (Crl.) No. 5946 of 2012
Central Bureau of Investigation ....
Appellant(s)
Versus
V. Vijay Sai Reddy ....
Respondent(s)
J U D G M E N T
P. Sathasivam, J.
1) Leave granted.
2) This appeal is directed against the final judgment and
order dated 13.06.2012 passed by the High Court of
Judicature of Andhra Pradesh at Hyderabad in Criminal
Petition No. 4387 of 2012, whereby the High Court dismissed
the petition filed by the Central Bureau of Investigation
(CBI)-the appellant herein seeking cancellation of bail
granted to the respondent herein.
1Page 2
Brief facts:
3) On the orders of the High Court of Andhra Pradesh in
Writ Petition Nos. 794, 6604 and 6979 of 2011 dated
10.08.2011, the CBI, Hyderabad, on 17.08.2011, registered a
case being R.C. No. 19(A)/2011-CBI-Hyderabad dated
17.05.2011 under Sections 120-B read with Sections 409,
420 and 477-A of the Indian Penal Code, 1860 (in short ‘IPC’)
and Section 13(2) read with Section 13(1)(c) and (d) of the
Prevention of Corruption Act, 1988 (in short “the PC Act”)
against Y.S. Jaganmohan Reddy (A-1), Member of Parliament
and 73 others.
(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).
2Page 3
(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 illgotten wealth. Most of the shareholders were alleged to be
3Page 4
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.
(e) After investigation, on 31.03.2012, the CBI filed first
charge sheet against A-1 to A-13 including the respondent
herein under Section 120-B read with Sections 409, 420 and
477-A of the IPC and Sections 13(2) read with Section 13(1)
(c) and (d) of the PC Act in the Court of Special Judge for CBI
Cases, Hyderabad. On 02.04.2012, A-2 filed another
application for grant of bail before the Special Judge. By
order dated 13.04.2012, the Special Judge granted bail to A-
2.
4Page 5
(f) Being aggrieved by the order dated 13.04.2012, the CBI
filed Criminal Petition No. 3712 of 2012 before the High
Court. The High Court, by order dated 20.04.2012, set aside
the order dated 13.04.2012 and remanded the matter to the
Court of Special Judge to consider the case of A-2 afresh. In
the meantime, the Principal Special Judge for CBI Cases,
Hyderabad took cognizance of the charge sheet dated
31.03.2012 against A-1 to A-13 which was numbered as CC
No. 8 of 2012. On 30.04.2012, after hearing both the sides
afresh in Criminal Misc. Petition No. 715 of 2012 for grant of
bail, the very same Special Judge, who passed the earlier
order dated 13.04.2012, granted bail to A-2.
(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.
5Page 6
(h) The High Court, by order dated 13.06.2012, dismissed
the petition filed by the CBI.
(i) Being aggrieved by the order of the High Court, the CBIthe appellant herein has preferred this appeal by way of
special leave.
4) Heard Mr. Ashok Bhan, learned senior counsel for the
appellant herein and Mr. Raju Ramachandran, learned senior
counsel for the respondent herein.
5) It is useful to refer the order dated 10.08.2011 passed
by the High Court ordering for CBI investigation wherein, in
para 51, it is stated thus:
“51. Prima facie, it emerges from the record forming part
of the writ petitions including pleadings of the parties that
from May, 2004 onwards, respondent No. 52 floated
number of companies wherein quid pro quo investments
have been made out of the benefits received by the
investors/beneficiaries from the decisions of the State
Government in various forms like SEZs, irrigation contracts,
relaxation/permission for real estate ventures, mines etc.
besides payment of huge premium amounts paid in the
shares and invested in the companies by such beneficiaries
and the money so paid is nothing but corrupt money
attracting Section 3 of the Prevention of Money Laundering
Act, 2002. The investigation by the Income Tax authorities
with respect to assessment orders of M/s Jagathi
Publications for the year 2008-09 shows huge unexplained
cash credit. Similarly, huge escalated face value of shares
to the extent of 35 times also was not accepted by the
Income Tax authorities and respondent No. 52 is directly or
indirectly connected with some of the companies which are
showing phenomenal growth and these facts make it
6Page 7
necessary to ascertain the role of individuals/firms/public
servants in the group companies of respondent No. 52.”
6) Based on the above directions, the CBI filed a charge
sheet on 17.08.2011, initiated investigation and filed several
charge-sheets and, according to learned senior counsel for
the CBI, three more charge-sheets are yet to be filed. It is
highlighted by learned senior counsel for the CBI that the
present appellant (A-2) participated in the conspiracy and
according to him, he is a key conspirator. He also
highlighted that by threatening many businessmen, he made
them close associates of Y.S. Jagan Mohan Reddy (A-1). He
also highlighted that the present appellant intimidated many
persons for investments in the concerns belonging to A-1.
Finally, he submitted that by branding him as Y.S. Jagan
Mohan Reddy’s (A-1) man, he collected huge money by way
of getting shares in the companies flouted by A-1. In
addition to the same, Mr. Ashok Bhan submitted that out of
eight charge-sheets, three charge-sheets are yet to be filed
for which the CBI requires interrogation and collection of
materials through him for which his bail has to be cancelled.
7Page 8
By taking us through the reasoning of the Special Court for
grant of bail and the affirmation order of the High Court,
learned senior counsel for the CBI submitted that both the
courts took note of irrelevant considerations, hence, both the
orders are liable to be set aside.
7) As against the above contentions, Mr. Raju
Ramachandran, learned senior counsel for the respondent,
after taking us through the averments in the FIR, allegations
in the charge-sheet(s) filed so far submitted that there is no
material to show that the appellant has gained anything
financially in the alleged transactions. He also pointed out
that no investments were made in Jagathi Publications
during the period when he was the Director. He further
submitted that the State Government itself had passed
various Government Orders to protect the Ministers and
Secretaries who alleged to have been involved on the
ground that everything was done in the course of normal
business of the Government. When such is the position,
according to him, the appellant being a Chartered
Accountant, without any financial gain, the Special Judge
8Page 9
was justified in granting him the bail. He also pointed out
that even when the appellant was out, five charge-sheets
have been filed and there is no impediment in finalizing the
remaining three charge-sheets and he is willing to cooperate
with the Agency by fulfilling all the conditions imposed by
the Special Court and the High Court.
8) We have considered the rival contentions and perused
all the relevant materials relied on by both the sides.
9) Let us consider the contentions put-forth by learned
senior counsel for the CBI. It is settled by a series of
decisions that if irrelevant materials have been taken into
account or relevant materials have been kept out of
consideration, the order granting bail to the accused cannot
be sustained. In the same way, if there is specific allegation
by the prosecution that the accused in question was a party
to the criminal conspiracy, neither the Special Court nor the
High Court is justified in granting bail to the said person.
These principles have been reiterated vide State of U.P.
through CBI vs. Amarmani Tripathi, (2005) 8 SCC 21,
para 31, Dinesh M.N. (S.P.) vs. State of Gujarat, (2008) 5
9Page 10
SCC 66, para 27, Narendra K. Amin (Dr.) vs. State of
Gujarat and Another, (2008) 13 SCC 584 para 27, State
of Maharashtra and Others vs. Dhanendra Shriram
Bhurle and Others, (2009) 11 SCC 541, para 8, Central
Bureau of Investigation, Hyderabad vs. Subramani
Gopalakrishnan and Another, (2011) 5 SCC 296, para 25.
10) Keeping those principles in mind, let us consider the
role played by the present respondent – V. Vijay Sai Reddy
(A-2) as projected by the CBI. In the first charge-sheet, it is
alleged as under:
i) V. Vijay Sai Reddy (A-2) was the founder Director of M/s
Jagathi Publications Pvt. Ltd. (A-12) and is the Financial
Advisor for Group Companies of Y.S. Jagan Mohan
Reddy (A-1).
ii) V. Vijay Sai Reddy (A-2) in conspiracy with Y.S. Jagan
Mohan Reddy (A-1) to fix the premium of M/s Jagathi
Publications Pvt. Ltd. at a high rate, provided false and
exaggerated information to M/s Deloitte Touche
Tohmatsu India Pvt. Ltd. and M/s Jagadisan & Co. and
got evaluated M/s Jagathi Publications Pvt. Ltd.. In
10Page 11
furtherance of the said conspiracy, V. Vijay Sai Reddy
(A-2) unilaterally fixed the premium of M/s Jagathi
Publications at Rs. 350/- per share for the sole purpose
of soliciting huge amounts as investments.
iii) V. Vijay Sai Reddy (A-2) and Y.S. Jagan Mohan Reddy
(A-1) were fully aware of their factual financial position
before starting the media company which takes 5 to 6
years for break even to claim profits. In spite of this
fact, V. Vijay Sai Reddy (A-2) prevailed over M/s Deloitte
Touche Tohmatsu India Pvt. Ltd. by providing false
inputs to exaggeratedly evaluate the fiscal status of M/s
Jagathi Publications Pvt. Ltd. and also to ante-date the
valuation report to suit the stealthy requirements of the
company. Thus, Vijaya Sai Reddy (A-2) was
instrumental in soliciting the premium @ Rs. 350/- of
M/s Jagathi Publications Pvt. Ltd. without any basis.
iv) V. Vijay Sai Reddy (A-2) in furtherance of the criminal
conspiracy, played a vital role in soliciting investments
in the form of bribes as a quid pro quo from the
individuals related to the MD of M/s Aurobindo Pharma
11Page 12
Ltd. and the companies M/s Hetero Group Companies
(A-4) and M/s Trident Life Sciences Ltd. (A-5).
v) By the above mentioned overt acts V. Vijay Sai Reddy
(A-2) in furtherance of criminal conspiracy with
remaining accused, has committed the offences under
Section 120-B read with Sections 409, 420 and 468 IPC
and thereby facilitated Y.S. Jagan Mohan Reddy (A-1) to
reap undue benefit in the form of investments in his
company from the beneficiaries mentioned above as a
quid pro quo.
11) It is brought to our notice that M/s Jagathi Publications
Private Limited was incorporated on 14.11.2006 as a Private
Limited Company and was converted into a Public Limited
Company on 12.01.2009. M/s Jagathi Publications Private
Limited represented by its the then Directors, Y.S. Jagan
Mohan Reddy (A-1) and V. Vijay Sai Reddy (A-2) solicited
investments from the general public although it was a
private limited company in violation of the provisions of the
Companies Act, 1956. It is contended by the CBI that the
main intention of M/s Jagathi Publications Private Limited
12Page 13
represented by the then Diectors A-1 and A-2 was to woo
innocent investors to buy shares at high premiums by
concealing the material facts. They cited several instances
in the charge sheet.
12) In the second charge-sheet dated 23.04.2012, Y.S.
Jagan Mohan Reddy (A-1), V. Vijay Sai Reddy (A-2) and M/s
Jagathi Publications Private Limited are the main accused for
the offences under Section 120-B read with Sections 420,
468 and 471 IPC and Section 9 of the PC Act. The third
charge sheet was filed on 07.05.2012 regarding the
investigation conducted in connection with the investments
made by M/s Ramky Pharma City (I) Ltd. in M/s Jagathi
Publications Private Limited. According to the CBI,
investigation revealed that Y.S. Jagan Mohan Reddy (A-1) in
conspiracy with V. Vijay Sai Reddy (A-2) ensured causing of
wrongful gain to M/s RPCIL represented by Ayodhya Rami
Reddy (A-4) in the matter of reducing the green belt area
from 250 mtrs. to 50 mtrs. by prevailing upon his father late
Dr. Y.S. Rajasekhara Reddy, the then Chief Minister to take
a decision to that effect during the meeting held on
13Page 14
23.11.2005. Based on the said decision, G. Venkat Ram
Reddy (A-5), the then Vice Chairman, VUDA accorded
approval to the layout plan of M/s RPCIL (A-6) with reduced
green belt area confining it to 50 mtrs. in contravention to
the decision dated 20.06.2005 and the G.O. No. 345 dated
30.06.2006 notifying the VUDA Master Plan 2021. In this
way, A-6 obtained wrongful gain of 914 acres of land inside
the Pharma City and by selling the land after dividing it into
plots, A-6 obtained a wrongful gain of Rs. 133.74 crores. It is
further pointed out that as a Financial Advisor and Founder
Director of M/s Jagathi Publications Private Limited, the
respondent herein played a very active role and as such he
cannot be absolved himself from the conspiratorial role
played by him in the affairs of M/s Jagathi Publications
Private Limited and is liable for all the irregularities.
13) It is pointed out by the CBI that investigation is under
progress regarding the transactions relating to Sandur Power
Company which involved many foreign transactions and the
present respondent V.Vijay Sai Reddy (A-2) was the main
person who dealt with all the foreign transactions for which
14Page 15
evidence is available. It is also highlighted that V.Vijay Sai
Reddy (A-2) has played a main role in pumping crores of
money to M/s Jagathi Publications Private Limited through
several companies like Artillegence Bio-Innovations Ltd., Bay
Inland Finance Pvt. Ltd., Bhaskar Fund Management Pvt.
Ltd., and other individuals based in Kolkata and Mumbai.
Likewise, VANPIC’s grant of mining lease and permits to
several group of companies, the investigation is under
progress and custodial interrogation from the appellant is
required.
14) Mr. Ashok Bhan, learned senior counsel has pointed out
that the Special Judge erroneously observed that the
investigation has reached to a conclusion and based on such
a wrong assumption enlarged him on bail.
15) According to the CBI, the investigation is still in
progress in other separate and distinct offences. He also
pointed out that the said conclusion is totally contrary to the
record. By pointing out various facts and figures, he
asserted that A-2 is an active member of the criminal
conspiracy and releasing him at the stage of investigation
15Page 16
would result in miscarriage of justice as the role played by
him in the conspiracy is serious and grave in nature. The
main grievance of the CBI is that when there was sufficient
evidence on record and investigation is yet to be completed
in many matters, grant of bail would defeat the proper
investigation in the case.
16) Though we are not expressing any definite opinion
about those allegations and it is for the trial Court to find out
the acceptability or otherwise in the full fledged trial, we are
of the view that in order to complete the investigation in
respect of three more charge sheets, the presence of
respondent (A-2) is required and cannot be ignored by
treating him as Chartered Accountant only.
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
16Page 17
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.
18) It is also brought to our notice that investigation
relating to M/s Sandur Power Company is in progress which
17Page 18
involves investigation in foreign countries in which Y.S.
Jaganmohan Reddy (A-1) was the Director. As per the
investigation, respondent herein (A-2) was the main person,
who facilitated formation of M/s Sandur Power Company Ltd..
There is also allegation that Sandur Power Company
received huge amounts from two Mauritius based Companies
and the source of those monies is being investigated
speedily and efforts to trace the source are being done
expeditiously. It is also brought to our notice that Letter of
Rogatories have been sent to six foreign countries and they
have furnished the status of LRs.
19) It is also the claim of the CBI that investigation is under
progress regarding granting of mining lease of limestone to
the extent of 2037.52 acres by the Government of Andhra
Pradesh to Raghuram Cements. It is highlighted that during
the period under review, the CBI has collected 400
documents running into thousands of pages from various
departments/banks and so far about 40 persons have been
examined.
18Page 19
20) It is also highlighted that the investigation disclosed
that respondent A-2 was nominated as a part time nonexecutive Director of Oriental Bank of Commerce by the
Ministry of Finance vide notification dated 14.12.2006 based
on the recommendation of late Dr. Y.S. Rajasekhara Reddy,
the then Chief Minister of Andhra Pradesh and father of A-1.
It is the assertion of the CBI that respondent A-2 was not
only the direct beneficiary of the post of Director in a
Nationalised Bank but was also a key conspirator and
facilitated for fiddling with public money of the said bank. As
the Director of the bank, he also facilitated a loan of Rs. 200
crores to A-1 without any security and was also appointed as
a Member of Tirumala Tirupati Devasthanams.
21) It is pointed out that so far 110 witnesses have been
examined and as many as 1382 documents running into
several thousands of pages have been collected in respect of
investment through paper companies based in Kolkata and
Mumbai, popularly known as suit case companies. Even in
the case of Indus Projects and Lepakshi Knowledge Hub Pvt.
19Page 20
Ltd., according to the CBI, the role of respondent A-2 is being
ascertained.
22) Finally, it is pointed out that the role of respondent (A-
2) in matters of Raghuram Cements and Sandur Power are
yet to be completed, hence, the presence of respondent
herein (A-2), who is outside the judicial custody would
definitely hamper the smooth investigation and blunt the
due process of law through his deceptive and subtle
manipulations to influence, intimidate and threaten the
witnesses.
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.
24) As pointed out by learned senior counsel for the CBI in
para 25 of the impugned judgment, the High Court did not
agree with the observation of the Special Judge that the
investigation has reached to a conclusion. In fact, the High
Court has concluded that the above finding is incorrect. In
20Page 21
para 26 also, the High Court appreciated and accepted the
stand of the CBI that it has been making investigation with
regard to other distinct offences that are alleged in the FIR.
Interestingly, the High Court has also not accepted the
another reasoning of the Special Court for granting bail,
namely, that the main accused A-1 and other beneficiaries
have not been arrested by the investigating agency. In other
words, the High Court has rightly concluded that the
circumstance of not arresting the other accused itself cannot
be a ground to grant bail. However, after finding fault with
certain reasoning and conclusion of the Special Court in
granting bail, the High Court has observed that the CBI has
not placed any material before the Special Court to
substantiate their stand. The Special Judge has also noted
that when respondent herein (A-2) was released on bail on
13.04.2012 and again surrendered before the Court on
23.04.2012, there is no allegation against him that during
this period, he tried to run away from the investigating
agency or made any attempt to influence the witnesses. In
this regard, learned senior counsel for the CBI has brought to
21Page 22
our notice the statement of one Gopalakrishnan Murali dated
20.06.2012. In his statement, in the penultimate paragraph,
it is noted that on receipt of notice under Section 91 of the
Code from CBI on 13.06.2012 the said deponent immediately
contacted V. Vijay Sai Reddy (A-2) for his instructions.
According to him, A-2 directed him not to part with any
document/information to CBI and directed to approach the
High Court of Andhra Pradesh through their legal advisors.
Admittedly, he had not brought any information as required
under the notice dated 13.06.2012 on the advise of the
respondent herein (A-2). As rightly pointed out, there is no
need to go to High Court to get specific direction for each
and every thing. When the Investigating Officer is in need
of certain documents/information for verification with
reference to the investigation it is but proper to place all the
materials under Section 91 of the Code. Likewise, further
statement of one Shri Sanjay S. Mitra dated 07.12.2012 was
pressed into service. When the attention was drawn to the
said person pointing out that his replies are intended to
protect directly the people involved in the above
22Page 23
transactions including his Managing Director Puneet Dalmia
and Vijay Sai Reddy (A-2), his answer was that he is an
employee working with Dalmia for salary and he has
indications from his management and indirectly from Vijay
Sai Reddy (A-2) about not revealing the above transactions
and he also informed the things having reservation about his
future. These are a few samples pointed out by the counsel
for the CBI.
25) Another relevant aspect as pointed out by learned
senior counsel for the CBI that bail can be cancelled when
lower court granted bail on irrelevant considerations. The
High Court accepted the said proposition and observed that
“though there appears to be some force in the contention of
Shri Kesava Rao, learned standing counsel for the CBI that
the Special Judge has taken into consideration certain factors
which appear to be not relevant such as not arresting A-1
and certain other observations of learned Special Judge,
such as investigation has been completed appear to be
incorrect.” Unfortunately, after arriving such conclusion,
particularly, criticizing the Special Judge, the High Court on
23Page 24
an erroneous ground concluded that “it cannot be said that
they are totally irrelevant circumstances, therefore, on that
ground, I feel that the bail granted to the respondent cannot
be cancelled”.
26) Finally, though it is claimed that respondent herein (A-
2) being only a C.A. had rendered his professional advise, in
the light of the various serious allegations against him, his
nexus with the main accused A-1, contacts with many
investors all over India prima facie it cannot be claimed that
he acted only as a C.A. and nothing more. It is the assertion
of the CBI that the respondent herein (A-2) is the brain
behind the alleged economic offence of huge magnitude.
The said assertion, in the light of the materials relied on
before the Special Court and the High Court and placed in
the course of argument before this Court, cannot be ignored
lightly.
27) It is true that the Special Judge while granting bail
imposed certain conditions and the High Court has also
added some more additional conditions, however, taking
note of few instances in which how the respondent has
24Page 25
acted, it cannot be possible for the investigating agency to
collect the remaining materials for the remaining three
charge sheets to be filed.
 In such circumstances, we are
satisfied firstly the Special Court took irrelevant materials for
consideration for grant of bail and secondly, the High Court
having arrived definite conclusion that several findings of
Special court are unacceptable or irrelevant but ultimately
affirmed the very same order of the special Judge granting
bail. 
28) While granting bail, the court has to keep in mind the
nature of accusations, 
the nature of evidence in support
thereof, the severity of the punishment which conviction will
entail,
 the character of the accused, 
circumstances which
are peculiar to the accused, 
reasonable possibility of
securing the presence of the accused at the trial,
 reasonable
apprehension of the witnesses being tampered with,
 the
larger interests of the public/State and other similar
considerations.
 It has also to be kept in mind that for the
purpose of granting bail, the Legislature has used the words
"reasonable grounds for believing" instead of "the evidence"
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which means the Court dealing with the grant of bail can
only satisfy it as to
whether there is a genuine case against
the accused and that the prosecution will be able to produce
prima facie evidence in support of the charge.
 It is not
expected, at this stage, to have the evidence establishing
the guilt of the accused beyond reasonable doubt.
29) We have highlighted the above aspects to show that
the High Court has mistakenly taken into account the
irrelevant materials and kept out the relevant materials,
which had to be considered for the grant of bail.
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
26Page 27
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. 
...…………….…………………………J.
(P. SATHASIVAM)
.…....…………………………………J.
(M. YUSUF EQBAL )
NEW DELHI;
MAY 09, 2013.
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