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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 730 OF 2013
(Arising out of S.L.P. (Crl.) No. 3404 of 2013)
Y.S. Jagan Mohan Reddy .... Appellant(s)
Versus
Central Bureau of Investigation ....
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 24.01.2013 passed by the High Court of
Judicature of Andhra Pradesh at Hyderabad in Criminal
Petition No. 8750 of 2012 in R.C. 19(A)/2011-CBI-Hyderabad,
whereby the High Court dismissed the petition filed by the
appellant herein for grant of bail.
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3) The only question posed for consideration is
whether
the appellant-herein has made out a case for bail.
Brief facts:
4) (a) 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 Central Bureau of Investigation (in short
“the CBI”), Hyderabad, registered a case being R.C. No.
19(A)/2011-CBI-Hyderabad dated 17.08.2011 under Section
120B read with Sections 420, 409 and 477-A of the Indian
Penal Code, 1860 (for 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. Jagan Mohan
Reddy (A-1), Member of Parliament and 73 others.
(b) The appellant-Y.S. Jagan Mohan Reddy was named as
an accused at Sl. No. 1 in the FIR dated 17.08.2011 (after
the chargesheet was framed, he was arrayed as A-1 and
hereinafter, he will be referred to as A-1).
(c) During investigation, it was revealed that Y.S. Jagan
Mohan Reddy (A-1), son of Late Dr. Y.S. Rajasekhara Reddy,
the then Chief Minister of Andhra Pradesh, has adopted
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several ingenious ways to amass illegal wealth which
resulted in great public injury. The then Chief Minister of the
State abused his public office to the benefit of his son Y.S.
Jagan Mohan Reddy (A-1). Since May, 2004, A-1 started
floating a number of companies including M/s Jagathi
Publications Pvt. Ltd., which 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, Y.S. Jagan Mohan Reddy (A-1) was designated
as the Authorised Signatory to operate the Bank accounts of
the said 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
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projects, special relaxations/permissions for real estate
ventures, mines etc. It is further revealed that Y.S. Jagan
Mohan 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.
(d) On 31.03.2012, 23.04.2012 and 07.05.2012, the CBI
filed first, second and third charge sheet(s) respectively
before the Special Judge for CBI Cases, Hyderabad and the
appellant was arrayed as A-1 in all the charge sheets. The
Principal Special Judge for CBI Cases took cognizance of the
charge sheet dated 31.03.2012 which was numbered as CC
No. 8 of 2012. The appellant was arrested on 27.05.2012 for
his involvement and complicity in the case and presently, he
is in judicial custody. On 29.05.2012 and 30.05.2012, the
Principal Special Judge for CBI Cases took cognizance of
second and third charge sheet(s) which were numbered as
CC Nos. 9 and 10 of 2012 respectively.
(e) On 29.05.2012, the appellant filed Crl. M.P. No.
1055/2012 in CC No. 8 of 2012 before the Court of the
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Special Judge for CBI Cases at Hyderabad for grant of regular
bail under Section 437 of the Code of Criminal Procedure,
1973 (in short ‘the Code’). The Special Judge, by order dated
01.06.2012, dismissed his application for bail.
(f) The CBI filed Criminal Petition Nos. 4743 and 4744 of
2012 before the High Court for the remand of A-1 for a
period of 5 days. The High Court, by order dated
02.06.2012, allowed the petitions and remanded A-1 to the
custody of the CBI from 03.06.2012 to 07.06.2012. By
further orders dated 08.06.2012 in Crl. M.P. No. 4785 of
2012 in Criminal Petition No. 4743 of 2012, the custody was
extended to a further period of 2 days.
(g) Being aggrieved, the appellant moved the High Court
for enlarging him on bail in Criminal Petition No. 5211 of
2012. The High Court, taking note of serious nature of the
offence and having regard to personal and financial clout of
the appellant (A-1) and finding that it cannot be ruled out
that witnesses cannot be influenced by him in case he is
released on bail at this stage, by impugned order dated
04.07.2012, dismissed his bail application.
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(h) Being aggrieved by the orders dated 02.06.2012 and
04.07.2012, the appellant preferred two special leave
petitions being Nos. 5901 and 5902 of 2012 before this
Court. This Court, by order dated 09.08.2012, issued notice
in SLP (Crl.) No. 5902 of 2012 and dismissed SLP (Crl.) No.
5901 of 2012.
(i) On 13.08.2012, the CBI filed fourth charge sheet in the
Court of Principal Special Judge for CBI Cases, Hyderabad
which was numbered as CC No. 14 of 2012.
(j) This Court, on coming to know that the investigation is
continuing in connection with 7 matters, dismissed the
special leave petition being SLP (Crl.) 5902 of 2012 by order
dated 05.10.2012 with a direction to the CBI to complete the
investigation as early as possible and to file a consolidated
charge sheet on the remaining 7 issues. This Court also
directed the appellant to renew his prayer for bail before the
trial court on completion of the investigation by the CBI.
(k) On 16.11.2012, the appellant filed Crl. M.P. No. 1938 of
2012 before the Special Judge for CBI Cases, Hyderabad,
seeking default/statutory bail. On the same day, the
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appellant filed Crl. M.P. No. 1939 of 2012 in CC No. 8 of 2012
before the Special Judge for CBI Cases, Hyderabad, seeking
regular bail. By orders dated 28.11.2012 and 04.12.2012,
the Special Judge rejected the bail applications filed by the
appellant herein in Crl. M.P. No. 1938 of 2012 and Crl. M.P.
No. 1939 of 2012 respectively.
(l) The appellant preferred Criminal Petition No. 8576 of
2012 before the High Court for grant of bail which came to
be dismissed on 24.12.2012. Being aggrieved, the appellant
preferred Criminal Petition No. 8750 of 2012 before the High
Court. The High Court, by order dated 24.01.2013,
dismissed the petition filed by the appellant herein.
(m) Being aggrieved by the order of the High Court, the
appellant herein has preferred this appeal by way of special
leave.
5) Heard Mr. Harish N. Salve, Mr. Mukul Rohatgi and Mr.
K.V. Vishwanathan, learned senior counsel for the appellantaccused and Mr. Ashok Bhan and Mr. Mukul Gupta, learned
senior counsel for the respondent-CBI.
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6) The CBI has filed a counter affidavit dated 06.05.2013,
sworn by a senior officer, namely, Deputy Inspector General
of Police and Chief Investigating Officer in RC No.
19(A)/2011-CBI-HYD and has furnished various information
such as allegations against the appellant,
companies/persons involved, investigation conducted so far
and progress of the investigation with regard to certain
companies/persons. During the course of hearing, the CBI
also circulated the Status Report in respect of the FIR being
No. 19(A)/2011-CBI-HYD regarding 7 issues mentioned in the
order of this Court dated 05.10.2012. Learned senior
counsel appearing for the appellant, by drawing our
attention to various materials/details including the fact that
the appellant is in custody nearly for a period of 1 year and
many persons alleged to have been involved in those
transactions are not in custody and no steps have been
taken by the CBI for their arrest, submitted that the
appellant may be enlarged on bail after imposing
appropriate conditions.
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7) In order to appreciate the rival contentions,
particularly, the stand of the CBI, it is useful to refer the
earlier order passed by this Court on 05.10.2012 which reads
as under:
“SLP (Crl.)No. 5902 of 2012
Heard Mr. Gopal Subramaniam, learned senior
advocate appearing for the petitioner at some length.
Mr. Mohan Parasaran, learned ASG appearing on
behalf of the CBI, submitted before us a report from which
it appears that the investigation is still going on in
connection with seven matters. In paragraph 9 of the
report, it is stated as under:
“…..The matters which are pending investigation also
involved investigation into various serious economic
offences involving hundreds of crores of rupees. The major
matters which are now under investigation relating to
conspiracies distinctly involving the following entities which
by themselves are independent to each other and are,
therefore, distinct conspiracies.
(i) Sandur Power Co. Ltd.
(ii) Grant of mining lease to Bharti Cements/Raghuram
Cements which are companies none other than own
companies of A1, Mr. JMR.
(iii) Penna Cements and Group companies
(iv) Dalmia Cements
(v) India Cements
(vi) Investment through paper companies based in
Kolkata and Mumbai, popularly known as suit case
companies.
(vii) Indu Projects, Lepakshi knowledge Hub
The amounts involved and which is subject matter of
investigation in the above cases as per estimates exceed
Rs.3000 crores.”
(emphasis in the original)
Mr. Parasaran stated that the CBI is making
investigation without wasting any time and he assured the
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Court that the investigation will be completed as early as
possible and on completion of the investigation the CBI
shall submit one final charge-sheet.
On hearing counsel for the parties and on going
through the report submitted by the CBI, we are not
inclined to interfere in the matter at this stage.
The special leave petition is, accordingly, dismissed.
It will be, however, open to the petitioner to renew
his prayer for bail before the trial court on completion of
the investigation by the CBI on the issues as indicated
above and submission of the final charge-sheet.
In case, such a prayer is made, the Court shall
consider the prayer for bail independently, on its own
merits, without being influenced by the dismissal of the
special leave petition.
SLP(Crl.)No.5946 of 2012
Put up after two weeks.”
8) Mr. Ashok Bhan, learned senior counsel for the CBI, by
pointing out the penultimate paragraph in the order dated
05.10.2012, i.e., “It will be, however, open to the petitioner
to renew his prayer for bail before the trial Court on
completion of the investigation by the CBI on the issues as
indicated above and submission of the final charge-sheet”,
submitted that in view of the fact that the investigation is
still continuing in respect of the transaction(s) with certain
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companies/persons, the present application for bail is not
maintainable.
9) It is relevant to note that in the order dated 05.10.2012,
this Court noted the statement made by learned ASG, who
appeared for the CBI, that the investigation relating to
conspiracies distinctly involving 7 entities which by
themselves are independent to each other requires further
time. According to learned senior counsel for the CBI, they
require 4-6 months’ time to complete the investigation in
respect of the 7 entities as mentioned in the order dated
05.12.2012 and to file a charge sheet. In support of the
above claim, the CBI pointed out various instances from the
counter affidavit as well as from the Status Report justifying
their stand for the dismissal of the bail application.
10) In the Status Report, the CBI has assured that the
investigation is being carried out expeditiously as directed
by this Court. It is stated that among 7 issues, the CBI has
completed the investigation with respect to M/s Dalmia
Cements and consequently filed the charge sheet in the
Court of Special Judge for CBI Cases, Hyderabad on
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08.04.2013. According to the CBI, presently, the
investigation is progressing with regard to other 6 issues
also and the CBI is in the final stages of investigation with
respect to the following, viz., M/s India Cements, Penna
Cements and Investments through Kolkata companies. It is
also assured to this Court that the CBI is likely to file charge
sheet/final reports in the above said three issues shortly.
11) The CBI in its Status Report has elaborated the progress
with regard to the investigation in the remaining issues
which are as under:-
M/s Dalmia Cements (Bharat) Ltd.
(a) The investigation has revealed that M/s Dalmia
Cements (Bharat) Ltd. invested an amount of Rs. 95 crores
into M/s Raghuram Cements Ltd. represented by Y.S Jagan
Mohan Reddy. In quid pro quo to the investments, A-1,
through his influence over his father Late Dr. Y.S.
Rajasekhara Reddy facilitated the grant and transfer of
mining lease to the extent of 407 hectares in Kadapa District
of Andhra Pradesh to M/s Dalmia Cements. The CBI has
highlighted the amount involved and the facilities provided
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by the father of the appellant. It is further highlighted in the
Status Report that the searches were conducted by the
Income Tax Department, New Delhi at the offices of M/s
Dalmia Cements (Bharat) Ltd. and the residential premises
of their employees.
(b) It is also highlighted that as per the pre-arranged
agreement between Y.S. Jagan Mohan Reddy (A-1), V. Vijay
Sai Reddy (A-2) and Puneet Dalmia, M/s Dalmia Cements
(Bharat) Ltd. sold of their stake in M/s Raghuram Cements
Ltd. to M/s PARFICIM, France, for a total consideration of Rs.
135 crores out of which, an amount of Rs. 55 crores was paid
to Y.S. Jagan Mohan Reddy (A-1) between 16.05.2010 and
13.06.2011, in cash through hawala channels, and the
details of the said payments were found in the material
seized by the Income Tax Department, New Delhi.
(c) The CBI has further alleged that M/s Dalmia Cements
(Bharat) Ltd. have returned the alleged sale proceeds to Y.S.
Jagan Mohan Reddy (A-1) in cash through hawala channels
which clearly establish that the initial payment of Rs. 95
crores was only illegal gratification for the undue benefits
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received by them from the Government of Andhra Pradesh
and was not genuine investments. It is further submitted
that the charge sheet has already been filed with regard to
the same on 08.04.2013 against A-1 and 12 others under
various sections of the IPC and the PC Act.
M/s Sandur Power Company Ltd.
(a) Regarding the investigation relating to M/s Sandur
Power Company Ltd., it is stated by the CBI that Y.S. Jagan
Mohan Reddy (A-1) was the Director of this Company from
16.06.2001 to 11.01.2010. M/s Sandur Power Company Ltd.
was incorporated on 23.10.1998 by M.B. Ghorpade and
subsequently, Y.S. Jagan Mohan Reddy (A-1) joined the
company during June 2001 along with the Board of Directors,
viz., Harish C. Kamarthy and JJ. Reddy. It is alleged by the
CBI that the Company is closely held by Y.S. Jagan Mohan
Reddy (A-1). The CBI also highlighted various share
transactions amounting to Rs. 124.60 crores with two
Mauritius based companies, viz., M/s 2i Capital and M/s Pluri
Emerging Company by M/s Sandur Power Company Ltd. It is
projected by the CBI that the above said amount is of A-1
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which was routed through the Mauritius based companies. It
is also highlighted that the role of Nimmagadda Prasad (A-3),
who is currently under judicial custody is also being
investigated for the same. Vijay Sai Reddy (A-2), along with
Y.S. Jagan Mohan Reddy (A-1), was the brain behind this
conspiracy inasmuch as A-2 had floated fictitious companies
in Chennai so as to enable round tripping or routing monies
into M/s Sandur Power Company Ltd. from India and foreign
countries through companies falsely created in Chennai as
well as in certain foreign countries.
(b) It is also pointed out by the CBI that notice has also
been issued to one Maiank Mehta, who is suspected to be
the person who handled the routing of money of Y.S. Jagan
Mohan Reddy (A-1) and notice has been issued for his
presence in India for examination and interrogation. The
said person is presently based in Hong Kong and is refusing
to come to India citing frivolous reasons. It is suspected that
he is being influenced by Y.S. Jagan Mohan Reddy (A-1) and
Vijay Sai Reddy (A-2) which amply prove that the witnesses
are being influenced by these persons in this case.
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Grant of Mining Lease to Bharti Cements/Raghuram
Cements:
It is pointed out by the CBI that investigation is under
progress regarding grant of mining lease of limestone to
Bharti Cements/Raghuram Cements which are the
companies owned by Y.S. Jagan Mohan Reddy (A-1). It is
claimed by the CBI that during the period under review, they
have collected nearly 400 documents running into thousands
of pages from various Departments/Banks including Oriental
Bank of Commerce, Jubilee Hills, Hyderabad, Koramangala,
Bangalore, Head Office, Gurgaon etc. for disbursement of
loan of Rs. 200 crores violating the bank guidelines and
rules. It is also stated that the investigation disclosed the
payment of illegal gratification of Rs. 30 crores to Y.S. Jagan
Mohan Reddy (A-1) by Nimmagadda Prasad (A-3) for the
wrongful gain obtained by A-3 from the Government of
Andhra Pradesh in connection with awarding a project
consisting of development of two Sea Ports and an Industrial
Corridor as VANPIC Project and falsification of documents to
cover up the said payment etc.
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M/s Indu Projects Ltd. (M/s Lepakshi Knowledge Hub
Pvt. Ltd. and M/s Indus Tech Zone Pvt. Ltd.)
The CBI has pointed out that the investigation is in progress
in respect of the above said group of companies. In the
Status Report, the CBI has highlighted a number of details
about the nexus of the appellant along with those
companies. Since the investigation is still under progress in
respect of those companies, we are not highlighting all those
details furnished by the CBI in the Status Report.
M/s India Cements Ltd.
The CBI has highlighted the investigation relating to M/s
India Cements Ltd. and the various amounts exchanged
between the parties. In respect of the above, according to
the CBI, they had made illegal quid pro quo investments to
the tune of Rs.140 crores into the group companies of Y.S.
Jagan Mohan Reddy (A-1) and had received several benefits
in the form of permissions granted for utilization/additional
quantity of water from Kagna and Krishna Rivers and lease
of land. It is also pointed out that the investigation in the
case is almost complete except few more crucial witnesses
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have to be examined. The CBI also pointed out the details of
investigation relating to investment through paper
companies based in Kolkata and Mumbai, popularly known
as suit case companies. Since investigation is on a half way,
we are not referring all those details mentioned in the Status
Report.
12) It is further pointed out that during investigation, a total
number of 140 witnesses including IAS officers and
concerned Ministers have been examined and 352
documents were collected. According to the CBI, out of
these, some more crucial witnesses have to be examined.
13) Learned senior counsel appearing for the appellant
pointed out that after the order dated 05.10.2012, the CBI is
not justified in prolonging the same just to continue the
custody of the appellant. It was also highlighted that even
according to the CBI, several Ministers and IAS officers are
involved, but no one has been arrested so far. As far as
those allegations are concerned, it is the claim of the CBI
that considering the huge magnitude of transactions, various
beneficiaries, companies/persons involved with A-1 and his
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associates, the CBI is taking effective steps for early
completion of the same. Though learned senior counsel for
the appellant submitted that in view of non-compliance of
Section 167 of the Code the appellant is entitled to statutory
bail, in view of enormous materials placed in respect of
distinct entities, various transactions etc. and in the light of
the permission granted by this Court in the order dated
05.10.2012, we are unable to accept the argument of
learned senior counsel for the appellant.
14) On going into all the details furnished by the CBI in the
form of Status Report and the counter affidavit dated
06.05.2013 sworn by the Deputy Inspector General of Police
and Chief Investigating Officer, Hyderabad, without
expressing any opinion on the merits, we feel that at this
stage, the release of the appellant (A-1) would hamper the
investigation as it may influence the witnesses and tamper
with the material evidence.
Though it is pointed out by
learned senior counsel for the appellant that since the
appellant is in no way connected with the persons in power,
we are of the view that the apprehension raised by the CBI
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cannot be lightly ignored considering the claim that the
appellant is the ultimate beneficiary and the prime
conspirator in huge monetary transactions.
15) Economic offences constitute a class apart and need to
be visited with a different approach in the matter of bail. The
economic offence having deep rooted conspiracies and
involving huge loss of public funds needs to be viewed
seriously and considered as grave offences affecting the
economy of the country as a whole and thereby posing
serious threat to the financial health of the country.
16) 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.
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17) Taking note of all these facts and the huge magnitude
of the case and also the request of the CBI asking for further
time for completion of the investigation in filing the charge
sheet(s), without expressing any opinion on the merits, we
are of the opinion that the release of the appellant at this
stage may hamper the investigation.
However, we direct the
CBI to complete the investigation and file the charge
sheet(s) within a period of 4 months from today.
Thereafter,
as observed in the earlier order dated 05.10.2012, the
appellant 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 dismissal of the present appeal.
18) With the above observation, the appeal is dismissed.
………….…………………………J.
(P. SATHASIVAM)
………….…………………………J.
(M.Y. EQBAL)
NEW DELHI;
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MAY 9, 2013.
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