R. Subramanian and Others vs State of Tamil Nadu

V. Ramasubramanian, J.—This is a petition seeking the release of the petitioner on bail.

Heard Mr. I. Subramaniam, learned Senior Counsel, assisted by Mr. Prakash Goklaney, learned counsel appearing for the petitioner, Mr. S. Shanmuga Velayutham, learned Public Prosecutor, Mr. Abudu Kumar Rajarathnam, Mr. Karthik Seshadri, Mr. G. Karthikeyan and Mr. R. Swaminathan, learned counsel appearing for the intervenors.

The petitioner is the fourth accused in Cr. No. 5 of 2013 on the file of the Economic Offences Wing - II of the Chennai City Police, for alleged offences under Sections 406, 420 and 120B of the Indian Penal Code read with Section 5 of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 (hereinafter referred to as the TNPID Act, 1997).

The case has a chequered history, all of which, may not be necessary for the purpose of deciding this petition for bail. Suffice it to say that the petitioner either promoted or got interest in a series of about 49 companies, some of which were registered as private limited companies and some registered as public limited companies. In some of them, the petitioner was a shareholder and/or director and in some others, he was not.

Right from the date of registration of the complaint on 21.10.2013, the petitioner fought a series of litigations in one jurisdiction or the other of this Court and enjoyed some protective orders, both from getting arrested and also from the investigation proceeding with.

Eventually, the curtain was drawn on 6.8.2015, when a writ petition filed by the petitioner got dismissed by this Court. Even then, the police were not able to apprehend the petitioner. However, the other directors were taken into custody. All of them were subsequently released on bail. One of the directors, who is 87 years of age, and who is suffering from cancer of the colon, was granted anticipatory bail.

The petitioner himself filed Crl.O.P. No. 21449 of 2015 seeking anticipatory bail. But, by an order dated 18.9.2015, I dismissed the petition for anticipatory bail.

On the very next day namely 19.9.2015, the petitioner was taken into custody. There are two versions. According to the petitioner, he surrendered immediately after the dismissal of his anticipatory bail. According to the police, they arrested him while he was on his way to the airport to flee from Chennai.

Be that as it may, the fact remains that the petitioner was taken into custody on 19.9.2015. As on date, a period of about 29 days has passed from the date of his arrest.

Admittedly, the police moved an application in Crl.M.P. No. 1448 of 2015 before the Trial Court for custodial interrogation. It was granted for six days from 23.9.2015 to 28.9.2015. Thereafter, the police sought extension for three more days, but the same was rejected by the Trial Court.

Moreover, the Enforcement Directorate also moved an application before the Trial Court. They were permitted to interrogate the petitioner in the prison, in which, he is now lodged, for a period of five days. The said period has also lapsed. Therefore, there is really no point in detaining him in prison as an under trial prisoner.

However, the learned Public Prosecutor opposes the enlargement of the petitioner on bail, on the basis of a very detailed counter filed by the prosecution. The objections taken in the counter filed by the police are :

"(i) that the petitioner is not a law abiding citizen, who has violated the provisions of the Companies Act, Reserve Bank of India Act, etc.

(ii) that the Central Bureau of Investigation had already registered a complaint in 2013 itself for the alleged offence under Section 420 of the Indian Penal Code for availing fraudulent credit facilities

(c) that the Reserve Bank of India has also filed a criminal case in E.O.C.C. No. 343 of 2009 for offences punishable under the Reserve Bank of India Act

(d) that the Registrar of Companies has filed a complaint for violation of the provisions of the Companies Act

(e) that a serious fraud investigation was already ordered against a company, of which, he was the promoter and managing director

(f) that the Income Tax Authorities have also registered cases against his companies for evasion of tax and

(g) that the total amount defaulted by him to the depositors is to the tune of Rs. 250 crores."

I have carefully considered the above objections.

The cases registered by the Reserve Bank of India and the Registrar of Companies are for violations of certain procedural provisions of those special enactments. The fate of the investigation undertaken by the Central Bureau of Investigation in C.B.I.R.C.4(E)/2013 is not known. Even after the petitioner''s arrest, the Central Bureau of Investigation has not moved any application for his custodial interrogation. Therefore, the grounds, on which, the prosecution opposes the bail plea, are not sustainable.

There are four petitions filed by individuals, seeking to intervene in this bail petition. Two of those petitions are filed by persons, who had deposited amounts in the companies managed by the petitioner herein. Their opposition to the petition for bail is on the ground that once the petitioner is released, he will abscond and escape the clutches of law and that he is a highly influential person. Another reason for the depositors opposing his petition for bail is that the petitioner is in the habit of filing affidavits after affidavits containing false statements and thereafter retracting even from those statements.

It is relevant to point out at this stage that the proposed intervenor in M.P. No. 1 of 2015 was also the intervenor in the petition for anticipatory bail filed by the petitioner. I accepted the stand taken by the intervenors and dismissed the petition for anticipatory bail on 18.9.2015.

But now, two more persons have filed M.P. Nos. 3 and 4 of 2015 seeking to intervene. Interestingly, these two persons do not claim to have deposited any money in any of the companies floated by the petitioner at any point of time. The petitioners in M.P. Nos. 3 and 4 of 2015 are persons, who have other disputes with the petitioner with regard to title to properties or the controlling interest in a company. In so far as they are concerned, it appears that so long as the petitioner continues to be in jail, the properties, over which, there is a title dispute, can safely be with them. Their objection to the bail petition, has added a new dimension and new twist to the case.

In the course of hearing of the bail petition, I directed the learned counsel for the petitioner to file a memo indicating the list of properties that could be made available by him for sale, so as to enable the poor depositors to get back their money. The learned counsel filed a list, which is as follows :

"List of Properties:

2 Properties in Pallikaranai Village of 1.65 Acres in all

1 Property of about 2.5 Acres in Jaladianpet Village

1 Property of about 1.37 Acres in Madipakkam Village

2 Properties of about 0.75 Acres in Madipakkam-II (S. Kolathur) Village

1 Property of 10.4 Acres in Marakkanam Village

2 Flats in Mylapore of about 2000 sq. ft., each.

1 Basement Office and 3 Flats in Vepery

About 25,000 sq. ft. Office Space in Velachery

About 2 1/2 grounds with 15000 sq. ft. built in Nungambakkam

30.8 Acres in Ponneri (25.8 plus 5)."

The petitioners in M.P. Nos. 3 and 4 of 2015 are persons, who have a dispute with regard to some items of properties disclosed by the petitioner. There are two methods of looking at the issue on hand. The first is that if the petitioner is not enlarged on bail, the depositors are not going to get any benefit. On the contrary, the properties that are tied up in litigation will also be lost. Such a consequence is not beneficial to the depositors themselves.

If the petitioner is enlarged on bail, there is a possibility, however remote the same may appear to be to the depositors, that these properties can be brought to sale, subject, however, to the resolution of title disputes, and the sale proceeds could be paid to the depositors. This course of action may be possible, in view of the fact that this Court is also seized of certain applications on the Company Side of this Court.

It must be borne in mind that the offence under the TNPID Act, 1997 is a compoundable offence. If the full particulars of the properties that could be brought to sale are made known or if the full particulars of the properties, the encumbrances over which could be removed without difficulty, are made available, the interest of depositors can be protected. This can be done by directing the Competent Authority under Section 3 of the TNPID Act, 1997 to pass orders of attachment. Therefore, I am of the considered view that the petitioner could be enlarged on bail subject to certain conditions. It is needless to say that if the conditions are not fulfilled, it will be open to the prosecution or even the depositors, who have filed intervention applications to seek cancellation of bail.

Accordingly, this petition is ordered to the following effect :

"(i) The petitioner is directed to be released on bail on his executing a bond for a sum of Rs. 1,00,000/- (Rupees one lakh only) with two sureties each for a like sum to the satisfaction of the Special Judge under the TNPID Act, Chennai.

(ii) The petitioner shall not leave Chennai, but shall report before the Investigating Officer, every at 10 AM until further orders

(iii) Within a week of his release, the petitioner shall file an affidavit before this Court giving full particulars of the properties with survey numbers, names of village, taluk, district, etc., over which, the petitioner or any of the companies over which, he has an interest, have a claim

(iv) His affidavit shall also contain full particulars of the disputes, in which, those properties are involved or the encumbrances into which, the properties are entangled

(v) The affidavit should also contain the details of persons claiming independent right, title or interest over those properties

(vi) It is made clear that this endeavour is not actually to take over the resolution of disputes relating to properties from the normal civil courts, in which, they are pending, but only to see whether there are properties, which can be attached under Section 3 of the TNPID Act, for the benefit of the depositors.

(vii) Since M.P. Nos. 1 and 2 of 2015 are by depositors, these petitions are allowed. Since M.P. Nos. 3 and 4 of 2015 are by persons unconnected with the offences in question, but who have other disputes with the petitioner, these petitions are dismissed."