Full Judgment Text
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO. 460 OF 2020
(@ Special Leave Petition (Crl.) No.1616 of 2020)
Jinofer Kawasji Bhujwala ... Appellant
Versus
State of Gujarat ... Respondent
O R D E R
V. Ramasubramanian.J
1. Leave granted.
2. Aggrieved by the dismissal of his bail application by the
Signature Not Verified
High Court of Gujarat at Ahmedabad, a person who is cited as
Digitally signed by
MEENAKSHI KOHLI
Date: 2020.06.19
16:20:02 IST
Reason:
A-1 in the First Information Report in Crime No.I-I/5/2019 dated
26.06.2019 for alleged offences under Sections 406, 409, 420,
465, 468, 471 and 120B of the Indian Penal Code and Section
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13(1)(d) of the Prevention of Corruption Act, 1988, has come
up with the above appeal.
3. We have heard Mr. Harish Salve and Mr. Siddhartha
Dave, learned Senior Counsel appearing for the appellant; Mr.
Tushar Mehta, learned Solicitor General appearing for the State
of Gujarat and Mr. Mukul Rohatgi, learned Senior Counsel
appearing for Gujarat Maritime Board.
4. Pursuant to an invitation to offer floated in November-
2006 and the assessment of the proposals received from
interested parties, a company by name Aatash Norcontrol
Limited (for short “ANL”), was issued with a Letter of Intent on
26.02.2007 for the construction and development of Vessels
Traffic and Port Management System (hereinafter referred to
as “VTPMS”) in the Gulf of Khambhat, on Build Own Operate
and Transfer (BOOT) basis. It was followed by a Concession
Agreement dated 30.09.2007 entered into between the
Gujarat Maritime Board, ANL and the Government of Gujarat.
5. As per the Concession Agreement, Aatash Norcontrol
Limited is obliged to install Key Radar Stations at 7 places in
the Gulf of Cambay and repeater Radar Stations at 2 places,
with the master control being set up at Dumas. The object of
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setting up the Radar Stations is to monitor the vessels
entering the Gulf of Khambhat and to ensure Coastal and
National Security.
6. VTPMS for the Gulf of Khambhat became operational in
August, 2010 after a completion certificate was issued by the
Gujarat Maritime Board. But in 2018 disputes arose regarding
the capital cost incurred by ANL. An expert committee was
appointed under Clause 18 of the agreement and they
submitted a report indicating a particular amount as the capital
cost.
7. But Gujarat Maritime Board claimed, on the basis of a
preliminary inspection report of the Principal Accountant
General that ANL made an extra income of Rs. 134.38 crores
during the financial years 2015-16 and 2017-18 and that the
said amount should be paid by ANL.
8. ANL moved the commercial court at Ahmedabad under
section 9 of the Arbitration and Conciliation Act, 1996, as there
was a threat of termination of the Concession Agreement. The
disputes were also referred to arbitration. Before the Arbitral
Tribunal constituted on 01.03.2019, both parties (ANL and
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Gujarat Maritime Board) moved applications under section 17
of the Arbitration and Conciliation Act.
9. However, on 01.05.2019, the Gujarat Maritime Board
lodged a complaint with the CID Crime, Gandhi Nagar Zone,
alleging that ANL was guilty of (1) inflation of cost (2) non
execution of certain works (3) creation of shell companies and
carrying out work through them (4) siphoning and round
tripping of funds through those companies (5) not carrying out
construction on the lands allotted for Master Control Room (6)
raising of false bills and forged invoices (7) managing the issue
of completion certificate through the then Superintending
Engineer and Chief Nautical Officer of the board and (8)
entering into a conspiracy with each other to exceed the
expenditure of the project upto Rs. 100 crores and committing
criminal breach of trust.
10. On the basis of the above complaint, a FIR bearing no. I-
I/5/2019 was registered on 26.6.2019 against eight named
accused, for alleged offences under sections 406, 409, 420,
465, 468, 471 and 120B of IPC and section 13(1)(d) of the
Prevention of Corruption Act. The appellant herein and his son
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and daughter were cited as A-1, A-2 and A-3 respectively, as
they happen to be the Directors of the Companies.
11. On 27.6.2019, the appellant and his son were arrested.
After being in police custody under orders of court, the
appellant was sent to judicial custody on 2.7.2019. Ever since
then, the appellant is in judicial custody. His bail application
was first rejected by the Sessions Court on 6.7.2019. Though
the appellant moved the High Court, he withdrew the
application on 6.8.2019 with liberty to move a fresh application
after the filing of the charge sheet. But, it is relevant to note
that the two officers of the Maritime Board who were also
implicated, were granted bail by the High Court.
12. A charge sheet was filed by the Investigating Officer on
21.9.2019, as against the appellant and the others. However,
no charge sheet was filed against the Officers of the Maritime
Board, as orders of sanction from the Government were awaited
at that time.
13. In view of the filing of the charge sheet, the appellant
moved a bail application before the Sessions Court but the
same was rejected on 3.10.2019. Therefore, the appellant
moved the High Court of Gujarat, which, by the order impugned
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in the appeal, dated 09-12-2019, dismissed the application.
However, the High Court gave liberty to the appellant to file a
fresh application before the Trial Court if the trial could not
commence within a period of six months. Incidentally, this
period of six months has now expired and the trial has not
commenced as yet.
14. Before proceeding further, it is to be noted that on
7.8.2019, the Arbitral Tribunal passed orders on the applications
under section 17 of the Arbitration Act (1) granting a stay of the
termination notice (2) directing ANL to deposit the entire
amount generated out of the VTPMS project in an escrow
account and to file a monthly report regarding the details of
deposits so made (3) permitting ANL to withdraw 25% of the
gross amount so deposited, to meet the overheads and to run
the project (4) permitting the State Police Personnel deputed at
the project site to continue without any interference with the
day to day functioning of the project except overseeing safety
aspects (5) permitting the Maritime Board to depute a
competent person to supervise and monitor the functioning of
the project (6) directing ANL not to encumber or dispose of the
plant and machinery and other valuable items and (7) directing
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ANL to pay Rs. 16,43,44,227/- to the Maritime Board payable
for the month of July, 2019.
15. As a result of the aforesaid interim measures ordered by
the Arbitral Tribunal, ANL continues to operate the project under
the Concession Agreement and the financial interests of the
Maritime Board stand protected by those directions.
16. In the background of the above facts, it is contended by
the learned Senior Counsel appearing for the appellant (1) that
a cloak of criminality has been given to a dispute of purely civil
nature (2) that the economic interests of the Board stand
protected by the interim measures granted by the Arbitral
Tribunal (3) that the appellant is a senior citizen having medical
complications and (4) that since the charge sheet has been filed
and the trial has not commenced, the continued incarceration
of the appellant is unjustified.
17. The prayer for bail is opposed by the State and the
Maritime Board, on the ground inter alia (1) that the very object
of the Concession Agreement was to establish Radar Stations to
monitor and identify infiltration by non-State vessels involved in
anti-national activities (2) that what is on hand is not just a civil
dispute but a huge financial scam (3) that the appellant is the
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brain behind such a scam involving round tripping of funds
through a maze of shell companies (4) that the matter involves
national security, which now stands threatened by the activities
of the appellant and the companies managed by him (5) that
the appellant has already started influencing the witnesses, by
sending gifts to the senior officers of the Maritime Board (6)
that under his pressure, two Chartered Accountants who had
earlier given statements, retracted (7) that even before the
report of the Forensic Sciences Laboratory could reach the
Investigating Officer, the appellant exhibited knowledge of its
contents, thereby showing his influence and power (8) that one
of the co accused is absconding and (9) that since many
witnesses for the prosecution are either the former or present
employees of the appellant or retired Government Officials,
they are vulnerable and hence the appellant’s request for bail
should be rejected.
18. We have carefully considered the pleadings, the
documents, the written notes of submissions and the issues
involved.
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19. At the outset, we should point out that the impugned
order of the High Court is dated 9.12.2019. The operative
portion of the order of the High Court is extracted as follows:
“ In view of the aforesaid discussion, I am not
inclined to exercise the discretion in favour of the
present applicant. Application is, therefore,
dismissed. However, liberty is reserved to the
applicant to file fresh application before the
concerned trial Court if the trial is not
commenced within a period of six months”.
20. Obviously, the period of six months within which the High
Court hoped the trial to commence, has expired as on date. The
appellant, who is admittedly 62 years of age has already spent
nearly a year in judicial custody. A period of nine months has
passed from the date of filing of the charge sheet. Though the
learned Solicitor General contended that the sanction to
prosecute has already been issued as against Government
Officials, the fact remains that charges have not been framed
and the trial has not commenced as yet.
21. The arguments revolving around the potential threat to
national security, cannot be sustained, for two reasons. The
first reason is that the project became operational in August-
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2010 and the disputes between the parties started only in 2018
and that too with regard to financial matters. The second
reason is that by virtue of the interim measures of protection
granted by the Arbitral Tribunal (comprising of a former Judge of
this court, a former Judge of the High court and a Senior
Advocate) in terms of section 17 of the Arbitration and
Conciliation Act, 1996, the termination of the Concession
Agreement stands stayed. Therefore, the Company of which
the appellant is the head, continues to operate the VTPMS
Project. In any case, the Arbitral Tribunal has not merely
protected the economic interests of the State, but also
permitted the State Police to be there at the project site. The
Tribunal has also allowed the Maritime Board to depute a
competent person, familiar with the project in question, to
supervise and monitor the functioning of the project. Therefore,
we cannot accept this contention blind fold.
22. Though much is said about the tempering of witnesses, it
is seen from the material on record that the prosecution rests
mainly on documents. In any case, the prosecution is not
remedyless, if a person enlarged on bail, indulges in certain
activities.
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23. Therefore, we are of the view that the appellant is
entitled to bail. Hence, the appeal is allowed and the appellant
is directed to be released on bail, subject to such terms and
conditions as the Sessions Court may deem fit and appropriate
in the facts and circumstances of the case, including a
condition for the surrender of the passport, which shall be
subject to orders passed by the Trial Court from time to time.
..…..…………....................J.
(Ashok Bhushan)
..…..…………....................J.
(M.R. Shah)
...…..………......................J.
(V. Ramasubramanian)
JUNE 19, 2020
NEW DELHI