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HIGH COURT OF DELHI
NISHANT MUTTREJA & SUSHANT MUTTREJA (CURRENTLY IN JUDICIAL CUSTODY) ..... Petitioner(s)
Through: Mr.Pramod Kumar Dubey, Sr.
Advocate with Mr.Apoorv Agarwal, Mr.Vaibhav Manu
Srivastava, Ms.Divya, Ms.Nikita and Ms.Shikha Khurana, Advocates.
Through: Ms.Rupali Bandhopadhya, ASC with Mr.Akshay Kumar and
Mr.Abhijeet Kumar, Advocates for State with Insp.N.K.Singh, PS
EOW.
Mr.Kalyan Dutt, Advocate for complainant.
Signing Date:16.12.2022 16:42
JUDGMENT
1. Both petitioners are facing trial in various FIRs registered with Economic Offences Wing (EOW) and had filed the present bail application(s). The allegations against the present applicants are as under:
(i) M/s Cosmic Structures Ltd., (Company/Cosmic Group), was not the rightful owner of the lands on which projects were raised.
(ii) The Company was not having necessary permission / NOCs to raise the projects.
(iii) The Company was not having any approval of Noida/Greater
(iv) Construction of the projects was very slow and the company did not hand over Units to the customers.
(v) The Company did not pay the Assured Return as promised by them.
(vi) The Company siphoned off the booking amount collected by them.
2. It is submitted the applicant has been roped in the FIRs for the sole reason they were discharging their duties in the capacity as directors but now have spent about five to six years in imprisonment in each FIR. It is stated under Section 420 IPC the imprisonment is extendable upto seven years; under Section 406 IPC the imprisonment is extendable upto three years with fine and for the offences under Section 409 IPC the imprisonment is extendable upto ten years plus fine or life.
3. Reference was made to Sections 29(1) and 325 Cr.P.C. to show the manner in which the trial and conviction under Section 409 IPC is done and the punishment if it is to be granted by the learned ACMM exceeding three/seven years.
4. It is the submission of the learned senior counsel for the petitioner the total amount allegedly cheated in the present FIR is approximately Rs.148.00 crores. Admittedly, out of the said amount, a sum of Rs.76.00 crores have been invested; Rs.29.00 crores and Rs.4.50 crores is lying in subsidiary companies which amount admittedly stood frozen by the Investigating Officer and thus only Rs.38.70 crores is the alleged cheated amount. It is submitted before the NCLT various efforts are being made by the petitioners to revive the schemes and one such scheme No.01/2020 was rather filed on 19.08.2019, but objections were filed by interested parties. On 06.04.2022 the Company Court ordered since the ex-directors of the company are in judicial custody it is difficult to accept the exmanagement would be in a position to sustain any viable scheme. The accused company also propounded a scheme with M/s.Good Living Infrastructure Pvt. Ltd. (Bhutani Group) in October, 2020 vide company appeal no.631/2020 which proposed to invest an amount of Rs.300 crores and also proposed an option to the customers to get a unit in Bhutani’s project in exchange. The accused company propounded yet another scheme with M/s.Renowned Buildtech Pvt. Ltd. vide Company Appeal no.76/2021 who proposed to invest an amount of Rs.50.00 crores and collaborate with the company for development of two projects but no order has since been passed.
5. The customer’s association also propounded a scheme with M/s.Alpha Corp. in October, 2020 vide C.A.(Main) No.02/2020 who proposed to invest Rs.100 crores by taking loan on properties of liquidating companies but such scheme was also dismissed vide order dated 26.04.2022 stating interalia the essential rationale of the scheme is to realize the value of the assets of the liquidating company and there was no upfront payment.
6. Various other schemes were also filed by M/s.Cosmic Unit Buyers Association and Cosmic Victims Association but were not accepted. It is also the case of the petitioners they had given the assured returns to customers till March, 2015.
7. On the other hand the learned ASC for the State has alleged the applicant/accused being directors were running group of companies with a sole object to cheat the investors. They opened various shell companies to siphon off the funds and were the directors in those companies as well. They have caused material damage to the economy and the trust required in order to ensure other legitimate projects to continue and have not taken suitable and concrete steps to revive the plan; as nothing is visible on ground, the application for bail was opposed. It was argued these are economic offences and whatever may be the length of their custody, the accused should not be granted bail in these type of offences.
8. The learned counsel for the complainant also argued there are 6000 investors who had invested their lifetime savings in the residential and commercial projects of the company but were put to loss and hence bail be not granted. He relied upon State of Bihar vs. Amit Kumar in CRL.A.767/2017 which read as under:
9. The learned counsel for the complainant referred to an order dated 06.04.2021 passed in BAIL APPLN.1133/2019 wherein the application of the accused was dismissed on account they were economic offenders. He also argued the schemes introduced by the petitioners were rejected by the Court in CO.APPL.76/2021 vide order dated 06.04.2022 as none of the management members could supervise it since all were in jail. Reference was also made to BAIL APPLN.1212/2016 decided on 18.10.2016 of a builder wherein the applicant were accused of siphoning off around Rs.600 crores and illegally benefiting from the complainants’ money on false pretext of providing lucrative returns. It is argued on 15.12.2021 an order was passed in Cr.Case6978/2021 by the learned CMM whereby disposing off an application under Section 173(8) Cr.P.C. for further investigation. It is stated not even a single penny has been handed over to the victims and as such they be not granted bail.
10. Heard.
11. As per the SFIO chargesheet the company had taken booking amount from customers totaling to Rs.524.16 crores and had utilized the funds for construction purposes totaling to Rs.422.85 crores after reducing the total expenditure by Rs.23.45 crores, Rs.17.34 crores and Rs.27.96 crores on account of transfer to profit and loss account on percentage completion method, the total expenditure is Rs.491.60 crores against receipt of Rs.524.16 crores.
12. A small asset worth Rs.29.00 crores is stated to be still available in subsidiary companies of CSL which details are given in CSL revival scheme dated 19.08.2019 submitted in the company Court. The SFIO report contain figures given by a government valuer and it notes total booking amount received was Rs.547.38 crores, including revenue recognised as Rs.23.22 crores and thus the net receipt is to Rs.524.16 crores.
13. Thus, whatever was received, it is alleged maximum was spent on the construction. The petitioner are still inclined to co-operate with the investors and time and again are giving various schemes to revive the projects.
14. The status report dated 27.09.2022, filed by prosecution read as under: “a. to b. xxx c. The alleged Petitioners/promoters of all the 06 projects of M/S Cosmic group collected approx. Rs. 524 Crore (Secured Creditors) from 6000 victims and Rs.6.94 Cr. from other sources (Unsecured Creditors). The total amount comes to be approximately Rs. 531 Crore. Further, expenditure incurred based on the surveyor's report (Government Approved Valuer) attached with the SFIO investigation report comes to be Rs. 506.74 Crore including Land Cost & Development/Direct Cost, Indirect Expenditure (Assured Return), Commission and Other Indirect Expenditure. Therefore, after deducting the amount of expenditure of Rs 506 74 Crore from the total money collected from victims, there is difference of approx. Rs. 40 Crore which is still to be traced. As per the investigation conducted so far by the Economic Offences Wing. New Delhi and as per the investigation conducted by SFIO(Serious Fraud Investigation Office), it is evident that the alleged Petitioners/promoters diverted the funds collected for construction and development of the 06 projects into the 30 associated/sister concerns/companies”
15. Further, the Status Report dated 31.10.2022 inter alia read as under:- During investigation, notice was sent to the directors of the accused company M/s Cosmic Structures Private Limited to provide the relevant documents. They joined the investigation on 28.10.2022 and provided the following documents/information:-
1) Valuation report of Mr.B.P.Singh, Govt. Approved Valuer dated 30.07.2019 hired by the accused company and Balance Sheet of the accused company. A joint statement of Mr.Vikas Raj Sharma and Mrs.Ravneet Muttreja wa also received in which they stated that the total amount received was of Rs.524 Crores while Rs.795 Crore was still to be collected from the customers, who had booked units in all the projects of accused company. As per that statement, a total amount of Rs.1319 crore was payable by investors in all, out of which 39.73% (i.e. Rs.524 Crore) had been actually paid to the company of the petitioners.
16. In Paresh Nathalal Chauhan vs. State of Gujarat SLP (CRL.)9458-59/2021 the Hon’ble Supreme Court held as under: On conspectus of the aforesaid matter, we are of the view that the appellant cannot be indefinitely detained in custody more so having already undergone a period of 25 months of custody when he can be sent behind bars for maximum five years. It is almost 50% of the sentence. Complaint has been filed. xxxxxxx In view of the aforesaid facts and circumstances, we are inclined to grant bail to the appellant on terms and conditions to the satisfaction of the Trial Court. We have put to learned counsel for the appellant that the appellant must be careful not to indulge in any such activities in the future.”
17. Further in Satender Kumar Antil vs. Central Bureau of Investigation SLP (CRL.) 5191/2021, the Hon’ble Supreme Court held as under:
19. Further in Suresh Kalmadi vs. Central Bureau of Investigation ILR (2012) II Delhi 630, the accused was granted bail when the offence was under Section 467 IPC which punishment is similar to Section 409 IPC.
20. In Ashish Naithani vs. State of Govt. of NCT of Delhi (2021) SCC OnLine Delhi 4400, the Court held as under:
21. Sunder Singh Bhati vs. State 2022 SCC OnLine Delhi 134 was a case of multi victim scam of over 900 victims who were cheated of about Rs.240 crores and the Court held as under:
22. Further in RE: Policy Strategy for Grant of Bail in Sou Moto Writ Petition (Crl.) 04/2021 decided on 14.09.2022, the Court held as under: “It is pointed to us that in the letter dated 10.6.2022 referred to aforesaid, the benchmark has been fixed as two third of the completed sentence but then we are of the view that 50% completed sentence would sub-serve the purpose and individual States will be taking their own call even qua the category of prisoners to whom the benefit can be given and not necessarily confined to the guidelines annexed to the letter dated 10.6.2022.”
23. Further in Dilip Singh vs. State of Madhya Pradesh and Another in CRL.A.53/2021 decided on 19.01.2021, the Court held as under: “5. It is well settled by a plethora of decisions of this Court that criminal proceedings are not for realization of disputed dues. xxxx”
24. Admittedly, the chargesheet has since been filed; the trial has not yet begin; there are numerous witnesses to be examined and it would take years to examine them; there is no possibility of dropping of evidence; the petitioners are not at flight risk as their passports have since been surrendered; they were earlier released on interim bail and did not misuse their liberty and have been in judicial custody for the last more than five years; the applicability of Section 436A Cr.P.C.; all evidence being documentary and in custody of Investigating Officer; hence, tempering is ruled out as is already in the sole custody of the State. Further the accused have been giving various schemes, including of upfront payments, though not accepted as they being in jail. Further admittedly, the applicants have already been granted bail in three other FIRs pending adjudication before the District Court, Gautam Buddha Nagar, Greater Noida, Uttar Pradesh, thus, in view of the law discussed above viz. Satender Kumar Antil (supra) Sunil Shakt (supra) and others, as also the facts stated above more specifically in paras 11, 12, 13, 24 above; I admit both the accused to bail on their furnishing personal bond of Rs.5.00 lacs each with one surety each of like amount to the satisfaction of the learned Trial Court in each of the FIR. The petitioners are directed to keep their mobile location app open at all time. They shall not leave the country without permission of the learned Trial Court and shall not threaten/coerce/influence the complainants/victims in any manner lest it shall be a ground for cancellation of bail.
25. The petitions stand disposed of along with pending application(s).
26. A copy of this order be communicated to the learned Trial Court/Jail Superintendent for information and compliance.
YOGESH KHANNA, J. DECEMBER 16, 2022