New Delhi Sept 28(ILNS): The Supreme Court granted bail to Harshad Purshottam Mehta accused of the offenses punishable under Sections 406, 409, 420, 465, 467, 468, 471, 477(a), 120-B read with Section 34 of the Indian Penal Code, 1860.
The bench comprised of Justice L. Nageswara Rao, Justice Sanjiv Khanna, and Justice BR Gavai after hearing Mr. Arjun Garg counsel appearing on behalf of the petitioner and Mr. Rahul Chitnis counsel on behalf of the State of Maharashtra, at length, has observed that the petitioner is in jail since last six and half years and there is no likelihood of completion of trial in a reasonable time.
The bench has granted bail subject to the satisfaction of the trial court with some conditions that he has to surrender his passport, report to the local police regularly, and attend the trial proceedings against him on every occasion court asks to be present before the court.
Mr. Garg has submitted before the court that the charge sheet filed against him is consists of 10 volumes and there are 150 witnesses in the case to examine.
Mr. Chitins has opposed the bail of the petitioner on the ground that the petitioner was involved in academic offence and is accused of siphoning huge amount of money from the country.
In fact, the petitioner Harshad Purshottam Mehta has filed the present petition seeking his release on bail in FIR/Crime No.258 of 2014 registered at Amboli Police Station subsequently transferred to Economic Offences Wing challenging the order passed by the Bombay High Court wherein Court has rejected the bail application of the petitioner.
On the previous occasions the petitioner had filed multiple applications before the learned Magistrate and also before the learned Sessions Court, which was rejected on merits, principally, on the ground, the crime being economic offence, bail therein is to be treated differently as it constitutes class apart and is to be visited with a different approach.
In this case, the complaint was filed by Mr Tejpal Shah, Director of M/s. Red Eye Production Private Ltd. This company was holding shares of M/s. Ashtavinayak Cinevision Limited of which, the son of the petitioner is the Chairman and Managing Director. The complainant and the directors of the company were engaged in the business of producing and distributing feature films for which finance was provided by the complainant.
In 2011, a dispute arose between the complainant and the petitioners’ Company over the distribution of rights of a feature film ‘Rockstar’. A suit was subsequently filed by the complainant, who then culminated into arbitration proceedings and according to the Consent Terms the Company was directed to pay Rs 41 crores. However, barring cheques for the value of Rs.4.73 Crores, the rest were dishonoured upon presentation. Subsequently, the complainant has filed proceedings under Section 138 of the Negotiable Instruments Act.
The complainant and other 154 shareholders of the Company also filed a petition before the Company Law Board whereby the proceedings disclosed that the Managing Director of the company, Mr Dhilin Mehta had incorporated various sham companies, entered into bogus agreements and then transferred funds to overseas subsidiary companies, which were found misappropriated to the tune of Rs.824.68 Crores and had thereby cheated shareholders.
It is alleged that during the period April 2007 till March 2012, the company had raised Rs.134.97 Crores by issuing foreign currency convertible bonds; Rs.336.95 Crores by the issue of Equity shares; Rs.474.12 Crores from the banks, financial institutions and private parties.
It is the complainant’s case that the Chairman of the company had entered into agreements with bogus companies namely 1) Suryojit Enterprises Pvt. Ltd. 2) M/s. V.K.Entertainment 3) E Force India Pvt. Ltd. 4) M/s. Armaan Entertainment Private Ltd. and 5) M/s. Century Pictures and had paid an aggregate amount of Rs.296.25 Crores. Agreements entered into with these companies for producing feature films in the regional languages were sham and bogus.
It was further alleged that in the year 2008, a subsidiary company named Shri Ashtavinayak Cinevision FZE was incorporated in Dubai and as per the financial reports of the company for the year 2010-2011, an amount of Rs.444.53 Crores was transferred by the company to the said subsidiary company by way of loan. The said amount was further paid by the subsidiary company to five entities for producing a feature film. However, investigation shows, that feature films for which agreements were entered into were neither produced nor were the funds returned by the said subsidiary companies.
The investigation further revealed that from the bank accounts of the company, funds were transferred to the accounts of 24 individuals and their Demat accounts were opened by Mr Vipul Simaria on the instructions of the applicant and the money was used for the rigging share price of the Company. The statement of the Demat account holders recorded under Section 164 of the Code of Criminal Procedure, 1973. The Prosecution placed on record a summary of such accounts and the amount transferred to these accounts to the tune of Rs.663,53,10,992/-.
The High Court in its judgment rejecting the bail application of the petitioner stated that in the investigation, it was revealed that apart from equity shares, foreign currency convertible bonds, global depository receipts, the Company had also raised finance of Rs.663 Crores and the said loan amounts had been siphoned off to the bogus companies and thereafter to bogus Demat accounts for inflating shares of the said company. After artificially inflating the value of shares, the said Company obtained huge loans against the inflated value of its shares, fully knowing that the values of shares were dishonestly inflated.
The loan was raised to the sum of Rs.132,15,29,611/- was after a fraudulent transfer to the bank accounts of the bogus company. Thus, in consideration of the facts of the case and the evidence available on record and admittedly, a case being one classified as economic offences, in the view of the judge; the applicant was not entitled to seek the benefit of provisions of Section 436A of the Cr.P.C.
High Court rejected the application because the evidence brought on record justified the detention of the applicant in judicial custody for the period longer than he had already undergone./ILNS/KR/SNG