S.K.SAHOO, J. -
(1.) The petitioner Shrikant Mohta earlier knocked the doors of this Court for bail in an application under section 439 of the Code of Criminal Procedure in BLAPL No.1983 of 2019 in connection with R.C. Case No. 39/S/2014-Kol dated 05.06.2014 corresponding to SPE Case No. 34 of 2014 pending on the file of Special C.J.M. (C.B.I.), Bhubaneswar which was rejected as per order dated 13.05.2019. After submission of charge sheet against the petitioner on 22.05.2019 for commission of offences punishable under sections 420, 409 read with section 120-B of the Indian Penal Code and sections 4, 5 and 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (hereafter '1978 Act'), he has again approached this Court for bail after his prayer for bail before the learned Sessions Judge, Khurda at Bhubaneswar in Bail Application No.854 of 2019 was rejected vide order dated 18.06.2019.
(2.) The present case was instituted by clubbing three First Information Reports of three different cases i.e. Buguda P.S. Case No.75 of 2013, Jeypore Town P.S. Case No.71 of 2013 and Nuapada P.S. Case No.82 of 2013 in pursuance of the order dated 09.05.2014 of the Hon'ble Supreme Court of India passed in W.P. (Civil) No.401 of 2013 filed by Shri Subrata Chattoraj and W.P. (Civil) No.413 of 2013 filed by Shri Alok Jena. According to the prosecution case, Rose Valley Group of Companies (hereafter for short 'Rose Valley') collected huge amount of money from public enticing them with false promise of paying higher rates of interest although Rose Valley was not having any authorization from the Reserve Bank of India (hereafter for short 'RBI') or the Securities and Exchange Board of India (hereafter for short 'SEBI') for carrying out such activities and therefore, the company cheated the public.
Investigation revealed that 'Rose Valley Resorts and Plantations Limited, Kolkata' was founded in the year 1997 and in the year 2002, SEBI imposed ban on the teak based investment schemes which the company was carrying out, for which the schemes floated were stopped. The company was renamed as 'Rose Valley Hotel and Entertainment Limited' in the year 1999. Two more companies in the name of 'Rose Valley Real Estates Constructions Limited' and 'Real Estate and Landbank India Ltd.' were founded subsequently in the year 1999 and 2001 which were registered with the Registrar of Companies (hereafter for short 'ROC'). Rose Valley started expanding its spheres and a lot of new companies were formed in between 1997 to 2012. The accused persons, namely Gautam Kundu, Chairman of Rose Valley, Shibamoy Dutta, Managing Director, Ashok Kumar Saha and Ram Lal Goswami, Directors of Rose Valley in furtherance of criminal conspiracy by establishing branches of the companies in different parts of India, collected money from the public through multi-level agent network system. They cheated the investors/depositors by way of camouflaged schemes and false assurance about legal sanctity and false promise of higher rates of interest. The accused persons also cheated the depositors as well as the agents by making false assurance that the accused companies were legally empowered to collect money from the public. They were running ponzi schemes and circulating the money collected from the depositors which was not disclosed to the depositors and agents. The accused persons made false propaganda that Rose Valley is having a big business empire and diversified business. They fraudulently claimed that the money collected from the depositors would be invested in those businesses and with the help of high returns from those companies, they would be able to pay back to the depositors their invested money with interest on maturity. The accused persons deceived the depositors and deliberately induced them to invest their hard-earned money in the accused companies. It further revealed from the scrutiny of the balance sheet of all the companies of Rose Valley that almost all the companies were making loss and old depositors were paid by using money of the new depositors since there was no income generated by the companies from any source. It further revealed that the total business model of Rose Valley was commercially unrealistic/unviable and it was not in a position to pay to its depositors the promised higher rates of interest and therefore, it was just rotating the money. Rose Valley not only collected thousand of crores of rupees illegally from the depositors by cheating them but they did not utilize the same for the purpose for which the money was invested. The accused persons did not return the money of lakh of depositors and thereby committed criminal breach of trust. The total money collection of Rose Valley according to the database up to the financial year 2012- 13 was Rs.1471,18,81724/- (rupees fourteen hundred seventy one crores eighteen lakhs eighty one thousand seven hundred twenty four only).
On 06.01.2016 first charge sheet was submitted against accused Gautam Kundu, Shibamoy Dutta, Ashok Kumar Saha, Ram Lal Goswami and three Rose Valley Companies under sections 420, 408, 409, 120-B/34 of the Indian Penal Code and sections 4, 5 and 6 of 1978 Act keeping the further investigation open under section 173(8) of Cr.P.C. for ascertaining the role of regulatory agencies like SEBI, ROC and RBI and other agencies and also other influential persons involved in it and for probing the larger criminal conspiracy and money trailing.
During course of further investigation, the roles of Tapas Paul and Shri Sudeep Bandyopadhyay, both Members of Parliament were examined and it was found that both the accused allowed their stature to be used to allure the investors, agents and in return, they also gained wrongfully. In order to promote the illegal money collection business of Rose Valley, they grossly abused their respective official positions and overtly certified the business of Rose Valley and their presence with the company bestowed confidence in the minds of agents and investors about the credential of the company. Thus, the two accused M.Ps. also deceived the investors to deposit money in the Rose Valley, cheated them and misappropriated the money in conspiracy with other accused persons.
On 26.04.2017 second charge sheet was submitted under sections 420 and 409 read with section 120-B of the Indian Penal Code and sections 4 and 6 of 1978 Act and section 13(2) read with section 13(1)(d) of the Prevention of Corruption Act, 1988 against the M.Ps. Tapas Paul and Shri Sudeep Bandyopadhyay and others keeping the further investigation open to look into the role of the regulatory authorities, larger criminal conspiracy and money trailing.
During course of further investigation, materials were found against accused Ramesh Gandhi, who was the Managing Director of M/s. Rainbow Productions Limited. It was found that having full knowledge that Rose Valley was collecting money from the general public in an illegal manner and their activities were under the scanner of law enforcement agencies, accused Ramesh Gandhi, who was a producer of T.V. programmes and was in electronic media business entered into business relation with accused Gautam Kundu and an agreement was executed to protect illegal money collection business of Rose Valley and to gain wrongfully. The said accused Ramesh Gandhi projected himself to be keeping control over the media channels/ newspapers of Assam for protecting the business of Rose Valley. Huge amount was paid to M/s. Rainbow Productions Ltd. towards the release of advertisements of the company from the account of Rose Valley.
On 15.05.2018 third charge sheet was submitted against accused Ramesh Gandhi, M/s. Rainbow Productions Ltd. and M/s. Aarambh Advertising and Marketing Ltd. under section 120-B read with sections 420 and 409 of the Indian Penal Code and sections 4 and 6 of 1978 Act keeping the further investigation open.
During course of further investigation, it was found that the petitioner is the Founder Director of M/s. Shree Venkatesh Films Private Limited (hereafter 'SVFPL'). SVFPL entered into an agreement with a sister concern of Rose Valley, namely, M/s. Brand Value Communication Ltd. (hereafter 'BVCL') on 07.04.2010 for supplying the telecast rights of seventy Bengali films for an amount of Rs.25 crores to be broadcasted through the satellite channel of BVCL namely 'Rupashi Bangla'. During telecast of Bengali films, publicity of Rose Valley was made in the T.V. channel owned by Rose Valley for alluring the investors to make investment which reflected the real purpose behind the agreement for supply of seventy Bengali films to BVCL. Nineteen films supplied by SVFPL to BVCL amounting to Rs.6.84 crores were found to be technically not viable and as such those films were returned to SVFPL but the amount of Rs.6.84 crores was not returned back by SVFPL to BVCL.
Investigation further revealed that BVCL lodged a First Information Report against SVFPL and its employees on 16.11.2011 at Baguiati Police Station, Kolkata in which charge sheet was submitted against all the F.I.R. named accused persons including the petitioner. The said charge sheet was challenged by the petitioner and other accused persons before the Hon'ble Calcutta High Court and the Hon'ble Court quashed the charge sheet. BVCL challenged the matter before the Hon'ble Supreme Court which upheld the decision of the Hon'ble Calcutta High Court. Finally, as it was found that the SVFPL had not supplied nineteen technically feasible films to BVCL, in an arbitration proceeding, the learned Arbitrator vide order dated 13.06.2018 awarded a payment of Rs.6.84 crores by SVFPL to BVCL. The award amount of Rs.6.84 crores passed by the learned Arbitrator was not paid by SVFPL. Investigation further revealed that the petitioner and accused Gautam Kundu, Chairman of Rose Valley entered into a criminal conspiracy amongst themselves to misappropriate the public fund illegally collected by the Rose Valley on the garb of an agreement for telecast right of films to the BVCL. The illegal financial business activities of the Rose Valley Group of companies namely Rose Valley Real Estates and Constructions Ltd., Rose Valley Resorts and Plantations Ltd. (subsequently renamed as 'Rose Valley Hotels and entertainments Ltd.'), Real Estates and Landbank India Ltd. were banned by SEBI by its orders in the year 2002 and during 2010-11 respectively. The same was widely publicised through media. The petitioner having full knowledge of banning of the activities of Rose Valley by the regulatory authority SEBI, entered into an agreement with BVCL. The petitioner through his company SVFPL purchased paintings from an exhibition held in Kolkata during 2011-13 for a declared amount of Rs.15 lakhs from 'Jago Bangla'. According to the prosecution, the amount which was received by SVFPL from BVCL was the money collected by the Rose Valley Group of companies from the depositors by deceiving them with assurance of getting higher returns without the permission of RBI. The money so collected was diverted by the Rose Valley to its sister concern BVCL which was further diverted to the accounts of SVFPL. It is the case of the prosecution that the petitioner belonged to the community of media and he was supposed to have the knowledge of the banning of the activities of the Rose Valley by the regulatory authority SEBI and in spite of that the petitioner's company SVFPL entered into an illegal agreement with BVCL. During course of investigation, as the petitioner did not cooperate with the investigation and prima facie case relating to his involvement in the crime was made out, he was arrested and forwarded to Court on 25.01.2019.
After rejection of the earlier bail application of the petitioner by this Court in BLAPL No.1983 of 2019, charge sheet was submitted against the petitioner on 22.05.2019 under sections 420, 409 read with section 120-B of the Indian Penal Code and sections 4, 5 and 6 of the 1978 Act.
In the charge sheet dated 22.05.2019, it is mentioned that SVFPL was registered with Registrar of Companies (ROC), Kolkata, West Bengal. The company was renamed as M/s. SVF Entertainment Private Ltd. (hereafter 'SVEPL') on 16.03.2017. The Directors of the company were the petitioner, Sri Mahendra Suni, Shri Bishnukanta Mohta and Sri Jeeban Das Mohta. The main object of the company was to carry out the business of exhibition, distribution of cinema TV, video films and production of cinema TV, Video cassettes etc. Investigation revealed that since the company M/s Rose Valley Resort and Plantation was indulged in illegal deposit collection business, SEBI had banned the collection of deposits in the name of M/s. Rose Valley Resorts and Plantation Ltd. vide order dated 24.02.2002. SEBI had also directed the M/s. Rose Valley Resorts and Plantation Ltd. to refund the money collected under the schemes within one month from the date of the order. The order passed by the SEBI was uploaded in the public domain. In compliance with the order of the SEBI dated 24.02.2002, M/s. Rose Valley Resorts and Plantation Ltd. wind up the CIS Scheme and repaid money to the investors. Subsequently during an enquiry by SEBI started from 08.01.2010, the company M/s. Rose Valley Real Estate and Construction Ltd. was also found to be engaged in running "Collective Investment Scheme" and soliciting money from the public in the name of plot selling without having any permission from the SEBI. In order to prevent the activities of M/s Rose Valley Real Estate and Constructions Ltd, SEBI banned the business of the company vide order dated 03.01.2011 and the said order was also uploaded in public domain and published in the newspaper "The Times of India" dated 19.05.2013 for the awareness of general public. Investigation further revealed that though SEBI had banned the company M/s. Rose Valley Resort and Plantation Limited, accused Gautam Kundu, Chairman of M/s. Rose Valley Group continued with illegal deposit collection business with an intention to cheat the public by changing the name of the company M/s. Rose Valley Resorts and Plantation Ltd. to M/s. Rose Valley Hotels and Entertainment Ltd. in the year 2007. In addition to that, with an intention to promote the illegal chit fund business of M/s. Rose Valley Group and to divert the money received from public, accused Gautam Kundu set up media business in the name of M/s. Rose Valley Films Ltd. and BVCL. To carry on the media business with the ulterior motive to promote illegal chit fund business, accused Gautam Kundu wanted to purchase some good films and telecast those films through 'Rupashi Bangla' Channel of BVCL. Investigation further revealed that the petitioner was the chief promoter of SVFEPL which was engaged in production and distribution in the field of media, music, digital cinema, exhibition since 1996. Though Shri Mahendra Soni, Jeewan Das Mohta and Shri Vishnukant Mohta were also the directors of SVFEPL, all the decisions were taken by the petitioner since he was the main director of the company. Despite being in the world of media, the petitioner was closely associated with the Managing Director of M/s. Rose Valley Group who was none else than accused Gautam Kundu and despite having knowledge about the illegal business activities of the Rose Valley Group, he entered into the business alliance which was in the nature of criminal conspiracy to divert the ill-gotten money in the guise of commercial ties.
Investigation further revealed that before entering into an agreement with BVCL, the petitioner and Mahendra Soni, both directors of SVFEPL company had joined in a meeting with accused Gautam Kundu, Shri Satyajit Saha, Director and Shri Kranti Kumar, staff of BVCL at Hotel Taj on 26.01.2010 and in the said meeting, accused Gautam Kundu on behalf of Rose Valley Group and the petitioner on behalf of SVFEPL discussed to promote the actual business i.e Chit fund business of M/s Rose Valley in the garb of business opportunity. In the said meeting, accused Gautam Kundu disclosed about his actual chit fund business in the name of M/s Rose Valley to the petitioner. He further requested the petitioner to promote his media business by supplying good films produced by SVFPL since during the relevant period of time TRP of SVFPL was very high in comparison to other production houses. Accused Gautam Kundu disclosed that his company's actual source of income was deposit collection from the public and he wanted to invest the said money in the media business for branding and promotion of his chit fund business. The petitioner knowing the facts that accused Gautam Kundu was doing illegal chit fund business by collecting the deposits from the public in the name of M/s. Rose Valley agreed to enter into an agreement and other business alliance with accused Gautam Kundu and finally both agreed mutually and decided the agenda vide item numbers 1, 2 and 3 of the minutes of the meeting which was sent by Mahendra Soni on behalf of SVFPL. In a said meeting, Shri Satyajit Saha, Shri Kranti Kumar of BVCL and Mahendra Soni were present. Investigation further revealed that agenda item no. 1 was the film deal i.e. M/s. Rose Valley principally agreed to acquire satellite right of seventy films from SVFPL for a period of three years. Agenda item no.2 was the fiction show i.e. SVFPL agreed to produce one fiction show for M/s. Rose Valley for 9 p.m. slot. Rose Valley had suggested launching the show by the end week of February. Further, M/s. Rose Valley approved the concept given by SVFPL and for the said fiction show, M/s. Rose Valley would provide the shooting floor. Agenda item no.3 was the film distribution and M/s. Rose Valley had asked SVFPL to distribute all their upcoming films and Shri Kranti Kumar was to further coordinate with SVFPL on the way forward.
Investigation further revealed that the petitioner as Director of SVFPL had entered into a criminal conspiracy with accused Gautam Kundu to promote the illegal chit fund business in the garb of business transaction with BVCL in spite of knowing the facts that M/s. Rose Valley Group was indulged in an illegal business activities i.e deposit collection from the public which was already banned by the SEBI in the year 2002 and in furtherance of that, an agreement dated 07.04.2010 was signed by Shri Mahendra Soni, Director on behalf of SVFPL and Shri Satyajit Saha, Director on behalf of BVCL for films assignment of sole and exclusive satellite television broadcasting rights in respect of seventy films through its channel 'Rupashi Bangla' at mutually agreed consideration amount of twenty five crores.
Investigation further revealed that as soon as the agreement was signed, total consideration amount of rupees twenty five crores after deducting a sum of Rs.2.5 crores on account of Tax Deducted at source (TDS) i.e Rs 22.50 crores was paid by accused Gautam Kundu to the petitioner by issuing cheques under his own signatures. The total amount of Rs 22.50 crores was debited from the account of BVCL. The said amount was diverted by accused Gautam Kundu in the account of BVCL from M/s. Rose Valley Real Estate and Constructions Ltd. During the relevant period of transaction i.e. 03.04.2010 to 01.07.2010, the major amount credited into the account of BVCL was from M/s. Rose Valley Real Estate and Construction Ltd. (Group Company of M/s. Rose Valley). The Rose Valley Real Estate and Constructions Ltd. was collecting investment from the public in an illegal manner for which the company was banned by the SEBI vide order dated 03.01.2011 and later on 06.01.2016 this company was charge sheeted by C.B.I. in this case. Investigation established that the amount received by SVFPL was actually the ill-gotten money invested to Rose Valley Real Estate and Constructions Ltd. which was transferred to BVCL by accused Gautam Kundu. Investigation further revealed that an amount of rupees nine crores was paid by BVCL by way of a cheque credited on 28.06.2010 in the account of SVFPL (TV and Studio Division). Another cheque for rupees nine crores was credited on 24.04.2010 in the account of SVFPL and another cheque for Rs 4.5 crores was credited on 05.05.2010 in the OD account of SVFPL.
Investigation further revealed that the petitioner did not supply films in spite of full payment received for supply of the films. Out of the seventy films, SVFPL finally supplied only fifty one films and the remaining nineteen films remained unsupplied which showed the actual attitude and intent of the said Company. The petitioner intended to receive the ill-gotton money in the garb of a genuine business deal/agreement but investigation established that by entering into a criminal conspiracy in the form of a business deal with accused Gautam Kundu, the petitioner conspired to cheat the general public since the amount received by him on the guise of the business transaction was the public money.
Investigation further revealed that apart from the film assignment agreement, to promote the chit fund business of M/s Rose Valley Group, SVFPL and BVCL had also entered into another agreement on 23.05.2010 to produce TV Serial "Suhashini" by SVFPL for BVCL @ Rs.1,45,000/- + Service Tax per episode and the said TV Serial was telecasted from 'Rupashi Bangla' channel of BVCL. Further, BVCL also provided shooting floor to SVFPL for the shooting of said TV serial.
Investigation further revealed that in order to bring more and more advertisers for telecasting their advertisements during the intervals of movies of SVFPL, one brochure was designed by using SVF logo and 'Rupashi Bangla' logo so that the advertisers might know that the films of SVFPL, a reputed production house which was known for production of quality films would be shown in the television channel of BVCL. The brochure was shown to the intending advertisers so that they could subscribe their advertisements during the programme which would increase the revenue and prestige of BVCL. Further, in the 'Rupashi Bangla' channel of BVCL, the advertisement of Rose Valley was used to be shown on a regular basis. By such agreement, SVFPL helped BVCL to enhance their revenue generation and also their prestige.
Investigation further disclosed that some differences between BVCL and SVFPL culminated into registration of F.I.R. No.689 of 2011. Finally, SVFPL and its inmate along with two employees of BVCL were charge sheeted. However, the said proceeding was quashed by the Hon'ble Calcutta High Court. Investigation further disclosed that in respect of alleged amount of said agreement dated 07.04.2010 which was the subject matter of the said proceeding, it was not surfaced at that time that the said amount was actually the misappropriated property of the general public invested with M/s. Rose Valley Real Estate and Constructions Ltd. Accordingly, C.B.I. while tracing the trail of money ascertained that SVFPL and its directors had conspired to misappropriate the fund of ill-gotten money. Though in the Baguiati P.S. case, the aggrieved party was BVCL but in the instant case, the aggrieved parties are poor and gullible investors and the public at large. In Baguiati P.S. case, whether the money involved was actually the money invested by poor investors or not, was never investigated.
Investigation further revealed that till 2010-11, the M/s. Rose Valley Group of companies had already raised funds to the tune of Rs.5357,92,82,699/- illegally. The payments made to SVFPL by BVCL was nothing but the investments made by gullible investors illegally collected by M/s. Rose Valley Group. The petitioner despite being a high profile person in the world of media, maintained his relationship with the Managing Director of M/s. Rose Valley Group and entered into business alliance with him, in spite of having fine knowledge about the illegal business activities of the M/s. Rose Valley Group. It is further stated that the illegal act of the companies, conspiracy angle for promoting the chit fund business under the guise of film supply, production of TV Serial, all these factual criminal angles were not placed before the Hon'ble High Court and instead of that, only agreement part was highlighted for treating the matter as civil in nature.
Investigation further revealed that a Divisional Bench of Calcutta High Court appointed an Arbitrator to decide the dispute between BVCL and SVFPL. During the arbitral proceedings, the learned Arbitrator compensated BVCL for the loss of title rights to telecast nineteen films for which it had paid and accordingly, taking average valuation of each film, compensation was awarded to the tune of Rs.6.84 crores to be paid by SVFPL to BVCL along with an interest @ 8% per annum w.e.f. 06.08.2013 to 13.06.2018 and further interest of 9% was directed to be levied on the awarded amount plus the interest amount from 14.06.2013 till the date of actual payment which was to be paid by SVFPL.
(3.) The earlier bail application of the petitioner was rejected by this Court considering the nature and gravity of the accusation, strong prima facie case available against the petitioner to show his involvement in the economic offence committed by Rose Valley, likelihood of tampering with the evidence when the investigation was at a crucial stage and several bank accounts of the petitioner and his company were under scrutiny to trace out any further money transactions with Rose Valley and above all in the larger interest of society.;