# Sujay Uday Desai v. C.B.I

- **Citation:** (2022) 9 ILRA 464
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-09-21
- **Case number:** Crl. Misc. Anticipatory Bail Application No. 1345 of 2022
- **Bench:** Brij Raj Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sujay-uday-desai-v-c-b-i-49074
- **Pages:** 16

## Headnote

(A) Criminal Law - Anticipatory Bail - issue
of economic offence - Indian Penal Code,
1860 - Sections 120B, 420, 467, 468, 471 -
Category B/D - on appearance of the
accused in the court pursuant to process
issued bail application to be decided on
merit. (Satender Kumar Antil Vs. Central
Bureau of Investigation & another) - case
of economic offences stand on a different
footing which affect the economic fabric
of the society and poses a serious threat
to the nation's economy and financial
integrity (P. Chidambaram Vs. Directorate
of Enforcement).(Para - 24,34)
9 All. Sujay Uday Desai Vs. C.B.I.
465
Matter pertaining to defrauded huge amount of
Rs.10.01 crores - specific allegation levelled
against applicant - looking after overall trade
and financial activities - company through its
directors in criminal conspiracy - accepted bogus
document presented before Indian Overseas
Bank (IOB).(Para - 34)

HELD:-In economic offences, the accused is
not entitled to anticipatory bail.(Para -24,35 )

Anticipatory bail application rejected. (E-7)

List of Cases cited:-

## Text

_Characters 0–39,996 of 52,214. This is a partial read: ask again with offset=39996 for what follows._

464 INDIAN LAW REPORTS ALLAHABAD SERIES
circumstances justifying grant of bail.
Noticing special feature, Court upheld
order of High Court granting bail.

35. Thus, the broad principles, which
are to be considered by this Court while
granting bail and when bail is already
granted but an application for cancellation
has come up for consideration, as discussed
above, show that there is no thumb rule in
both the situations. However, it is true that
factors relevant for grant of bail are
different and approach required to be
adopted while considering application for
cancellation of bail is different.

36. Liberty granted to accused -
respondent No.2 by enlarging him on bail
has been misused in view of the facts stated
on oath by the applicant, which are
uncontroverted since respondent No.2 has
chosen to opt for grant of bail by
concealing
material
fact
that
while
enlargement on bail he involved himself
into two criminal cases and to contest this
application. The conduct and nature of
violations on the part of respondent No.2,
has already been discussed above.

37. Looking into all the facts and
circumstances, this court is of the view that
here is a case in which it has clearly
substantiated that accused-respondent No.2
has misused the bail granted to him and,
therefore, it is justified to cancel the bail.

38. In the result, the application for
cancellation of bail is allowed.

39. The bail granted to accused -
respondent
No.2,
namely,
Pinku
@
Mustakeem @ Irfan Ahmad vide order of
this Court dated 18.08.2021 passed in
Criminal Misc. Bail Application No.8763
of 2021 in Case Crime No.157 of 2017,
under Sections 394, 397 and 411 IPC
registered at Police Station Asoha, District
Unnao, is hereby cancelled.

40. However, it is stated by learned
counsel for the parties that the accused -
respondent No.2 is in jail, however, if that
be not so, he shall surrender before
concerned
Chief
Judicial
Magistrate
positively by 19.09.2022, failing which, the
Chief Judicial Magistrate concerned shall
ensure his arrest and send him to jail.
----------
(2022) 9 ILRA 464
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 21.09.2022

BEFORE

THE HON'BLE BRIJ RAJ SINGH, J.

Crl. Misc. Anticipatory Bail Application No. 1345
of 2022

Sujay Uday Desai ...Applicant
Versus
C.B.I. ...Respondent

Counsel for the Applicant:
Nadeem Murtaza, Aditya Vikram Singh, Sheeran
Mohiuddin Alvi

Counsel for the Respondent:
Anurag Kumar Singh

(A) Criminal Law - Anticipatory Bail - issue
of economic offence - Indian Penal Code,
1860 - Sections 120B, 420, 467, 468, 471 -
Category B/D - on appearance of the
accused in the court pursuant to process
issued bail application to be decided on
merit. (Satender Kumar Antil Vs. Central
Bureau of Investigation & another) - case
of economic offences stand on a different
footing which affect the economic fabric
of the society and poses a serious threat
to the nation's economy and financial
integrity (P. Chidambaram Vs. Directorate
of Enforcement).(Para - 24,34)
9 All. Sujay Uday Desai Vs. C.B.I.
465
Matter pertaining to defrauded huge amount of
Rs.10.01 crores - specific allegation levelled
against applicant - looking after overall trade
and financial activities - company through its
directors in criminal conspiracy - accepted bogus
document presented before Indian Overseas
Bank (IOB).(Para - 34)

HELD:-In economic offences, the accused is
not entitled to anticipatory bail.(Para -24,35 )

Anticipatory bail application rejected. (E-7)

List of Cases cited:-

1. Bharat Chaudhary & anr. Vs St. of Bihar &
anr., (2003) 8 SCC 77

2. Siddharth Vs St. of U.P. & anr. , (2022) 1
SCC 676

3. Aman Preet Singh Vs C.B.I. through Director
(Criminal Appeal No.929 of 2021)

4. Satender Kumar Antil Vs C.B.I. & anr., (AIR
2022 SC 3386)

5. Satender Kumar Antil Vs C.B.I. & anr.; (2021
10 SCC 773)

6. Y.S. Jagan Mohan Reddy Vs CBI , (2013) 7
SCC 439

(Delivered by Hon'ble Brij Raj Singh, J.)

1. Supplementary affidavit filed today
is taken on record.

2. The present anticipatory bail
application has been filed on behalf of the
applicant in Criminal Case No.87600 of
2021 (CBI V. Globiz Exim Pvt. Ltd. &
Ors.) pending in the Court of Special
Judicial Magistrate - CBI, Lucknow arising
out of F.I.R. No.RC0532020E0004 of 2020,
under Sections 120-B, 420, 467, 468, 471
I.P.C. registered at Police Station CBI-SCB
Lucknow, District Lucknow with a prayer
to enlarge him on anticipatory bail.

3. The F.I.R. was lodged on
11.06.2020
bearing
F.I.R.
No.RC0532020E0004 of 2020, registered
by complainant, Sri Niranjan Panda, Chief
Regional Manager, Indian Overseas Bank,
Regional Office, Lucknow, under Sections
120B, 420, 467, 468, 471 I.P.C. at Central
Burau of Investigation, Special Crime
Branch, Lucknow (hereinafter referred to
as "CBI").

4. As per F.I.R., it is stated that M/s
Globiz Exim Private Limited had entered
into criminal conspiracy and the verbatim
of FiR is quoted below:-

"A complaint No.RO/CRM/2019-2020
dated 05.06.2020 have been received from
Sh. Niranjan Panda, Chief Regional
Manager, Indian Overseas Bank, Regional
Office, Lucknow requesting therein to
register FIR against M/s Globiz Exim Pvt.
Ltd, 402-403, Kalpana Plaza, 24/147B,
Birhana
Road,
Kanpur,
Shri
Arvind
Srivastava, Independent Director , M/s
Globiz Exim Pvt. Ltd., R/o BM 783,
Malviya Nagar-1st Floor, New Delhi; Sri
Saral Verma, Director, M/s Globiz Exim
Pvt. Ltd., R/o 3a/2017, Azad Nagar, Kanpur
and other unknown third parties which is
enclosed as Annexure of FIR Gist of the
allegations are that M/s Globiz Exim Pvt.
Ltd., Kanpur and it's Promoters/Directors
entered into a criminal conspiracy among
themselves
and
cheated
the
Indian
Overseas Bank to the tune of Rs.10.01
Crores by way of misrepresenting the facts
and diverting the funds extended by the
Bank in the form of loans/Letter of Credits.

Information discloses that M/s Globiz
Exim Pvt. Ltd. Having its registered office
at Kalpna Plaza, 24/147 B, Birhana Road,
Kanpur (UP) was enjoying various credit
facilities with Indian Overseas Bank under
multiple banking arrangements viz. Letter
466 INDIAN LAW REPORTS ALLAHABAD SERIES
of Credit (foreign) to the tune of Rs.2,000
crores; Letter of Credit on DP/180 days
comes for purchase of goods for trading to
the tune of Rs.128 crores etc. All the said
facitilites were sanctioned by the Indian
Overseas Bank, MCB, Central Office in the
year 2014 and 2016. M/s Globiz Exim Pvt.
Ltd. was incorporated as S.N.V. Trading
Pvt. Ltd. On 14 July, 2005, however, the
company later changed its name to M/s
Globiz Exim Pvt. Ltd. On 2.9.2009.
Initially, the company was engaged in
manufacturing of leather items from its
manufacturing plant at Jajmau at Kanpur
but later on, it concentrated in trading of
pluses
and
other
commodities
like
Laptop/Computers, Coal, Copper Cathode
etc.

M/s. Globiz Exim Pvt Ltd. and it's
Promoters/Directors with intent to cheat
the Bank, while availing the credit facilities
from the IOB, had fraudulently siphoned off
its funds through unsecured loans and
advances to as many as 34 parties without
any loan agreements or entering into any
formal contract with such parties. The
company duped the Bank by showing false
Merchanting Trade Transactions amongst
known
companies/customers.
The
documents purportedly issued by different
purchasers/suppliers were prepared by one
and the same person related to the
suspicious
Merchanting
Trade
Transactions. The borrower company has
further shown bogus local trades without
support of related documents to falsify its
Balance Sheet and mislead the Bank by
way of showing false inflated stock. The
account of the Company was classified Non
Performing Asset (NPA) on 30.9.2018 and
as on the date of NPA the total loss to the
Bank was Rs.10.01 crores.

The contents of the complaint dated
05.06.2020
prima
facie
discloses
commission of cognizable offences u/s 120B, 420, 467, 468, 471 I.P.C. and substantive
offences thereof against the aforesaid
accused persons. Hence, a Regular Case is
registered and investigation entrusted to
Sh. Sanjay Sharma, ASP, CBI, SCB,
Lucknow."

5. Learned counsel for the applicant
has submitted that though the charge sheet
has been filed in the present case but the
anticipatory bail application filed by the
applicant is maintainable in view of the
decision of the Hon'ble Supreme Court in
the case of Bharat Chaudhary and
another Vs. State of Bihar and another,
(2003) 8 SCC 77.

6. It has been further submitted that
the applicant is innocent and has not
committed the offence and he is not named
in the FIR. It has been next submitted by
learned counsel for the applicant that the
applicant
was
not
arrested
during
investigation, therefore, after filing of the
charge sheet, the applicant should not be
remanded to judicial custody and there is
no purpose to remand him because he had
cooperated in the investigation.

7. It has been further submitted on
behalf of the applicant that the goods was
transferred between the foreign seller,
Globiz and foreign buyer in that sequence
of the transaction of the business. The
transfer of title in goods was done by way
of endorsement in the bill of lading which
is the prevaling practice. On the import of
the transactions the bill of lading was
provided to Globiz by the foreign supplier.

8. Learned counsel for the applicant
has further submitted that in same subject
matter in respect of Flagship Company of
the Frost Group i.e. Frost International
Limited (FIL), SFIO and ED had initiated
9 All. Sujay Uday Desai Vs. C.B.I.
467
proceedings and the applicant was arrested
by both SFIO and ED. In both cases,
applicant had been granted regular bail by
the Hon'ble Supreme Court and by this
High Court respectively. It has been further
submitted that the applicant did not play
any role in preparation of document
relating to merchanting trade and allegation
of forgery cannot be attributed to the
applicant. It has been further submitted that
the merchanting documents were prepared
by the foreign parties and sent to Globiz in
India through the banks on acceptance.
After
acceptance
by
Globiz,
these
documents were then forwarded by the
banks to the foreign buyer for their
acceptance. Merchanting trade documents
were approved by multiple banks once on
the import leg of transaction and again on
the export leg of transaction but the
applicant did not prepare the document.

9. It has been further submitted that
the bank officials are not named as accused
in the present case. It has been submitted
that bank officials have checked and
verified the documents but they are not
made accused. It has been submitted that
there is no possibility of tampering with
evidence or influencing witnesses because
the documents have already been collected.
There is no question to influence the
witnesses in any manner, therefore, the
applicant may be enlarged on bail. Learned
counsel for the applicant has submitted that
the business was carried out as per RBI
guidelines. The transaction was done after
approving the multiple level cheques done
by the bank. In this regard, paragraph 44 of
the submission of the bail application is
quoted below:-

"44. That it is also submitted that the
MT business was carried out in line with
the extant RBI guidelines. As mentioned
earlier, these guidelines are issued under
FEMA, and banks, being authorized
persons under such law, are required to
ensure
compliance.
Once
the
entire
business
details
and
documentation
required for obtaining the credit facilities
were submitted to the banks, and the banks,
approved of the same and granted sanction,
it would be accurate to presume that the
RBI guidelines were satisfied. Further, no
show cause notice was ever issued by RBI
to the company regarding any noncompliance with the RBI guidelinses."

10. It has been further submitted that
there is no common directorship or any
shareholding between Globiz and the
foreign buyers ans sellers and merely
because the foreign parties were known to
each other as they worked with each,
therefore, it cannot be the basis of alleging
connivance.

11. Learned counsel for the applicant
has further submitted that the multiple
levels of scrutiny is not done through the
Foreign Bank and then Indian AD Bank
and as per the guidelines of the R.B.I.
documents were verified and then the
transaction has been completed. In this
regard, Paragraphs 48 and 49 of the bail
application are quoted below:-

"48. That it is also noteworthy that all
documents pertaining to MT transactions
undergo multiple levels of scrutiny, first
through the Foreign Bank and then through
the Indian AD Bank. While executing the
MT transactions, the Indian AD banks are
required to ensure that the terms and
conditions for LCs have been satisfied and
the MT documents presented by the
contracting parties are in compliance with
the said terms and conditions. As per the
guidelines of RBI, the Authorized Dealer
468 INDIAN LAW REPORTS ALLAHABAD SERIES
(''AD') Banks have to satisfy itself on the
genuineness of the trade (provided under
RBI Guidelines bearing reference "Master
Circular on Import of Goods and Services
(RBI/2013-14/13)" dated 01 July 2013
under instruction C.15). In case of MT
transactions of Globiz as well, the
Complaint Bank had duly verified the
documents and only upon being satisfied
that the documents are proper, processed
the payments to the foreign suppliers.

49. Thus, it is submitted that the MT
business of Globiz was perfectly legal,
bona fide and had commercial substance.
As explained above, the MT business
involved the buying and selling of goods
from genuine foreign parties without the
goods entering India. Over the years,
Globiz made substantial profits from such
business and paid substantial amounts
towards income-tax. In light of the above, it
is submitted that the allegations raised in
the FIR that the MT business of Globiz was
not genuine are completely erroneous and
baseless."

12. Learned counsel for the applicant
has
further
submitted
that
the
discrepencies, if any, were merely technical
and procedural in nature, therefore, it is no
ground to doubt the genuineness and
veracity of the transaction of the Globiz. In
this regard learned counsel for the applicant
has made averment in paragraph 80 of the
bail application.

13. Learned counsel for the applicant
has submitted that the contents of the
certificate
of
origin
were
correct.
Regarding the origin of the goods, it has
been further submitted that the certificate
of origin was issued by the foreign supplier
and the same was accepted by the banks
and this discrepancy was never considered
a major one. Once the certificate of origin
was issued by the foreign supplier can at
best be treated as a technical noncompliance and cannot be veracity of
transaction.

14. Learned counsel for the applicant
has further submitted that no offence under
Sections 120B, 420, 467, 468, 471 I.P.C. is
made out in the present case. It has been
further submitted that the business of
Globiz was a genuine and profitable
business which involved movement of
goods and transfer of title in the goods
between the goods and contracting parties.
It has been further submitted that funds
were utilized solely for the business
transaction and for the purpose for which
they were sanctioned by the banks. It has
been submitted by learned counsel for the
applicant that there is no evidence which
indicate that the bank funds were siphoned
or diverted.

15. It has been further submitted by
learned counsel for the applicant that the
business was regulated and the documents
were thoroughly scrutinized by the multiple
banks, hence, it can be concluded that the
transactions
were
executed
with
the
approval of all banks.

16. Learned counsel for the applicant
has relied upon the judgment of Siddharth
Vs. State of Uttar Pradesh and another
reported in (2022) 1 SCC 676; Aman
Preet Singh Vs. C.B.I. through Director
(Criminal Appeal No.929 of 2021);
Satender Kumar Antil Vs. Central
Bureau of Investigation & another, (AIR
2022 SC 3386); Satender Kumar Antil
Vs. Central Bureau of Investigation &
another; (2021 10 SCC 773).

17. He has also relied some
judgments in paragraph nos.92, 93, 94 &
9 All. Sujay Uday Desai Vs. C.B.I.
469
96 in the bail application which are
pertaining to different sections of the Indian
Penal Code, which has been invoked
against the applicant and as per his
argument the offence under Sections 120B,
420, 467, 468, 471 I.P.C. is not made out in
view of the aforementioned law by the
applicant.

18. On the other hand, Sri Anurag
Kumar Singh, learned counsel for the
C.B.I. has made following submissions on
the basis of instructions:-

19. It has been submitted that the applicant
is the Director and CEO of Frost
International Ltd. M/s Globiz Exim Pvt.
Ltd. is a company of the Frost Group
wherein the applicnat is a Shareholder,
Promoter and Incharge of the day-to-day
operations of company at Kanpur. The
Frost Group of companies are:-

(i) M/s Frost International Pvt. Ltd.

(ii) M/s Frost Infrastructure Pvt. Ltd.

(iii) M/s Globiz Exim Pvt. Ltd.

(iv) M/s Olympic Oil Industries Pvt.
Ltd.

(v) M/s Viva Merchant Pvt. Ltd.

20. The F.I.R. has been lodged in the
present case on the basis of the complaint
of Indian Overseas Bank.

21. It has been submitted that the
allegation in the FIR is that M/s Globiz
Exim Pvt. Ltd. was enjoying credit
facilities including an arrangement known
as Letter of Credit (hereinafter referred to
as "LC").

22. It has been further submitted
that it is admitted case of the applicant
that the total amount of defrauded by the
Frost
Group
of
Companies
is
approximately Rs.4000 crores. In the
present case, M/s Globiz Exim Pvt. Ltd.
Rs.10.01 Crores and M/s Olympic Oil
Industries Pvt. Ltd. Rs.6.67 Crores. It has
been submitted that investigation by CBI
in respect of the fraudulent activities
done by other two companies involving
the
credit
facilities
availed
are
in
progress.

23. Learned counsel for the CBI has
further made submission that as to how
Letter of Credit (LC) works:-

A. For availing LC, bank takes
securities from companies to the extent of
85-90% of the amount of which LC is
applied.

B. For merchanting business, there
has to be an exporter situated in a foreign
country from which the Indian Company
purchases the goods and there also has to
be an importer situated in a foreign
country that purchases the goods from the
Indian merchanting company.

C. After LC is established, the
information is given by the bank of the
applicant company to the bank of the
exporter company.

D. There is a facility called as
SWIFT messaging by means of which the
banks communicate.

E. For the release of the payment of
LC, the foreign bank has to sent certain
documents pertaining to the shipment to
the Indian Bank, i.e. Indian Overseas
Bank (IOB) in this case.

F. These documents certify the
genuineness of the transaction and in case
there is some discrepancy, the documents
are provided to the Indian party.

G. Documents contain Container No.,
Name of the Shipping Co., Name of the
Ship,
Name
of
Port
of
Dispatch,
Description of goods, etc.
470 INDIAN LAW REPORTS ALLAHABAD SERIES

H. When the exporter dispatches
consignment, he provided the documents to
his own bank to be sent to the Indian Bank.

I. The Indian bank examines the
documents and if they are in order, LC is
released and if there is some discrepancy,
they are provied to the Indian party for
verification.

Submissions of Counsel for C.B.I.:-

24. Sri Anurag Kumar Singh, learned
counsel for CBI has explained as to how
the transaction has been done in the present
case:-

A. Documents were found discrepant
by Indian Overseas Bank.

B. The applicant's party accepted the
discrepancy/forged documents and asked
the bank to release the payment to the
Foreign Bank which in turn would release
it to the alleged exporter based at
Singapore. This is despite the fact that the
documents on the face of it are forged.
(page 135 of bail application)

C. The goods were directly shipped to
Hong Kong.

D. Ironically, M/s Fareast Distribution
based
at
Singapore
and
M/s
Gulf
Distribution Ltd. based in Hong Kong are
both controlled by one person named
Rajesh Bothra.

E. So, the same person cannot sell the
goods at a lower rate and purchase the
same goods at a higher rate through the
company of the applicant.

F. In the present case, there was no
transaction, and no goods were exported or
imported. .

G. Therefore, no payment was made
from M/s Gulf Distribution Pvt. Ltd. to the
applicant as in fact no export or import
took place.

H. Since, the bank takes only 85-90%
securities against LC, therefore, loss of 1510% has been caused to the bank because
of the false transaction and forgery of the
documents.
I. Shiphoning of public money has been
done in systematic manner by all the
member companies of the Frost Group
controlled by the applicant, causing a
planned theft of public money.

J. The offences committed by:

(i) M/s Frost International Pvt. Ltd. are
being investigated by Delhi Banking
 Securities and Fraud Branch);

(ii) M/s Frost Infrastructure Pvt. Ltd.
are being investigated by CBI/ACB,
Lucknow; and
(iii) M/s Globiz Exim Pvt. Ltd.; M/s
Olympic Oil Pvt. Ltd. and M/s Viva
Merchant Pvt. Ltd. are being investigated
by CBI/SCB, Lucknow.

K. It is the admitted case of the
applicant that he was looking after the
financial affairs of the company.

L. PMLA case has also been registered
against the applicant in which he has been
granted regular bail. (order page 95 of bail
application).

M. SFIO also registered a case against
the applicant for offences committed under
Companies Act in which he has been
granted regular bail. (order page 117 of bail
application).

N. Payment adjustment window is 180
days, that has been exploited by the
applicant for making huge amount of loss
by making several transactions one after
the other.

O. The offence is grave and such
offenders have fled the country in the past,
as such the applicant is not entitled to bail.

P. The applicant has been chargesheeted under Sections 120-B, 420, 467,
468 and 471 I.P.C. in the present case.
9 All. Sujay Uday Desai Vs. C.B.I.
471

Q. The Hon'ble Supreme Court in the
case of Satender Kumar Antil Vs. Central
Bureau of Investigation and another,
reported in 2022 SCC online 825 has issued
some guidelines for granting bail in cases
where charge sheet has already been filed
and accused was not arrested during
investigation.
According
to
these
guidelines, the present case falls under
category B/D. For the category B/D which
involves the offences punishable with
imprisonment for life, the Hon'ble Supreme
Court has directed that "on appearance of
the accused in court pursuant to process
issud bail application to be decided on
merits".

R. It is well settled that economic
offences stand as a different class as they
affect the economic fabric of the society
and poses a serious threat to the nation's
economy and financial integrity, and
therefore in economic offences, the accused
is not entitled to anticipatory bail, as
observed by the Hon'ble Supreme Court in
P.
Chidambaram
Vs.
Directorate
of
Enforcement reported as (2019) 9 SCC 24.

25. The charge sheet filed by C.B.I.
has been annexed by the applicant as
Annexure no.7 to the bail application. The
relevant portion of the charge sheet
regarding Letter of Credit no.148/18 is
extracted here-in-below:-

"After establishment of LC, the IOB
Mall Road Branch, Kanpur had received
documents viz. Bill of Lading; Certificate of
Origin;
Packing
List;
Beneficiary
Certificate and Pre Shipment Certificate
from Bank of India, Singapore. The Branch
on receipt of documents had scanned the
copies
of
the
said
document
and
transmitted the same to the CFEPC
Chennai
on
24.11.2017
for
import
lodgement under LC 148/2017. Since the
Bill of Lading and Certificate of Origin
were discrepant in terms of the conditions
of the LC, the CFEPC Chennai issued an
Advise of Refusal (SWIFT 734) dated
27.11.2017 and refused to honour the
documents on the grounds that the BL was
issued prior to LC and the Certificate of
Origin was issued by the Beneficiary iteself
instead of Chamber of Commerce. The
CFEPC had further observed that they
were holding the documents until it receive
waiver from the applicant or receives
further instructions from the Bank of India,
Singapore.

In the meantime, the Branch had
supplied a set of documents to the
company, received from Bank of India,
Singapore. The company vide letter dated
24.11.2017 accepted the documents despite
of discrepancies and given an undertaking
to make the payment under the said LC by
its due date. After accpetance of documents
by the Company, the CFEPC had accepted
the import under LC No.148/2017 vide
SWIFT 754 ON 29.11.2017.

Before the due date of payment, the
company vide letter dated 21.05.2018 had
requested the Branch to make payment of
USD 3232174 to M/s Fareast Distribution
& Logistics Pte. Ltd., Singapore by way of
creating a Temporary Over Draft (TOD) as
there was a short fall in its current account.
The
company
had
also
given
an
undertaking that the TOD would be cleared
by the next 10 days.

After creating a TOD, a payment of
USD 3232174 (equivalent Rs.21.15 Crores)
was made to the Bank of India, Singapore
for crediting the account of M/s Fareast
Distribution
&
Logistics
Pte.
Ltd.,
Singapore as per the terms and conditions
of the LC. However, the company as per its
undertaking did not adjust the TOD.

Facts emerged during the course of
investigation
472 INDIAN LAW REPORTS ALLAHABAD SERIES

1.
As
per
IOB
circular
No.
FX/96/2014-15
dated
20.02.2015,
an
insurance policy should not be later than
the date of issuance of Bill of Lading.
However in the present case, the Insurance
Certificate dated 21.11.2017 was issued
after the issuance of Bill of Lading dated
18.11.2017 which is contrary to the
guidelines of the Bank.

2. As per the terms and conditions of
the Letter of Credit No.148/2017 as
mentioned in SWIFT 700 (Issueance of a
Documentary Credit) bearing Sequence
No.288796 dated 21.11.2017 (Page No.4448 MR No. 17/20 SL No.15), at Additional
conditions No.47-A' transport documents
must not be dated prior to the date of this
Credit". Further, as per the guidelines as
well as procedure laid down by the bank, a
Bill of Lading under an LC, is issued after
execution of a Contract between the Seller
and the Buyer as well as establishment of
an LC by the concerned bank. In the
instance case, the Bill of Lading dated
18.11.2017 was issued earlier than the
Contract
No.
FEGE2111/17487
dated
21.11.2017. It is pertinent to mention here
that as per the Bill of Lading dated
18.11.2017, the freight was "shipped on
board" on 13.11.2017 meaning thereby that
the goods under the said Contract were
dispatched on 13.11.2017 i.e. much before
the commencement of the Contract dated
21.11.2017 as well as establishment of LC
No.148/2017 dated
21.11.2017.
It
is
therefore apparent that the freight dated
13.11.2017 under Bill of Lading dated
18.11.2017 was not covered under the
contract
No.
FEGE2111/17487
dated
21.11.2017 and LC No.148/2017 dated
21.11.2017.

3.
The
Bill
of
Lading
No.
SZAELM11221394/1F dated 18.11.2017
issued by the Landmark Clearing &
Forwarding LLC, Dubai in favour of M/s
Globiz Exim Pvt. Ltd., Kanpur is having a
reference
of
Sales
Contract
No.FAGE2111/17487
(IOB)
dated
21.11.2017 and also the documentary credit
No.047860117000148 dated 21.11.2017.
Thus, the BL issued on 18.11.2017 was
having references of such documents i.e.
sales contract and documentary credit
which were not in existeance as on
18.11.2017. Therefore, the bill of lading
dated 18.11.2017 issued by the Landmark
Clearing & Forwarding LLC in favor of
M/s Globiz Exim Pvt. Ltd., Kanpur is a
bogus document.

4.
Likewise,
a
Pre
Shipment
Certificate dated 13.11.2017 shown to have
been issued by M/s Enlight Corporation
Ltd., Hong Kong, received by the IOB, Mall
Road
Branch,
Kanpur
alngwith
the
transport documents is having reference of
Contract
No.
FEGE2111/17487
dated
21.11.2017
(not
in
existence
as
on
13.11.2017). Therefore, the said document
cannot be termed as a genuine document
rather the same was bogus document.

5. As per the terms & conditions of the
Letter of Credit No.148/2017 as mentioned
in SWIFT 700 (Issue of a Documentary
Credit) bearing Sequence No.288796 dated
21.11.2017 (Page No.44-48 MR No.17/20
SL No.15), at Additional Conditions No.46A "Certificate of Origin in duplicate issued
by a Chamber of Commerce or Attested by
a Chamber of Commerce" was to be
forwarded by Bank of India, Singapore to
the IOB, Mall Road Branch, Kanpur. In the
instant case, a Certificate of Origin dated
21.11.2017 (Page No.27 MR No.17/20 SL
No.15) was not issued by a Chamber of
Commerce or Attested by a Chamber of
Commerce rather the same was issued by
the Seller M/s Fareast Distribution &
Logistic Pte Ltd. Singapore itself.
6. As per the Bill of Lading No.
SZAELM11221394/1F dated 18.11.2017,
9 All. Sujay Uday Desai Vs. C.B.I.
473
the Shipment was shipped on board on
13.11.2017
in
a
Vessel
"Cape
Artemisio/004W" at Shekou port, China in
a container bearing No. NYKU9819056.
The said Bill of Lading was shown to have
been issued by M/s Landmark Clearing &
Forwarding LLC on behalf of the carrier
"NYK". During the course of investigation,
a copy of the said Bill of Lading was sent to
M/s NYK Line (India) Pvt. Ltd., Mumbai to
confirm whether the said Bill of Lading was
issued by it or M/s Landmark Clearing &
Forwarding LLC on behalf of M/s NYK
Line (India) Pvt. Ltd. With reference to the
letter No.1832 dated 21.09.2020 of the
CBI, SCB, Lucknow, M/S NYK Line (India)
Pvt. Ltd., Mumbai vide letter dated
06.10.2020 has informed that the Bill of
Lading No. SZAELM11221394/1F dated
18.11.2017
covering
container
NYKU9819056 was not an NYK document.
This fact further establish that the bill of
lading
No.SZAELM11221394/1F
dated
18.11.2017 shown to have been issued on
behalf of M/s NYK was not a genuine
document.

7. As per the documents submitted by
the company with the IOB, Mall Road
Branch, Kanpur for establishment of a
Letter of Credit, the company had to import
the goods viz computer accessories from
M/s Fareast Distrbution & Logistic Pte
Ltd., Singapore and to export the same
consignment to M/s Gulf Distribution Ltd.,
Hong Kong at Dubai.

Investigation in respect of M/s Fareast
Distribution & Logistic Pte Ltd., Singapore
has revealsed that the said company was
incorporated under the Territory of the
British Virgin Islands on 31.08.2012 by Ms.
Ooi Ai Ling. The said company has been
maintaining
an
account
No.JPY7111000197 with Punjab National
Bank, Des Voeux Road, Central, Hong
Kong
since
December,
2012.
Since,
opening of the said account, the authorized
signatory to the said bank account was Shri
Rajesh Bothra, General Manager having
Passport Number E0614726E. By virtue of
being General Mangar having Passport
Number E0614726E. By virtue of being
General Manager and single Authorized
Signatory of the said company Shri Rajesh
Bothra was looking after the overall
activities of M/s Fareast Distribution &
Logistic Pte Ltd Singapore. As per the bank
records, M/s Fareast Distribution &
Logistic
Pte
Ltd
was
having
a
correspondence address at 13/F, Block-A,
Wah Kit Commercial Centre, 302, Des
Voeux Road, Central Hong Kong.

Investigation in respect of M/s Gulf
Distribution Ltd, Hong Kong has revealed
that the company was maintaining a JPY
account
no.7111000198
with
Punjab
National Bank, Des Voeux Road, Central,
Hong Kong. The Charirman of the said
company as well as Authorized Signatory to
the account no.JPY7111000198 of PNB,
Hong Kong was Shri Rajesh Bothra. He
was
holding
a
Singapore
passport
No.E0614726E. The said account was
opened on 03.05.2011. As per the Bank
records, M/s Gulf Distribution Ltd, Hong
Kong
was
having
a
correspondence
address
at
13/F,
Block-A,
Wah
Kit
Commercial Centre, 302, Des Voeux Road,
Central Hong Kong.

In view of the facts mentioned above it
is established that M/s Fareast Distribution
& Logistic Pte Ltd, Singapore and M/s Gulf
Distribution Ltd, Hong Kong are not only
the sister concern companies but also
owned by the same person namely Shri
Rajesh Bothra. Further both the companies
were having the same common address i.e.
13/F, Block-A, Wah Kit Commercial Centre,
302, Des Voeux Road, Central Hong Kong.
Therefore, the claim of the company that it
had purchased/imported the goods from
474 INDIAN LAW REPORTS ALLAHABAD SERIES
M/s Fareast Distribution & Logistic Pte.
Ltd, Singapore and sold/exported the same
to M/s Gulf Distribution Ltd, Hong Kong
was
just
an
adjustment
of
the
entries/funds."

26. The fact which has emerged
during the course of investigation and
which is part of charge sheet is also
important which is quoted below:-

"As per the terms and conditions of the
Letter of Credit No.05/2018 as mentioned
in SWIFT 700 (Issue of a Documentary
Credit) bearing Sequence No.304176 dated
08.01.2018 (Page No.48-53 MR No.17/20
SL No.16), at Additional Conditions No.46A "Certificate of Origin in duplicate issued
by a Chamber of Commerce or Attested by
a Chamber of Commerce" was to be
forwarded by Canara Bank, Hong Cong to
IOB, Mall Road Branch, Kanpur. In the
instant case, a Certificate of Origin dated
21.11.2017 (Page No.44 MR No.17/20 SL
No.16) was not issued by a Chamber of
Commerce or Attested by a Chamber of
Commerce rather the same was issued by
the Seller M/s Fareast Distribution &
Logistic Pte Ltd., Singapore itself.

A Packing List for export of a
consignment is always issued before the
shipment of that particular consignment.
Whereas, in the instant case, a Packing List
was issued on 09.01.2018 (Page No.31 MR
No.17/20 SL No.16) i.e. after the issuance
of a Bill of Lading dated 08.01.2018.

As per the documents submitted by the
company with the IOB, Mall Road Branch,
Kanpur for establishment of a Letter of
Credit, the company had to import the
goods viz computer accessories from M/s
Fareast Distribution & Logistic Pte Ltd,
Singapore
and
to
export
the
same
consignment to M/s Gulf Distribution Ltd,
Hong Kong at Dubai.

Investigation in respect of M/s Fareast
Distribution & Logistic Pte Ltd, Singapore
has revealed that the said company was
incorporated under the Territory of the
British Virgin Islands on 31.08.2012 by Ms.
Ooi Ai Ling. The said company have been
maintaining
an
account
No.JPY7111000197
with
the
Punjab
National Bank, Des Voeus Road, Central,
Hong Kong since December, 2012. Since,
opening of the said account, the authorized
signatory to the said bank account was Shri
Rajesh Bothra, General Manager having
Passport Number E0614726E. By virtue of
General Manager, Shri Rajesh Bothra
being single authorize signatory was
looking after the overall activities of M/s
Fareast Distribution & Logistic Pte Ltd,
Singapore. As per the Bank records, M/s
Fareast Distribution & Logistic Pte Ltd
was having a correspondence address at
13/F, Block-A, Wah Kit Commercial Centre,
302, Des Voeus Road, Central Hong Kong.

Investigation in respect of M/s Gulf
Distribution Ltd, Hong Kong has revealed
that the company was maintaining a JPY
account
no.71110001998
with
Punjab
National Bank, Des Voeux Road, Central
Hong Kong. The Chairman of the said
company as well as authorized signatory to
the account no.JPY7111000198 of PNB,
Hong Kong was Shri Rajesh Bothra. He
was
holding
a
Singapore
passport
No.E0614726E. The said account was
opened on 03.05.2011. As per the Bank
records, M/s Gulf Distribution Ltd, Hong
Kong
was
having
a
correspondence
address
at
13/F,
Block-A,
Wah
Kit
Commercial Centre, 302, Des Voeus Road,
Central Hong Kong.

It is therefore established that M/s
Fareast Distribution & Logistic Pte Ltd,
Singapore and M/s Gulf Distribution Ltd,
Hong Kong are sister concerns companies
owned by Shri Rajesh Bothra. Further both
9 All. Sujay Uday Desai Vs. C.B.I.
475
the companies were having the same
common address i.e. 13/F, Block-A, Wah
Kit Commerical Centre, 302, Des Voeus
Road, Central Hong Kong. Therefore, the
claim of the company that it had
purchased/imported the goods from M/s
Fareast Distribution Logistic Pte Ltd,
Singapore and sold/exported to M/s Gulf
Distribution Ltd, Hong Kong was just an
adjustment of the entries/funds.

In view of the facts and circumstances
of the case, it is established that M/s Globiz
Exim Pvt. Ltd and its directors namely
Arvind Srivastava and Saral Verma were
the actual benericiary out of the defrauded
amount of Rs.10.01 Crores. The company
through its directors in criminal conspiracy
with each other as well as Sujay Desai in
order to cheat the IOB had accepted
discrepant/bogus document knowing fully
well that the same were bogus and that
there was no movement of the goods as
reflected in the documents presented before
the IOB, Kanpur. Further , the company
with malafide intention and with intent to
cheat
the
bank
had
accepted
that
discrepant papers received under the
alleged LCs despite of the facts that the
same were not in accordance with terms of
the contracts/LCs which is evident from the
Bill of Lading; Certificate of Origin;
Packing List; Pre Shipment Certificate etc.
More so, the documents like Bill of lading
and Pre Shipment Certificate were bearing
the references of alleged LCs which were in
existence as on the dates of issuance of
such Bls/Pre Shipment Certificates.

As regard the role of Sujay Desai is
concerned, he was looking after the overall
trade and financial activities of the Frost
Group of Companies including M/s Globiz
Exim Pvt. Ltd. He used to contact Sujay
Desai, a citizen of Singapore for imports of
goods from M/s Fareast Distribution &
Logistic Pte. Ltd, Singapore and export of
the same goods to M/s Gulf Distribution
Ltd. under alleged LCs. Sujay Desai in
India
and
Rajesh
Bothra
in
Hong
Kong/Singapore used to play pivotal role in
the questioned matter. He was also aware
that LCs were got realized without any
actual import/export business.

M/s Fareast Distribution & Logistic
Pte. Ltd is based at Hong Kong and was
responsible for procuring the alleged
documents viz. Bill of lading, Packing List,
Certificate of Origin, Invoice, Pre Shipment
Certificate etc. under both the alleged
Letters of Credit no.148/2017 and 05/2018,
which were found to be bogus.

M/s Gulf Distribution Ltd. is based at
Hong Kong. The export under the alleged
Letters of Credit shown to have been made
to this company. As per the investigation,
both M/s Gulf Distribution Ltd. (Importer
of goods under alleged LCs) and M/s
Fareast Distribution & Logistic Pte. Ltd,
Hong Kong (Exporter of goods under
alleged LCs) were controlled by one and
the same person namely Rajesh Bothra.

M/s
Landmark
Clearing
&
Forwarding LLC is based at Dubai. This
company alleged to have issued Bills of
Lading under the alleged Letters of Credit.
As per the investigation, the Bills of Lading
purportedly issued by the said company
were bogus.

Further investigation is kept open u/s
173(8) Cr.P.C. to ascertain the role of
overseas
companies
M/s
Fareast
Distribution & Logistic Pvt. Ltd.; M/s Gulf
Distribution Ltd.; M/s Landmark Clearing
& Forwarding LLC and Shri Rajesh
Bothra.

Further investigation is also kept open
u/s 173(8) Cr.P.C. to ascertain the role of
Bank Officials, IOB, Mall Road, Kanpur
and CFEPC Officials of IOB, Chennai who
had processed and accepted the discrepant
documents under the alleged LCs.
476 INDIAN LAW REPORTS ALLAHABAD SERIES