# 13 (ADDL.) S.C.R. 309 SANJAY CHANDRA v. CBI

- **Citation:** [2011] 13 S.C.R. 309
- **Court:** Supreme Court of India
- **Decided:** 2011-11-23
- **Case number:** Criminal Appeal No. 2178 of 2011
- **Bench:** G.S. Singhvi, H.L. Dattu
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/13-addl-s-c-r-309-sanjay-chandra-v-cbi-27279
- **Pages:** 38

## Headnote

CODE OF CRIMINAL PROCEUDRE, 1973:
A
B
s. 439 - Bail - Governing principles - Explained -
C
Telecom scam - Applications for bail rejected by Special
Judge and High Court - Held: No doubt, the offence alleged
against the accused is a serious one in terms of alleged huge
loss to the State exchequer, that, by itself, should not deter
the Court from enlarging them on bail when there is no o
serious contention of the prosecution that the accused, if
released on bail, would interfere with the trial or tamper with
evidence - It is also significant that the investigation has
already been completed and the charge sheet has been filed
before the Special Judge and, as such, custody of the
E
accused may not be necessary for further investigation -
Further, when the under trial prisoners are detained in jail
custody to an indefinite period, Article 21 of the Constitution
is violated - Every person, detained or arrested, is entitled to
speedy trial - In the instant case, there are seventeen F
accused persons - Statements of the witnesses run to several
hundred pages and the documents on which reliance is
· placed by the prosecution, is voluminous - The trial may take
considerable time and the appellants, who are in jail, have to
remain in jail longer than the period of detention, had they G
been convicted - It is not in the interest of justice that the
accused should be in jail for an indefinite period - Therefore,
the accused are entitled to the grant of bail pending trial on
stringent conditions in order to ally the apprehension
expressed by the prosecution - The accused are directed to
309
H
310
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A be released on bail on the conditions stipulated in the
judgment - Constitution of India, 1950 - Article 21 - Doctrine/
Principle - Test of necessity.
Prosecution was launched against the appellants for
B commission of offences punishable uls 120-B, 420, 468,
471 and 109 IPC and s. 13(2) read with s. 13(1) (d) of the
Prevention of Corruption Act,1988. Bail was refused to
them by the Special Judge CBI as well as by the Single
Judge of the High Court. In the Instant appeals, it was,
C inter alia, contended for the appellants that they were
cooperating with the investigation all through out, that
there was no threat from them of tempering with the
witnesses; that gravity of the offence would be
determined by the punishment and not by any other
standard or measure and, in the instant case, the
D offences alleged against the appellants are punishable
with a maximum sentence of 9 years; and that the charge
sheet in the case has been filed and the trial is likely to
take considerable time to be concluded. Therefore, it was
contended that the courts below should not have
E declined bail to the appellants. The stand of the
prosecution was that the Supreme Court had refused to
entertain the special leave petition against the order
rejecting the bail of the co-accused.
F
Disposing of the appeals the Court
HELD: 1. In the earlier petition of the co-accused*, the
petitioner therein was before this Court before framing of
charges by the trial court. The earlier and the instant
proceedings cannot be compared and it cannot be
G concluded that there are no changed circumstances.
[para 12] [327-B-C]
H
•sharad Kumar etc. vs. Central Bureau of Investigation
2012 (1) sec 65 - distinguished.
SANJAY CHANDRA v. CBI
311
2.1 This Court, time and again, has stated that bail is
A
the rule and committal to jail an exception. It is also
observed that refusal of bail is a restriction on the
personal liberty of the individual guaranteed under Article
21 of the Constitution. [para 16) [329-F-G]
B
State of Rajasthan v. Balchand, 1978 (1) SCR 535 =
(1977) 4 SCC 308, Gudikanti Narasimhulu v. Public
Prosecutor, 1978 (2) SCR 371 = (1978) 1 SCC 240,
Gurcharan Singh v. State (Delhi Admn.) 1978 (2) SCR 358 =
(1978) 1 sec 118, Babu Singh v. State of U.P., 1978 ( 2) c
SCR 777 = (1978) 1 sec 579, Moti Ram v. State of M. P.,
1979 ( 1 ) SCR 33

## Text

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[2011] 13 (ADDL.) S.C.R. 309
SANJAY CHANDRA
v.
CBI
(Criminal Appeal No. 2178 of 2011)
NOVEMBER 23, 2011
[G.S. SINGHVI AND H.L. DATTU, JJ.]
CODE OF CRIMINAL PROCEUDRE, 1973:
A
B
s. 439 - Bail - Governing principles - Explained -
C
Telecom scam - Applications for bail rejected by Special
Judge and High Court - Held: No doubt, the offence alleged
against the accused is a serious one in terms of alleged huge
loss to the State exchequer, that, by itself, should not deter
the Court from enlarging them on bail when there is no o
serious contention of the prosecution that the accused, if
released on bail, would interfere with the trial or tamper with
evidence - It is also significant that the investigation has
already been completed and the charge sheet has been filed
before the Special Judge and, as such, custody of the
E
accused may not be necessary for further investigation -
Further, when the under trial prisoners are detained in jail
custody to an indefinite period, Article 21 of the Constitution
is violated - Every person, detained or arrested, is entitled to
speedy trial - In the instant case, there are seventeen F
accused persons - Statements of the witnesses run to several
hundred pages and the documents on which reliance is
· placed by the prosecution, is voluminous - The trial may take
considerable time and the appellants, who are in jail, have to
remain in jail longer than the period of detention, had they G
been convicted - It is not in the interest of justice that the
accused should be in jail for an indefinite period - Therefore,
the accused are entitled to the grant of bail pending trial on
stringent conditions in order to ally the apprehension
expressed by the prosecution - The accused are directed to
309
H
310
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A be released on bail on the conditions stipulated in the
judgment - Constitution of India, 1950 - Article 21 - Doctrine/
Principle - Test of necessity.
Prosecution was launched against the appellants for
B commission of offences punishable uls 120-B, 420, 468,
471 and 109 IPC and s. 13(2) read with s. 13(1) (d) of the
Prevention of Corruption Act,1988. Bail was refused to
them by the Special Judge CBI as well as by the Single
Judge of the High Court. In the Instant appeals, it was,
C inter alia, contended for the appellants that they were
cooperating with the investigation all through out, that
there was no threat from them of tempering with the
witnesses; that gravity of the offence would be
determined by the punishment and not by any other
standard or measure and, in the instant case, the
D offences alleged against the appellants are punishable
with a maximum sentence of 9 years; and that the charge
sheet in the case has been filed and the trial is likely to
take considerable time to be concluded. Therefore, it was
contended that the courts below should not have
E declined bail to the appellants. The stand of the
prosecution was that the Supreme Court had refused to
entertain the special leave petition against the order
rejecting the bail of the co-accused.
F
Disposing of the appeals the Court
HELD: 1. In the earlier petition of the co-accused*, the
petitioner therein was before this Court before framing of
charges by the trial court. The earlier and the instant
proceedings cannot be compared and it cannot be
G concluded that there are no changed circumstances.
[para 12] [327-B-C]
H
•sharad Kumar etc. vs. Central Bureau of Investigation
2012 (1) sec 65 - distinguished.
SANJAY CHANDRA v. CBI
311
2.1 This Court, time and again, has stated that bail is
A
the rule and committal to jail an exception. It is also
observed that refusal of bail is a restriction on the
personal liberty of the individual guaranteed under Article
21 of the Constitution. [para 16) [329-F-G]
B
State of Rajasthan v. Balchand, 1978 (1) SCR 535 =
(1977) 4 SCC 308, Gudikanti Narasimhulu v. Public
Prosecutor, 1978 (2) SCR 371 = (1978) 1 SCC 240,
Gurcharan Singh v. State (Delhi Admn.) 1978 (2) SCR 358 =
(1978) 1 sec 118, Babu Singh v. State of U.P., 1978 ( 2) c
SCR 777 = (1978) 1 sec 579, Moti Ram v. State of M. P.,
1979 ( 1 ) SCR 335 = (1978) 4 SCC 47, Vaman Narain
Ghiya v. State of Rajasthan, 2008 (17) SCR 369 =(2009) 2
SCC 281, and Siddharam Satlingappa Mhetre v. State of
Maharashtra, 2010 (15) SCR201 = (2011) 1 SCC 694D
relied on.
2.2 It would be quite contrary to the concept of
personal liberty enshrined in the Constitution of India that
any person should be punished in respect of any matter,
upon which, he has not been convicted or that in any
E
circumstances, he should be deprived of his liberty upon
only the belief that he will tamper with the witnesses if left
at liberty, save in the most extraordinary circumstances.
[para 14) [328-B-C]
2.3 In bail applications, generally, it has been laid
F
down from the earliest times that the object of bail is
neither punitive nor preventative, but to secure the
appearance of the accused at his trial by reasonable
amount of bail. Deprivation of liberty must be considered
G
a punishment, unless it can be required to ensure that an
accused will stand his trial when called upon. The courts
owe more than verbal respect to the principle that
punishment begins after conviction, and that every man
is deemed to be innocent until duly tried and duly found
H
312
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A guilty. From time to time, necessity demands that some
un-convicted persons should be held in custody pending
trial to secure their attendance at the trial but in such
cases, 'necessity' is the operative test. [para 14] [327-GB
H; 328-A-B]
Prahlad Singh Bhati v. NCT, Delhi, 2001 (2) SCR 684 =
(2001) 4 SCC 280, State of U. P. v. Amarmani Tripathi, 2005
(3) Suppl. SCR 454 = (2005) 8 sec 21 - referred to.
2.4 In the instanf case, the "pointing finger of
C accusation" against the appellants is 'the seriousness of
the charge'. The offences alleged are economic offences
which have resulted in loss to the State exchequer.
Though, it has been contended that there is possibility
of the appellants tampering with witnesses, no material
D has been placed in support of the allegation. Seriousness
of the charge is, no doubt, one of the relevant
considerations while considering bail applications but ..
that is not the only test or the factor: The other factor that
also requires to be taken note of is the punishment that
E could be imposed after trial and conviction, both under
the Penal Code and the Prevention of Corruption Act.
Otherwise, the Court would not be balancing the
Constitutional Rights but rather "recalibration of the
scales of justice." [para 15] [328-E-H]
F
Kalyan Chandra Sarkar Vs. Rajesh Ranjan (2005) 2
sec 42 - referred to.
3.1 This Court has taken the view that when there is
a delay in the trial, bail should be granted to the accused.
G [para 22] [340-C-D]
Babba v. State of Maharashtra, (2005) 11 SCC 569,
Vivek Kumar v. State of U. P., (2000) 9 SCC 443, Mahesh
Kumar Bhawsinghka v. State of Delhi, (2000) 9 SCC 383 -
H relied on.
SANJAY CHANDRA v. CBI
313
3.2 In the instant case, both the courts have refused
A
the request for grant of bail on two grounds: The primary
··ground is that the offence alleged against the accused
persons is very serious involving deep rooted planning
in which huge financial loss is caused to the State
exchequer; the secondary ground is that the possibility
8
of the accused persons tempering with the witnesses.
The charge against the accused is that of cheating and
dishonestly inducing delivery of property, forgery for the
purpose of cheating using a forged document as
genuine. The punishment of the offence is imprisonment C
for a term which may extend to seven years. It is, no
doubt, true that the nature of the charge may be relevant,
but at the same time, the punishment to which the party
may be liable, if convicted, also bears upon the issue.
Therefore, in determining whether to grant bail, both the
0
seriousness of the charge and the severity of the
punishment should be taken into consideration. The
grant or refusal to grant bail lies within the discretion of
the court. The grant or denial is regulated, to a large
extent, by the facts and circumstances of each particular
case. But at the same time, right to bail is not to be denied
E
merely because of the sentiments of the community
against the accused. [Para 25) [342-F-H; 343-A-C]
3.3 The primary purposes of bail in a criminal case
are to relieve the accused of imprisonment, to relieve the
F
State of the burden of keeping him, pending the trial, and
at the same time, to keep the accused constructively in
the custody of the court, whether before' or after
conviction, to assure that he will submit to the jurisdiction
of the court and be in attendance thereon whenever his G
presence is required. [Para 25) [343-C-E]
3.4 When the under trial prisoners are detained in jail
custody to an indefinite period, Article 21 of the
Constitution is violated. Every person, detained or H
314
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R
A arrested, is entitled to speedy trial. In the instant case,
there are seventeen accused persons. Statements of the
witnesses run to several hundred pages and the
documents on which reliance is placed by the
prosecution, is voluminous. The trial may take
B considerable time and the appellants, who are in jail, have
to remain in jail longer than the period of detention, had
they been convicted. It is not in the interest of justice that
the accused should be in jail for an indefinite period. [Para
26] [343-F-H; 344-A]
c
State of Kera/a v. Raneef (2011) 1 SCC 784- relied on.
3.5 No doubt, the offence alleged against the
appellants is a serious one in terms of alleged huge loss
to the State exchequer, that, by itself, should not deter
D the Court from enlarging the appellants on bail when
there is no serious contention of the respondent that the
accused, if released on bail, would interfere with the trial
or tamper with evidence. There is no good reason to
detain the accused in custody, that too, after the
E completion of the investigation and filing of the chargesheet. [Para 26] [344-A-C]
3.6 It is true that the accused are charged with
economic offences of huge magnitude and the offences
alleged, if proved, may jeopardize the economy of the
F country. At the same time, it is also significant that the
investigating agency has already completed investigation
and the charge sheet is already filed before the Special
Judge. Therefore, custody of the accused may not be
necessary for further investigation. Therefore, the
G appellants are entitled to the grant of bail pending trial on
stringent conditions in order to ally the apprehension
expressed by CBI. The appellants are directed to be
released on bail on the conditions stipulated in the
judgment. [Para 28-29] [344-H; 345-A-C]
H
SANJAY CHANDRA v. CBI
315
R vs. Griffiths and Ors., (1966) 1 Q.B. 589 - referred to.
A
Case Law Reference:
(1966) 1 Q.B. 589
referred to
para 6
2012 (1) sec 65
distinguished
para 10
B
(2005) 2 sec 42
referred to
para 15
1978 (1) SeR 535
relied on
para 16
1978 (2) SeR 371
relied on
para 17
c
1978 (2) SCR 358
relied on
para 18
1978 (2) SCR 777
relied on
para 19
1979 ( 1 ) SCR 335
relied on
para 20
2008 (17 ) SeR 369
relied on
para 21
D
(2010 (15) SCR 201
relied on
para 22
(2005) 11 sec 56
relied on
para 22
(2000) 9 sec 443
relied on
para 22
E
(2000) 9 sec 383
relied on
para 22
2001 (2) SeR 684
referred to
para 23
2005 (3) Suppl. SCR 454
referred to
para 24
F
(2011) 1 sec 784
relied on
para 26
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 2178 of 2011.
From the Judgment & Order dated 23.05.2011 of the High
G
Court of Delhi at New Delhi in Bail Application No. 508 of 2011.
WITH
Crl. A. Nos. 2179, 2180, 2181 & 2182 of 2011.
H
316 SUPREME COURT REPORTS (2011] 13 (ADDL.) S.C.R.
A
Harin P. Raval, ASG, Ram Jethmalani, Mukul Rohatgi, Soli
J. Sorabjee, Ashok H. Desai, Ritu Bhalla, Manu Sharma, Karan
Kalia, Pranav Diesh, Ananya Ghosh, Sahil Sharma, Vijay
Agarwal, Saurabh Kirpal, Ninad Laud, Purnima Bhat Kak,
Shally Bhasin Maheshwari, Mahesh Agarwal, Siddharth Singla,
B Tapesh Kumar Singh, Rajiv Nanda, Anirudh Sharma, Harsh N.
Parekh, Anando Mukherjee, Padmalakshmi Nigam, Arvind
Kumar Sharma for the appearing parties.
The Judgment of the Court was delivered by
C
H.L. DATTU, J. 1. Leave granted in all the Special Leave
Petitions.
2. These appeals are directed against the common
Judgment and Order of the learned Single Judge of the High
D Court of Delhi, dated 23rd May 2011 in Bail Application No.
508/2011, Bail Application No. 509/2011 & Crl. M.A. 653/2011,
Bail Application No. 510/2011, Bail Application No. 511/2011
and Bail Application No. 512/2011, by which the learned Single
Judge refused to grant bail to the accused-appellants. These
E cases were argued together and submitted for decision as one
case.
3. The offence alleged against each of the accused, as
noticed by the Ld. Special Judge, CBI, New Delhi, who rejected
bail applications of the appellants, vide his order dated
F 20.4.2011, is extracted for easy reference :
G
H
Sanjay Chandra CA7l in Crl. Appeal No. 2178 of 2011
[arising out of SLP (Crl.)No.5650 of 20111:
"6. The allegations against accused Sanjay Chandra are
that he entered into criminal conspiracy with accused A.
Raja, R.K. Chandolia and other accused persons during
September 2009 to get UAS licence for providing telecom
services to otherwise an ineligible company to g<:!t UAS
licences. He, as Managing Director of M/s Unitech
Wireless {Tamil Nadu) Limited, was looking after the
SANJAY CHANDRA v. CBI [HL DATIU, J.]
317
business of telecom through 8 group companies of Unitech A
Limited. The first-come-first-served procedure of allocation
of UAS Licences and spectrum was manipulated by the
accused persons in order to benefit M/s Unitech Group
Companies. The cutoff date of 25.09.2007 was decided
by accused public servants of DoT primarily to allow B
consideration of Unitech group applications for UAS
licences. The Unitech Group Companies were in business
of realty and even the objects of companies were not
changed to 'telecom' and registered as required before
applying. The companies were ineligible to get the licences c
till the grant of UAS licences. The Unitech Group was
almost last within the applicants considered for allocation
of UAS licences and as per existing policy of first-comefirst-served, no licence could be issued in as many as 10
to 13 circles where sufficient spectrum was not available. D
The Unitech companies got benefit of spectrum in as many
as 10 circles over the other eligible applicants. Accused
Sanjay Chandra, in conspiracy with accused public
servants, was aware of the whole design of the allocation
of LO ls and on behalf of the Unitech group companies was E
ready with the drafts of Rs. 1658 crores as early as 10th
October, 2007."
Vinod Goenka (AS) in Crl. Appeal No. 2179 of 2011 [arising
out of SLP(Crl)No.5902 of 2011] :
"5.The allegations against accused Vinod Goenka are that F
he was one of the directors of M/s Swan Telecom (P)
Limited in addition to accused Shahid Usman Balwa w.e.f.
01.10.2007 and acquired majority stake on 18.10.2007 in
Mis Swan Telecom (P) Limited (STPL) through DB G
Infrastructure (P) Limited. Accused Vinod Goenka carried
forward the fraudulent applications of STPL dated
02.03.2007 submitted by previous management despite
knowing the fact that STPL was ineligible company to get
UAS licences by virtue of clause 8 of UASL guidelines H
2005. Accused Vinod Goenka was an associate of
A
B
c
D
E
F
G
H
318
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
accused Shahid Usman Balwa to create false documents
including Board Minutes of M/s Giraffe Consultancy (P)
Limited fraudulently showing transfer of its shares by the
companies of Reliance ADA Group during February 2007
itself. Accused/applicant in conspiracy with accused
Shahid Usman Balwa concealed or furnished false
information to DoT regarding shareholding pattern of STPL
as on the date of application thereby making STPL an
eligible company to get licence on the date of application,
that is, 02.03.2007. Accused/applicant was an overall
beneficiary with accused Shahid Usman Balwa for getting
licence and spectrum in 13 telecom circles.
12. Investigation has also disclosed pursuant to TRAI
recommendations dated 28.08.2007 when Mis Reliance
Communications Ltd. got the GSM spectrum under the
Dual Technology policy, accused Gautam Doshi, Hari Nair
and Surendra Pipara transferred the control of Mis Swan
Telecom Pvt. Ltd., and said structure of holding companies,
to accused Shahid Balwa anc' Vined Goenka. In this
manner they transferred a company which was otherwise
ineligible for grant of UAS license on the date of
application, to the said two accused persons belonging to
Dynamix Balwa (DB) group and thereby facilitated them to
cheat the DoT by getting issued UAS Licences despite the
ineligibility on the date of application and till 18.10.2007.
13. Investigation has disclosed that accused Shahid Balwa
and Vined Goenka joined M/s Swan Telecom Pvt. Ltd. and
Mis Tiger Traders Pvt. Ltd. as directors on 01.10.2007 and
DB group acquired the majority stake in TTPU M/s Swan
Telecom Pvt. Ltd. (STPL) on 18.10.2007. On 18.10.2007
a fresh equity of 49.90 lakh shares was allotted to M/s DB
Infrastructure Pvt. Ltd. Therefore on 01.10.2007, and
thereafter, accused Shahid Balwa and Vined Goenka were
in-charge of, and were responsible to, the company M/s
Swan Telecom Pvt. Ltd. for the conduct of business. As
SANJAY CHANDRA v. CBI [H.L. DATTU, J.)
319
such on this date, majority shares of the company were A
held by D.S. Group."
Gautam Doshi (A9), Surendra Pipara (A10) and Hari Nair
(A 11) in Crl. Appeal Nos.2180,2182 & 2181 of 2011
[arising out of SLP (Crll Nos. 6190,6315 & 6288 of 20111:
8
"7. It is further alleged that in January-February, 2007
accused Gautam Doshi, Surendra Pipara and Hari Nath
in furtherance of their common intention to cheat the
Department of Telecommunications, structured/created net
worth of M/s Swan Telecom Pvt. Ltd., out of funds arranged C
from M/s Reliance Telecom Lid. or its associates, for
applying to DoT for UAS Licences in 13 circles, where M/
s Reliance Telecom Ltd. had no GSM spectrum, in a
manner that its associations with M/s Reliance Telecom
Ltd. may not be detected, so that DOT could not reject its D
application on the basis of clause 8 of the UASL Guidelines
dated 14.12.2005.
8. In pursuance of the said common intention of accused
persons, they structured the stake-holding of M/s Swan
E
Telecom Pvt. Ltd. in a manner that only 9.9% equity was
held by M/s Reliance Telecom Ltd. (RTL) and rest 90.1 %
was shown as held by M/s Tiger Traders Pvt. Ltd. (later
known as M/s Tiger Trustees Pvt. Ltd. - TIPL), although
the entire company was held by the Reliance ADA Group
of companies through the funds raised from M/s Reliance
F
Telecom Ltd. etc.
9. It was further alleged that M/s Swan Telecom Pvt. Ltd.
(STPL) was, at the time of application dated 02.03.2007,
an associate of Mis Reliance ADA Group I M/s Reliance G
Communications Limited I Mis Reliance Telecom Limited,
having existing UAS Licences in all telecom circles.
Investigations have also disclosed that M/s Tiger Traders
Pvt. Ltd., which held majority stake (more than 90%) in M/
s Swan Telecom Pvt. Ltd. (STPL), was also an associate
H
A
B
c
D
E
F
G
H
320
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
company of Reliance ADA Group. Both the companies
has not business history and were activated solely for the
purpose of applying for UAS Licences in 13 telecom
circles, where Mis Reliance Telecom Lid. did not have
GSM spectrum and M/s Reliance Communications Ltd.
had already applied for dual technology spectrum for these
circles. Investigation has disclosed that the day to day
affairs of M/s Swan Telecom Pvt. Ltd. and M/s Tiger
Traders Pvt. ltd. were managed by the said three
accused persons either themselves or through other
officers/consultants related to the Reliance ADA group.
Commercial decisions of M/s Swan Telecom Pvt. Lid. and
M/s Tiger Traders Pvt. Ltd. were also taken by these
accused persons of Reliance ADA group. Material intercompany transactions (bank transactions) of M/s Reliance
Communications I Mis Reliance Telecommunications Lid.
and M/s Swan Telecom Pvt Lid. (STPL) and M/s Tiger
Traders Pvt. ltd. were carried out by same group of
persons as per the instructions of said accused Gautam
Doshi and Hari Nair.
10. Investigations about the holding structure of M/s Tiger
Traders Pvt. Ltd. has revealed that the aforesaid accused
persons also structured two other companies i.e. M/s
Zebra Consultancy Private Limited & Mis Parrot
Consultants Private Limited. Till April, 2007, by when M/s
Swan Telecom Pvt. Lid. applied for telecom licences, 50%
shares of M/s Zebra Consultancy Private Limited & M/s
Parrot Consultants Private Limited, were purchased.by M/
s Tiger Traders Pvt. Ltd. Similarly, 50% of equity shares
of M/s Parrot Consultants Private Limited & Mis Tiger
Traders Private Limited were purchased by Mis Zebra
Consultancy Private Limited. Also, 50% of equity shares
of M/s Zebra Consultancy Private Limited and Mis Tiger
Traders Private Limited were purchased by M/s Parrot
Consultants Private Limited. These 3 companies were,
therefore, cross holding each other in an inter-locking
SANJAY CHANDRA v. CBI [H.L. DATIU, J.]
321
structure w.e.f. March 2006 till 4th April, 2007.
A
11. It is further alleged that accused Gautam Doshi,
Surendra Pipara and Hari Nair instead of withdrawing the
fraudulent applications preferred in the name of M/s Swan
Telecom (P) Limited, which was not eligible at all, allowed B
the transfer of control of that company to the Dynamix
Balwa Group and thus, enabled perpetuating and (sic.)
illegality. It is alleged that TRAI in its recommendations
dated 28.08.2007 recommended the use of dual
technology by UAS Licencees. Due to this reason M/s
Reliance Communications Limited, holding company of M/ C
s Reliance Telecom Limited, became eligible to get GSM
spectrum in telecom circles for which STPL had applied.
Consequently, having management control of STPL was
of no use for the applicant/accused persons and M/s
Reliance Telecom Limited. Moreover, the transfer of D
management of STPL to DB Group and sale of equity held
by it to M/s Delphi Investments (P) Limited, Mauritius, M/s
Reliance Telecom Limited has earned a profit of around
Rs. 10 crores which otherwise was not possible if they had
withdrawn the applications. Mis Reliance Communications E
Limited also entered into agreement with M/s Swan
Telecom (P) Limited for sharing its telecom infrastructure.
It is further alleged that the three accused persons
facilitated the new management of M/s Swan Telecom (P)
Limited to get UAS licences on the basis of applications F
filed by the former management. It is further alleged that
M/s Swan Telecom (P) Limited on the date of application,
that is, 02.03.2007 was an associate company of Reliance
ADA group, that is, M/s Reliance Communications Limited/
M/s Reliance Telecom Limited and therefore, ineligible for G
UAS licences.
12. Investigation has also disclosed pursuant to TRAI
recommendations dated 28.08.2007 when M/s Reliance
Communications Ltd. got the GSM spectrum under the H
A
B
c
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SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
Dual Technology policy, accused Gautam Doshi, Hari Nair
and Surendra Pipara transferred the control of Mis Swan
Telecom Pvt. Ltd., and said structure of holding
companies, to accused Shahid Balwa and Vinod Goenka.
In this manner they transferred a company which was
otherwise ineligible for grant of UAS license on the date
of application, to the said two accused persons belonging
to Dynamix Balwa (DB) group and thereby facilitated them
to cheat the DoT by getting issued UAS Licences despite
the ineligibility on the date of application and till
18.10.2007."
4. The Special Judge, CBI, New Delhi, rejected Bail
Applications filed by the appellants by his order dated
20.04.2011. The appellants moved the High Court by filing
D
applications under Section 439 of the Code of Criminal
Procedure (in short, "Cr. P.C."). The same came to be rejected
by the learned Single Judge by his order dated 23.05.2011.
Aggrieved by the same, the appellants are before us in these
appeals.
E
5. Shri. Ram Jethmalani, Shri. Mukul Rohatgi, Shri Soli J.
Sorabjee and Shri. Ashok H. Desai, learned senior counsel
appeared for the appellants and Shri. Harin P. Raval, learned
Additional Solicitor General, appears for the respondent-CBI.
F
6. Shri. Ram Jethmalani, learned senior counsel
appearing for the appellant Sanjay Chandra, would urge that
the impugned Judgment has not appreciated the basic rule laid
down by this Court that grant of bail is the rule and its denial is
the exception. Shri. Jethmalani submitted that if there is any
apprehension of the accused of absconding from trial or
G tampering with the witnesses, then it is justified for the Court
to deny bail. The learned senior counsel would submit that the
accused has cooperated with the investigation throughout and
that his behavior has been exemplary. He would further submit
that the appellant was not arrested during the investigation, as
H
SANJAY CHANDRA v. CBI [H.L. DATTU, J.]
323
there was no threat from him of tampering with the witnesses. A
He would submit that the personal liberty is at a very high
pedestal in our Constitutional system, and the same cannot be
meddled with in a causal manner. He would assail the
impugned Judgment stating that the Ld. Judge did not apply
his mind, and give adequate reasons before rejecting bail, as B
is required by the legal norms set down by this Court. Shri.
Jethmalani further contends that it was only after the appellants
appeared in the Court in pursuance of summons issued, they
were made to apply for bail, and, thereafter, denied bail and
sent to custody. The learned senior counsel states that the trial c
Judge does not have the power to send a person, who he has
summoned in pursuance of Section 87 Cr.P.C to judicial
custody. The only power that the trial Judge had, he would
contend, was to ask for a bond as provided for in Section 88
Cr.P.C. to ensure his appearance. Shri. Jethmalani submits that D
when a person appeared in pursuance of a bond, he was a free
man, and such a free man cannot be committed to prison by
making him to apply for bail and thereafter, denying him the
same. Shri. Jethmalani further submits that if it was the intention
of the Legislature to make a person, who appears in pursuance
of summons to apply for bail, it would have been so legislated E
in Section 88 Cr.P.C. The learned senior counsel assailed the
Judgment of the Delhi High Co.urt in the 'Court on its own
motion v. CBI', 2004 (I) JCC 308, by which the High Court gave
directions to Criminal Courts to call upon the accused who is
summoned to appear to apply for bail, and then decide on the
F
merits of the bail application. He would state that the High Court
has ignored even the CBI Manual before issuing these
directions, which provided for bail to be granted to the accused,
except in the event of there being commission of heinous crime.
The learned senior counsel would also argue that it was an error G
to have a "rolled up charge", as recognized by the Griffiths'
case (R vs. Griffiths and Ors., (1966) 1 Q.B. 589).
Shri.Jethmalani submitted that there is not even a prima facie
case against the accused and would make references to the
charge sheet and the statement of several witnesses. He would
H
324
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A
emphatically submit that none of the ingredients of the offences
charged with were stated in the charge sheet. He would further
contend that even if, there is a prima facie case, the rule is still
ba·il, and not jail, as per the dicta of this Court in several cases.
B
7. Shri. Mukul Rohatgi, learned senior counsel appearing
for the appellant Vinod Goenka, while adopting the arguments
of Shri. Jethmalani, would further supplement by arguing that
the Ld. Trial Judge erred in making the persons, who appeared
in pursuance of the summons, apply for bail and then denying
C the same, and ordering for remand in judicial custody. Shri.
Rohatgi would further contend that the gravity of the offence
charged with, is to be determined by the maximum sentence
prescribed by the Statute and not by any other standard or
measure. In other words, the learned senior counsel would
submit that the alleged amount involved in the so-called Scam
D
is not the determining factor of the gravity of the offence, but
the maximum punishment prescrib')d for the offence. He would
state that the only bar for bail pending trial in Section 437 is
for those persons who are charged with offences punishable
with life or death, and there is no such bar for those persons
E who were charged with offences with maximum punishment of
seven years. Shri. Rohatgi also cited some case laws.
8. Shri. Ashok H. Desai, learned senior counsel appearing
for the appellants Hari Nair and Surendra Pipara, adopted the
F
principal arguments of Shri.Jethmalani. In addition, Shri. Desai
would submit that a citizen of this country, who is charged with
a criminal offence, has the right to be enlarged on bail. Unless
there is a clear necessity for deprivation of his liberty, a person
should not be remanded to judicial custody. Shri. Desai would
G submit that the Court should bear in mind that such custody is
not punitive in nature, but preventive, and must be opted only
when the charges are serious. Shri. Desai would further submit
that the power of the High Court and this Court is not limited
by the operation of Section 437. He would further contend that
Surendra Pipara deserves to be released on bail in view of his
H serious health conditions.
SANJAY CHANDRA v. CBI [H.L. DATTU, J.]
325
9. Shri. Soli J. Sorabjee, learned senior counsel appearing
A
for Gautam Doshi, adopted the principal arguments of Shri.
Jethmalani. Shri. Sorabjee would assail the finding of the
Learned Judge of the High Court in the impugned Judgment
that the mere fact that the accused were not arrested during
the investigation was proof of their influence in the society, and
B
hence, there was a reasonable apprehension that they would
tamper with the evidence if enlarged on bail. Shri. Sorabjee
would submit that if this reasoning is to be accepted, then bail
is to be denied in each and every criminal case that comes
before the Court. The learned senior counsel also highlighted c
that the accused had no criminal antecedents.
10. Shri. Haren P. Raval, the learned Additional Solicitor
General, in his reply, would submit that the offences that are
being charged, are of the nature that the economic fabric of the
country is brought at stake. Further, the learned ASG would
D
state that the quantum of punishment could not be the only
determinative factor for the magnitude of an offence. He would
state that one .of the relevant considerations for the grant of bail
is the interest of the society at large as opposed to the personal
liberty of the accused, and that the Court must not lose sight of
E
the former. He would submit that in the changing circumstances
and scenario, it was in the interest of the society for the Court
to decline bail to the appellants. Shri. Raval would further urge
that consistency is the norm of this Court and that there was
no reason or change in circumstance as to why this Court
F
should take a different view from the order of 20th June 2011
in Sharad Kumar Etc. v. Central Bureau of Investigation [in
SLP (Crl) No. 4584-4585 of 2011] rejecting bail to some of the
co-accused in the same case. Shri. Raval would further state
that the investigation in these cases is monitored by this Court
G
and the trial is proceeding on a day-to-day basis and that there
is absolutely no delay on behalf of the prosecuting agency in
completing the trial. Further, he would submit that the appellants,
having cooperated with the investigation, is no ground for grant
of bail, as they were expected to cooperate with the
H
326
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A investigation as provided by the law. He would further submit
that the test to enlarge an accused on bail is whether there is a
reasonable apprehension of tampering with the evidence, and
that there is an apprehension of threat to some of the witnesses.
The learned ASG would further submit that there is more reason
B now for the accused not to be enlarged on bail, as they now
have the knowledge of the identity of the witnesses, who are
the employees of the accused, and there is an apprehension
that the witnesses may be tampered with. The learned ASG
would state that Section 437 of the Cr.P.C. uses the word
c "appears", and, therefore, that the argument of the learned
senior counsel for the appellants that the power of the trial Judge
with regard to a person summoned under Section 87 is
controlled by Section 88 is incorrect. Shri. Raval also made
references to the United Nations Convention on Corruption and
0 the Report on the Reforms in the Criminal Justice System by
Justice Malimath, which, we do not think, is necessary to go
into. The learned ASG also reliea on a few decisions of this
Court, and the same will be dealt with in the course of the
judgment. On a query from the Bench, the learn~d ASG would
E submit that in his opinion, bail should be denied in all cases of
corruption which pose a threat to the economic fabric of the
country, and that the balance should tilt in favour of the public
interest.
. 11. In his reply, Shri. Jethmalani would submit that as the
F presumption of innocence is the privilege of every accused,
there is also a presumption that the appellants would not tamper
with the witnesses if they are enlarged on bail, especially in the
facts of the case, where the appellants have cooperated with
the investigation. In recapitulating his submissions, the learned
G senior counsel contended that there are two principles for the
grant of bail - firstly, if there is no prima facie case, and
secondly, even if there is a prima facie case, if there is no
reasonable apprehension of tampering with the witnesses or
evidence or absconding from the trial, the accused are entitled
H to grant of bail pending trial. He would submit that since both
SANJAY CHANDRA v. CBI [H.L. DATTU, J.]
327
the conditions are satisfied in this case, the appellants should
A
be granted bail.
12. Let us first deal with a minor issue canvassed by Mr.
Raval, learned ASG. It is submitted that this Court has refused
to entertain the Special Leave Petition filed by one of the coB
accused [Sharad Kumar Vs. CBI (supra)] and, therefore, there
is no reason or change in the circumstance to take a different
view in the case of the appellants who are also charge- sheeted
for the same offence. We are not impressed by this argument.
In the aforesaid petition, the petitioner was before this Court
before framing of charges by the Trial Court. Now the charges C
are framed and the trial has commenced. We cannot compare
the earlier and the present proceedings and conclude that there
are no changed circumstances and reject these petitions.
13. The appellants are facing trial in respect of the offences D
under Sections 420-B, 468, 471 and 109 of Indian Penal Code
and Section 13(2) read with 13(i)(d) of Prevention of Corruption
Act, 1988. Bail has been refused first by the Special Judge,
CBI, New Delhi and subsequently, by the High Court. Both the
courts have listed the factors, on which they think, are relevant E
for refusing the Bail applications filed by the applicants as
seriousness of the charge; the nature of the evidence in support
of the charge; the likely sentence to be imposed upon
conviction; the possibility of interference with witnesses; the
objection of the prosecuting authorities; possibility of F
absconding from justice.
14. In bail applications, generally, it has been laid down
from the earliest times that the object of bail is to secure the
appearance of the accused person at his trial by reasonable
amount of bail. The object of bail is neither punitive nor G
preventative. Deprivation of liberty must be considered a
punishment, unless it can be required to ensure that an accused
person will stand his trial when called upon. The courts owe
more than verbal respect to the principle that punishment begins
after conviction, and that every man is deemed to be innocent H
328
SUPREME COURT REPORTS [2011] 13 (ADDL.) S.C.R.
A until duly tried and duly found guilty. From the earliest times, it
was appreciated that detention in custody pending completion
of trial could be a cause of great hardship. From time to time,
necessity demands that some un-convicted persons should be
held in custody pending trial to secure their attendance at the
8 trial but in such cases, 'necessity' is the operative test. In this
country, it would be quite contrary to the concept of personal
liberty enshrined in the Constitution that any person should be
punished in respect of any matter, upon which, he has not been
convicted or that in any circumstances, he should be deprived
C of his liberty upon only the belief that he will tamper with the
witnesses if left at liberty, save in the most extraordinary
circumstances. Apart from the question of prevention being the
object of a refusal of bail, one must not lose sight of the fact
that any imprisonment before conviction has a substantial
0
punitive content and it would be improper for any Court to refuse
bail as a mark of disapproval of former conduct whether the
accused has been convicted for it or not or to refuse bail to an
un-convicted person for the purpose of giving him a taste of
imprisonment as a lesson.
E
15. In the instant case, ~s we have already noticed that
the "pointing finger of accusation" against the appellants is 'the
seriousness of the charge'. The offences alleged are economic
offences which has resulted in loss to the State exchequer.
Though, they contend that there is possibility of the appellants
F tampering witnesses, they have not placed any material in
support of the allegation. In our view, seriousness of the charge
is, no doubt, one of the relevant considerations while
considering bail applications but that is not the only test or the
factor : The other factor that also requires to be taken note of
G is the punishment that could be imposed after trial and
conviction, both under the Indian Penal Code and Prevention
of Corruption Act. Otherwise, if the former is the only test, we
would not be balancing the Constitutional Rights but rather
"recalibration of the scales of justice." The provisions of Cr.P.C.
H confer discretionary jurisdiction on Criminal Courts to grant bail
SANJAY CHANDRA v. CBI [H.L. DATTU, J.]
329
to accused pending trial or in appeal against convictions, since A
the jurisdiction is discretionary, it has to be exercised with great
care and caution by balancing valuable right of liberty of an
individual and the interest of the society in general. In our view,
the reasoning adopted by the learned District Judge, which is
affirmed by the High Court, in our opinion, a denial of the whole B
basis of our system .of law and normal rule of bail system. It
transcends respect for the requirement that a man shall be
considered innocent until he is found guilty. If such power is
recognized, then it may lead to chaotic situation and would
jeopardize the personal liberty of an individual. This Court, in C
Kalyan Chandra Sarkar Vs. Rajesh Ranjan- (2005) 2 SCC
42, observed that "under the criminal laws of this country, a
person accused of offences which are non-bailable, is liable
to be detained in custody during the pendency of trial unless
he is enlarged on bail in accordance with law. Such detention D
cannot be questioned as being violative of Article 21 of the
Constitution, since the same is authorized by Jaw.