Orissa High Court
Case Details
Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Dec-2024 16:41:04 IN THE HIGH COURT OF ORISSA AT CUTTACK BLAPL No. 10913 of 2024 Gautam Kundu …. Petitioner (s) Mr. Manas Mohapatra, Sr. Adv. along with associates. Union of India (CBI) -versus- …. Opposite Party(s) Mr. Sarthak Nayak, Adv. CORAM: DR. JUSTICE S.K. PANIGRAHI ORDER 24.12.2024 Order No. 03. F.I.R. No. S.P.E. No.34/2014 with RC.39/S/2014 -SCB/KOL Dated 05.06.2014 Police Station Case No. and Courts’ Name Khordha/SPECI AL C.B.I. II,BHUBANESW AR /TR/4/ 2017 JUDGE, Sections Section 420/408/409/120 -B/34 of I.P.C. r/w. Section 4, 5, and 6 of Prize Chits and Money Circulation Schemes (Banning) Act, 1978. 1. This matter is taken up through hybrid arrangement.
Legal Reasoning
2. Heard learned counsel for the parties. 3. The petitioner, who is currently in custody in connection with TR Case No. 4/2017 pending before the Court of Learned Special Judge CBI, Bhubaneswar for alleged commission of offence under Sections Page 1 of 7 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Dec-2024 16:41:04 420/408/409/120-B/34 of the Indian Penal Code read with Section 4, 5, 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978. 4. The petitioner had previously sought bail, which was rejected by the Court of Learned Special Judge CBI, Bhubaneswar. Aggrieved by the order of rejection, the petitioner has now approached this Court by filing the present application seeking bail. 5. The prosecution’s case/ as advanced by the Central Bureau of Investigation (CBI), unfolds a tale of massive financial fraud orchestrated by Gautam Kundu, Chairman of the Rose Valley Group, alongside other directors. 6. Initiated on the Supreme Court’s directive in Subrata Chattoraj v. Union of India (2014), the investigation revealed the fraudulent collection of ₹17,367 crores from lakhs of gullible investors under the guise of high- return schemes, of which ₹8,947 crores remain unpaid. Rose Valley Group operated through a labyrinth of companies, creating an illusion of diversified businesses while evading regulatory scrutiny and making false claims of profitability and approvals. Kundu, the primary architect of this scam, managed financial operations, authorized significant transactions, and misappropriated funds, all while holding positions in at least 25 group companies. The scale of deceit inflicted catastrophic losses on vulnerable investors, including the poor and elderly, many of whom were left destitute, unable to recover their life savings. This colossal breach of trust has been meticulously detailed across multiple Page 2 of 7 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Dec-2024 16:41:04 charge sheets, illustrating a calculated conspiracy with severe socio- economic repercussions. 7. The petitioner, Goutam Kundu, fervently seeks relief from prolonged judicial custody, asserting that his incarceration for over 8 years and 7 months without trial constitutes a violation of his fundamental right to a speedy trial under Article 21 of the Constitution. 8. The petitioner contends that substantial repayments of ₹8,419.88 crores, along with ₹2,430 crores as interest, have been made to depositors, further expressing his willingness to liquidate company assets to honour outstanding liabilities. 9. Citing deteriorating health, including diabetes, neurological and nephrological ailments, the petitioner highlights the personal hardships he endures, including the loss of his father and the critical condition of his bedridden mother. As a permanent resident of Kolkata with significant immovable and movable assets, he maintains there is no risk of absconding. 10. Emphasizing his cooperation during the investigation, including surrendering his passport and adhering to interim bail conditions, the petitioner seeks the court’s indulgence for his release on bail. 11. Per contra, the CBI vehemently opposed the bail application, asserting that the petitioner, as the principal architect of the Rose Valley scam, played a pivotal role in orchestrating the massive financial fraud. His active involvement is irrefutably evidenced by his signatures on critical documents and participation in meetings aimed at motivating agents to Page 3 of 7 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Dec-2024 16:41:04 perpetuate the deception. The petitioner’s influence and financial power present a clear and imminent risk of witness tampering and evidence interference if released. The economic nature of the crime, involving the fraudulent collection of multi-thousand crore rupees from innocent depositors nationwide, demands strict judicial scrutiny. 12. Furthermore/ the petitioner’s companies flagrantly violated regulatory norms, operating without requisite approvals from SEBI, RBI, or ROC, thereby deceiving the public on a colossal scale. The petitioner’s resources and established influence, it is highlighted that there is a substantial risk of his absconding or engaging in similar fraudulent activities, posing a grave threat to societal interests and justice. 13. While examining the case records, it prima facie appears that the petitioner stands accused of involvement in an economic offence of unprecedented magnitude, an act that not only contravened the laws of the land but inflicted a profound wound upon the moral fabric of the nation. This court cannot overlook the gravity of a scandal that reverberated across the socio-economic spectrum, leaving in its wake severe financial ramifications. The ripple effects of such malfeasance transcend mere numbers; they erode public trust, destabilize institutions, and taint the very ethos of integrity that binds a society together. 14. In assessing the petition before this Court, it is imperative to underscore that a crime of this nature, by their scale and consequence, demand the most scrupulous examination under the law. The actions of the Page 4 of 7 Signature Not Verified Digitally Signed Signed by: BHABAGRAHI JHANKAR Designation: AR-CUM-SR. SECRETARY Reason: Authentication Location: ORISSA HIGH COURT, CUTTACK Date: 24-Dec-2024 16:41:04 petitioner constitute a betrayal of fiduciary responsibilities on a scale that casts a long shadow over the collective conscience of the citizenry. Such acts of economic plunder must, therefore, be met with judicial resolve befitting their magnitude. 15. Highlighting the gravity of economic offences, the Supreme Court remarked in the case of State of Gujarat v. Mohanlal Jitamalji Porwal and Others1 as under: “5...The entire community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on the personal profit regardless of community. A disregard for the interest of the community can be manifested only at the cost of forfeiting the trust and faith of the community in the system to administer justice in an even- handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest.” the consequence to 16. In view of these compelling observations, it is abundantly clear that a different approach must be adopted in addressing offences of this nature. Hence, in this regard, it would be prudent to refer to the judgment of the Supreme Court in the case of Y.S. Jagan Mohan Reddy v. CBI2 wherein it observed as under: “34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The