Sanjeev Govindaswamy .… v. State of Odisha
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK ABLAPL No. 9799 of 2023 & ABLAPL No. 13053 of 2023 Applications under Section 438 of Cr.P.C. ---------------- ABLAPL No. 9799 of 2023 Sanjeev Govindaswamy .…… Petitioner - Versus - State of Odisha ...…. Opp. Party ABLAPL No. 13053 of 2023 Sathy Govindaswamy ……. Petitioner - Versus - State of Odisha ..….. Opp. Parties Advocate(s) appeared in this case:- _________________________________________________________ For Petitioners: Mr. Subir Palit, Sr. Advocate with M/s. Sumit Sekhar Pattanaik, N.B. Behuria & A. Priya, Advocates. (In ABLAPL No.9799 of 2023) Mr. Devasis Panda, Advocate M/s. Sumit Sekhar Pattanaik & N.B. Behuria, Advocates (In ABLAPL No.13053 of 2023) For Opp. Party : Mr. Bibekananda Bhuyan, Advocate for EOW. ____________________________________________________________ CORAM: JUSTICE SASHIKANTA MISHRA Page 1 of 15 JUDGMENT 9th February, 2024 SASHIKANTA MISHRA, J. Both these applications seeking pre-arrest bail arise out of the same case and involve identical facts for
Decision
which both were heard together and are being disposed of by this common judgment. 2. The petitioners are apprehending their arrest in connection with EOW Bhubaneswar P.S. Case No. 19 of 2023 corresponding to C.T. Case No. 5 of 2023 pending in the Court of learned Special Judge, OPID Court, Cuttack for the alleged commission of offence under Sections 419/420/467/468/471/120-B of IPC read with Sections 66(C)/66(D) of IT Act and Section 6 of OPID Act, 2011. 3. The prosecution case is that one Sasmita Sahoo being the Inspector of Police, EOW CID-CB, Bhubaneswar lodged a written complaint before the Khordha EOW, Bhubaneswar on 13.06.2023 stating therein that in course of investigation into an allegation of online financial fraud in relation to a website called www.smsmvip.com, she found that several companies were involved in cheating and Page 2 of 15 misappropriating public money by inducing customers to invest in their companies with assurance of higher returns. One Bijay Kumar Nath of Puri had submitted a written report on 25.04.2023 that being thus lured, he had invested some money in the aforementioned website and initially got some return but subsequently he suspected that some fraud had been committed. On further investigation, huge amounts of money were found to have been transacted by several companies through gaming apps on mobile phones. It was thus found that the creator of the website and developer of the application and the Directors, proprietors of the companies/firms named in the complaint, had committed serious financial fraud. The present petitioners have not been named in the FIR. Their apprehension of being arrested stems from the fact that in course of investigation, one S. Chitravel, an employee of Byrontec Solutions Pvt. Ltd. was arrested. He was a colleague of petitioner-Sanjeev Govindaswamy. Moreover, the bank accounts of Sanjeev Govindaswamy held in IDFC Bank and IDBI Bank were frozen. The other petitioner- Sathy Govindaswamy Page 3 of 15 apprehends arrest as he was a Director of Byrontec Solutions Pvt. Ltd. 4. Heard Mr. S. Palit, learned Senior Counsel with Mr. S.S. Pattanaik, learned counsel for the petitioner-Sanjeev Govindaswamy; Mr. D. Panda, learned counsel for the petitioner-Sathy Govindaswamy and Mr. B. Bhuyan, learned counsel appearing for the State in OPID matters. 5. Learned Senior Counsel, Mr. S. Palit would argue that the offence under Section 6 of the OPID Act is not made out inasmuch as the ingredients necessary to constitute such offence are nonexistent. Mr. Palit has referred to Section 6 of the OPID Act to submit that unless money has been deposited either in lump sum or by installments with the financial establishment it would not partake the nature of ‘deposit’ as defined under Section 2(b) of the OPID Act. There is absolutely no evidence in the present case to show that either the initial complainant, Bijay Kumar Nath or any of the so called complainants had ever made any such deposit with any financial establishment much less with the petitioners. According to Mr. Palit therefore, the very basis of the case is misconceived and therefore, untenable. As regards Page 4 of 15 the offences under the Indian Penal Code alleged against the petitioner, Mr. Palit would argue that even assuming the prosecution allegations to be correct on their face value, then also it is clearly borne out from the materials on record that investment by a person in a gaming app cannot be construed as deposit within the meaning of Section 2(b) of the OPID Act, since the participant is required to exercise skill while playing the game and winning is a precondition for getting returns. Mr. Palit has relied upon the judgment of this court in the case of Gajanan Property Dealer and Construction Pvt. Ltd. v. State of Orissa, 2018 SCC OnLine Ori 387 and the decision of the Madras High Court in D. Siluvai Venance v. State, 2020 SCC OnLine Mad 1546 to argue that online gaming apps like Rummy, Teen Pati, Poker etc. are games of skill and chance where there is neither any assurance nor commitment of returns on the investment made by a player. Mr. Palit further argues that even otherwise the complainant, Bijay Kumar Nath has not invested in any app owned by Byrontec Solutions Pvt. Ltd. to which the petitioners are connected. The investigation has so far not shown any link whatsoever with the petitioners and other accused persons Page 5 of 15 named in the FIR. There is simply no proof of any money having found its way to the personal accounts of the petitioners being siphoned by them. Merely because some amount is credited or transacted through the bank accounts does not, per se, make it illegal. 6. Mr. D. Panda while supporting the arguments made by Mr. Palit as noted above additionally contends that the so called confession made by the co-accused, S. Chitravel has no legal sanctity in view of the bar under Sections 24 to 27 of the Indian Evidence Act read with Section 161(2) of Cr.P.C. Mr. Panda further argues that pursuant to the direction of this Court, the petitioners made themselves available for interrogation by the I.O. on 27th, 28th, 29th, 30th and 31st of December, 2023 but the I.O. was herself unavailable and asked them to appear before here only on 29th December, 2023 on which date they appeared and answered all questions put to them by her save and except those of which they had no knowledge and those, the answers to which would have incriminated them. Mr. Panda has relied upon the celebrated judgment of the Supreme Court in the case of Nandini Satpathy v. P.L. Dani, (1978) 2 SCC 424 in this Page 6 of 15 regard. Mr. Panda sums up his arguments by contending that the petitioners having rendered necessary cooperation with the investigation and charge sheet having already been submitted, their liberty cannot be curbed on the ruse of further custodial interrogation. 7. Mr. Bhuyan, learned State Counsel has vehemently opposed the prayer for anticipatory bail. He would argue that investigation has clearly revealed the involvement of a Chinese national, Ethan @ Wang Guanhua and his collaboration with both the petitioners. In fact, petitioner- Sanjeev Govindaswamy had become one of the Directors of Bettec Technologies Private Ltd. owned by said Chinese national, wherein co-accused S. Chitravel was the authorized signatory. The company was closed due to Covid pandemic situation whereupon Ethan @ Wang Guanhua opened a new company in March/April, 2021 named, Byrontec Solutions Pvt. Ltd., which dealt with online gaming apps, like Rummy etc. Sanjeev Govindaswamy became the Director and subsequently, his brother Sathy Govindaswamy also became a Director in the said company, while co-accused, S. Chitravel became the authorized signatory of the accounts. Page 7 of 15 Ethan @ Wang Guanhua thereafter opened several such companies and collected huge amounts of money from the public solely with the intention of duping them. The modus operandi of the culprits is, use of multiple layers of mule bank accounts at lower levels, followed by current bank accounts of the shell companies/hired firms and finally, use of some dubious export-import firms and crypto traders to siphon money out of India. Mr. Bhuyan adds that it is a huge financial scam with the possibility of a complicated and large money trail being involved. Since investigation is at nascent stage, the petitioners should not be granted liberty. Mr. Bhuyan further contends that economic offences have to be viewed differently and anticipatory bail should not be allowed in such cases. He relies on the decision of the Supreme Court in the case of P. Chidambaram vs. Directorate of Enforcement, reported on (2019) 9 SCC 24. 8. Having heard the rival submissions at length and having perused the materials on record, this Court would at the outset like to keep in perspective the principles governing exercise of power under Section 438 of Cr.P.C. in considering the prayer of the petitioners for grant of pre-arrest bail. For Page 8 of 15 immediate reference, sub-Section(1) of Section 438 of Cr.P.C., which is relevant, is quoted hereunder. “Section 438 -Direction for grant of bail to person apprehending arrest. 1(1) Where any person has reason to believe that he may be arrested on accusation of having committed a non-bailable offence, he may apply to the High Court or the Court of Session for a direction under this section that in the event of such arrest he shall be released on bail; and that Court may, after taking into consideration, interalia, the following factors, namely:--- (i) the nature and gravity of the accusation; (ii) the antecedents of the applicant including the fact as to whether he has previously undergone imprisonment on conviction by a Court in respect of any cognizable offence; (iii) the possibility of the applicant to flee from justice; and. (iv) where the accusation has been made with the object of injuring or humiliating the applicant by having him so arrested, either reject the application forthwith or issue an interim order for the grant of anticipatory bail: Provided that, where the High Court or, as the case may be, the Court of Session, has not passed any interim order under this sub-section or has rejected the application for grant of anticipatory bail, it shall be open to an officer in-charge of a police station to arrest, without warrant the applicant on the basis of the accusation apprehended in such application.” 9. Coming to the facts of the case, this Court finds that investigation appears to have been set into motion upon a Page 9 of 15 complaint lodged by one Bijay Kumar Nath of Puri district, wherein he alleged that being lured by a particular website he initially deposited Rs.150/- followed by Rs.1,000/- and again followed by Rs.1,000/-. He also downloaded two other gaming apps and invested a sum of Rs.900/- on three occasions. Except for Rs.150/-, which was initially credited to his account, the so called promised returns on further amounts deposited by him did not come to his account for which he suspected commission of some kind of financial fraud. While investigating into his complaint, the I.O. found that the amount of Rs.150/- credited to the account of Sri Nath was from a company named, Redeem & Honour Pvt. Ltd. Scrutiny of the account of the company revealed that the total transactions therein amounted to Rs.2,01,80,006.16. Further, the amount of Rs.1000/- deposited by Sri Nath was found to have landed in an account belonging to one Muhammad Ahsan N in the South Indian bank. In the said account also a sum of Rs.14,88,604.00 was found to have been transacted within a short time. Further investigation led to evidence of transactions with several other companies including Bettec and Byrontec Solutions Pvt. Ltd.. As such, Page 10 of 15 there is no clear cut material to show any link between the amount invested by Bijay Kumar Nath directly or indirectly with the petitioners either through the companies in which they were involved or to their personal accounts. It has been argued at length on behalf of the State that huge amount of money running into crores was transacted fraudulently by several companies including the companies of which the petitioners were Directors. But then in the absence of a proximal nexus showing that a definite fraud was committed at the expense of any person much less the original complainant, Bijay Kumar Nath, it becomes difficult to impute any criminality to the petitioners. Merely because the companies in question had transacted substantial amounts of money, per se, does not make them illegal entities or label such transactions as fraudulent or illegal. Unless the prosecution comes up with a definite case to show that the petitioners, acting either on other own or through the companies in question had committed any specific act to defraud any person, their complicity as projected by the prosecution would remain in the realm of suspicion only. Page 11 of 15 10. It goes without saying that liberty as guaranteed under Article 21 of the Constitution of India being one of the cherished objects of our Constitutional ideals, cannot be curbed on mere suspicion. This Court however, would hasten to add that an order protecting liberty of a person does not take away the right of the investigating agency to investigate into the case, as was held by the Supreme Court in the celebrated Constitution Bench judgment rendered in the case of Shri Gurubaksh Singh Sibbia vs. State of Punjab, 1980 (2) SCC 565. 11. As to the grounds raised by learned State Counsel that pre-arrest bail should not be granted in cases involving economic offences, this Court feels persuaded to rely upon the observations of the Constitution Bench of the Supreme Court in its judgment rendered in the case of Sushila Aggarwal and others vs. State (NCT of Delhi) and another, (2020) 5 SCC 1 that power under Section 438 of Cr.P.C. can be exercised to grant pre-arrest bail in respect of all offences unless there is statutory bar or restriction in respect of the offences concerned. It is relevant to note that there is no Page 12 of 15 such bar in the OPID Act and/or in respect of the alleged offences under the IPC. 12. It is further seen that charge sheet has been submitted in this case though investigation has been kept open in terms of Section 173(8) of Cr.P.C. Under such circumstances, it cannot by any stretch of imagination be said that investigation is at a nascent stage as substantial progress appears to have been made by the investigating agency in the form of examination of witnesses, collection/seizure of documents, freezing of bank accounts etc. As regards the necessity of custodial interrogation, this Court finds that in obedience to the direction of this Court, the petitioners had appeared before the I.O. on 29th of December, 2023 and spent a considerable period of time for such purpose (11a.m. to 6 p.m.). It has been alleged that such appearance was a sham as they remained silent to most of the questions put to them. It has been submitted in response that the petitioners refused to answer only those questions, the answers to which they did not know and secondly, the answers to those, which would have been self- incriminating in nature. There is no gainsaying that the right Page 13 of 15 against self-incrimination is a fundamental right recognized by the Constitution in the form of Article 20(3) of the Constitution and Section 161 (2) of Cr.P.C. and has to be respected at all costs as held in Nandini Satpathy (supra). The exact questions put to the petitioners have not been informed to the Court for which this Court is unable to form any opinion as to if the petitioners were justified in refusing to answer questions citing protection of Article 20(3). It would however, suffice to note that the petitioners had appeared and spent considerable time with the I.O. Only because they may be required to be interrogated or examined further does not necessarily mean that their liberty should be curbed. It cannot be held as an inviolable rule that interrogation in such cases must always be custodial in nature. 13. From what has been discussed hereinbefore, it is clear that the prosecution has not been prima facie, able to show a definite link with the alleged occurrence of financial fraud and the petitioners. Under such circumstances, the question whether the offence under the OPID Act is made out against them or not need not be gone into in the present case. Page 14 of 15 14. For the foregoing reasons therefore, this Court is inclined to allow the prayer of the petitioners for grant of pre- arrest bail. The anticipatory bail applications are disposed of with the direction that in the event of arrest, the petitioners shall be released by the arresting officer on such terms and conditions as he may deem fit and proper to impose including the following conditions; (i) The petitioners shall make themselves available as and when required by the I.O. and render full and effective cooperation with the investigation, failing which it shall be open to the prosecution to seek cancellation of this order. (ii) They shall surrender their upassports, if any, in the Court having seisin over the matter within a period of two weeks from the date of receipt of certified copy of this order. ……..……………………. Sashikanta Mishra, Judge Orissa High Court, Cuttack. The 9th February, 2024/ A.K. Rana, P.A. Signature Not Verified Digitally Signed Signed by: AJAYA KUMAR RANA Designation: PERSONAL ASSISTANT Reason: Authentication Location: High Court of Orissa, Cuttack Date: 12-Feb-2024 13:23:38 Page 15 of 15