MHCC020009312021

IN THE COURT OF SESSIONS FOR [Link] AT MUMBAI

CRIMINAL BAIL APPLICATION NO. 177 OF 2021
IN
[Link].37 OF 2021
IN
E.O.W. FIR NO. 03 OF 2020

[Link] Wadhawan
Aged about 44 years having
permanent address at
Wadhawan House, Plot No.32/A,
Union Park Road, No.5, [Link] Petit
School, Bandra(W), Mumbai 400050. ...Applicant
V/s.
The State of Maharashtra
Through Senior Inspector of Police,
Housing-I, Economic Offence Wing
Mumbai, [Link].03/2020 ...Respondent

Appearances:
[Link] Poarab i/b. MZM Legal for applicant/accused.
Ld. Adv Ishani Shah for Intervenor.
[Link] Mr. Abhijeet Gondwal for the State/Respondent.

CORAM : HIS HONOUR [Link]

JUDGE SHRI R. V. KOKARE.
([Link].37)
DATED : 18 /02/2021.
 .. 2..

ORDER
This is bail application filed on behalf of applicant for releasing
him on bail in view of section 439 of Cr.P.C. in Crime bearing No.03 of
2020 registered with EOW, Housing Unit-I for offences punishable
under sections 409, 420, 34 of IPC and Sections 3, 4, 13 and 4 of
MOFA. This application is resisted on behalf of the respondent/State by
filing its say at Exh. 2 and Intervenor.

2. Read the present application and say of the Investigating Officer

at Exhibit-02. Heard learned counsel on behalf of applicant and learned
APP on behalf of respondent. Perused the present application, say of the
respondent thereon as well say of the Intervenor and documents
produced on behalf of both the sides.

3. In nutshell the story of the prosecution is that the FIR registered

against the present applicant and others on the complaint of Shri
Chandrakishore Sobharam Kolindewala. In the complaint, it has alleged
that the HDIL and its Directors, the applicant and his father [Link]
Kumar Wadhawan had taken an amount of more than INR 200 crores
being 20-30% advance amount for sale of flats from 404 different flat
buyers in relation to “ Majestic Towers Project” against which the HDIL
and the buyers had entered into registered sale deed in relation to their
respective flats. It is alleged that the accused company did not provide
possession of the flats as per the terms of the agreements and that the
said amount was diverted for their own enrichment. It is further alleged
that the amount received from the flat buyers was deposited in the
Majestic Towers in Account No.007110100004426 of PMC Bank,
Bhandup Branch. The applicant and his father, accused no.2 are the
 .. 3..

authorized signatories/operators of the said bank account. It is further

alleged that the applicant and his father vide different ‘Funds Transfer’
letter transferred/diverted the amounts deposit in the above bank
account to the other projects of the company. As such, it is alleged that
the accused/applicant and his father induced the buyers into delivering
amounts of more than INR 200 crores. Hence, the FIR is lodged against
the present applicant and others.

4. The learned counsel on behalf of the applicant/accused has

submitted that the investigation is completed in the present case and
the respondent/Investigating Agency had filed the chargesheet before
the trial Court. This is the first bail application filed before this Hon’ble
Court after filing of chargesheet.

5. It is the case of the applicant that the applicant has not

committed any of the offences as alleged and the entire dispute is civil
in nature. It is submitted by the learned advocate that substantial
construction work has been carried out. The present crime was
registered against the applicant and others vide [Link].23/2020 with
the Bhandup Police Station, Mumbai for the offences punishable under
sections 409, 420, 34 of IPC and sections 3, 4, 13 and 14 of the MOFA.
The applicant further submits that on the basis of false, frivolous and
baseless allegations without considering the material facts of the
present case in its true perspective. The investigation of the case was
subsequently transferred to the Economic Offences Wing, Mumbai and
[Link]. 03/2020 was registered with the EOW, Mumbai and without
any preliminary enquiry or investigation, as mandatory, the applicant
 .. 4..

was taken into custody on 13/10/2020 and since then the applicant is
in custody till date.

6. The learned counsel on behalf of the applicant/accused has

submitted that the applicant is arrayed as an accused in the present
offence in the capacity of the Director of accused no.1 Company
Guruashish Construction [Link]. (GCPL) and Promoter of a company
Housing Development and Infrastructure Limited (HDIL). The learned
counsel for the applicant submits that the present criminal prosecution
against the applicant arises out of a commercial transaction and is
purely a civil dispute and Hon’ble Apex Court in the number of
judgments has held that a purely civil dispute arising out of a
contractual relationship cannot be given a criminal colour and
converted into a criminal offence to get favorable results. The learned
counsel for the applicant/accused further submits that there is neither
intentional nor deliberate and the same was result of happenings and
events which were not in the hands of the applicant and for the reasons
of several litigations filed in different Hon’ble Court including the
Hon’ble Supreme Court, in connection and with respect to the
redevelopment work. Due to the pendency of the court proceedings,
the applicant was prevented from complying with the time line for
construction as mentioned in the conveyance dated 16/10/2009.

7. The learned counsel for the applicant further submits that as on

31/03/2019, HDIL had incurred a total expense of the INR 732.59
crores in relation to the project as against the receipt of a total of INR
279.80 crores including or resident and commercial sale units. The
applicant submits that there is no question of any misappropriation of
 .. 5..

amount or committing any cheating, either upon the SRA or upon the
tenants or purchaser under the redevelopment project. The entire delay
in handing over possession of the flat buyers of “ Majestic Towers
Projects” is due to the multiple litigation and stop work notices
imposed on GCPL by MHADA and also due to this applicant losing
control of his company due to the admission under IBC Code vide in CP
(IB) -27/I and BP/MB 2019 between HDIL Vs. Bank of India. The
advocate for the applicant further submits that pursuant to the
Insolvency Proceedings before the National Company Law Tribunal,
Mumbai and Interim Resolutions Professionals took over the
management of accused company and under those circumstances no
construction could be done as per the provision of Insolvency and
Bankruptcy Code 2016. The said insolvency proceedings is pending
before the National Company Law Tribunal Mumbai as on date.

8. The learned counsel on behalf of the applicant/accused submits

that since the investigation is completed in the present case and the
chargesheet had been filed by the respondent/Investigating Agency and
as all the evidence are documentary evidence, no purpose will be served
to keep the present applicant in custody. The learned counsel of the
applicant further submits that the all banks accounts and properties are
seized by the Investigating Agency. The learned advocate for the
applicant has further submits that all the evidence are of documentary
in nature and it is in custody of the Investigating Agency. It is further
submits that the transaction between the first informant and the
applicant are of commercial in nature. There is a civil dispute between
the parties. It is further argued that there is general allegations made in
the FIR. The applicant is fully co-operated with the Investigating
 .. 6..

Agency. It is submitted by the applicant that he is ready to face the trial

and he may be released on bail on any such terms and conditions.

9. The learned counsel for the applicant in support of his aforesaid

submissions has relied upon the judgments of the Hon’ble Apex Court in
Sanjay Chandra V/s. CBI reported in AIR 2012 Supreme Court 830,
wherein the ratios is laid down as follows:
“(i)Ordinarily, persons accused of any offence at the stage of trial,
should be enlarged on bail;
(ii) The object of bail is primarily to secure the attendance of the
accused at the trial;
(iii) Grant of bail is the rule and refusal is the exception. Presumption of
innocence is sacrosanct and, therefore, bail at the stage of trial is
imperative to enable accused to look after his own case and establish his
innocence.”

28.“ We are conscious of the fact that the accused are charged with
economic offencs of huge magnitude. We are also conscious of the fact
that the offences alleged, if proved, may jeoparadize the economy of the
country. At the same time, we cannot lose sight of the fact that the
investigating agency has already completed investigation and the
charge sheet is already filed before the Special Judge, CBI, New Delhi.
Therefore, their presence in the custody may not be necessary for
further investigation. We are of the view that the appellants are entitled
to the grant of bail pending trial on stringent conditions in order to ally
th apprehension expressed by CBI. ”
 .. 7..

10. The learned counsel for the applicant/accused has further

submitted that pendency of several criminal cases against the accused
cannot be a ground for rejection and had relied upon an order passed
by the Hon’ble Bombay High Court in Criminal Bail Application No.373
of 2011 in Raosaheb Patole Vs. The State of Maharashtra wherein the
Hon’ble High Court has granted bail to the applicant therein even
though there were as many as 28 crimes registered against the applicant
of similar nature and held that “ This cannot be a ground for refusing
bail to the Applicant to the accused.”

11. The learned counsel for the applicant/accused has further relied
upon the following authorities:
a. In Sudeep Kumar Ganesh Khanna Versus State of Maharashtra
through EOW, Crime Branch, CID, Mumbai, the Hon’ble Bomaby High
Court has observed that:
“ To my mind, even if the allegations are taken to be serious and
involving white collared criminals so also the magnitude of the crime
being enormous having involvement of sum of Rs.60 crores
approximately, still, after the applicant was arrested in November, 2012
and is in custody since then, after the charge-sheet being filed, his
detention is no longer necessary. By imposing appropriate conditions
and even if he is involved in several such cases, he can be enlarged on
bail. The documents have been seized. Even necessary prohibitory steps,
including attaching bank accounts, have been taken”.

b. In Chhagan Chandrakant Bhujbal V/s. Assistant Director, Directorate

of Enforce and Anr.(Bail Application No.248/2018), the Hon’ble
Bombay High Court has held as follows:
 .. 8..

“ Applicant cannot be kept in custody for an indefinite period to deny

his right to defend himself in accordance with law”.

c. In the case of Gurucharan Singh Vs. State ( Delhi Admn.), the Hon’ble
Apex Court has laid down the law while considering scope of Section
437(1) and 439 Cr.P.C. had noted in para 24 of its judgment and
observed thus:
“ the nature and gravity of the circumstance in which the offence is
committed; the position and status of the accused with reference to the
victim and the witnesses; the likelihood, of the accused fleeing from
justice; of repeating the offence; of jeopardizing his own life being faced
with a grim prospect of possible conviction in the case; of tampering
with witnesses; the history of the case as well as of its investigation and
other relevant grounds which, in view of so many valuable factors,
cannot be exhaustively set out”.

d. In International Advanced Research Centre for Powder Metallurgy

and New Materials ( ARCI) and Ors. (2016) 1 Supreme Court Cases
348, the Hon’ble Apex Court has observed:
15. The essential ingredients to attract Section 420 IPC are : (i)
cheating; (ii) dishonest inducement to deliver property or to make, alter
or destroy any valuable security or anything which is sealed or signed or
is capable of being converted into a valuable security; and (iii) mens rea
of the accused at the time of making the inducement. The making of a
false representation is one of the essential ingredients to constitute the
offence of cheating under Section 420 IPC. In order to bring a case for
the offence of cheating, it is not merely sufficient to prove that a false
representation had been made, but, it is further necessary to prove that
 .. 9..

the representation was false to the knowledge of the accused and was
made in order to deceive the complainant.
16. The distinction between mere breach of contract and the cheating
would depend upon the intention of the accused at the time of alleged
inducement. If it is established that the intention of the accused was
dishonest at the very time when he made a promise and entered into a
transaction with the complainant to part with his property or money,
then the liability is criminal and the accused is guilty of the offence of
cheating. On the other hand, if all that is established is that a
representation made by the accused has subsequently not been kept,
criminal liability cannot be foisted on the accused and the only right
which the complainant acquires is the remedy for breach of contract in
a civil court. Mere breach of contract cannot give rise to criminal
prosecution for cheating unless fraudulent or dishonest intention is
shown at the beginning of the transaction.

e. In P. Chidambaram Versus Directorate of Enforcement 2019 SCC

Online SC 1549, the Hon’ble Apex Court has observed that :
27. Therefore, at this stage while considering the bail application of the
appellant herein what is to be taken note is that, at a stage when the
appellant was before this Court in an application seeking for interim
protection/anticipatory bail, this Court while considering the matter in
Criminal Appeal No. 1340/2019 had in that regard held that in a matter
of present nature wherein grave economic offence is alleged, custodial
interrogation as contended would be necessary and in that circumstance
the anticipatory bail was rejected. Subsequently the appellant has been
taken into custody and has been interrogated and for the said purpose
the appellant was available in custody in this case from 16.10.2019
 .. 10..

onwards. It is, however, contended on behalf of the respondent that the

witnesses will have to be confronted and as such custody is required for
that purpose. As noted, the appellant has not been named as one of the
accused in the ECIR but the allegation while being made against the co-
accused it is indicated the appellant who was the Finance Minister at
that point, has aided the illegal transactions since one of the co-accused
is the son of the appellant. In this context even if the statements on
record and materials gathered are taken note, the complicity of the
appellant will have to be established in the trial and if convicted, the
appellant will undergo sentence. For the present, as taken note the
anticipatory bail had been declined earlier and the appellant was
available for custodial interrogation for more than 45 days. In addition
to the custodial interrogation if further investigation is to be made, the
appellant would be bound to participate in such investigation as it
required by the respondent. Further it is noticed hat one of the co-
accused has been granted bail by the High Court while the other co-
accused is enjoying interim protection from arrest. The appellant is aged
about 74 years and as noted by the High Court itself in its order, the
appellant has already suffered two bouts of illness during incarceration
and was put on antibiotics and has been advised to take steroids of
maximum strength. In that circumstance, the availability of the
appellant for further investigation, interrogation and facing trial is not
jeopardized and he is already held to be not a ‘ flight risk’ and there is
no possibility of tampering the evidence or influencing /intimidating the
witnesses. Taking these and all other facts and circumstances including
the duration of custody into consideration the appellant in our
considered view is entitled to be granted bail. It is made clear that the
observations contained touching upon the merits either in the order of
 .. 11..

the High Court or in this order shall not be construed as an opinion

expressed on merits and all contentions are left open to be considered
during the course of trial.

f. In V. Y .Joshi and Anr. Versus State of Gujarat And Anr(2009) 3

Supreme Court Cases 78, the Hon’ble Apex court has observed that:
14. An offence of cheating canot be said to have been made out unless
the following ingredients are satisfied:
(i) deception of a person either by making a false or misleading
representation or by other action or omission;
(ii) fraudulently or dishonestly inducing any person to deliver any
property; or to consent that any person shall retain any property and
finally intentionally inducing that person to do or omit to do anything
which he would not do or omit.
For the purpose of constituting an offence of cheating, the complainant
is required to show that the accused had fraudulent or dishonest
intention at the time of making promise or representation. Even in a
case where allegations are made in regard to failure on the part of the
accused to keep his promise, in the absence of a culpable intention at
the time of making initial promise being absent, no offence under
Section 420 of the Penal Code can be said to have been made out.
22. We may reiterate that one of the ingredients of cheating as
defined in Section 415 of the Penal Code is existence of an (sic
fraudulent or dishonest) intention of making initial promise or existence
thereof from the very beginning of formation of contract.

g. In Ashok Ratanchand Jain Versus the State of Maharashtra, the

Hon’ble Bombay High court has observed:
 .. 12..

“Now all the investigations have been completed and further statements
have been recorded and the supplemental charge sheet has been filed, it
would not be proper to retain the applicant in custody as that is no
longer required ”.

h. In Amiya Kumar Gourishankar Jha Versus The State of

Maharashtra, the Hon’ble Bombay High Court has observed that:
“ After having perused the application and annextures thereto and
applying the tests as laid down by the Hon’ble Supreme Court in a
recent judgment in the case of Sanjay Chandra V/s. CBI reported in AIR
2012 SC 830. I am of the opinion that the offences alleged are of
cheating and forgery. The case is based primarily on documents. The
bank accounts have been frozen at least qua the applicant. Equally, the
applicant has given permanent residence address in Thane District. In
such circumstances by imposing stringent and appropriate conditions,
the applicant’s presence for questioning, interrogation and for trial can
be secured.

12. The learned APP on behalf of the respondent/State and learned

advocate on behalf of the Intervenor have strongly opposed for granting
bail to the present applicant/accused on the grounds that further
investigation is pending under section 173(8) of Cr.P.C. and the
applicant has paid active role in the crime. The applicant is habitual
offender and is accused in several other cases. The applicant may
influence witnesses and may cause hindrances in the investigation. The
offence is serious in nature, multiple cases are registered against him
and there is possibility that the applicant may abscond. The accused
 .. 13..

have wrongfully gained an amount of Rupees more than 200 crores

from the offences and misappropriated the said funds.

13. On scrutiny of the present application and say of the prosecution,

as well as say of Intervenor thereon and scrutiny of the arguments
advanced on behalf of both the sides at length, it reveals to me that
applicant is arrested in the present case on 13/10/2020 and remanded
to police custody from time to time and on 26/10/2020, granted
Judicial custody . The investigation is completed in the present case and
the chargesheet is filed by the Investigating Agency.

14. Having considered the entirety of the matter and having

considering the arguments advanced by the advocate for the applicant,
the learned APP and PI Jitendra Misal attached to EOW and considering
the authorities relied upon by the advocate for the applicant, in my
view, since the applicant is in custody approximately more than 4
months and admittedly, the investigation is completed and the
chargesheet is filed in the said crime, it is neither necessary nor it would
be proper to detain and continue custody of the present applicant in the
present case as that is no longer required.

15. Applying the tests as laid down Hon’ble Supreme Court in a

recent judgment in the case of Sanjay Chandra Vs. CBI reported in AIR
2012 SC 830 and which was also considered by the Hon’ble Bombay
High Court in the matter of Amiya Kumar Gaurishankar Jha Vs. the
State of Maharashtra, I am of the opinion that the offences alleged are
of cheating and forgery. The case is based primarily on documents. The
bank accounts have been frozen at least qua the applicant. Equally, the
 .. 14..

applicant has given permanent resident address in Mumbai District. In

such circumstances, by imposing stringent and appropriate conditions,
the applicant’s presence for questioning, interrogation and for trial can
be secured by imposing appropriate conditions all the apprehensions of
the prosecution can be taken care of .

16. Therefore, under the aforesaid facts and circumstances, and

authorities cited herein, I am of the view that the applicant is entitled to
release on bail. In the result, I proceed to pass following order.
ORDER
1. Bail application No. 177of 2021 is allowed.
2. Applicant/accused Sarang Rakeshkumar Wadhawan in connection
with [Link].03 of 2020 registered with Economic Offence Wing,
Housing Unit-I, Mumbai for the offences punishable under sections 409,
420, 34 of IPC and sections 3, 4, 13 and 14 of MOFA shall be enlarge on
bail on furnishing P.R. Bond of Rs.5,00,000/- ( Rupees Five Lakhs only)
with one or two sureties in like amount.
3. The applicant shall attend the office of the Economic Offence Wing ,
Mumbai on every first Monday of each month till the conclusion of
trial.
4. The applicant shall not tamper the evidence, hamper the
investigation and pressurize the informant or any person connected
with the crime.
5. The applicant shall inform his latest place of residence and mobile
contact number immediately after being released and/or change of
residence or mobile details, if any, from time to time to the court seized
of the matter and to the Investigating Officer of the concerned police
station.
 .. 15..

6. The applicant shall surrender his passport, if any (if not already
surrendered), and in case, he is not a holder of the same, he shall swear
to an affidavit. If he has already surrendered before any other authority,
that fact should also be supported by an affidavit.
7. The applicant shall not leave India without prior permission of the
trial court.
8. The applicant shall cooperate with the court for expeditious disposal
of the case, any attempt by the applicant to delay the trial may be a
ground for cancellation of bail.
9. On the oral request of the learned advocate for the applicant,
provisional cash bail of Rs. 5,00,000/- is granted to the applicant for the
period of eight weeks from the date of this order.
10. Bail in Lower Court.
11. Application stands disposed of accordingly.

Digitally
signed by
Raosaheb
Raosaheb Vithalrao
Vithalrao Kokare
Kokare Date:
2021.03.01
[Link]
+0530

( R. V. Kokare )
Additional Sessions Judge
Dated: 18/02/2021 [Link]
 .. 16..

“CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL

SIGNED JUDGMENT/ORDER”
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
01/03/2021 at 3.00 p.m. ( Mrs. V. V. Malgaonkar )

Name of the Judge HHJ Shri R. V. Kokare

(COURT ROOM NO.37)
Date of pronouncement of 18/03/2021
judgment/order
Judgment/order signed by P.O. on 01/03/2021
Judgment/order uploaded on 01/03/2021