Court :

Brief :
the petitioner abused the liberty of bail granted to him in the aforesaid cases and it cannot be lost sight of that once bail is granted to the petitioner, he may again trap unwary manufacturers into losing large sums of money. It is, therefore, considered expedient to reject the bail plea of the petitioner.

Citation :
BAIL APPLN. 2016/2008 10.02.2009


BAIL APPLN. 2016/2008

DATE OF RESERVE: February 03, 2009

DATE OF DECISION: February 10, 2009

AJAY VERMA ..... Petitioner
Through: Mr. Jayant Bhushan, Sr. Advocate with
Mr. Sudhir Makkar, Mr. Ajay Verma and
Mr. Gaurav Bhattacharya, Advocates


STATE .....
Through: Mr. M.N. Dudeja, Advocate for State.
Mr. Ashok Bhasin, Sr. Advocate with
Mr. Sunil Fernandes and Mr. Rajat
Jariwal, Advocates for the complainant


1. Whether reporters of local papers may be allowed
to see the judgment?

2. To be referred to the Reporter or not?
3. Whether judgment should be reported in Digest?


1. The petitioner seeks bail after a period of five months incarceration
in a case registered against him initially under Sections 406/420/120 IPC for
which he was subsequently charge-sheeted under Sections 406/420/465/468/471 IPC.
2. The background in which the case was registered against the petitioner
is that the complainant M/s. Fabritex Exports Pvt. Ltd. had exported goods
through this petitioner, who was operating as a buying agent and a middleman for
bringing the manufacturers in contact with foreign importers. Sometime in the
beginning of June, 2006, the petitioner contacted the complainant Company, which
was facing a lean season and induced the complainant into entering into an
export order for the export of cushion covers to Australia. Various meetings
were held between the petitioner and the complainant at its office premises in
which the petitioner impressed the complainant that not only was he in the
business of acting as a buying agent, but he was also acting as a middleman
facilitating export from India of several products, including garments to
destinations all over the world and that he had a long standing and excellent
relationship not only with foreign importers but also with banks and that,
therefore, because of his involvement in any deal, payments would not be a
problem and the deal would go through smoothly. Based on these representations,
the complainant was induced into entering into a Memorandum of Understanding
(MOU), which was drawn up at Delhi on or about 10th June, 2006 and the said
Memorandum of Understanding was drafted by the petitioner. As per the aforesaid
MOU, the goods were to be exported by the complainant to a company by the name
of NEGO C8, who were stated to be interested in importing cushion covers worth
1.5 million dollars. The petitioner also undertook to source the fabric on
behalf of the complainant Company for which payment was to be made by the
complainant in favour of the supplier before the opening of the Letter of Credit
itself. It was also stipulated in the MOU that before the opening of the L/C,
the complainant Company will get 4,600 mts of base fabric of cushion covers
worth Rs.10,70,788/- and 3,100 mts worth Rs.9,25,970/- for border fabric of
cushion covers and accessories. As a counter guarantee, cheque No.482478 dated
30th June, 2006 amounting to Rs.32,10,000/- of Punjab National Bank was issued
in favour of M/s. Fabritex Exports Pvt. Ltd. (the complainant) with the
understanding that if the L/C was not arranged from the buyer till 25th June,
2006, then the complainant would be at liberty to encash the said cheque and
will give the manufactured items out of 1,250 sets of cushion covers to the
petitioner. If and when the L/C was opened in favour of the complainant, the
guarantee cheque of M/s. Sirdanwal Overseas, the sole proprietary concern of the
petitioner, would be returned back by the complainant to the petitioner. Total
shipment time in the L/C was stipulated as 55 days with a validity of 70 days.
The petitioner priced the fabric at Rs.200/- for each cushion cover, whereas the
inherent price of the fabric of each cushion cover was Rs.40/-, on the
misrepresentation that this was the so-called scarcity value of the fabric and
that unless the fabric was available, the complainant could not fulfil the
order. As per the MOU, the petitioner issued a post-dated cheque as a guarantee
till the opening of the L/C and upon the opening of the L/C on 28th June, 2006,
the said cheque was duly returned to the petitioner.
3. It is the case of the complainant Company that they came to know that
the fabric was to be supplied by Yogesh Trading Company and their apprehensions
and fears were partly allayed by the said knowledge, as Yogesh Trading Company
is a very well known name in the fabric trade enjoying excellent market
reputation and goodwill, but subsequently they discovered that the Yogesh
Trading Company to which they had paid by way of demand drafts for more than

five times the market value of the fabric was an imposter and not the reputed
Yogesh Trading Company which they were induced to believe it was. The Yogesh
Trading Company, which supplied fabric, held out its premises to be at Nawab
Sahib Katra, Delhi ? 110 006 with its head office at New Cloth Market,
Ahmedabad-2. When contacted, the genuine Yogesh Trading Company situate at 9/9
Main Road, Kailash Nagar, Gandhi Nagar, Delhi made it clear that they were not
the fabric suppliers and that they were unaware that some other persons were
using their name in this manner. Subsequently, on enquiry from the addresses
mentioned on the bills of Yogesh Trading Company at Nawab Sahib Katra, Delhi
and New Cloth Market, Ahmedabad-2, the said addresses were found to be bogus
addresses. After tracking the movement of the demand drafts issued to the
Yogesh Trading Company and conducting an internet search for Yogesh Trading
Company, the said Company was found to be located at 9/3422, Gali No.8,
Dharampura, Gandhi Nagar, New Delhi. The said address was also found to be a
bogus one as B.V. Enterprises was found at that address.
4. It is also alleged that the petitioner got the L/C dated 28th June,
2006 opened by one Diversified Impex Corporation, 445 Fifth Avenue Suite # 30H
New York Ny10016 USA issued by the First International Merchant Bank Ltd.,
Malta, Sliema for US $ 3,88,800/- which was subsequently enhanced by way of
amendment to US $ 13,50,000/- on 14th July, 2006. By 30th June, 2006, tthe
complainant Company had gone into production and the finished product was made
available to the accused for inspection on 21st August, 2006. The complainant
alleges that no defect was found in the goods at the time of inspection, but
subsequently, after three days, on 24th August, 2006, some defects were pointed
out. On the complainant Company taking up the matter strongly that the defects
subsequently pointed out were not such as were contrary to the original product
specification, however, the petitioner got the L/C amended with the delivery
time extended from 20th August, 2006 to 5th September, 2006 and the L/C expiry
time extended from 5th September, 2006 to 15th September, 2006. After that, on
one pretext or the other, the petitioner kept delaying the inspection and
finally inspected the goods, which were lying ready for re-inspection, between
28th August, 2006 and 1st September, 2006. On 15th September, 2006, again the
goods were deliberately failed in inspection for no rhyme or reason. By this
time, the L/C had already expired and the petitioner made it clear that he would
not get the L/C extended and that the complainant would have to ship the goods
on a credit period term of 120 days. The complainant Company thereupon
approached the Export Credit Guarantee Corporation (ECGC) to obtain insurance
cover for 120 days and was informed by ECGC that NEGO C8 had a bad history and
hence they were not willing to give an insurance cover on NEGO C8. The matter
was brought to the notice of the petitioner, who, in order to allay the
suspicion of the complainant, informed the complainant that the Common Wealth
Bank had agreed to handle collection bills on behalf of NEGO C8 and to endorse
any shipment documents consigned to the said Bank by the suppliers of NEGO C8.
Thereafter, the consignment was inspected and found ?ok? between 30th September,
2006 and 27th November, 2006 and eventually the goods were shipped on 9th
December, 2006. Confirmation was received by the bankers of the complainant
Company regarding the due date of payment as 14.05.2007 in the sum of US $
13,24,560/-, but payment was never received. On verification, it was found by
the complainant that the buyer had not taken possession of the goods and that
the goods were still lying in the docks. Subsequently, the complainant Company
received notice of voluntary liquidation of NEGO C8 dated 11.07.2007 calling a
meeting of creditors of NEGO C8. It was also learnt by the complainant that
NEGO C8 had applied for de-registration as early as 5th April, 2007. It was
also learnt by the complainant that a similar modus operandi of cheating had
been adopted by the petitioner with various other similarly situate garment
manufacturers and exporters, such as, SM Apparels, 45A Main Road, Velacheri,
Chennai 600 032; DKA Exports, 9, Cathedral Road, Chennai ? 600 086; R.K.

Industries, Race Course Road, Guindy, Chennai ? 600 032; Lakshmi Graha Apparels,
SF No.106/1, Arasur to Avinash NH 47 LPT Bus Stop Arsur, Coimbatore ? 641 047
and Myco Pranave Creations, VSM Villa, 59 Appachi Nagar Main Road, Tirupur ? 641
5. Mr. Jayant Bhushan, the learned senior counsel for the petitioner
strenuously urged that it was completely un-understandable as to why no
complaint was made by M/s. Fabritex Exports Pvt. Ltd. till December, 2007 when
the Letter of Credit itself had expired in September, 2006, and urged that the
complainant had lodged a false complaint after one year and three months only
with a view to covering up its own defaults and follies. The complainant could
not comply with the time stipulation set out in the Letter of Credit though the
deadline was extended by amending the Letter of Credit. The complainant
admittedly had received an advance payment of US $ 1,50,000/- (approximately
Rs.67 lakhs). The buyer had to make payment to the complainant upon timely
delivery of the goods. The complainant could not meet the deadlines for
delivery and the present false complaint against the petitioner was an attempt
to arm twist the petitioner to make unlawful gains.
6. Mr. Bhushan, the learned senior counsel for the petitioner also
submitted that though the present dispute arises out of a commercial
transaction, it is with the ulterior motive of making good their loss suffered
on account of their own tardiness that the complainant has set the criminal law
machinery in motion. No culpability can be attached in the instant case as the
petitioner was only facilitating the business transaction and taken at its very
best it is a case of contractual breach. The fabric was supplied to the
complainant on an agreed rate fixed in the MOU and till the FIR was registered,
there was not even a whisper about the high value of the fabric. In any event,
it is not disputed that the fabric was completely supplied by the fabric vendor
to the complainant and it is, therefore, immaterial that the vendor was a bogus
7. The learned senior counsel further contended that the L/C had expired
in September, 2006. Admittedly, the complainant had not shipped the goods.
Subsequently, they got in touch with the Australian buyer and shipped the goods
on D/A basis. The buyer subsequently declared bankruptcy and the shipping
agency sold the goods to meet the warehousing charges once they did not make the
payment. When they came to know that other complainants had filed complaints,
they got the idea of extorting money and filed a verbatim complaint.
8. Finally, it was urged that the petitioner has been in custody for more
than five months after facing custodial interrogation from 1st September, 2008
till 6th September, 2008, during which period the petitioner fully cooperated
with the investigation. Charge-sheet has since been filed and there is no
reason to deny bail to the petitioner. The petitioner's only son is suffering
from thalasimia, a life threatening disease in which twice in a month blood
transfusion has to be given. If the petitioner is denied bail, his family will
be seriously affected as there is no other male member in his family to look
after his son. There is also no likelihood of the petitioner absconding as the
petitioner did not misuse the interim bail granted by the Hon'ble Supreme Court
of India vide order dated 04.04.2008 and surrendered before the trial court in
compliance with the order dated 26th August, 2008 passed by the Hon'ble Supreme
Court in SLP (Crl.) 1791/2008. Reliance is sought to be placed upon the
judgments of the Hon'ble Supreme Court in the cases of State of Rajasthan,
Jaipur vs. Balchand alias Baliay reported in 1977 (4) SCC 308 and Gudikanti
Narasimhulu vs. Public Prosecutor, High Court of A.P. reported in 1978 (1) SCC
240 to urge that the basic rule is to grant bail except where there are
circumstances suggestive of fleeing from justice or thwarting the course of
justice or creating other troubles in the shape of repeating offences, or
intimidating witnesses and the like.

9. Mr. M.N. Dudeja, the learned counsel for the State, on the other hand,
has urged that this is not a fit case for grant of bail keeping in view the
guidelines laid down by the Supreme Court in State of U.P. vs. Madhumani
Tripathi (2005) 8 SCC 21 wherein the Hon'ble Supreme Court has emphasized that
the nature of accusations, the nature of evidence in support of the accusations,
the larger interest of society and the propensity of the accused are to be
examined before grant of bail. He urged that applying the aforesaid tests to
the present case, the accusations against the petitioner are serious in nature
as the petitioner is stated to have cheated the complainant of the sum of Rs.4
crores. The nature of evidence, he urged, also pointed to the guilt of the
petitioner, in that, the petitioner had not only supplied fabric to the
complainant Company at highly inflated rates, but also under the
misrepresentation that the same were being purchased from the reputed M/s.
Yogesh Trading Company. It was only later on that the complainant realised that
the Yogesh Trading Company known to the fabric trade had not supplied the fabric
and the Yogesh Trading Company whose address was mentioned on the invoices was a
fictitious one. Reliance was placed by Mr. Dudeja in this regard upon the
statements of the proprietors of the original Yogesh Trading Company, recorded
in the course of investigation, to the effect that the invoices were not of
their Company and as a matter of fact they had been issuing computerised
invoices since the year 2006. He further submitted that the profile of the
foreign buyer NEGO C8, which was an Australian Company run by a husband and
wife, who were Indians, was also under scrutiny with the INTERPOL. Thus,
looking at the cumulative effect of all the accusations and the nature of the
evidence on record, it was not a fit case for grant of bail.
10. Particular emphasis was laid by the learned counsel for the State on
the fact that grant of bail to the petitioner would militate against the larger
interest of Society keeping in view the propensity of the petitioner, who was
committing such kind of offences on a regular basis with a calculated mind, as
was clear from the fact that the modus operandi adopted by the petitioner to
cheat innocent garment manufacturers was the same in all the cases in which the
petitioner was involved. It was further highlighted that while the petitioner
was granted interim bail in criminal cases registered against him in the year
2002, being FIR No.98/02, Police Station Chittaranjan Park and FIR No.241/02,
Police Station Connaught Place both under Sections 420/406/120B IPC, the
petitioner indulged in committing similar offences in the instant case as well
as in three other cases registered against him. The particulars of the
involvement of the petitioner in similar cases was given as follows:-
FIR No.98/02 dated 06.04.02. PS Chittranjan Park, u/s 420/406/120B IPC
Joginder Kumar Seth (M/s. EM ESS Enterprises)
M/s. Bajrang Enterprises
Rs.80.50 lakhs
Ajay Verma and Ors.
FIR No.241/02 dated 20.04.02 PS Connaught Place, u/s 420/406/120B IPC
Lokesh Chopra (M/s. Lokesh Garments Pvt. Ltd.)

M/s. Bajrang Enterprises
Rs.15.40 Lakhs
Ajay Verma and Ors.
FIR No.268/2005 PS Tilak Nagar, Delhi u/s 467/471/477/ 420/406 IPC
M/s. High Ami Exports
Pl. Ref to Charge Sheet
Ajay Verma
FIR No.773/07 dated 20.12.07 PS Hauz Khas, u/s 420/406/120B IPC
Sudhir Sekri (M/s. Fabritex Exports Pvt. Ltd.)
M/s. Yogesh Trading Co.
Rs.4.06 Crores
Ajay Verma
FIR No.139/08 dated 19.08.08 PS Hauz Khas, u/s 420/406/129B IPC
M/S. DKA Exports (Chennai)
M/s. Yogesh Trading Co.
Rs.2.75 Crores
Ajay Verma and Ors.
Complaint No.2370/08 dated 21.04.08
M/s. Lakshmi Graha Apparels Ltd. (Coimbatore)
M/s. Yogesh Trading Co.
Rs.4 Crores
Ajay Verma

11. It was submitted that the petitioner had already suffered a conviction
in the last case while the remaining cases were still pending against him. It
was also submitted, relying upon the judgment of the Hon'ble Supreme Court in
Lalmuni Devi vs. State of Bihar and Ors. JT 2001 (1) SC 150, that it is settled
law that merely because a civil claim is maintainable it does not mean that the
criminal complaint cannot be maintained. Finally, as regards the long
incarceration of the petitioner in judicial custody, it was submitted that the
fact that the petitioner was in jail for a long time though is germane in
granting bail for offences of this nature, long detention in jail could not be
the sole criteria for arriving at the conclusion that the grant of bail was
12. Having heard the learned counsel for the parties and examined the
record, I have no hesitation in stating that though ordinarily, keeping in view
the cumulative facts and circumstances of the case, I would have been inclined
to admit the petitioner to bail albeit on stringent terms and conditions, in
the present case I am constrained to reject the prayer for bail for the reason
that the petitioner appears to have a propensity for committing such like
offences as in the instant case. The cases enumerated hereinabove in which the
petitioner is involved are of like nature and clearly indicate his modus
operandi. I find substance in the contention of the learned counsel for the
State that had the petitioner not been granted interim bail in FIR No.98/02 and
FIR No.241/02, the present case bearing FIR No.773/07, as well as two more cases
of like nature, being FIR No.268/05 and FIR No.139/08 as well as Complaint
No.2370/08 dated 21st April, 2008 would not have been registered against the

petitioner. In a sense, therefore, the petitioner abused the liberty of bail
granted to him in the aforesaid cases and it cannot be lost sight of that once
bail is granted to the petitioner, he may again trap unwary manufacturers into
losing large sums of money. It is, therefore, considered expedient to reject
the bail plea of the petitioner.
13. The present application is accordingly dismissed placing it on record
that any observations made in the present case are solely for the purpose of
consideration of the bail plea and will have no bearing on the merits of the
case upon the trial of the petitioner.

FEBRUARY 10, 2009


on 25 February 2009
Published in Criminal Law
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