Interim Order 2

Order Details: Bail Order
Pdf Text: C. C. No. 1904 PW 2022 State Vs J. Sudhakar Reddy and ors.
CNR No.MHMM18-009146-2022
COMMON ORDER BELOW FOLLOWING BAIL APPLICATIONS
1. B.A. No.3709/2022 – Mr. J. Sudhakar Konda Reddy, Accused No.1, Exh.16
2. B.A. No.3618/2022 – Mr. Owaiz Salim Ahmed, Accused No.2,
Mr. Vipul Shankar Guada, Accused No.3,
Mr. Adnan Salim Ahmed, Accused No.4, Exh.17
3. B.A. No.3794/2022 – Mr. Vighnesh Anand, Accused No.10, Exh.18
4. B.A. No.3731/2022 – Mr. Kurubu Mallaiah, Accused No.11, Exh.19
5. B.A. No.4194/2022 – Miss. Priyanshi Kandpal, Accused No.13, Exh.20
6. B.A. No.3796/2022 – Mr. Ram Shriram Pathade, Accused No.18, Exh.21
1. Background of the applications -
The first informant, Mr. Gopi Jayram Mandadi, on 20.05.2022,
approached Cyber West Division Police Station, B.K.C., Mumbai, and
lodged report stating that he is serving as a Engineer in private company.
In the month of September 2021, he was in need of money. On Google
Play Store application in his cellular phone he found another application
Lend Mall, providing online loan. He downloaded it and given permission
to access his camera and storage data. He found various loan products and
for obtaining loan he furnished his various details, including bank account
number, PAN card, Aadhar Card, address, etc.
2. In the beginning, he obtained online loan of Rs.10,000/- and repaid
it within seven days by paying Rs.16,000/-. He found such loan
applications useful and from several applications downloaded from Play
Store Application, between September 2021 to March 2022, he had
availed Rs.3,85,000/-, as online loan. He repaid it along with interest and
other charges within time.
3. Despite that he started receiving calls from different unknown
numbers asking for repayment of the loan amount. From time to time, it is
informed by him to concerned that amount is already paid, but owners of
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the loan applications through such a calls and using mobile data obtained
by them by accessing mobile phone of informant, spread misinformation
about the informant in his contacts. They morphed his images and spread
pornographic data about him and his family members, amongst his
contacts and on Internet. They blackmailed informant and extracted
amount of Rs.15 lacs from him from time to time by following such
methods.
4. On its basis the offence at C. R. No.20 of 2022, was registered with
said police station. Investigation commenced. The scrutiny of various
factors and persons involved started. It is transpired that they are
connected to accused/applicant No.1, J. Sudhakar Konda Reddy.
Additional material connecting him with the alleged acts also collected
and he has been arrested on 24.06.2022. Certain articles, including his
mobile phone and SIM cards were seized and it is transpired that he is
involved in various activities about recovery of loan amounts relating to
more than one application.
5. On the basis of material collected from him and from his
interrogation other applicants/accused Nos.2 to 4, Mr. Owaiz, Vipul and
Adnan, were also found to be involved in assisting him, therefore, they
were also arrested. His team members Accused Nos.5 to 7 and other
persons, were also arrested. Various hardware and soft data collected from
them.
6. All these persons were found to be running and involved in
activities relating to various loan applications such as DingTalk, CashG,
LuckyWallet, etc. It is also transpired that amplitude of the acts of
recovery by coercive and fraudulent means is vide. Various other persons
were blackmailed and huge amount is extracted from them in the name of
loan recovery. It is transpired that all these on-line loan applications were
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having foreign links. The persons residing abroad were created these
applications and with the help of these accused persons and other persons
residing in India, running their business. During investigation, bulky
material collected. It is transpired that the money collected is huge and
transferred to various bank accounts and also transferred abroad using Bit
coins. All these persons/applicants, after arrest were initially remanded to
police custody and then to magisterial custody. Their initial bail
applications were rejected and now by filing these applications, they
again prayed for bail as charge sheet is filed/investigation is completed.
Bail Application No.3709 of 2022 (Mr. J. Sudhakar Konda Reddy) -
7. This applicant/accused sought bail mainly on the ground that there
are no impeding reasons to detain him further in custody. He is ready to
co-operate further and will not flee. Everything is seized from him.
Investigation relating to him is over. During investigation it is transpired
that there is no specific role entrusted to him and no evidence found
against him. The charges invoked are unsustainable. No physical custody
is required as investigation is over.
Bail Application No.3618 of 2022 (Mr. Owaiz Salim Ahmed, Mr. Vipul Shankar
Guada and Mr. Adnan Salim Ahmed) -
8. This is a common application filed by three accused persons, who
prayed for bail on similar grounds. The summary of their contentions is
that the applicants were arrested only on the ground of suspicion. There is
no nexus found between these applicants and allegations made. They are
permanent resident of Bangalore and will remain present for trial and co-
operate further with investigation agency. There is no role attributed to
them. One of them is only employee of the call centre and not actually
involved in the alleged acts. The evidence already collected and further
custody is not justifiable.
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Bail Application No.3794 of 2022 (Mr. Vighnesh Anand)-
9. He is arrested only on the ground of suspicion. The only allegation
against him is in respect of receiving Rs.99,000/- only, but there is
nothing in the charge sheet which will connect this applicant or the said
amount with the alleged amount of loan recovered from the informant or
other persons. The hardware and other material already seized from him.
There is no evidence that he has formed fake company except oral
contentions no specific role is attributed to the accused. He is permanent
resident of Bangalore, and ready to remain abide by the conditions.
Investigation is over and there is no point in keeping further detention.
Bail Application No.3731 of 2022 (Mr. Kurubu Mallaiah) -
10. He is arrested only on the ground of suspicion stating that he is
director of one of the company and worked with other companies as
Trainee Caller. It is also alleged that he has received certain amount, but
during investigation no evidence found against him. He is ready to co-
operate further. The sections invoked against him are not sustainable. The
documents and electronic evidence already collected. He is ready to
remain abide by the conditions.
Bail Application No.4194 of 2022 (Ms. Priyanshi Kandpal) -
11. She is 24 years old girl and was holding position of Chinese
Interpreter/Team Leader in the disputed company. She was just employee
only associated with limited work of translation. She has not at all
concerned with disbursement of loan or it's recovery. She has been
arrested in several such complaints later on and her liberty was
deliberately curtained by misusing state machinery. She is innocent. No
material found during investigation against her. No liability can be
saddled on her as she is just employee of the company, and not connected
with the activities of the company. She is law abiding citizen, having deep
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technical knowledge and better future prospectus. All the hardware,
electronic data and other material already collected from her. Her arrest is
illegal and in violation of Section 41-A of Code of Criminal Procedure.
She is ready to remain abide by the conditions, if any, imposed. The
various decisions of Supreme Court mandates her release on bail.
Bail Application No.3796 of 2022 (Mr. Ram Shriram Pathade) -
12. He is permanent resident of Mumbai and working as a Director of
Mahagram Payment Pvt. Ltd., a company having an unblemished record.
It is alleged that he has a loan application in the name of said company,
but it is a Payment Processor or Intermediary engaged in business of
providing services to Micro/Low Level Payment Processing in real time
artificial payment information technology i.e. Cash Free Payments Pvt.
Ltd. Thus, he is doing the business as a fintech/payment service provider
on behalf of Cash Free Payments Pvt. Ltd. and nothing to do with the
alleged sanction of loan or it's recovery. Applicant is doing this business,
having various customers across India, he is a tax payer and received
several awards from Government of India. The Investigating Officer
failed to understand his position and wrongly arrested the applicant. His
company is registered with Cash Free for payment gateway services and
A.P.I. Software. After verification, the Cash Free, is allowed virtual
account/wallet enabled by accessible through A.P.I. Software of Cash
Free/Yes Bank. The investigation agency has done fishing and rowing
inquiry without any complaint against the present applicant. Technically
it's not possible for applicant's company for Mahagram to know for which
purpose the money was transferred and how it is going to be recovered.
He relied on judgments of Supreme Court in the case of Google India
Private Limited Vs Ms. Vishakha Industries ((1587) SCC) and Flipkart Internet
Pvt. Ltd. Vs State of N.C.T. of Delhi and anr. (2022 (Delhi) W.P. (Cri.) 1376/2020)
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and submitted that present applicant/accused, being intermediary, he is
covered under such protection provided under Section 79(1) of
Information Technology Act, 2000 and can not be prosecuted. Further he
is innocent. There is no role attributed to the accused. He is having no
criminal antecedents. He is ready to remain abide by the conditions.
Summary of objections by Investigating Officer and Ld. A.P.P. -
13. The Investigating Officer as well as Ld. A.P.P. strongly objected to
the bail applications. The summary of their objection is that the active
involvement of all the applicants/accused persons is noticed in the
allegations. It is transpired during investigation that they were involved in
activities of disbursement and coerced recovery of the loan amount along
with forceful high returns, relating to various applications. For this
purpose they established various shell companies. They siphoned of huge
amounts recovered from customers across India and abroad through
various bank accounts and using crypto-currencies. There found foreign
connections and syndicate of various persons to run such illegal activities.
Substantial evidence in the form of hardware and soft data collected
against accused persons showing their active involvement. There is
possibility of tampering of evidence and fleeing away of accused persons
from trial. They may not turn up. The investigation is still incomplete.
Merely because charge sheet is filed accused can not be released for these
reasons.
Substance of arguments of both the sides -
14. All the Ld. Advocates for respective applicants during their
arguments made submissions in tune with their respective contentions.
Those submissions can be summarized as, that applicants are innocent,
there transpired nothing which will connect the accused persons with the
alleged acts, investigation is over and charge sheet is already filed.
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Accused are ready to remain abide by the conditions. Arrest of some of
the applicants/accused is illegal and certain punishing provisions as
mentioned in respective bail applications are not sustainable. They also
produced and relied on citations of Supreme Court and other High Courts,
mentioned below, illustrating the principles of grant of bail and the legal
position that intermediary can not be prosecuted.
15. The submissions of Ld. A.P.P. are also in tune with respective
objections raised. It is submitted on behalf of prosecution that allegations
are serious, amount involved and strength of persons defrauded is high.
Investigation is still going on and foreign connections were established.
The accused persons are actively found to be involved in the various acts.
They are residents of other States and may not turned up for trial. There is
possibility of tampering.
Reasons -
16. Admittedly investigation is over. All the material, including
hardware and soft data, from the custody of accused persons collected.
The charge sheet reflects that the Accused No.1, J. Sudhakar Konda
Reddy, was instrumental in running various activities, from disbursement
of loan to it's coerced recovery. He was mainly assisted by Accused No.2,
Mr. Owaiz Salim Ahmed, Accused No.10, Mr. Vighnesh Anand, Accused
No.11, Mr. Kurubu Mallaiah and Accused No.13, Ms. Priyanshi Kandpal,
besides other persons. The other applicants were found to be mainly
involved either as their employees or facilitating the online activities
relating to transactions, generally not associated with the work of
recovery of loan amount.
17. The final report also reflects another important thing. That the First
Information Report is only in respect of disbursement of loan amount of
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Rs.3,85,000/-, in respect of which the amount of about Rs.16 lacs was
recovered forcefully following illegal means. However, during
investigation, Investigating Officer found that this is a crime syndicate
running various on-line loan applications and shell companies, gaining
huge profits by providing loan. He came to conclusion that by such means
the amount found to be collected was 100+ crore rupees and several
persons across India, were defrauded. He found such amounts transferred
through various bank accounts and frozen some of them. But except
informant not a single such person was found to be traced. Not a single
statement was recorded. It appears that such conclusion is inferred only
on the basis of material collected and the amount found to be involved in
the transactions of the companies involved. Such a material is mainly,
only in the form of account statements and nothing else. For the limited
purpose of bail it can be said that about the additional huge amount, that
the claim of Investigating Officer, that it is collected by defrauding
borrowers, is doubtful. Thus, the bail applications can be considered only
for the limited purpose of amount of about Rs.16 lacs.
18. In these background facts and circumstances the contentions of
accused persons needs further consideration.
19. As observed above, all the accused persons are in custody for more
than three months and all the relevant material from their custody is
collected. The investigation on its basis is over and charge sheet is also
filed. The witnesses, are mainly informant and other interested persons.
Their evidence is mainly based on electronic transactions about which
data is already generated and such data is already seized, produced with
chargesheet and is also in custody of bank or other stakeholders, who are
independent persons. Thus, possibility of tampering is almost nil.
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20. Majority of the accused persons are educated, having technical
backgrounds and below the age of 30 or 35 years. All of them are either
working with companies or running companies for earning livelihood for
themselves and their families. They are permanent residents of the places
situated within India and having sound backgrounds. They and their
parents belonged to reputed families. Investigation relating to them is
over and their presence can be secured as all the applicants/accused are
ready to follow bail conditions.
21. The evidence collected reflect that it runs in several pages. It
involves various hard and soft data generated through enumerable
electronic transactions, performed by so many persons about transactions
spread across various places in India and abroad. The examination of
those witnesses, proving all documents after commencement of trial will
take substantial time. It means the possibility of conclusion of trial within
limited span of time by keeping the accused in detention is almost nil.
22. Further, for this purpose it is necessary to bear upon the citations
relied by one of the applicant. Applicants mainly relied on observations
made by Supreme Court, mainly in the matters of, P. Chidambaram Vs.
Enforcement Directorate ((2020) 13 SCC 791), Sanjay Chandra Vs. C.B.I. ((2012) 1
SCC 40), P. Chidambaram Vs. C.B.I. ((2020) 13 SCC 337), wherein the
principles of granting bail, are enunciated, besides other citations.
23. The summary of the above citations is that while granting bail, the
nature of accusation and severity of punishment, reasonable apprehension
of tampering of evidence, reasonable possibility of absconding of
accused, character, behavior and standing of the accused and larger public
interest needs due consideration. Further, if charge sheet is filed the
balance approach is needed. Merely because there is strong evidence the
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liberty can not be curtailed for indefinite period. Pre-trial detention is not
permissible and must be avoided, even if there found prima facie strong
evidence. Factors denying bail only on the ground of seriousness of
offence are not justifiable to reject bail, if speedy trial is not possible. The
bail is matter of discretion and such a jurisdiction is to be exercised only
on the basis of well settled principles having regard to facts and
circumstances of particular case.
24. The present offence is triable by this court itself. As observed
above the possibility of tampering of evidence or absconding of accused
is almost nil. During investigation it is transpired that the persons mainly
involved in the formation of syndicate are from other countries and they
are not yet arrested and it appears that out of all the present applicants
some of them, who are of tender age, holding sound educational
backgrounds, were used by main culprits. No doubt these persons also
found to be involved voluntarily, but these aspects deserves some
consideration for limited purpose of bail. If we considered these facts and
circumstances in the light of above guidelines issued by Supreme Court in
several judgments, it can be said that the prayer for bail deserves due
consideration.
25. As observed in preceding paragraphs, out of all the applicants the
role of accused/applicants, Mr. J. Sudhakar Konda Reddy, Accused No.2,
Mr. Owaiz Salim Ahmed, Accused No.10, Mr. Vighnesh Anand, Accused
No.11, Mr. Kurubu Mallaiah and Accused No.13, Ms. Priyanshi Kandpal,
found to be more serious. Then question remains whether those are also
entitled to bail.
26. So far as, accused/applicants Mr. J. Sudhakar Konda Reddy, Mr.
Owaiz Salim Ahmed, Mr. Vighnesh Anand and Mr. Kurubu Mallaiah, are
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concerned, all of them, were major. From the record it appears that they
were actively involved in the conspiracy with main culprits and used
other persons for running activities. The grounds pleaded are also
somewhat vague and lacks merits. Therefore, their bail plea can not be
entertained in view of the amplitude of allegations and stake involved.
27. But the case of Ms. Priyanshi Kandpal, stands on somewhat
different footing. She is unmarried girl of tender age. Besides other
discussed grounds as she is in custody for long time she can be released
on bail by imposing certain conditions to prevent tampering of evidence
and securing her presence. The above guidelines are also applicable to her
and as such keeping her in further detention appears unjustifiable.
Considering all the above factual and legal aspects and contents of her
bail application, I am of the opinion that she is also entitled to bail.
28. In addition to it, some of the accused already released on bail
before filing of charge sheet. One of the accused also released on bail
after filing of charge sheet by Sessions Court. On ground of parity also
the bail plea needs due consideration.
29. Besides these aspects, before parting, it is also necessary to
mention that the case of applicant/accused Mr. Ram Shriram Pathade,
stands on different footing. In this regard it is contended that he is
intermediary, and not at all concerned either with providing and
disbursement of loan or its recovery.
30. The Section 2(1)(w) of Information Technology Act, provides for
definition of intermediary runs as follows,
Section 2(1)(w) “intermediary”, with respect to any particular electronic records, means
any person who on behalf of another person receives, stores or transmits that record or
provides any service with respect to that record and includes telecom service providers,
network service providers, internet service providers, web-hosting service providers,
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search engines, online payment sites, online-auction sites, online-market places and
cyber cafes;]
Further, Section 79(1) of the said Act, provides for exemption from
liability of intermediary in certain cases, it runs as follows,
Section 79(1) Exemption from liability of intermediary in certain cases.–(1)
Notwithstanding anything contained in any law for the time being in force but subject to
the provisions of sub-sections (2) and (3), an intermediary shall not be liable for any
third party information, data, or communication link made available or hosted by him.
31. The Ld. Advocate in this regard relied on judgments of Supreme
Court in the case of Google India Private Limited Vs Ms. Vishakha Industries
((1587) SCC) and Flipkart Internet Pvt. Ltd. Vs State of N.C.T. of Delhi and anr.
(2022 (Delhi) W.P. (Cri.) 1376/2020), wherein it is observed that intermediary
is not liable for prosecution under certain circumstances.
32. If we go through charge sheet, from the material produced it is
clear that the present applicant/accused Mr. Ram Pathade, acted as
Fintech, through his company Mahagram, for providing real time
disbursement of amount, from companies working through loan
applications to it's customers. He has no role in it, except than this. He can
not be said to be acted in connivance with other accused persons. The
observations made and law laid down in the matters of Google India Private
Limited and Flipkart Internet Pvt. Ltd., mentioned above, that intermediary is
not liable for prosecution, are squarely applicable to his case, as there is
doubt over the involvement of this applicant in the alleged acts, for this
reason.
33. The bail also sought by all the applicants disputing the legality of
arrest. But there found no substance in those contentions as punishment
provided to some of the offences invoked is above seven years. It needs
no discussion.
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34. In view of above discussed facts and circumstances, legal and
factual aspects of the matter, following order -
ORDER
a. Bail Application No.4194/2022, filed by accused/applicant Ms.
Priyanshi Kandpal (Accused No.13) and Bail Application No.3796/2022,
filed by accused/applicant Mr. Ram Shriram Pathade (Accused No.18),
are allowed.
b. Common Bail Application No.3618/2022, is partly allowed to the
extend of accused persons/applicants Mr. Vipul Shankar Guada (Accused
No.3) and Mr. Adnan Salim Ahmed (Accused No.4).
c. The above accused persons/applicants, are released on bail on their
furnishing P.B. and S.B. of Rs.30,000/- each.
d. Permission granted to furnish one or more sureties for the amounts
of surety bond ordered subject to condition that one of the sureties must
be either from Government service or having landed property situated
within the jurisdiction of Mumbai.
e. One month time is allowed to furnish S.B., in the mean time
permission granted to deposit cash security provisionally in substitution
of surety bond for one month.
f. It is further directed that the accused persons shall also furnish their
detailed addresses, names and addresses of their parents and sureties, in a
printed format, along with their addresses and I.D. proofs.
g. Accused persons shall not tamper with prosecution evidence and
shall remain present before Investigating Officer, whenever called by him.
h. Bail Applications filed by accused persons/applicants Mr. J.
Sudhakar Konda Reddy (Accused No.1), Mr. Owaiz Salim Ahmed
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(Accused No.2), Mr. Vighnesh Anand (Accused No.10) and Mr. Kurubu
Mallaiah (Accused No.11), are rejected.
MUMBAI (KOMALSING RAJPUT)
DATE – 20.10.2022 M.M., 12TH COURT, BANDRA, MUMBAI
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