Mumbai, Maharashtra | June 3, 2022 – The Special Judge for CBI, Greater Bombay, Shri A.S. Sayyad, presiding over CBI Special Court (C.R.No.52), rejected the bail application of Brijesh Lohiya, accused No. 4 in a significant economic fraud case involving the alleged illegal remittance of over ₹2252.82 crores in foreign exchange. The order, pronounced on June 3, 2022, pertains to Bail Application No. 153 of 2022, stemming from Remand Application No. 183 of 2022 in RC No. 4/E/2017-CBI/EOB/MUMBAI.
Brijesh Lohiya, a 43-year-old businessman, sought bail under Section 439 of the Code of Criminal Procedure (Cr.P.C.) in connection with offences punishable under Section 120-B (criminal conspiracy) read with Sections 420 (cheating), 467 (forgery of valuable security, will, etc.), 468 (forgery for purpose of cheating), and 471 (using as genuine a forged document or electronic record) of the Indian Penal Code (IPC), along with Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act.
The Central Bureau of Investigation (CBI), Economic Offences Wing (EOB), Mumbai, registered the case on May 13, 2017, against several entities, including M/s. Stelkon Infratel Pvt. Ltd. and others, along with unknown public servants. The allegations revolve around the fraudulent remittance of a massive amount of foreign exchange (US Dollars equivalent to ₹2252.82 crores) to various entities in Hong Kong between 2014 and 2016.
The CBI alleged that 13 entities (11 firms and 2 companies) were established using Import and Export Codes (IEC) obtained in the names of fictitious or non-existent individuals. Current accounts were subsequently opened in the names of these entities across various banks, including Punjab National Bank, Central Bank of India, and State Bank of India. False and fabricated import documents, such as Bills of Entries, Invoices, and Bills of Lading, purportedly issued by Jawaharlal Nehru Custom House (JNCH) Nhava Sheva and New Custom House (NCH) Mumbai, were allegedly presented to these banks to facilitate the fraudulent forex remittances.
The investigation further revealed that the prime accused, Mohd. Farooque, along with other accomplices, including the present applicant, Brijesh Lohiya, allegedly induced poor and illiterate individuals to share their KYC documents in exchange for small sums. These documents were then used to create the aforementioned fictitious entities, making these individuals Directors and Proprietors on paper. The accused allegedly collected substantial amounts of unaccounted cash from various entities seeking to illegally remit forex abroad. This cash was allegedly layered through “Angadias” (traditional money couriers), cheque discount brokers, and accounts of multi-state cooperative societies before being credited via RTGS into the accounts of the 13 fictitious entities.
The prosecution specifically implicated Brijesh Lohiya, a Custom House Agent (CHA), alleging his active involvement in the fraud. The CBI pointed to a property transaction in April 2017, involving a Memorandum of Understanding for the purchase of M/s. GLS Electronics Industries Ltd. between Lohiya and Smt. Aasma Farooque Shaikh (wife of the prime accused), as evidence of his involvement in the conspiracy.
Advocate Shri. Aabad Ponda, representing Brijesh Lohiya (instructed by Adv. Shri. Raj Raut), argued that his client was implicated based on only four circumstances. He emphasized that the alleged period of the offence was between 2014 and 2016, the FIR was registered in 2017, and after a detailed investigation, the charge sheet was filed on May 19, 2022. He contended that this was primarily a documentary case, with all relevant documents already recovered. Advocate Ponda argued that there was no direct involvement of his client with the other accused, and any alleged transactions were through bank accounts, not direct cash dealings. He asserted his client’s innocence, stating that Lohiya neither prepared nor forged any documents in collusion with others and never provided any formats or assistance in committing the alleged offence. He further highlighted that Lohiya was arrested five years after the FIR registration (on February 22, 2022) and has been in custody since. Being a married man and the sole earner for his family, his continued detention served no purpose, especially with the investigation concluded. He cited the case of Shelia Sebastian Vs. R. Jawaharaj & Anr. to support his plea for bail.
Conversely, Learned SPP Shri. J.K. Sharma, representing the CBI, strongly opposed the bail application, reiterating the gravity of the economic offence and Lohiya’s alleged active involvement. The prosecution argued that Lohiya was a close associate of the prime accused, Mohd. Farooque Shaikh, and played a crucial role in the conspiracy. Investigation revealed that Lohiya allegedly provided formats of Bills of Entries, Invoices, and rubber stamps of Customs officers to facilitate the illegal forex transactions using forged documents purportedly issued by JNCH, Nhava Sheva. The prosecution asserted the existence of “clinching material” demonstrating Lohiya’s complicity and argued that releasing him on bail could lead to him absconding or tampering with evidence, especially with further investigation ongoing.
Learned SPP Sharma relied on several Supreme Court and High Court judgments, including Jameel Ahmad Vs. Mohammed Umair Mohammad Haroon & Anr. and State of Bihar & Anr. Vs. Amit Kumar @ Bacha Rai, emphasizing the principle that economic offences constitute a distinct class requiring a different approach in bail matters due to their potential to severely impact the country’s economy. He argued that the court must consider the prima facie view of whether the accused committed the offence, the nature and gravity of the crime, and the likelihood of obstruction of justice.
After carefully considering the submissions and the material on record, Special Judge Shri A.S. Sayyad noted that the applicant was allegedly working as a Custom House Agent at the relevant time. He referred to the principles laid down in the cited judgments, emphasizing the need to consider the nature and gravity of the accusations, the applicant’s antecedents, the possibility of fleeing justice, and whether the arrest was made with malicious intent.
While acknowledging the arguments made by the applicant’s counsel regarding the delay and completion of the investigation, the court focused on the specific allegations against Lohiya. The charge sheet, particularly paragraphs 12, 49, 54, and 146, prima facie indicated Lohiya’s active involvement with the prime accused.
The court highlighted the prosecution’s allegations that Lohiya was privy to the conspiracy, held meetings with Mohd. Farooque Shaikh, facilitated meetings with Customs officers, provided substantial cash of his clients for illegal forex transfers, and managed DRI and Customs officers to overlook the illegal activities. Furthermore, the charge sheet alleged that Lohiya provided ECC bills of entry for preparing forged BEs, furnished Bill of Entry numbers of other entities’ imports, and supplied computer-generated formats of BEs, rubber stamps of Customs officers, and invoice models of Chinese suppliers.
The court also noted the serious allegation regarding Lohiya’s acquisition of M/s. GLS Electronic Industry Pvt. Ltd. and the subsequent financial transactions involving the prime accused’s wife, suggesting a potential link to the proceeds of the alleged crime.
Based on these prima facie findings, Special Judge Sayyad concluded, “On careful perusal of the paras of charge-sheet cited supra, prima facie it appears the active involvement of the applicant with the prime accused Mohd. Fqrooque Shaikh in the alleged fraud. There are many specific allegations made against the present applicant in respect of the alleged fraud which is in multiple crores. There is a prima facie clinching material to show the active complicity of the present applicant in the alleged huge fraud.”
The court opined that despite the filing of the charge sheet, many aspects of the alleged fraud remained to be unearthed. Considering the seriousness and economic impact of the multi-crore fraud, the court held that there was a possibility of the applicant tampering with prosecution evidence and witnesses if released on bail. While acknowledging the applicant’s arguments, the court found that his alleged active complicity in the crime did not warrant his release on bail.
Consequently, the court passed the order rejecting Bail Application No. 153 of 2022. The order was digitally signed and pronounced in open court on June 3, 2022, with the certified copy uploaded on the same day.
This order reflects the judiciary’s stringent approach towards economic offences of such magnitude, emphasizing the potential threat to the nation’s financial health and the need for a thorough investigation and trial. The denial of bail underscores the seriousness with which the court views the allegations against the Custom House Agent in this multi-crore forex scam.