Mumbai, June 3, 2022 – A Special Judge for CBI cases in Greater Mumbai, Shri A.S. Sayyad, today rejected the bail application of Brijesh Lohiya, a Custom House Agent (CHA) and one of the accused in a massive ₹2252.82 crore foreign exchange fraud case. Lohiya, who is Accused No. 4 in RC No. 4/E/2017 registered by the CBI, Economic Offence Wing (EOB), Mumbai, had sought bail under Section 439 of the Cr.P.C.

The court, after hearing arguments from both the CBI and the applicant’s counsel, found prima facie evidence of Lohiya’s active involvement in the alleged conspiracy and expressed concerns about the possibility of him tampering with evidence and witnesses if released on bail.

Background of the Alleged Fraud

The case, initiated on May 13, 2017, by the CBI, targets the directors and proprietors of 13 entities (11 firms and 2 companies) along with unknown public servants. The core allegation is that between 2014 and 2016, these entities were floated using fictitious or non-existent Import and Export Codes (IEC). Current accounts were opened in their names across various banks, including Punjab National Bank, Central Bank of India, Corporation Bank, Canara Bank, Axis Bank, and e-State Bank of Hyderabad (now 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 presented to these banks. This allegedly facilitated the fraudulent remittance of US Dollar equivalent to ₹2252.82 crores to various entities in Hong Kong.

The prosecution alleges that prime accused Mohd. Farooque, Mohd. Gaus, Mohd. Husssain alias Raja, the present applicant Brijesh Lohiya, Kiran Kokare alias Sonu Kalia, and other accomplices induced poor and illiterate individuals to share their KYC documents for petty amounts. These KYC documents were then allegedly used to float the fictitious firms and companies, making the individuals their directors and proprietors.

Further, huge amounts of unaccounted cash, running into crores, were allegedly collected from various entities seeking fraudulent forex remittances abroad. This cash was reportedly layered through “Angadias” (traditional cash couriers), cheque discount brokers, and accounts of members of various multi-state cooperative societies before being credited via RTGS into the accounts of the 13 fictitious entities.

Role of the Applicant, Brijesh Lohiya

The CBI contends that Brijesh Lohiya, being a Custom House Agent (CHA), was actively involved in this elaborate fraud. The prosecution highlighted several specific allegations against him:

• Conspiracy and Meetings: Lohiya was allegedly privy to the conspiracy with prime accused Mohd. Farooque Shaikh, regularly meeting him at their office and Hotel Sabalan for discussions. He is also accused of hosting customs officers at this hotel and arranging their meetings with Mohd. Farooque Shaikh.
• Facilitating Illegal Forex: Lohiya is accused of handing over large sums of cash from his clients to Mohd. Farooque Shaikh for illegally sending foreign exchange to parties in Hong Kong.
• Managing Authorities: He allegedly managed officers of the Directorate of Revenue Intelligence (DRI) and Customs to “hush up” the illegal import/export activities of Mohd. Farooque Shaikh and the consequent forex payments.
• Providing Forged Document Formats: Lohiya allegedly furnished computer-generated formats of Bills of Entries (BEs), rubber stamps of Customs officers, invoice models of Chinese suppliers, and Bills of Lading to facilitate the creation of forged documents. This was done particularly when more BEs were required, even providing Bill of Entry Numbers of imports made by other entities.
• Property Transaction and Financial Link: Serious allegations against Lohiya include his acquisition of M/s. GLS Electronic Industry Pvt. Ltd. at Haridwar, which had become a Non-Performing Asset (NPA). It is alleged that Mohd. Farooque Shaikh, through his wife Smt. Aasma Farooque Shaikh, paid approximately ₹9.75 crores to ₹10 crores into Lohiya’s company account for the acquisition of this factory, demonstrating a significant financial link.

Arguments for and Against Bail

Ld. Adv. Aabad Ponda (for the applicant) vehemently argued that Lohiya was implicated based on only four circumstances. He stressed that the FIR was registered on May 13, 2017, and the charge-sheet was filed five years later on May 19, 2022, indicating that the investigation was complete and all documentary evidence had been recovered. He contended that there was no direct connection between Lohiya and other accused, and any alleged transactions were account-to-account. Ponda asserted Lohiya’s innocence, stating he neither prepared nor forged documents, nor did he provide any formats or assistance for the alleged offense. He highlighted that Lohiya was arrested on February 22, 2022, and has been in custody since, and being a married, earning member, his family was suffering. He cited the Supreme Court judgment in Shelia Sebastian Vs. R. Jawaharaj & Anr. to support his plea for bail.

Ld. SPP Shri. J.K. Sharma (for CBI) strongly opposed the application, emphasizing the gravity and nature of the economic offense, which involved a massive fraud in multiple crores. He reiterated Lohiya’s active complicity as a close associate of prime accused Mohd. Farooque Shaikh, with “clinching material” on record demonstrating his deep involvement. Sharma argued that further investigation was ongoing and that granting bail would risk Lohiya absconding from justice or tampering with prosecution evidence and witnesses. He 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, which underscore that economic offenses require a different approach for bail consideration due to their severe impact on the nation’s economy. These judgments highlight factors such as the nature of accusations, gravity of punishment, character of the accused, likelihood of obstructing justice, and larger public interest.

Court’s Decision

Special Judge Shri A.S. Sayyad carefully considered all submissions and the cited legal precedents. While acknowledging the applicant’s counsel’s arguments about the completion of investigation and the duration of custody, the court placed significant weight on the specific and serious allegations against Lohiya detailed in the charge-sheet.

The judge concluded that there was “prima facie active involvement of the applicant with the prime accused Mohd. Fqrooque Shaikh in the alleged fraud.” The court noted the “many specific allegations” and “prima facie clinching material to show the active complicity of the present applicant in the alleged huge fraud.”

Given the “serious and economic offence relates to multiple crores,” the court expressed its “considered opinion that if the applicant is enlarged on bail, probability of tampering the prosecution evidence and witnesses may not be ruled out.”

Consequently, the Bail Application No. 153 of 2022 was rejected and disposed of.