Mumbai, January 11, 2019 – In a significant development, the Special Judge for CBI cases in Greater Mumbai, Shri Jayendra C. Jagdale, today granted regular bail to Ishwardas Laxmichandji Agarwal, 73, one of the accused in a multi-crore fraud case involving Punjab National Bank (PNB). Agarwal, a director of M/s. Chandri Paper & Allied Products Pvt. Ltd., was arrested on December 17, 2018, and has been in judicial custody since.

The case, registered by the Central Bureau of Investigation (CBI), Bank Securities & Fraud Cell, Mumbai (RC No. BSM/2018/E/0004), involves offenses punishable under Section 120-B (criminal conspiracy) read with Sections 409 (criminal breach of trust by public servant, or by banker, merchant, or agent) and 420 (cheating) of the Indian Penal Code, and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act (criminal misconduct by a public servant).

The Prosecution’s Allegations:

The CBI’s case stems from a complaint filed by Shri Avaneesh Nepaliya, DGM, Punjab National Bank, in March 2018. It alleges that in April 2017, two PNB officials, Shri Gokulnath Shetty (then Dy. Manager) and Shri Manoj Hanumant Kharat (Single Window Operator, now suspended) from the Brady House branch, conspired with Ishwardas Agarwal and his son, Aditya Rasiwasia (Accused No. 3), both directors of M/s. Chandri Paper and Allied Products Pvt. Ltd., to fraudulently issue two Letters of Undertaking (LOUs).

These LOUs, totaling USD 1,421,311.82 (equivalent to Rs. 9,09,63,956.48), were issued in favor of SBI, Antwerp, Belgium, on April 25, 2017, without any sanctioned credit limit or the required 110% margin from Chandri Paper. The bank officials allegedly bypassed standard procedures, failing to obtain necessary applications, documents, or internal approvals. The prosecution contended that Agarwal and his son were the primary beneficiaries of this amount, obtaining LOUs for purported import consignments of base oil, which were allegedly mis-declared as capital goods in connivance with the bank officials.

The CBI strongly opposed the bail application, arguing that the repayment of the defrauded amount after the FIR registration did not absolve the accused of criminality. They also expressed apprehension that Agarwal might tamper with evidence and influence witnesses, given the “crucial stage of investigation.”

Defense Arguments and Court’s Rationale:

Mr. Parab, the learned Advocate for Ishwardas Agarwal, argued that his client was merely a “namesake director” on the board, having no active role in the day-to-day business affairs or transactions of Chandri Paper, and was completely unaware of the alleged fraudulent activities. He emphasized that Agarwal is a 73-year-old senior citizen suffering from multiple medical complications, including diabetes, blood pressure, and a complication from a recent cataract surgery requiring monthly injections.

Crucially, the defense pointed out that M/s. Chandri Paper & Allied Products Pvt. Ltd. had already returned the entire defrauded sum of Rs. 9,09,63,956/- to Punjab National Bank in three tranches in June 2018, a fact acknowledged by the bank and informed to the CBI. This, the defense argued, meant no wrongful loss had ultimately occurred to PNB.

Special Judge Jagdale, referring to the Supreme Court’s observations in Nimmagadda Prasad v/s. Central Bureau of Investigation, considered various factors for granting bail: the nature of accusations, evidence, severity of punishment, character of the accused, peculiar circumstances, possibility of securing presence at trial, apprehension of tampering, and larger public interest.

The judge found the prosecution’s claim of potential tampering with evidence and influencing witnesses to be “vague.” Significantly, the Investigating Officer, Mr. A.D. More, categorically submitted to the court that the chargesheet would be filed within 2-3 days. This admission undermined the prosecution’s argument about the investigation being at a “crucial stage” with evidence yet to be collected, as it indicated that most of the evidence had already been gathered.

The court also took into account a report from jail authorities confirming Agarwal’s hospitalization and his suffering from hypertension and other diseases, reinforcing his advanced age and health concerns.

Considering these factors cumulatively – the lack of specific evidence attributing direct knowledge or active role to Agarwal in the alleged conspiracy, the full repayment of the defrauded amount, the impending filing of the chargesheet (implying evidence collection is largely complete), and Agarwal’s advanced age and deteriorating health – the court concluded that he should be released on bail subject to certain conditions.

Bail Conditions:

Ishwardas Laxmichandji Agarwal has been granted provisional bail immediately upon furnishing a cash bail of Rs. 50,000/- for two months. He must also execute a P.R. Bond of Rs. 50,000/- and furnish one or more solvent sureties of the like amount within two months.

Other strict conditions imposed by the court include:

• Not leaving India without prior court permission.
• Surrendering his passport (if any) to the CBI until surety is furnished.
• Furnishing his permanent address and contact numbers to the CBI.
• Providing addresses and contact numbers of two relatives to the CBI.
• Not tampering with prosecution evidence and assisting in the trial’s disposal.
• Not committing any further offenses while on bail.
• Remaining present before the Investigating Officer every Tuesday between 10:00 a.m. and 4:00 p.m. until further orders.

The court explicitly warned that a breach of any of these conditions would lead to the cancellation of bail.

The order was dictated, transcribed, and signed on January 11, 2019, and uploaded on the same day. This decision highlights the judiciary’s careful consideration of individual circumstances, especially health and age, alongside the progress of investigation, in major economic offense cases.