Mumbai, Maharashtra – A Special Judge for the Central Bureau of Investigation (CBI) at Greater Bombay has rejected the bail application of Mohammed Gous Mohmammed Hanif Shaikh alias Mohd. Gous, aged 41, who is accused of involvement in a massive forex remittance fraud amounting to over Rs. 2,252 Crores. Special Judge V.C. Barde delivered the order on April 27, 2022, in Bail Application No. 189 of 2022.
Shaikh was arrested on February 22, 2022, in connection with CBI’s R.C. No. 4/E/2017/CBI/EOB/Mumbai. He faces charges under Sections 420 (cheating), 467 (forgery of valuable security), 468 (forgery for purpose of cheating), 471 (using as genuine a forged document) read with Section 120-B (criminal conspiracy) of the Indian Penal Code (IPC), and Sections 13(2) (criminal misconduct by a public servant) and 13(1)(d) (obtaining pecuniary advantage by corrupt or illegal means) of the Prevention of Corruption Act (P.C. Act).
Background of the Case
The CBI initially registered the First Information Report (FIR) in 2017 against the Directors and Proprietors of 13 entities, including M/s. Stelkon Infratel Pvt. Ltd., M/s. Apollo Enterprises, and others. The core allegation is that between 2014 and 2016, these entities, through a conspiracy, used bogus and false invoices to transfer foreign exchange worth Rs. 2,252.82 Crores abroad through six major banks: Punjab National Bank, Central Bank of India, Corporation Bank, Canara Bank, Axis Bank, and e-State Bank of Hyderabad (now State Bank of India). The modus operandi involved floating these firms using the Know Your Customer (KYC) documents of poor and illiterate individuals, obtaining necessary registrations like Import Export Code (IEC) and VAT, and opening current accounts in the aforementioned banks.
The fraud allegedly involved importing low-value Chinese goods from Hong Kong and clearing consignments by filing Bills of Entry for significantly lower values online with customs authorities (JNCH, Nhava Sheva, and NCH, BPT, Mumbai). Subsequently, forged documents, including Bills of Entry and invoices, were prepared with highly inflated values (twenty to thirty times the actual value) using forged signatures and seals of Customs Officers and other entities. These fabricated documents were then submitted to banks to fraudulently remit exorbitant sums in US dollars to various entities in Hong Kong.
Applicant’s Defense
Represented by Mr. Harshad Meshram, Mohammed Gous argued that he was falsely implicated, primarily because he is the real brother of the prime accused, Mohd. Farooq Shaikh. He claimed that the FIR initially did not name him, and the forgery-related sections (467, 468, 471 IPC) were added five years later in February 2022, much after the FIR was registered in 2017, just before his arrest.
Gous asserted that he had not forged any documents, affixed any signatures, or prepared any customs bills of entry or challans, nor did he use any such alleged documents for fund remittances. He denied creating any rubber stamps or forged customs documents, and stated that a house search by the CBI yielded nothing incriminating, only personal documents and legitimate cash and jewelry. He emphasized that the investigation regarding his alleged role was complete, and his continued custody was unnecessary as no charge sheet had been filed.
He also stated that no witness had implicated him, and there was no chance of him threatening or alluring witnesses. Gous highlighted his status as a permanent resident of Mumbai, a law-abiding citizen with a family (wife and two school-going children), and asserted that there was no risk of him absconding. He mentioned that he had been residing separately from his brother, Mohd. Farooq, and had no involvement in his brother’s business. Furthermore, he claimed that all documents related to the alleged offense were in the custody of the CBI or ED (in a related PMLA case), making further custody unnecessary. He also pointed out that his specimen signatures taken by the police did not match any forged documents.
Gous also stated that he suffered from a heart condition and that the CBI’s initial entry into his house was forcible, as they did not disclose their identity. He mentioned that he was previously arrested by the Directorate of Revenue Intelligence (DRI) but was subsequently released, as no role was found against him.
CBI’s Opposition to Bail
The CBI-EOB, represented by Ld. P.P. Mr. J.K. Sharma, vehemently opposed the bail application, outlining Mohammed Gous’s active and crucial role in the conspiracy. The CBI alleged that Gous actively assisted Mohd. Farooq Shaikh in:
- Mobilizing “name lenders” (poor and illiterate individuals) by providing petty amounts for their KYCs.
- Floating firms and companies in the names of these “name lenders” and making them Proprietors/Directors.
- Obtaining necessary statutory registrations like IEC and opening current accounts in the six banks for these 13 entities.
- Collecting huge unaccounted cash from various entities wanting to fraudulently remit funds abroad.
- Layering this unaccounted cash through Angadias, cheque discount brokers, and accounts of multi-state cooperative societies, ultimately crediting it via RTGS into the accounts of the accused entities.
- Obtaining stationery of custodians for printing Bills of Entry, Bills of Lading, and procuring forged rubber stamps of Customs Officers/Chartered Accountants and other entities.
- Playing a major role in preparing false and fabricated Bills of Entry and invoices with exorbitant values (20-30 times higher than actual) by affixing forged signatures and seals of Customs Officials.
- Submitting these false and fabricated documents to banks, thereby facilitating fraudulent forex remittances of approximately Rs. 1,463.35 Crores through 8 entities to Hong Kong.
- Being an ultimate beneficiary of the crime proceeds in the form of commission per USD collected.
The CBI asserted that Gous willfully assisted the main accused, contributing significantly to the illegal forex remittance of a massive amount. The prosecution cited several Supreme Court and High Court judgments emphasizing the need for a serious view of economic offenses, which have a far-reaching impact on the nation’s fiscal health and economy. These judgments underscored that economic offenses are a class apart and cannot be treated on par with conventional crimes, making the grant of bail in such cases a serious consideration.