By Legal Correspondent | Mumbai | April 28, 2022
In a significant development in one of India’s largest alleged foreign exchange scams, the Special CBI Court in Mumbai has rejected the bail application of Kiran Anil Kokare, also known as Sona Kalia, an accused in a ₹2,252.82 crore fraudulent remittance case. The detailed order was passed on April 27, 2022, by Special CBI Judge Shri V.C. Barde, at the City Civil and Sessions Court, Greater Bombay.
Case Background: Alleged Economic Offence of Massive Scale
The case stems from R.C. No. 4/E/2017/CBI/EOB/Mumbai, where the Central Bureau of Investigation (CBI) launched a probe into an alleged criminal conspiracy involving forged import documents and illegal foreign exchange remittances. The fraud, which reportedly took place between 2014 and 2016, involved 13 fictitious companies that routed foreign remittances to entities in Hong Kong through forged Bills of Entry, Invoices, and Bills of Lading.
According to the CBI, the fraud was orchestrated by a network of individuals including Mohammed Farooque Mohammed Hanif Shaikh, Mohammed Gaus, and others. These individuals allegedly created shell companies using the KYC documents of poor and illiterate individuals who were misled into becoming directors and proprietors. These entities opened current accounts in six banks — Punjab National Bank, Canara Bank, Corporation Bank, State Bank of Hyderabad (now SBI), Central Bank of India, and Axis Bank — and misused the banking system to remit large sums of money abroad.
The case is also under investigation by the Directorate of Enforcement (ED) under the Prevention of Money Laundering Act (PMLA), although the accused Kokare has not been named in that specific charge sheet.
The Bail Plea: Defence Claims Innocence and Lack of Involvement
The bail application (B.A. No. 170/2022) was filed under Section 439 of the Criminal Procedure Code by the accused Kiran Anil Kokare, who was arrested on February 22, 2022. The defence, represented by Advocate Mr. R.B. Mokashi, argued that:
- Kokare was not employed with the main accused during the period (2014–2016) when the fraudulent transactions occurred.
- He only joined the alleged mastermind Mohd. Farooque in 2017 and worked as an employee until August 2021, well after the scam had reportedly taken place.
- The accused had no role in the preparation or use of forged documents and did not benefit from the fraud.
- Key evidence had already been seized and investigation largely completed, so further detention was unnecessary.
- All accused in the PMLA case, including prime accused Farooque, have been granted bail, which should entitle Kokare to the same relief.
The defence emphasized that “bail is a rule, jail is an exception,” citing various Supreme Court rulings including Sanjay Chandra vs. CBI and P. Chidambaram vs. CBI to support the plea.
CBI’s Stand: A Deep Role in Forgery and Laundering
The CBI, represented by Public Prosecutor Mr. J.K. Sharma, opposed the bail application with strong arguments and supporting evidence:
- Kokare allegedly played an active and sustained role in assisting Mohd. Farooque and others in executing the illegal foreign remittances.
- He allegedly:
- Collected large sums of cash from parties wishing to remit funds to Hong Kong.
- Procured stationery, rubber stamps, and forged seals used in faking import documentation.
- Took photographs of containers at JNCH, Nhava Sheva to aid in falsifying Bills of Lading.
- Submitted forged import documents to banks to facilitate remittances.
- Kokare is said to have assisted in the illegal transfer of ₹1,463.35 crores through 786 instances using eight front companies.
- A key witness, Govind Vaijinath Kadam, a director in M/s Violet Trading Pvt. Ltd., testified that he was induced by Kokare and Farooque to provide documents and was unaware of their misuse.
- Funds from the fictitious company Flora International were allegedly routed through Violet Trading to purchase a hotel (Shri Nanumal Bhojraj) in the name of Kishor Bhojraj Gaba, supposedly on behalf of Farooque.
- After Farooque’s arrest by ED in 2018, Kokare allegedly helped destroy crucial evidence, including rubber stamps, forged documents, and computer hard drives.
The CBI further submitted that economic offences such as this one, which have wide-reaching implications for national financial security, must be treated with greater severity.
Court’s Findings: Prima Facie Evidence of Active Involvement
After a meticulous review of submissions and case records, the Special Judge concluded that:
- There exists sufficient prima facie evidence that Kokare actively participated in the conspiracy, beyond the limited role of an employee.
- The case involves a massive economic offence, with over ₹2,252 crore remitted using fraudulent methods.
- Kokare allegedly played a key role in collecting and layering funds, submitting forged documents, and participating in post-offence destruction of evidence.
- Given the ongoing investigation, release of the accused at this stage could potentially hamper progress and lead to tampering of evidence or influence over witnesses.
Conclusion: Bail Rejected, Investigation to Continue
The court firmly rejected the bail application, stating:
“After careful perusal of the case-diary and the role alleged against the accused, at this stage of the matter, a sufficient prima facie evidence is appearing in order to show that the accused has actively participated in crime… No case is made out to grant bail to the accused.”
The detailed 18-page order, signed and uploaded on April 28, 2022, reinforces the judiciary’s caution in granting bail in large-scale financial crimes. As the investigation by the CBI and ED continues, the case remains one of the most significant forex scams uncovered in recent years, with implications for both regulatory oversight and international financial compliance.
Key Legal Provisions Invoked
- Indian Penal Code: Sections 420 (cheating), 467 (forgery of valuable security), 468 (forgery for cheating), 471 (using forged document), 120-B (criminal conspiracy)
- Prevention of Corruption Act: Sections 13(2), 13(1)(d)
- Criminal Procedure Code: Section 439 (special powers of High Court or Court of Sessions regarding bail)
Stay tuned as further hearings unfold in this high-stakes case.