Mumbai, Maharashtra | January 11, 2019 – The Special Judge for CBI, Greater Bombay, Shri. Jayendra C. Jagdale (C. R. No. 51), granted bail to Shri. Ishwardas Laxmichandji Agarwal, a 73-year-old senior citizen and accused No. 2 in a case registered by the Central Bureau of Investigation (CBI), Bank Securities & Fraud Cell, Mumbai. The case, R.C. No. BSM/2018/E/0004-CBI/BS & FC/Mumbai, involves allegations of criminal conspiracy, cheating, and offences under the Prevention of Corruption Act, 1988, related to fraudulent Letters of Undertaking (LOUs) issued by Punjab National Bank (PNB).

Shri. Ishwardas Laxmichandji Agarwal, residing at Nepean Sea Road, Mumbai, was arrested on December 17, 2018, and had been in judicial custody. He sought bail under Section 439 of the Code of Criminal Procedure (Cr.P.C.).

The CBI’s case stemmed from a complaint filed by a Deputy General Manager of Punjab National Bank, alleging that during April 2017, two PNB officials, Gokulnath Shetty (the then Dy. Manager) and Manoj Hanumant Kharat (Single Window Operator, now suspended), entered into a criminal conspiracy with Shri. Aditya Rasiwasia and the present applicant, Shri. Ishwardas Agarwal, both Directors of M/s. Chandri Paper and Allied Products Pvt. Ltd., Mumbai, and unknown others. The conspiracy allegedly led to the dishonest and fraudulent issuance of two LOUs totaling USD 1,421,311.82 (equivalent to ₹9,09,63,956.48) in favor of SBI, Antwerp, Belgium, with the intention to defraud Punjab National Bank, MCB, Brady House, Mumbai.

The prosecution alleged that these LOUs were fraudulently issued to M/s. Chandri Paper & Allied Products Pvt. Ltd. without any sanctioned credit limit for the company and without the mandatory 110% margin being provided. It was further alleged that the accused bank officials bypassed required procedures, including obtaining necessary applications, documents, and approvals, and without making entries in the bank’s system, transmitted the LOUs to the overseas bank. The CBI contended that the applicant and his son were the primary beneficiaries, obtaining the LOUs without any genuine underlying import transactions. The purported import consignment of base oil was allegedly misdeclared as capital goods by Shri. Aditya Rasiwasia in collusion with his father and the PNB official, Gokulnath Shetty. The prosecution emphasized that the repayment of the defrauded amount occurred only after the registration of the FIR and did not absolve the accused of their criminal actions. They argued that the investigation was at a crucial stage and that releasing the applicant could lead to tampering with evidence and influencing witnesses.

Mr. Parab, the learned Advocate for the applicant, argued that his client was a senior citizen suffering from multiple health issues, including diabetes, high blood pressure, and complications from cataract surgery requiring monthly injections. He submitted that Shri. Agarwal was merely a namesake director, appointed by his son, Shri. Aditya Rasiwasia (accused No. 3), and had no active role in the day-to-day business affairs or transactions of Chandri. He was allegedly unaware of the fraudulent transactions and had cooperated with the investigating agency, providing a detailed statement to the CBI. Furthermore, the Advocate highlighted that after the FIR was registered, M/s. Chandri Paper & Allied Products Pvt. Ltd. had returned the entire sum of ₹9,09,63,956/- to Punjab National Bank in three tranches in June 2018, which was an admitted fact. In light of this repayment, no wrongful loss was ultimately caused to the bank. The defense argued that no specific role was attributed to Shri. Agarwal, and there was no material to demonstrate his knowledge of the fraudulent activities.

Mr. Omprakash, the learned S.P.P. for the CBI, strongly opposed the bail, citing the gravity of the offences and the potential for the accused to obstruct the ongoing investigation.

Special Judge Shri. Jayendra C. Jagdale, after hearing the arguments and perusing the records, referred to the guidelines laid down by the Hon’ble Supreme Court in the case of Nimmagadda Prasad v/s. Central Bureau of Investigation, which outlines the considerations for granting bail, including the nature of accusations, the evidence supporting them, the severity of punishment, the accused’s character, the possibility of securing their presence at trial, the apprehension of witness tampering, and the larger public interest.

In this context, the Special Judge noted that the prosecution had not raised concerns about securing the applicant’s presence at trial or any significant threat to the larger public interest. While the prosecution vaguely stated the possibility of evidence tampering and witness influencing, the investigating officer, Mr. A.D. More, who was present in court, categorically submitted that the charge sheet was expected to be filed within 2-3 days. This indicated that the evidence collection was substantially complete, reducing the likelihood of the accused thwarting the investigation by tampering with remaining evidence.

Crucially, the court also considered the applicant’s advanced age (73 years) and his deteriorating health condition, as reported by the jail authorities. The report specifically mentioned his hospitalization and suffering from hypertension and other ailments.

Considering these cumulative factors – the imminent filing of the charge sheet, the applicant’s advanced age and medical condition, and the lack of specific allegations of potential absconding or significant threat to public interest – the Special Judge deemed it appropriate to grant bail, subject to certain conditions.

Consequently, the court passed the following order:

ORDER

1. Bail Application No. 963/2018 in R.A. No. 1230/2018 (R.C. No. BSM/2018/E/0004-CBI/BS & FC/Mumbai) is hereby allowed.
2. The applicant/original accused No. 2, SHRI. ISHWARDAS LAXMICHANDJI AGARWAL, is directed to be released on executing a P.R. Bond of ₹50,000/- (Rupees Fifty Thousand Only). He is further directed to furnish one or more sureties of the like amount within two months.
3. The applicant/accused is directed not to leave India without obtaining prior permission from this Court.
4. Until furnishing surety, the applicant/accused is directed to surrender his passport, if any, with the CBI.
5. The applicant/accused is directed to furnish his permanent address as well as permanent contact numbers to the CBI.
6. The applicant/accused is directed to furnish the addresses of his two relatives and their permanent addresses and contact numbers to the CBI.
7. The applicant/accused is further directed not to tamper with the prosecution evidence and to assist in the disposal of the trial.
8. The applicant/accused shall not commit any offence while on bail.
9. The applicant/accused is hereby directed to remain present before the investigating officer every Tuesday between 10:00 a.m. and 4:00 p.m. until further order.
10. Breach of any of the above conditions will amount to cancellation of bail granted to the applicant/accused.
11. The applicant/accused is hereby allowed to be released provisionally after furnishing a cash bail of ₹50,000/-, temporarily for a period of two months.
12. Bail Application No. 963/2018 in R.A. No. 1230/2018 stands disposed of accordingly.

The order, dictated and pronounced in open court on January 11, 2019, highlights the court’s consideration of the specific circumstances of the accused, particularly his age and health, alongside the progress of the investigation and the principles of bail jurisprudence. The granting of bail, despite the serious economic offences alleged, underscores the importance of balancing the interests of justice with the individual rights and circumstances of the accused.