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Telangana High Court · body

2020 DIGILAW 832 (TS)

Prashanth Prabhu v. State of Telangana

2020-12-03

KUNURU LAKSHMAN

body2020
ORDER : Kunuru Lakshman, J. 1. This petition is filed under Sections 437 and 439 of the Code of Criminal Procedure, 1973 (for short, 'CrPC) by the petitioner/A.7 seeking to grant regular bail to the petitioner in Cr. No. 92 of 2020 pending on the file of the Station House Officer, CCS, DD, Hyderabad, registered for the offences under Sections 406, 420, 409 and 120(B) read with 34 IPC and Sections 3 and 5 of the Telangana Protection of Depositors of Financial Establishments Act, 1999(for short, 'the Act'). 2. Heard Sri T. Niranjan Reddy, learned Senior Counsel representing Ms. Apurva M. Gokhale, learned counsel for the petitioner/A.7 and learned Asst. Public Prosecutor. Perused the record. 3. In the complaint dated 05.08.2020, the name of the petitioner is not mentioned. As per the complaint, dated 05.08.2020, the defacto-complainant has obtained Demat account with M/s. Manoj Javeri Stock Broking Private Limited (for short, 'MJSBPL)/A.1 Company, on 25.01.2018 with Id. 28188 in the name of his company i.e. Pampered Moments LLP. On 13.09.2019 when the defacto-complainant requested for redemption of funds from the account, he got e-mails from A.2 one of the Directors of A.1 company, admitting that the funds are struck and he will repay soon. After a long wait, in the month of February, 2020, he filed a complaint with NSE Conard Securities, a sister concern of A.1-Company for which he got reply from A.2 requesting to withdraw the complaint and would start payment by 10.07.2020, but on completion of said period, he could not get any further communication from the concerned and he has a fear that the funds might have been swindled. 4. During the course of investigation, the Police have included the name of the petitioner herein as A.7 in the above said crime. The allegation against the petitioner herein is that on 29.10.2020, the Police have interrogated him thoroughly wherein he has confessed that during the year 2016-2019, he was associated with the Directors of A.1 company as relationship Manager to the said Company and lured hundreds of investors from Karnataka, Dubai and Hyderabad cities for share trading with a promise of high returns on investments. The petitioner has sent monthly trading statement to L.Ws. 1 to 4 since 2018 till December, 2019 on behalf of accused No. 1 Company. He has collected commission from the said L.Ws. 1 to 4 through bank transfers. The petitioner has sent monthly trading statement to L.Ws. 1 to 4 since 2018 till December, 2019 on behalf of accused No. 1 Company. He has collected commission from the said L.Ws. 1 to 4 through bank transfers. The details of the transfers were also mentioned in the remand report in a tabular form. 5. It is further alleged against the petitioner herein that during the month of November, 2018, he has introduced L.W.5 Mohd. Abdul Rawoof as Advisor of A.1 company and relationship Manager and lured him to invest in A.1 company under the guise of giving high rate of returns over the investment. Thus, the L.W.5 has invested amounts and the details of the said investment including name of the bank, bank account number, date of transfer, amount of transfer etc, are specifically mentioned. It is further alleged against the petitioner herein that after L.W.5 deposited/invested amount, the L.W.7, on behalf of A.1 company, sent monthly trade statement through M/s. 29K IAPL/29K FACL through their company emailed.support@29kadvisers.com. L.W.5 did not receive any returns from A.1 company. 6. It is further alleged in the remand report that during the year 2016-2020, the A.7 along with A.6 approached the defacto-complainant/L.W.1 and L.W.5 and introduced himself as agent of A.1 company and offered to invest amount in share trading through A.1 company. Thereafter, the Directors of A.1 company, the A.6 and A.7 given assurance to give high rate of returns over the investment. Accordingly, the Directors of A.1 company through 29K Investment Advisors (represented by its Director/A.7) and M/s. Trillion Market Capital (represented by its Director by name Radhika Anil Upadhyaya W/o A.6-Anil K. Upadhyaya) issued fake Client ID numbers, the details of the same are specifically mentioned therein and victims including the defacto-complainant i.e., L.W.1 to L.W.5 have transferred an amount of Rs. 7.19 Crores and Rs. 25Lakhs during the period from July, 2017 to 2019, for share trading through account No. 0547053000003279 of South Indian Bank, Madhapur Branch, Hyderabad. Thus, it is alleged that all the accused including the petitioner herein have diverted funds for their personal use instead of investing in share trading in the names of L.Ws. 1 to 5 and violated SEBI Rules. It is further alleged that the petitioner, on behalf of the A.1 Company, issued fake transaction statement of each client showing that their details of profit/loss regularly. 1 to 5 and violated SEBI Rules. It is further alleged that the petitioner, on behalf of the A.1 Company, issued fake transaction statement of each client showing that their details of profit/loss regularly. Thus, the petitioner herein has committed offences alleged against him. 7. Sri T. Niranjan Reddy, learned Senior Counsel would submit that the petitioner herein is only investment advisor to the defacto-complainant. A Declaration was given on 17.07.2018 by the defacto-complainant and in the said declaration, the defacto-complainant categorically stated that he understands that there is a risk of making loss by investing in derivative product. He would further contend that the defacto-complainant and M/s. 29K Investment Advisors Private Limited represented by the petitioner herein have entered into investment advisory services agreement, dated 30.08.2019. As per the said agreement, the defacto-complainant has to pay advisory fee. The learned senior counsel has referred to various clauses of the said agreement and would contend that the petitioner herein has extended his services in terms of the said clauses of the agreement. According to him, as per the said agreement, the defacto-complainant/Client has to pay a fee of 20% of the net profit when disbursed into the bank account, a fee of 1% per annum (Stocks/mutual funds, profit of mutual invoice along with the same). 8. By referring the same, learned Senior Counsel would contend that the petitioner herein is only an Investment Advisor and he has extended his services in terms of agreement dated 30.08.2019. The learned Senior Counsel has referred to the mail dated 07.08.2019 sent by the said 29K Investment Advisory informing the defacto-complainant that A.1 Company has informed him that they have forwarded request for margin refund and funds would be released by end of that day i.e. 07.08.2019 and it has requested the defacto-complainant to check his bank account and confirm by next day. The defacto-complainant has replied for the same and informed the petitioner that futures strategy google drive folder is updated with the new file(s) in the folder 2019-20 available inside the main folder. It is also informed to the defacto-complainant that the complaint submitted by the defacto-complainant was taken up with the trading member for redressal vide email dated 02.03.2020. The defacto-complainant has informed that his complaint is resolved with the trading member and the same is confirmed with the defacto-complainant through phone. It is also informed to the defacto-complainant that the complaint submitted by the defacto-complainant was taken up with the trading member for redressal vide email dated 02.03.2020. The defacto-complainant has informed that his complaint is resolved with the trading member and the same is confirmed with the defacto-complainant through phone. By referring to the same, the learned Senior Counsel would submit that it is only a commercial transaction and the defacto-complainant has received huge profit of Rs. 1.78 Crore from the A.1 company, which has paid an amount of Rs. 38.00 Lakhs to the petitioner/A.7 as profit in terms of the said agreement dated 30.08.2019. 9. The petitioner herein is in fact a victim and he is not an accused. Learned Senior Counsel would further submit that the petitioner did not issue any fake ID as alleged against him. His custodial interrogation for one day i.e. 06.11.2020 to 07.11.2020 was over and the Investigating Officer did not seek extension of custodial interrogation of the petitioner herein. Therefore, he seeks to consider the bail application of the petitioner on imposition of certain conditions since he was in jail from 28.10.2020. 10. On the other hand, learned Asst. Public Prosecutor, would submit that the petitioner has involved in one more case i.e., Cr. No. 1055 of 2020 for the offences alleged under Section 420, 406 and 409 IPC. There are serious allegations against the petitioner and other accused. The Investigating Officer is collecting evidence and he has recorded the statements of some of the victims. The petitioner is an influential person and there is every possibility of the petitioner interfering with the Investigating Officer, influencing the witnesses/victims and he may try to win over the witnesses. There are several cases pending against the A.1 company. The Investigation is pending. The allegation against the petitioner herein is that he has introduced himself as relationship Manager of A.1 company and lured hundreds of investors from Karnataka, Dubai and Hyderabad cities for investing funds in share trading to get huge returns on investments. He has sent monthly trading statement for the years 2016 to 2019 to L.Ws. 1 to 4 since December, 2019. He has collected commission on the same from A-1. He has issued fake IDs. to the customers/investors. Thus, there are serious allegations against the petitioner herein. 11. He has sent monthly trading statement for the years 2016 to 2019 to L.Ws. 1 to 4 since December, 2019. He has collected commission on the same from A-1. He has issued fake IDs. to the customers/investors. Thus, there are serious allegations against the petitioner herein. 11. The learned Public Prosecutor would further submit that the petitioner belongs to Bangalore, Karnataka State and there is every possibility of petitioner fleeing from the jurisdiction of the Police Station in which the case is pending. There is every possibility of the petitioner jumping over the bail. With the said submissions learned Public Prosecutor seeks to dismiss the petition. 12. The above stated facts would reveal that the name of the petitioner is not there in the complaint, dated 05.08.2020 lodged by the defacto-complainant. However, the defacto-complainant has opened de-mat account with A.1 company on 25.08.2018 with ID No. 28188 in the name of his company on 13.09.2019. He has requested for redemption of funds from the account. He got mail from A.2 admitting that funds are struck and he would repay soon. He has waited quite a long time but the A.1 company did not pay the same. He has suspected that the funds might have been swindled. 13. During the course of investigation, the Investigating Officer has included the name of the petitioner as A.7. Pursuant to the order dated 05.11.2020 in Electronic Crl.M.P. 687 of 2020, he was taken into custody from 10.00 a.m. of 06.11.2020 to 4.00 p.m. of 07.11.2020. He was associated with the Directors of A.1 company as relationship Manager of A.1 company during the years 2016-2019. There are serious allegations against the petitioner/A.7 that he has lured hundreds of investors from Karnataka, Dubai and Hyderabad cities for issuing share trading with a promise of high returns on investments. He has sent monthly trading statements to L.Ws. 1 to 4 since 2018 till December, 2019 on behalf of the A.1 company and he has collected commission from L.Ws.1 to 4 through bank transfers. The details of the account numbers, date of transfer and amount transferred, have specifically mentioned in the remand report. 14. The petitioner/A.7 has introduced himself to L.W.5 Mohd. Abdul Rawoof, as Advisor and relationship Manager of A.1 company and lured him to invest in A.1 company under the guise of giving high rate of returns over the investment. The details of the account numbers, date of transfer and amount transferred, have specifically mentioned in the remand report. 14. The petitioner/A.7 has introduced himself to L.W.5 Mohd. Abdul Rawoof, as Advisor and relationship Manager of A.1 company and lured him to invest in A.1 company under the guise of giving high rate of returns over the investment. Accordingly, the L.W.5 has invested huge amounts in the A.1 company. The details of the same are specifically mentioned in the remand report including amount transferred, name of the bank, account number etc. The petitioner/A.7 has introduced himself as agent of A.1 company. He has assured the victims of high rate of returns over the investment and introduced them to invest in the A.1 Company. Being the Director of M/s. 29K Investment Advisory Limited, the petitioner has issued fake IDs, to the victims. There is serious allegation of diversion of funds to the personal accounts of the petitioner and other relationship Managers of the A.1 company. There is also allegation that the petitioner on behalf of the A.1 company issued fake transaction statements of each Client showing the trade details of profit/loss regularly. 15. On perusal of the entire record including the remand repot would reveal that A.1 Company i.e., M/s. Manoj Javery Stock Broking Private Limited was declared as defaulted company by SEBI in the year 2017 itself. The said fact was suppressed by the petitioner and other accused. On the other hand, the petitioner and other accused being the relationship Managers made the investors/victims to believe to invest in A.1 company. Believing the petitioner and the other accused, the victims including L.Ws. 1 to 5 have invested/deposited huge monies. The petitioner herein has received Rs. 38.00 Lakhs as profit. Thus, there are several factual aspects which are to be investigated into by the Investigating Officer. There are serious allegations against the petitioner herein that he has lured hundreds of investors from Karnataka, Dubai and Hyderabad cities. He has involved in two cases i.e. Cr. No. 1055 of 2020 and Cr. No. 92 of 2020. Against the A.1 company there are 7 crimes including three crimes in Bangalore city, two in Hyderabad city and one in Cyberabad Commissionerate. Investigation is still pending in all the said cases. 16. In view of the principle laid down by the Hon'ble Apex Court in Sanjay Chandra Vs. No. 1055 of 2020 and Cr. No. 92 of 2020. Against the A.1 company there are 7 crimes including three crimes in Bangalore city, two in Hyderabad city and one in Cyberabad Commissionerate. Investigation is still pending in all the said cases. 16. In view of the principle laid down by the Hon'ble Apex Court in Sanjay Chandra Vs. CBI, 2012(1) SCC 40 relied upon by the learned Senior Counsel appearing for the petitioner that the detention in custody pending completion of trial would cause hardship etc., to the petitioner is not applicable to the facts of the present case. In the said case, the investigation was completed and charge sheet was already filed. There are serious allegations of luring victims by the petitioner/A.7 from Karnataka, Dubai and Hyderabad cities in the present case. Therefore, the said principle is not applicable to the facts of the present case. 17. Considering the said facts and also the fact that the investigation is pending and there are serious allegations against the petitioner herein, this Court is not inclined to grant regular bail to the petitioner herein for the present. 18. In the result, the Criminal Petition is dismissed. Miscellaneous petitions, pending if any, shall stand closed.