CENTRAL BUREAU OF INVESTIGATIONversusV. VIJAY SAI REDDY

                        [2013] 8 S.C.R. 830


A            CENTRAL BUREAU OF INVESTIGATION
                                  v.
                       V. VIJAY SAi REDDY
                (Criminal Appeal No. 729 of 2013)
                            MAY 9, 2013
B
             [P. SATHASIVAM AND M.Y. EQBAL, JJ.]

       Code of Criminal Procedure, 1973 - s. 437 - Bail -
  Charge-sheets against the accused - Bail application -
C Granted by courts below - Held: Bail was granted, taking into
  account irrelevant materials and keeping out relevant
  materials - In the facts of the case, bail liable to be cancelled
  - Accused free to renew his prayer for bail after investigation
  relating to remaining charge-sheets are complete and
D appropriate report is filed before the Court.

        Bail - Grant of - Considerations - Discussed.

        Bail - Cancellation of - Held: Power to cancel bail should
    always be exercised very sparingly by the court of law.
E
       CBI, pursuant to the order of the High Court,
  registered case against 74 persons including respondent-
  accused uls. 120-B rlw. ss. 409, 420 and 477-A IPC and
  s. 13(2) r/w. s. 13(1)(c) and (d) of Prevention of Corruption
F Act, 1988. After the investigation, few charge-sheets were
  filed by CBI against the accused persons including the
  respondent-accused. In the meantime Special Court
  granted bail to respondent-accused and the same was
  confirmed by High Court. Hence the present appeal by
G CBI, seeking cancellation of bail granted to the
  respondent-accused.
        Allowing the appeal, the Court

        HELD: 1. While granting bail, the court has to keep
H                                830
 CENTRAL BUREAU OF INVESTIGATION v. V. VIJAY 831
                SAi REDDY
in mind the nature of accusations, the nature of evidence      A
in support thereof, the severity of the punishment which
conviction will entail, the character of the accused,
circumstances which are peculiar to the accused,
reasonable posslblllty of securing the presence of the
accused at the trial, reasonable apprehension of the           B
witnesses being tampered with, the larger interests of the
public/State and other similar considerations. It has also
to be kept in mind that for the purpose of granting bail,
the Legislature has used the words "reasonable grounds
for believing" instead of "the evidence" which means the
Court dealing with the grant of bail can only satisfy it as
                                                               c
to whether there is a genuine case against the accused
and that the prosecution will be able to produce prima
facie evidence in support of the charge. It is not expected,
at this stage, to have the evidence establishing the guilt
of the accused beyond reasonable doubt. [Para 28] [847-        D
A-DJ
     2. The Special Court took irrelevant materials for
consideration for grant of bail and the High Court having
arrived at definite conclusion that several findings of        E
Special court are unacceptable or irrelevant but ultimately
affirmed the very same order of the special Judge
granting bail, taking into account the irrelevant materials
and keeping out the relevant materials, which had to be
considered for the grant of bail. [Para 27 and 29] [846-G-     F
H; 847-D-E]

     3. If irrelevant materials have been taken into account
or relevant materials have been kept out of consideration,
the order granting bail to the accused cannot be
sustained. In the same way, if there is specific allegation    G
by the prosecution that the accused in question was a
party to the criminal conspiracy, neither the Special Court
nor the High Court is justified in granting bail to the said
person. [Para 9] [838-C-D]
                                                               H
    832      SUPREME COURT REPORTS                 [2013) 8 S.C.R

A      State of U.P. through CBI vs. Amarmani Tripathi (2005)
  8 SCC 21: 2005 (3) Suppl. SCR 454; Dinesh MN. (S.P.) vs.
  State of Gujarat (2008) 5 SCC 66: 2008 (6) SCR 1134;
  Narendra K. Amin (Dr) vs. State of Gujarat and Anr. (2008)
  13 SCC 584: 2008 (6) SCR 1149; State of Maharashtra and
B Ors. vs. Dhanendra Shriram Bhurle and Ors. (2009) 11 SCC
  541: 2009 (3) SCR 143; Central Bureau of Investigation,
  Hyderabad vs. Subramani Gopalakrishnan and Anr. (2011)
  5 sec 296: 2011 (5) SCR 824 - relied on.

       4. Cancellation of bail necessarily involves the review
C of a decision already made, it should always be exercised
  very sparingly by the court of law. In the light of the facts
  of the case, the special Judge committed an error in
  granting bail and the same was erroneously affirmed by
  the High Court. Five charge sheets have been filed so far
D and three more charge sheets are in the final stages and
  are yet to be filed. In order to complete the investigation
  in respect of three more charge sheets, the presence of
  respondent (A-2) is required and cannot be ignored by
  treating him as Chartered Accountant only. [Paras 16, 17,
E 30 and 31] [ 842-B-D; 847-E-F]

       5. The respondent would be free to renew his prayer
  for bail before the trial Court after the investigation
  relating to the remaining three charge sheets are
F complete and appropriate report before the trial court Is
  filed and if any such petition is filed, the trial Court is free
  to consider the prayer for bail independently on its own
  merits. [Para 32] [847-G-H; 848-AJ
                         Case Law Reference:
G
          2005 (3) Suppl. SCR 454      relied on        Para 9
          2008 (6) SCR 1134            relied on        Para 9
          2008 (6) SCR 1149            relied on        Para 9
H         2009 (3) SCR 143             relied on        Para 9
 CENTRAL BUREAU OF INVESTIGATION v. V. VIJAY 833
                SAi REDDY
     2011 (5) SCR 824               relied on       Para 9        A

    CRIMINAL APPELLATE JURISIDICTION : Criminal
Appeal No. 729 of 2013.

    From the Judgment & Order dated 13.06.2012 of the High
Court of A.P. at Hyderabad in CRLP No. 4387 of 2012.              B

    Ashok Bhan, Mukul Gupta, S. Nanda Kumar, D.L.
Chhidanand, Anjali Chauhan, Arvind Kumar Sharma for the
Appellant.
   Raju    Ramachandran,       Sushil Kumar,       Gopal          C
Sankaranarayanan, Niranjan Reddy, Subash Pothireddy,
Madhur Panjwani, Senthil Jagadeesan for the Respondent.
    The Judgment of the Court was delivered by
                                                                  D
    P. SATHASIVAM, J. 1. Leave granted.
      2. This appeal is directed against the final judgment and
order dated 13.06.2012 passed by the High Court of
Judicature of Andhra Pradesh at Hyderabad in Criminal Petition
No. 4387 of 2012, whereby the High Court dismissed the            E
petition filed by the Central Bureau of Investigation (CBl)-the
appellant herein seeking cancellation of bail granted to the
respondent herein.
Brief facts:
                                                                  F
    3. On the orders of the High Court of Andhra Pradesh in
Writ Petition Nos. 794, 6604 and 6979 of 2011 dated
10.08.2011, the CBI, Hyderabad, on 17.08.2011, registered a
case being R.C. No. 19(A)/2011-CBl-Hyderabad dated
17.05.2011 under Sections 120-B read with Sections 409, 420       G
and 477-A of the Indian Penal Code, 1860 (in short 'IPC') and
Section 13(2) read with Section 13(1 )(c) and (d) of the
Prevention of Corruption Act, 1988 (in short "the PC Act")
against Y.S. Jaganmohan Reddy (A-1). Member of Parliament
and 73 others.
                                                                  H
    8'34     SUPREME COURT REPORTS                 (2013] 8 S.C.R.


A      (b) V. Vijay Sai Reddy-the respondent herein was named
  as an accused at SI. No. 2 in the FIR dated 17 .08.2011 (after
  the chargesheet was framed, he was arrayed as A-2 and
  hereinafter, he will be referred to as A-2). The respondent herein
  was the founder Director of M/s Jagathi Publications and was
B the Financial Advisor for the group of companies of Y.S. Jagan
  Mohan Reddy (A-1).

       (c) He was arrested on 02.01.2012 and was in police
  custody from 04.01.2012 to 09.01.2012 and again from
  11.01.2012 to 17.01.2012. On 27.01.2012, he filed an
C application for grant of regular bail under Section 437 of the
  Code of Criminal Procedure, 1973 (in short 'the Code') before
  the Court of the Special Judge for CBI Cases at Hyderabad.
  The Special Judge, by order dated 21.03.2012, dismissed his
  application for bail.
D
       (d) During investigation, it was revealed that M/s Jagathi
  Publications Pvt. Ltd. was originally incorporated as a private
  limited company on 14.11.2006 and later converted into a
  public limited company on 12.01.2009. At the relevant time, the
E respondent herein was the founder Director of the Company
  and Y.S. Jagan Mohan Reddy (A-1) was designated as the
  Authorised Signatory to operate the Bank accounts of the
  Company. He was appointed as a Director and Chairman with
  effect from 21.06.2007. It is alleged that A-1 floated M/s Jagathi
F Publications Pvt. Ltd. with an objective of conducting media
  business with the ill-gotten wealth. Most of the shareholders
  were alleged to be the benamis of Y.S. Jagan Mohan Reddy
  (A-1). Further, as a quid pro quo to these investments, the
  benefits were received by various investors including the
G companies/individuals from the decisions of the State
  Government in allotment of lands for Special Economic Zones
  (SEZs), contracts for irrigation projects, special relaxations/
  permissions for real estate ventures, mines etc. It is further
  revealed that Y.S. Jaganmohan Reddy (A-1) laundered the bribe
  money by routing it through various individuals and companies
H
 CENTRAL BUREAU OF INVESTIGATION v. V. VIJAY 835
        SAi REDDY [P. SATHASIVAM, J.]
and getting investments made by them in his companies at a         A
high premium.

     (e} After investigation, on 31.03.2012, the CBI filed first
charge sheet against A-1 to A-13 including the respondent
herein under Section 120-B read with Sections 409, 420 and         B
477-A of the IPC and Sections 13(2) read with Section 13(1}(c}
and (d} of the PC Act in the Court of Special Judge for CBI
Cases, Hyderabad. On 02.04.2012, A-2 filed another
application for grant of bail before the Special Judge. By order
dated 13.04.2012, the Special Judge granted bail to A-2.
                                                                   c
     (f} Being aggrieved by the order dated 13.04.2012, the CBI
filed Criminal Petition No. 3712 of 2012 before the High Court.
The High Court, by order dated 20.04.2012, set aside the order
dated 13.04.2012 and remanded the matter to the Court of
Special Judge to consider the case of A-2 afresh. In the           D
meantime, the Principal Special Judge for CBI Cases,
Hyderabad took cognizance of the charge sheet dated
31.03.2012 against A-1 to A-13 which was numbered as CC
No. 8 of 2012. On 30.04.2012, after hearing both the sides
afresh in Criminal Misc. Petition No. 715 of 2012 for grant of     E
bail, the very same Special Judge, who passed the earlier
order dated 13.04.2012, granted bail to A-2.

      (g} Aggrieved by the order dated 30.04.2012, the CBI filed
Criminal Petition No. 4387 of 2012 before the High Court for       F
cancellation of bail granted to A-2. In the meantime, the CBI
filed third chargesheet with respect to the investment made by
M/s Ramky Group of Companies. On 29.05.2012 and
30.05.2012, the Principal Special Judge for CBI Cases took
cognizance of second and third chargesheet(s} which were
numbered as CC Nos. 9 and 10 of 2012 respectively.                 G

     (h} The High Court, by order dated 13.06.2012, dismissed
the petition filed by the CBI.

    (i} Being aggrieved by the order of the High Court, the CBI-   H
    836       SUPREME COURT REPORTS                   [2013] 8 S.C.R.


A the appellant herein has preferred this appeal by way of special
    leave.

        4. Heard Mr. Ashok Bhan, learned senior counsel for the
    appellant herein and Mr. Raju Ramachandran, learned senior
B   counsel for the respondent herein.

         5. It is useful to refer the order dated '10.08.2011 passed
    by the High Court ordering for CBI investigation wherein, in
    para 51, it is stated thus:

c          "51. Prima facie, it emerges from the record forming part
           of the writ petitions including pleadings of the parties that
          from May, 2004 onwards, respondent No. 52 floated
           number of companies wherein quid pro quo investments
          have been made out of the benefits received by the
D          investors/beneficiaries from the decisions of the State
          Government in various forms like SEZs, irrigation
          contracts, relaxation/permission for real estate ventures,
          mines etc. besides payment of huge premium amounts
          paid in the shares and invested in the companies by such
          beneficiaries and the money so paid is nothing but corrupt
E
          money attracting Section 3 of the Prevention of Money
          Laundering Act, 2002. The investigation by the Income Tax
          authorities with respect to assessment orders of M/s
          Jagathi Publications for the year 2008-09 shows huge
          unexplained cash credit. Similarly, huge escalated face
F         value of shares to the extent of 35 times also was not
          accepted by the Income Tax authorities and respondent
          No. 52 is directly or indirectly connected with some of the
          companies which are showing phenomenal growth and
          these facts make it necessary to ascertain the role of
G         individuals/firms/public servants in the group companies of
          respondent No. 52."

      6. Based on the above directions, the CBI filed a charge
  sheet on 17.08.2011, initiated investigation and filed several
H charge-sheets and, according to learned senior counsel for the
 CENTRAL BUREAU OF INVESTIGATION v. V. VIJAY 837
        SAi REDDY [P. SATHASIVAM, J.]
CBI, three more charge-sheets are yet to be filed. It is            A
highlighted by learned senior counsel for the CBI that the
present appellant {A-2) participated in the conspiracy and
according to him, he is a key conspirator. He also highlighted
that by threatening many businessmen, he made them close
associates of Y.S. Jagan Mohan Reddy {A-1). He also                 B
highlighted that the present appellant intimidated many persons
for investments in the concerns belonging to A-1. Finally, he
submitted that by branding him as Y.S. Jagan Mohan Reddy's
{A-1) man, he collected huge money by way of getting shares
in the companies flouted by A-1. In addition to the same, Mr.       c
Ashok Bhan submitted that out of eight charge-sheets, three
charge-sheets are yet to be filed for which the CBI requires
interrogation and collection of materials through him for which
his bail has to be cancelled. By taking us through the reasoning
of the Special Court for grant of bail and the affirmation order    D
of the High Court, learned senior counsel for the CBI submitted
that both the courts took note of irrelevant considerations,
hence, both the orders are liable to be set aside.

      7. As against the above contentions, Mr. Raju
Ramachandran, learned senior counsel for the respondent, after      E
taking us through the averments in the FIR, allegations in the
charge-sheet{s) filed so far submitted that there is no material
to show that the appellant has gained anything financially in the
alleged transactions. He also pointed out that no investments
were made in Jagathi Publications during the period when he         F
was the Director. He further submitted that the State
Government itself had passed various Government Orders to
protect the Ministers and Secretaries who alleged to have
been involved on the ground that everything was done in the
course of normal business of the Government. When such is           G
the position, according to him, the appellant being a Chartered
Accountant, without any financial gain, the Special Judge was
justified in granting him the bail. He also pointed out that even
when the appellant was out, five charge-sheets have been filed
and there is no impediment in finalizing the remaining three        H
    838          SUPREME COURT REPORTS               [2013) 8 S.C.R.


A charge-sheets and he is·W~ling to cooperate with the Agency
  by fulfilling all the conditions ~mposed by the Special Court and
  the High Court.

          8. We have considered the rival contentions and perused
    all the relevant materials relied on by both the sides.
8
       9. Let us consider the contentions put-forth by learned
  senior counsel for the CBI. It is settled by a series of decisions
  that if irrelevant materials have been taken into account or
  relevant materials have been kept out of consideration, the order
C granting bail to the accused cannot be sustained. In the same
  way, if there is specific allegation by the prosecution that the
  accused in question was a party to the criminal conspiracy,
  neither the Special Court nor the High Court is justified in
  granting bail to the said person. These principles have been
D reiterated vide State of U.P. through CBI vs. Amarmani
  Tripathi, (2005) 8 SCC 21, para 31, Dinesh M.N. (S.P.) vs.
  State of Gujarat, (2008) 5 SCC 66, para 27, Narendra K. Amin
  (Dr.) vs. State of Gujarat and Another, (2008) 13 SCC 584
  para 27, State of Maharashtra and Others vs. Dhanendra
E Shriram Bhurle and Others, (2009) 11 SCC 541, para 8,
  Central Bureau of Investigation, Hyderabad vs. Subramani
  Gopalakrishnan and Another, (2011) 5 SCC 296, para 25.

       10. Keeping those principles in mind, let us consider the
  role played by the present respondent - V. Vijay Sai Reddy (A-
F 2) as projected by the CBI. In the first charge-sheet, it is alleged
  as under:

          (i)     V. Vijay Sai Reddy (A-2) was the founder Director
                  of M/s Jagathi ~ublications Pvt. Ltd. (A-12) and is
G                 the Financial Advisor for Group Companies of Y.S.
                  Jagan Mohan Reddy (A-1 ).

        · (ii)    V. Vijay Sai Reddy (A-2) in conspiracy with Y.S.
                  Jag an Mohan Reddy (A-1) to fix the premium of Ml
                  s Jagathi Publications Pvt. Ltd. at a high rate,
H
CENTRAL BUREAU OF INVESTIGATION v. V. VIJAY 839
       SAi REDDY [P. SATHASIVAM, J.]
           provided false and exaggerated information to M/         A
           s Deloitte Touche Tohmatsu India Pvt. Ltd. and M/s
           Jagadisan & Co. and got evaluated M/s Jagathi
           Publications Pvt. Ltd .. In furtherance of the said
           conspiracy, V. Vijay Sai Reddy (A-2) unilaterally
           fixed the premium of M/s Jagathi Publications at         B
           Rs. 350/- per share for the sole purpose of soliciting
           huge amounts as investments.

   (iii)   V. Vijay Sai Reddy (A-2) and Y.S. Jagan Mohan
           Reddy (A-1) were fully aware of their factual
           financial position before starting the media
                                                                    c
           company which takes 5 to 6 years for break even
           to claim profits. In spite of this fact, V. Vijay Sai
           Reddy (A-2) prevailed over M/s Deloitte Touche
           Tohmatsu India Pvt. Ltd. by providing false inputs
           to exaggeratedly evaluate the fiscal status of M/s       D/
           Jagathi Publications Pvt. Ltd. and also to ante-date
           the valuation report to suit the stealthy requirements
           of the company. Thus, Vijaya Sai Reddy (A-2) was
           instrumental in soliciting the premium @ Rs. 350/-
           of M/s Jagathi Publications Pvt. Ltd. without any        E
           basis.

   (iv)    V. Vijay Sai Reddy (A-2) in furtherance of the
           criminal conspiracy, played a vital role in soliciting
           investments in the form of bribes as a quid pro quo      F
           from the individuals related to the MD of M/s
           Aurobindo Pharma Ltd. and the companies M/s
           Hetero Group Companies (A-4) and M/s Trident
           Life Sciences Ltd. (A-5).

   (v)     By the above mentioned overt acts V. Vijay Sai           G
           Reddy (A-2) in furtherance of criminal conspiracy
           with remaining accused, has committed the
           offences under Section 120-B read with Sections
           409, 420 and 468 IPC and thereby facilitated Y.S.
           JaQan Mohan Reddy (A-1) to reap undue benefit in         H
    840     SUPREME COURT REPORTS                  [2013] 8 S.C.R


A               the form of investments in his company from the
                beneficiaries mentioned above as a quid pro quo.

        11. It is brought to our notice that Mis Jagathi Publications
  Private Limited was incorporated on 14.11.2006 as a Private
B Limited Company and was converted into a Public Limited
  Company on 12.01.2009. M/s Jagathi Publications Private
  Limited represented by its the then Directors, Y.S. Jagan
  Mohan Reddy (A-1) and V. Vijay Sai Reddy (A-2) solicited
  investments from the general public although it was a private
  limited company in violation of the provisions of the Companies
C Act, 1956. It is contended by the CBI that the main intention of
  M/s Jagathi Publications Private Limited represented by the
  then Diectors A-1 and A-2 was to woo innocent investors to
  buy shares at high premiums by concealing the material facts.
  They cited several instances in the charge sheet.
D
       12. In the second charge-sheet dated 23.04.2012, Y.S.
  Jagan Mohan Reddy (A-1), V. Vijay Sai Reddy (A-2) and Mis
  Jagathi Publications Private Limited are the main accused for
  the offences under Section 120-B read with Sections 420, 468
E and 471 IPC and Section 9 of the PC Act. The third charge
  sheet was filed on 07.05.2012 regarding the investigation
  conducted in connection with the investments made by M/s
  Ramky Pharma City (I) Ltd. in M/s Jagathi Publications Private
  Limited. According to the CBI, investigation revealed that Y.S.
F Jagan Mohan Reddy (A-1) in conspiracy with V. Vijay Sai
  Reddy (A-2) ensured causing of wrongful gain to Mis RPCIL
  represented by Ayodhya Rami Reddy (A-4) in the matter of
  reducing the green belt area from 250 mtrs. to 50 mtrs. by
  prevailing upon his father late Dr. Y.S. Rajasekhara Reddy, the
G then Chief Minister to take a decision to that effect during the
  meeting held on 23.11.2005. Based on the said decision, G.
  Venkat Ram Reddy (A-5), the then Vice Chairman, VUDA
  accorded approval to the layout plan of Mis RPCIL (A-6) with
  reduced green belt area confining it to 50 mtrs. in contravention
  to the decision dated 20.06.2005 and the G.O. No. 345 dated
H
 CENTRAL BUREAU OF INVESTIGATION v. V. VIJAY 841                         •
        SAi REDDY [P. SATHASIVAM, J.]
30.06.2006 notifying the VUDA Master Plan 2021. In this way,         A
A-6 obtained wrongful gain of 914 acres of land inside the
Pharma City and by selling the land after dividing it into plots,
A-6 obtained a wrongful gain of Rs. 133.74 crores. It is further
pointed out that as a Financial Advisor and Founder Director
of M/s Jagathi Publications Private Limited, the respondent          B
herein played a very active role and as such he cannot be
absolved himself from the conspiratorial role played by him in
the affairs of M/s Jagathi Publications Private Limited and is
liable for all the irregularities.

      13. It is pointed out by the CBI that investigation is under   C
progress regarding the transactions relating to Sandur Power
Company which involved many foreign transactions and the
present respondent V.Vijay Sai Reddy (A-2) was the main
person who dealt with all the foreign transactions for which
evidence is available. It is also highlighted that V.Vijay Sai       D
Reddy (A-2) has played a main role in pumping crores of
money to M/s Jagathi Publications Private Limited through
several companies like Artillegence Bio-Innovations Ltd., Bay
Inland Finance Pvt. Ltd., Bhaskar Fund Management Pvt. Ltd.,
and other individuals based in Kolkata and Mumbai. Likewise,         E
VANPIC's grant of mining lease and permits to several group
of companies, the investigation is under progress and custodial
interrogation from the appellant is required.

     14. Mr. Ashok Bhan, learned senior counsel has pointed          F
out that the Special Judge erroneously observed that the
investigation has reached to a conclusion and based on such
a wrong assumption enlarged him on bail.

     15. According to the CBI, the investigation is still in
progress in other separate and distinct offences. He also            G
pointed out that the said conclusion is totally contrary to the
record. By pointing out various facts and figures, he asserted
that A-2 is an active member of the criminal conspiracy and
releasing him at the stage of investigation would result in
miscarriage of justice as the role played by him in the              H
    842      SUPREME COURT REPORTS                   [2013] 8 S.C.R.


A   conspiracy is serious and grave in nature. The main grievance
    of the CBI is that when there was sufficient evidence on record
    and investigation is yet to be completed in many matters, grant
    of bail would defeat the proper investigation in the case.

B      16. Though we are not expressing any definite opinion
  about those allegations and it is for the trial Court to find out
  the acceptability or otherwise in the full fledged trial, we are of
  the view that in order to complete the investigation in respect
  of three more charge sheets, the presence of respondent (A-
C 2) is required and cannot be ignored by treating him as
  Chartered Accountant only.

          17. As mentioned earlier, five charge sheets have been
    filed so far and three more charge sheets are in the final stages
    and are yet to be filed. At the time of arguments, learned senior
D   counsel for the CBI has brought to our notice that the last of
    the charge has been filed in the Dalmia Cements Ltd. issue
    on 08.04.2013 which is on the file of the Special Judge for the
    CBI Cases for taking cognizance. We have already noted the
    stand of the CBI insofar as the respondent herein is concerned,
E   his relationship with the main accused Y.S. Jagan Mohan Reddy
    (A-1) his interest in M/s Jagathi Publications Private Limited
    etc. It is also seen and highlighted that respondent A-2 was
    engaged in Financial Consultant Company, namely M/s
    Deloitte Touche Tehmatsu India Private Limited and according
F   to the CBI, he directed this Company to fudge and exaggerate
    fiscal status of M/s Jagathi Publications Private Limited. It is
    their claim that it is A-2 who was instrumental in soliciting the
    premium at Rs. 350 per share of M/s Jagathi publications
    Private Limited without any basis for actual share of Rs. 10 per
G   share. It is pointed out that on the basis of this false rating of
    Jagathi Publications Private Limited of which A-2 was the
    Director, many more companies and individuals were made to
    invest their money by threat, intimidation, cheating and
    inducement. It is the specific stand of the CBI that these ratings
H   were falsely projected by A-2.
 CENTRAL BUREAU OF INVESTIGATION v. V. VIJAY 843
        SAi REDDY [P. SATHASIVAM, J.]
     18. It is also brought to our notice that investigation relating    A
to M/s Sandur Power Company is in progress which involves
investigation in foreign countries in which Y.S. Jaganmohan
Reddy (A-1) was the Director. As per the investigation,
respondent herein (A-2) was the main person, who facilitated
formation of M/s Sandur Power Company Ltd .. There is also               B
allegation that Sandur Power Company received huge amounts
from two Mauritius based Companies and the source of those
monies is being investigated speedily and efforts to trace the
source are being done expeditiously. It is also brought to our
notice that Letter of Rogatories have been sent to six foreign           c
countries and they have furnished the status of LRs.

     19. It is also the claim of the CBI that investigation is under
progress regarding granting of mining lease of limestone to the
extent of 2037.52 acres by the Government of Andhra Pradesh
to Raghuram Cements. It is highlighted that during the period            D
under review, the CBI has collected 400 documents running into
thousands of pages from various departments/banks and so
far about 40 persons have been examined.

      20. It is also highlighted that the investigation disclosed that   E
respondent A-2 was nominated as a part time non-executive
Director of Oriental Bank of Commerce by the Ministry of
Finance vide notification dated 14.12.2006 based on the
recommendation of late Dr. Y.S. Rajasekhara Reddy, the then
Chief Minister of Andhra Pradesh and father of A-1. It is the            F
assertion of the CBI that respondent A-2 was not only the direct
beneficiary of the post of Director in a Nationalised Bank but
was also a key conspirator and facilitated for fiddling with public
money of the said bank. As the Director of the bank, he also
facilitated a loan of Rs. 200 crores to A-1 without any security         G
and was also appointed as a Member of Tirumala Tirupati
Devasthanams.

    21. It is pointed out that so far 110 witnesses have been
examined and as many as 1382 documents running into several
thousands of pages have been collected in respect of                     H
    844      SUPREME COURT REPORTS                  [2013] 8 S.C.R.


A investment through paper companies based in Kolkata and
  Mumbai, popularly known as suit case companies. Even in the
  case of Indus Projects and Lepakshi Knowledge Hub Pvt. Ltd.,
  according to the CBI, the role of respondent A-2 is being
  ascertained.
B
        22. Finally, it is pointed out that the role of respondent (A-
  2) in matters of Raghuram Cements and Sandur Power are yet
  to be completed, hence, the presence of respondent herein (A-
  2), who is outside the judicial custody would definitely hamper
  the smooth investigation and blunt the due process of law
C through his deceptive and subtle manipulations to influence,
  intimidate and threaten the witnesses.

       23. Though the CBI has annexed certain documents in
  support of the above claim, we are not looking into the same
D at this stage and if the charge sheet(s) is filed with reference
  to the same, it is for the Special Court to consider merit and
  demerits of the claim of the prosecution.

          24. As pointed out by learned senior counsel for the CBI
E   in para 25 of the impugned judgment, the High Court did not
    agree with the observation of the Special Judge that the
    investigation has reached to a conclusion. In fact, the High Court
    has concluded that the above finding is incorrect. In para 26
    also, the High Court appreciated and accepted the stand of the
    CBI that it has been making investigation with regard to other
F   distinct offences that are alleged in the FIR. Interestingly, the
    High Court has also not accepted the another reasoning of the
    Special Court for granting bail, namely, that the main accused
    A-1 and other beneficiaries have not been arrested by the
    investigating agency. In other words, the High Court has rightly
G   concluded that the circumstance of not arresting the other
    accused itself cannot be a ground to grant bail. However, after
    finding fault with certain reasoning and conclusion of the Special
    Court in granting bail, the High Court has observed that the CBI
    has not placed any material before the Special Court to
H   substantiate their stand. The Special Judge has also noted that
 CENTRAL BUREAU OF INVESTIGATION v. V. VIJAY 845
        SAi REDDY [P. SATHASIVAM, J.]

 when respondent herein (A-2) was released on bail on                A
 13.04.2012 and again surrendered before the Court on
 23.04.2012, there is no allegation against him that during this
 period, he tried to run away from the investigating agency or
 made any attempt to influence the witnesses. In this regard,
 learned senior counsel for the CBI has brought to our notice        B
the statement of one Gopalakrishnan Murali dated 20.06.2012.
 In his statement, in the penultimate paragraph, it is noted that
on receipt of notice under Section 91 of the Code from CBI on
 13.06.2012 the said deponent immediately contacted V. Vijay
Sai Reddy (A-2) for his instructions. According to him, A-2          c
directed him not to part with any documenVinformation to CBI
and directed to approach the High Court of Andhra Pradesh
through their legal advisors. Admittedly, he had not brought any
information as required ~nder the notice dated 13.06.2012 on
the advise of the respon~ent herein (A-2). As rightly pointed out,
                                                                     D
there is no need to go to Hlgh Court to get specific direction
for each and every thing. When the Investigating Officer is in
need of certain documents/information for verification with
reference to the investief,ation it is but proper to place all the
materials under Sectio11 91 of the Code. Likewise, further
statement of one Shri Sanjay S. Mitra dated 07.12.2012 was           E
pressed into service. When the attention was drawn to the said
person pointing out that his replies are intended to protect
directly the people involved in the above transactions including
his Managing Director Puneet Dalmia and Vijay Sai Reddy (A-
2), his answer was that he is an employee working with Dalmia        F
for salary and he has indications from his management and
indirectly from Vijay Sai Reddy (A-2) about not revealing the
above transactions and he also informed the things having
reservation about his future. These are a few samples pointed
out by the counsel for the CBI.                                      G

    25. Another relevant aspect as pointed out by learned
senior counsel for the CBI that bail can be cancelled when lower
court granted bail on irrelevant considerations. The High Court
accepted the said proposition and observed that "though there
                                                                     H
      846   SUPREME COURT REPORTS                  [2013] 8 S.C.R

A appears to be some force in the contention of Shri Kesava
  Rao, learned standing counsel for the CBI that the Special
  Judge has taken into consideration certain factors which
  appear to be not relevant such as not arresting A-1 and certain
  other observations of learned Special Judge, such as
B investigation has been completed appear to be incorrect."
  Unfortunately, after arriving such conclusion, particularly,
  criticizing the Special Judge, the High Court on an erroneous
  ground concluded that "it cannot be said that they are totally
  irrelevant circumstances, therefore, on that ground, I feel that
c the bail granted to the respondent cannot be cancelled".

        26. Finally, though it !s claimed that respondent herein (A-
  2) being only a C.A. had rendered his professional advise, in
  the light of the various serious allegations against him, his
  nexus with the main accused A-1, contacts with many investors
D all over India prima facie it cannot be claimed that he acted only
  as a C.A. and nothing more. It is the assertion of the CBI that
  the respondent herein (A-2) is the brain behind the alleged
  economic offence of huge magnitude. The said assertion, in
  the light of the materials relied on before the Special Court and
E the High Court and placed in the course of argument before
  this Court, cannot be ignored lightly.

       27. It is true that the Special Judge while granting bail
  imposed certain conditions and the High Court has also added
F some more additional conditions, however, taking note of few
  instances in which how the respondent has acted, it cannot be
  possible for the investigating agency to collect the remaining
  materials for the remaining three charge sheets to be filed. In
  such circumstances, we are satisfied firstly the Special Court
G took irrelevant materials for consideration for grant of bail and
  secondly, the High Court having arrived definite conclusion that
  several findings of Special court are unacceptable or irrelevant
  but ultimately affirmed the very same order of the special Judge
  granting bail.

1:1
 CENTRAL BUREAU OF INVESTIGATION v. V. VIJAY 847
        SAi REDDY [P. SATHASIVAM, J.]
      28. While granting bail, the court. has to keep in mind the     A
nature of accusations, the nature of evidence in support thereof,
the severity of the punishment which conviction will entail, the
character of the accused, circumstances which are peculiar to
the accused, reasonable possibility of securing the presence
of the accused at the trial, reasonable apprehension of the           8
witnesses being tampered with, the larger interests of the
public/State and other similar considerations. It has also to be
kept in mind that for the purpose of granting bail, the Legislature
has used the words "reasonable grounds for believing" instead
of "the evidence" which means the Court dealing with the grant        C
of bail can only satisfy it as to whether there is a genuine case
against the accused and that the prosecution will be able to
produce prima facie evidence in support of the charge. It is not
expected, at this stage, to have the evidence establishing the
guilt of the accused beyond reasonable doubt.
                                                                      D
     29. We have highlighted the above aspects to show that
the High Court has mistakenly taken into account the irrelevant
materials and kept out the relevant materials, which had to be
considered for the grant of bail.
                                                                      E
    30. Taking note of the fact that cancellation of bail
necessarily involves the review of a decision already made, it
should always be exercised very sparingly by the court of law.

     31. In the light of the above discussion, we are of the view
that the special Judge committed an error in granting bail and        F
the same was erroneously affirmed by the High Court.

     32. Taking note of all the aspects discussed above, without
expressing any opinion on the merits, we set aside both the
orders of the Special Judge and the High Court granting bail          G
to A-2 and allow the appeal filed by the CBI with a direction to
complete all the investigation relating to the remaining three
charge sheets and file appropriate report before the trial Court
within a period of four months from today. Thereafter, the
respondent herein is free to renew his prayer for bail before         H
                                                                          -
    848      SUPREME COURT REPORTS                   [2013] 8 S.C.R.


A the trial Court and if any such petition is filed, the trial Court is
  free to consider the prayer for bail independently on its own
  merits without being influenced by the present appeal. During
  the course of hearing, it is brought to our notice that the marriage
  of the d~ughter of the respondent has been fixed for
8 26.05.2013. Taking note of the said aspect, we direct the
  respondent herein to surrender on or before 5-6-2013 before
  the Special Court for being sent to the custody.

          33. The appeal is_~llowed.

C K.K.T.                                             Appeal allowed.