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Judgment
The Central Bureau of Investigation ('CBI', for brevity) freezed certain accounts of the petitioners and challenging the same, the petitioners approached the Court of the I Additional Special Judge for CBI Cases, Hyderabad - cum - I/C Principal Special Judge for CBI Cases, Hyderabad by way of filing Crl.M.P.No.1001, 1002 and 1004 of 2012 in C.C.No.8 of 2012 in RC No.19/2011 (A)/2011 - CBI, Hyderabad. However, the said petitions were dismissed by the Court below. Aggrieved by the same, the petitioners approached this Court by filing Crl.P.Nos.4523, 4524 and 4525 of 2012 and this Court passed orders in Crl.P.M.P.Nos.4520, 4521 and 4522 of 2012 dated 23.05.2012 directing the respondents to defreeze the current accounts of the petitioners, subject to certain terms and conditions.
This Court, vide its order dated 23.05.2012, held as follows:-
"On principle, I am in agreement with the submissions that in all cases wherein it is alleged that there is huge accumulation of ill-gotten wealth, investigating agencies must make fair investigation and unearth the real beneficiaries and see that truth is surfaced. It is for the concerned appropriate authorities, and the respective Governments to take steps to see that all ill-gotten money is ultimately confiscated to the State and no person should be allowed to enjoy the huge properties earned through illegal corrupt means. I would not have interfered with the order of freezing the accounts had there been no problem to thousands of employees."
".....if the Court does not come to the rescue of the employees working in the petitioner company, their families would be thrown into the streets and keeping in view the interest of the investigating agency and the State and public at large, passed orders defreezing the current accounts of the petitioner company subject to certain terms and conditions."
In the same order, this Court, taking into consideration the fact that the total crime money involved is Rs.1172.56 crores and the tangible assets is Rs.490.79 crores, ordered that the petitioner should not alienate, sell in any form either by way of sale, mortgage, lease or otherwise dispose of any of its assets or create any third party interest or authorize any other person to deal with the assets by executing any GPA to deal with both movable and immovable properties. It was further observed as follows:-
"In the above circumstances, the petitioners are directed to see that all the revenue received through advertisements, circulations, scrap sales, printing charges etc., should be strictly deposited in the current accounts only and there should not be any diversion of any funds from any source to any other account. It appears that the total revenue to be incurred may be sufficient to meet the total expenditure every month, if properly utilized. The petitioners shall pay the salaries of all the employees through account payee cheques only. Similarly, the other expenditures, i.e., consumption of newsprint, administrative and other overheads, also should be paid through the account payee cheques."
"The petitioners shall furnish the details of revenue and expenditure and the payments made by them, to this Court on or before 10th of every month duly furnishing a copy of all such particulars to the respondent - CBI."
"It is made clear that this order does not come in the way of CBI in taking any further steps to freeze the other accounts of the petitioners in any Bank or with regard to any other accounts or transactions, since it is alleged that the total crime money involved is Rs.1172.56 crores."
"It is made clear that these orders are only interlocutory orders and parties are at liberty to approach this Court as and when they feel that slight modifications of these orders is necessary, if any practical difficulties arise."
Then, the petitioners approached this Court by filing Crl.P.M.P. Nos. 4843, 4844 and 4845 of 2012 in Crl.P.M.P. No. 4522, 4521 and 4520 of 2012 in Crl.P. Nos. 4525, 4524 and 4523 of 2012 and Crl.P.M.P. No. 5197 of 2012 in Crl.P.M.P. No. 4520 of 2012 in Crl.P.No.4523 of 2012 and Crl.P.M.P.No.5058 of 2012 in Crl.P.No.4523 of 2012 respectively seeking to vary and modify the order dated 23.05.2012 passed by this Court. In all these petitions, the petitioners have stated as follows:-
".....The amount lying in the current accounts is the amount that are used on day to day basis for the purpose of operating petitioner's business and the said funds are akin to the working capital of the petitioner."
".....Unless this Hon'ble Court would be pleased to consider such relaxation it would be difficult for the petitioner to operationalize its accounts and conduct its business. The petitioner therefore prays for the said relief in the interest of justice."
The above paras indicate that, the petitioners are not having any other current accounts i.e., collection account and payment account particulars of SBI branches.
Having regard to the submissions made before this Court, this Court, by order dated 06.07.2012 in the said petitions, permitted M/s.Oriental Bank of Commerce to appropriate the FDRs kept in lien with it including the FDRs already encashed to the tune of Rs51,78,13,551/-. This Court also observed as follows:-
"In view of the above referred specific directions of this Court and with reference to the income received by the petitioners from different accounts, i.e., collection of revenue under various heads including from local advertisements and local recovery of sale price of newspapers and circulation news, the petitioner ought to have informed about the particulars of collection amount number and payment account number etc., to the CBI and also with regard to the transactions, if any, dealt by it. In view of the same, it is made clear that the petitioner shall not operate any other current account or any account for its day to day operations at any place in the name of any person or company contrary to the orders passed by this Court. In fact, the petitioners or the respondent should have brought to the notice of this Court about the collection accounts and payments accounts being operated by the petitioner at 19 locations. It is made clear that the condition imposed in this order as above and other conditions enumerated in the earlier order have to be strictly complied with. Thus, all the revenue receipts from various bank accounts, either by way of collection account, payment account or any other account, shall be operated strictly in compliance with the earlier orders dated 23.05.2012 passed by this Court. In view of the orders passed above, the 19 collections and payment accounts of the petitioners stands defreezed. This petition is ordered accordingly."
Now, the petitioner - M/s.Jagati Publications has filed Crl.M.P.No.5543, 5587 and 5703 of 2012 in Crl.P.No.4523 of 2012, to modify the conditions imposed by this Court in Crl.M.P.No.4845 of 2012 in Crl.P.No.4523 of 2012 by permitting the petitioner to furnish immovable property security by way of deposit of title deeds of properties belonging to M/s.Janani Infrastructure Ltd and/or M/s.Jagati Publications Ltd., or in the alternative relax the said condition of deposit of title deeds; to modify its order dated 23.05.2012 and 06.07.2012 and permit the petitioner to access and utilize the FDRs amount lying with Oriental Bank of Commerce for the purpose of opening fresh FLCs and for any other business purposes related to the petitioner; and to issue interim directions to the respondent to forthwith recall the freezing orders addressed to the State Bank of India freezing the petitioner's unit accounts at 19 places in terms of this Hon'ble Court's orders dated 06.07.2012 made in Crl.M.P.No5197 of 2012 respectively; the petitioner - M/s.Janani Infrastructure Ltd., has filed Crl.M.P.No.5544 of 2012 in Crl.P.No.4524 of 2012 seeking permission of the Court to comply with the conditions imposed by this Hon'ble Court in Crl.M.P.No.4844 of 2012 by permitting the petitioner to furnish immovable property security by way of deposit of title deeds of properties belonging to it or in the alternative relax the said condition of deposit of title deeds; and the petitioner - M/s.Indira Television Ltd. Filed Crl.M.P.No.5545 of 2012 in Crl.P.No.4525 of 2012 seeking permission of the Court to permit the petitioner to comply with the conditions imposed by this Hon'ble Court in Crl.M.P.No.4522 of 2012 by permitting the petitioner to furnish immovable property security by way of deposit of title deeds of properties belonging to it and/or in the alternative relax the said condition of deposit of title deeds. CBI filed detailed counters in all the petitions except in Crl.M.P. No.5703 of 2012 denying the contentions of the petitioners.
The main contention of the petitioners is that the petitioners do not own any other properties other than the properties covered by the earlier orders of this Court. It is also their case that in view of the legal cases that are filed against them including initiation of proceedings under the Prevention of Money Laundering Act, 2002, they are facing extreme difficulty to request any third party security as there is genuine concern amongst other persons that such property would be long mired in litigation.
Sri C.Padmanabha Reddy, learned senior counsel appearing for Sri S.Niranjan Reddy, learned counsel for the petitioner submitted that the petitioner filed these petitions only for seeking modification of the order dated 06.07.2012 passed by this Court and not for reviewing the said order. Learned senior counsel further submitted that by virtue of the opportunity given to the petitioner by this Court in its order dated 23.05.2012 to approach this Court again if any modification in the order is necessary, the petitioner filed the present petitions and that the respondent/CBI is not justified in taking a plea in their counter that the petitioner is virtually asking for review of the earlier order passed by this Court.
Per contra, Sri P. Keshav Rao, learned standing counsel for the respondent/CBI submitted that the endeavour of the petitioner in filing these petitions is to dilute the earlier orders of this Court under the guise of modification, which course is not available to the petitioners. Learned standing counsel further submitted that the clarification in an order would only be needed for the purpose of enabling the parties to workout the remedies and not to totally change the structure of the order which is nothing but review as contemplated under Section 362 Cr.P.C. Learned standing counsel further submitted that the respondent/CBI had seized 19 bank accounts of the petitioner which were with State Bank of India by virtue of the earlier order of this Court dated 23.05.2012 and in spite of specific directions of this Court to the petitioners not to open any other bank accounts, the petitioners have opened 19 accounts with Canara Bank and have been transacting with the same and even the CBI was not aware of the same and that nothing prevented the petitioners to disclose about these 19 bank accounts with Canara Bank when a subsequent order was passed on 06.07.2012 and that these 19 accounts with Canara Bank were unearthed when the 19 accounts with the State Bank of India were freezed by virtue of the orders of this Court. Learned standing counsel further submitted that though there is a specific direction of this Court to the petitioners to inform the state of affairs time to time to the respondent/CBI, the petitioners never choose to do the same. It is also his submission that when a party approaches the Court for modification of the earlier order passed by it, they have to prove their bona fides. His main submission is that though this Court, in its earlier order dated 06.07.2012, had given opportunity to the petitioners to approach this Court again if any slight modification is needed in the said order, that does not mean that the petitioners can file galore of petitions before this Court time and again seeking modification of the said order and doing so is nothing but systematically diluting the earlier orders of this Court without fulfilling the conditions stipulated in the said order.
In reply, Sri Niranjan Reddy, learned counsel for the petitioner submitted that since the earlier orders have been passed in the interlocutory applications and these petitions also being interlocutory applications, the question of review or the earlier order does not arise, since law provides that pending disposal of the petition/appeal, as the case may be, the Court can pass a totally new interlocutory order in any interlocutory application filed in the said petition/appeal. Learned counsel further submitted that though this Court, by order dated 06.07.2012, ordered the respondent/CBI to defreeze the current accounts of the petitioner, but till today, there is no defreezing of current accounts of the petitioners by the respondent/CBI.
I have considered the above rival contentions. The only point that arise for consideration in these petitions is whether the petitioners are entitled to seek indulgence of this Court to modify the earlier orders passed by this Court.
Though it is a fact that 19 current accounts held by the petitioners with State Bank of India branches in different locations were not freezed and they were not the subject matter of the earlier orders of this Court dated 23.05.2012, but however, when this Court directed the petitioners to see that all the revenue received through advertisement, circulars, scrap sales, printing charges etc., should be strictly deposited in the current accounts only and there should not be any diversion of any funds from any source to any other account and shall pay the salaries of all the employees through Account Payee cheques only and the other expenditure, i.e., consumption of newsprint, administration and other overheads should be paid through account payee cheques, it is most unfortunate that this Court was not informed that 19 other current accounts were being maintained by the petitioners in various locations. It is also most unfortunate that even after passing the orders on 23.05.2012, the petitioners never approached this court intimating this Court about the accounts being maintained by them in 19 different locations. When the CBI freezed 19 accounts of the petitioners with the State Bank of India, then only the petitioners approached this Court.
In spite of the above, this Court passed an equitable order on 06.07.2012 making certain observations. Now, it is shocking to note that the petitioners have opened 19 accounts with Canara Bank and have been transacting with them. Sri S. Niranjan Reddy, learned counsel for the petitioners submits that the petitioners have to comply with the Audit Bureau Circulations (ABC) Guidelines. According to him, the ABC guidelines make it obligatory that the publisher members are required to deposit into the bank on the same day or the next working day cash received from all sources, viz., sale of copies, advertisement receipts and from any other source. Cash required by the publisher for day to day disbursement should be separately withdrawn and not adjusted from daily cash collection. Even if the contention of the learned counsel for the petitioner is true, nothing prevented the petitioners to approach this Court and seek permission to open 19 current accounts. The action of the petitioners in not informing the Court about the 19 current accounts being maintained with the State Bank of India even after passing orders on 23.05.2012 till those accounts are freezed by the CBI and subsequent opening of 19 current accounts with Canara Bank and transacting with the same after freezing the 19 current accounts with State Bank of India is nothing but a clear violation of the earlier orders passed by this Court on 23.05.2012 and on 06.07.2012 by this Court. This Court, in its order dated 06.07.2012, categorically observed that the petitioner shall not operate any other current account or any account for its day to day operation at any place in the name of any person or company contrary to the orders passed by this Court.
Sri Niranjan Reddy submits that after passing of orders on 06.07.2012, the petitioners have intimated the CBI by sending e-mails, the particulars of the transactions of accounts. This cannot be treated as compliance of the earlier orders of this Court. The very opening of separate bank accounts and diverting the funds received through advertisements, circulars, scrap sales, etc., is nothing but clear violation of the earlier orders passed by this Court. In fact, the earlier orders passed by this Court is based on the principles of equity and keeping in view the interests of the employees working with the petitioners. While passing orders on 23.05.2012, this Court was under the impression that the petitioners were not having any other accounts pertaining to collection of revenue or expenditure and in view of the same, observations were made that all the revenue receipts should be deposited into the current accounts which were the subject matter of those petitions only. It is true that this court also observed that the CBI was at liberty to freeze any other accounts of the petitioners, but that does not mean that the petitioner could continue to operate some other current accounts and divert the collections of revenue received by way of advertisements, circulars, scrap sales etc., into those accounts, without intimating the Court and without taking prior permission of the Court. He who approaches the Court must approach with clean hands.
Wherein a case, conditional orders have been passed defreezing the accounts or certain conditions are imposed in bail matters, the accused and prosecution have an obligation to see that the conditions are strictly complied with. The purpose for which those conditions have been imposed should always be kept in view. The Investigating Agencies should keep a watch over the actions of the accused and verify whether the accused are flouting the orders of the Court. Apprehending that there may be diversion of assets and revenue collections, this Court passed detailed orders on 23.05.2012. The apprehension became true. First of all, there is suppression of facts. The petitioners never intimated the Court that they were operating 19 accounts at different locations in SBI branches and all the revenue collections and expenditure were being transacted through those accounts. Even if it is said that those accounts were not the subject matter of freezed accounts, this Court made categorical direction that all the revenue and collection should be through current accounts only, it means through the accounts of the subject matter of those petitions only. When there was a clear direction and when the petitioners had given an opportunity to approach this Court as and when slight modifications are required while implementing the orders of this Court, the petitioners ought to have approached this Court immediately after 23.05.2012, informing this Court that they were transacting through 19 current accounts of State Bank of India branches at different locations. Be that as it may, when these 19 current accounts were freezed, when the petitioners again approached this Court or when they obtained orders on 06.07.2012, they were under obligation to inform this Court about the other 19 current accounts being operated by them in Canara Bank. Thus, it is clear that the specific direction that there should be not be any diversion of collection of revenue is openly violated, since the revenues have been diverted to new 19 accounts being operated in Canara Bank branches. It appears that by opening new 19 current accounts in Canara Bank branches, the petitioners are conveniently hoodwinking and flouting the earlier orders of this Court. Therefore, they had no urgency to comply with the conditions imposed by this Court in the earlier orders.
Though it is argued that the petitioners (companies) do not have any other properties other than the properties covered by the earlier orders of this Court, it is not their case that the Managing Director or Directors of these companies have no other personal properties. Even if third parties have not come forward to give security of their properties, nothing prevented the Managing Director or the Directors to offer their own properties as securities. I have already passed a detailed order keeping in view all the facts and circumstances and I do not see any reason to modify the earlier orders. Moreover, what I had observed is that only when practical difficulties arise in implementing the order, the parties can approach the Court seeking slight modifications. In view of the conduct of the petitioners, they are directed not to open any bank account in any Bank without the prior permission of this Court and the CBI is directed to inform all the banks not to open any new bank accounts or to operate any other/existing bank accounts other than the bank accounts covered by the orders of this Court. In fact, the CBI and any other investigating agency should promptly inform the Court as and when the directions/orders of this Court are violated and flouted.
(Thus, M/s.Jagati Publications is not entitled to seek any further relief in these petitions and they are liable to pay exemplary costs for their conduct). It is the duty of the CBI and the petitioners to assist the Court in arriving at truth and passing orders in accordance law, justice and equity. I appreciate the efforts by Sri P.Keshav Rao, learned standing counsel for the CBI in assisting the Court.
In the above circumstances, I am of the view that the petitioners do not deserve the relief claimed by them in these petitions and are liable to be dismissed. It is needless to say that the petitioners have to strictly comply with the earlier orders passed by this Court on 23.05.2012 and 06.07.2012.
In view of the conduct of the petitioner in Crl.P.No.4523 of 2012 - M/s.Jagati Publications Ltd., Crl.M.P.No.5543, 5587 and 5703 of 2012 are dismissed with exemplary costs of Rs.1,00,000/- (Rupees one lakh only) for each petition payable to the Secretary, A.P. State Legal Services Authority, Hyderabad within a period of seven (07) days from today. However, Crl.M.P.No.5544 of 2012 filed by M/s.Janani Infrastructure Ltd., and Crl.M.P.No.5545 of 2012 filed by M/s.Indira Television Ltd., are dismissed without any order as to costs.