"No Rule To Deny Bail In Case Of Grave Economic Offence": Allahabad HC Grants Bail To Businessman Accused Of Stashing ₹196 Crore In Cash

The Allahabad High Court today granted bail to Kanpur-based Perfume businessman, Peeyush Jain in connection with a case registered against him for allegedly stashing cash amounting to Rs. 196.57 Crores. He has been directed to furnish a personal bond of Rs.10 Lakhs and two reliable sureties each of the like amount.

The bench of Justice Subhash Vidyarthi granted him bail as it noted that even if the allegation is one of grave economic offence, it is not a rule that bail should be denied in every case since there is no such bar created in the relevant enactment passed by the legislature nor does the bail jurisprudence provide so.

"The position of law regarding grant of bail which emerges from the judgments of the Supreme Court referred to above, is that the basic jurisprudence relating to bail in economic offences remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. It is not advisable to categorize all economic offences into one group and deny bail on that basis. One of the circumstances to consider the gravity of the offence is the term of sentence that is prescribed for the offence the accused is alleged to have committed," the Court remarked.

The case in brief

Essentially, on December 22, 2021, the Officers of the DGGI started making a search on the residential and official premises of Jain at Kannuaj and Kanpur, which continued till December 28, 2021. Cash amounting to Rs. 196.57 Crores was seized from his premises besides the recovery of 23 kilograms of gold. Jain was arrested on December 26, 2021 and was booked under Section 132 (1) (a) read with Section 132 (1) (i) and 132 (5) of the Central Goods and Services Tax Act, 2017

It has been alleged that Jain is one of the partners in the firm M/S Odochem Industries and he used to operate and manage two other proprietorship concerns along with his brother Ambrish Kumar Jain, and that they were collectively engaged in illicit supply of finished goods, namely perfumery compounds, without issuing any tax invoice and without payment of GST.

Separate proceedings have been initiated against the applicant in respect to the recovery of 23 KG of Gold under the provision of the Customs Act, 1962.

Arguments advanced

Jain's counsel, Senior Advocate Anurag Khanna argued that the offences alleged to carry a minimum punishment of six months imprisonment and a maximum of five years imprisonment and the offence is compoundable, which indicates that the offence is not grave.

He further submitted that the applicant has already paid a sum of Rs.54.09 Crores towards tax, interest, and penalty and he has undertaken to deposit the amount of any additional liability whereas the Department is yet to ascertain his tax liability. 

It was further contended that Jain has already spent more than 8 months in jail and during this period the department has not sought his custodial interrogation, which shows that his custody is not at all required.

On the other hand, the counsel for the DGGI contended that the applicant is also accused of committing offence under the Customs Act (23 Kg of Gold Recovery) and the present case falls under clause (c) of the Proviso appended to Section 138 and therefore, the same is not compoundable.  

Court's observations

At the outset, the Court noted that so as to attract clause (c) of the Proviso appended to Section 138, the person should have been accused of committing an offence under this Act which is also an offence under any other law for the time being in force.

However, the Court noted that the allegations against the applicant which amount to an offence under the Customs Act, are not an offence under this act and vice versa and, therefore, the Court held that clause (c) of the Proviso appended to Section 138 won't be attracted in the present case.

The Court further stressed that prayer for bail is not to be denied merely because the sentiments of the community are against the accused. Consequently, the Court granted him bail by taking into account the following factors:

- The offences alleged carry a minimum punishment of six months imprisonment and a maximum of five years imprisonment and the offences are compoundable, which indicates that the offences are not grave;

- The applicant has already paid a sum of Rs. 54.09 Crores towards tax, interest and penalty and he has undertaken to deposit the amount of any additional liability;

- The Department is yet to ascertain the applicant's tax liability;

- The amount of Rs.196,57,02,539/- seized by the DGGI from the applicant's premises is still lying with the Department and, therefore, the interest of the Revenue, as well as that of the public at large, is protected;

- The applicant has already spent more than 8 months in jail and during this period the department has not sought his custodial Page 14 of 16 interrogation, which shows that his custody is not at all required;

Case title - Peeyush Kumar Jain v. Union of India [CRIMINAL MISC. BAIL APPLICATION No. - 21223 of 2022]

Case Citation: 2022 LiveLaw (AB) 409

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