Heera Exim Gold Scam : Supreme Court Dismisses SFIO Plea To Cancel Bail Of Nowhera Shaikh

"The application is dismissed and proceedings pursuant to the FIR are stayed. We put it to the ASG to obtain instruction whether they have something further to say regarding quashing of FIR."

A Bench comprising Justices Sanjay Kishan Kaul and M.M. Sundresh reckoned that in cases pertaining to economic offences, the primary focus of the investigating agency should be to disburse money to the defrauded investors, rather than to put in all their efforts to ensure the accused persons are put behind bars. In this regard, the Bench noted -

"The focus should be to verify claims, verify assets and to see how best the disbursement to the investors takes place, so that the issue of investors getting back their fund is met with, at priority. We made it clear that the question of criminal action for violation if any is a secondary aspect to the primary aspect of making sure that investors get their money. It is with this objective we have kept the matter - to monitor and see the results."

Heera Gold Exim Private Limited, a company dealing in gold, collected huge deposits from the public with a promise to pay a 36% dividend on the invested amount. When the company failed to pay dividends and maturity amounts, investors across states lodged complaints, inter alia, alleging cheating and fraud.

In the light of the same, Nowhera Shaikh, was arrested. On 19.01.2021, the Supreme Court granted her interim bail on the condition that she would settle the claims of the investors. The interim bail was extended from time to time and on 05.08.2021 it was made absolute.

On Thursday, the Additional Solicitor General, Mr. S.V. Raju appraised the Bench that he has moved an application seeking cancellation of bail in view of the fact that Heera Gold Exim Pvt Ltd., in an attempt to impersonate, has put up a board at their office indicating that it is an office of SFIO. He stated that SFIO had received e-mail communication from an investor informing it about the same. An FIR was also registered in this regard. Photographs were also put on record to substantiate his submission.

Advocate, Mr. Nikhil Rohatgi, representing the respondent Company, sought time to respond to the allegations as the papers were served on them the very day the hearing was scheduled. Another Counsel appearing for the Company appologised on behalf of Heera Exim and informed the Bench that the intent of the board was not to defraud but to inform all that it was assisting SFIO in the investigation.

The Bench stated that the intention might not have been malafide, but the writing on the board was inappropriately worded. Accordingly, it noted -

"We have no doubt that the nature of the board put up by the respondent is not happily worded at all. If the intention was to assist the SFIO, then the board should have indicated that it is the help desk of the company to assist the SFIO. Be as it may, it is neither a case for cancellation of bail nor for further criminal investigation."

Concerned about the manner in which the investigation is proceeding, Justice Kaul remarked -

"It is exasperating to me that you catch hold of somebody, but for years together you cannot make out what the person has done. Can we keep everything in abeyance till the efficiency level of the investigation improves to a level they can pin down what the person has done."

Previously, Mr. Raju had informed the Bench that though the Forensic Science Labs (FSL) have manpower, the workload is enormous. It was noted that for three years the Telangana FSL has not been able to submit its report. The Bench had expressed its displeasure about the inordinate delay in getting the FSL report.

Again, on Thursday, the Bench, reiterated that FSLs are overburden, which is affecting the pace of investigation -

"You said there is large data, we understand that. Large data can take you months, but not years. We asked you to take help from outside. Unfortunately the labs you have are too few for the number of cases you are investigating…You have to upgrade manpower, ability to catch hold of people. We are not seeing any light at the end of the tunnel."

But, Mr. Raju informed the Bench about some improvements. He stated that some progress has been made in the mapping of claims and SFIO has been intimated by Telangana FSL to collect 2 out of 4 discs pertaining to the present case. He was hopeful that the availability of the data would facilitate progress in investigation.

Justice Kaul emphasised that the focus of the investigating agency ought to be to refund the investors first -

"4 years have gone by. People who have invested, for 4 years have not seen the money. You know our view is not to keep someone behind bars only because the investigation is not complete. The priority is that the people whose money was taken, is returned the money. In economic offences the first priority is to get the money back. Second priority can be to punish."

Justice Kaul asked Mr. Raju, "When should we next keep the matter?"

Mr. Raju stated that his instructions were that there would be significant improvement in the investigation and that the matter can be listed in 3 months.

Accordingly, the Bench noted -

"ASG stated that three months' time be given, in which they expect that they would be closer to the goal even if they do not reach the goal."

Mr. Rohatgi submitted that the Company is making efforts to assist the SFIO, but the agency is making them run from pillar to post in the process. Per contra, Mr. Raju argued that no support was forthcoming by the Company.

The Bench was also apprised that though it had directed the Directorate of Enforcement to de-freeze the accounts of Heera Company, so that refunds can be disbursed, only 67 out of 241 accounts have been defreezed. The Bench is to take up this issue on the next date of hearing.

The Supreme Court had on previous occasions asked Shaikh and the Investigating Agency to ensure that the investors receive their dues. To facilitate the same, the Court had also asked the Investigating Agency to de-freeze the accounts of the company and provide necessary access to Shaikh so that the settlement process could be expedited.

The matter to be next taken up on 30th August.

[Case Title: State of Telangana v M/s Heera Gold]

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