Court rejects bail plea of Ambience group's promoter in Rs 800 crore fraud case

Raj Singh Gehlot, promoter of Ambience group and owner of Ambience Mall, has had his bail plea dismissed by the Patiala House Court. He was arrested by the Enforcement Directorate in July 2021 in connection with an alleged Rs 800 crore bank loan fraud and money laundering case involving the Jammu and Kashmir Bank Consortium. The court cited the gravity of economic offences, the intricate nature of the investigation, and the potential for the applicant to influence proceedings as reasons for denial.

In Directorate of Enforcement v. Raj Singh Gehlot [ECIR/14/HQ-STF/2019 dated September 10, 2021], Raj Singh Gehlot ("the Applicant") moved a bail application for grant of regular bail but the bail plea was dismissed by Hon'ble Patiala House Court.

In this case the Hon'ble Patiala House Court dismissed the bail plea of Applicant, the owner of Ambience Mall who was arrested in a money laundering case related to Rs. 800 crore bank loan alleged fraud case. The Enforcement Directorate arrested Appellant in July, 2021 under the Prevention of Money Laundering Act, 2002 ("PMLA") for committing bank fraud against the Jammu and Kashmir Bank Consortium.

The learned Counsel appearing for Applicant argued that the relevant information about the transactions concerning the loan and its utilization has been mischievously withheld by Enforcement Directorate ("ED"). Further, submitted that even prior to disbursal of the loan amount in question, construction was commenced with the funds of the promoters and that no siphoning or misappropriation of loan amount. Furthermore, stated the Applicant is an old and ailing man with firm roots in the society and he is neither a flight risk nor in a position to tamper with the evidence nor influences the witnesses and he deserves to be admitted on bail.

The Hon'ble Patiala House Court relied upon the judgment passed in the matter of Y. S. Jangan Mohan Reddy v. CBI [(2013) 7SCC 439], in which the Hon'ble Apex Court has observed that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threatto the financial health of the country. While granting bail, the Court has to keep in mind the 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 witnesses being tampered with, the larger interests of the public/State and other similar considerations.

Further, held that considering the nature of allegations, intricate nature of investigation and the possibility of the Applicant attempting to influence the course of investigation, the Court is of the considered opinion that the instant bail application is bereft of any merits andthe same is accordingly dismissed.

Furthermore, the Court stated that the economic offences are required to be treated as a separate class and bail cannot be granted as a matter of routine.