Y.S. Jagan Mohan Reddy v.

Central Bureau of
Investigation, (2013) 7 SCC 439
(Before the Division Bench of SC)

Procedural History:

The CBI on the orders of AP High Court in P. Shankar Rao v. Govt. of APdt.
10/08/2011 registered a case dt. 17/08/2011 under section 120-B (Criminal
Conspiracy) r/w sections 420 (Cheating), 409 (Criminal Breach of Trust by Public
Servant) and 477-A (Falsification of Accounts) of IPC, and sections 13(2) r/w
section 13(1)(c) and (d) of the Prevention of Corruption Act, 1988, against YS
Jagan Mohan Reddy (A-1) and several others. The appellant was arrested in
27/05/2012.

On 29/05/2012 A1 files an application for grant of regular bail u/s 437 of CrPC,
before the Court of Special Judge for CBI cases. This bail application was
dismissed.

CBI filed Criminal Petitions before the HC for remand of A1 for 5 days. The
remand was granted and was later extended by 2 days. A1 filed an application for
bail but the same was rejected by the HC.

Being aggrieved by the above order, A1 filed an SLP in the SC. The SC dismissed
the SLP as the investigation was still going on in connection with 7 matters and the
chargesheet was yet to be filed on the 7 issues. However, the court directed CBI to
complete the investigation as early as possible and directed the appellant to renew
his prayer for bail before the trial court on completion of the investigation by CBI.

The appellant later filed an application for regular bail before Special Judge CBI,
but the same was rejected. The appellant then challenged this decision of the
Special Judge in HC, but again the bail was rejected. Thus, the present appeal
before the SC.

Facts:

During the tenure of his father as CM of AP, Jagan adopted several ingenious ways
to amass illegal wealth which resulted in greater public injury. He floated
numerous companies and used these companies to amass illegal wealth using his
father’s public office as a leverage. Jagan (A-1) received thousands of crores of
bribes from various entities and in return, he awarded irrigation projects, land in
SEZs, mining deals, government contracts, etc. He routed this black money
through various above-mentioned shell companies. The amount involved and
which was the subject matter of investigation in all the cases exceeds Rs. 3000
crores.

Issue:

Whether bail can be granted to the accused, considering the enormity of the
financial transactions involved and the clout and status of the accused?

Judgement:

Bail was denied to the accused even by the SC, with the liberty to file a fresh bail
application before the Special judge CBI after the completion of the investigation.
In this case, several factors were consideredfor denying bail to the accused:

1. Clout and status of the appellant (In the present case, MP and son of Ex-
CM).
2. Apprehension that the appellant, if released, might tamper with evidence
and influence witnesses as he was the ultimate beneficiary and prime
conspirator.
3. Enormity of financial transactions to be investigated.
4. Severity of crime and the resultant loss to the public and nation.
5. Investigation was still pending and chargesheet was yet to be filed in 7
cases.

Ratio:

Economic offences constitute a class apart and need to be visited with a different
approach in the matter of bail. The economic offences having deep-rooted
conspiracies and involving huge loss of public funds need to be viewed seriously
and considered as grave offences affecting the economy of the country as a whole
and thereby posing a serious threat to the financial health of the country.

While granting bail several factors are considered:

1. Nature and accusation of evidence.

2. Severity of punishment which conviction will entail.
3. Character and circumstances that are peculiar to the accused.
4. Reasonable possibility of securing the presence of the accused at trial.
5. Reasonable apprehension of witnesses being tampered with.
6. Larger interests of public/state and other similar considerations.