After bail cancellation he duly surrendered which demonstrates that he is not a flight risk: Delhi HC grants conditional bail to businessman accused of cheating Republic of Djibouti of over USD 5 million, asks him to pay Rs 5 lakh
Justice Amit Sharma [04-04-2024]

Read Order: SAI RAMAKRISHNA KARUTURI v. STATE OF NCT DELHI  [DEL HC- BAIL APPLN. 533/2024]

Tulip Kanth

New Delhi, April 8, 2024: In a case of cheating and fraud initiated on the basis of a complaint filed by the Ambassador of the Republic of Djibouti in India alleging that the Director of M/s Karuturi Global Limited, Sai Rama Krishna Karuturi, had defrauded the East African country of over USD 5 million, the Delhi High Court has granted him conditional bail and also asked him to deposit Rs 5 lakh.

The present FIR was registered on a complaint filed by H.E. Sh. Said Absieh Warsama, Ambassador of Republic of Djibouti in India. It was alleged that Sai Rama Krishna Karuturi, the applicant who is the Director of M/s Karuturi Global Limited (KGL) entered into an agreement through its sister concern, M/s Karuturi Overseas Limited, Dubai (KOL) with the Government of Djibouti. By virtue of the said agreement, KOL was supposed to provide 10,000 Hectares of land in Ethiopia for agricultural purposes.

It was further alleged that in the year 2012, KOL entered into a second agreement with the Government of Djibouti for development of 5,000 hectares of land. It was alleged that in order to assist KOL in performing its obligations. The Central Bank of Djibouti issued bank guarantee in the sum of $ 6.5 Million USD in favour of Bank of Africa. Accordingly, Bank of Africa issued a loan/credit of $ 6.5 Million USD to KOL. However, KOL allegedly failed to perform its obligations and repay the said loan. It was alleged that consequently, Bank of Africa insisted that the Government of Djibouti repay the loan amount of $ 6.5 Million USD. It was further the case of the complainant that in the year 2013, the applicant issued a letter of "Acknowledgment of Debt" acknowledging to pay $ 5 Million USD alongwith interest to the Government of Djibouti. It was alleged that the obligations as undertaken by the applicant were not honored and thus, the present FIR came to be registered.

The applicant sought bail on the ground that the present FIR arose from a complaint containing misleading facts. It was submitted that several bonafide transactions took place between KGL and KOL on one hand and the Republic of Djibouti and its appointed advisory/consultant firm, namely, Multiplex Biotech FZC (Multiplex) on the other. It was submitted that aforesaid KGL and KOL, the company of which the present applicant is a Director performed contracts entered into with the Republic of Djibouti and Multiplex, and had suffered losses. It was further submitted that in addition to the aforesaid losses, an amount of approximately $ 3.5 Million USD (in cash as well as cash equivalent i.e., machinery) had been returned. So far as the second tripartite agreement dated 23.02.2012 is concerned, it was submitted that the same was for developing of 5000 Hectares of land in Ethiopia with irrigation facilities including rain water harvesting.

It was also submitted that the applicant is suffering from various medical issues which will bring him in the category of "sick and infirm" and who deserves bail on the said ground. It was further submitted that the applicant was not a "Flight Risk" and while he was on anticipatory bail he had made himself available as and when required by the Investigating Officer.

The respondent, on the other hand, submitted that the allegation against the present applicant were serious in nature as he had cheated the complainant for an amount of $ 5 Million U.S.D. and pocketed the said amount without performing any obligations in the two agreements.

The Single-Judge Bench of Justice Amit Sharma noted that the allegations qua the present applicant are grave in nature, for which he claimed to have defence. As per the Bench, the veracity of the case of the prosecution as well as the defence taken by the applicant would be determined during the course of the trial.

It was noted that the contention of the applicant with regard to the fact that distinct stands had been taken by the applicant in the previous bail application for the anticipatory bail and in this bail application with regard to the signatures on the aforesaid letter of acknowledgment dated 10.02.2013 was factually correct but it was not the case of the applicant that he never received the money.

The Bench also noticed that the Investigating Officer had not verified the e- mail from the complainant and had chosen to rely upon the statement made by Mahesh G. Shetty regarding this, who stated that the machineries were never given against the amount due but were only given as goodwill. Reliance had also been placed by the applicant to certain invoices with regard to the purchase of machineries from U.S. to the port of destination which is shown as Djibouti, Ethopia.

In order to elucidate upon the jurisprudence relating to bail, the Bench referred to Satender Kumar Antil v. CBI [LQ/SC/2022/823]; Sanjay Chandra v. CBI, [LQ/SC/2011/1492]; Gurbaksh Singh Sibbia v. State of Punjab, [LQ/SC/1980/169]; Vaman Narayan Ghiya v. State of Rajasthan, [LQ/SC/2008/2467].

Reference was also made to the opinion of the Medical Board with regard to the health condition of the applicant. The Bench took note of the fact that the applicant was in judicial custody since 25.10.2023. The investigation in the present case stood complete, although the sanction for prosecution under Section 188 of the Cr.P.C. was still awaited.

Noting that there was no previous involvement of the present applicant, the Bench also asserted that in the statement given by Mahesh G Shetty, it was recorded that the applicant was largest rose producer in the world as well as the largest investor in Ethopia signifying that the present applicant was not a fly-by-night operator.

“It is also a matter of record that the Government of Djibouti, after the letter of acknowledgement dated 10.02.2013 till the filing of the complaint, took no steps with regard to recovery of money in any civil proceedings. The applicant was granted anticipatory bail by this Court and after cancellation of the same; he had duly surrendered before the learned Trial Court which demonstrates that he is not a flight risk”, the Bench said.

Thus, allowing the application, the Bench directed the applicant to be released on conditional bail upon his furnishing a personal bond in the sum of Rs 5,00,000 alongwith two sureties.