LAMBERT KROGER Vs. STATE

JUDGEMENT

(1.) This petition has been filed under Section 439 of the Criminal Procedure Code for grant of bail to the petitioner Lambert Kroger, a German National, who is an accused in FIR No. 219/99 registered at Police Station Chitranjan Park under Sections 120B/420/409 of the Indian Penal Code read with Sections 3,4 and 5 of the Prize Chits and Money Circulation Scheme (Banning) Act, 1978. The said FIR was registered on the basis of the complaint of one Shri Lakshmi Chand Gupta. Since the petitioner had already been arrested by the officials of the Enforcement Directorate on 8.7.1999 for the provisons under FERA, 1973 violations and had been in judicial custody he was arrested in this case on 26.7.1999 through production warrants and was remanded to police custody for three days and thereafter he continued to be in judicial custody.

(2.) According to the complaint filed by Shri Lakshmi Chand Gupta and the FIR registered on the basis of the said complaint, the complainant is doing business of Motor Workshop. In the first week of May, 1999 one of his acquaintenances Shri Ravinder Nath Puri informed him that Maple Leaf Trading International Private Limited has floated a scheme appointing general public as business partners. The officers of the company hold meetings in Five Star Hels every Saturday and Sunday on payment of Rs. 500.00 and call the people interested in becoming members. Shri Ravinder Nath Puri was made a member by one Shri Hardeep Singh. The said Shri Hardeep Singh called the complainant in Hotel Holiday Inn on 15.5.1999 at 1.30 p.m. where 100-125 persons had gathered. There one Shri Ashok Aggarwal gave a presentation of Maple Leaf Scheme and told that whoever became member of the scheme would have to deposit Rs. 60,000.00 through Bank Draft in favour of the company. The member who appoints four more persons will get Rs. 11,800.00 worth gold in Phase I of the scheme. In Phase II the four members appointed in Phase I will have to further appoint four members-each, upon which the original member (first) will get Rs. 29,500.00 worth gold. In Phase III the sixteen members appointed in Phase II will have to further appoint four members each, upon which the original (first) member will get Rs. 29,500.00 worth gold. In Phase III the sixteen members appointed in Phase II will have to further appoint four members each, upon which the original (first) member will get Rs. 2,35,000.00 worth gold and this process will continue. In the hotel party the said Hardeep Singh informed the complainant that if the complainant was not able to appoint members they would extend full help in appointing members so that the complainant was able to get gold. Shri Hardeep Singh is the spokes person (Manager) of the company and on the advice of the Directors he induces general public to become a member. During the meetings in the hotel such a rosy picture is presented that every person will have a lot of gold and every person agress to become member. The complainant also became a member on 18.5.1999 on payment of Rs. 60,000.00 by depositing draft in Maple Leaf Trading International Private Limited on the inducement of the said Hardeep Singh and other officials of the company. The complainant was not able to appoint any member and he asked Shri Hardeep Singh and the company to refund his money but they refused to refund his money. It is also stated in the complaint that the company is cheating other people also. The complainant wants his money to be refunded and legal action to be taken against the offenders.

(3.) Pursuant to the above mentioned FIR investigation has been conducted and charge sheet has been filed in the Court on 20.9.1999. As per the charge sheet the accused persons sent for trial are Lambert Kroger (petitioner herein), Naresh Sharma, Dalip Arora, Ashok Chatterjee and M/s. Maple Leaf Trading International Private Limited through Managing Director. According to the charge sheet Lambert Kroger, Cliff Roy and Paul Singh Clare are the Directors of the company. On 8.7.1999 Shri Lambert Kroger has been arrested by officials of Enforcement Directorate for FERA violations. Ashok Aggarwal, Naresh Sharma and Mrs. Nalini Mishra are the Academy Instructors of the company. Ashok Aggarwal has obtained Rs. 31,65,673.00 as commission. Naresh Sharma has obtained Rs. 24,96,714.00 as commission and Mrs. Nalini Mishra has obtained Rs. 7,10,884.00 as commission. The company succeedec in making 3700 persons as business partners. The company has got accounts in ABN Amro Bank and Bank of America. Shri Naresh Sharma was arrested on 10.7.1999 as there was sufficient evidence against him for inducing the people to part with their money, causing wrongful loss to them and getting wrongful gain in terms of commission. The Investigating Officer wrote to the Banks of the accused persons for stopping the operation of the accounts and for obtaining the statement of accounts. Various complaints were received from the victims who have been cheated by the company and induced by the Academic Instructors and Academic Assistants. The persons who lodged the complaint have been examined under Section 161 of the Criminal Procedure Code. Further records have been obtained from the premises of the company which included the marketing plan, the statement of sources and allocation of funds, the commission paid to Academic Assistants and Academic Instructors and the loss of investors with their addresses. As per the records of the company it is found that the company has received Rs. 26.24 crores from 3700 innocent investors, Rs. 13.32 lakhs as share capital and Rs. 60.00 lakhs on account of conference fee. The company has paid huge commission to the tune of Rs. 1.88 crores to Academic Instructors and Academic Assistants. Rs. 58 lakhs have been sent abroad as well. The company had four Bank accounts with the ABN Amro Bank in the nances of the Maple Leaf Trading (current account). Maple Leaf Gold A / c. Maple Leaf Persons and Places in Need Trust and Maple Leaf Main Gold A/c. There were also three individual accounts of Paul Singh Clare (Director), Cliff Roy (Director) and Lambert Kroger (Managing Director). The balance amount in Maple Leaf Trading (current account) is Rs. 6,15,17,244.00, in Maple Leaf Gold Account is Rs. 41,89,460.00, in Maple Leaf Persons and Places in Need Trust is Rs. 14,73,340.00, in Leaf Main Gold account is Rs. 2,44,98,474.00, in Paul Singh Clare's account is Rs. 60,104.32, in Cliff Roy's account is Rs. 19,966.18 and nil balance in the account of Lambert Kroger. The Maple Leaf Company holds a balance of Rs. 3,51,25,780.17 in their fixed deposit account. The balance amount in Bank of America is Rs. 3,88,089.72. During the course of investigation and as per examination of witnesses it was found that Lambert Kroger, Cliff Roy, Paul Singh Clare, Naresh Sharma, Mrs. Nalini Mishra, Mrs. Tina Garg, Mrs. Bimaljeet Singh Johar, Prabal Arora, Hardeep Singh, Ashok Chatterjee, Dalip Arora and Rajiv Gupta used to present wrong arid rosy pictures during presentations which were held every Saturday and Sunday in different Five Star Hotels, staling that the scheme was approved by the Reserve Bank of India and had sanction of the Government of India and was at par with the law of land. The complainants have categorically mentioned about the above mentioned persons in their complaints. Although there have been some more Academy Instructors and Assistants who got the commission, no complaint has been received against them. As per evidences collected it is found that the company had never invested the deposits collected from the investors to meet the expenses and other heads towards commission etc. Maple Leaf Scheme actually produces no goods of any significance, provides no service, creatres no wealth and all it does is to circulate existing wealth. The entire investments of investors are shared among the originators of the scheme and their cronies in the form of commissions. Therefore, every rupee that an investor gains by such a scheme is a rupee some other investor has lost. Money is made by the company by exponentially expanding enrollments and will continue to operate only if it is able to enroll new replacements of the losers who are cycled out. If the scheme continues in this manner the benefits of this scheme will be confined to only a handful of persons and the rest will be losers. It is further stated in the charge sheet that if each member makes atleast three additional members, the scheme would require one hundred odd crores of people to make it workable, as per promises made by the company. At the end when there are no more people left to induct further, the people inducted at later stages will lose their entire investments. According to the charge sheet there is evidence to prove that Lambert Kroger, being the Managing Director of the company, floated the scheme which was not having approval of either Reserve Bank of India or any other agency in India, that he organised the presentation programmes through personal contacts with the connivance of other Academy Instructors and Academy Assistants in various Five Star Hotels on every Saturday and Sunday, that every person attending the presentation programme was charged Rs. 500.00 and that Lambert Kroger alongwith Academy Instructors used to induce the persons attending the programme staring that they could earn a lot of money within short span of time and that the scheme was approved by Reserve Bank of India and was in accordance with the law of land. During the presention programmes the participants were told that the investments were very safe and members facing difficulty in making more members would be rendered full help and, if anybody wanted to withdraw membership he would be allowed to do so within eight days of becoming member and their deposit would be refunded. It is also stated in the charge sheet that 19 complaints have been seized from the premises of the company in which request was made for refund, but no refund has been made to any of them. The fax messages received by Lambert Kroner, which have been seized by the officials of Enforcement Directorate, clearly confirmed that the intention of the management was to flee away from India after collecting huge money and become millionaires. It is also stateu that Rs. 58 lakhs have already been sent abroad by the Directors and being custodian/trustree of the public money, they misappropriated the public money. If is further stated that as per investigation conducted there have been sufficient evidence against accused Lambert Kroger, Naresh Sharma, Ashok Chatterjee and Dalip Arora. The other accused persons viz. Ashok Aggarwal, Prabal Arora, Mrs. Nalini Mishra, Mrs. Tina Garg, Mrs. Bimaljeet Singh Johar and Hardeep singh are absconding and are evading their arrest and efforts are continued to apprehend them and after their arrest supplementary charge sheet will be filed. It Is further stated that accused Paul Singh Clare and Cliff Roy have run abroad and that Look Out Cards have been opened against them and efforts are afoot for their deportation/extradition through Interpol.