1

BEFOREDESIGNATEDCOURTUNDERM.P.I.D.ACTAT
BOMBAYCITYCIVIL&SESSIONSCOURT,ATMUMBAI.
BAILAPPLICATIONNO.43OF2016
IN
C.R.NO.78/2013
MalckolmNozerDesai,
Age45years,Occu.:Business.
R/o.302,Parishram,40,PaliHill,
BandraWest,Mumbai400050.

Applicant.

Respondent.

V/s.
TheStateofMaharashtra,
(ThroughEconomicOffenceWing,
UnitIII,CrimeBranch,
C.R.No.78/2013)

Sr.CounselMr.A.Mundergii/bAdv.SudattaPatilforApplicant.
SPPAdv.GharatfortheRespondent/State.
BAILAPPLICATIONNO.44OF2016
IN
C.R.NO.78/2013
SrinivasRaoVanka,
S/oPattabhiRamaRaoVanka,
Agedabout50years,
ResidingatFlatNo.303A,
RaghuramRegency,
M.S.R.Road,Gokula,Bangalore560054.

Applicant.

Respondent.

V/s.
TheStateofMaharashtra,
(ThroughEconomicOffenceWing,
UnitIII,CrimeBranch,
C.R.No.78/2013)

Adv.Pondai/bAdvKarnikfortheApplicant.
SPPAdv.GharatfortheRespondent/State.
BAILAPPLICATIONNO.45OF2016
IN
C.R.NO.78/2013
MagaralVeeravalliBalaji,
S/oMagaralVearavalliChellapillai,
Ageabout47years,
ResidingatC/003,TheCanopy,
AgraMainRoad,
Bapusapalaya,Bangalore560043.

Applicant.

Respondent.

V/s.
TheStateofMaharashtra,
(ThroughEconomicOffenceWing,
UnitIII,CrimeBranch,
C.R.No.78/2013)
Adv.Pondai/bAdvKarnikfortheApplicant.
SPPAdv.GharatfortheRespondent/State.
BAILAPPLICATIONNo.46OF2016
IN
C.R.NO.78/2013
MichaelJosephFerreira,
Aged77years,Occup.Retired.
R/o.RestHarrow,187B,
GroundFloor,D'MonteParkRoad,
OffTurnerRoad,Bandra(West),
Mumbai400050.

Applicant.

Respondent.

V/s.
TheStateofMaharashtra,
(ThroughEconomicOffenceWing,
UnitIII,CrimeBranch,
C.R.No.78/2013)

Sr.CounselMr.A.Mundergii/bAdv.SudattaPatilforApplicant.
SPPAdv.GharatfortheRespondent/State.
CORAM:
DATED:

SPECIALJUDGE,MPIDACT.
D.P.SURANA(C.R.No.36)
14thOctober,2016.

COMMONORDER
By these applications u/sec.439 of the Cr.P.C. the accused
MalckolmNozer Desai,Srinivas RaoVanka,MagaralVeeravalliBalaji
andMichaelJosephFerreiraareseekingbailinC.R.No.78of2013for
theoffencepunishableu/sec.409,420,465,468,471,120B,201ofthe
I.P.Code,sec.3,5and6ofPCMCBAct,sec.5and7oftheDrugsand
MagicRemediesActandsec.3oftheMPIDAct.
2.

HeardSr.CounselMr.A.P.Mundargifortheapplicantsin

BANo.43andBANo.46,Adv.PondaforapplicantsinBANo.44andBA
No.45andSPPAdv.GharatfortheState.
3.

ItisthecaseofprosecutionthatapplicantMichaelFerreira

is 80% and applicant Malckolm Desai 20% share holder of Vihaan

DirectSelling(India)Pvt.Ltd.(inshortVihaan).ThatapplicantSrinivas
Vanka,applicantMagaralBalajiarethedirectorsofVihaan.ThatVihaan
starteditsbusinessin2012.ThesaidcompanyisfranchiseeofQNet
(QI) group of companies. That initially QNet group of companies
startedtheirbusinessbynameandstyleGoldQuestInternationalPvt.
Ltd.Thatapplicantsjoinedthesaidgrouplongbackintheyear2006.
That,whentheGoldQueststoppeditsbusinesssamebusinessofGold

QuestwascontinuedbyanothernameandstyleQuestNetEnterprises
Pvt.Ltd.ThatwhenthebusinessofQuestNetwasstoppedQNetgroup
ofcompaniesformed3companiesbynameVanmalaHotels,Travelsand
Tourism Services Pvt. Ltd, Transview Enterprises India Pvt. Ltd. and
VihaanDirectSelling(I)Pvt.Ltd.ThatthesamebusinessofQIgroup
of companies was continued by the said newly formed 3 companies
includingcompanyofapplicants.That,thoughtheschemefloatedby
the company was like product based MLM scheme, but the entire
schemeswerebogusschemes,wherebysham,chipandboguproducts
weresoldunderthepretextofecommerceandhandsomereturns.That
QI group of companies is located in Hong Kong. By way of said
scheme several Indian citizens were asked to deposit Rs.30,000/ to
7,00,000/on thegrabofshamandchipproducts like Biodisk,Chi
Pendent, Eeducation packages etc. Thereby QI group of companies
wereindulgedinfraudulentmoneycirculationschemeonthepretextof
given highreturnsasCommissionetc.Thatthe IndianCitizenswere
induced and were recruited as members (IR's) and thereby huge
amountofIndiancurrencywastakenoutofIndiatodamageIndian
economy.Thattheapplicantsandothercoaccused,withthehelpof
otherIR's,inducedaround90,000IndianCitizensanddupedtheirhard
earningofaroundRs.425Crores.
4.

OnthebasisofinformationofGurupreetsinghAnanddtd.

16.08.2013, offence vide C.R. No.316 of 2013 was came to be

registered which was later on transfered to EOW UnitIII for further
investigation, which is now under investigation with EOW SIT. It is
allegedbytheinformantGurupritsinghinhisinformationtoOshiwara
PoliceStationdated16.08.2013,thatinthefirstweekofApril,2013,3
independentrepresentatives(inshortIRs)visitedtohisMetroDhaba/

RestaurantandinformedhiswifeaboutthesaidMLMschemeofQNet,
runningthroughwebsite www.qnetindia.in.Informantfurtheralleged
that the IRs shown his wife the product called Bio Disc used for
medicaltreatmentandfurtherinformedhiswifeabouttheseminarsof
thecompanyarrangedon04.04.2013and14.04.2013,whichhiswife
attendedonsuchinstancesbythesaidIRs.Informantfurtheralleged
thatsaidIRsinducedhiswifetoinvestthemoneyintotheschemeon
the pretext of getting handsome returns on it and income could be
earnedbyintroducingnewmemberstotheschemeofthecompany.As
perinformanthiseldersonhasbrainrelatedproblem.TheIRsNavjot
DasandMarchilaDuttainformedhiswifethattheproductBioDisc
has a magical power to heal and cure critical disease like diabetes,
cancer etc., as the Bio Disc can change the molecular structure of
water. InformantfurtherallegesthathiswifePrameet,lookingatthe
scheme as genuine, issued a cheque in the name of the IR Chinar
Shinde towards the product and registration as an IR for QNet,
accordingtothescheme.Informantfurtherallegesthatonthereceiptof
saidinformationtohimbyhiswife,towhichhegotsuspiciousabout
the scheme, he accessed the website www.qnetindia.in. As per
informant,hegotinformation thatsaidwebsite is run byVihaan,of
whichapplicant'sarethedirectorsandshareholders.That,thescheme
looks like product based MLM scheme, whereby sham and cheap
productsweresoldunderthepretextofecommerce.Informantfurther
alleges that, from Internet he also realized that Vihaan and
www.qnetindia.in is being run by QI Group of companies located in
HongKong.AsperinformantprevioustwocompaniesoperatingMLM
schemes for QI Group under the name and style of Gold Quest
International Pvt. Ltd. and Quest Net Enterprises Pvt. Ltd. were
closedandalltheoldmembersofbothcompaniesweretakeninVihaan

todisguisetheinnocentnewmembers.Whereas,therealbeneficiary
willbetheoldapplyingIR's/membersofboththecompanies,whereby
losswillbecausedtothenewdownlyingmembers.Asperinformant,
theVihaan,throughthesaidwebsite,isoperatingillegalproductsbased
MLMschemeandtherebycheatingtheinnocentpeople.That,likehis
wife,severalinnocentpeopleinIndiaarecheatedbyoperatingvarious
shamandcheapproductforRs.30,000/toRs.7,00,000/likeBioDisc,
pendent,eeducationpackagesetc.,andtherebytheyareindulgedin
fraudulent money circulation scheme on the pretext of getting high
returnsascommissionbyrecruitingnewmembersandthereby,drain
millionsofIndiancurrencyoutofIndiatodamageIndianeconomy.
5.

Sr. Counsel Mr. Mundargi contended that FIR is dated

16.08.2013.ApplicantssurrenderedinthemonthofSeptember,2016.
ThattheapplicantsareneitherDirectorsnortheshareholdersofQNet.
That, they are already interrogated from 8 to 11 times before their
policecustodyremand.Thattheyhaveprovidedallthedocumentsand
information as asked by the investigating agency, before their police
custody remand itself. That, during full police custody remand
applicantswerethroughlyinterrogated.That,thegroundsputforthby
theinvestigatingagencyintheirreplyopposingtheapplicationarenot
sufficientenoughtorejectthebailapplicationoftheapplicants.That,
applicantsMichaelFerreiraisagedabout77years,hehasrootsinthe
society, he is suffering from several ailments, including back pain,
vertigoetc.,andtherebyhefallsunderoneofthecategoryofsec.437of
theCr.P.C.Hefurthersubmittedthatinthereplyfiledbyinvestigating
agency it is not mentioned as to why the further detention of the
applicantsisnecessaryorastohowhisfurthercustodywillbehelpful
inthefurtherinvestigation.Thattheapplicantsarereadytocooperate

the investigation and mark their presence for the purpose of

interrogationbythepolice.Hesubmittedthatnopurposewillbeserved
inkeepingtheapplicantsbehindthebars.
6.

Adv.Ponda submittedthatapplicants werenotthe share

holdersofeitherQNetoranyofthe3companiesincludingVihaan.That
theywereonlytheDirectorsofVihaanatsomepointoftimebutbefore
registrationofFIR.ThatbothofthemresignedasDirectorinAugust
andSeptember2014.ThatthefatherofSrinivasVankais92yearsof
ageandisabedridden.Thatnopurposewillbeservedinkeepingthe
applicants behind the bars, when they are already and sufficiently
interrogated.
7.

All 4 applicants filed on record their respective

undertaking, whereby they have undertaken not to indulge in any

manner in respect of QNet activities. Applicants also placed their
relianceonthefollowingauthorities.
Adv.Pondasubmittedthefollowingcitations:
a.

Hon'blethe DelhiHighCourtinthe caseofSharadKumarVs.

CBI,inBailApplicationNos.1565/2011,1567/11,1564/11,1566/11,
15651568/11,BailAppln.No.1568/2011,BANo.15651568/2011.
b.

Hon'bletheBombayHighCourtinthecaseofRafiqA.MalikVs.

StateofMaharashtra[1997(99(3))BOM.L.R.535inCri.Appln.No.
585of1997].
c.

Hon'bletheBombayHighCourtinthecaseofSadruddinHasan

DayaV/s.StateofMaharashtra,Cri.ApplicationNo.420of1997.

d.

Hon'bletheSupremeCourtofIndiainthecaseofStateRep.by

theCBIVs.AnilSharma(Cri.AppealNo.811of1997).
e.

Hon'bletheBombayHighCourtinthecaseofMeninoLopesV/s.

StateofGoa(1995(1)Bom.C.R.334).
f.

Hon'bletheSupremeCourtofIndiainthecaseofBhagirathsinh

JudejaV/s.StateofGujarat(AIR1984SC372=1984Cri.L.J.160).
g.

Hon'bletheSupremeCourtofIndiainthecaseofSanjayChandra

V/s.CentralBureauofInvestigation((2012)1SCC40).
h.

Hon'ble the Supreme Court of India in the case of Gurcharan

Singh and Ors. V/s. State (Delhi Administration) and Raj Kumar
SharmaandOrs.V/s.State(DelhiAdministration)(AIR1978SC170).
i.

Hon'bletheSupremeCourtofIndiainthecaseofSandeepJain

V/s.NationalCapitalTerritoryofDelhirep.BySecretary.HomeDeptt
(2000Cri.L.J.807(SC)).
j.

Hon'bletheBombayHighCourtinthecaseofKhemloSakaram

SawantV/s.State(2002(1)Bom.C.R.689(PanajiBench)).
8.

As against this SPP submitted that the offence is serious

one. That, duetotheQNetactivitiesnotonlytheeconomyofcountry

butthesecurityofthecountyisalsoat stake. Thatinvestigationisin
progress.Thatthereispossibilityofincreaseofthenumberofvictims
upto 5 Lakhs. That the amount of fraudulent default or the duped

amountmaylikelytoincreaseuptoaroundRs.1,000Croresormore.He
submittedthatstillactivitiesofthecompanyisgoingon.Applicantsare
still actively participating in the business affairs of QI group of
companies.Thatthereiseverypossibilityoftamperingoftheevidence
bythewitnessesortheirabscondingif,theyarereleasedonbail.He
submittedthatapplicantswereinitiallyjoinedasIR'swithQIgroupof
companiesandthenformedVihaan.TheyaspartnersorDirectorsof
Vihan. They continued their illegal activities of QNet group of
companiesafterthebusinessofQuestNetwasstopped.Hesubmitted
thatonlyaftercompletionoftheinvestigationasagainsttheapplicants
it will be clear as to what further material is found against the
applicants. As such, the SPP prayed that the applicants may not be
releasedonbail.
9.
a.

SPPtooplacedhisrelianceonthefollowingauthorities.
Hon'ble the Supreme Court of India in the case of Y.S. Jagan

MohanReddyv/s.CentralBureauofInvestigation((2013)7SCC439).
b.

Hon'bletheSupremeCourtofIndiainthecaseofGautamKundu

V/s. Manoj Kumar, Assistant Director, Easter Region, Directorate of

Enforcement (Prevention of Money Laundering Act) Govt. of Inida.,
(2015SCCOnLineSC1333).
c.

Hon'blethe SupremeCourtofIndia inthecaseofSudhirV/s.

State of Maharashtra and Anr. with Chandrakant V/s. State of

Maharashtra&Anr.((2016)1SCC146).
d.

Hon'bletheSupremeCourtofIndiainthecaseofStateofGujarat

10

V/s.MohanlalJitamaljiporwalandAnr.(1987AIR1321).
10.

After hearing the rival contentions, I have perused the

materialonrecordandsomeoftherelevantpolicecasepaperswiththe
replyofSPPExh.2.
11.

Itseemsto me thatthe offenceandthe activities of QI

groupofcompaniesarecontinuefromandpriorto2013tillnearfuture.
Thebasicassurancesinrespectofproductorreturnprimafacieseems
tobebogusorimpracticablepromises.Asperinvestigatingagency,till
date,thereareonlyaround90,000citizenswhoseamountofaround
Rs.425 Crores is alleged to have duped. Whereas, the investigating
agency is apprehending that around 5 Lakhs citizens for the total
amountofaroundmorethanRs.1000Croresarebeingdupedonthe
falsepretext.ThescopeofthiseconomyoffenceisnotlimitedtoIndia
butisspreadindifferentcountriesincludingSingapore,Hongkongetc.,
The huge amount of Indian citizens is also alleged to have been
siphonedofoutofIndia.Itisnotthecasethatapplicantsarenotaware
or were not involved in either QI group of companies or Vihaan.
Applicantsaretheimportanttoolsinthisscamp. Theyareprimafacie
seemstobeinvolvedinthebusinessactivitiesofQIgroupofcompanies.
12.

Offence punishable u/sec.409 of the I.P. Code prescribes

punishmentformorethan7years,whichisappliedinthesaidcrime
againsttheaccused.Whethertheallegedoffencearereallymadeoutor
notagainstapplicants/accusedcanbeseenatthetimeoftrialoratthe
timeofhearingonthepointofcharge.Whereas,thisistheinitialstage
ofinvestigation,thoughthematterisof2013.

11

13.

Itisveryeasytosaythattheinvestigationispendingsince

2013.Butitseemsthatforwantofarrestoftheaccuseditcouldnot
reachtoitsproperpoint.Theothercoaccusedarealsoallegedtobe
abscondingandnotyetnapped.Theyarenotonlyavoidingtheirarrest
butarealsocontinuingwiththeillegalactivitiesordupingbyinducing
anddeceivingthedepositors.
14.

In the economic offence, specially like the case in hand,

investigating agency requires considerable time and sufficient

interrogationwiththeaccusedeitherinthepolicecustodyorinjudicial
custody.FromthedocumentspointedoutbytheSPPfromthediaryit
seemsthatVihaanandtheapplicantswereactive intheVihaaneven
tillSeptember,2016.Irrespectiveofthefactthatoffencewasregistered
in2013,thiswayorthatway,theactivitiesofQIgroupofcompanies
werecontinuedtillnearfuture.Applicantsknowinglycontinuedwith
thesaidactivities.Hence,itcannotbesaidthattheydonothaveany
informationregardingthecommissionofcrime.
15. Moreover,irrespectiveofthe factthatapplicantdirectors
allegedtohavebeenresigned,butasoffactitcannotbesaidthatbeing
directors,forwhatevershortperiodmaybe,theyareunawareofthe
businessmoduleandthebusinessaffairsoftheQIgroupofcompanies
orVihaan.Factthatconsciouslyandknowinglytheycontinuedwiththe
activitiesandschemefloatedbyQIgroupofcompaniesbyitselfshows
thatapplicantshasnoregardtothelawandtheconsequencesandas
such, they without regard to the consequences continued with such
illegal activities. Hence, undertaking given by the applicants at this
stage cannot be taken into consideration as their bonafide. Even

12

otherwisewhentheschemeitsseemstobebogusscheme,applicants
are legally bound to refrain from such activities. The fact that the
number of depositors and the amount of fraudulent default or the
amount involved in the crime of victims have been tremendously
increasedfrom the closureofbusinessactivityof the GoldQuesttill
datebyitselfindicatesastohowbigthisfinancialscamis.
16.

The other culprits/ coaccused are yet to be arrested or

nabbed.TheinvestigationregardingthesiphonedamountfromIndiato
abroadisstillunderinvestigation.HavingregardtotheactivitiesofQI
group of companies, the possibility, which is apprehended by the
investigationagency,oftamperingbytheapplicantswiththeevidence,
pendinginvestigation,cannotberuledout.Thesaidpossibilityisnot
mereapprehensionwheninvestigatingagencyalsoallegesthatduring
investigationsomeofthedatafromtheserverwasremoved,whichwas
helpfulforthepurposeofinvestigation.
17.

Soalso,onperusalofthepolicecasepapersitseemsthat

theanswersgivenbytheaccusedtothequeriesmadebytheI.O.were
sowiselyanswered,sothattheinvestigatingagencyshouldnotreachto
aconclusionorfinalityregardingthequeriessomade.Hence,itmay
notbesaidthattherewasreallycooperationbytheapplicantsduring
theinvestigation,thoughtheyareinterrogated.
18.Beingconsciousenoughandaftergivingthoughtfulconsideration
tothe citationsandkeeping inmindtheprincipaloflibertyandthe
principalofbailandnotjail,balanceisrequiredtobestruckbetween
thegravityofoffence,itsseriousness,itseffectonpendinginvestigation
andonfurtherinvestigationandthelibertyofcitizens.Onbeingwaived

13

with all the principles, I am of the view that pending

investigation against applicants, their release on bail will create
hindrance in further investigation. Interrogation of applicants during
judicialcustodywillalsobehelpfulforfurtherinvestigation.Inviewof
theverdictofHon'bleApexCourtinthecaseofUdayMohanlalAcharya
V/s.StateofMaharashtrasuchinterrogationduringthejudicialcustody
ispermissible.Assuch,inmyview,theyarenotentitleforbailatthis
initialstageofinvestigation.
19.

Pendingtheseapplications,attheflagend,theinformant

Gurupreetsingh Anand filed applications for intervention, which was

opposedbyapplicantsbutnotbySPP. Hetriedtoconvincethatheis
entitledtobeheard.Whereas,inviewoftheverdictofHon'bleHigh
CourtinthecaseofSmt.SharadaDattatrayChoudhariV/s.Stateof
Maharashtra & Anr. in Cri. Writ Petition No.3455 of 2014 dated
02.02.2015,heisnotentitletobeheardatthisstage,asprosecution
hasnotfailedtoestablishthataccusedarenotentitleforbail.Hence
theinterventionapplicationsarerejected.
20.

Having regard to my above findings, I proceed to pass

followingorder.
ORDER
Applicationsstandsrejected.
Date14.10.2016.

(D.P.Surana)
Spl.Judge,MPIDAct&
Addl.SessionsJudge,
CityCivil&SessionsCourt,Gr.Mumbai.

OrderDictatedon :14.10.2016
Transcribedon :15.10.2016
Signedon
:17.10.2016

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IaffirmthatthecontentsofthePDFfileorderarethesame,wordtoword,
aspertheoriginalorder.
NameofStenowithpost

:VarshaN.Rajgole.
(H.G.Stenographer)
NameoftheJudge(withCourtRoomno.):HHJShri.D.P.SURANA
(CR36)
Dateofpronouncementoforder
:14.10.2016
OrdersignedbytheP.O.On

:17.10.2016
Orderuploadedon
: