JINOFER KAWASJI BHUJWALA versus THE STATE OF GUJARAT

Citation: [2020] 5 S.C.R. 383 · Decided: 19-06-2020 · Supreme Court of India · Bench: ASHOK BHUSHAN · Disposal: Appeal(s) allowed

Judgment (excerpt)

A
B
C
D
E
F
G
H
383
JINOFER KAWASJI BHUJWALA
v.
THE STATE OF GUJARAT
(Criminal Appeal No. 460 of 2020)
JUNE 19, 2020
[ASHOK BHUSHAN, M.R. SHAH AND
V. RAMASUBRAMANIAN, JJ.]
Bail – A Company ‘ANL’ was issued a Letter of Intent for
Construction and development of Vessels Traffic and Port
Management System (VTPMS) in the Gulf of Khambhat, on Build
Own Operate and Transfer basis – It was followed by a Concession
Agreement, entered into between the Gujarat Maritime Board, ANL
and the Government of Gujarat – Dispute arose regarding the
Capital Cost incurred by ANL – On basis of a preliminary inspection
report, the Gujarat Maritime Board claimed that ANL made an extra
income of Rs. 134.38 crores – ANL moved the Commercial Court
u/s.9 of the Arbitration and Conciliation Act, 1996 as there was
threat of termination of the Concession Agreement and thereafter
matter was referred to Arbitration – The Gujarat Maritime Board
lodged a complaint and on basis of the said complaint FIR was
registered against 8 accused, including A-1, A-2 and A-3 u/ss. 406,
409, 420, 465, 468, 471 and 120 B IPC and s. 13(1)(d) of the
Prevention of Corruption Act – A-1(Appellant) and A-2 his son were
arrested – Ever since then, the appellant is in judicial custody – His
bail application was rejected several times – However, the High
Court gave liberty to the appellant to file a fresh application before
the trial Court if the trial could not commence within a period of six
months – Incidentally, this period of six months has expired and
trial has not commenced yet – Also, the Arbitral Tribunal passed
interim measures and financial interests of the Maritime Board were
protected – In the background of the above facts, the appellant
sought bail – Per contra, the respondent-State contended that the
matter involved national security, which stands threatened by the
activities of the appellant – Held: The potential threat to national
security, cannot be sustained, for two reasons – The first reason is
that the project became operational in August 2010 and the disputes
[2020] 5 S.C.R. 383
383
A
B
C
D
E
F
G
H
384
SUPREME COURT REPORTS
[2020] 5 S.C.R.
started between the parties in 2018 that too with regard to financial
matters – The second reason, by virtue of interim measures of
protection granted by the Arbitral Tribunal u/s. 17, the termination
of Concession Agreement stands stayed – Therefore, the Company
of which the appellant is the head, continues to operate the VTPMS
Project – The Arbitral Tribunal has also permitted the State Police
to be there at the Project and allowed Maritime Board to depute a
competent person, familiar with the project in question, to supervise
and monitor the functioning of the Project – Also, the period of six
months within which the High Court hoped the trial to commence,
has expired as on date – Therefore, appellant is entitled to bail and
is directed to be released on bail.
Allowing the appeal, the Court
HELD: 1. The period of six months within which the High
Court hoped the trial to commence, has expired as on date. The
appellant, who is admittedly 62 years of age has already spent
nearly a year in judicial custody. A period of nine months has
passed from the date of filing of the charge sheet. Though the
Solicitor General contended that the sanction to prosecute has
already been issued as against Government Officials, the fact
remains that charges have not been framed and the trial has not
commenced as yet. [Para 20][389-F]
2. The arguments revolving around the potential threat to
national security, cannot be sustained, for two reasons. The first
reason is that the project became operational in August-2010
and the disputes between the parties started only in 2018 and
that too with regard to financial matters. The second reason is
that by virtue of the interim measures of protection granted by
the Arbitral Tribunal (comprising of a former Judge of this court,
a former Judge of the High court and a Senior Advocate) in terms
of section 17 of the Arbitration and Conciliation Act, 1996, the
termination of the Concession Agreement stands stayed.
Therefore, the Company of which the appellant is the head,
continues to operate the VTPMS Project. In any case, the Arbitral
Tribunal has not merely protected the economic interests of the
State, but also permitted the State Police to be there at the project
site. The Tribunal has also allowed the Maritime Board to depute
A
B
C
D
E
F
G
H
385
a competent person, familiar with the project in q

Excerpt shown. Read the full judgment & AI analysis in Lexace.