New Delhi, Feb 8 (IANS) A Delhi court has rejected the bail application of a businessman accused of defrauding the east African nation of Djibouti of $5 million, citing failure to fulfill contractual obligations and non-payment of the owed amount.
The court’s decision came after businessman Sai Ramakrishna Karuturi, who faced charges of cheating the African country based on a complaint filed by its Ambassador in India in 2018, surrendered before the court in compliance with a Supreme Court order.
Despite arguments from Karuturi’s counsel regarding the absence of a final report from the investigating officer (IO) and cooperation in the investigation, Additional Sessions Judge Kiran Gupta of Patiala House Courts deemed the allegations serious enough to warrant denial of bail.
The judge noted that Karuturi had received a bank guarantee of $6.5 million for agricultural activities, which he failed to perform.
It was further noted that Karuturi neither returned the amount nor supplied the agreed-upon agricultural produce as per the contractual agreements dated September 10, 2011, and February 23, 2012.
Moreover, the court noted Karuturi’s failure to provide evidence of substantial machinery and equipment supplied to Djibouti, as stipulated in the agreements.
The prosecution argued that the accused misrepresented the agricultural potential of leased land in Ethiopia, resulting in financial losses for Djibouti.
Despite claims of unforeseen circumstances such as floods, the court noted that it was Karuturi’s obligation to fulfill contractual obligations and compensate for losses incurred.
The prosecution opposed to his bail application saying that Karuturi’s flight risk was heightened by his lack of permanent residence in India and substantial assets in Kenya and elsewhere in Africa.
The genesis of the dispute lies in tripartite agreements between Karuturi’s companies, Djibouti, and its consultant firm, Multiflex Biotech FZC.
These agreements mandated Karuturi Overseas Ltd (KOL) to develop agricultural land in Ethiopia and supply produce to Djibouti, backed by bank guarantees issued by the latter nation. Despite claims of crop loss due to floods, Djibouti contended that KOL failed to fulfill contractual obligations, leading to financial losses. The court noted that while KOL acknowledged crop destruction, it failed to supply the agreed-upon machinery in compensation.
In light of these factors, the court dismissed Karuturi’s bail plea, citing the seriousness of the charges and the need to ensure compliance with contractual obligations.