Allahabad High Court Denies Bail to Chinese National in Economic Offence Case, Cites Flight Risk and Hostile Relations

Allahabad, India – The Allahabad High Court has rejected the bail application of a Chinese national, Xue Fei alias Koei, who is accused of forgery, illegal stay, and running a clandestine operation detrimental to India's economic interests. The court, presided over by Justice Arun Kumar Singh Deshwal, underscored the significant flight risk, the absence of an extradition treaty with China, and the country's "hostile relationship" as primary reasons for the denial.

Background of the Case

The case against Xue Fei began following the arrest of two other Chinese nationals who entered India illegally from Nepal. Information from them led police to a flat in Noida where Xue Fei was residing. A search of the premises allegedly uncovered a forged Indian passport and an Aadhar card in the name of "Laakpa Sherpa."

The prosecution alleges that Xue Fei had also tampered with his visa (e-FRRO report) to fraudulently extend its validity from 2020 to 2022. He is accused of being the "kingpin" of a larger operation involving several companies, including HTZN Technology Pvt. Ltd., which were allegedly used to collect computer processors and chips from scrap material and illegally export them to China. The prosecution further contended that these activities were part of a scheme to siphon money out of India through cryptocurrency, although this charge was not included in the final charge sheet.

Arguments Presented in Court

Applicant's Plea for Bail: Counsel for Xue Fei argued that he was falsely implicated based on the confessional statements of co-accused, which are inadmissible as primary evidence. It was submitted that there was no direct material evidence linking him to the management of the companies or any financial wrongdoing. The defense highlighted that the applicant has been incarcerated since June 14, 2022, and with only nine out of 76 witnesses examined, the trial is proceeding slowly. Citing a Supreme Court precedent, the counsel suggested that a foreign national could be granted bail by imposing strict conditions, such as impounding the passport and obtaining an assurance from the concerned embassy.

Prosecution's Strong Opposition: The State vehemently opposed the bail plea, portraying the applicant as the mastermind of an operation that posed a threat to India's economy. The prosecution stressed several key points:

- Flight Risk: Given the lack of an extradition treaty between India and China, there would be no legal mechanism to bring the applicant back to face trial if he fled the country. This concern was amplified by the fact that another co-accused, Twensang Dorgi, has already absconded and remains untraceable.

- National Interest: The prosecution invoked Section 57(11) of the Evidence Act, urging the court to take "judicial notice" of the hostile relationship between India and China.

- Expired Visa: The applicant's visa expired in 2020, meaning he has no legal right to stay in India. The prosecution argued that granting bail would be a "futile exercise" as he would have to remain in custody regardless.

- Rejection of Co-accused's Bail: Bail applications for several co-accused in the same case had already been rejected by both the High Court and the Supreme Court.

Court's Rationale for Denial

After considering the arguments, Justice Deshwal found prima facie evidence against the applicant. The court noted that the recovery of forged documents and the tampered visa were not in dispute.

In its order, the court observed:

> "There is material in the case diary which prima facie show that the applicant has committed forgery, in preparation of passport, aadhar card and visa and staying illegally in India to carry out activities which fall under the category of economic offence, therefore, applicant is not entitled to be released on bail."

The court placed significant weight on the national security and economic threat angles, stating:

> "This Court cannot ignore the relationship of India with China by overlooking the mandate of Section 57(11) of Evidence Act and there are chances if the applicant is released on bail, he may leave the country illegally..."

Final Decision

Concluding that the applicant posed a serious flight risk and was involved in activities against the nation's economic interests, the High Court rejected the bail application. However, acknowledging the period of incarceration, the court directed the trial court to conclude the trial as expeditiously as possible.