Jain was arrested on July 3 from his Carmichael Road residence by the ED for alleged FERA violations. The ED had raided Jain's Delhi residence on January 4 last year.

The judge held that bail was the rule rather than the exception and compelling reasons were warranted to deny bail. "In the instant case, I do not see any compelling reason to deny bail," he said.

Earlier, Jain's counsel, Mahesh Jethmalani, argued that the ED was merely acting at the behest of "a notorious litigant", N S Hoon, who had filed several cases against Jain. Apart from the grounds of his health and the fact of his having been interrogated at least 19 times, theapplicant was entitled to bail on merits also, he argued.

Jethmalani said of the six allegations against Jain, four were sponsored by N S Hoon's information. He said one of these was about a proposal by Jain to give a bank guarantee from a Swiss bank for US $ 11.2 million for alleged purchase of shares of Turner Morrison and Company. Jethmalani said Hoon had made this allegation first in the year 1991 though he had been litigating in respect of the same alleged transaction for years before that. He said the other "investigation" was with respect to the alleged transfer of Rs 4 crore or US $ 1.25 million abroad made by one Keshav Bangur through one Arun Kumar Bajoria, for the benefit of Jain. Jethmalani said that Bangur, who was arrested as a co-accused only after Jain's lawyers brought it to the notice of the court in Delhi, later retracted his statement in respect of the transaction of US $ 1.25 million.

According to Jethmalani, Bangur also alleged that he had been forced to make a statement againstJain. As he began to urge another point on the health of his client, Justice Bhairavia sought to know the case some months back when an accused had died in Tihar jail. Lawyers in court informed him it was Rajan Pillai.

Rafique Dada, who appeared for the ED, argued that the Supreme Court, had in its order dated January 8, 1998, not accepted Jain's argument that there was no case for custodial interrogation. He said the investigation process had not gone any forward from January 8, 1998, since the applicant had left the country for a bypass surgery. Since his return to the country on May 31, the ED had sent him four summonses which went unanswered. All the arguments made on behalf of Jain today had already been heard by various courts including the SC, Dada said.

When Dada dwelt on the magistrate's order appointing a panel of doctors to report on Jain's health, the court wanted to know what was the need for it when "the man was struggling for his life." "If he wanted to jump bail he would not havereturned from the US," Justice Bhairavia remarked forcing Dada to fall silent at one point.