2021 (3) TMI 1091 - HC - Companies Law

Court denies regular bail under Section 212(6) Companies Act 2013 but grants interim bail for medical reasons.

The court denied the applicant regular bail under Section 212(6) of the Companies Act, 2013, due to the seriousness of the offenses and evidence ... Seeking grant of regular bail - siphoning of funds - economic offences - Sick person or infirm person or not - interim bail already granted - HELD THAT:- Merely because the petitioner is on interim bail, it cannot be held that the petitioner’s prayer seeking the grant of regular bail cannot even be considered till he surrenders for the very prayer made by the applicant seeking the grant of regular bail implicitly in the facts and circumstances of the instant case takes into account that the applicant was granted interim bail after he had been arrested on 02.12.2019 - in the facts and circumstances of the instant case, the petition filed by the petitioner seeking release on regular bail in terms of Section 439 of the Cr.P.C., 1973 is maintainable. Sick person or infirm person or not - HELD THAT:- This Court is of the considered view that the applicant cannot be considered to be a person so sick to fall within the ambit of grant of regular bail till disposal of the proceedings in the complaint case for all that he needs is the intravitreal injections and the angiography which he himself has chosen to be rescheduled after his eye injections and which angiography even as per the report of the Human Care Medical Trust would require hospitalization for a day, though the other procedure would take time depending upon the procedure required and the kidney function test. Though the Court does not consider it appropriate to grant the bail to the applicant in terms of Section 212(6) and the proviso thereto in the category of being a sick person or infirm person, nevertheless, in as much as, the applicant does require medical care despite the factum that it is the applicant who has chosen to get his angiography done in the month of April, 2021 conducted after his eye treatment, it is considered appropriate to extend the period of interim bail granted to the applicant vide order dated 08.04.2020 for a period of 60 days at the maximum whereupon he is directed to surrender without default. It is not considered appropriate to grant bail to applicant - application dismissed. Issues Involved:1. Grant of regular bail to the applicant.2. Alleged commission of offenses under various sections of the Companies Act, 2013 and 1956.3. Specific fraudulent transactions and siphoning off funds by the applicant.4. Applicability of Section 212(6) of the Companies Act, 2013.5. Applicant's medical condition and its impact on bail considerations.6. Precedents and legal principles regarding bail in economic offenses.Detailed Analysis:1. Grant of Regular Bail to the Applicant:The applicant sought regular bail in a case pending before the Special Judge, Companies Act, for alleged offenses under Sections 36(c), 128, 129, 134, 188(5), 447, 448 of the Companies Act, 2013, and Sections 211, 217, 628 of the Companies Act, 1956. The applicant was accused of siphoning off funds from Rockland Hospitals Ltd. (RHL) through various transactions.2. Alleged Commission of Offenses:The Central Government directed an inquiry under Section 206(4) of the Companies Act, 2013, which led to an investigation by the SFIO. The investigation revealed that the applicant and other accused siphoned off funds from RHL through multiple transactions, amounting to significant financial misappropriation.3. Specific Fraudulent Transactions:The SFIO identified seven distinct transactions involving the applicant:- First Instance: Siphoning off Rs. 13.17 Crores from RHL by manipulating refunds from SDMC.- Second Instance: Manipulating patient information in the Hospital Information System to inflate revenue figures.- Third Instance: Creating false implant bills, resulting in siphoning off Rs. 76.03 Crores.- Fourth Instance: Using Layer-1 and Layer-2 companies to fraudulently increase share capital in RHL.- Fifth Instance: Siphoning off funds from RHL to Rockland Hotels Limited (RHOL).- Sixth Instance: Defrauding the minority shareholder (IFC) by not disclosing a deal with VPS Healthcare.- Seventh Instance: Submitting false financial statements to banks to obtain credit facilities.4. Applicability of Section 212(6) of the Companies Act, 2013:Section 212(6) mandates that no person accused of an offense under Section 447 of the Companies Act, 2013, shall be released on bail unless the Public Prosecutor is given an opportunity to oppose the application and the court is satisfied that the accused is not guilty and not likely to commit any offense while on bail. The SFIO argued that the applicant did not meet these criteria.5. Applicant's Medical Condition:The applicant claimed to be a sick/infirm person suffering from multiple medical conditions, including Type 2 Diabetes Mellitus, Hypertension, Coronary Heart Disease, and others. He argued that his medical condition warranted bail without the twin conditions under Section 212(6). The court considered medical reports and concluded that while the applicant required medical care, he did not fall within the ambit of being so sick to warrant regular bail till the disposal of the proceedings.6. Precedents and Legal Principles:The court referred to several precedents, including 'P Chidambaram vs CBI' and 'Y.S. Jagan Mohan Reddy v. CBI,' which emphasized that economic offenses need to be viewed seriously. The court also considered the verdicts in 'Rohit Tandon v. Directorate of Enforcement' and 'State of Gujarat v. Mohanlal Jitamalji Porwal,' which highlighted the gravity of economic offenses and the need for a stringent approach in granting bail.Conclusion:The court concluded that the applicant could not be granted regular bail under Section 212(6) of the Companies Act, 2013, considering the gravity of the offenses and the evidence presented. However, the court extended the interim bail for 60 days on medical grounds, with conditions that the applicant shall not leave the country and shall appear before the trial court as directed.