2023 (4) TMI 1030 - HC - Companies Law

Court grants bail in fraud case under Companies Act, 2013

TARANJEET SINGH BAGGA@SONU SINGH Versus SERIOUS FRAUD INVESTIGATION OFFICE

The court granted bail to the applicant in a case involving allegations of fraudulent activities under Section 447 of the Companies Act, 2013. Despite ... Seeking grant of Regular Bail - Money Laundering - creation of fictitious proprietorship firm in the name of Kewal International by using the documents of the applicant - twin conditions and bar under Section 212(6) of Companies Act - HELD THAT:- As per Section 212(7), the limitation or bar to grant of bail under Section 212(6) is in addition to the limitations under the Code of Criminal Procedure, 1973 or any other law for grant of bail. The aforesaid principles were held to be mandatory in nature by the Hon’ble Apex Court in SERIOUS FRAUD INVESTIGATION OFFICE VERSUS NITTIN JOHARI & ANOTHER [2019 (9) TMI 570 - SUPREME COURT]. The issue at hand was also considered by a Co-ordinate Bench of this Court in Rana Kapoor v. Directorate of Enforcement [2022 (11) TMI 1232 - DELHI HIGH COURT], where under similar circumstances, the accused therein was never arrested during the period of investigation and at a later stage, after the concerned Court took cognizance, he was taken into custody in a case under Prevention of Money Laundering Act, 2002. As held by the Hon’ble Apex Court in Satender Kumar Antil [2022 (8) TMI 152 - SUPREME COURT], when an accused, who has not been arrested during investigation, and investigating agency does not require his/her custody, and the accused appears pursuant to summoning order before Trial Court, there is no need to file any bail application since there is no need to arrest the said accused. It has also been clarified by the Hon’ble Apex Court that if the Court taking cognizance is of the opinion that remand of accused is necessary, an opportunity to be heard has to be given to the accused. It is an admitted position, that even at the stage when the applicant appeared before the learned Trial Court upon being summoned, the Investigating Officer never sought his remand to judicial custody. It is not the case of prosecution that applicant did not join or did not co-operate in the investigation. The Director of accused company Komal Chadha has already been granted bail by this Court, and present applicant is allegedly an employee of accused company. There is no allegation that applicant can either intimidate any witnesses or tamper with the evidence - A perusal of complaint also shows that accused no. 2 i.e. Suman Chadha had created several entities in the name of his employees, including the present applicant. In fact, the driver of the said accused is named as proprietor in one such entity namely S.K. Enterprises. Considering the fact that petitioner is in judicial custody since 25.05.2022, this Court is inclined to grant bail to accused/applicant on furnishing a personal bond in the sum of Rs.50,000/- with one surety of like amount to the satisfaction of Trial Court/ Successor Court/ Link M.M/ Duty M.M concerned on the terms and conditions imposed - bail application disposed off. Issues Involved:1. Whether the applicant should be granted bail under Section 439 of the Code of Criminal Procedure, 1973, for the offence under Section 447 of the Companies Act, 2013.2. Whether the twin conditions under Section 212(6) of the Companies Act, 2013, apply to the applicant's bail application.3. Whether the applicant's non-arrest during the investigation affects the bail application.Detailed Analysis:1. Grant of Bail under Section 439 of Cr.P.C. for Offence under Section 447 of Companies Act, 2013:The applicant sought regular bail in C.C. No. 245 of 2021, where he was arraigned as accused no. 10 among 12 accused persons. The complaint against Parul Polymers Pvt. Ltd. (PPPL) involved allegations of fraudulent activities, including the issuance of fake tax invoices and the creation of sham entities to route funds. The applicant was alleged to have facilitated these activities by arranging documents and people for opening fake bank accounts. Despite these allegations, the applicant argued that he was merely an office boy and unaware of the fraudulent operations. The court noted that the applicant had cooperated with the investigation and had no previous criminal antecedents.2. Applicability of Twin Conditions under Section 212(6) of Companies Act, 2013:Section 212(6) of the Companies Act imposes stringent conditions for granting bail, requiring the Public Prosecutor to oppose the bail and the court to be satisfied that the accused is not guilty and unlikely to commit an offence while on bail. The prosecution argued that the applicant's role in arranging fake entries and bank accounts fell under this provision. However, the court referred to the Supreme Court's decision in Satender Kumar Antil v. CBI, which clarified that if an accused is not arrested during the investigation, there is no need for further arrest upon appearance in court. The court also cited a similar case, Rana Kapoor v. Directorate of Enforcement, where the accused was granted bail despite not being arrested during the investigation.3. Impact of Non-Arrest During Investigation on Bail Application:The court emphasized that the applicant was not arrested during the investigation and was only taken into custody upon appearing in court. The investigating agency did not seek his remand, and there was no allegation of non-cooperation. The court noted that the applicant was sent to judicial custody without any reason being assigned, merely because no bail application was filed at the time of appearance. This was contrary to the principles laid down in Satender Kumar Antil, which stated that there is no need for a bail application if the accused is not arrested during the investigation and the prosecuting agency does not require custody.Conclusion:Considering the above points, the court granted bail to the applicant on furnishing a personal bond of Rs. 50,000 with one surety of like amount. The applicant was required to surrender his passport, remain available on a specified mobile number, inform any change of address, and not tamper with evidence or contact prosecution witnesses. The court clarified that this decision did not reflect any opinion on the merits of the case.