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2020 (2) TMI 406
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....and (2) r/w Section 212 of the Companies Act, 2013 r/w Section 621(1) of the Companies Act, 1956 r/w Section 193 Cr.P.C. Ld. Sr. Counsel has submitted that the applicant was taken into custody on 02.05.2019 and is in JC since then. He is the only accused currently in judicial custody in the instant case out of the 284 accused persons. Petitioner had joined Bhushan Steel Ltd. (hereinafter referred to as 'BSL') in 1995 as an Assistant General Manager and was thereafter promoted to the post of Chief Financial Officer in 2014. In February 2018, petitioner had resigned from BSL. 3. Ld. Sr. Counsel has submitted that the petitioner has fully cooperated with SFIO in the investigation and supplied all the documents and information as and when required. On 02.05.2019, SFIO had summoned the petitioner via telephone and arrested him without any justification or reasons. The petitioner was produced before the Ld. Duty M.M., Patiala House Courts and was remanded to SFIO custody for two days which was thereafter extended from time to time. On 08.05.2019, the petitioner was remanded to judicial custody which has also been extended from time to time by the Ld. Special Judge, Dwarka Courts. The ....
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....ed both the bail applications in routine and casual manner and submissions recorded by Ld. Special Judge in the bail order dated 02.08.2019 are a replication of the submissions recorded in order dated 06.06.2019. 5. It is next submitted that conditions for bail imposed under Section 212(6)(ii) and 212(7) of the Companies Act 2013 are completely unreasonable, draconian and contrary to the fundamental tenets of criminal law. He, therefore, prayed that petitioner be released on bail in the interest of justice. 6. Ld. Sr. Counsel for the petitioner in support of its contention has also relied upon the following case law:- a. Sanjay Chandra v. CBI, (2012) 1 SCC 40; b. Nikesh Tarachand Shah v. Union of India, (2018) 11 SCC1; c. Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294; d. Ankush Kumar @ Sonu vs. State of Punjab, 2018 SCC Online (P&H) 1259; e. Gurbaksh Singh Sibbia v. State of Punjab, (980) 2 SCC 565; f. State of Maharashtra v. Nainmal Punjaji Shah & Anr (1969) 3 SCC 904; g. Niranjan Singh & Anr. v. Prabhakar Rajaram Kharote & Ors.,(1980) 2 SCC 559; h. P. Chidambaram v. CBI, 201....
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....complex web of transactions, funds were transferred and the affairs of the accused companies were conducted in such a manner so as to facilitate fraud of massive proportions. It is submitted that petitioner was one of the prime perpetrator and master mind behind all the fraudulent activities and thus, in view of the serious nature of allegations and active role played by the petitioner and the offence being an economic one which affects the economy of the nation and twin conditions for grant of bail as envisaged under Section 212(6)(ii) of the Companies Act, 2013 are not satisfied, the bail application be dismissed. Ld. ASG in support of her submissions has relied upon following case law:- a. State of M.P. v. Kajad, (2001) 7 SCC 673; b. Bijando Singh v. Md. Ibocha (2004) 10 SCC 15; c. Union of India v. Rattan Mallik @ Habul-(2009) 2 SCC 624; d. Narcotics Control Bureau v. Kishan Lal (1991) 1SCC 705; e. Customs New Delhi v. Ahmadalieva Nadira 2004 3 SCC 549; f. Union of India v. Shiv Shankar Kesari-(2007) 7 SCC 798; g. Satpal Singh vs. state of Punjab (2018) 13 SCC 813; h. Narcotics Control Bureau v. Dilip Pralh....
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....ailing credit facilities from bank through Letter of Credit (LC) by filing false documents with various banks. LCs were obtained on the basis of false and fabricated documents. There are allegations that the petitioner, along with other individuals, also submitted false documents under his signatures for discounting the LCs including the false and fabricated letters under the name and (false) signature of Hindustan Zinc Ltd. or Jindal Steel Works and its authorized signatory. 11. It is alleged against the petitioner that at the time of opening of LCs, the documents attached such as proforma invoice/lorry receipts etc. were not genuine. The request letter of the beneficiary of the LC at the time of discounting of documents under LC were not issued by the beneficiary i.e. Hindustan Zinc Ltd. and JSW Steel Ltd. In most of the cases, the transporter either did not exist or the vehicle number mentioned turned out to be a two/three passenger vehicle. The request letter given by the beneficiary of the LC for negotiation of the documents were not issued by them and the account number mentioned therein was of Bhushan Steel Ltd. instead of beneficiary of LC i.e. Hindustan Zinc Ltd. and JS....
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.... financial year 2014-15 and 2015-16. The only disclosures made were in Note 45 of the Financial Statements for Financial Year 2016-17, which are insufficient and do not provide details of the item wise adjustments made. It is further alleged that the petitioner was also aware that the documents submitted to banks for availing credit using LCs are fabricated/false and that the material was not being supplied by the beneficiaries i.e. JSW or HZL against those fabricated LCs. Further, a fraudulent method of accounting was put in place in BSL for the amounts involved in the fraudulently opened, discounted and repaid LCs. The fraudulent method ensured that huge inflow and outflow of funds was not reflected in the balance sheet. BSL was maintaining separate accounts in SAP and Legacy/Foxpro system citing excuse of transition and used the accounting head BSL-ITT Orissa for camouflaging these transactions. 14. It is further alleged that the manipulation in the financials was also within the knowledge of the petitioner. Under the garb of first time adoption of IndAs (Indian Accounting Standards), the amount of Rs. 3,727.45 Cr. and Rs. 2,420.69 Cr. for the F.Y. 2014-15 and 2015-16 resp....
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....nt of bail to an accused. In the present bail application, the petitioner is alleged to be involved in offences under Section 36(c), 128, 129, 447, 448 of the Companies Act, 2013; under Section 209, 211 r/w Section 628 of the Companies Act, 1956; under Section 467, 468, 471 r/w Section 120-B of the Indian Penal Code. Thus, the offences alleged against the petitioner are not only economic offences but offences defined under the Companies Act as well where conditions for grant of bail are stringent in nature as envisaged under Section 212(6) (ii) of the Companies Act, 2013 and Hon'ble Supreme Court while remanding the bail application back to this court has directed to reconsider the bail application filed by the petitioner in the light of the principles governing the grant of bail under Section 439 of the Cr.P.C. while also keeping in mind the scope and effect of the twin mandatory conditions for grant of bail laid down in Section 212(6)(ii) of the Companies Act, 2013. 16. Ld. Sr. Counsel has argued that investigation in the present case is complete. There are 284 accused persons and documents on which reliance has been placed are voluminous and trial may take considerable time a....
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....the directions passed by the Hon'ble Supreme Court. 19. Reliance is next placed upon Gurbaksh Singh Sibbia's case (supra), wherein the Hon'ble Supreme Court has observed that grant of bail is a rule and refusal is an exception. Ld. Sr. Counsel has next relied upon State of Maharashtra v. Nainmal Punjaji Shah & Anr (1969) 3 SCC 904; Niranjan Singh and Anr. v. Prabhakar Rajaram Kharote & Ors., (1980) 2 SCC 559; P.Chidambaram v. CBI, 2009 SCC OnLine SC 1380 and D.K.Shivakumar v. Directorate of Enforcement, 2019 SCC OnLine Del 10691 and argued that this court is not required to discuss the evidence in detail at the time of deciding the bail application but at this stage should only consider the fact whether the petitioner will be available to face the trial and whether there is any apprehension that he would tamper with evidence or influence the witnesses and according to Ld. Counsel this is not the case here as there is nothing on record to suggest that petitioner will abscond or tamper with evidence or influence witnesses. The investigation is already over. It is, therefore, prayed that petitioner be released on bail in the interest of justice. 20. I have carefully considered t....
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....ffence covered under section 447] of this Act shall be cognizable and no person accused of any offence under those sections shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence referred to this sub-section except upon a complaint in writing made by- (i) the Director, Serious Fraud Investigation Office; or (ii) any officer of the Central Government authorised, by a general or special order in writing in this behalf by that Government. (7) The limitation on granting of bail specified in sub-section (5) is in addition to the limitations under the Code of Crimina....
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.... along with other accused persons by using the fraudulent and deceptive methods availed the illegitimate flow of funds amounting to Rs. 45,818 Crore during the period 2013-14 to 2016-17. Thus, there are serious allegations against the petitioner regarding manipulation and fabrication of financial documents by way of which, the fund was siphoned off to other companies and therefore, it cannot be held that there are no reasonable grounds to believe that accused is not guilty of the offences alleged against him. 26. Further in view of the allegations appearing on record and active participation of the petitioner in alleged commission of the offence i.e. in fabrication of documents in opening LCs and discounting of the same, manipulation of accounts and siphoning of the funds worth several crores and keeping in mind the fact that all fraudulent activities were allegedly planned in advance and executed carefully and with deliberate design and further taking overall view of the matter, it is difficult to hold that petitioner will not commit any offence under the Act while on bail. This court is, therefore, of the opinion that on the basis of allegations appearing on record, it cannot ....