TaxTMI 
TaxTMI 
2022 (1) TMI 1172
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the appellant herein a non-banking financial company (NBFC) lodged an FIR/complaint with the Economic Offences Branch, New Delhi against the company M/s Sri Aranath Logistics Limited (formerly known as M/s LMJ Logistics Limited), Respondent No.2 herein Jayant Kumar Jain - Managing Director and others for the offences under Sections 409, 420, 467, 468, 471 and 120B IPC. It was alleged against the accused - Respondent No.2 herein that he is the Managing Director of M/s Aranath Logistics Limited engaged in the business of multi­commodity trading of agricultural and non­commodities agricultural. That by way of written agreement accused availed loan credit facilities to the tune of Rs. 25 crores for a term of 180 days from the complainant company. It was alleged that the said amount of Rs. 25 crores was disbursed in the year 2017. It was alleged that the said amount of Rs. 25 crores was required to be used by the company for its own purpose. It was further alleged that for the purpose of repayment of loan, no stock statement was submitted and mortgage was also not created as agreed between the parties. It was further alleged that instead of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e charge­sheet has been filed against Respondent No.2 and other co­accused. The detailed status report was filed pointing out how a sum of Rs. 25 crores to be used by M/s LMJ Logistic Limited was transferred to shell and other companies such as M/s LMJ Logistic Limited and how a systematic fraud was committed. Despite the above, by the impugned judgment and order, the High Court has directed to release Respondent No.2 on bail merely on the ground that the case arises out of a commercial transaction and is based on documents already seized. 3. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court directing to release Respondent No.2 - accused on bail, the original complainant has preferred the present appeal. 3.1 At the outset, it is required to be noted that after this Court directed to issue notice to the respondents vide order dated 17.12.2020 and thereafter the matter was adjourned from time to time, on 08.01.2022 the petitioner(appellant) moved an application being Criminal Miscellaneous Application No.4818 of 2022 seeking permission to withdraw the present Special Leave Petition submitting that during the pen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dent No.2 - accused has heavily relied upon the decisions of this Court in the case of Dolat Ram vs. State of Haryana, (1995) 1 SCC 349; X vs. State of Telangana, (2018) 16 SCC 511; Prabhakar Tewari vs. State of U.P., (2020) 11 SCC 648 as well as the decision of this Court in the case of Gurcharan Singh vs. State (Delhi Administration) (1978) 1 SCC 118 in support of his submissions that once the bail has been granted by the High Court and/or the Court below the same may not be cancelled unless it is found that the accused has violated any of the terms and conditions of the bail order and/or has misused any liberty shown to him while releasing him on bail and/or there are any other peculiar circumstances. 4.4. Making the above submissions it is prayed to dismiss the present appeal. 5. Present appeal is opposed by learned Counsel on behalf of Respondent - State. A status report on behalf of the State has been filed in which it is stated that the State had filed a status report on 09.09.2020 before the High Court and before the High Court, the State vehemently opposed the bail of Respondent No.2. However, at that stage, further investigation was underway and a supple....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... From the aforesaid it can be seen that while releasing the Respondent No.2 on bail the High Court has not at all adverted to and/or considered the nature of accusation and the material found/collected during the course of investigation and the serious allegations of siphoning off the huge amount through various shell companies. The High Court has not at all dealt with and/or considered any of the allegations and/or material collected during the course of the investigation which were specifically pointed out and mentioned in the status report filed by the I.O. From the status report and even the charge­sheet/supplementary charge­sheet papers it has been found during the course of the investigation that a sum of Rs. 25 crores was disbursed by the complainant to Respondent No.2 and its company M/s LMJ Logistics Limited. The said amount was disbursed for its own use. During the course of the investigation, it has been found that the said amount was debited to the various companies/entities as under: Sr. No. Date Beneficiary Firm Voucher No. Amount (In Rs.) 1. 03.11.17 LMJ International Ltd. Corporation Bank Kolkata 860388 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e investigation/further investigation it has been revealed that Sairam Agrocorp Pvt. Ltd. and Vasudev Agro Foods Pvt. Ltd. are fake and shell companies and they do not exist at the registered address. During the course of the investigation, it has been found that some of the employees were made directors without their knowledge and their KYC and other documents were misused without their knowledge. As per the charge­sheet/supplementary chargesheet it appears that the investigation revealed that the accounts in question were created to inflate the turnover of the company so that they could avail the credit facility from various banks. It further reveals that the shell companies were created to misappropriate/siphoned off the money entrusted to them as a loan to the tune of Rs. 25 crores. It has been revealed that there was no genuine transaction of sale and purchase but it was simply routing and re­routing of the amount received from the complainant to different entities which were in actual being operated by Respondent No.2. All these aforesaid allegations and the material collected during the course of the investigation which are being part of the c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....8 SCC 21] (SCC p. 31, para 18), Prahlad Singh Bhati v. NCT of Delhi [(2001) 4 SCC 280], and Ram Govind Upadhyay v. Sudarshan Singh [(2002) 3 SCC 598]. 10. It is manifest that if the High Court does not advert to these relevant considerations and mechanically grants bail, the said order would suffer from the vice of non­application of mind, rendering it to be illegal. In Masroor [(2009) 14 SCC 286], a Division Bench of this Court, of which one of us (D.K. Jain, J.) was a member, observed as follows: (SCC p. 290, para 13) "13. ... Though at the stage of granting bail an elaborate examination of evidence and detailed reasons touching the merit of the case, which may prejudice the accused, should be avoided, but there is a need to indicate in such order reasons for prima facie concluding why bail was being granted particularly where the accused is charged of having committed a serious offence." 11. We are constrained to observe that in the instant case, while dealing with the application of the accused for grant of bail, the High Court completely lost sight of the basic principles enumerated above. The accused, in the present case, is alleged to have committed a hein....
X X X X Extracts X X X X
X X X X Extracts X X X X
....accused fleeing from justice; (iv) the impact that his release may make on the prosecution witnesses, its impact on the society; and (v) likelihood of his tampering. 10.3 In the case of Prahlad Singh Bhati vs. NCT of Delhi & Ors., (2001) 4 SCC 280, it is observed and held by this Court that the jurisdiction to grant bail has to be exercised on the basis of well settled principles having regard to the circumstances of each case and not in an arbitrary manner. It is observed and held as under: "The jurisdiction to grant bail has to be exercised on the basis of well settled principles having regard to the circumstances of each case and not in an arbitrary manner. While granting the bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character, behaviour, means and standing of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public or State and similar o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....law laid down by this Court in the aforesaid decisions that once the bail is granted by the High Court, though the High Court could not have granted the bail, in absence of any allegation of misuse of liberty and/or breach of any of the conditions of the bail, the bail cannot be set aside when grant of bail is itself subject matter of challenge in appeal/revision. 12.1 What is observed and held is that the rejection of bail in a non­bailable case at an initial stage and cancellation of bail so granted has to be dealt with and considered on different basis and that very cogent and overwhelming circumstances are necessary for an order directing the cancellation of the bail already granted. Therefore, on very cogent and overwhelming circumstances the bail can be cancelled. At this stage the decision of this Court in the case of Mahipal vs. Rajesh Kumar alias Polia and Another, (2020) 2 SCC 118 is required to be referred to. In the said decision, it is observed and held by this Court that though this Court does not ordinarily interfere with the order of the High Court granting bail, however, where the discretion of the High Court to grant bail has been exercised without du....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the accused or the supervening circumstances that have happened subsequently. It, on the contrary, delves into the justifiability and the soundness of the order passed by the Court." 12.2 Thus, as per the law laid down by this Court where a Court while considering an application for bail fails to consider the relevant factors, an Appellate Court may justifiably set aside the order granting bail. Appellate Court is thus required to consider whether the order granting bail suffers from a non­application of mind or a prima facie view from the evidence available on record. 13. From the aforesaid it emerges that while releasing Respondent no.2 on bail, the High Court has not at all considered the relevant factors including the nature and gravity of accusation; the modus operandi and the manner in which the offences have been committed through shell companies and creating the false/forged documents and/or misusing the PAN Cards, Aadhar Cards and KYCs of the employees and showing them as Directors of the fake and shell companies. As observed hereinabove, the High Court has not at all considered and taken into consideration the status report and the evidence collected....