TaxTMI 
TaxTMI 
2019 (11) TMI 1736
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....the Companies Act 2013 read with 120-B of IPC and under Sections 417, 418, 420, 477-A IPC read with Section 120-B of the IPC, and also for the offences punishable under Section 74 (3) and 76A of the Companies Act 2013, as well as, for offence punishable and Section 447 of the Companies Act, 2013 on several counts, which is pending in the Court of Special Judge, Gurugram. It deserves to be pointed out at the outset that this case is one of the cases in a bunch; which were heard together. However, for making the things more distinct these cases are being decided vide separate judgments. However, since several aspects of the matter are common to all the cases and have even been argued on similar lines and even jointly, therefore, some aspects of the matter would form part of all the judgments. The brief facts constituting allegations in this case are that one Multilevel Co-operative Society was got registered by one Mukesh Modi and family in the name of Adarsh Credit Co-operative Society Ltd. (hereinafter referred to as the Co-operative Society or (ACCSL). That Co- operative Society collected deposits from about 22 lakh investors. In the process about Rs.5000 Crores were collected f....
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....e petitioner is arrayed as Accused No.115, and his 5 companies are arrayed as the accused at Sr. No. 79 and at Sr. No 90 to 93. Under the provisions of section 212 (15) of Companies Act 2013, such a report be taken as a report presented under section 173 of Cr.P.C. After receipt of the report from the SFIO, the Special Court summoned various accused including the CUIs and other individuals, under different sections of the Old Companies Act and the New Companies Act, 2013. The petitioner was summoned by the Special Court under Sections 447 of the Companies Act 2013 read with 120-B of IPC and under Sections 417, 418, 420, 477-A IPC read with Section 120-B of the IPC alongwith his co-accused, and also for the offences punishable under Section 74 (3) and 76A of the Companies Act 2013, as well as, for offence punishable and Section 447 of the Companies Act, 2013 on several counts, some of which are cognizable and non-bailable as per the provisions of the New Companies Act, 2013; and which are punishable with upto 10 years of imprisonment. However, during investigation since the role of the petitioner had surfaced in the very beginning, therefore, at the initial stage itself when the i....
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....ioner Vivek Harivyasi. The petitioner Vivek Harivyasi, was authorized signatory in 90% of the CUIs of Adarsh Group and was a Director in 50% of the CUI of Adarsh Group. So as per the allegations the petitioner was the front-man for the controllers of the Adarsh Group of Companies to route, re-route and ultimately, siphon off the money from the CUIs of the Adarsh Group, by creating a cobweb of apparently legal transactions. The broadly; participation of the petitioner alleged in the siphoning off of the money of the CUIs of Adarsh Group is three-fold. Firstly, as authorized signatory, director or the key managerial person of the CUIs the petitioner withdrew the amounts from the bank accounts of the company and created cash-in-hands which was squandered through the cobweb of fictitious transactions. An amount of Rs. 89.23 Crore was created as cash-in-hand through cash withdrawals and was shown as cash in hand in the books of accounts. This amount was siphoned off. This siphoning was given a lawful color by the controllers/accused persons of CUIs in connivance with ACCSL and Jainam Rathod (A-130), a bogus bill provider and habitual entry provider for commissions, by way of showing fa....
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....his own 5 companies, namely, Cynosure Real Estates Private Limited, EOS Developers Private Limited, Headstrong International Exports Private Limited, Adler Infra Ventures Private Limited and A3G Infra Private Limited. These companies were owned / controlled by him and were not part of AGCL and RSGC. Vide additional approval; the affairs of these companies were also brought under investigation. Finding these companies also involved in the frauds, these companies have also been made accused in the present complaint. Investigation revealed that the petitioner Vivek Harivyasi, being a Key Managerial Person in AGCL and RSGC, misappropriated the funds siphoned from AGCL and RSGC to purchase Riyasat Green Farm, Chattarpur in the name of his company Cynosure Real Estates Private Limited (CREP). In the process he was helped by the co-accused Peeyush Aggarwal, Vijay Jhindal, Raj Kumar Modi, and Paramvir Singh Sangwan to launder and invest cash to the tune of Rs.17 Crore. He along with Peeyush Aggarwal held the shares of the company as Benami in the name of Garima Sharma. Still further, the petitioner Vivek Harivyasi, as Director/Authorised Signatory of Sun Dream Build Private Limited-CUI of....
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....ellation of bail are altogether different. Very strong case is required for cancellation of bail. Realizing his predicament qua the nature and quantum and gravity of the allegations and the alleged evidence / material claimed against him by the prosecution; the ld. Counsel for the petitioner has not even adverted to the merits of the case qua the factual gamut, except to say the case against the petitioner is false and that the relevant transactions were duly reflected in the records of the CUIs of the Adarsh Group and of his own companies. Referring to the alleged evidence collected by the prosecution, learned Counsel for the petitioner submitted that there is no evidence whatsoever against the petitioner. The prosecution is relying upon the alleged disclosure statement of the petitioner. Since the investigating officer of the case also had the power of recording the statement on oath and also very wide power to arrest a person during the investigation, therefore he had the potential to pressurize the accused, and hence any inculpating statement, allegedly recorded by him during the investigation; cannot be relied upon against the petitioner. Besides the disclosure of the stateme....
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....he petitioner for some of the offences qua some of the CUIs of Adarsh Group only. Since the further investigation had proliferated to the other persons, entities and the companies as well, including the companies of the petitioner, therefore, it could not be completed within the stipulated statutory period. Hence, the petitioner was granted the default bail under section 167(2) Cr.P.C. At that time consideration of material available against the petitioner was totally immaterial. However, at the conclusion of the investigation the petitioner is found to be the pivotal person; who has managed most of the fraudulent transaction involving the CUIs of the Adarsh Group; in his capacity as the Director and / or the authorized signatory. He is also found having created his own companies, including the benami ones; to siphon off the money of the CUIs of the Adarsh Group and having purchased the properties in the name of his own companies by utilizing the funds from the CUIs of the Adarsh Group. Therefore a lot of material has been collected against the petitioner during the investigation. Due to his involvement in frauds by or in the affairs of various companies the petitioner is charge-sh....
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....would be required to be considered by this court as well. Referring to the reliance of the counsel for petitioner upon the case of Nikesh Tarachand Shah (supra) case, qua vires of the twin conditions, ld. Counsel for the SFIO has submitted that after that judgment of the Supreme Court, the Parliament has amended the Prevention of Money Laundering Act, 2002 and has removed the inconsistency qua the offences punishable under the provisions of Prevention of Money Laundering Act, 2002 and therefore, has rectified the aspect which had earlier led to declaration of the twin conditions under that Act as ultr-vires. Still further it is submitted by the ld. Counsel that although constitutional validity of the twin conditions, as prescribed under section 212 (6) of the new Companies Act, 2013 is under challenge before the Supreme Court in case of Serious Frauds Investigation Office V/s Neeraj Singhal 2018 SCC Online SC 1573 and other cases, however, the Supreme Court has again reiterated the applicability of the twin conditions for the purpose of consideration for bail, in case of Nitin Johari (supra). So far as the reliance of the Counsel for the petitioner upon the judgment of this Court i....
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....nsactions involving payment of Share Application Money and bogus purchase of suits lengths (cloth). The entire transactions involved are of Rs. 223.775 Crore which included 30 CUIs and 22 firms, all belonging to Adarsh Group. Still further, huge loans and advances of Rs. 210 Crore had been given without any loans documents or other supporting agreements. Further, Riddhi Siddhi Group of Companies (RSGC) was created, which included 8 companies and was managed and controlled by Mahender Tak (A-155) and his family members; who are also accused in this case. Investigation revealed that the petitioner entered into conspiracy with the co-accused managing this group of companies. These companies were advanced amounts from CUIs of Adarsh Group through fraudulent transactions. The alleged loans so advanced were as a self-serving exercise and through this process loans to the tune of Rs. 152.62 Crores were advanced as principal, which alongwith interest; as on 31.03.2018; is outstanding at Rs.883 Crore in the accounts of CUIs of Adarsh Group. The said grant of loan lacked any due diligence. Petitioner Vivek Harivyasi, being a Key Managerial Person in CUIs of Adarsh Group and also Director in ....
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....n frauds committed upon the CUIs of the Adarsh Group to swindle the money of the Co-operative Society. Therefore if the entire material on record against the petitioner is taken into consideration, by any means; it cannot be said that petitioner is not guilty of the offences under the Companies Act. Still further since the petitioner is highly given to manipulations, for earning money by devising embezzling machinations, therefore by nature the petitioner is manipulative. Hence if the petitioner is released on bail, he is most likely to influence the witnesses of the case and also to destroy the evidence against him. The argument of the learned Counsel for the petitioner that the petitioner had been joining the investigation and was released on interim bail as well; and that during that duration he had not made any attempt to influence the witnesses or to destroy the evidence, is totally irrelevant. At that time the petitioner was not sure of the material and the evidence which the prosecution would be relying against him and was not sure that his all frauds on multiple counts would be detected during the investigation. Therefore he might not have resorted to that exercise. But now....
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....t be relied upon against him. For the same reason the confession of the co-accused cannot be relied against the petitioner. It has also been submitted by the Counsel for the petitioner that even the Supreme Court has granted bail in case of Sanjay Chandra V/s Central Bureau of investigation, (2012) 1 SCC 40 despite the fact that the offences in that case involved economic offences. The Supreme Court has granted bail even by observing in para No.46 of that judgment that it was conscious of the fact that the offences involved were the economic offences of huge magnitude, and if proved, may even jeopardize the economy of the country. Still the accused in that case were released on bail. The para relied upon by the petitioner reads as under:- "46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge-sheet is already filed before the Special Judge, CBI, New Delhi. Therefore, their presence in the....
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....iders further detention unnecessary, he may order the accused to be forwarded to a Magistrate having such jurisdiction: Provided that - [(a) the Magistrate may authorise the detention of the accused person, otherwise than in the custody of the police, beyond the period of fifteen days, if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorise the detention of the accused person in custody under this paragraph for a total period exceeding, (i) ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years; (ii) sixty days, where the investigation relates to any other offence, and, on the expiry of the said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail, and every person released on bail under this sub-section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that Chapter;] [(b) no Magistrate shall authorise detention of the accused in custody of the police under this Section unless th....
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....dy under the orders made by an Executive Magistrate under this sub-section, shall be taken into account in computing the period specified in paragraph (a) of the proviso to sub-section (2) : Provided that before the expiry of the period aforesaid, the Executive Magistrate shall transmit to the nearest Judicial Magistrate the records of the case together with a copy of the entries in the diary relating to the case which was transmitted to him by the officer-in-charge of the police station or the police officer making the [investigation], as the case may be.] (3) A Magistrate authorising under this section detention in the custody of the police shall record his reasons for so doing. (4) Any Magistrate other than the Chief Judicial Magistrate making such order shall forward a copy of his order, with his reasons for making it, to the Chief Judicial Magistrate. (5) If in any case triable by a Magistrate as a summons case, the investigation is not concluded within a period of six months from the date on which the accused was arrested, the Magistrate shall make an order stopping further investigation into the offence unless the officer making the investigation satisfies the Magist....
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....viso.] (2) Notwithstanding anything contained in sub-section (1), where a person has failed to comply with the conditions of the bail-bond as regards the time and place of attendance, the Court may refuse to release him on bail, when on a subsequent occasion in the same case he appears before the Court or is brought in custody and any such refusal shall be without prejudice to the powers of the Court to call upon any person bound by such bond to bond to pay the penalty thereof under section 446. 437. When bail may be taken in case of non bailable offence:- [(1) When any person accused of, or suspected of, the commission of any non-bailable offence, is arrested or detained without warrant by an officer in charge of a police station or appears or is brought before a Court other than the High Court or Court of Session, he may be released on bail, but - (i) such person shall not be so released if there appear reasonable grounds for believing that he has been guilty of an offence punishable with death or imprisonment for life; (ii) such person shall not be so released if such offence is a cognizable offence and he had been previously convicted of an offence ....
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....mission of which he is suspected, and (c) that such person shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case or to any police officer or tamper with the evidence, and may also impose, in the interests of justice, such other conditions as it considers necessary or otherwise in the interests of justice. (4) An officer or a Court releasing any person on bail under sub- section (1), or sub-section (2), shall record in writing his or its reasons or special reasons for so doing. (5) Any Court which has released a person on bail under sub- section (1), or sub-section (2), may, if it considers it necessary so to do, direct that such person be arrested and commit him to custody. (6) If, in any case triable by a Magistrate, the trial of a person accused of any non-bailable offence is not concluded within a period of sixty days from the first date fixed for taking evidence in the case, such person shall, if he is in custody during the whole of the said period, be released on bail to the satisfaction of the Magistrate, unless for reasons to be recorded in writing, the Magistrate otherwise directs. (7) If, at an....
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....o such an accused is sought to be cancelled, then the courts may apply the well settled criteria for this purpose, like assessing misuse of the concession of bail by the accused, or the order of granting bail itself being perverse. Still further, these courts may; otherwise also; order the accused being taken into custody, for any other appropriate reason. The addition of serious offences; after the accused was earlier granted bail; can be one such reason. This has been well clarified by the Hon'ble Supreme Court in 2019(3) RCR(Criminal) 538, Pradeep Ram Versus State of Jharkhand & Anr. as under:- 17. This Court in Hamida v. Rashid alias Rasheed and Others, (2008) 1 SCC 474 held that an accused after addition of serious non-cognizable offence is required to surrender and apply for bail for newly added offences. It is, thus, clear that the bail granted to an accused earlier to addition of new non-bailable offence shall not ensure to the benefit of the accused insofar as newly added offences are concerned and he is required to surrender and obtain a bail with regard to newly added offences to save him from arrest. 21. Both Sections 437(5) and 439(2) empowers the Court to arrest a....
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....ed has already been granted bail, the investigating authority on addition of an offence or offences may not proceed to arrest the accused, but for arresting the accused on such addition of offence or offences it need to obtain an order to arrest the accused from the Court which had granted the bail. Otherwise also; if any order of grant of bail can be set aside or withdrawn; due to the same being perverse or not being based on correct disclosures or facts; and such an accused can be ordered to be taken into custody, then there is no reason why an accused granted default bail under section 167(2) Cr.P.C.; cannot be taken into custody on filing of report by investigating agency under section 173 or equivalent provision. After all, the default bail under section 167(2) Cr.P.C. is granted only due to lack of proper facts with the court - because the investigating agency were not able to put the complete facts qua the alleged involvement of such accused before the court within specified time, whereas, filing the report under section 173 Cr.P.C. or equivalent provision; is nothing but putting before the court the entire facts showing the alleged involvement of the said accused in the a....
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....ment of the Central Government or a State Government, the Central Government may, by order, assign the investigation into the affairs of the said company to the Serious Fraud Investigation Office and its Director, may designate such number of inspectors, as he may consider necessary for the purpose of such investigation. (2) Where any case has been assigned by the central government to the serious fraud investigation office for investigation under this act, no other investigating agency of central government or any state government shall proceed with investigation in such case in respect of any offence under this act and in case any such investigation has already been initiated, it shall not be proceeded further with and the concerned agency shall transfer the relevant documents and records in respect of such offences under this act to serious fraud investigation office. (3) Where the investigation into the affairs of a company has been assigned by the Central Government to Serious Fraud Investigation Office, it shall conduct the investigation in the manner and follow the procedure provided in this Chapter; and submit its report to the Central Government within such period as....
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....e Director, Additional Director or Assistant Director of Serious Fraud Investigation Office shall, immediately after arrest of such person under sub-section (8), forward a copy of the order, along with the material in his possession, referred to in that sub-section, to the Serious Fraud Investigation Office in a sealed envelope, in such manner as may be prescribed and the Serious Fraud Investigation Office shall keep such order and material for such period as may be prescribed. (10) Every person arrested under sub-section (8) shall within twentyfour hours, be taken to a Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the Magistrate's court. (11) The Central Government if so directs, the Serious Fraud Investigation Office shall submit an interim report to the Central Government. (12) On completion of the investigation, the Serious Fraud Investigation Office shall submit the investigation report to the Central Government. (13) Notwithstanding anything contained in this Act or in any other law for the time b....
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....ch body corporate or a person- (a) to preserve and to produce to an inspector or any person authorised by him in this behalf all books and papers of, or relating to, the company or, as the case may be, relating to the other body corporate or the person, which are in their custody or power; and (b) otherwise to give to the inspector all assistance in connection with the investigation which they are reasonably able to give. (2) The inspector may require any body corporate, other than a body corporate referred to in sub-section (1), to furnish such information to, or produce such books and papers before him or any person authorised by him in this behalf as he may consider necessary, if the furnishing of such information or the production of such books and papers is relevant or necessary for the purposes of his investigation. (3) The inspector shall not keep in his custody any books and papers produced under sub-section (1) or sub-section (2) for more than one hundred and eighty days and return the same to the company, body corporate, firm or individual by whom or on whose behalf the books and papers were produced: Provided that the books and papers may be called for by the i....
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....ich is his duty under sub- section (1) or sub-section (2) to produce; (b) to furnish any information which is his duty under sub- section (2) to furnish; (c ) to appear before the inspector personally when required to do so under sub-section (4) or to answer any question which is put to him by the inspector in pursuance of that sub-section; or (d) to sign the notes of any examination referred to in sub- section (7), he shall be punishable with imprisonment for a term which may extend to six months and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, and also with a further fine which may extend to two thousand rupees for every day after the first during which the failure or refusal continues. (9) The officers of the Central Government, State Government, police or statutory authority shall provide assistance to the inspector for the purpose of inspection, inquiry or investigation, which the inspector may, with the prior approval of the Central Government, require. (10) The Central Government may enter into an agreement with the Government of a foreign State for reciprocal arrangements to assist in any inspection, inq....
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.... and the inspector shall submit the report to such court within thirty days or such extended time as the court may allow for further action: Provided that the evidence taken or collected under this subsection or authenticated copies thereof or the things so collected shall be forwarded by the court, to the Central Government for transmission, in such manner as the Central Government may deem fit, to the court or the authority in country or place outside India which had issued the letter of request. Section 219 Power of inspector to conduct investigation into affairs of related companies, etc. - If an inspector appointed under section 210 or section 212 or section 213 to investigate into the affairs of a company considers it necessary for the purposes of the investigation, to investigate also the affairs of- (a) any other body corporate which is, or has at any relevant time been the company's subsidiary company or holding company, or a subsidiary company of its holding company; (b) any other body corporate which is, or has at any relevant time been managed by any person as managing director or as manager, who is, or was, at the relevant time, the managing director or the man....
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.... in such custody as he thinks fit for a period not exceeding fifteen days in the whole where such Magistrate is a Judicial Magistrate and seven days in the whole where such Magistrate is an Executive Magistrate: Provided that where such Magistrate considers that the detention of such person upon or before the expiry of the period of detention is unnecessary, he shall order such person to be forwarded to the Special Court having jurisdiction; (c) the Special Court may exercise, in relation to the person forwarded to it under clause (b), the same power which a Magistrate having jurisdiction to try a case may exercise under section 167 of the Code of Criminal Procedure, 1973 (2 of 1974) in relation to an accused person who has been forwarded to him under that section; and (d) a Special Court may, upon perusal of the police report of the facts constituting an offence under this Act or upon a complaint in that behalf, take cognizance of that offence without the accused being committed to it for trial. (2) When trying an offence under this Act, a Special Court may also try an offence other than an offence under this Act with which the accused may, under the Code of Criminal Proce....
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....prisonment shall not be less than three years. Provided further that where the fraud involves an amount less than ten lack rupees or one per cent of the turnover the company, whichever is lower, and does not involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to five years or with fine which may extend to twenty lakh rupees or with both. Explanation:- For the purposes of this section- (i) "fraud" in relation to affairs of a company or anybody corporate, includes any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss; (ii) "wrongful gain" means the gain by unlawful means of property to which the person gaining is not legally entitled; (iii) "wrongful loss " means the loss by unlawful means of property to which the person losing is legally entitled;" A cursory perusal of the above-said provisions....
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....Government; and for the reasons mentioned therein, the Central Government can order investigation under Section 210 of the Companies Act. Still further, if during some proceedings some default or even fraudulent affairs in relation to the conduct of affairs of the company comes to the knowledge of the Company Tribunal then under Section 213, the Tribunal can require the investigation. However, all these investigations, ordered by the Government under Sections 208 or 210 or ordered by the Tribunal under Section 213, are to be conducted by ordinary Inspector of Companies. But 'serious frauds' in relation to affairs of companies have been carved out as separate and distinct category for their investigation and punishment. For investigating serous frauds a separate investigating agency, called 'Serious Fraud Investigation Office' has been provided under Section 211 of the Companies Act. The investigation in serious frauds is to be ordered by Central Government under Section 212 of the Companies Act and is to be carried out by SFIO. This investigation is not to be carried out by ordinary Inspectors of Companies, but is to be carried out by the Director, Additional Direct....
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.... Section 217(4) make a distinction between the ordinary Inspector of Companies, investigating as per the mandate of Sections 208, 210 and 213 on the one hand; and the Officer of SFIO investigating the serious fraud as per the mandate of Section 212 on the other hand. If a statement on Oath is to be recorded, of a person who is officer or employee etc., of the Company under investigation, then Ordinary Inspector and Officer of SFIO, both are authorised to record the same under provision of Section 217(4)(a), being a person already covered by Section 217(1). But if the statement of any other person, who is not the employee or Officer etc. of the Company under investigation, is to be recorded on Oath then under provisions of Section 217 (4) (b) the ordinary Inspector of Companies shall be required to obtain prior approval from the Central Government. However, if the Officer of the SFIO, investigating the case under approval granted under Section 212 is to record statement on Oath; of a person who is not connected with the management and control of the affairs of the Company under investigation as employee or officer etc., then as per the proviso to Section 217(4)(b) he shall require a....
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....ves to taken into custody for the purpose of proper and smooth conduct of trial. This court does not find any illegality or impropriety with the order passed by the court below, whereby the bail granted to the petitioner has been cancelled. Although ld. Counsel has argued that the petitioner was already arrested for the offence under section 447 of Companies Act, therefore nothing new has come on record, however it deserves to be mentioned that even if the charge has to be only under section 447 of the Companies Act, then also he shall now be required to be separately charged under this section; multiple times; for alleged frauds with or involving different CUIs of Adarsh Group and his own companies, giving details of different frauds separately; as per the claim of the prosecution. The multiple charges under section 447 of the Companies Act have resulted from several and distinct acts of frauds by involving several companies and their independent affairs; but in the same continuous process of swindling the money of the Cooperative Society (ACCSL). All these alleged offences have common origin, interlinked steps, interwoven processes and the same end-product in the form of frauds q....
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....on of the Supreme Courts in case of Nikesh Tarachand Shah (Supra) case and such language has already been declared to be ultra vires by the Supreme Court in that case. Not only this, even this court had an occasion of considering the nature and scope and the operational functionality of the language of these twin conditions, as contained in the Narcotic Drugs and Psychotropic Substances Act, in case of Ankush Kumar (supra). After threadbare analyzing the operational functionality of the language of the twin conditions, as used in the statute, this court had come to conclusion that the language of the twin conditions requires impossibility from the court, besides defying the human logic in its operational functionality. This language, if made operational in a case, even by adopting the semi-cooked concept of 'reading down' the language - and thereby ignoring the celebrated 'Doctrine of Severability' and the touchstone of Articles 14 & 21; both, qua test of constitutional validity, then also it turns on their head some well established principles of criminal jurisprudence as well as, goes in negation of the provisions of Cr.P.C. dealing with the further progress of the trial in a cri....
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.... in Section 437 of Cr.P.C to argue that a similar language is already used in the said provision of bail; and has also relied upon the judgment of the Supreme Court rendered in Kartar Singh V/s State of Punjab, 1994 (3) SCC 569, wherein referring to the language of section 437 Cr.P.C. the para materia language of twin conditions used in Terrorist and Disruptive Activities Act was upheld. However, although this court has no competence to comment upon this judgment of the Supreme Court, yet it has to be noted that the same judgment was cited even before the Supreme Court in Nikesh Tarachand Shah (Supra) case and the Hon'ble Supreme Court had not found it worth reliance to the extent of being sufficient for upholding the para-materia language of twin conditions used in the Prevention of Money Laundering Act. Beyond that; this court can only observe that any further relevance of this judgment can be assessed only by the Hon'ble Supreme Court in the case which is now stated to be pending before the Supreme Court itself and in which the constitutional validity of twin conditions as prescribed under section 212(6) is directly under challenge. However, so far as the language of section 437....
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..... This can be clear from another inconvenient question, which has not been shown by the learned Counsel for the SFIO to have been answered by any court so far, including the Hon'ble Supreme Court. The question is - for how long an accused can be kept in custody on the basis of non-fulfillment of the requirement prescribed under section 212(6). This question was specifically referred to Delhi High Court by way of reference by a judicial officer, in case of Court on its Own Motion (Supra) case. However, even there the question does not find any answer. Unless this question is categorically answered to say that till the conclusion of the trial such a person cannot be released on bail without satisfying the conditions mentioned in section 212(6), the twin condition cannot be held to be mandatory. This is so because if a person can be released on bail without satisfying the twin conditions of the section 212(6), say, after 3 years, then there is no reason why he cannot be released without complying the said twin condition today itself. But this court has come across the unfortunate situations where a court may not even find the moral courage or the legal sanctity to tell to the accused ....
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....nsidered the material on record of the case and had granted bail even without adverting to the factors considered relevant by the Supreme Court for economic offences. Additionally, the Supreme Court had also directed the Delhi High Court to consider the 'scope and effect' of the twin conditions prescribed under section 212(6) of the Companies Act. However, in the present case, as mentioned above, this court has already considered the 'scope and effect' of the operational functionality of the language para materia to the one contained in the twin conditions, as prescribed under section 212(6) of the Companies Act and has found in the case of Ankush Kumar (Supra) that the languages is in conflict with the right of the accused guaranteed under Article 14 and Article 21 of the Constitution and thus has to give way to the fundamental rights of the accused; qua his consideration for grant of bail. That judgment of this court was even challenged before the Hon'ble Supreme Court in case of SLP(Criminal) Diary No. 42609 of 2018, State of Punjab V/s Ankush Kumar @ Sonu. However, the Hon'ble Supreme Court had not found any reason to interfere with that judgment of this court; and SLP was, acc....
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....nsistently even by the Supreme Court. He has also submitted that the Supreme Court has granted bail to the accused in cases involving economic offices. Not only this, the Supreme Court has granted bail to such accused even by writing that it was conscious of the fact that the offences involved in those cases were economic offences and that offences would have an adverse effect upon the economy as such. The counsel has relied upon the judgment in case of Sanjay Chandra (Supra) and in case of D. K. Sethi (Supra). Therefore, it is submitted that applying the concept of economic offences selectively would tantamount to discrimination in application of law. Hence it is submitted by the Counsel for the petitioner and the distinction between 'economic offences' and the other offences; qua the consideration of bail to the accused; no more holds good. Saying otherwise would give an impression that the courts are adopting a different approach in case of rich and high-ups and a different approach qua ordinary mortals. However, for the purpose of this case this court finds the argument to be not relevant. This court finds that in a case relating to the same offences under the new Companies Act....
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....ails mentioned in the foregoing paras. The charge-sheet against the petitioner is for multiple counts under section 447 of the Companies Act, which is a serious offence, inviting punishment of imprisonment up to 10 years. Although the Counsel for the petitioner has submitted that the petitioner was already granted bail despite his alleged involvement in the offence under section 447 of the Companies Act, however, the fact remains that the petitioner has been charge-sheeted for offences under section 447 of the Companies Act, 2013 on multiple counts in the charge-sheet filed by the investigating agency. Although the counsel has also submitted that the transactions alleged against the petitioner and income arising there-from is reflected in the bank accounts and in the income tax returns of the companies, however, this is only an argument in futility. The very allegation against the petitioner is that the petitioner and his companies colluded with other co-accused in getting created these artificial entries to route and adjust the cash and the money given to them and by creating and showing the entries of in the records of the companies; through cobweb of companies, of the transacti....
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....aspect. Otherwise also, to repose confidence in and to provide due protection to the corporate world, unlike the free-hand powers of the police qua arrest, search and seizure, the powers of the investigating officers under the Companies Act are far more controlled and circumscribed by the conditions, restrictions and even the prohibitions under the relevant provisions of the Companies Act. Accordingly, under the Companies Act the investigating officer has also been conferred commensurate sanctity and his work has been conferred more authenticity as compared to that of the ordinary police officers. Therefore, under the provisions of the section 217(4) and section 217(5) Companies Act the investigating Officers has been given the power to record even the statements on oath and to summon person as the civil court does. The statement recorded by an authority having powers to record the statement on oath can never be put at par with the one recorded by an ordinary police officer. Such a statement recorded by the investigating officer under Companies Act, even if it is of 'admission' of certain fact; though could not be taken as sufficient for conviction on its own, however, the same wou....
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....; is the coercion of law and not of the individual investigating officer. Legal coercion to speak the truth; accompanied by the legal protection against unjust harassment; cannot be branded as unfair process. If at all the individual investigating officers is alleged to have exercised actual coercion; as of fact or the pressure; in some case, the accused would be at liberty to expose such aspect by getting an opportunity to cross-examine such an investigating officer and by leading other evidence to this effect. Hence this court finds no ground to discard the statement of the petitioner and his co-accused; even for the purpose of consideration of bail. Lastly, this court also does not find any substance in the argument of the counsel for the petitioner that since the petitioner had joined investigation and he was also granted default bail but he has never made any effort to run away from the process of the law, therefore there is no material with the prosecution that either the petitioner would influence the witnesses or he shall flee from country if he is released on bail. Although the learned Counsel has heavily relied upon the judgment of Supreme Court in case of P. Chidambram ....
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....y for the courts to create concepts which neither withstands test of logic nor are contemplated by the statutory law. Grant or not to grant bail is discretion of the court. This discretion is; better left to be guided by the material on record qua the crime and the attending possible conclusion which can be drawn therefrom; than to be pushed to frontiers unchartered for the investigating agency. Therefore in view of this court; the possibility of the petitioner influencing the witnesses, fleeing from the process of the law or destroying the evidence, if at all required to be considered at this stage, has to be seen with reference to the material forming part of chargesheet against him. In view of the above, this court finds substance in the argument of the learned Counsel for the SFIO that since, as per the charge-sheet the petitioner is given to manipulations, for earning money, therefore, it cannot be denied that by nature, the petitioner could be manipulative. Hence, this court has no reason to believe that if the petitioner is released on bail, he is not likely to influence the witnesses of the case and also not likely to destroy the evidence against him. The past conduct of t....