TaxTMI 
TaxTMI 
2019 (11) TMI 1736
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....hich he has been summoned 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, 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. ....
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....urugram on 18.5.2019. In this Complaint / report the 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 be....
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....Modi, his family members and associates, including the petitioner 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....
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....15 and was managing their real estate business sector. He created 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 Dir....
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....r already stands deposited with the court. Criteria for grant and cancellation 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 r....
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.... the initial stage when the investigating officer had the material against the 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 ....
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....court is to consider the case of the petitioner for bail, the same conditions 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 th....
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....and habitual entry provider for commissions, by way of showing fake circular transactions 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 Harivy....
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....nies of Peeyush Aggerwal and in the companies of Jainam Rathod, which show their collusion in 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 detec....
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...., any self-incriminating statement of the petitioner recorded by the investigating officer cannot 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 c....
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.... a term not exceeding fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers 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 Cha....
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....on of the accused person has been made by a Magistrate competent to make such order, and where an order for such further detention is made, the period during which the accused person was detained in custody 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 conc....
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....tion (3) of section 116 [or section 446A [Explanation. - Where a person is unable to give bail within a week of the date of his arrest, it shall be a sufficient ground for the officer or the Court to presume that he is an indigent person for the purposes of this proviso.] (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....
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.... attempt to commit, any such offence, is released on bail under sub-section (1) the Court shall impose the condition:- (a) that such person shall attend in accordance with the conditions of the bond executed under this chapter, (b) that such person shall not commit an offence similar to the offence of which he is accused or suspected, of the commission 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, t....
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....on that it is 'necessary' to do so. But in case of High Court and the Sessions Court passing such an order, even that requirement; of the taking such accused again in custody being 'necessary'; has been done away with by the statute. In that case; the High Court and the Session Court would be required to exercise their discretion according to; but not limited to; the general judicial principles for exercise of discretion. If bail granted to 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 off....
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....437(5) or 439(2) of Cr.P.C., 1973 can direct for taking into custody the accused who has already been granted bail after cancellation of his bail. The Court in exercise of power under Section 437(5) as well as Section 439(2) can direct the person who has already been granted bail to be arrested and commit him to custody on addition of graver and non-cognizable offences which may not be necessary always with order of cancelling of earlier bail. (iv) In a case where an accused 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 ....
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.... Investigation into affairs of Company by Serious Fraud Investigation Office.-(1) Without prejudice to the provisions of Section 210, where the Central Government is of the opinion, that it is necessary to investigate into the affairs of a company by the Serious Fraud Investigation Office:- (a) on receipt of a report of the Registrar or inspector under section 208; (b) on intimation of a special resolution passed by a company that its affairs are required to be investigated; (c) in the public interest; or (d) on request from any Department 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 a....
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....6) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. (8) If the Director, Additional Director or Assistant Director of Serious Fraud Investigation Office authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of any offence punishable under sections referred to in sub-section (6), he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest. (9) The 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 ar....
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....ency, State Government, police authority or income tax authorities, which may be relevant or useful for such investigating agency, State Government, police authority or income-tax authorities in respect of any offence or matter being investigated or examined by it under any other law. 217. Procedure, powers etc., of inspectors.- (1) It shall be the duty of all officers and other employees and agents including the former officers, employees and agents of a company which is under investigation in accordance with the provisions contained in this Chapter, and where the affairs of any other body corporate or a person are investigated under section 219, of all officers and other employees and agents including former officers, employees and agents of such 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 ....
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....able with imprisonment which may extend to one year and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees. (ii) If a director or an officer of the company has been convicted of an offence under this section, the director or the officer shall, on and from the date on which he is so convicted, be deemed to have vacated his office as such and on such vacation of office, shall be disqualified from holding an office in any company. (7) The notes of any examination under sub-section (4) shall be taken down in writing and shall be read over to, or by, and signed by, the person examined, and may thereafter be used in evidence against him. (8) If any person fails without reasonable cause or refuses- (a) to produce to an inspector or any person authorised by him in this behalf any book or paper which 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....
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.... this behalf: Provided further that every statement recorded or document or thing received under this sub-section shall be deemed to be the evidence collected during the course of investigation. (12) Upon receipt of a letter of request from a court or an authority in a country or place outside India, competent to issue such letter in that country or place for the examination of any person or production of any document or thing in relation to affairs of a company under investigation in that country or place, the Central Government may, if it thinks fit, forward such letter of request to the court concerned, which shall thereupon summon the person before it and record his statement or cause any document or thing to be produced, or send the letter to any inspector for investigation, who shall thereupon investigate into the affairs of company in the same manner as the affairs of a company are investigated under this Act 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 ....
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....in any document concerning the company or body corporate; or (c) provides an explanation which is false or which he knows to be false, he shall be punishable for fraud in the manner as provided in section 447. SECTION 436. OFFENCES TRIABLE BY SPECIAL COURTS:- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974): (a) all offences specified under sub-section (1) of section 435 shall be triable only by the Special Court established for the area in which the registered office of the company in relation to which the offence is committed or where there are more Special Courts than one for such area, by such one of them as may be specified in this behalf by the High Court concerned; (b) where a person accused of, or suspected of the commission of, an offence under this Act is forwarded to a Magistrate under sub-section (2) or sub-section (2A) of section 167 of the Code of Criminal Procedure, 1973 (2 of 1974), such Magistrate may authorise the detention of such person 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....
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....sions, the Special Court shall be deemed to be a Court of Session and the person conducting a prosecution before a Special Court shall be deemed to be a Public Prosecutor. Section 446-A: The Court or the Special Court while deciding the amount of fine or imprisonment under this Act, shall have due regard to the following factors, namely:- (a) Size of the company; (b) nature of business carried on by the company; (c) injury to public interest ; (d) nature of the default ; and (e) repetition of the default. Section 447: Punishment for fraud:- Without prejudice to any liability including repayment of any debt under this Act or any other law for the time being in force, any person who is found to be guilty of fraud, shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud: Provided that where the fraud in question involves public interest, the term of imprisonment shall not be less than thre....
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....the accused. There are provisions which would affect consideration of bail to the accused by the Special Court. It would also be appropriate to point out at this stage that there are lot many other provisions in the Companies Act which make various Acts, omissions, non-filing, non-disclosure, not keeping proper records and other defaults and defects qua affairs of a Company as punishable, although with smaller quantum of punishments of imprisonment and/or fine. These provisions are strewn with throughout the body of the Act. To inspect the records of Companies and to investigate these minor offences, the Central Government is to appoint 'Inspectors' of Companies, who shall work as the ordinary Inspectors to investigate the said firms. The investigation, under the Companies Act can be initiated in three different manners and for different reasons, which might come to the knowledge of the Central Government. If during routine inspection something criminal comes to the knowledge of Inspectors, on that the investigation can be started under Section 208 of the Companies Act. If certain other misconduct or fraud in the affairs of a Company comes to the knowledge of the Central....
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....d company; a separate approval from the Central Government is required and the same is to be granted by the Government, as required under Section 219 of the Companies Act. Again, whether it is the investigation originally initiated under Section 208, 210, 212 or 213 or approved additionally under Section 219, all have to be conducted under the procedure given under Section 217 of Companies Act; additionally controlled by restrictive provisions of Section 212 for officers of SFIO. Under Section 217, when an investigation Officer feels the need to join any person or other body corporate in investigation qua the affairs of the company which he is already authorised to investigate, then under Section 217(2) he can seek record from such any other person or body corporate, as he considers relevant for the purpose of his investigation. Under Section 217(4) he can also record the statement on Oath, of the Officers and employees etc of the Company under investigation. Additionally he can also record statement on Oath of any other person or body corporate, which is not directly connected with, or controlled by the Company under investigation. At this stage of investigation, the provisions....
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.... of the company under investigation as well. Appreciating the above-said legal perspective, this court finds substance in the argument of ld. Counsel for the SFIO that in the present case, the petitioner was granted default bail by the court at the initial stage, when investigation could not be completed in prescribed time and therefore; not much material was placed before the court. When charge-sheet has finally been filed against the petitioner he has been found to be involved in the acts of frauds on multiple counts and qua multiple companies; which were not even in the knowledge of the investigating officer at the time when he had arrested the petitioner in the first instance or when he was granted default bail by the trial court. Altogether new offences on multiple counts are now alleged against the petitioner and the allegations against him are now supported by the, alleged, plethora of evidence. Therefore, on appreciation of this entire material qua involvement in newly alleged and multiple offences of serious nature the trial court has been of the prima facie view that the petitioner has committed serious offences and hence not entitled to bail on merits; and therefore; ....
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....y substance in the argument of the learned Counsel for the SFIO that the twin conditions prescribed under section 212(6) of the New Companies Act, 2013 start with negation of bail to the accused and the court could grant bail to such an accused only if the court records a satisfaction qua the accused being 'not guilty' of the alleged offence and also a satisfaction that if released on bail the accused is not likely to commit any similar offence again. Also this court does not find substance in the insistence of the learned counsel for the SFIO that the application of the twin conditions, as prescribed under Section 212 (6), are mandatory and have to be applied to all the considerations of grant of bail to the accused facing charge covered by section 447 of the New Companies Act, 2013. No doubt the statutory language of section 212 (6) has prescribed the twin conditions to be considered by the court, in case the prosecutor raises his objection to the grant of bail, however a similar language existing in the Prevention of Money Laundering Act, which was para materia to the language of the twin conditions contained in section 212(6) of the new Companies Act, had earlier come-up for co....
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....he language of the twin conditions might be considered by some other court in some other appropriate proceedings, the state could not be permitted to take the twin conditions as an objection to the grant of the bail to the accused. This court does not find any reason to take a different view now. This 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, accordingly, dismissed by the Supreme Court. It would not be appropriate to reproduce only some part of that judgment of this court in a mutilated form, lest the essence of the matter should be lost in the process. Rather to truly appreciate the matter of the operational functionality of the twin conditions; the said judgment has to be read as an organic whole. Since the said judgment is reported one, thus, the reasoning given in that judgment can be taken as a supplement to the decision of the present case as well. Although the learned Counsel for the SFIO has, additionally, referred to the la....
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....guilty' of the offence. Both these provisions are perfectly in tandem with the other provisions of Cr.P.C. relating to the stages and progress of trial, like framing of charge, discharge and acquittal of an accused as per the progress of trial and availability of evidence on record. On the other hand, section 212(6) of the Companies Act requires from the court; at the start of the trial itself; what section 437(7) requires from the court at the end of the trial. Even if, by hook or crook, the court manages to record, while granting bail to an accused, as is required under section 212(6), that the accused 'is not guilty', then it negates the entire process of further trial of that accused. It goes against framing of the charge by the same court and it may require even discharge of such an accused; because by recording a satisfaction that a person 'is not guilty' the court surpasses the level of satisfaction required for framing charge itself; and goes near to recording the satisfaction required for his discharge. Similarly, holding the twin conditions to be mandatorily followed in all situations for release of an accused on bail; can lead the court to hit against the wall in a gi....
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....ck to the conditions; like the ones prescribed under section 212(6); to deny even the bail to such an accused? Even if the courts are to stick to such condition; then how much injustice to the accused would be sufficient to off-set or to balance with the rigor of the twin condition? This court finds the answer to these inconvenient questions to be in negative and, therefore, constrained to observe that in humble view of this court; the twin conditions mentioned in section 212(6) are not mandatory in their compliance. Although learned Counsel for the SFIO has submitted that in the case of Nitin Johari (Supra) the Hon'ble court has remanded the matter to the Delhi High Court for reconsideration on bail by considering the scope and effect of the twin conditions, as laid down in the section 212(6) of the Companies Act, however, this court finds that; in that case, the Hon'ble Supreme Court has also observed that even if conditions prescribed under section 212(6) are not to be followed, still the criteria meant for bail in cases of economic offences was required to be considered by the High Court of Delhi. Hence, the primary reason for remand in that case was that the High Court of D....
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....of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posting serious threat to the financial health of the country." 35. While granting 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 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/state and other similar considerations." Therefore this court is under obligation to consider the nature of offence and the material placed on record before the special court, by way of charge-sheet against the petitioner, for consideration of question of granting bail to petitioner. To discredit the concept of economic offences being a class apart; learned Counsel for the petitioner has submitted that concept of economic offences constituting a class ap....
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....ale and machinations of the offence and the fraud, size of the Company, Nature of the Business of the Company and the Injury to the Public Interest; to be the guiding factor to grade the quantum of the punishment to be awarded accused by the Court. Hence there is no doubt that the offences under the Companies Act constitute a class apart and these offences are prescribed by the Companies Act itself as to be treated as the serious economic offences. So far as the seriousness of the offences and the material against the petitioner is concerned, this court finds weight in the arguments of the learned Assistant Solicitor General representing SFIO that there are serious allegations against the petitioner and there is enough material inculpating the petitioner in the offence. As per the allegations the petitioner and his companies have been instrumental in swindling of huge amounts out of total swindled amount of Rs.1700 Crores (Rs 4140 Crores including interest); which was, allegedly, swindled by the Adarsh Group of Companies through their subsidiaries and co-conspirators. The petitioner is alleged to be the pivotal person to commit the frauds upon the Cooperative Society and the CUI....
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.... the learned Counsel for the petitioner has submitted that the since the statement of the petitioner was recorded by the investigating officer who has powers akin to the police powers, therefore, the alleged admission by the petitioner has to be treated as a confession, which is not admissible under section 25 of the Evidence Act, however, this court does not find any substance in this argument. The Companies Act 2013 is a special statute. As per the provision contained in section 212(3) the investigation of the offences by the authorities under this Act has to be carried out only as per the provisions of this Act. Still further, under sections 435, 436 and section 439 the trial of an offender under this Act is to be conducted by the Special Court in accordance with Cr.P.C. and the procedure as modified under this Act. Section 217(7) specifically provides that the statement made by a person before the investigating officer shall be admissible against such person and can be used against him. The Companies Act is a special statute; therefore any provision specifically enacted under this Act shall have overriding effect over any other provision in any other general law, like Cr.P.C. a....
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....however, it deserves to be noted that the trial of an accused is only a mean to achieve the end i.e. to do substantial justice. The end-product of the criminal trial can very well be the total deprivation of the liberty of the accused. Therefore, some element of coercion is bound to creep-in in all the procedures of criminal trial. Although, even the means also have to be such which are not in conflict with the fundamental rights of the accused, however, all kinds of coercion and all the degrees of the same cannot be pleaded to be in conflict with the fundamental rights of the accused. Under the provisions of the section 212 and section 217 of the Companies Act a person, when joined into investigation, is bound to state only the truth. There are punishments and the penalties provided for making incorrect statements or for furnishing wrong information or false records. At the same time, although the investigating officer is bound by several conditions and restriction prescribed under the Companies Act; but at the same time, he has also been conferred the power to record the statement on oath and certain powers of Civil Court for enforcing attendance and seeking documents etc. So wha....
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....ocess to be a compartmentalized aspect and in distinct water-tight segments, instead of being a rational and interdependent continual process, can deny this logical conclusion. Conspiracies and the designed intentions; being those aspects of human psychology which are concealed deep within the grey matter; normally do not have easy external direct material to manifest. Even the Social or the political status of a person; or his economic clout; are no more easy indicators of moral moorings of a person; when it comes to crime, particularly the economic crime. After all, no investigating officer could have any material or anticipation that a Member of Parliament would flee from the country after committing alleged huge economic crime and the country would be forced to contest his extradition proceeding in a foreign land for years together; just to bring him to the justice, or that the business tycoons owning hundreds of companies and business of hundreds of billions of rupees would flee from the country after committing the alleged crime and would even start denying their Indian Citizenship. Although one can say that a few individuals cannot be made example to deny bail in deserving c....