AI Drafter 
TaxTMI 
TaxTMI 
2023 (5) TMI 103
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....e respondent/accused on bail taking into account salient factors namely the beneficial proviso contained under Section 212 (6) Companies Act, 2013; the role attributed to the respondent/accused in the said fraud; as three major functionaries of the company have been granted interim protection by the Hon'ble Apex Court in another ED matter pertaining to same/ similar allegations which is still subsisting. Ld. Spl. Judge thus while opining that since the offence is by and large documented and there is no likelihood that the respondent/accused would flee from justice or evade trial, held that no purpose would be served in keeping the respondent/accused in JC and enlarged her on bail. 3. It has been submitted that it is settled law that economic offences constitute a class apart and are far more serious to the society as compared to individual criminal offences and they tend to seriously prejudice/destroy the economy of the country, thereby causing immense irreversible damage to the larger public interest. It has been submitted that the Ld. Spl. Judge while granting bail has diluted the mandatory twin conditions as stipulated u/s 212(6) of the Companies Act, 2013, which is contrary ....
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....ctors was constituted for conducting the investigation. Thereafter, MCA, vide order No. 5/5/2016/CL-II dated 08.01.2018 granted approval u/s 219 (b) & (c) of the Companies Act, 2013 to investigate into 20 group companies associated with BPSL. 8. The respondent/accused joined the investigation in 2016 pursuant to the above-mentioned order of MCAdated 03.05.2016. 9. Briefly stated the case of the petitioner SFIO is that BPSL (a company manufacturing flat, round and long steel products), following a split in the family business, was managed and controlled by one Sh. Sanjay Singhal who was also the Chairman & MD of BPSL. Investigation into the affairs of BPSL & Ors. (total 31 Companies) revealed that the corporate structure of BPSL was repeatedly abused for various fraudulent purposes. The books of accounts of BPSL were manipulated and various paper/shell companies were used for routing of funds in a deceptive manner. It has been alleged that using a complex web of transactions the affairs of the companies were conducted so as to perpetuate fraud of massive proportions. Investigation till date has revealed a fraud amounting to Rs. 5,431 crores approx. 10. Respondent/ accused h....
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.... to SFIO custody till 24.03.2022. Thereafter, vide order dated 24.03.2022, the respondent/accused and 1 other individual was remanded to SFIO custody till 28.03.2022, whereas others were remanded to judicial custody. A bail application was moved by the respondent/accused, whereby, vide order dated 28.03.2022 the Ld. Special Court allowed the bail application of the respondent/accused. 15. It has been stated that the SFIO investigation report was submitted to MCA and pursuant to the directions of MCA, Ct. No. 374/2022 was filed before the Ld. Special Court ASJ-03 District South-west Dwarka Delhi, wherein the Petitioner was arrayed as accused No. 37. It has been submitted that Cognizance has been taken by the Ld. Court vide its order dated 20.09.2022 and the respondent/accused has been summoned for offences u/s36 (c), 447 of the Companies Act, 2013 and sections 417, 420 and 120B IPC. 16. It has been submitted that the husband of the petitioner Sh. Sanjay Singhal along with 2 other persons namely Hardev Chand and RP Goel have preferred WP No. 36/2020 challenging constitutional validity of certain provisions of Companies Act, 2013, whereby, vide order dated 17.02.2020, the Hon'bl....
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....n the form of bogus capital advances and routing the same as equity or unsecured loans in related entities of BPSL i. BPSL funds were diverted to paper companies as 'Capital advances' which, through a web of other companies, infused back into the associated companies from the F.Y 2009-2010 to 2017-18. Funds were infused as share capital, diverted for purchase of shares or purchase of assets in the name of the Respondent, her husband and the partnership firm of which her daughters are partners. As per balance sheet of BPSL for the F.Y 2016-17, a provision of Rs. 2606 crore of capital advances and raw material was made. ii. Respondent was the authorized signatory in all the bank accounts of BPSL through which funds were siphoned. It was under her instructions/signatures that the funds were transferred to paper companies managed and controlled by various entry-operators. C. Bogus advances to suppliers i. BPSL funds were also diverted under the garb of 'advances to suppliers' to bogus paper entities managed and controlled by different entry-operators. As per balance sheet of BPSL for the F.Y 2016-17, a provision of Rs.471 crores were made f....
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....ncome of 7.05 Crore was projected as rental income from BPSL and associated companies by leasing out the same property. 21. Petitioner SFIO thus seeks to set aside the impugned order dated 28.03.2022 predominantly on the grounds that the Ld. Special Court has failed to consider the gravity of offence, committed by the petitioner and the material on record and also the applicable law in the correct perspective; a) The active role of Petitioner and the fact that she was not merely a dutiful and obedient wife working on behest of her husband as she was present in the board meetings and was authorized signatory of BPSL is also not duly considered by the Ld. Special Court while passing the impugned order and granting her bail; b) The Ld. Special Court has failed to consider the mandatory twin conditions of bail as provided in section 212(6) of the Companies Act, 2013 which ought not have been cast aside completely; c) The Ld. Special Court erroneously relied upon the fact of not impleading the respondent as an accused by other agencies such as Enforcement Directorate etc. The Ld. Special court failed to consider that the ambit and scope of the investigation....
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....eme Court held that a person approaching a Court has to reveal all material facts and failure to disclose the same amounts to polluting the stream of justice and playing fraud upon the court. 25. Ld. Senior Counsel submits that very cogent and overwhelming circumstances are required for an order directing the cancellation of the bail already granted. Petitioner, SFIO has failed to bring out any reasons warranting cancellation of bail of the respondent, hence the present petition is not maintainable. Reliance has been placed upon the following judgments: Dolat Ram and Others Vs. State of Haryana, 1995 SCC (Cri) 237; Subhendu Mishra Vs. Subrat 'Kumar Mishraand another, 2000 SCC (Cri) 1508(3 Member Bench); Enforcement Directorate Vs Ratul Puri, CRL.M.C. 6466/2019; Sandeep Singh Vs Simran Sodhi and Ors., CRL.M.C. 1769/2020 dated 18.05.2022; CBI, Hyderabad Vs. Subramani Gopalkrishnan & Anr, 2011 (5) SCC 296; Rajan Mahajan And Anr. vs State And Anr.,2002 [1] JCC 557; Directorate of Revenue Intelligence Vs Harsh Vasant & Anr,2010 [1] JCC 109. 26. It is settled law that the conduct of the accused is material while deciding whether bail granted needs to be cancelled. It has been s....
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.... the possession of various agencies. SFIO has already conducted custodial interrogation/investigation of the Accused extensively for 6 days and further custodial interrogation is not required. g) Certain accused including the husband of the Accused has been granted 'No Coercive Steps' by the Hon'ble Supreme Court. h) Respondent being a woman, is entitled to the beneficial proviso under Section 212 (6) of Companies Act. It has been submitted that the first proviso of S.212 (6) is akin to the first proviso of S. 437 Cr.P.C. (S.497 of the old Code)in terms of the enabling provision for women. Reliance has been placed on Mt. Choksi vs The State 1957 Cri.L.J. 102, wherein the Hon'ble High Court of Rajasthan granted bail to the accused in the said case who was a woman alleged to have committed offences under section 302/34 IPC, thereby upholding the constitutional validity of the benefit provided to certain categories of persons mentioned in Section 497 Cr.P.C (old code which is pari-materia to the proviso u/s 437 of the new code) and held that it is open for the Courts under Section 497 (Old code) to grant bail to a woman even in cases where she is accused of an of....
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....assed the Ld. Spl. Judge, (Companies Act), Dwarka Courts, granting bail to the respondent accused, it reveals that the bail was granted to the respondent accused in terms of the beneficial proviso contained under section 212 (6) of the Companies Act. Ld. Spl. Judge inter alia held that there is no independent offence pertaining to her except that she and her husband were authorised signatories, had signed cheques or issued instructions to the banks for issuance of DDs and payment of freight was also paid by her and her husband from their joint bank accounts. Ld. Spl. Judge opined that the respondent accused being a dutiful wife was in all probability acting at the behest of her husband. 36. Ld. Spl. Judge with respect to the allegations levelled at the respondent accused pertaining to the properties in Bombay, whereby she has been alleged with her husband for conspiracy to acquire the same by siphoning of funds from the company, it was observed that the respondent accused has not been named in the complaint before the Adjudicating Authority, only her husband and 2 other companies namely M/s Assurity Real Estate LLP and M/s Millenium Developers Pvt. Ltd. were named as accused. ....
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....any offence under those sections shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence referred to this subsection except upon a complaint in writing made by- (i) the Director, Serious Fraud Investigation Office; or (ii) any officer of the Central Government authorised, by a general or special order in writing in this behalf by that Government." 40. A perusal of the aforesaid provision makes it clear that no person, accused of an offence under section 447 of Companies Act, which is a cognizable offence, shall be released on bail or on his own bond unless the twin co....
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....ccused on bail in terms of the proviso under 212 (6) of Companies Act. 43. Furthermore, the Hon'ble Supreme Court in Satender Kumar Antil v. CBI, (2022) 10 SCC 51, regarding certain categories of persons as mentioned in the proviso to section 437 Cr.P.C observed as under: "69. Proviso to Section 437 of the Code mandates that when the accused is under the age of sixteen years, sick or infirm or being a woman, is something which is required to be taken note of. Obviously, the court has to satisfy itself that the accused person is sick or infirm. In a case pertaining to women, the court is expected to show some sensitivity. We have already taken note of the fact that many women who commit cognizable offences are poor and illiterate. ***** 78. .....While dealing with a welfare legislation, a purposive interpretation giving the benefit to the needy person being the intendment is the role required to be played by the court. We do not wish to state that this proviso has to be considered favourably in all cases as the application depends upon the facts and circumstances contained therein. What is required is the consideration per se by the court of this provis....
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....tegra. While all of them directly affect the personal liberty of a person which is a fundamental right guaranteed under Article 21 of the Constitution of India. However, Courts have to adopt different parameters and mechanisms while adjudicating the three. For instance, while rejecting a bail plea, the Courts need not delve into the nitty gritty and details of the case and the same may be adjudicated simpliciter basis the nature and gravity of offence. However, while cancelling a bail already granted to an accused pending Trial, the Courts should be slow and circumspect and should take away the liberty already granted only in the wake of grave and supervening circumstances which warrants such cancellation of bail. The onus to prove is on the party seeking such cancellation. The liberty cannot be withdrawn mechanically without taking into account whether the accused has misused his liberty or whether any supervening circumstances have rendered it no longer conducive for the accused to enjoy his liberty. 49. It has been held in a catena of judgements that while cancellation of bail under section 439 (2) Cr.P.C. the Courts must see whether the order granting bail was vitiated by an....
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....upak Rana 2016 (226)DLT 605, it has been held that the bail once granted cannot be cancelled mechanically in absence of supervening circumstances which will render the trial not conducive. It cannot be cancelled on a mere request from the other side unless it is established that the liberty granted is being misused. 53. In Charu Soneja v. State (NCT of Delhi), 2022 SCC OnLine Del 5, this Court held that, courts while deliberating revocation of an undertrial's bail, must proceed with due care and circumspection as personal liberty of an individual is a core constitutional right that should be taken away only under the most compelling and serious circumstances. Courts should be cautious while cancelling bail already granted, as the same entails review and possible cancelling of a reasoned order based on material evidence on record. It is settled law that Courts should only interfere and revoke the liberty so granted if new facts and supervening circumstances reveal that the accused has been abusing his freedom, tampering with evidence, or influencing witnesses. The onus is on the party seeking such cancellation to present compelling evidence depicting that the accused poses a ....
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....that the respondent has been found tampering with evidence. Moreover, admittedly the SFIO in the present case has already filed the detailed complaint on 19.05.2022, thus it is safe to say that the evidence which was to be collected already stands collected by the various departments. Cognizance has been taken on 20.09.2022 and the accused along with 92 others have been summoned. It has been stated that the respondent was summoned to appear on 17.01.2023, which was duly complied with and the next date fixed is 09.05.2023.Thus, petitioner SFIO has failed to point out any cogent reason behind seeking remand of the respondent to JC. Petitioner SFIO has merely in a vague and cursory manner stated that the respondent is a flight risk, or may tamper with the evidence, but in absence of any cogent, compelling reason this court cannot interfere with the said order and cancel the bail so granted. Moreover, the respondent has appeared on several dates before the SFIO and has adhered to all the conditions imposed vide the impugned order granting bail. Thus the mere allegation of the petitioner that the respondent has joined the investigation but is being evasive does not hold force. 56. Be....