TaxTMI 
TaxTMI 
2023 (6) TMI 73
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....56, pending before the Court of the learned Additional Sessions Judge-03/Special Judge (Companies Act), Dwarka Courts, New Delhi. Background 2. The Ministry of Corporate Affairs, Government of India ('MCA'), in exercise of its powers conferred under Section 212(1)(c) of the Companies Act, assigned the investigation into the affairs of Bhushan Power and Steel Ltd. ('BPSL'), its ten group companies and Bhushan Steel Limited ('BSL') with its two group companies to Serious Fraud Investigation Office ('SFIO'), vide order F. No. 5/5/2016/CL-II dated 03.05.2016. 3. The Director, SFIO, appointed officers of the SFIO as inspectors to investigate the aforementioned companies. Thereafter, MCA vide order No. 5/5/2016/CL-II dated 08.01.2018 granted approval under Section 219(b) & 219(c) of the Companies Act to investigate twenty group companies associated with BPSL. 4. The applicant herein, a Chartered Accountant, was associated with BPSL since the year 2000 till May 2019, handling financial matters of the company. 5. As per the allegations leveled by the SFIO, during investigation, it was revealed that in furtherance of a fraudulent modus operandi, finished goods lying in the pl....
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....vent the BPSL bank accounts from being classified as NPAs. The SFIO, in its report, alleges fraudulent availing of credit facilities from banks also through the instrument of Inland Letter of Credits ('LCs') issued on the basis of false documents from banks and then fraudulently discounting the said LCs, converting them into wrongful gains. 9. After placing sufficient material on record against the accused, for prosecution under Sections 447/36(c) read with Sections 447/129/448 of the Companies Act, Sections 211 and 628 of the Companies Act, 1956 and Sections 120B/417/420 of the IPC. The SFIO arrested the applicant on 21.03.2022 and produced him before the learned Special Court, Dwarka that granted 2 days judicial remand. Thereafter, the SFIO filed an application seeking 14 days Judicial Custody that was granted by the learned Special Court vide Order dated 24.03.2022. The applicant is in judicial custody since then. 10. The SFIO, in the complaint case, on the basis of the findings of the investigation report, has leveled the following charges of fraud, citing instances that associate the applicant herein to the alleged fraud with respect to public money to the tune of Rs. 5,....
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.... 154. Arun Agrawal, CFO had signed the balance sheet for F.Y 20L6-17 knowing that the financials are not reflecting a true and fair picture of BPSL and wherein provision of Rs.471.78 crores was made and E & Y in its Forensic Report of BPSL has red flagged advances to certain parties wherein there was no supporting documents except the payment vouchers and the names of 20 parties out of top 26 advances to suppliers were in the said list prepared by E&Y report. On investigation, it was revealed that advances to suppliers were not genuine. He, along with Amarjeet Sharma was coordinating on behalf of BPSL in conduct of Forensic Audit and supplying response/documents on behalf of BPSL to Forensic Auditor. 155. He submitted response of BPSL vide its letter dated 2l.06.2017 the SBI in response to clarifications sought on the issues related to Forensic Auditor, wherein he had stated that the advances made to parties mentioned at Sr. No.5,8,13,14,15,17,20,22,23,24,30 & 36 of the letter were given in the normal course of business for supply of goods and services, however on investigation it is found that these parties are not genuine and the funds transferred to these parties we....
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....s submitted hereinabove, in order to achieve the said objective' the funds of BPSL were diverted in form of capital advances, advances to suppliers and also the cash generated through the sale of theft material from BPSL Plant to various paper entities managed and controlled by aforesaid entry-operators and after placing and layering through web of entities, the funds were infused in the Companies including four front companies namely Diyajyoti, Jasmine, Marsh and Vision and ultimately infused in BPSL as share capital. Investigation revealed that through four front companies a total capital of Rs. 3689.89 crores (equity - Rs. 2681.31 crores and preference shares - Rs. 1008.58 crores)had been infused in BPSL. Through this modusoperandi BPSL used to maintain a healthy debt-equity ratio and thereby dishonestly induced the banks to sanction as well as disburse the loans to it. 270. Thus, Sanjay Singal, Amarjeet Sharma, Alkesh Sharma, R.K. Gupta, R.P. Goyal, H. C. Verma, Arun Kumar Agrawal' R.K. Mehra (Deceased), Abhaychand Bardia, Abhishek Chokhani, Anand Kumar Sharma, Anil Kumar Khemk &, B. D. Agarwal, Praveen Kumar Jain alias Pintoo, Sagarmal Nahata, Sirish Chanderkant shah,....
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....r front companies namely Diyajyoti, Jasmine, Marsh and vision and ultimately infused in BPSL as share capital. Through four front companies a total capital of Rs' 17.60 crores had been infused in BPSL during FY 2014-15 to 2016-17 as preference shares. 272. Thus, Sanjay Singal, Aarti Singal, H'C' Verma, R'P' Goyal' R.K. Gupta, Alkesh Sharma, Amarjeet Sharma, Arun Kumar Agrawal Himanshu Verma, Devesh Upadhyaya, Krishan Kumar Khadaria, Vikash Chowdhary, Diyajyoti Steel Ltd., Jasmine Steel Trading Ltd., Marsh Steel Trading Ltd and Vision Steel Limited used false documents in order to induce banks for availing loans from the banks during the period covering F.Y. 2014-15 to 2016-17 and thereby, they are liable for fraudulent inducement of banks as laid down in Section 36(c) of companies Act 2013 and punished u/s 36 (c) r/w 447 of the Companies Act, 2013." 10.5. Charge 7: Liability for making false representations in the financials for the Financial Year 2017-18, under Sections 129 and 448 read with 447 of the Companies Act. The relevant allegations read as under: "Arun Kumar Agarwal 286. Investigation revealed that Sanjay Singal (erstwhile CMD), R. P. Goyal ....
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.... their duties as required under the Companies Act. 290. Therefore, the accused persons have falsified the books and accounts and financials of BPSL for F.Y. 2009-10 to F.Y. 2016-17 and hence, knowingly created the false documents i.e. books of accounts and financials which did not reflect true and fair view about the affairs of BPSL and are hence, liable to be prosecuted u/s. 129(7), 448 r/w 447 of the Companies Act, 2013 and u/s. 211 and 629 of the Companies Act, 1956 for the corresponding relevant financial years as follows: i) Sanjay Singal (Managing Director)' R'P' Goyal (Director) Amarjeet Sharma (Director), Arun Kumar Agrawal (CFO) only for F.Y. 2012-13, R.K. Gupta' Company Secretary and R'K' Mehra (Deceased) Statutory Auditor, Parbrer Mehra Goel & Co. u/s. 211 r/w 628 of Companies Act, 1956 for F.Y. 2009-10 to 2012-13; ii). Sanjay Singal (Managing Director)' R'P' Goyal (Director)' Amarjeet Sharma (Director), Arun Kumar Agrawal (CFO)' R.K. Gupta (Company Secretary), R'K' Mehra (Deceased) Statutory Auditor, Parfirer Mehra Goel & Co' S'K' Mittal & Co' through S.K. Mittal, Partner, Statutory Auditor (F'Y' 2015-16 to 2016-17)." 10.7. Charge 10: Other....
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.... erstwhile CMD of BPSL connived with R.P. Goyal, Ex- Whole Time Director, BPSL for misusing the structure of Audit Committee for perpetuation of fraud. Investigation also established that the Audit committee was not functioning independently and the committee members were merely following the instructions of Sanjay Singal and R.P. Goyal. 299. During investigation, Dinesh Kumar Behal, chairman of the Audit committee, vide his statement recorded u/s 217 (4) of the companies4ct,2073, has stated that he was the chairman for namesake and no extensive discussions regarding financials had taken place in the meetings of Audit committee. Since the Audit committee was functioning under the control of Sanjay Singal, therefore, it had never highlighted the irregularities which were going on in BPSL. 300. Thus, Sanjay signal in connivance with R.P. Goyal Member of the Audit committee and Ex Whole-Time Director, BPSL with an intent to deceive the shareholders/creditors and to conceal the true affairs of BPSL had misused the structure of Audit Committee and on their instructions, the Audit committee didn't properly examine the financials of BPSL and placed the false financials b....
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....-accused Amarjeet Sharma (A-43) for their veracity. It was also pointed out that it is the case of the respondent itself that primary accused Sanjay Singal (A-36) and Aarti Singal (A-37) were the authorized signatories to the bank account of BPSL and they gave directions for extending advances to paper companies. 12.1.3. It is argued that it is the case of the respondent that four group companies of BPSL, being accused nos. 14, 17, 19, 30, referred to as "four front companies" in the investigation report, received accommodation entries from several entry operators, and invested Rs. 3350.05 crores in BPSL. It is pointed out that Sanjay Singal (A-36) and Aarti Singal (A-37), along with their children Aniket Singal (A-38), and Priyanka Miglani (A39) were directors/shareholders in the said four front companies. Aniket Singal was not arrested during investigation and was granted anticipatory bail by the learned Special Judge vide order dated 16.03.2023, and Priyanka Miglani has not been arrested. It is pointed out that Aniket Singal and Priyanka Miglani have not even been made accused under the present charge. 12.1.4. It is argued by learned Senior Counsel on behalf of the applica....
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....ents of Sanjay Singal (A36) and Aarti Singal (A-37), which have ultimately been disbelieved by the respondent. No other employee or person implicates the applicant in the present charge. 12.3.2. The allegation of the respondent under the present charge is that funds which were siphoned off from BPSL through capital advances and advances to suppliers were used to purchase a property situated at Worli, Mumbai through one Assurity Real Estate LLP (A-35), a firm incorporated in the name of Priyanka Miglani (A-39). The modus operandi alleged is to be similar to the previous instances. It has been submitted that none of the entry operators name the applicant. Attention of this Court has been drawn to the Statements of Dilip Nahata, Praveen Kumar Tavatiya, R.K. Kedia and Deepak Aggarwal recorded in the investigation report, wherein it has been stated that Alkesh Sharma (A-42) and Sanjay Singal were the persons, on whose request they had provided loans to Assurity Real Estate Pvt. Ltd. and Aarti Singal in form of accommodation entries. It was pointed out that Priyanka Miglani (A-39), one of the designated partners in Assurity Real Estate LLP, and a direct beneficiary, was not arrested. ....
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.... advance to suppliers as being bogus. There is no evidence linking the applicant to the present charge. 14.1. It is argued that the applicant had neither worked in the capacity of Chief Financial Officer ('CFO'), nor given any responsibility associated with the position and was just a namesake CFO or Key Managerial Personnel ('KMP') as no board resolution was passed in his name by the Board of Directors. He had never been at the forefront of any alleged activities rendering his arraignment by SFIO in the capacity of CFO as incorrect. 15. Charges 7 & 8: Learned Senior Counsel has submitted that allegations under Charges no. 7 and 8 pertain to making false representation in the financials for the financial year 2017-18 and falsification of books of accounts. It has been submitted that the balance sheets and financial reports of BPSL were prepared at the Chandigarh office of BPSL, under the supervision of Amarjeet Sharma (A-43), as per the case of respondent itself, the applicant was working out of the Delhi office of BPSL. 15.1. It has been submitted that the applicant did not verify the figures in the balance sheets and he relied on Amarjeet Sharma (A-43), who prepared them....
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....ntention of the applicant that majority of the activities were directly controlled by Sanjay Singal, and he was not involved in the preparation or verification of financial statements/balance sheets. 18. Learned Senior Counsel appearing on behalf of the applicant submitted that the applicant has been in judicial custody since 24.03.2022 in the aforementioned case, even after joining the investigation more than twenty times, conforming to the summons received from time to time. On 19.05.2022, SFIO filed the prosecution complaint under Section 447 of the Companies Act. The Learned Special Court, in order dated 19.05.2022, has recorded as under: "Documents contained in nine trunks have been also filed along with the complaint" Therefore, it is submitted that as per the provisions of Section 439 of the CrPC, the applicant deserves bail to prevent interference with personal liberty of the applicant as there will be a delay in trial, owing to the voluminous documents. To support the said contention, learned Senior Counsel for the applicant placed reliance on 'Jainam Rathod v. State of Haryana & Anr., Criminal Appeal No. 640 of 2022' and 'Sujay Desai v. SFIO, Criminal Appea....
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....37. Such findings are required to be recorded only for the purpose of arriving at an objective finding on the basis of materials on record only for grant of bail and for no other purpose. 38. We are furthermore of the opinion that the restrictions on the power of the court to grant bail should not be pushed too far. If the court, having regard to the materials brought on record, is satisfied that in all probability he may not be ultimately convicted, an order granting bail may be passed. The satisfaction of the court as regards his likelihood of not committing an offence while on bail must be construed to mean an offence under the Act and not any offence whatsoever be it a minor or major offence. If such an expansive meaning is given, even likelihood of commission of an offence under Section 279 of the Penal Code, 1860 may debar the court from releasing the accused on bail. A statute, it is trite, should not be interpreted in such a manner as would lead to absurdity. What would further be necessary on the part of the court is to see the culpability of the accused and his involvement in the commission of an organized crime either directly or indirectly. The court at the tim....
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....he basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained in sub-Section (4) of Section 21 of the Act, the court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby. 47. In Kalyan Chandra Sarkar v. Rajesh Ranjan [(2004) 7 SCC 528 : 2004 SCC (Cri) 1977] this Court observed : (SCC pp. 537-38, para 18) "18. We agree that a conclusive finding in regard to the points urged by both the sides is not expected of the court considering a bail application. Still one should not forget, as observed by this Court in the case Puran v. Rambilas [(2001) 6 SCC 338 : 2001 SCC (Cri) 1124] : (SCC p. 344, para 8) 'Giving reasons is different from ....
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....022 SCC Online SC 929), after examining the ratio in Ranjitsing Brahmajeetsing Sharma (supra) held as under: "401. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of Trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad, the words used in Section 45 of the 2002 Act are "reasonable grounds for believing" which means the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt. 402. Sub-Section (6) of Section 212 ....
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.... of the 2002 Act are in addition to the limitations under the 1973 Code. 404. As aforementioned, similar twin conditions have been provided in several other special legislations validity whereof has been upheld by this Court being reasonable and having nexus with the purposes and objects sought to be achieved by the concerned special legislations. Besides the special legislation, even the provisions in the general law, such as 1973 Code stipulate compliance of preconditions before releasing the accused on bail. The grant of bail, even though regarded as an important right of the accused, is not a mechanical order to be passed by the Courts. The prayer for grant of bail even in respect of general offences, have to be considered on the basis of objective discernible judicial parameters as delineated by this Court from time to time, on case-to-case basis." 21.3. Similarly in Anil Vasantrao Deshmukh v. State of Maharashtra., 2022 SCC Online Bom 3150 while examining the ration in Ranjitsing Brahmajeetsing Sharma (supra) and Vijay Madanlal (supra) held as under: "37. The aforesaid pronouncements, thus, indicate that the statutory restrictions in the matter of grant o....
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...., it is necessary to protect the constitutional right to an expeditious trial in a situation where a large number of accused implicated in a criminal trial would necessarily result in a delay in its conclusion. The role of the appellant must be distinguished from the role of the main accused." 21.5. The Hon'ble Supreme Court in Sujay U. Desai v. Serious Fraud Investigation Office (2022 SCC OnLine SC 1507), held as under: "7. Having duly considered the provisions of Section 212(6) of the Companies Act 2013, we are of the view that in the facts of the present case, the appellant ought to be granted the benefit of bail under Section 439 of the Code of Criminal Procedure 1973 since the right to an expeditious trial is protected under Article 21 of the Constitution. We accordingly direct that the appellant shall be released on bail, subject to such terms and conditions, as may be imposed by the Sessions Judge, Kanpur in connection with Sessions Trial No 577 of 2020. 21.6. The Hon'ble Supreme Court, in Gurbaksh Singh v. CBI & Anr (1980) 2 SCC 565, held as under: "27. It is not necessary to refer to decisions which deal with the right to ordinary bail becau....
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.... person must have his freedom to enable him to establish his innocence." 21.7. A coordinate bench of this Court in Bindu Rana v. Serious Fraud Investigation Office, 2023 SCC Online Del 276 held as under: "41. The economic offences are considered under the category of grave offences and is a factor which has to be kept in mind in addition to the triple test which is normally applied while considering the application for grant of bail. 42. It is, however, equally true that only because the allegations are one of the grave economic offences, it is not a rule that the bail has to be denied in every case. Every application has to be considered on its own merits and considering the factors which are relevant for the said case. The basic test, as reiterated by the Hon'ble Apex Court from time to time, remains the same being: (i) the chances of tampering with the documents and evidence, (ii) the chances of influencing the witness, and (iii) the flight risk. 43. It is not in dispute that the investigation in the present case is already complete, which has culminated into a criminal complaint filed before the concerned Special Cour....
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....sent charge pertains to commission of fraud with the intent to injure interest of the company and is punishable under Section 447 of the Companies Act. The investigation established that Sanjay Singal (A-36), his wife Aarti Singal (A-37) and his associates namely R.P. Goyal (A-41), H.C. Verma (A-40), Amarjeet Sharma (A-43), Alkesh Sharma (A-42), R.K. Gupta (A45), Arun Kumar Agarwal (A-44) were the "directing mind and will" and evidence brought on record established that they colluded together and were involved in dubious transactions which caused loss to lenders and brought enrichment to themselves. 23.1.1. Learned CGSC asserted that even though the applicant says that he wasn't involved in the day-to-day activities of the company as regards the siphoning off funds of BPSL in the form of bogus capital advances, he connived with Amarjeet Sharma (A-43) by using the mode of capital advances, diverting funds to various paper companies, which were placed and layered through a web of entities and ultimately used for infusing in BPSL as share capital, hence, routing the same as equity or unsecured loans to related entities of BPSL. During the investigation, it was revealed that huge am....
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....o used to attend the meetings with bankers on behalf of BPSL. He was completely aware of the affairs of the company. Thus, the applicant alongwith other accused persons connived with each other to commit a fraud upon BPSL. 24. Charge 2: Learned CGSC submitted that Sanjay Singal (A-36) had devised and adopted a mechanism and knowingly connived with the applicant and other KMPs of BPSL to fraudulently avail credit facilities from banks. Investigation established that during financial year 2014-15 and financial year 2015-16, Sanjay Singal (erstwhile CMD of BPSL) (A36) knowingly connived with Ravinder Kumar Rastogi (A-46), the then Vice President of BPSL and the applicant who was then the CFO of BPSL to get LCs issued on the basis of false documents from banks and then, fraudulently discounted the LCs for causing wrongful gain to themselves. In pursuance of aforesaid object, Ravinder Kumar Rastogi and the applicant were authorized by committee on borrowings of BPSL, in its meeting on 26.06.2013, to open the LCs and execute all related documents. 25. Charges 3 & 4: The present charges pertain to cheating banks by fraudulent inducement. Learned CGSC submitted that during financial ....
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....been submitted though the applicant denies the presence of any specific findings against him, his role of being responsible for handling financial matters of BPSL and raising funds from banks has to be considered. He was instrumental in obtaining loans for BPSL from various banks and financial institutions. An amount of Rs.37000 Crore was outstanding against such loans as on 31.03.2017. Additionally, the applicant was an authorized signatory to the bank accounts and he used to sign the cheques. 28. Charge 11: Learned CGSC has placed on record the statements of one Dinesh Kumar Behal, chairman of the audit committee for financial year 2016-17, to demonstrate Charge 11 against the applicant. It has been submitted that the applicant connived with other co-accused persons for misusing the corporate structure of these 30 companies for commission and continuation of the fraud. Investigation also established that the financials of these companies were knowingly manipulated for the purpose of equity infusion into BPSL. The financials of 30 companies' for financial year 2009-10 to 2016-2017 did not reflect a true and fair picture of its affairs. It is the argument of the learned CGSC tha....
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....he bail applications filed on behalf of co-accused Amarjeet Sharma & Alkesh Sharma. 32. Since the complaint, along with the investigation report and annexures were filed within the stipulated time frame of 60 days from the date of first judicial remand of the applicant, learned CGSC submits that neither the general conditions for grant of bail are satisfied qua the applicant in the instant case nor has a case been made out for grant of bail in the case of a serious economic offence. 33. In support of his arguments, learned CGSC placed reliance on the following judgments; 33.1 The judgment in Vijay Madanlal Choudhary and Ors. v. Union of India & Ors., 2022 SCC Online SC 929 was cited for the proposition that provisions of Section 447 read with Section 212(6) of the Companies Act, have been upheld. 33.2 In Narcotics Control Bureau v. Mohit Aggarwal, 2022 SCC OnLine SC 891, it was held as under: "18. In our opinion the narrow parameters of bail available under Section 37 of the Act, have not been satisfied in the facts of the instant case. At this stage, it is not safe to conclude that the respondent has successfully demonstrated that there are reasonable grounds ....
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....natures. Analysis and Findings 35. Heard the learned counsel appearing on behalf of the parties and perused the record. 36. For the purpose of present bail application, to bring home the allegations with respect to commission of offence under Section 447 read with Section 212(6) of the Companies Act, the respondent SFIO relies on the ground that the applicant, a qualified chartered accountant was associated with BPSL from the year 2000 till 2019 and he was appointed as a Chief Financial Officer in the year 2007. It is alleged that Chief Financial Officer in terms of Section 2(19) is "Officer including any Director, Manager or Key Managerial Personnel or any person in accordance with whose directions or instructions, the board of directors or anyone or more of the Directors is or are accustomed to act." 37. The allegations with respect to the present application for commission of offence under Section 447 read with Section 212(6) of the Companies Act, are with respect to following charges: 37.1. Charge 1 Instance II relates to siphoning of funds from BPSL through capital advances and routing the same as equity of unsecured loans to related entities of BPSL. It is the ....
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....r the said purpose. 38. A perusal of the record with respect to the aforesaid allegations made under Charge 1 Instance II with regard to the present applicant reflects that none of the entry operators through whom the aforesaid siphoning of funds was allegedly done named the present applicant. It is part of the record that the statements of the said entry operators named Alkesh Sharma (A-42) to be their contact person and from whom they received funds from BPSL or in cash. It is further on record that the balance sheet and the financial report, as per case of respondent were prepared at Chandigarh office of BPSL under supervision of Amarjeet Sharma (A-43) and the applicant was working out of Delhi office. It has been the consistent stand of the present applicant in his statements to the respondent that he did not verify the financial figure and balance sheet and relied upon the aforesaid Amarjeet Sharma (A-43) for their veracity. Moreover, as per the role ascribed to Sanjay Singal and Aarti Singal, it is case of the respondent that they were the authorized signatories of BPSL and had given directions to extend advances to paper companies. 38.1. So far as the four front com....
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....ngal. However, the aforesaid company Assurity Real Estate LLP (A-35) was a partnership firm incorporated in the name of Priyanka Miglani (A-39) as a Partner. As stated above, the said Priyanka Miglani (A-39) was not arrested by the respondent. 39. Charge-2 relates to issuance and negotiation of LCs by BPSL. It is alleged that bogus LCs were opened by BPSL on the basis of forged and fabricated proforma invoice, bills of exchange without any further underlying documents. It has been pointed out that it is the case of respondent itself that Ankur Nagar (A-46), consultant for LC discounting (A-80) had played a crucial role and arranged false and fabricated documents for opening bogus LCs. However, he does not name the present applicant but takes the name of Ravindra Kumar Rastogi, Vice President (A-46). It has been pointed out that both the aforesaid accused persons namely Ravindra Kumar Rastogi (A-46), who as per the case of respondent in his confessional statement admitted direct involvement in the commission of the offence and aforesaid Ankur Nagar (A-80) have not been arrested by the respondent. 39.1. It has been further pointed out that with reference to the gist of Banker's....
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....PSL wherein it is alleged that cash was handed over to one entry operator namely Narender Kumar Jain (A-71), who then placed and layered the same through web of entities controlled and managed by him and subsequently rotating it in the group companies of BPSL namely Vintage Steel Ltd and Olympian Finvest Pvt. Ltd. in form of equity. Attention of this Court has been drawn to the statement of aforesaid Narender Kumar Jain (A-71) wherein he does not name the applicant but states that Alkesh Sharma (A42) used to provide cash and directions for provisioning such entries. 43. Charge 11 is related to misuse and fraudulent abuse of structure of audit committee. It is stated in the SFIO investigation report that during financial year 2016-2017, there were three persons who were part of the audit committee namely Dinesh Kumar Behal, R.P. Goel (A-41) and Anil S. Supanekar. It is alleged, in the said report that although the board had entrusted said committee with specific duties in terms of Section 171 of the Companies Act, with regard to correctness and completeness of financial results but the structure of audit committee was used to perpetrate fraud. It is the case of the respondent its....
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....pecial Judge. On the same lines, it has been argued that Aniket Singal (A-38), who was also a direct beneficiary has not been arrested during trial and was granted anticipatory by learned Special Judge. The other beneficiary Priyanka Miglani (A-39) has also not been arrested. It is further submitted that none of the entry operators (A-53 to A-92) and other employees of BPSL (A-45 to 47) and statutory auditors (A-48 to A-52) were never arrested by the respondent. As noted hereinbefore, Ravinder Kumar Rastogi (A-46) and Ankur Nagar (A-80) were also not arrested. 45. It was further submitted that the present applicant has not been charged for certain allegations which are otherwise intrinsically linked to the involvement of inner circle of Sanjay Singal. These charges are related to theft of material from Sambhalpur plant, sale of Chennai land and destruction of SRP-ERP data. Finally, it has been vehemently argued upon that no material has come on record to show that the present applicant was beneficiary of the any of the alleged siphoned funds. 46. The Supreme Court while considering the provisions of Section 37 of the NDPS Act, in Mohd. Muslim alias Hussain v. State (NCT of De....
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....arameters is where the court is reasonably satisfied on a prima facie look at the material on record (whenever the bail application is made) that the accused is not guilty. Any other interpretation, would result in complete denial of the bail to a person accused of offences such as those enacted under Section 37 of the NDPS Act. 21. The standard to be considered therefore is one, where the court would look at the material in a broad manner, and reasonably see whether the accused's guilt may be proved. The judgments of this court have, therefore, emphasized that the satisfaction which courts are expected to record, i.e., that the accused may not be guilty, is only prima facie, based on a reasonable reading, which does not call for meticulous examination of the materials collected during investigation (as held in Union of India v. Rattan Malik). Grant of bail on ground of undue delay in trial, cannot be said to be fettered by Section 37 of the Act, given the imperative of Section 436A which is applicable to offences under the NDPS Act too (ref. Satender Kumar Antil supra). Having regard to these factors the court is of the opinion that in the facts of this case, the appe....
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....ditions to apply, there must be (i) a specific allegation against the accused; (ii) which allegation must find place in the complaint/FIR; (iii) there must be material in support of such allegation; and (iv) the combined reading of the material in support of the allegation must point towards the guilt of the accused as regards the relevant offence. It would be necessary to note that the bulky nature of material annexed to the complaint is not a sufficient criteria, there must be something, as regards each specific allegation against the accused in the complaint, which point towards the guilt of the accused of the offence which attracts the additional twin-conditions. 31. After all, bail, not jail is the rule.(Arnab Manoranjan Goswami v. State of Maharashtra, (2021) 2 SCC 427) 32. While still on this point, it may be noticed that the 2013 Act specifically circumscribes even the power of an SFIO officer to arrest an accused. Section 212(8) expressly stipulates that an arrest may only be made by an officer of the rank of Assistant Director or above; and further stipulates pre-conditions to making an arrest, viz. that the officer must be in possession of material, bas....
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....pertinent to note that the name of the applicant on the minutes of meeting sans his signature prima facie vindicates his stand that he was namesake CFO. In this context, it is pertinent to note that the case of the respondent as noted hereinabove is that the Chief Financial Officer in terms of Section 2(19) of the Companies Act, is "Officer including any Director, Manager or Key Managerial Personnel or any person in accordance with whose directions or instructions, the board of directors or anyone or more of the Directors is or are accustomed to act." A plain reading of the aforesaid provision indicates that if the board of directors has to follow the directions or instructions of the Chief Financial Officer then the presence of the latter in such meetings would be a necessity. In this background, the conspicuous absence of the present applicant's name from the attendance registers of board meetings and audit committee will have a bearing for the purposes of deciding the present application. It is pertinent to note that while grave allegations have been made qua the applicant with regard to connivance/conspiring with the promoters and other co accused, but no allegation with regard....