TMI Blog2022 (12) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... inferred that the officer did not have reason to believe that the petitioner was guilty of any offence punishable under the concerned sections of the Companies Act. Even when the report under section 212(12) of the Companies Act was filed, there is nothing on record to show that the investigating officer sought for the petitioner to be remanded to judicial custody - In the opinion of this court, the petitioner s conduct cannot have a worse effect now, than it possibly could have had during the course of investigation, since all the purportedly incriminating evidence and material has already been collected and placed before the learned Special Judge as part of the criminal complaint. The proviso to section 212(6) of the Companies Act cannot be treated as nugatory or dead letter. By way of the proviso, the Legislature has specifically carved-out an exception to the otherwise strict provision for bail, to say that though the twin conditions in section 212(6)(i) and (ii) of the Companies Act must otherwise be satisfied before a person is released on bail, those conditions would not apply inter-alia to a woman. In view of the proviso, it would be anathema to the legislative intent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The gravamen of the offences alleged inter-alia under section 447 of the Companies Act is that the company, which was engaged in the trade of plastic granules, indulged in cash sales, in fictitious sale of food grain and in creation of accommodation/adjustment accounting entries, apart from misuse of cheque discounting facilities. 6. It is also the allegation that the company manipulated financial statements, to project substantial growth in its revenues, to mislead banks, so as to induce them to extend and enhance credit limits, which monies were not used towards the business activity of the company but were diverted and siphoned-off to other entities, with no genuine underlying business transactions, thereby indulging in fraudulent diversion of funds to sister concerns. 7. Suffice it to say, that a perusal of the summoning order, which is based upon the criminal complaint filed by the SFIO inter-alia under section 212(15) of the Companies Act, shows that the role ascribed to the petitioner is that of being an officer who is in default within the meaning of section 2(60) of the Companies Act, since the petitioner was a director of the company; and was therefore, liable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. (emphasis supplied) 14. It is further submitted that there is no material, nor even an allegation by the SFIO, that the petitioner is either a flight-risk or that she may intimidate witnesses or destroy evidence or commit any offence. 15. Counsel argues that the petitioner was merely a signing authority for the company, who functioned on the instructions of her husband and main accused Suman Chadha; and that Suman Chadha has so stated on oath in his statements dated 17.07.2017 and 23.08.2017 recorded under section 217 of the Companies Act. 16. It is further submitted that since both the petitioner and her husband are in judicial custody, among o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Dataram Singh vs. State of Uttar Pradesh (2018) 3 SCC 22: On the point that discretion in matters of grant of bail must be exercised judiciously, in a humane manner, and compassionately. SFIO s Contentions 19. On the other hand, opposing grant of bail, Ms. Raman has urged that the present application is the sixth attempt on the petitioner s part to seek bail in a span of 05 months. It is noticed however, that the bail applications referred to by the SFIO are all applications seeking interim bail on various grounds, which appear to have been withdrawn. These also include interim bail applications filed in the present petition itself. 20. It is further submitted that there is apprehension of witnesses being influenced, since charges are yet to be framed and evidence is yet to be recorded. 21. It is pointed-out that most of the other accused persons are either employees or accountants or auditors of the company, over whom the petitioner enjoys clout, which she may use to interfere in the course of trial. 22. It is urged that the offence under section 447 of the Companies Act is an economic offence, which genre of offences, the courts have said, are far more se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2018) 11 SCC 46 : To urge that economic offences with deep rooted conspiracies and involving a huge loss of public funds need to be viewed seriously and considered grave offences affecting the economy of the country as a whole; 24.8. Shivani Rajiv Saxena vs. Directorate of Enforcement Anr (2017) 245 DLT 230 : to contend that merely because the accused is a woman, does not by itself entitle her for bail under the proviso to section 212(6) of the Companies Act; and the nature and gravity of the offence has to be considered; 24.9. Arnesh Kumar vs. State of Bihar Anr (2014) 8 SCC 273 : To submit that not arresting the petitioner, was in compliance of the Supreme Court mandate as contained in this judgment; 24.10. Satender Kumar Antil vs. CBI (2022) 10 SCC 51, YS Jagan Mohan Reddy vs. Central Bureau of Investigation (2013) 7 SCC 439, Serious Fraud Investigation Office vs. Nittin Johari Anr (2019) 9 SCC 165, P Chidambaram vs. Directorate of Enforcement (2019) 9 SCC 24 and State of Gujarat vs. Mohanlal Jitamalji Porwal Anr (1987) 2 SCC 364: On the point that economic offences constitute a separate class, and the court must consider circumstances such as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect criminal complaint, as also the summoning order; and in view of what is stated in the petition and the submissions made by counsel for the parties, the following inferences arise: 30.1. There is no allegation by the SFIO that during the course of the investigation, the petitioner attempted to destroy evidence or intimidate witnesses, or that she otherwise interfered in the course of investigation; 30.2. It is apparent that the essence of the allegation against the petitioner is, that being the wife of the main accused Suman Chadha and a director of the company, the petitioner signed various papers, documents and records in her capacity as a co-director, and is therefore an officer who is in default in relation to the affairs of the company within the meaning of section 2(60) of the Companies Act; 30.3. Despite having the power under section 212(8) of the Companies Act, to arrest the petitioner in the course of investigation, the investigating officer did not arrest the petitioner, by which it can reasonably be inferred that the officer did not have reason to believe that the petitioner was guilty of any offence punishable under the concerned sections of the Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se imposed on convicts. Not to mention, that an undertrial in custody is prevented from contributing to the preparation of their defence in the trial, which burden then falls heavily on innocent members of the family; 30.10. It is also noticed that in Laloo Prasad vs. State of Jharkhand (2002) 9 SCC 372, cf. para 7, after taking into consideration the seriousness of the charges and the maximum sentence that could be imposed, the Supreme Court directed the release of the accused, who had been in jail for a period of more than 06 months, observing that further detention as a pre-trial prisoner would not serve any purpose; 30.11. This court is constrained to observe, that in view of the above discussion, keeping the petitioner in judicial custody throughout the course of trial could only be justified by way of pre-trial punishment, which is abhorrent to the law. Keeping the petitioner in judicial custody will serve no discernible purpose, except to deny her liberty, for no reasonable cause. 31. It is important to note that the power of the SFIO to arrest an accused during investigation in exercise of the powers conferred under section 212(8) of the Companies Act is the po ..... X X X X Extracts X X X X X X X X Extracts X X X X
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