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2023 (5) TMI 144 - HC - Companies LawSeeking grant of Regular Bail - Criminal conspiracy and cheating by diverting funds - siphoning off of funds - receiving money back into personal bank accounts from some 65 companies/entities through dubious transactions which money he then showed as promoter contribution towards the CDR process - round-tripping funds - twin-conditions in section 212(6) of the 2013 Act satisfied or not. HELD THAT - Since in the course of deciding a bail petition this court is not required to render any finding in relation to the allegations in the complaint and is required to decide the matter on broad probabilities this court refrains from deliberating further upon the facts as propounded in the complaint. The petitioner began working as an officer of ESL from 01.11.2013 as Senior Vice President (Finance) and thereafter became the CFO from 26.05.2014 to 24.02.2018. Though it is alleged that he was advising ESL in his professional capacity as a Chartered Accountant/financial consultant even before that at that time the petitioner was clearly not an officer of the company and could not therefore have been a key managerial personnel or an officer in default - Even as Senior Vice President (Finance) the petitioner could not have been the final deciding authority in relation to the financial affairs of ESL. Out of the Rs.240 crores alleged to have been siphoned-off from ESL Rs.235 crores were siphoned-off before 31.03.2015 between FY 2012-13 and FY 2014-15; but the petitioner became CFO only w.e.f. 26.05.2014. The principal promoters and Whole-time Directors of ESL have never suffered any custody since they were granted interim protective orders by a Co-ordinate Bench of this court. Other senior officers such as the Procurement Head and others have not even been named as accused. Only 02 out of the 55 accused persons were ever arrested one the petitioner; and the other the CTO/Dr. Bindu Rana. Dr. Bindu Rana has been admitted to regular bail by a Co-ordinate Bench of this court on 20.01.2023. The bail has been granted not under the special dispensation for women contained in the proviso to section 212 (6) of the 2013 Act but on the merits of her case. In the circumstances for the limited purpose of the bail plea this court is satisfied that there are reasonable grounds for believing that the petitioner is not guilty of the offence charged under the 2013 Act. Furthermore considering that the investigation is complete and the prosecution complaint has been filed before the learned Special Judge this court is also satisfied that the petitioner is not likely to commit any offence while on bail. The petitioner is admitted to regular bail subject to the conditions imposed - petition allowed.
Issues Involved:
1. Regular bail under Section 439 Cr.P.C. read with Section 212(6) of the Companies Act, 2013. 2. Allegations of fraud under Section 447 of the Companies Act, 2013. 3. Allegations of criminal conspiracy and cheating under Sections 420/120B IPC. 4. Petitioner's involvement and role in the alleged offences. Summary: 1. Regular Bail Petition: The petitioner sought regular bail under Section 439 Cr.P.C. read with Section 212(6) of the Companies Act, 2013, in a criminal complaint filed by the Serious Fraud Investigation Office (SFIO) alleging offences under Sections 420/120B IPC, Sections 211/628/227/233 of the Companies Act, 1956, and Sections 129/447/448 of the Companies Act, 2013. 2. Allegations of Fraud (Section 447 of the Companies Act, 2013): The SFIO alleged that the petitioner, as CFO of Educomp Solutions Ltd. (ESL), was involved in siphoning off Rs. 240.76 crores from ESL through dubious transactions, which were then shown as promoter contributions. The SFIO detailed 11 charges against the petitioner, including the use of paper companies to siphon funds, divesting assets fraudulently, and falsifying financial statements. 3. Allegations of Criminal Conspiracy and Cheating (Sections 420/120B IPC): The SFIO accused the petitioner of being part of a criminal conspiracy to cheat by diverting funds through bogus capital advances and inflated land deals. The petitioner allegedly facilitated the siphoning of funds from ESL and its subsidiaries through various fraudulent transactions. 4. Petitioner's Involvement and Role: The petitioner contended that he joined ESL after the company had already opted for Corporate Debt Restructuring (CDR) and was not involved in the initial financial mismanagement. He argued that he was not a key managerial personnel or a decision-maker in the fraudulent transactions. The petitioner also highlighted that the main promoters and other key individuals were granted interim protection and were not arrested, while he was selectively prosecuted. Court's Analysis and Conclusions: 1. Threshold for Bail under Section 212(6) of the Companies Act, 2013: The court noted that the twin-conditions under Section 212(6) do not imply automatic denial of bail. The prosecution must establish foundational facts to oppose bail, and the court must be satisfied that there are reasonable grounds for believing the accused is not guilty and will not commit any offence while on bail. 2. Petitioner's Role and Timing: The court observed that the petitioner joined ESL as CFO on 26.05.2014, after most of the alleged siphoning had occurred. He was not on the Board of Directors and did not have control over the financial affairs before becoming CFO. The financial transactions during his tenure were monitored by the consortium of banks under the CDR process. 3. Selective Prosecution: The court noted that the principal promoters and other key individuals were not arrested and had interim protection, while the petitioner was selectively prosecuted. The petitioner's involvement in the alleged offences was not as significant as that of the main promoters. 4. Grant of Bail: The court concluded that there were reasonable grounds for believing that the petitioner was not guilty of the offence charged under the Companies Act, 2013. Considering the investigation was complete and the prosecution complaint filed, the court was satisfied that the petitioner was not likely to commit any offence while on bail. Order: The petitioner was granted regular bail subject to conditions, including furnishing a personal bond, surrendering his passport, and cooperating with the investigation. The court directed the issuance of a Look-out-Circular to prevent the petitioner from leaving the country without permission. Note: This summary preserves the legal terminology and significant phrases from the original text while ensuring privacy by not mentioning the names of parties or individuals.
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