TMI Blog2019 (12) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel is that the same material cannot be interpreted in two different manners, one by the Investigating Officer and the other by the Trial Court. However, this court does not find any substance in this argument as well. The provision regarding arrest of a person during investigation under the new Companies Act is contained in section 212(8). The perusal of this provision shows that under the new Companies Act, the investigating officer does not have unbridled or as much liberal powers to arrest a person, as are available under Cr.P.C. Under the new Companies Act, 2013; before arresting a person, investigating officer is required to have material in his possession and on the basis of that material, is required to record reasons in writing that a person has been guilty of offence punishable under sections, which are mentioned in section 212 (6) of this Act. Therefore despite having the material in his possession justifying the arrest of a person, the investigating officer under the Companies Act may not choose to arrest a person, so as to avoid onerous duty of recording reasons. The trial court is under a mandatory duty to appreciate the said material in the manner a judicially ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive. Hence, this court has no reason to believe that if the petitioner is released on bail, he is not likely to influence the witnesses of the case and also not likely to destroy the evidence against him. The past conduct of the petitioner has also not been exemplary - Also the argument of the counsel for the SFIO that since the vocation of the petitioner and his Companies is only to commit crimes to earn money, therefore, by any means, it cannot be said that if the petitioner is released on bail, he would not commit any offence again, also finds favor with this court. Petition dismissed. - CRM-M-36693-2019 - - - Dated:- 13-11-2019 - MR. RAJBIR SEHRAWAT J. Present: Mr. Vikram Chaudhri, Senior Advocate with Mr. Sangram Saron, Mr. Sartaj Singh Gill, and Mr. Rahil Mahajan, Advocate for the petitioner. Mr. Chetan Mittal, Assistant S.G.I. with Mr. Alok Kumar Jain, Senior Panel Counsel and Mr. Himanshu Gupta, Advocate for SFIO. Mr. Deepak Sabharewal, Additional Advocate General, Haryana. Mr. Parshant Baliyan, Investigating Officer in person. RAJBIR SEHRAWAT, J. This petition under Section 439 of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conferred under section 212 (1) (c) of Companies Act 2013 and section 43(2) (3)(c)(i) of LLP Act 2008, ordered an investigation into the affairs of the said companies, through the Serious Fraud Investigation Office (hereinafter referred to as SFIO), which is an instrumentality created under the new Companies Act for investigation into the affairs of the companies. During investigation it came out that 70 Companies of the Adarsh Group of Companies Ltd. had shown ₹ 4140Crores approximately as payable to the said Co-operative Society; as the loan yet to be repaid. Still further, during investigation some companies out-side the Adarsh Group of Companies were also found to be the alleged collaborators of the Adarsh Group and those companies were also taken under investigation. Accordingly, a total of about 125 Companies (hereinafter referred to as CUIs), and some individuals, including the petitioner and his Companies as conspirators; were taken under investigation. After completion of the investigation and taking necessary permissions from the Central Government, SFIO presented the investigation report in the form of a statutory Complaint before the Special Court at Gurugram o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the cash-in hand had gone missing from these Companies. Further investigation had shown that the above-said amount was shown as having been paid to the Co-operative Society, ACCSL, as advance Share Application Money (SAM) pending allotment. However this cash amount was not deposited in the accounts of the Co-operative Society. When further coordinated investigation of the CUIs and The Co-operative Society was carried out then it was found in the accounts of the Co-operative Society that there were the bills and invoices for an amount of ₹ 223.77Crores, for alleged purchase of Suit Lengths (Cloth) by the Co-operative Society from 27 Companies; including the Companies of the petitioner. But besides the alleged part-supply from the Companies of the petitioner, even the remaining; entire supply of the cloth from the Companies/Firms of the other persons; was also shown as having been arranged through petitioner Jainam Rathod. Out of the above purchase of cloth, purchase worth ₹ 89.23Crores was found to have been made during the period from 31-03-2016 to 31-10-2017. Bills and invoices for these purchases were reflecting the petitioner or his Companies/Firms as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case learned counsel for the petitioner submitted that starting with September 2018, the petitioner has joined the investigation by appearing before the investigating officer of the case, as and when he was called. The petitioner had not even applied for anticipatory bail. Despite that the petitioner was not taken into custody by the investigating officer. On completion of collection of the alleged evidence, when the complaint was filed by the investigating officer, then the Special Court had taken cognizance of the offence on 03-06-2019, that is, after about 5 months of the petitioner last joining the investigation. The petitioner was summoned by the special court. The petitioner appeared before the special court on 13/07/2019 in compliance of the summons issued by the court. Even at that stage the petitioner was granted interim bail by the trial court. Although there was not even any allegation that the petitioner had misused his liberty or the interim bail granted by the trial court, yet the application for bail pending trial, moved by the petitioner, was finally dismissed on 28-08-2019 and then petitioner has been taken into custody. Since then he is suffering incarceration. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing, that the said person is guilty of an offence punishable; being covered under section 447 of the new Companies Act. Still further under section 217 (4) the investigating officer of the case has been conferred power to examine a person on oath and under section 217(5) the investigation officer has been given enormous powers of the civil court as well; for summoning the witnesses and for enforcing their presence. Therefore the investigating officer had the trappings of the court also, besides being an investigating officer who could have arrested the petitioner; if he had some material in his possession. Under the provisions of the section 439 Cr.P.C. the bail pending trial is to be considered by the trial court by applying the criteria as prescribed in section 439 Cr.P.C. The requirements prescribed for arresting a person during investigation under section 212(8); by the investigating officer; for the offences under new Companies Act, stand at much higher pedestal than the conditions required to be considered by the trial court for releasing such an accused on bail pending trial by exercising powers under section 439 Cr.P.C. Hence, if the investigating officer himself had not ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the state authorities for opposing the bail application of the petitioner; because these conditions are infringing not only the right to life and liberty of the petitioner guaranteed by Article 21 of the Constitution, rather, are also in violation of the provisions of Article 14, being irrational, illogical and requiring the court to record something which is impossible by any means. The learned Counsel for the petitioner has relied upon the judgment of this court rendered in Ankush Kumar @ Sonu V/s State of Punjab, 2018 SCC Online P H 1259 to support his argument. Again referring to the judgment of the Supreme Court rendered in case of Nikesh Tara Chand Shah (Supra) the learned Counsel for the petitioner has further argued that even if the applicability of twin conditions, as prescribed under section 212(6) of the new Companies Act; is to be invited to the case of the petitioner, then interpretation of these conditions has to be toned down to see only the probability of conviction of the petitioner; and the probability of conviction under the new Companies Act only. However, the evidence, allegedly collected by the prosecution, against the petitioner is not suf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through legitimate business transactions and through legitimate means. The amount of about ₹ 90Crores, allegedly, cash-in-hand of the 30 Companies of the Adarsh Group of Companies, if any, was being circulated among themselves only. The petitioner has no concern with that money of those Companies. The petitioner had no equity transaction with those companies. Hence it is clear that petitioner is an innocent person and he is a law abiding gentleman and legitimate businessman. He has not committed any crime as alleged against him. Hence he deserves to be released on bail during the pendency of the trial. On the other hand, learned Asstt. Solicitor General of India, appearing for SFIO, has argued that the fact that the investigating officer had not arrested the petitioner during the investigation is totally inconsequential. Referring to the provision of section 212(8) of the new Companies Act, learned counsel appearing for SFIO has submitted that the provision itself speaks of the words investigating officer may arrest such a person. Hence it is clear that it is the discretion of the investigating officer, whether to arrest the person or not; of course he has to satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below. Relying upon the judgment of the Supreme Court in Serious Frauds Investigation Office V/s Nitin Johari 2019 SCC Online 1178 ; and drawing parallel therewith, learned Counsel for SFIO has submitted that merely because the petitioner had himself appeared before the court after the charge-sheet was filed against him or merely because he was granted interim bail, in the first instance, does not mean that the bail cannot be denied to the petitioner during the pendency of the trial or that such person cannot be taken into custody. Question of bail still has to be considered and decided by the court as per the relevant and applicable factors. It is, accordingly, submitted by the Counsel that in case of Nitin Johari (Supra) also, though the charge- sheet had been filed and the High Court had granted bail, yet the Supreme Court set aside the order of the High Court and remanded the matter to the High Court for fresh consideration, by considering the relevant factors. Had this been the valid proposition of law; that when the charge-sheet stands filed and accused appear before the court; then the petitioner cannot be taken into custody, then the Supreme Court would not have sent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and has removed the inconsistency qua the offences punishable under the Prevention of Money Laundering Act, 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 Companies Act 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 the reliance of the Counsel for the petitioner upon the judgment of this Court in case of Ankush Kumar (Supra) is concerned, it is submitted by the Counsel for the SFIO that when this court had considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by him or his Companies. Although the petitioner has shown entries for an amount of ₹ 31.9Crores in his balance sheet, however, even this amount is not found to have been deposited in the bank accounts of the petitioner or his companies. Hence these were paper entries only, to help about 30 companies of the Adarsh Group of Companies to swindle the money of the cash-in-hands; which was the public money. In lieu of this help and conspiracy with the above said companies, the petitioner has availed commission of about 22lakhs. The fakeness of the invoices, the Bill and the entries created by the petitioner has been duly established by the evidence collected by the investigating officer from the accounts of the Cooperative Society, maintained on the SAP accounting software, wherein it has been found that most of these entries were actually made within few days after the demonetization of certain currency notes by the Central Government, although these were shown as spread over a long duration during the financial year; by antedating the entries and the bills and the invoices supporting those entries. The fake bills/ invoices were recovered from the Co-operative Society and the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... destroy the evidence, is totally irrelevant. At that time the petitioner was not sure of him being made an accused in the case. Therefore he might not have resorted to that exercise. But now, when the petitioner knows that his crime has been detected, no straightforward conduct is expected from the petitioner, who is manipulative by disposition. In the same vein, the counsel for the SFIO has also submitted that since the vocation of the petitioner and his Companies is only to commit crimes to earn the money, therefore, by any means, it cannot be said that if the petitioner is released on bail, he would not commit any offence again. In the end it has been argued by the learned counsel for the SFIO that even if the conditions, as prescribed under section 212(6) of the new Companies Act, 2013 are not to be taken into consideration, at least the factors which has been laid down by the Supreme Court in case of Y. S. Jagan Mohan Reddy(supra) and which has been reiterated by the Supreme Court in case of Nitin Johari (supra), for the economic offences, has to be considered by the court while considering grant of bail to the petitioner. However, the charge-sheet against the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer has the power akin to the police, therefore, 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 investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r shows that it is restricted to the aspect of bringing a person to the door of the court; and nothing more. The provisions of this chapter does not have anything to do with release of a person on bail as such. Rather; the provisions of this chapter are neutral to the status of a person as an accused , as a witness , or simply as only a person present in the court ; without any legal capacity qua trial as such. The sections included in this chapter do not even use the word accused , except in some sections relating to a person, who has already avoided ordinary process of the summons or warrant and therefore; is to be dealt with through the proceedings for proclamation. Hence; this chapter is prescribing simply the procedure for ensuring the presence of a person before the court, whether as an accused or as a witness. Once a person is brought to or appears before the court; it is for the court to deal with the person in accordance with the procedure prescribed under the Cr.P.C. If the person is called by the court through the above prescribed procedure as a witness ; then he shall be dealt with the procedure meant for a witness. But if such a person is called by the court throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he criminal court throughout the proceedings of the trial and at all stages thereof. Besides power of asking to furnish the bonds or sureties for appearance; under section 88, similar power is found in section 311 Cr.P.C.; where the court can require the deposition as witness from any person in attendance of the court, though such a witness may not have been cited as a witness by either side. Not only this, section 319 Cr.P.C. also empower the court to add any person in attendance of the court as an additional accused in the trial, if in the opinion of the court such person is required to be added as an accused as per the standards prescribed for such addition. Hence, under Cr.P.C.; a criminal court always have a power to deal with a person, who is otherwise present in the court; maybe even by chance. Section 88 is only one manifestation of such power of the criminal court; at the stage of compelling appearance of such a person before the court. Although the counsel for the petitioner have relied upon the judgment of the Supreme Court rendered in case of Data Ram (Supra), however, this court finds the said judgments to be totally distinguishable on the particular facts of those ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h person shall be released on bail : Provided that such officer or Court, if he or it thinks fit, [may, and shall, if such person is indigent and is unable to furnish surety, instead of taking bail] from such person, discharge him on his executing a bond without sureties for his appearance as hereinafter provided : Provided further that nothing in this section shall be deemed to affect the provisions of sub-section (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of section 446A and pending such inquiry, be released on bail, or, at the discretion of such officer or Court on the execution by him of a bond without sureties for his appearance as hereinafter provided. (3) When a person accused or suspected of the commission of an offence punishable with imprisonment which may extend to seven years or more or of an offence under Chapter VI, Chapter XVI, or Chapter XVII or more or conspiracy or 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.] otherwise in the interests of justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading of the language of sections 436 and 437 of the Cr.P.C. show that these sections provide for dealing with bail not only of those persons who are arrested by the investigating officer during the investigation, but also provide for dealing with bail to that person who appears or is brought before the court . It is a different matter whether such a person would get the concession of bail or not, depending upon the facts and circumstances of the case. But mere fact that the investigating officer had not arrested the accused during the investigation is, ipso facto, no ground to exclude the discretion of the court in the matter of grant of bail. Such an argument not only tends to make discretion of the court subservient to the discretion of the Investigation Officer in the matter of bail to the accused, but also is in direct negation of language of section 436 and 437 of the Cr.P.C. Only section 439 contemplates a person being arrested and being in custody for being considered for grant of bail by a Sessions Court or High Court. However, even this section provides that even if such a person is released on bail, these courts can order such a person to be taken into custody again, de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nspector 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 any offence under this act and in case any such investigation has already been initiated, it shall not be proceeded further with and the concerned agency shall transfer the relevant documents and records in respect of such offences under this act to serious fraud investigation office. (3) Where the investigation into the affairs of a company ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 arrested under sub-section (8) shall within twenty-four hours, be taken to a Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the Magistrate's court. (11) The Central Government if so di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 personauthorised 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 connectionwith the investigation which they are reasonably able to give. (2) The inspector may require any body corporate, other than abody corporate referred to in sub-section (1), to furnish such information to, or produce such books and papers before him or any person authorised by him in this behalf as he may consider necessary, if the furnishing of such information or the production of such books ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 subsection (1) or sub-section (2) to produce; (b) to furnish any information which is his duty under subsection (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 by the inspector in pursuance of that sub-section; or (d) to sign the notes of any examination referred to in subsection (7), he shall be punishable with imprisonment for a term which may extend to six months and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tside 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 sub-section or authenticated copies thereof or the things so collected shall be forwarded by the court, to the Central Government for transmission, in such manner as the Central Government may deem fit, to the court or the authority in country or place outside India which had issued the letter of request. Section 219 Power of inspector to conduct i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithstanding 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 days in the whole where such Magistrate is an Executive Magistrate: Provided that where such Magistrate considers that the detention of such person upon or before the expiry of the period of detention is unnecessary, he shall order such person to be forwarded to the Special Court having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imposing any fine under this Act may direct that the whole or any part thereof shall be applied in or towards payment of the costs of the proceedings, or in or towards the payment of a reward to the person on whose information the proceedings were instituted. Section 446-A of the Companies Act, 2013, 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 of the Companies Act, 2013 : 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... much liberal powers to arrest a person, as are available under Cr.P.C. Under the new Companies Act, 2013; before arresting a person, investigating officer is required to have material in his possession and on the basis of that material, is required to record reasons in writing that a person has been guilty of offence punishable under sections, which are mentioned in section 212 (6) of this Act. Therefore despite having the material in his possession justifying the arrest of a person, the investigating officer under the Companies Act may not choose to arrest a person, so as to avoid onerous duty of recording reasons. The section itself confers discretion upon the investigating officer; to arrest or not to arrest an accused. This again; is clear from the fact that the section is using the word may and it is not casting any mandatory duty upon the Investigating Officer to arrest the accused. On the other hand, after the investigation report is filed before the court, which is given a deeming fiction of being a charge-sheet filed under Section 173 of Cr.P.C. under section 212(15) of the Companies Act, the Special Court would have that entire material before it on the basis of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or non-appreciation of the material by the investigating officer. Therefore despite the fact that the investigating officer may have arrested a person during the investigation, the court may grant him the bail during the pendency of the trial; on its appreciation of the evidence filed in the charge-sheet. On the contrary; the trial court may not grant any bail to the accused, on the appreciation of the material placed before it in the form of the charge-sheet, despite the fact that the accused was not arrested by the investigating officer even in the face of the availability of the same material before him. However, whether there is any material available against the petitioner in this case, is separately argued by the Counsel for the petitioner and, therefore, would be dealt with in the coming paragraph separately. This Court does not find any force in the other argument of the counsel for the petitioner as well, that since the investigating officer had not obtained prior approval from Central Government for investigating the petitioner or his companies separately, therefore, the investigation qua him is unauthorised and, hence, even the cognizance by the Court taken upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to be carried out by the Director, Additional Director or other Officers of SFIO, authorised by the Director SFIO. However, the person carrying out the investigation under SFIO is also given a deeming faction of being an 'Inspector' for the purpose of powers of Investigating Officer; defined under Section 217 of the Companies Act. Hence all the Investigating Officers, whether investigating at the instance of Central Government under Section 208 or Section 210 or acting at the instance of Tribunal under Section 213 or acting at the instance of SFIO under Section 212, are to be known as 'Inspector' and are to conduct investigation as per procedure prescribed under Section 217. But Officer of SFIO, authorised to conduct investigation under Section 212; is further bound by the restrictions and prohibitions as prescribed under Section 212 of Companies Act as well. One more fact which comes out is that if an investigation is ordered by the Central Government, whether under Sections 208, 210, 213 or 212, and in the process the affairs of some other subsidiary or controlled company of the company under investigation are also found worth investigation, then even for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer etc., then as per the proviso to Section 217(4)(b) he shall require approval only from the Director SFIO, instead of the Central Govt. This distinction has been made by the statute keeping in view the specialized function of SFIO and nature of the offences; which SFIO is required to investigate. Reason for prescribing condition of requiring approval only from Director, SFIO is because, originally, the investigation is entrusted by the Central Government under Section 212 to SFIO only and not to any Inspector. The Inspector is specified, further, only by the SFIO. Hence, being delegate of Director, SFIO, the Inspector requires prior approval only from the Director, SFIO under Section 217(4)(b) proviso. In the present case the approval from the Director SFIO has been obtained by the investigation officer. Therefore, there is nothing wrong with joining the petitioner also qua the investigation of affairs of the Companies of the Adarsh Group. Since, as per the provisions of Section 212 (14), on receipt of investigation report the Central Government can order initiation of prosecution; not only against the officers and employees etc. of the Company under investigation; but also ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al functionality of the language of these twin conditions, as contained in the Narcotic Drugs and Psychotropic Substances Act, in case of Ankush Kumar (supra). After threadbare analyzing the operational functionality of the language of the twin conditions, as used in the statute, this court had come to conclusion that the language of the twin conditions requires impossibility from the court, besides defying the human logic in its operational functionality. This language, if made operational in a case, even by adopting the semi-cooked concept of reading down the language - and thereby ignoring the celebrated Doctrine of Severability and the touchstone of Articles 14 21; both, qua test of constitutional validity, then also it turns on their head some well established principles of criminal jurisprudence as well as, goes in negation of the provisions of Cr.P.C. dealing with the further progress of the trial in a criminal case, besides requiring prophesy from the court, which by no means, is a job of a criminal court. Hence this court had held in case of Ankush Kumar(supra), that since the operational functionality of the language of twin conditions is based upon totally indeterm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uage of section 437 Cr.P.C. the para materia language of twin conditions used in Terrorist and Disruptive Activities Act was upheld. However, although this court has no competence to comment upon this judgment of the Supreme Court, yet it has to be noted that the same judgment was cited even before the Supreme Court in Nikesh Tarachand Shah (Supra) case and the Hon ble Supreme Court had not found it worth reliance to the extent of being sufficient for upholding the para-materia language of twin conditions used in the Prevention of Money Laundering Act. Beyond that; this court can only observe that any further relevance of this judgment can be assessed only by the Hon ble Supreme Court in the case which is now stated to be pending before the Supreme Court itself and in which the constitutional validity of twin conditions as prescribed under section 212(6) is directly under challenge. However, so far as the language of section 437 Cr.P.C. is concerned, although in itself that cannot be a ground for pleading constitutional validity of the section 212(6) of the Companies Act, yet otherwise also; that language is drastically different than the language used in section 212(6) of Companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be kept in custody on the basis of non-fulfillment of the requirement prescribed under section 212(6)? This question was specifically referred to Delhi High Court by way of reference by a judicial officer, in case of Court on its Own Motion (Supra) case. However, even there the question does not find any answer. Unless this question is categorically answered to say that till the conclusion of the trial such a person cannot be released on bail without satisfying the conditions mentioned in section 212(6), the twin condition cannot be held to be mandatory. This is so because if a person can be released on bail without satisfying the twin conditions of the section 212(6), say, after 3 years, then there is no reason why he cannot be released without complying the said twin condition today itself. But this court has come across the unfortunate situations where a court may not even find the moral courage or the legal sanctity to tell to the accused that he shall have to wait in custody till conclusion of the trial, despite and in face of the legislative policy contained in provisions of section 436A of the Cr.P.C. If an accused is in custody for years together without his fault and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i High Court to consider the scope and effect of the twin conditions prescribed under section 212(6) of the Companies Act. However, in the present case, as mentioned above, this court has already considered the scope and effect of the operational functionality of the language para materia to the one contained in the twin conditions, as prescribed under section 212(6) of the Companies Act and has found in the case of Ankush Kumar (Supra) that the languages is in conflict with the right of the accused guaranteed under Article 14 and Article 21 of the Constitution and thus has to give way to the fundamental rights of the accused; qua his consideration for grant of bail. That 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. Hence this court is of the view that bail to the petitioners cannot be denied only on the strength of insistence by the public prosecutor upon twin conditions, as prescribed under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court has granted bail to such accused even by writing that it was conscious of the fact that the offences involved in those cases were economic offences and that offences would have an adverse effect upon the economy as such. The counsel has relied upon the judgment in case of Sanjay Chandra (Supra) and in case of D. K. Sethi (Supra). Therefore, it is submitted that applying the concept of economic offences selectively would tantamount to discrimination in application of law. Hence it is submitted by the Counsel for the petitioner and the distinction between economic offences and the other offences; qua the consideration of bail to the accused; no more holds good. Saying otherwise would give an impression that the courts are adopting a different approach in case of rich and high-ups and a different approach qua ordinary mortals. However, for the purpose of this case this court finds the argument to be not relevant. This court finds that in a case relating to the same offences under the new Companies Act 2013 only, the Supreme Court of India, in case of Nitin Johari (supra) has specifically directed the High Court of Delhi to take into consideration the factors which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner has been indulging in creating fake bills/invoices since the year 2012. Hence a petitioner is alleged to be a habitual entry-maker, and is alleged to be known as such in his area of operation. Coming to the material against the petitioner, learned Counsel for the SFIO has pointed out that investigation has led to the seizure and recovery of the material and the data showing that from April 2016 to October 2016 the petitioner is shown to have supplied suit length to Co- operative Society for an amount of ₹ 89.23Crores, however, this material has been found not to have actually been supplied by him or his Companies. Although the petitioner is alleged to have shown entries for an amount of ₹ 31.90Crores approximately in his balance sheet in this regard, however, even this amount is not found to have been deposited in the bank accounts of the petitioner or his companies. Hence, as per the allegations, these were the paper entries only, to help about 30 companies of the Adarsh Group of Companies to swindle the money of the cash-in-hands; which was the public money. In lieu of this help and conspiracy with the above said companies, the petitioner is alleged to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he recoveries. Beside this there are independent witnesses who have deposed against the petitioner. Hence, considering the entire material on record against the petitioner, by any means; it cannot be said that petitioner is not involved in the offences alleged against him. Although 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 befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the trial. Although in the first blush it can occur to the mind that such provision; which makes the statement made before the investigating officers as admissible in evidence; is in negation of fair trial due to inbuilt possibility of pressure and coercion in making such statement, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed the petitioner to collect cash from 30 companies of the Adarsh Group of Companies. Cash amount is stated to have been received by the petitioner, but is not found to have been deposited in the bank accounts. These facts are alleged to have been confirmed even by the confirmation ledger signed by the petitioner. The participation of the petitioner has duly been reflected as for the record. Lastly, this court also does not find any substance in the argument of the counsel for the petitioner that since the petitioner had joined investigation, was never arrested by the arresting officer and has never made any effort to run away from the process of the law, therefore there is no material with the prosecution that either the petitioner would influence the witnesses or he shall flee from country if he is released on bail. Although the learned Counsel has heavily relied upon the judgment of Supreme Court in case of P. Chidambram V/s CBI, 2019 SCC Online SC 1380 to argue that unless there is independent material to show the effort of the accused to flee from country or to influence the witnesses, he should not be denied bail, however, this court finds that even in that case the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat a few individuals cannot be made example to deny bail in deserving cases, but then, there is no pressing necessity for the courts to create concepts which neither withstands test of logic nor are contemplated by the statutory law. Grant or not to grant bail is discretion of the court. This discretion is better left to be guided by the material on record qua the crime and the attending possible conclusion which can be drawn therefrom than to be pushed to frontiers unchartered for the investigating agency. Therefore in view of this court; the possibility of the petitioner influencing the witnesses, fleeing from the process of the law or destroying the evidence, if at all required to be considered at this stage, has been seen with reference to the material forming part of charge-sheet against him. In view of the above, this court finds substance in the argument of the learned Counsel for the SFIO that since, as per the charge-sheet the petitioner is given to manipulations, for earning commissions, therefore, it cannot be denied that by nature, the petitioner could be manipulative. Hence, this court has no reason to believe that if the petitioner is released on bail, he is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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