TMI Blog2020 (2) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... desirable to weigh the evidence meticulously to arrive at a positive finding as to whether or not the accused has committed offence. What is to be seen is whether there is reasonable ground for believing that accused is not guilty of the offence(s) he is charged with. There are serious allegations against the petitioner regarding manipulation and fabrication of financial documents by way of which, the fund was siphoned off to other companies and therefore, it cannot be held that there are no reasonable grounds to believe that accused is not guilty of the offences alleged against him - in view of the allegations appearing on record and active participation of the petitioner in alleged commission of the offence i.e. in fabrication of documents in opening LCs and discounting of the same, manipulation of accounts and siphoning of the funds worth several crores and keeping in mind the fact that all fraudulent activities were allegedly planned in advance and executed carefully and with deliberate design and further taking overall view of the matter, it is difficult to hold that petitioner will not commit any offence under the Act while on bail. On the basis of allegations appear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments and information as and when required. On 02.05.2019, SFIO had summoned the petitioner via telephone and arrested him without any justification or reasons. The petitioner was produced before the Ld. Duty M.M., Patiala House Courts and was remanded to SFIO custody for two days which was thereafter extended from time to time. On 08.05.2019, the petitioner was remanded to judicial custody which has also been extended from time to time by the Ld. Special Judge, Dwarka Courts. The interim bail application of petitioner was allowed by the Hon ble High Court on the medical ground of his mother. However, the first regular bail application of the petitioner was dismissed by the Ld. Special Judge on 06.06.2019. Thereafter charge-sheet was filed before the Ld. Special Judge on 01.07.2019. The Petitioner had filed the 2nd bail application on 12.07.2019, however, the same was also dismissed by the Ld. Special judge on 02.08.2019. 4. Ld. Sr. Counsel has submitted that investigation in the present case stands completed and even charge sheet has been filed by the investigating agency. The present case is based on documentary evidence and banking transactions and, therefore, there is no p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Union of India, (2018) 11 SCC1; c. Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294; d. Ankush Kumar @ Sonu vs. State of Punjab, 2018 SCC Online (P H) 1259; e. Gurbaksh Singh Sibbia v. State of Punjab, (980) 2 SCC 565; f. State of Maharashtra v. Nainmal Punjaji Shah Anr (1969) 3 SCC 904; g. Niranjan Singh Anr. v. Prabhakar Rajaram Kharote Ors.,(1980) 2 SCC 559; h. P. Chidambaram v. CBI, 2019 SCC OnLine SC 1380; i. D.K. Shivakumar v. Directorate of Enforcement, 2019 SCC OnLine Del 10691. 7. Ld. ASG on the other hand has opposed the bail application and submitted that Ld. Special Court has taken cognizance and summoned the petitioner of the offences under Section 36(c), 128,129,447,448 of the Companies Act, 2013; under Section 209, 211 r/w 628 of the Companies Act, 1956 and under Section 467, 468, 471 r/w. Section 120-B of the Indian Penal Code vide order dated 16.08.2019. It is further submitted that the case against the petitioner squarely falls under the provisions of Section 212 (6)(ii) of the Companies Act, 2013. Section 212(6) of the Companies Act, 2013 starts with a nonobstante clause and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2001) 7 SCC 673; b. Bijando Singh v. Md. Ibocha (2004) 10 SCC 15; c. Union of India v. Rattan Mallik @ Habul-(2009) 2 SCC 624; d. Narcotics Control Bureau v. Kishan Lal (1991) 1SCC 705; e. Customs New Delhi v. Ahmadalieva Nadira 2004 3 SCC 549; f. Union of India v. Shiv Shankar Kesari-(2007) 7 SCC 798; g. Satpal Singh vs. state of Punjab (2018) 13 SCC 813; h. Narcotics Control Bureau v. Dilip Pralhad Namade (2004) 2 SCC 619; i. Union of India v. Saurabh Chatterji (2006) 9 SCC 759; j. Y.S.Jagan Mohan Reddy v. Central Bureau of Investigation, reported in 2013 97) SCC 439; k. Rohit Tandon v. Directorate of Enforcement, (2018) 11 SCC 46; l. State of Gujarat vs. Mohanlal Jitamalji Porwal, (1987) 2 SCC 364; m. Ram Govind Upadhyay v. Sudarshan Singh Ors., AIR 2002 SC 1475; n. State of Bihar and Anr v. Amit Kumar alias Bachcha Rai (2017) 13 SCC 751; o. Gautam Kundu v. Directorate of Enforcement (PMLA) (2015) 16 SCC 1; p. Achint Navinbhai Patel v. State of Gujarat and Anr. (2002) 10 SCC 529. 9. I have considered the rival submissions. As per the material/documents appearing on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the cases, the transporter either did not exist or the vehicle number mentioned turned out to be a two/three passenger vehicle. The request letter given by the beneficiary of the LC for negotiation of the documents were not issued by them and the account number mentioned therein was of Bhushan Steel Ltd. instead of beneficiary of LC i.e. Hindustan Zinc Ltd. and JSW Steel Ltd. Bill of exchange was neither drawn nor signed by any of the authorized signatory of Hindustan Zinc Ltd. and JSW Steel Ltd. 12. It is further alleged against the petitioner that the confirmation with regard to the genuineness of the trade transaction and supply of goods as per proforma invoice accompanying the documents submitted to LC discounting bank were signed by various accused persons including the present petitioner. The LC discounted amount was, thereafter, transferred to the BSL account and was available as a credit to it for the period of LC, which could be sixty, ninety or any number of days as per the terms and conditions of the LC. Thus, using the fraudulent, deceptive method, various accused persons including the present petitioner were able to avail the illegitimate flow of funds amountin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansition and used the accounting head BSL-ITT Orissa for camouflaging these transactions. 14. It is further alleged that the manipulation in the financials was also within the knowledge of the petitioner. Under the garb of first time adoption of IndAs (Indian Accounting Standards), the amount of ₹ 3,727.45 Cr. and ₹ 2,420.69 Cr. for the F.Y. 2014-15 and 2015-16 respectively was shown under the head Bill of exchange-payable, which reflected the actual position of the fraudulently availed LCs. However, it was never reflected in the balance sheet for F.Y. 2014-15 and 2015-16. During the course of investigation, it was also revealed that the books of accounts of BSL were manipulated, in the figures of Stock-in-Transit (SIT) and Trade Receivable and on account of the fraudulently encashed LCs during the period 2013-14 to 2016-17 which was covered up through false increase in valuation of assets by around ₹ 15000/- crore. The revaluation was fraudulently done and based on a false valuation report. The balance sheet of BSL was already manipulated to contain the inflated figures of ₹ 6523 crore of SIT (Stock-in-Transit), ₹ 1271 crore of trade Receiva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bail under Section 439 of the Cr.P.C. while also keeping in mind the scope and effect of the twin mandatory conditions for grant of bail laid down in Section 212(6)(ii) of the Companies Act, 2013. 16. Ld. Sr. Counsel has argued that investigation in the present case is complete. There are 284 accused persons and documents on which reliance has been placed are voluminous and trial may take considerable time and, therefore, the petitioner in view of the judgment of Hon ble Supreme Court in Sanjay Chandra s case (supra) be released on bail. However, the said case is distinguishable from the case in hand as the charges in the said case carried a maximum punishment for a term which may extend to seven years whereas in the present case, the petitioner is alleged to involved in offence u/S. 36(c), 128,129,447,448 of the Companies Act, 2013; u/S. 209, 211 r/w 628 of the Companies Act, 1956 and under Section 467,468,471 r/w Section 120B of the Indian Penal Code and one of the offence u/S. 467 IPC is punishable with imprisonment up to life. 17. Ld. Sr. Counsel has further relied upon Nikesh Tarachand Shah s case (supra), wherein Hon ble Supreme Court has held that Section 45(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is any apprehension that he would tamper with evidence or influence the witnesses and according to Ld. Counsel this is not the case here as there is nothing on record to suggest that petitioner will abscond or tamper with evidence or influence witnesses. The investigation is already over. It is, therefore, prayed that petitioner be released on bail in the interest of justice. 20. I have carefully considered the submissions made by Ld. Sr. Counsel. As discussed earlier, no straitjacket formula can be laid down in deciding a bail application. The Hon ble Supreme Court in State of Bihar Anr. v. Amit Kumar @ Bachcha Rai, (2017) 13 SCC 751 has held as under:- 11. Although there is no quarrel with respect to the legal propositions canvassed by the learned counsels, it should be noted that there is no straight jacket formula for consideration of grant of bail to an accused. It all depends upon the facts and circumstances of each case. The Government's interest in preventing crime by arrestees is both legitimate and compelling. So also is the cherished right of personal liberty envisaged under Article 21 of the Constitution. Section 439 of The Code of Crimina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section 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. (7) The limitation on granting of bail specified in sub-section (5) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. 24. Perusal of Section 212 (7) of the Companies Act, 2013 reveals that limitation on granting bail is in addition to the Limitation provided under Section 439 Cr.P.C. This court has now to decide the bail application in the light of the provisions of bail enunciated in the Companies Act as well as Cr.P.C. This court has, thus, to be satisfied that there are reasonable grounds for believing that petitioner is not guilty of the offences alleged against him and that he is not likely to commit any offence while on bail. It is a settled law that at the time of consideration of bail application, it is neither necessary nor desirable to weigh the evidence meticulously to arrive at a positive finding as to whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing in mind the fact that all fraudulent activities were allegedly planned in advance and executed carefully and with deliberate design and further taking overall view of the matter, it is difficult to hold that petitioner will not commit any offence under the Act while on bail. This court is, therefore, of the opinion that on the basis of allegations appearing on record, it cannot be held that there are no reasonable grounds to believe that the accused is not guilty of the offences alleged against him and that he is not likely to commit any offence under the Act while on bail and thus, twin conditions for grant of bail as envisaged under Section 212(6) (ii) are not satisfied. 27. This court is further of the opinion that petitioner is not entitled to bail even under Section 439 Cr.P.C. even if the bail application is not tested on the touchstone of twin conditions as enumerated in Section 212(6) (ii) of the Companies Act, 2013 for the reason that offence committed by the petitioner is an economic offence which affects the economy of the nation. In Y. S. Jagan Mohan Reddy vs. Central Bureau of Investigation, (2013) 7 SCC 439 , the Hon ble Supreme Court has held that while g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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