TMI Blog2020 (7) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... cused with respect to internal investigation being carried out by AZB Partners is also relevant as the Accused refused to participate in the investigation - In addition, there are various complaints and FIR which have been filed by the Complainant Company and are pending investigation. The Accused has also been made a suspect in another case emanating from FIR No. 189/2019 dated September 23, 2019 which is pending at the stage of cognizance. It is pertinent to note that this is not an isolated instance and there are various other frauds committed by the accused persons. Agencies like SEBI, ED and SFIO are also investigating REL. It is settled law that economic offences are considered to be grave offences especially when public money is involved and that the Courts have to be careful in granting bail in such cases. In view of facts and law discussed and the fact that further investigation is at the crucial stage regarding fraud committed by accused for worth of ₹ 2,000/- crores plus of public money, there is apprehension that the petitioner may tamper with the evidence and influence the prosecution witnesses, therefore, this Court is not inclined to grant bail - Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs (Advocates and Solicitors) (hereinafter referred to as AZB Report ), Anil Saxena was issuing direct instructions for disbursement of loans. In fact, the case of the petitioner is on a far better footing, since Anil Saxena was part of the parent company Religare Enterprises Limited (hereinafter referred to as REL ) management team, while the petitioner was part of the subsidiary Religare Finvest Limited (hereinafter referred to as RFL ) team. Further, whereas there are no allegations whatsoever, against petitioner that he received even a single penny out of the loan amount siphoned off by the promoters, on the other hand there are allegations against Anil Saxena that he was also granted a loan of ₹ 1,40,00,000/- (one crore and forty lacs) by one of entities owned and controlled by the promoters. 4. Mr.Bali submitted that the mandate given to the petitioner on his joining RFL was to set up a retail Small and Medium Enterprise (hereinafter referred to as SME ) lending business which does not have dependence on performance of Capital Markets. The Petitioner was handling Consumer Finance which later got rechristened to SME Lending Business, being successfully created so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R. 6. Learned senior counsel submitted that the Petitioner was chargesheeted on wholly misconceived facts, falsely implicating him of causing wrongful losses to RFL by siphoning off its funds as ICD/CLB loans, in conspiracy with the other chargesheeted accused, to the benefit of RHC Holding Pvt. Ltd. (A company consisting of a 100 % shareholding of the Malvinder Mohan Singh and Shivinder Mohan Singh, the promoters of REL). The said chargesheet proceeds on a completely false premise to arraign the Petitioner, holding him liable for disbursal of loans and alleged siphoning of money, without being able to produce even an iota of evidence to show the Petitioner's involvement in the alleged offences. 7. Mr.Bali submitted that the Hon'ble Supreme Court in Sanjay Chandra Vs. CBI, (2012) 1 SCC 40, which involved economic offences of huge magnitude, while giving due regard to the settled principles of bail jurisprudence has exhaustively laid down law on bail. The Apex Court held that utmost importance has to be given to the valuable right of personal liberty and innocence of the Accused until proven guilty. The said principles were also kept in mind by the Apex Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 Accused No.3 B. RPT Committee Members S.No. Name Post Loans Approved Whether Made Accused 1. Avinash Chander Mahajan Independent Director, REL (Also approved 6 loans in RMC meetings) 11 No 2. Rashi Dhir Independent Director of REL 6 No 3. Monish K. Dutt International Finance Corporation (IFC) Nominee Director, REL 9 No 4. Sunil Godhwani MD and Chairman of REL (Also approved 6 loans in RMC meetings) 6 Accused No.5 5. Harpal Singh Director, REL 5 No 9. One such RMC Approval meeting dated 31.01.2017 clearly shows that approvals were granted unanimously b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. In addition, he passed 3 loans as RMC member. Infact, as per RFL website, at present he is the President Head of Corporate Planning and Strategy. Further, while sending the email he knew that rest of RMC (of which petitioner was a member) would not agree with his suggestion. In addition, as per the charge sheet, the defaulting entities were operating from the offices of RHC and transactions were carried out on instructions of Hemant Dhingra (Director of Finance of RHC). Statement of Hemant Dhingra relied upon in the charge sheet attributes no role to the petitioner, more so does not even mention his name. Statement of Directors of defaulting entities relied upon in the charge sheet attributes no role to the petitioner. Further, these Directors have stated that they were either known to the promoters or acquaintances of their late father. Not even remotely connected to the petitioner. 12. As held in P.Chidambaram vs. CBI: 2019 SCC OnLine SC 1197, if the applicant fulfils the triple test of bail then holding him in custody is detrimental to course of justice and violative of Article 21 of the Constitution. 13. In the case of S.K. Alagh vs. State of Uttar Pradesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner on 01.09.2016. 16. Further submitted that petitioner s role in the conspiracy and petitioner s position in the complainant company found during investigation that the Petitioner was the CEO and Managing Director of the Complainant Company for 6 years, i.e., between 14.11.2011 to 12.11.2017. By virtue of his position as the CEO and Managing Director he was the overall incharge of the business of the Complainant Company. During his tenure as the CEO and Managing Director a large part of the siphoning took place. He was the ultimate approving authority on the various committees which sanctioned the loans and was directly responsible for such sanctions. Out of 19 loans in default which have been mentioned in the chargesheet, the Petitioner had approved 16 loans amounting to approximately ₹ 1900 crores. The other 3 loans out of 19 were initially granted under the Loan Against Property portfolio. Therefore, the Petitioner was approving all loans under the Corporate Loan Book. The Petitioner being the CEO and Managing Director was a key managerial personnel of the Complainant Company and responsible for disbursement of loans to the shell entities. Investigation has found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt. Ltd.- ₹ 165 Cr Modland Wears Pvt. Ltd.- ₹ 162 Cr It is pertinent to mention that these loans were opposed by the independent director - Mr. Mohnish Dutt vide his email dated 31.8.2016 but were still approved by the Petitioner. 21.09.2016 The Petitioner was a party to an internal email which acknowledges that the CLB Loans must be evergreened to avoid being categorized as NPAs. The email was sent in the context of credit rating agency - ICRA seeking explanation regarding the CLB Loans from the Petitioner. 27.01.2017 Since the CLB Loans continued unabated, the RBI once again in a letter addressed to the Petitioner raised issues with the CLB Loans and specifically stated that the loans were routed from one entity to another. RBI red flagged the following entities which are also part of the chargesheet to which loans had been granted: A A Capital Services Pvt. Ltd. Gurudev Financial Services Pvt. Ltd. Fern Healthcare Pvt. Ltd. Tripoli Investment and Trading Company Annies Apparels Pvt. Ltd. Torus Buildcon Pvt. Ltd. Rosestar Marketing Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er s role (as the Managing Director and CEO) in the conspiracy is evident from the following: (a) The petitioner kept extending loans to shell companies despite RBI raising a concern regarding the same specifically with the Petitioner. The SEBI has also noticed the increase in CLB Loans despite contrary undertakings to the RBI; (b) He fabricated minutes of RMC Committee meeting of 28 June, 2017 to disburse loans amounting to ₹ 800 crores and then ratified these forged minutes on 16 August, 2017. This shows that documentation with respect to CLB loans was a mere charade to legitimize the transfer of funds. (c) He knowingly falsified books of accounts, i.e., the Director's Report dated 31 August, 2017 to state that the CLB Loans were not NPAs, despite knowing to the contrary (as per email of 21 September, 2017 in the context of ICRA seeking answers from the Petitioner). (d) He was instrumental in granting of loan to Modland Wears Pvt. Ltd. who had admittedly indulged in round-tripping. Modland Wears Pvt. Ltd. in the insolvency proceedings initiated against it by the complainant has admitted that such loan was given for round- tripping and the same has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplainant's contentions against this, the Petitioner herein approved loans to 16 out of the 19 entities in question. Therefore, the Petitioner's role was greater than that of Anil Saxena and the two cannot be placed equally. Thus, the present petition deserves to be dismissed. 21. I have heard learned counsel for the parties and perused the material available on record. 22. It is pertinent to mention here that while a fraction of the money trail of ₹ 2000 crores has been recovered, the other fraction still remains untraced as yet and investigation regarding the same is ongoing, by the Economic Offences Wing as well as independently by SEBI. The SEBI itself is still investigating fraud of about ₹ 600 crores and has recorded the same in its order dated 14.03.2019. Moreover, the loans granted by the Petitioner to the following entities amounting to over ₹ 600 crores are still under investigation: A. A A Capital Services Pvt. Ltd. B. Shridham Distributors Pvt. Ltd (erstwhile Abhiruchi Distrbutors Pvt. Ltd) C. Annies Apparel Pvt. Ltd. D. Gurudev Financial Services Pvt. Ltd; and E. Tara Alloys Ltd. 23. The petitioner being infl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019), the Hon'ble Supreme Court held that economic offences having deep rooted conspiracy involving investors' money have to be taken seriously. The Hon'ble Supreme Court while dismissing the order of bail, despite filing of chargesheet stated in Paragraph no. 8 as follows: This Court is conscious of the need to view such economic offences having a deep rooted conspiracy and involving a huge loss of investors' money seriously. Though further investigation is going on, as of now, the investigation discloses that the Respondent played a key role....thereby cheating a large number of innocent depositors and misappropriating their hard-earned money. 28. This Court is conscious about the fact that the Petitioner has been charged with Section 409 IPC which is a grave offence punishable with life imprisonment. The judgments of Sanjay Chandra vs. CBI is distinguishable from the present case as the charges in the said case carried a maximum punishment of 7 years, which is not the case herein. The same was also noted in Nittin Johari vs. SFIO (BA 1971/2019), wherein this Court held: 4. Ld. Sr. Counsel has submitted that investigation in the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not involve misappropriation of public money, unlike in the present case. The same has been distinguished by this Court in the case of Gurmeet Singh Ors. v. CBI [2017 (162) DRJ 488], wherein this Court held: 12. The main argument addressed by learned senior counsels for the petitioners is that entire allegations of the CBI show that being an offence of serious nature, bail should not be granted, whereas in Sanjay Chandra (supra) Supreme Court noted that the statement of the witnesses ran into seven hundred pages and the other documentary evidence was also too voluminous, so the trial may take considerable time and the appellant therein would have to remain in jail longer than the period of detention had they been convicted, thus it was not in the interest of justice that they should be in jail for indefinite period. In Sanjay Chandra (supra) the Supreme Court was not dealing with a case of large number of investors rather the allegations were in respect of criminal conspiracy between the accused in the year 2009 to get UAS license for providing telecom services to a company otherwise ineligible to get UAS license. 31. Moreover, Sanjay Chandra vs. CBI Ors. has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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