TMI Blog2023 (5) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order reflects that the order is neither unsubstantiated nor perverse. The order granting bail is a well-reasoned order and has been based on proper material on record taking into account several incidental aspects around the case. There is no infirmity with the order which so requires the interference of this Court. The Ld. Special Court has after correctly appreciating the special benefit conferred on a woman and after considering the role of the Respondent and upon its satisfaction, has duly exercised its discretion in favour of the present Respondent thereby granting her bail. Moreover, it is not in dispute that SFIO complaint has been filed, cognizance taken and accused persons have been summoned. Thus in absence of any legal infirmity or perversity, this Court cannot interfere with the order of the Ld. ASJ granting regular bail to the respondent/accused. This Court does not sit as a court of appeal and cannot reappreciate evidence and substitute its view with that of the subordinate court merely because another plausible view was taken. Further, in absence of any cogent, supervening circumstances necessitating cancellation of bail of the respondent/accused, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. 4. Petitioner SFIO thus aggrieved has challenged the said order on the salient grounds which are as under: a) Ld. Spl. Judge has wrongly interpreted and applied the beneficial proviso under section 212 (6) Companies Act, 2013; b) Ld. Spl. Judge has failed to consider the detailed role played by the respondent/accused in the present fraud; c) Ld. Spl. Judge erred while accepting the contention of respondent/accused that she was merely a dutiful/obedient wife acting on the instructions of her husband; d) Ld. Special Court ruled out the respondent/accused is a flight risk after wrongly relying upon the findings and developments in ED cases (which has a separate mandate) rather than relying exclusively on the SFIO findings, despite the fact that the scope and ambit of investigation under the PMLA and the Companies Act are vastly different, being separate statutes altogether. e) Ld. Spl. Court has granted bail to the respondent/accused after relying on the order of the Hon ble Supreme Court granting interim protection to various individuals including the husband of the respondent/accused in another ED matter pertaining to similar allegations. It has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sanjay Singhal, who is said to be the main mastermind behind the present fraud. Admittedly she was the director of BPSL from 2006 - 2019. It has been alleged that in her capacity as a director, she attended 12 board meetings during the relevant period and even chaired 5 such meetings. Admittedly, she and her husband Sh. Sanjay Singhal were authorized signatories in all bank accounts of BPSL along with its 30 associated companies, which are under investigation. It has been alleged that being an authorized signatory in all bank accounts of BPSL and its group companies, she actively partook in all the fraudulent activities undertaken by the company. 11. It has been alleged that investigation revealed that the respondent/accused being an authorised signatory in all bank accounts of BPSL and other associated companies, was actively involved in the following fraud: i. Siphoning of materials from BPSL Plant, Sambalpur, Orissa to sell it in the open market without issuing sale invoices. ii. Diversion of funds from BPSL in the form of bogus capital advances and routing the same as equity or unsecured loans in related entities of BPSL iii. Bogus advances to suppliers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... coercive steps. 17. It has been stated that the interim protection granted to the above mentioned persons is still subsisting without any change or modification. 18. It has been submitted that parallelly in another ED matter whereby similar allegations had been levelled, Sh. Sanjay Singhal, who was also initially arrested, was granted bail by the Ld. ASJ vide order dated 24.01.2020. It has been submitted that however the respondent/accused namely Aarti Singhal who is the wife of Sh. Sanjay Singhal was neither named as an accused and nor was she charge-sheeted against in the said proceedings. Submissions on Behalf of SFIO Petitioner 19. Learned counsel for the petitioner submits that the respondent accused has been charged under sections 447/36(c) of Companies Act, 2013 and sections 417/420/120B of IPC. Section 447 and 36 (c) attract the twin conditions of bail as enumerated u/s. 212(6) Companies Act, 2013.Investigation till date has revealed fraud to the tune of Rs. 5431 crores (approx).Respondent accused was the Director of BPSL w.e.f.2006 to 2019, in which period she attended 12 Board Meetings during the relevant period and chaired 5 such meetings. Respondent accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank accounts of BPSL through which funds were siphoned. It was under her instructions/signatures that the funds were transferred to paper companies managed and controlled by various entry-operators. On her instructions to banks, payments were made as bogus advances to supplier's parties through which funds of BPSL were siphoned off. D. Issue and negotiation of Inland Letters of Credit by Bhushan Power Steel Limited i. The instrument of Letter of Credit was misused through which BPSL availed credit facilities from banks on the strength of fabricated documents. The beneficiaries were group companies of BPSL and paper entities used by BPSL for availing the funds ii. Respondent is the authorized signatory in the bank account wherein the proceeds of Letter of Credit had been credited after rotating through the accounts of group companies and paper entities. E. Diversion of BPSL funds for purchase of. Shares by Promoters Family Members for Long-Term Capital Gains i. Aarti Singhal, along with her husband, family members etc., availed bogus LTCG to the tune of Rs. 1084.93 crores during the F.Y 2009-10 to 2016-17. F. Bogus purchase of capital good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FIO has clearly established the role played by the respondent in commission of serious economic offence; d) The Ld. Special Court has wrongly relied upon the Interim order of Hon'ble Supreme court where the constitutional validity of provisions of Companies Act,2013 are challenged by her husband Sanjay Singhal, in which Aarti Singhal/Respondent is not a party; and e) The Ld. Court failed to consider the judgments by the Hon'ble Supreme court and Hon'ble High courts in various cases where the law regarding granting of bail under twin conditions and proviso to section 212(6) has been settled, such as Serious Fraud Investigation Office Vs. Nittin Johari Anr. 2019 SCC Online SC 1178, Shivani Rajiv Saxena Vs Directorate of Enforcement 2017 SCC Online DEL 104, Priyanka Modi Vs Serious Fraud Investigation Office (CRM-M No. 22815 of 2021). Submissions on Bhelaf of the Respondent/Accused Aarti Singhal 22. Ld. Senior Counsel for the respondent submits that the present petition u/s 482 Cr.P.C. seeking to exercise inherent jurisdiction of this Court to set aside the impugned order is not maintainable, as the provision for cancellation of bail is specificall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch were imposed. It has been submitted that the said conditions have been complied with and there is no specific allegation to the effect that the present Respondent has breached any of the said conditions. 27. Ld. Senior Counsel submitted that the Ld. Special Judge has rightly granted bail to the respondent accused on the following succinct grounds: a) Respondent accused is merely a housewife and senior citizen aged 62 yrs. She was not involved in affairs of the Company and was merely signing cheques, acting as signatory on instructions of Company officials. It is a matter of record that she did not act independently and only followed the instructions of her husband. b) Respondent was not charge sheeted in the ED case wherein similar allegations were made against the husband of the respondent. c) Respondent satisfied the triple test for grant of bail. Necessary condition of visiting SFIO daily till next 20 working days and thereafter thrice for two weeks and twice for two weeks subsequently, has been imposed by Court to take care of the apprehension that the respondent may flee from justice. Further, no allegation has been made by the SFIO to claim that the accuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by ED on similar allegations as in present case, where respondent has not been made an accused, it has been stated under various statements recorded u/s 50, PMLA, that the respondent is a housewife and was merely a namesake director. As a result respondent/accused has not been arraigned as an accused in the said ED case, whereby her husband has been already granted bail in 2020. 29. It has been submitted that the co-accused persons vide order dated 17.02.2022 in WP (Crl) No. 36/2020 titled Hardev Chand Ors. vs Union of India Anr. have been granted an interim protection in the ED matter, which is still subsisting. 30. Learned counsel submits that subsequent facts have emerged after the respondent has been granted bail. SFIO has filed its detailed complaint on 19.05.2022 and the Ld. Spl. Judge has taken cognizance on 20.09.2022 thereby summoning 92 accused person. 31. Respondent was also summoned for 17.01.2023 and has duly appeared before the Ld. Special Court on the said date. It has been submitted that the next date of hearing in the said matter is on 09.05.2023 and the same is pending scrutiny of documents/ grants of bail to other accused/ service of summons to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisprudence behind adopting the same language as contained under section 437 proviso Cr.P.C is to also extend the same benefit to certain categories prescribed under the Companies Act such as persons under 16 yrs of age, women, infirm or sick. Ld. Court thus held that a liberal effect may be given to the proviso. 38. Ld. Court then proceeded to deal with the aspect whether the respondent accused satisfied the triple test i.e. flight risk, tampering of evidence and influencing of witnesses. Without delving into the detailed merits of the case the respondent accused was enlarged on bail in terms of the proviso contained under section 212 (6) Companies Act, on the following predominant grounds: a) the main accused i.e. husband of the respondent along with 2 major functionaries have been granted interim protection by the Hon ble Supreme Court which is still subsisting. Ld. Court held that with respect to influencing of witnesses and tampering of evidence is concerned since the husband of the accused is protected, this aspect cannot be taken against the wife. Ld. Court held that keeping the accused in JC would not serve any purpose and necessary conditions may be imposed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opposes the application, the Court has to be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail. The first proviso is an exception to the above rule and vests the discretion with the Court to release certain categories of persons including woman, infirm, sick or persons under 16 yrs on bail. 41. The aspect of the beneficial proviso contained under section 212 (6) of the Companies Act, 2013, has been further considered in detail in BAIL APPL N 1740/2022 titled Komal Chada vs. SFIO, whereby this Court in a similar matter enlarged the accused on bail in terms of the enabling provision of section 212 (6) and inter alia held as under: 30.6 Most importantly, 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- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proviso nugatory, in as much as, an accused will be entitled to be released on bail only if he satisfies the twin condition laid down in the said section. The object and purpose behind the legislature in carving out this exception for certain categories of people would in essence be dead letter if the twin conditions set out are interpreted to be a precursor for the grant of bail even in cases pertaining to the said categories in the proviso. 45. This Court is of the considerate view that said proviso is only an enabling provision which vests discretion with the Courts to grant bail to certain categories of person. The said discretion is not to be used as a rule of thumb but rather depends on special circumstances and facts necessitating such release on bail while also considering the nature, gravity and seriousness of the offence. 46. The consequences and ramifications of under trial detentions are grave. The respondent in the present case is a woman aged 62 yrs. and stated to be a senior citizen. It has been contended that she is in fact a housewife who was merely a figurehead in the company and has acted at the behest of her husband and the other senior functionaries o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to detain the accused by way of punishment, but to ensure if his presence would be readily available during trial or whether he is likely to abuse the liberty by tampering or influencing the witness. 50. In State (Delhi Administration) Vs. Sanjay Gandhi [1978 (2) SCC 411] the Hon ble Supreme Court held as under: Rejection of bail when bail is applied for is one thing; cancellation of bail already granted is quite another. It is easier to reject a bail application in a non-bailable case than to cancel a bail granted in such a case. Cancellation of bail necessarily involves the review of a decision already made and can by and large be permitted only if, by reason of supervening circumstances, it would be no longer conducive to a fair trial to allow the accused to retain his freedom during the trial 51. In Central Bureau Of Investigation Vs Akhand Pratap Singh, 2008 11 AD (DELHI) 139, it was inter alia held as under: 14 The cancellation of the bail necessarily involves the review of a decision already made and can by and large be permitted only, if by reason of supervening circumstances, it would be no longer conducive to a fair trial to allow the accused to retain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercising its inherent power under section 482 Cr.P.C to set aside the bail order as in this case, the Courts can only interfere if there is an infirmity with the order granting bail, or if the order is perverse, illegal, or finding are contrary to material on record. It is pertinent to note that the Courts cannot intervene and set aside the order under section 482 Cr.P.C in the absence of any infirmity or perversity. 54. In Puran v. Rambilas, (2001) 6 SCC 338, the Hon ble Supreme Court held as under: 10 ..One such ground for cancellation of bail would be where ignoring material and evidence on record a perverse order granting bail is passed in a heinous crime of this nature and that too without giving any reasons. Such an order would be against principles of law. Interest of justice would also require that such a perverse order be set aside and bail be cancelled. It must be remembered that such offences are on the rise and have a very serious impact on the Society. Therefore, an arbitrary and wrong exercise of discretion by the trial court has to be corrected. 11. Further, it is to be kept in mind that the concept of setting aside the unjustified illegal or perverse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 482 Cr.P.C seeking to set aside the order dated 28.03.2022 granting bail to the respondent accused and seeks her surrender /remand to JC. 57. It is a trite law that the inherent power of this Court under section 482 Cr.P.C. to quash or set aside a bail order, works on a different footing as compared to cancellation and rejection of bail. This Court under section 482 Cr.P.C. can only interfere and entertain an order of the subordinate court if such order is unreasonable, illegal, perverse or based on irrelevant materials/evidence on record. High Courts will not exercise its jurisdiction to interfere with an order of bail granted by Special Judge if there is no serious infirmity in it. This Court does not sit as a court of appeal and thus cannot reappreciate evidence and substitute its view with that of the subordinate court merely because another possible view was taken. 58. It is well settled that in exercising its jurisdiction under Section 482 CrPC, the High Court does not in absence of perversity upset the judgement of the courts below. Power under section 482 Cr.P.C. can only be used to prevent the abuse of the process of the Court or to secure the ends of justice. 59 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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