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TMI Blog2023 (5) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... ccount salient factors namely the beneficial proviso contained under Section 212 (6) Companies Act, 2013; the role attributed to the respondent/accused in the said fraud; as three major functionaries of the company have been granted interim protection by the Hon'ble Apex Court in another ED matter pertaining to same/ similar allegations which is still subsisting. Ld. Spl. Judge thus while opining that since the offence is by and large documented and there is no likelihood that the respondent/accused would flee from justice or evade trial, held that no purpose would be served in keeping the respondent/accused in JC and enlarged her on bail. 3. It has been submitted that it is settled law that economic offences constitute a class apart and are far more serious to the society as compared to individual criminal offences and they tend to seriously prejudice/destroy the economy of the country, thereby causing immense irreversible damage to the larger public interest. It has been submitted that the Ld. Spl. Judge while granting bail has diluted the mandatory twin conditions as stipulated u/s 212(6) of the Companies Act, 2013, which is contrary to the spirit and object of the Act. 4. Pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /5/2016/CL-II dated 08.01.2018 granted approval u/s 219 (b) & (c) of the Companies Act, 2013 to investigate into 20 group companies associated with BPSL. 8. The respondent/accused joined the investigation in 2016 pursuant to the above-mentioned order of MCAdated 03.05.2016. 9. Briefly stated the case of the petitioner SFIO is that BPSL (a company manufacturing flat, round and long steel products), following a split in the family business, was managed and controlled by one Sh. Sanjay Singhal who was also the Chairman & MD of BPSL. Investigation into the affairs of BPSL & Ors. (total 31 Companies) revealed that the corporate structure of BPSL was repeatedly abused for various fraudulent purposes. The books of accounts of BPSL were manipulated and various paper/shell companies were used for routing of funds in a deceptive manner. It has been alleged that using a complex web of transactions the affairs of the companies were conducted so as to perpetuate fraud of massive proportions. Investigation till date has revealed a fraud amounting to Rs. 5,431 crores approx. 10. Respondent/ accused herein, namely Aarti Singhal, is the wife of Sh. Sanjay Singhal, who is said to be the main mast ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll 28.03.2022, whereas others were remanded to judicial custody. A bail application was moved by the respondent/accused, whereby, vide order dated 28.03.2022 the Ld. Special Court allowed the bail application of the respondent/accused. 15. It has been stated that the SFIO investigation report was submitted to MCA and pursuant to the directions of MCA, Ct. No. 374/2022 was filed before the Ld. Special Court ASJ-03 District South-west Dwarka Delhi, wherein the Petitioner was arrayed as accused No. 37. It has been submitted that Cognizance has been taken by the Ld. Court vide its order dated 20.09.2022 and the respondent/accused has been summoned for offences u/s36 (c), 447 of the Companies Act, 2013 and sections 417, 420 and 120B IPC. 16. It has been submitted that the husband of the petitioner Sh. Sanjay Singhal along with 2 other persons namely Hardev Chand and RP Goel have preferred WP No. 36/2020 challenging constitutional validity of certain provisions of Companies Act, 2013, whereby, vide order dated 17.02.2020, the Hon'ble Supreme Court while issuing notice has granted interim protection of no coercive steps. 17. It has been stated that the interim protection granted to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; which, through a web of other companies, infused back into the associated companies from the F.Y 2009-2010 to 2017-18. Funds were infused as share capital, diverted for purchase of shares or purchase of assets in the name of the Respondent, her husband and the partnership firm of which her daughters are partners. As per balance sheet of BPSL for the F.Y 2016-17, a provision of Rs. 2606 crore of capital advances and raw material was made. ii. Respondent was the authorized signatory in all the 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. C. Bogus advances to suppliers i. BPSL funds were also diverted under the garb of 'advances to suppliers' to bogus paper entities managed and controlled by different entry-operators. As per balance sheet of BPSL for the F.Y 2016-17, a provision of Rs.471 crores were made for advances to supplier. ii. Respondent was the authorized signatory in all the bank accounts of BPSL through which funds were siphoned. It was under her instructions/signatures that the funds were transferred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to consider the gravity of offence, committed by the petitioner and the material on record and also the applicable law in the correct perspective; a) The active role of Petitioner and the fact that she was not merely a dutiful and obedient wife working on behest of her husband as she was present in the board meetings and was authorized signatory of BPSL is also not duly considered by the Ld. Special Court while passing the impugned order and granting her bail; b) The Ld. Special Court has failed to consider the mandatory twin conditions of bail as provided in section 212(6) of the Companies Act, 2013 which ought not have been cast aside completely; c) The Ld. Special Court erroneously relied upon the fact of not impleading the respondent as an accused by other agencies such as Enforcement Directorate etc. The Ld. Special court failed to consider that the ambit and scope of the investigation conducted by SFIO is at larger footing and as per Companies Act, 2013 and investigation conducted by SFIO 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'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cancellation of the bail already granted. Petitioner, SFIO has failed to bring out any reasons warranting cancellation of bail of the respondent, hence the present petition is not maintainable. Reliance has been placed upon the following judgments: Dolat Ram and Others Vs. State of Haryana, 1995 SCC (Cri) 237; Subhendu Mishra Vs. Subrat 'Kumar Mishraand another, 2000 SCC (Cri) 1508(3 Member Bench); Enforcement Directorate Vs Ratul Puri, CRL.M.C. 6466/2019; Sandeep Singh Vs Simran Sodhi and Ors., CRL.M.C. 1769/2020 dated 18.05.2022; CBI, Hyderabad Vs. Subramani Gopalkrishnan & Anr, 2011 (5) SCC 296; Rajan Mahajan And Anr. vs State And Anr.,2002 [1] JCC 557; Directorate of Revenue Intelligence Vs Harsh Vasant & Anr,2010 [1] JCC 109. 26. It is settled law that the conduct of the accused is material while deciding whether bail granted needs to be cancelled. It has been submitted that bail to the respondent was granted subject to fulfilment of several stringent conditions which 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. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to the beneficial proviso under Section 212 (6) of Companies Act. It has been submitted that the first proviso of S.212 (6) is akin to the first proviso of S. 437 Cr.P.C. (S.497 of the old Code)in terms of the enabling provision for women. Reliance has been placed on Mt. Choksi vs The State 1957 Cri.L.J. 102, wherein the Hon'ble High Court of Rajasthan granted bail to the accused in the said case who was a woman alleged to have committed offences under section 302/34 IPC, thereby upholding the constitutional validity of the benefit provided to certain categories of persons mentioned in Section 497 Cr.P.C (old code which is pari-materia to the proviso u/s 437 of the new code) and held that it is open for the Courts under Section 497 (Old code) to grant bail to a woman even in cases where she is accused of an offence punishable with death or transportation of life. 28. Learned Senior counsel for the respondent states that in the case investigated 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tories, had signed cheques or issued instructions to the banks for issuance of DDs and payment of freight was also paid by her and her husband from their joint bank accounts. Ld. Spl. Judge opined that the respondent accused being a dutiful wife was in all probability acting at the behest of her husband. 36. Ld. Spl. Judge with respect to the allegations levelled at the respondent accused pertaining to the properties in Bombay, whereby she has been alleged with her husband for conspiracy to acquire the same by siphoning of funds from the company, it was observed that the respondent accused has not been named in the complaint before the Adjudicating Authority, only her husband and 2 other companies namely M/s Assurity Real Estate LLP and M/s Millenium Developers Pvt. Ltd. were named as accused. 37. Ld. Court observing parity in the proviso contained under section 437 Cr.P.C., 45, PMLA and 212 (6) Companies Act, held that the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a person, who, is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence referred to this subsection 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." 40. A perusal of the aforesaid provision makes it clear that no person, accused of an offence under section 447 of Companies Act, which is a cognizable offence, shall be released on bail or on his own bond unless the twin conditions as stipulated in Section 212(6) of Companies Act are fulfilled. The first being that Ld. PP has to be given an opportunity; and second being that in case Ld. PP 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tisfy itself that the accused person is sick or infirm. In a case pertaining to women, the court is expected to show some sensitivity. We have already taken note of the fact that many women who commit cognizable offences are poor and illiterate. ***** 78. .....While dealing with a welfare legislation, a purposive interpretation giving the benefit to the needy person being the intendment is the role required to be played by the court. We do not wish to state that this proviso has to be considered favourably in all cases as the application depends upon the facts and circumstances contained therein. What is required is the consideration per se by the court of this proviso among other factors." 44. The rigours of Section 212 (6) Companies Act will not apply as a precursor to the categories of persons, as mentioned in the proviso as the same would render 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial, the Courts should be slow and circumspect and should take away the liberty already granted only in the wake of grave and supervening circumstances which warrants such cancellation of bail. The onus to prove is on the party seeking such cancellation. The liberty cannot be withdrawn mechanically without taking into account whether the accused has misused his liberty or whether any supervening circumstances have rendered it no longer conducive for the accused to enjoy his liberty. 49. It has been held in a catena of judgements that while cancellation of bail under section 439 (2) Cr.P.C. the Courts must see whether the order granting bail was vitiated by any serious infirmity. Cogent and overwhelming circumstances are required for an order seeking cancellation of bail. Even where prima facie case is made out, the approach of the Courts is not 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual is a core constitutional right that should be taken away only under the most compelling and serious circumstances. Courts should be cautious while cancelling bail already granted, as the same entails review and possible cancelling of a reasoned order based on material evidence on record. It is settled law that Courts should only interfere and revoke the liberty so granted if new facts and supervening circumstances reveal that the accused has been abusing his freedom, tampering with evidence, or influencing witnesses. The onus is on the party seeking such cancellation to present compelling evidence depicting that the accused poses a threat to the victim or their family, or is tampering with evidence, or influencing witnesses so that would jeopardize or hamper the trial. However, the parameter is quite different when the Court is exercising 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut any cogent reason behind seeking remand of the respondent to JC. Petitioner SFIO has merely in a vague and cursory manner stated that the respondent is a flight risk, or may tamper with the evidence, but in absence of any cogent, compelling reason this court cannot interfere with the said order and cancel the bail so granted. Moreover, the respondent has appeared on several dates before the SFIO and has adhered to all the conditions imposed vide the impugned order granting bail. Thus the mere allegation of the petitioner that the respondent has joined the investigation but is being evasive does not hold force. 56. Be that as it may, it is pertinent to note that the petitioner SFIO has not sought to cancel the bail under section 439 Cr.P.C., instead he has approached this Court invoking its inherent jurisdiction under section 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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