2023 (2) TMI 1166 - HC - Companies Law

Seeking grant of bail - flight risk - cash sales - fictitious sale of food grain - creation of accommodation/adjustment accounting entries, apart from misusing cheque discounting facilities - HELD THAT - It is however the admitted position, that the petitioner was never arrested in the course of the 06-year long investigation; that he was remanded to judicial custody by the learned Special Judge only at the stage after cognizance was taken and the petitioner appeared before the court against summons issued, purportedly in view of the provisions of section 212 of the Companies Act; in particular considering that section 212(6) bars the grant of bail unless the twin conditions contained therein are satisfied. As held by this court in Komal Chadha 2022 (12) TMI 982 - DELHI HIGH COURT however, other things apart, in mechanically remanding the petitioner to judicial custody, the learned Special Judge misdirected himself in applying section 212(6) to the situation in as much as that provision relates to a stage where the court is considering grant or refusal of bail to a person who is in custody - Section 212(6) would not apply to a case where the I.O. has never sought police custody of the accused; and has not even asked that the accused be remanded to judicial custody after cognizance is taken. The decision whether to remand the petitioner to judicial custody upon his appearance, vests with the Special Judge; and that should have been considered and decided by the Special Judge in accordance with well-settled and restrictive principles as to pre-trial detention of an accused. In the present case, as also in the case of Komal Chadha 2022 (12) TMI 982 - DELHI HIGH COURT , the order remanding the petitioner to judicial custody discloses no application of mind as to why, on what basis, for what reason, or for what purpose the learned Special Judge formed the view that the petitioner‟s judicial custody had become necessary, after the petitioner had been at liberty for the past 06 years. There was no allegation of the petitioner having either intimidated any witnesses; or having tampered with evidence; or having otherwise interfered in the course of investigation. As for the question whether the petitioner is a flight risk, it is noted that no specific risk has been cited or shown to exist; and the perceived theoretical risk which exists in the case of every accused on bail, can be addressed by imposing appropriate conditions on grant of bail. The court is persuaded to allow the present petition and admit the petitioner to regular bail, subject to the conditions imposed - petition allowed.

Summary

Issues Involved:
Petition for regular bail under section 439 of Cr.P.C. - Allegations under section 447 of Companies Act - Role of the petitioner in fraudulent activities - Comparison with co-accused's bail - Application of section 212(6) of Companies Act - Necessity of judicial custody - Flight risk assessment - Conditions for granting bail.

Detailed Analysis:

1. Petition for Regular Bail: The petitioner filed a petition seeking regular bail under section 439 of the Code of Criminal Procedure, 1973, as he was accused in a case titled SFIO vs. Parul Polymers Pvt. Ltd & Ors. The petitioner, arraigned as accused No. 4, sought bail before the Special Judge (Companies Act) at Dwarka Courts, New Delhi.

2. Allegations under Section 447 of Companies Act: The petitioner was accused of involvement in various fraudulent activities under section 447 of the Companies Act, 2013. The allegations included cash sales, fictitious transactions, accommodation entries, misuse of cheque facilities, manipulation of financial statements, and diversion of funds to sister concerns.

3. Role of the Petitioner in Fraudulent Activities: The petitioner's role was described as that of a regular employee and a close confidant of a key accused. He was alleged to have assisted in opening bank accounts for illegal purposes, as per his statement recorded on oath. The petitioner's involvement in siphoning off funds through fake bank accounts was a significant aspect of the case.

4. Comparison with Co-Accused's Bail: The petitioner's counsel argued for bail by comparing his role with that of a co-accused who had been granted bail previously. It was emphasized that the petitioner had a peripheral and non-voluntary role in the alleged offenses, similar to the co-accused who had already been admitted to bail.

5. Application of Section 212(6) of Companies Act: The issue of remanding the petitioner to judicial custody was discussed concerning the application of section 212(6) of the Companies Act. It was argued that the provision should not apply in the absence of a request for police custody or remand by the Investigating Officer.

6. Necessity of Judicial Custody: The court analyzed the necessity of judicial custody for the petitioner, considering factors such as the absence of prior arrest during the investigation, lack of intimidation or tampering allegations, and the Investigating Officer's decision not to seek custody earlier.

7. Flight Risk Assessment: The court considered the question of the petitioner being a flight risk and noted the absence of specific risks cited. It was highlighted that any perceived risk could be managed through imposing appropriate bail conditions.

8. Conditions for Granting Bail: After detailed deliberation, the court granted bail to the petitioner with specific conditions, including furnishing a personal bond, surrendering the passport, providing contact details, and refraining from contacting witnesses or tampering with evidence.

9. Final Order: The court disposed of the petition, emphasizing that the order should not be construed as an opinion on the case's merits. The order was to be sent to the Jail Superintendent, and pending applications were also disposed of.

This comprehensive analysis covers the key issues and discussions presented in the judgment, providing a detailed understanding of the legal considerations and decision-making process involved in granting bail to the petitioner.