2022 (2) TMI 1440 - HC - Companies Law

Seeking grant of anticipatory bail - abuse of position by lending corporate identify of MSL, its books and bank accounts to the promoter directors of RGC and FIL by appellant, Promoters- Directors of Mohan Steels Limited (MSL) - fraudulent merchantine trade - siphoning of Bank funds through merchantine trade - falsification of financial statement of the Companies involved in the matter by not showing true and fair views - HELD THAT - If the role of the applicants, as alleged by the prosecution, nature and gravity of the offence and also the evidence available on record in support thereof, are compared with the submissions advanced by the learned counsel for the parties, in the present matter huge amount received by the applicants company through Letter of Credit has become NPA due to non-payment of advance taken by the Company. It is also evident that this situation arose due to falsification in the books of account furnished by the company before the Bank concerned. Hence, if the aforesaid facts are considered at this stage in light of the submissions raised across the bar, allegations made against the applicants and the Company concerned cannot be overlooked / ignored. Applicants were fully aware about the coercive process issued against them by the Trial Court. It is an economic offence which is related to multi thousand crores. Further, keeping in view the modus operandi adopted by the Companies concerned for obtaining the Letter of Credit and the amount of NPA, applicants can also not be enlarged on anticipatory bail on the ground of illness. In view of the Court, the nature and gravity of the allegations / offences levelled against the applicants shake the conscience of the society and public at large. Therefore, considering the entire facts and circumstances of the case, submissions of learned counsel for the parties and keeping in view the nature of offence, evidence, complicity of accused, conduct of the applicants and the law laid down by the Apex Court in Prem Shanker Prasad case 2021 (10) TMI 1405 - SUPREME COURT and without expressing any opinion on the merits of the case, the Court is of the view that there is no substance in the submissions made by the learned Senior Counsel appearing for the applicants. The anticipatory bail application is liable to be rejected and the same is accordingly rejected.

Summary

Issues: Anticipatory Bail Application under Sections 36(c) red with Sections 447, 185, 186 of the Companies Act, 2013.

Analysis:
1. Nature of Offence and Allegations: The applicants sought anticipatory bail in a case involving Sections 36(c) red with Sections 447, 185, 186 of the Companies Act, 2013. The prosecution alleged that the applicants, as Directors and Promoters of a company, engaged in fraudulent activities causing substantial financial loss to a Public Sector Bank through falsification of financial statements and misuse of funds in merchantine trade.

2. Submissions by Applicants: The applicants, through their counsel, argued their innocence, claiming they were not involved in the offense. They emphasized that the prosecution's case relied on false facts and that they cooperated with the investigating agency. The applicants contended that no monetary benefit was gained, and the loan in question was to be repaid by co-accused. Additionally, the health condition of one applicant was highlighted as a reason for anticipatory bail.

3. Prosecution's Argument: The SFIO, opposing anticipatory bail, asserted that the applicants actively participated in the crime by furnishing false books of accounts, leading to a substantial loss for the Bank and the public. Despite coercive processes, the applicants did not cooperate with the trial court, indicating their non-entitlement to anticipatory bail. The prosecution stressed the economic nature of the offense and the significant impact on the financial system and national interest.

4. Judgment: After considering the submissions and evidence, the Court found the allegations and gravity of the offense to be severe, affecting public interest. The Court noted the non-cooperation of the applicants with the trial court despite awareness of the processes against them. Referring to a relevant Apex Court decision, the Court concluded that the applicants failed to establish a case for anticipatory bail. Consequently, the anticipatory bail application was rejected, emphasizing the seriousness of the allegations and the societal impact of the offense.