2019 (12) TMI 947 - HC - Companies Law

Grant of Anticipatory bail - money laundering - siphoning of funds - Director of companies, which had caused a loss to the State by hatching a conspiracy - HELD THAT - Though undoubtedly, the allegations which are levelled against the applicant/petitioner of his being a Director of four shell companies/ dummy companies which companies are stated to have been created so that they could be taken over by the prime accusedA-1 Mohd. Iqbal for the purpose of laundering his ill-gotten money through engaging in illegal sand mining operations in the State of UP and in/around the District Saharanpur, so that he could project the said ill-gotten money as legitimate assets and these companies were utilized to purchase land and that majority of the transactions made by these companies were outside the banking channels and the companies did not even maintain any account,- are allegations, if established prima facie undoubtedly fall within the domain of a fraud in terms of Sections 447 and 448 of the Companies Act, 2013. The provisions of Section 212(6) of the Companies Act, 2013 in the facts and circumstances of the instant case would have also to be considered and thus, it cannot be contended that the embargo of Section 212(6) would essentially operate in the instant case - In the instant case, there are no contentions raised on behalf of the SFIO that the applicant s presence cannot be secured or that the applicant would flee from justice or that the applicant can influence the witnesses or tamper with the evidence in any manner. The applicant in the circumstances is allowed to be released on bail on filing a bail bond in the sum of ₹ 2,00,000/- with two sureties of the like amount to the satisfaction of the Special Judge - application disposed off.

Issues Involved:
1. Legality of the Complaint Filing
2. Applicability of Section 212(6) of the Companies Act, 2013
3. Involvement and Role of the Petitioner
4. Bail Considerations
5. Comparative Analysis with Other Accused

Detailed Analysis:

1. Legality of the Complaint Filing:
The petitioner argued that the complaint under Section 447 of the Companies Act, 2013 was not valid as it was filed by the Senior Assistant Director of SFIO, who was neither the Director of SFIO nor authorized by the Central Government. The petitioner contended that the requirements of Section 212(6) were not met, as the complaint was not filed by an authorized officer.

2. Applicability of Section 212(6) of the Companies Act, 2013:
The petitioner claimed that the stringent conditions of Section 212(6) of the Companies Act, 2013, which restrict bail, do not apply post-investigation. He further argued that Section 447 of the Companies Act, 2013, which came into force on 01.03.2014, should not apply to him for actions allegedly committed before this date. The SFIO, however, maintained that the provisions of Section 212(6) are mandatory and apply to the case, emphasizing that the case falls under Section 212(6)(ii) of the Companies Act, 2013.

3. Involvement and Role of the Petitioner:
The petitioner denied his involvement with the companies in question, claiming he was not well-educated and worked as a salesman. He argued that his identity was misused by one Sanat Kumar Jain, leading to his false implication. The SFIO countered that the petitioner was a Director in four companies involved in fraudulent activities, contributing to a larger conspiracy led by Mohd. Iqbal to launder money obtained through illegal sand mining.

4. Bail Considerations:
The petitioner sought bail, arguing that the investigation was complete, no evidence showed he benefited from the alleged fraud, and he had clean antecedents with no risk of tampering with evidence. The SFIO opposed, citing the gravity of the economic offences and the need for a different approach in such cases. However, the court noted that several other accused had been granted bail or interim protection and found no specific evidence against the petitioner in the SFIO's response.

5. Comparative Analysis with Other Accused:
The petitioner highlighted that several co-accused in the same complaint had been granted bail or interim protection. The court considered this, along with the fact that the petitioner had no direct benefit from the alleged fraud and no risk of absconding or tampering with evidence, in its decision to grant bail.

Conclusion:
The court allowed the petitioner to be released on bail, noting the lack of specific evidence against him and the precedent of other accused being granted bail. The petitioner was required to file a bail bond of ?2,00,000 with two sureties and adhere to conditions such as not leaving the country and not tampering with evidence. The application was disposed of accordingly.

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