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2020 (6) TMI 261 - HC - Companies LawGrant of Bail - collusion in fraud - petitioner has been charge-sheeted under section 447 of the new Companies Act - HELD THAT - There are no substance in the argument of the learned Counsel for the SFIO that the twin conditions prescribed under section 212(6) of the New Companies Act, 2013 start with negation of bail to the accused and the court could grant bail to such an accused only if the court records a satisfaction qua the accused being not guilty of the alleged offence and also a satisfaction that if released on bail the accused is not likely to commit any similar offence again. Also this court does not find substance in the insistence of the learned counsel for the SFIO that the application of the twin conditions, as prescribed under Section 212(6), are mandatory and have to be applied to all the considerations of grant of bail to the accused facing charge covered by section 447 of the New Companies Act. No doubt the statutory language of section 212 (6) has prescribed the twin conditions to be considered by the court, in case the prosecutor raises his objection to the grant of bail, however a similar language existing in the Prevention of Money Laundering Act, which was para materia to the language of the twin conditions contained in section 212(6) of the new Companies Act, had earlier come-up for consideration of the Supreme Courts in case of Nikesh Tarachand Shah 2017 (11) TMI 1336 - SUPREME COURT case and such language has already been declared to be ultra vires by the Supreme Court in that case. This court is under obligation to consider the nature of offence and the material placed on record before the special court, by way of charge-sheet against the petitioner, for consideration of question of granting bail to petitioner. In the present case, not keeping the books and records qua the dealings between the Cynosure Real Estate Company of the co-accused Vivek Harivyasi and the companies of the petitioner, in their respective offices; despite impending legal threat of severe punishment prescribed above provisions itself creates initiation of deceitful intention. There is nothing on record to even remotely suggest that the said money was given by the companies of the petitioner to the Cynosure Real Estate Company of the co-accused Vivek Harivyasi petitioner as loan on any terms and conditions. Although, the petitioner has relied upon some financial entries in his ledger and bank accounts, however, these are only the financial statements of his companies as defined under section 129 of the Companies Act; and which can be compiled at any time by matching the bank account entries; and these are not the books of account as required under section 128 of the Companies Act; which comprise of the original agreements and original records - the allegation of the prosecution that it can be a ploy to route the cash money by the petitioner and his co-accused Vivek Harivyasi by squandering the money of the CUIs of the Adarsh Group, cannot be easily brushed aside. Although the learned Counsel for the petitioner has submitted that the since the statement of the petitioner was recorded by the investigating officer who has powers akin to the police powers, therefore, the alleged admission by the petitioner has to be treated as a confession, which is not admissible under section 25 of the Evidence Act, however, this court does not find any substance in this argument. The Companies Act 2013 is a special statute. As per the provision contained in section 212(3) the investigation of the offences by the authorities under this Act has to be carried out only as per the provisions of this Act. Still further, under sections 435, 436 and section 439 the trial of an offender under this Act is to be conducted by the Special Court in accordance with Cr.P.C. and the procedure as modified under this Act. Section 217(7) specifically provides that the statement made by a person before the investigating officer shall be admissible against such person and can be used against him. This court finds substance in the argument of the learned Counsel for the SFIO that since, as per the charge-sheet the petitioner is given to manipulations, for earning money, therefore, it cannot be denied that by nature, the petitioner could be manipulative. Hence, this court has no reason to believe that if the petitioner is released on bail, he is not likely to influence the witnesses of the case and also not likely to destroy the evidence against him. The past conduct of the petitioner has also not been exemplary - this court finds force in the argument of the counsel for the SFIO that at that time the petitioner was not sure of him being made an accused in the case. Therefore he might not have resorted to that exercise. But now, when the petitioner is fully aware that his alleged crime has been detected, it may not be in the fitness of the things to expect the same straightforward conduct from the petitioner, who is alleged to be manipulative by disposition. Petition dismissed.
Issues Involved:
1. Grant of Regular Bail under Section 439 of the Code of Criminal Procedure. 2. Validity of Investigation and Cognizance by the Court. 3. Applicability of Twin Conditions under Section 212(6) of the Companies Act, 2013. 4. Material Evidence Against the Petitioner. 5. Risk of Flight, Tampering with Evidence, and Reoffending. Issue-wise Detailed Analysis: 1. Grant of Regular Bail under Section 439 of the Code of Criminal Procedure: The petitioner sought regular bail pending trial in a criminal complaint involving alleged offenses under Sections 447 of the Companies Act, 2013, read with Section 120-B IPC, and Sections 418 and 420 IPC read with Section 120-B IPC. The petitioner argued for bail based on his cooperation during the investigation, non-arrest by the investigating officer, and compliance with court summons. The court, however, emphasized that the discretion to grant bail lies with the court and not the investigating officer, and the court must independently assess the material on record. 2. Validity of Investigation and Cognizance by the Court: The petitioner challenged the investigation's validity, arguing that no prior approval was obtained from the Central Government for investigating his companies separately. The court rejected this argument, stating that the investigation was properly conducted under Section 212 of the Companies Act, 2013, with necessary approvals from the Director, SFIO. The court held that the investigation and subsequent cognizance by the court were valid and not vitiated. 3. Applicability of Twin Conditions under Section 212(6) of the Companies Act, 2013: The petitioner contended that the twin conditions under Section 212(6) of the Companies Act, 2013, should not apply. The court referred to the Supreme Court's judgment in Nikesh Tarachand Shah, which declared similar conditions under the Prevention of Money Laundering Act as ultra vires. The court held that the twin conditions in Section 212(6) are not mandatory for granting bail, aligning with its earlier judgment in Ankush Kumar, which was upheld by the Supreme Court. 4. Material Evidence Against the Petitioner: The court found substantial material against the petitioner, including admissions on oath and statements from co-accused indicating the petitioner's involvement in the alleged fraud. The petitioner and his companies were implicated in routing and embezzling funds from the CUIs of Adarsh Group. The absence of proper records and agreements in the petitioner's companies further supported the allegations of deceitful intentions and fraudulent activities. 5. Risk of Flight, Tampering with Evidence, and Reoffending: The court considered the risk of the petitioner fleeing, tampering with evidence, or reoffending if granted bail. Despite the petitioner's cooperation during the investigation, the court found that his past conduct and the nature of the alleged offenses indicated a likelihood of manipulative behavior. The court emphasized that economic offenses require a different approach, and the petitioner's potential to influence witnesses and destroy evidence justified denying bail. Conclusion: The court dismissed the petition for bail, emphasizing the seriousness of the economic offenses, substantial evidence against the petitioner, and the risk of tampering with evidence and reoffending. The court upheld the validity of the investigation and cognizance and ruled that the twin conditions under Section 212(6) of the Companies Act, 2013, are not mandatory for bail considerations.
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