2020 (7) TMI 550 - HC - Indian Laws

Grant of Regular Bail - Fraud - siphoning of public money - disbursement of loans to shell entities - HELD THAT - While a fraction of the money trail of ₹ 2000 crores has been recovered, the other fraction still remains untraced as yet and investigation regarding the same is ongoing, by the Economic Offences Wing as well as independently by SEBI. The SEBI itself is still investigating fraud of about ₹ 600 crores and has recorded the same in its order dated 14.03.2019. Moreover, the loans granted by the Petitioner to the following entities amounting to over ₹ 600 crores are still under investigation. The petitioner being influential is capable of tampering with evidence and influencing witnesses who were his subordinates. As apparent from the various documents and the bail applications themselves, there is no denial of the Complainant Company's funds by the accused persons having been siphoned away. In addition, there is a higher apprehension of the accused persons including petitioner herein absconding as they are aware that they are likely to be convicted. Further, the conduct of the Accused with respect to internal investigation being carried out by AZB Partners is also relevant as the Accused refused to participate in the investigation - In addition, there are various complaints and FIR which have been filed by the Complainant Company and are pending investigation. The Accused has also been made a suspect in another case emanating from FIR No. 189/2019 dated September 23, 2019 which is pending at the stage of cognizance. It is pertinent to note that this is not an isolated instance and there are various other frauds committed by the accused persons. Agencies like SEBI, ED and SFIO are also investigating REL. It is settled law that economic offences are considered to be grave offences especially when public money is involved and that the Courts have to be careful in granting bail in such cases. In view of facts and law discussed and the fact that further investigation is at the crucial stage regarding fraud committed by accused for worth of ₹ 2,000/- crores plus of public money, there is apprehension that the petitioner may tamper with the evidence and influence the prosecution witnesses, therefore, this Court is not inclined to grant bail - Petition dismissed.

Issues Involved:
1. Regular Bail Petition under Section 439 read with Section 482 of the Code of Criminal Procedure, 1973.
2. Allegations of involvement in economic offences under Sections 409, 420, and 120-B of the Indian Penal Code, 1860.
3. Parity with co-accused already granted bail.
4. Role and responsibilities of the petitioner in the alleged offences.
5. Legal principles and precedents regarding bail in economic offences.

Detailed Analysis:

1. Regular Bail Petition:
The petitioner sought regular bail under Section 439 read with Section 482 of the Code of Criminal Procedure, 1973, after being arrested on 10.10.2019 during the investigation of F.I.R. No. 50/2019, registered by the Economic Offence Wing, Delhi Police, under Sections 409/420 read with Section 120-B of the Indian Penal Code, 1860. The chargesheet dated 06.01.2020 implicated the petitioner as Accused No. 4.

2. Allegations of Involvement in Economic Offences:
The petitioner was accused of causing wrongful losses to Religare Finvest Limited (RFL) by siphoning off funds as Inter-Corporate Deposits (ICD)/Corporate Loan Book (CLB) loans in conspiracy with other accused. The petitioner's counsel argued that there was no material evidence to implicate the petitioner, and his role was limited to the Small and Medium Enterprise (SME) lending business, not the ICD/CLB loans.

3. Parity with Co-Accused:
The petitioner argued for bail on the grounds of parity with co-accused Anil Saxena, who was granted regular bail. The petitioner claimed that both had similar roles, and Saxena's involvement was more significant as he was part of the parent company Religare Enterprises Limited (REL) management team, while the petitioner was part of the subsidiary RFL team. Additionally, there were no allegations of the petitioner receiving any siphoned funds.

4. Role and Responsibilities of the Petitioner:
The petitioner's counsel emphasized that the petitioner was responsible for setting up the SME lending business and had no control over the ICD/CLB loans. The petitioner was part of various committees that approved loans, but the decisions were taken collectively, and the petitioner did not act independently or against the committee's decisions. The counsel also highlighted that other committee members who approved the loans were not named as accused, questioning the selective prosecution.

5. Legal Principles and Precedents:
The petitioner's counsel cited several legal precedents emphasizing the importance of personal liberty and the presumption of innocence until proven guilty. The Supreme Court's judgments in Sanjay Chandra Vs. CBI and Dipak Shubhashchandra Mehta v. CBI were referenced, arguing that detaining under-trials indefinitely violates Article 21 of the Constitution of India.

Respondent's Arguments:
The respondent's counsel opposed the bail, arguing that the petitioner played an active role in siphoning ?2000 crores of public money through a conspiracy involving layered transactions and shell entities. The petitioner's position as CEO and Managing Director made him responsible for approving loans to shell entities despite RBI's concerns and undertakings. The respondent highlighted the petitioner's involvement in fabricating minutes of meetings and falsifying books of accounts to conceal the siphoning.

Court's Observations and Decision:
The court noted that while a fraction of the siphoned money had been recovered, a significant amount remained untraced, and investigations by the Economic Offences Wing and SEBI were ongoing. The court expressed concerns about the petitioner's potential to tamper with evidence and influence witnesses. Given the gravity of the economic offences involving public money and the ongoing investigation, the court dismissed the bail petition, emphasizing that economic offences are grave and require careful consideration in granting bail.

Conclusion:
The petition for regular bail was dismissed, with the court emphasizing the seriousness of economic offences involving public money and the potential for the petitioner to tamper with evidence. The trial court was instructed not to be influenced by the observations made in this order.

← Previous Next →