2021 (5) TMI 603 - HC - Companies Law

Grant of Bail - in-action on part of the Court in taking cognizance - Contention is that provision of Section 167 Cr.P.C. itself is ample clear and default bail can only be granted in case charge sheet/complaint was not filed within the stipulated period - sum and substance of the investigation conducted in the matter and the facts mentioned in the complaint for prosecution are that concerned Companies were engaged in fraudulent merchantine trade and caused wrongful loss to the Public Sector Banks to the tune of 7820 Crores approximately applying different modus operandi including siphoning of Bank funds through merchantine trade. HELD THAT - It is admitted fact in the present matter that the applicant has not moved regular bail application before the court below. Only default bail application was moved and same was rejected by the court below. Thereafter present bail application has been moved before this Court taking recourse to the provisions of Section 439 and 167 Cr.P.C. It is true that provision of Section 212 Cr.P.C. has not been mentioned in the bail application but on this technical ground alone prayer made by the applicant to consider the bail application on regular side cannot be rejected - preliminary objection raised on behalf of the S.F.I.O. cannot be accepted particularly keeping in view the pandemic situation arose in the country and non regular functioning of the subordinate courts. Submissions made by the learned counsel appearing for the applicant and disclosed in the written submission regarding the application of provisions of Section 167 (1) Section 167 (2) and Section 309 Cr.P.C. are not liable to be accepted. If the prosecution had filed complaint/police report within the period of sixty days the right of default bail would not accrue in favour of the accused person as has been held by the Apex Court consistently in several cases and is being followed by the Courts till today. Construction of provisions of Section 167(2) Cr.P.C. in the manner submitted by learned counsel appearing for the applicant is not permissible and is not akin to the settled legal proposition. Remand could continue under Section 167(2) Cr.P.C. even after filing of complaint / charge-sheet despite this fact that cognizance had not been taken on the complaint. It is admitted case of the applicant that he moved default bail application on 18.05.2020. Since complaint had already been filed on 15.05.2020 and sixty days period was to be expired on 17.05.2020 therefore default bail was not liable to be allowed. The amount involved in the matter which has become N.P.A. the court is of the view that no case for regular bail is made out - prayer for regular bail is also hereby rejected.

Issues Involved:
1. Interim Bail Application
2. Regular Bail Application under Sections 167 and 439 Cr.P.C.
3. Default Bail Application
4. Regular Bail Application under Companies Act

Detailed Analysis:

1. Interim Bail Application:
The applicant sought interim bail on the grounds that his parents were critically ill due to Covid-19 and there was no one to look after them. The court, after considering the arguments and the affidavit annexed, rejected the interim bail application as the main bail application was being decided on the same day.

2. Regular Bail Application under Sections 167 and 439 Cr.P.C.:
The applicant argued that he should be granted bail under Sections 167 and 439 Cr.P.C. due to the pandemic and non-regular functioning of courts. He highlighted that he had been granted bail in a similar case by the C.B.I. and that the Supreme Court had rejected the S.L.P. against it. The applicant contended that the bar under Section 212(6) of the Companies Act should not apply as no new facts were presented by the S.F.I.O. The court rejected this argument, noting that the applicant had not moved a regular bail application before the lower court, and the bar under Section 212(6) of the Companies Act applies.

3. Default Bail Application:
The applicant claimed an indefeasible right to default bail as the complaint was not filed within 60 days. He argued that the remand extended after the expiry of 60 days was illegal. The court, however, found that the complaint was filed within the stipulated period and that the right to default bail did not accrue. The court held that remand could continue under Section 167(2) Cr.P.C. even after the filing of the complaint, and the applicant's custody was not illegal.

4. Regular Bail Application under Companies Act:
The applicant's regular bail application was also rejected. The court considered the serious nature of the economic offence, which involved a loss of ?4168 crores to public sector banks. The court emphasized the bar under Section 212(6) of the Companies Act, which prohibits bail unless the court is convinced that the applicant is not guilty and will not commit any offence while on bail. The court found no reasonable grounds for believing that the applicant was not guilty and noted the potential for the applicant to commit further offences.

Conclusion:
The court rejected both the interim and regular bail applications. The default bail application was also denied as the complaint was filed within the required period. The court underscored the serious nature of the economic offences and the stringent provisions under the Companies Act, which prevent the granting of bail unless specific conditions are met.

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