2021 (6) TMI 477 - HC - Indian Laws

Validity of grant of Bail - Siphoning of funds by respondent No.2 promoter, before they ceased to be in control over the complainant-company - foremost plea put-forth by petitioner is that the trial court while granting bail to respondent No.2, has not taken into consideration the directions issued by this Court in its right perspective - HELD THAT - The learned trial court had heard the parties at length, noted their contentions and thereafter, held that accused is in custody for one year and four months and he cannot be kept in custody for infinite time; that investigation is complete and prosecution has to clarify why accused should be kept in continued custody and also that tampering of evidence exists in every case till the length of the trial - No doubt at the time of grant of bail, the court is not required to go into the merits of the prosecution case and meticulous observations on the material placed on record are not required to be made, but the court is expected to judiciously apply its mind as to whether a prima facie case against the accused is made out and his continued detention in judicial custody would serve any purpose. In the impugned order, the learned trial court has recorded reasons for granting bail to respondent No. 2, but has failed to consider that the present FIR case pertains to a serious economic offence of high magnitude, where large amount of approximately ₹ 2400 crores including interest has been siphoned off at the behest of respondent No.2 and his brother Malvinder Mohan Singh by diverting it through various financial transactions, by granting loan to the shell companies, of whom they were the Directors or Promoters or beneficiary in interest - the learned trial court has failed to take note of the fact that offences alleged are serious in nature and rather than taking into account the factors that respondent No.2 is behind bars for more than one year and that investigation is complete, however, should have borne in mind the peculiarity of fraud and conspiracy involved in this case and refrained itself from passing a blanket order releasing respondent No.2 on bail. No doubt on the premise that investigation is complete and accused is behind bars for some time and that trial shall take time, bail can be granted but only when the offences alleged are of lesser magnitude. However, the trial court by rendering such an opinion in the present case, lost sight of the enormity of the offence alleged against respondent No.2. It is not disputed that after passing the impugned order dated 03.03.2021, considering the seriousness and gravity of the offence, learned court of Sessions dismissed the bail application of Malvinder Mohan Singh vide order dated 01.04.2021, who has been ascribed a similar role in the present case - the court below had no ground to grant bail to the respondent No.2 vide its impugned order dated 03.03.2021, as the role of respondent No.2 is not less than above named accused by any stretch of imagination. The bail granted to respondent No.2 in this FIR case by the trial court is also set aside - Petition allowed.

Issues Involved:
1. Legality of the bail granted to respondent No.2.
2. Consideration of the gravity and seriousness of the economic offences involved.
3. Application of judicial discretion in granting bail.
4. Potential for tampering with evidence and influencing witnesses.
5. Consistency in judicial decisions regarding bail for co-accused.

Detailed Analysis:

1. Legality of the Bail Granted to Respondent No.2:
The petitioner, a non-banking financial company, challenged the trial court's order dated 03.03.2021, which granted bail to respondent No.2 in FIR No. 50/2019 under Sections 409/420/120-B IPC. The petitioner argued that the trial court did not properly consider the directions issued by the High Court on 09.02.2021, which relegated respondent No.2 to seek bail from the trial court with a directive to consider the application on merits and in accordance with the law. The High Court found that the trial court failed to adequately consider the gravity of the offences and the significant role of respondent No.2 in the alleged crimes.

2. Consideration of the Gravity and Seriousness of the Economic Offences Involved:
The High Court emphasized that the offences involved were serious economic crimes of high magnitude, involving the siphoning of approximately ?2400 crores. The court noted that respondent No.2, in connivance with his brother and other co-accused, allegedly diverted funds through various financial transactions and created a Corporate Loan Book (CLB) for personal benefits. The trial court's decision to grant bail was found to have overlooked the severity of these allegations and the potential punishment under Section 409 IPC, which includes imprisonment for life.

3. Application of Judicial Discretion in Granting Bail:
The High Court highlighted that judicial discretion in granting bail must be exercised judiciously, with reasons recorded to ensure the thought process meets objective standards of reason and justice. The trial court's decision was scrutinized for failing to consider relevant factors and for not providing a sound justification for granting bail. The trial court's focus on the duration of respondent No.2's custody and the completion of the investigation was deemed insufficient, given the serious nature of the offences.

4. Potential for Tampering with Evidence and Influencing Witnesses:
The High Court found that the trial court did not adequately address the potential for respondent No.2 to tamper with evidence or influence witnesses. The prosecution's assertion that respondent No.2 actively participated in the company's affairs even after claiming retirement raised concerns about his potential to interfere with the judicial process. The trial court's dismissal of these concerns was considered a significant oversight.

5. Consistency in Judicial Decisions Regarding Bail for Co-Accused:
The High Court noted the inconsistency in the trial court's decisions, where co-accused Rajender Prasad Aggarwal's bail application was dismissed on the same day respondent No.2 was granted bail. The court emphasized that the role of each accused must be independently assessed, and the reasoning for granting bail to one should not automatically apply to others. The High Court found that the trial court failed to maintain this consistency and did not adequately consider the serious allegations against respondent No.2.

Conclusion:
The High Court set aside the trial court's order dated 03.03.2021, canceling the bail granted to respondent No.2. The court held that the trial court's decision suffered from serious infirmities and resulted in a miscarriage of justice. The continued detention of respondent No.2 was deemed necessary to unearth the conspiracy and trace the siphoned funds. The petition was allowed, and the trial court and Jail Superintendent were informed accordingly.

← Previous Next →