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2022 (7) TMI 367 - HC - Companies LawSeeking grant of regular bail - Applicant is a Chartered Accountant and one of the partners at ASRN Associates - failure to perform his duty independently and diligently by not verifying the stock in transit - allegation of collusion with the office bearers of M/s Bhushan Steel Limited as well - satisfaction of twin conditions under section 212(6) of the Companies Act, 2013 or not - HELD THAT - Since the ex-promoters/directors and similarly situated chartered accountants have been granted bail, there is no reason why the Applicant should be treated any differently. The summoning order was issued on 16.08.2019 and the Applicant had not been arrested till 01.06.2022 without there being any protection in favour of the Applicant. There is also no reason shown for seeking judicial custody of the Applicant. Applicability of legal embargo of Section 212(6) - HELD THAT - Sub-section-(i) has duly been complied with, as the Public Prosecutor (Ld. CGSC) has been given a chance to oppose the bail application. I am prima facie of the view that the Applicant is not guilty of the offence of which he is charged with, and therefore, it is opined that he is not likely to commit any further offence while on bail. Hence, sub-section (ii) of Section 212(6) is also complied with. There are no merit in the contentions and submissions of the learned CGSC - application allowed.
Issues Involved:
1. Grant of regular bail to the applicant. 2. Allegations against the applicant concerning stock audit. 3. Compliance with Section 212(6) of the Companies Act, 2013. 4. Parity with co-accused who have been granted bail. Issue-Wise Detailed Analysis: 1. Grant of Regular Bail to the Applicant: The applicant, a senior citizen and Chartered Accountant, sought regular bail in a case involving allegations of financial misconduct by Bhushan Steel Limited (BSL). The primary contention was that the applicant, appointed as a stock auditor by Punjab National Bank (PNB) for FY 2016-17, failed to perform his duties independently and diligently, allegedly colluding with BSL's promoters to inflate stock figures and mislead banks. 2. Allegations Against the Applicant: The Serious Fraud Investigation Office (SFIO) accused the applicant of failing to verify stock in transit, relying on incorrect information provided by BSL, and contributing to inflated Drawing Power (DP) figures, causing wrongful loss to lenders. The investigation report highlighted several lapses, including the auditor's reliance on management-provided data without sufficient verification, particularly for stock in transit worth Rs. 5389.58 crore. 3. Compliance with Section 212(6) of the Companies Act, 2013: For bail to be granted under Section 212(6), two conditions must be met: - The Public Prosecutor must be given an opportunity to oppose the bail application. - The court must be satisfied that there are reasonable grounds for believing the applicant is not guilty of the offense and is unlikely to commit any offense while on bail. The court found that the applicant's stock audit pertained to a period (FY 2016-17) not under investigation (FY 2013-14 to 2015-16). The applicant had raised significant issues in the audit report, indicating the company's financial stress and non-performing asset status. The court concluded that the applicant was not guilty of the alleged offense and was unlikely to commit further offenses while on bail. 4. Parity with Co-Accused Who Have Been Granted Bail: The court noted that key stakeholders, including ex-promoters/directors of BSL and similarly situated chartered accountants, had been granted bail. This included interim relief to Neeraj Singal by the Supreme Court, bail to Nittin Johari, and bail to co-accused chartered accountants Rajesh Kumar Yaduvanshi and Pankaj Mahajan. Given this context, the court saw no reason to treat the applicant differently. Conclusion: The court allowed the bail application, subject to the applicant furnishing a personal bond with two local sureties, appearing before the court as directed, and informing the court of any address changes. The court dismissed the application for interim bail as infructuous, given the grant of regular bail.
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