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2019 (12) TMI 1097 - HC - Companies LawGrant of bail - Illegal mining - unaccounted money - summon for alleged commission of offences punishable under Sections 477A read with Section 120B Indian Penal Code, 1860 and under 628 of the Companies Act 1956 and under Section 448 of the Companies Act, 2013. HELD THAT - In terms of Section 212 (6) of the Companies Act, 2013, the offence prescribed under Section 448 of the Companies Act, 2013 which relates to making of a statement which is false in any material particulars knowing it to be false or which omits any material fact, knowing it to be material in any return, report, certificate, financial statement, prospectus, statement or other document required by, or for, the purpose of any of the provisions of this Act or the rules made thereunder makes a person culpable under Section 447 of the Companies Act, 2013 - In terms of the ambit of Explanation-(i) to Section 447 of the Companies Act, 2013 which defines fraud for the purpose of the said Section, a false statement in relation to in any return, report, certificate, financial statement, prospectus, statement or other document required by, or for, the purposes of any of the provisions of this Act or the rules made thereunder, any person makes a statement which is false in any material particulars, knowing it to be false or which omits any material fact, knowing it to be material, would fall within the ambit of Sections 448 and 447 of the Companies Act, 2013 as sought to be contended on behalf of the petitioner. In the present case, the relevant documents attributed against the applicant were stated to have been collected from the office of Jitender Kumar, Chartered Accountant, the co-accused (A-79), which the SFIO submitted were statutory records like minutes book prepared after the occurrence of the event in order to complete the legal formalities but were not the documents prepared during the course of actual functioning of the company and that the minutes books and other documents were not required to be signed by the petitioner and the same were not signed - In as much as it has been submitted on behalf of the petitioner that the documents have not been filed with any statutory authorities and the same were only draft documents prepared from the statutory records available and downloaded from the site of the MCA, the applicability of Section 448 of the Companies Act, 2013 becomes wholly doubtful in the absence of any signed document having been submitted by the petitioner. As regards the contention that has been raised on behalf of the SFIO that orders under Section 439 of the Cr.PC, 1973 as sought by the petitioner herein, cannot be granted without reference to the provisions of Section 212(6) and 212(7) of the Companies Act, 2013 without entering a finding on the required level of satisfaction of the Court that there are reasonable grounds for believing that the petitioner is not guilty of the offences alleged to have been committed by him and that the petitioner is not likely to commit any offence while on bail - the provisions of Section 212(6) of the Companies Act, 2013 in the facts and circumstances of the instant case would have also to be considered and thus, it cannot be contended that the embargo of Section 212(6) would essentially operate in the instant case. In the instant case, there are no contentions raised on behalf of the SFIO that the applicant s presence cannot be secured or that the applicant would flee from justice or that the applicant can influence the witnesses or tamper with the evidence in any manner. The applicant in the circumstances is allowed to be released on bail on filing a bail bond in the sum of ₹ 2,00,000/- with two sureties of the like amount to the satisfaction of the Special Judge, Companies Act, with conditions that he shall not leave the country, shall not tamper with the evidence, shall provide his contact details to the Serious Fraud Investigation Office (SFIO) and shall commit no offence whatsoever. Bail application disposed off.
Issues Involved:
1. Grant of bail to the applicant. 2. Alleged commission of offenses under Sections 477A read with Section 120B IPC, Section 628 of the Companies Act, 1956, and Section 448 of the Companies Act, 2013. 3. Application of Section 447 read with Section 212(6) of the Companies Act, 2013. 4. Preparation of statutory records for past years. 5. Parity in bail applications. Issue-wise Detailed Analysis: 1. Grant of Bail to the Applicant: The applicant sought bail in CC No.720/2017 pending before the Special Judge (Companies Act), Dwarka District Courts, Delhi. The applicant argued that he was in judicial custody since 24.5.2019 and that his first bail application was erroneously rejected. The applicant contended that he was charged under Sections 477A read with Section 120B IPC, Section 628 of the Companies Act, 1956, and Section 448 of the Companies Act, 2013, but not under Section 447 of the Companies Act, 2013. The applicant emphasized that the rigors of Section 212(6) of the Companies Act, 2013, which applies to offenses involving fraud under Section 447, should not apply to him as he was not charged under that section. 2. Alleged Commission of Offenses: The applicant was accused of preparing statutory records for several companies for the period FY 2008-09 to 2014-15 during February-March 2016. The SFIO alleged that the applicant, as part of a larger conspiracy, prepared these records without original documents, using information from the MCA website. The SFIO claimed that the records were backdated and prepared to complete legal formalities, not during the actual functioning of the companies. The SFIO further alleged that these records were unsigned and unfiled draft documents found in the possession of another accused, Jitender Kumar Sharma. 3. Application of Section 447 read with Section 212(6) of the Companies Act, 2013: The SFIO contended that the offenses under Section 448 of the Companies Act, 2013, which involve making false statements, fall under the ambit of Section 447, which deals with fraud. Therefore, the SFIO argued that the bail conditions under Section 212(6) of the Companies Act, 2013, should apply. This section requires that the Public Prosecutor be given an opportunity to oppose bail and that the court be satisfied that there are reasonable grounds to believe that the accused is not guilty and will not commit any offense while on bail. 4. Preparation of Statutory Records for Past Years: The applicant argued that preparing statutory records for past events is not an offense and is necessary for the compounding of offenses under Section 441 of the Companies Act, 2013. The applicant contended that the records were prepared based on information from the MCA website and not original documents. The SFIO's investigation revealed that the records were prepared after the events occurred and were not signed or filed with any statutory authorities, making the applicability of Section 448 of the Companies Act, 2013, doubtful. 5. Parity in Bail Applications: The applicant sought bail on the principle of parity, noting that other co-accused, including Vijay Kumar Sharma (Accused No. 86) and Shriti Kumari (Accused No. 89), had been granted bail. The applicant also highlighted that Jitender Kumar Sharma (Accused No. 79), from whose possession the unsigned documents were recovered, received interim protection from the Allahabad High Court. Judgment: The court considered the submissions from both sides. It noted that the applicant's role began in February-March 2016, and the records prepared were not signed or submitted to any authority. The court found the applicability of Section 448 of the Companies Act, 2013, doubtful in the absence of any signed document submitted by the applicant. The court also considered the principle of parity, noting that similarly placed co-accused had been granted bail. The court concluded that the applicant should be granted bail, emphasizing that the charges were yet to be framed and that the applicant's presence could be secured without risk of him fleeing or tampering with evidence. The applicant was granted bail on filing a bail bond of ?2,00,000/- with two sureties of the like amount, with conditions not to leave the country, not to tamper with evidence, to provide contact details to the SFIO, and not to commit any offense. The Bail Application 2154/2019 and CRL.M. (BAIL) 1511/2019 were disposed of accordingly.
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