2021 (1) TMI 191 - HC - Companies Law

Grant of Bail - siphoning of funds - transfer of funds among different companies - shell companies or not - allegation is that public money worth ₹ 2000 crores has been siphoned away by the Petitioner pursuant to a deep rooted conspiracy with the promoters of the Complainant Company and others, through a labyrinth of layered transaction - It is further submitted that Petitioner is around 60 years of age and is suffering from Sleep Apnea and his aged parents are also ill - HELD THAT - The Petitioner received an amount of ₹ 34 crores from Fern Healthcare Private Limited, one of the shell companies, as part of the benefits for working closely with the Promoters. Fern Healthcare is an entity related to petitioner and loans to the same were proposed and approved by him. The chargesheet clearly records that the real source of the said money was the complainant company. The bank statements filed by the I.O. pursuant to Order dated 2-7-2020 shows that the Petitioner used the abovementioned funds to clear his outstanding liabilities towards RHC Holdings on the very same day on which the money was disbursed by the Complainant Company and was finally routed to the Petitioner. It is pertinent to mention here that in order dated 17-6-2020 granting bail to Mr. Anil Saxena, categorically observed by coordinate bench that he was not part of day-to-day functioning of RFL is of no relevance here as the charge sheet records that by virtue of being Chairman and MD of REL, (the Petitioner herein) had a say in the functioning of RFL. Further, loans were disbursed upon Petitioner's instructions and to the entities known to him. Thus, case of petitioner is different from the case of Anil Saxena. Moreover, the Petitioner herein also benefitted by way of the loan amounting to ₹ 34 crores paid to him from the funds of the Complainant Company. The Petitioner also became the Group President of RHC Holding, which is the ultimate beneficiary of the entire fraud - The offences involve complex and layered transactions which will take time to be unearthed by the EOW. Releasing the Petitioner on bail will hamper the tracing of money trail. Additionally, the accused person 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 by the accused persons of the Complainant Company's funds having been siphoned away. There is a higher apprehension of the accused persons absconding as they are aware that they may be convicted - Moreover, the Complainant Company has filed various complaints and FIR and the investigation in still pending. Complainant Company verily believes that the Petitioner has been charge sheet in another case emanating from FIRs No. 189/2019 dated 23-9-2019, which is pending at the stage of cognizance. 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 into the matter. The present case is of an economic offence involving siphoning of public money/investor money to the tune of ₹ 2000 crores. 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 - the Hon'ble Supreme Court of India in case of Virupakshappa Gouda v. State of Karnataka 2017 (3) TMI 1777 - SUPREME COURT has held that filing of the chargesheet does not lessen the allegations of the prosecution in any manner. This Court is not inclined to grant bail to the petitioner - Petition dismissed.

Issues Involved:
1. Grant of bail under section 439 Cr. P.C.
2. Role and involvement of the petitioner in the alleged offences.
3. Allegations of siphoning public money.
4. Relationship and transactions between companies involved.
5. Petitioner's influence and control over the companies.
6. Investigation status and ongoing inquiries by various agencies.
7. Precedents and legal principles applicable to economic offences and bail.

Detailed Analysis:

1. Grant of Bail under Section 439 Cr. P.C.:
The petitioner sought bail in connection with FIR No. 50/2019 for offences under sections 420/409/120B IPC. The court considered the petitioner's request, the nature of the allegations, and the evidence presented.

2. Role and Involvement of the Petitioner:
The petitioner, a former Chairman and Managing Director (CMD) of Religare Enterprises Limited (REL), was accused of being involved in the disbursal of problematic loans. The court noted that the petitioner was part of the loan approval committees and had a significant role in approving loans to shell companies, which were not creditworthy.

3. Allegations of Siphoning Public Money:
The prosecution alleged that the petitioner, in conspiracy with the promoters of the complainant company, siphoned public money worth ?2000 crores through layered transactions. The funds were allegedly diverted to shell companies and ultimately to RHC Holdings Private Limited, which was controlled by the promoters.

4. Relationship and Transactions between Companies Involved:
The court examined the relationship between REL, its subsidiaries, and the shell companies that received the loans. It was found that loans were extended to entities with no business income, ostensibly for working capital, which was a camouflage for siphoning funds. The petitioner's involvement in these transactions was evident from the loan proposals and approvals.

5. Petitioner's Influence and Control over the Companies:
The petitioner held significant positions in REL and its subsidiaries, including being a member of the Related Party Transaction Committee (RPT Committee). The court noted that the petitioner used his influence to procure loan approvals and manage the affairs of the companies involved in the alleged fraud.

6. Investigation Status and Ongoing Inquiries by Various Agencies:
The court highlighted that the investigation by the Economic Offences Wing (EOW), SEBI, and other agencies was ongoing. A fraction of the money trail had been discovered, and further investigation was needed to trace the remaining funds. The complexity of the transactions required thorough investigation.

7. Precedents and Legal Principles Applicable to Economic Offences and Bail:
The court referred to several judgments, including Sanjay Chandra v. CBI, which emphasized the seriousness of economic offences involving public money. The court noted that granting bail in such cases could adversely impact the investigation and the trust in the criminal justice system. The petitioner's potential to tamper with evidence and influence witnesses was also considered.

Conclusion:
The court dismissed the petition for bail, stating that the petitioner was involved in serious economic offences, and releasing him could hamper the ongoing investigation. The court emphasized the need for careful consideration in granting bail in cases involving large-scale financial fraud and public money. The trial court was instructed not to be influenced by the observations made in this order.

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