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TMI Blog2021 (6) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... ntinued 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to various entities. The complainant-company is classified as a systematically important NBFC by the RBI and is a subsidiary of Religare Enterprises Limited (REL), which is a public company, listed on stock exchanges. 3. Pertinently, respondent No.2- Shivender Mohan Singh, the accused in FIR in question, was the Promoter along with the entities controlled by him and with persons acting in concert with him, owned the majority shareholding of REL till June 2017 and was as such classified as the Promoter of REL. Effectively, he continued to control REL till February, 2018, i.e. till the time he remained on the Board of Directors of REL and thereby, since the complainant-company was a subsidiary of REL, he also controlled the complainant-company i.e. RFL. Thus, he allegedly played a significant role in the management and conduct of affairs of the complainant-company and exercised deep and pervasive control over its management. 4. In February, 2018, respondent No.2-Shivender Mohan Singh and his brother, Malvinder Mohan Singh, who was also the Promoter, lost complete control over REL and its subsidiaries, including the complainant-company, pursuant to invocation of the shares p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Limited (RFL). 8. During the course of investigation, it revealed that high amount of shareholder's funds of REL have been invested in RFL. In this manner, the diversion of funds from RFL caused a direct loss to the shareholders of REL for the reason REL owned 85.64% equity share capital in RFL, the management of RFL is under the control of REL and REL is accountable for the actions taken by the management of RFL. 9. From further investigation, it was found that the Corporate Loan Book (CLB) was created since beginning of RFL business for the purpose of utilizing funds at the disposal of Promoters. This was done through loan product unsecured and also through investment route in a systematic manner. The modus operandi had been inter-corporate loans to various companies under control of Promoters (directly or indirectly) through which the funds were routed to the Promoter/ Promoter owned companies being ultimate beneficiaries. Since, the due amounts were funded through new loans and also there were continuous requirement of additional funds, the CLB loan book gradually increased over the period of time. This process of CLB continued since 2008. The loans were sanctioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97 crores as principal amount has been siphoned away at the behest of respondent No.2 in collusion with his brother- Malvinder Mohan Singh and other co-accused, for their personal benefit. Learned senior counsel emphasized that offence under Section 409 IPC has been invoked against both of them, which is punishable with imprisonment up to life. 15. Learned senior counsel for petitioner submitted that the learned trial court while granting bail to respondent No.2 vide impugned order dated 03.03.2021 has not taken the directions issued by this Court vide order dated 09.02.2021 in its right perspective. 16. He next submitted that on the very same day of passing the impugned order, the learned trial court has dismissed bail application of co-accused Rajender Prasad Aggarwal on the grounds of gravity and seriousness of the offence, but has erroneously allowed bail application of respondent No.2. Further submitted that bail application of another co-accused Malvinder Mohan Singh was also dismissed by the trial court on 01.04.2021 while considering the seriousness of gravity of offence. 17. The impugned order has also been assailed on the ground that the conduct and behaviour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013) 16 SCC 797; Kalyan Chandra Sarkar Vs. Rajesh Ranjan and Ors. (2004) 7 SCC 528; Nittin Johari Vs. Serious Fraud Investigation Office 2020 SCC Online Del 394 and Rajesh Ranjan Yadav Vs. CBI (2007) 1 SCC 70. 22. Lastly, learned senior counsel submitted that petitioner has prayed for setting aside of impugned order dated 03.03.2021 and resultantly, cancellation of bail granted to respondent No.2 is sought, as the impugned order is perverse and has been passed by non-application of mind. 23. On the other hand, learned senior counsel appearing for respondent No.2 supported the impugned order and submitted that the trial court was well cognizant of the merits of the case, which have been noted at length in the impugned order and so, it does not suffer from any illegality or perversity. 24. Learned senior counsel submitted that the learned trial court has correctly taken note of the fact that once supplementary charge sheet has been filed and no further investigation is required qua respondent No.2, his detention is not necessary and he qualifies the triple test of bail. 25. Learned senior counsel also submitted that in the charge sheet filed, no specific role has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 03.03.2021 passed by the learned trial court is sought. 32. Pertinently, the prayer made in this petition is two folds; (a) setting aside of the impugned order (b) consequently cancellation of bail granted to respondent No.2. Hence, this Court is not just required to test the correctness of the impugned order, but also to dwell upon the reasons as to why the relief of bail, already granted to respondent No.2, is required to be interfered with by this Court. 33. On this aspect, the pertinent observations of the Hon ble Supreme Court in Mahipal Vs. Rajesh Kumar (2020) 2 SCC 118 are as under:- 16. The considerations that guide the power of an appellate court in assessing the correctness of an order granting bail stand on a different footing from an assessment of an application for the cancellation of bail. The correctness of an order granting bail is tested on the anvil of whether there was an improper or arbitrary exercise of the discretion in the grant of bail. The test is whether the order granting bail is perverse, illegal or unjustified. On the other hand, an application for cancellation of bail is generally examined on the anvil of the existence of supervening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... athod Vs. Vishanbhai Hirabhai Makwana (Koli) Anr. 2021 SCC OnLine SC 335 , whereby deciding bunch of five appeals arising from orders of the High Court of Gujarat granting bail under Section 439 of the Code of Criminal Procedure 1973 to six persons, who were implicated in five homicidal deaths, the Hon ble Supreme Court observed as under:- 43. Grant of bail under Section 439 of the CrPC is a matter involving the exercise of judicial discretion. Judicial discretion in granting or refusing bail - as in the case of any other discretion which is vested in a court as a judicial institution - is not unstructured. The duty to record reasons is a significant safeguard which ensures that the discretion which is entrusted to the court is exercised in a judicious manner. The recording of reasons in a judicial order ensures that the thought process underlying the order is subject to scrutiny and that it meets objective standards of reason and justice .. 36. Keeping in mind the afore-noted observations of Hon ble Supreme Court in Mahipal (Supra) and Ramesh Bhavan Rathod (Supra), this Court has to scrutinize the impugned order and consider the rival contentions raised on behalf of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dence exists in every case till the length of the trial. If the stand of the IO canvassed in the reply is accepted then any accused cannot be released till the conclusion of the trial as there is always a possibility of tampering with the evidence. I find substance in the contention of Ld. counsel for applicant/accused that merits of the case has receded in the background and after filing of the supplementary chargesheet the merits of the case was discussed in detail by this court vide order dated 25.09.2020 and thereafter order dated 09.02.2021 of Hon'ble High Court was passed. The applicant/accused is not at flight risk as admittedly LOC has been opened against him. The entire evidence is documentary in nature which cannot be tampered with. The prosecution or the complainant has not shown or produced any material before the court to show that applicant/accused if released on bail will tamper with the evidence. 38. The foremost plea put-forth by petitioner is that the trial court while granting bail to respondent No.2 vide impugned order dated 03.03.2021, has not taken into consideration the directions issued by this Court vide order dated 09.02.2021 in its right perspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponsibility upon the courts to uphold procedural fairness before a person's liberty is abridged. Although bail is the rule and jail is an exception is well established in our jurisprudence, we have to measure competing forces present in facts and circumstances of each case before enlarging a person on bail. 42. 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. The Court has also to bear in mind the gravity and seriousness of the offence alleged and the punishment prescribed in respect thereof. In the light of aforesaid, this Court does not find substance in the findings returned by the court below in the present case. 43. I am conscious that by invoking the appellate jurisdiction, this Court is required to justify the reasons for arriving at a conclusion as to on what premise the trial court order granting bail has to be inhibit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h other co-accused created the Corporate Loan Book (CLB) for the purpose of utilizing the funds of the company to their personal benefits and the Corporate Loan Policy was not at all followed by the sanctioning authority. Moreover, the learned trial court has ignored the fact that respondent No.2 along with other accused persons has been charge- sheeted for the offences under Sections 409/420/120B IPC. The punishment prescribed for the offence under Section 409 IPC is imprisonment for life or imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine. 46. In this way, 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 gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and Maninder Singh hatched a conspiracy to divert the funds of complainant-company. Hence, the plea put-forth on behalf of respondent No.2 that he cannot be held vicariously liable for the acts of the company, shall be tested during trial. 50. The plea put-forth by respondent No.2 that he had taken retirement from active life and was in Radha Swami Satsang, Beas is controverted by the prosecution alleging that Board Minutes and various emails reveal his active participation in the affairs of the company even after his appointment as Non-Executive Director Vice Chairman and this assertion of prosecution, casts a doubt in the mind of this Court that if respondent No.2 is released on bail, he may not design a conspiracy to tamper with the evidence or influence the witnesses. 51. So far as the assertion on behalf of petitioner that other co-accused Rajender Prasad Aggarwal has been refused bail by the trial court on the same day of passing the impugned order, however, the same is not subject matter of consideration before this Court but it is relevant to mention here that while dismissing the bail application of said accused vide order dated 03.03.2021, the same court has obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers are legally infirm and vulnerable leading to miscarriage of justice and absence of supervening circumstances such as the propensity of the accused to tamper with the evidence, to flee from justice, etc. would not deter the court from cancelling the bail. The High Court or the Sessions Court is bound to cancel such bail orders particularly when they are passed releasing the accused involved in heinous crimes because they ultimately result in weakening the prosecution case and have adverse impact on the society. Needless to say that though the powers of this Court are much wider, this Court is equally guided by the above principles in the matter of grant or cancellation of bail. 55. In the present case, nature and gravity of accusation against respondent No.2 is serious. The grant of bail in a case involving cheating, criminal breach of interest by an agent of such a large magnitude of money, affecting a very large number of people would also have an adverse impact not only on the progress of the case but also on the trust of the criminal justice system that people repose. Thus, the parameters set out by the Hon ble Supreme Court for cancellation of bail in Kanwar Singh Meen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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