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TMI Blog2022 (1) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... e debit notes were adjusted against the payment received from the LC rotated funds. Falsified financial statements of FIL signed by the applicant was filed with ROC and was submitted to public sector Banks depicted false MT trade receivables. The applicant provided false and bogus documents to the Banks. Abuse of position as promoter/directors of FIL to cause wrongful loss of ₹ 4041 Crores to public sector Banks - HELD THAT:- Applicant utilized the corporate identity of FIL to perpetrate fraud of rotating the funds obtained through Letter of Credits discounting for mopping the interest arbitrage available between LC issuance and discounting charges and that between the interest on fixed deposits. This whole conspiracy was played under the garb of doing MT - The sum and substance of the outcome of the investigation conducted in the matter and the facts mentioned in the complaint for prosecution are that concerned Companies were engaged in fraudulent Merchanting Trade and caused wrongful loss to the Public Sector Bank to the tune of ₹ 7820 Crores approximately applying different modus operandi including siphoning of Bank funds through Merchanting Trade; falsification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oached this Court by filing bail application under section 439 Cr.P.C. being Criminal Misc Bail Application No.12047 of 2020, which came to be disposed of by order dated 05.05.2020 whereby the prayer for interim bail of the applicant was rejected and liberty was granted to the applicant to move regular bail application. However, in the meantime, the order dated 05.05.2020 has also been challenged by the applicant before the Apex Court by filing SLP Criminal No.2393 of 2020, which came to be disposed of vide order dated 28.05.2020 as not maintainable and liberty was granted to the applicant to file a regular bail application. Hence, the present bail application has been filed seeking regular bail under Section 439 Cr.P.C. read with Section 212(6) of the Companies Act, before this Court. 4. The encapsulated facts of the case are that the applicant is said to have been arrested in pursuance of the arrest order dated 19.03.2020 by the Arresting Officer, who is Assistant Director of Ministry of Corporate Affairs for the offence under Sections 447 and 448 of the Companies Act, 2013. Copies of grounds of arrest were also served on the applicant on 19.3.2020. In pursuance of Order No.03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies coaccused and others Directorsco accused. It is also found that the applicant abused their position as PromoterDirector of Frost International Limited (FIL) to cause wrongful loss of ₹ 4041/crores to public Sector Banks. Applicant along with other Directors utilized the corporate identity of the FIL to perpetrate fraud of rotating the funds obtained through Letter of Credit. It is further alleged that in furtherance of their dishonest intention, applicant along with others manipulated the books of FIL by showing fake and unrecoverable MT trade receivable to the tune of ₹ 3537.74 crores to deceive the public sector Banks and allured them to obtain credit facilities. It is further alleged that the applicant along with other Directors were also indulged in speculative currency trading with banks money and ultimately public money which resulted in heavy losses. The applicant along with others have also done siphoning of money to the tune of ₹ 845 crores which is standing in the books of FIL in furtherance to the perpetration of the above mentioned fraud. 7. It is submitted by learned Counsel appearing for the applicant that applicant is in jail since 19.3.2020. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it facilities to F.I.L. which ultimately remained outstanding as account of F.I.L. became N.P.A. He submitted that the offence committed by the applicant being the Director and the Managing Director of F.I.L., has come into light during the investigation, is of grave nature. In support of his arguments, learned counsel also relied upon the cases of P. Chidrambaram vs. Directorate of Enforcement (2019) 9 SCC 24 and Y.S. Jagan Moham Reddy vs. Central Bureau of Investigation, 2013 (7) SCC 439 , in which the Court has observed that economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. 11. I have considered the rival submissions advanced by the learned counsel for the parties and have gone through the entire material available on record. 12. Perusal of the record discloses that the applicant has been arraigned as an accused no.44 in the complaint filed by the SFIO. Applicant is stated to be the Managing Director, Signatory of the financial statements of Frost International Limited, which is a company engaged in the business of commodities and merchant trading. The FIL had secured the credit facilities by way of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd discounting charges and that between the interest on fixed deposits. This whole conspiracy was played under the garb of doing MT. 14. The applicant used the corporate identity of FIL to rotate LC funds for mopping the interest arbitrage and showed it in the books as Merchanting Trade business. Since it was not actually into MT business the corresponding sales and purchase shown in the financial statements and books of accounts is false. Since mopping of interest was done by keeping the rotated funds obtained through LC discounting in Fixed Deposits to camouflage the same the interest income from FD was shown as part of revenue from operation in the financial statements to give a false picture of profitability of MT business. A large amount of these fictitious trade receivables were standing against their undisclosed related parties. The sum and substance of the outcome of the investigation conducted in the matter and the facts mentioned in the complaint for prosecution are that concerned Companies were engaged in fraudulent Merchanting Trade and caused wrongful loss to the Public Sector Bank to the tune of ₹ 7820 Crores approximately applying different modus operandi in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approach for grant of bail. The offence has been committed with prior planning with an eye on personal profit totally disregarding the interest of the community and causing damage to the economy and ignoring national interest. The applicant was instrumental in submissions of false and fabricated documents and siphoning of funds of the company to the tune of several crores and indulging in fraudulent and deceptive methods, and thus, keeping in mind the nature of accusation as discussed in detail in earlier paras and the material brought on record against the applicant by SFIO, this court is not inclined to release the applicant on bail even under Section 439 Cr.P.C. 18. In the end, it is contended by learned counsel for the applicant that the applicant is suffering from diabetes and various other ailments and, therefore, on that ground, he should be released on bail and also looking to the present Covid19 pandemic. 19. However, he has failed to bring on record any document which may reveal that accused is not getting proper medical treatment or care in jail or he requires such treatment which can only be provided if he is released on bail. In the absence of any documentary ev ..... 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