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TMI Blog2023 (6) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... hment, even before the conclusion of trial. In the present case, this Court is of the opinion that no possible prejudice can be caused to the case of the prosecution before the learned Trial Court if the applicant is released on bail with necessary considerations, safeguarding the interests of the prosecution, especially when other co-accused persons have also been granted bail. Admittedly, the investigation in the present case in complete and the main chargesheet, as well as the supplementary chargesheets stand filed before the learned Trial Court. It is also an admitted case that the evidence in the present case, primarily, is documentary in nature; all material documents have been recovered and are in the custody of the prosecution. It is also pertinent to note that no material has been placed on record to demonstrate that while the applicant was on interim bail, he tried to influence the witnesses, tamper with evidence or misuse his liberty in any manner. In view of the law laid down in the judicial precedents cited hereinabove and in view of the facts and circumstances of the present case, the present application is allowed. The applicant is directed to be released on bail upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngh and Shivinder Mohan Singh till June, 2017, i.e., till when they were classified as promoters of REL. Thereafter, till February 2018, they remained on the Board of Directors of REL. Effectively, since Malvinder Mohan Singh and Shivinder Mohan Singh had control over REL, they also had control over its subsidiary - RFL, the complainant company. Shivinder Mohan Singh held the position of Non-Executive Director of REL from 13.12.2004 till 06.04.2010 and thereafter, he held the position of Non-Executive Director and Vice-Chairman of REL from 29.07.2016 till 14.02.2018. Malvinder Mohan Singh, held the position of Non-Executive Chairman of REL from 13.12.2004 till 06.04.2010 and thereafter, from 29.07.2016 till 14.02.2018. 2.2. The shareholding and Board of REL was reconstituted in the year 2018 after Shivinder Mohan Singh and Malvinder Mohan Singh lost control pursuant to invocation of shares pledged by them with various banks in February 2018. After the said reconstitution, the new management conducted internal enquiries and discovered willful defaults on significant unsecured loans, defined for internal purposes as the Corporate Loan Book ( CLB ), by borrower entities, either relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose of utilization of funds by the promoters. The modus-operandi, as alleged by the investigating agency, was that inter-corporate loans were disbursed to various companies controlled by the promoters, through which funds were routed to companies owned by the promoters, who were the ultimate beneficiaries. The CLB increased gradually because the amounts due towards re-payment of loans were funded through new loans. 2.5. Furthermore, it was found that the CLB Loans were granted on the basis of verbal instructions. RFL did not receive any official request from the borrowers requesting such loans. The only written communications available with respect to the initiation of the said loans were e-mails circulated by Mr. Pawan Seth to Ms. Rajni Barnwal, requesting her to initiate the underwriting process, and emails from Ms. Rajni barnwal to Mr. Punit Arora requesting him to initiate the RMC approval process. 2.6. Nineteen entities to which loans were extended were indentified. It was alleged that the amount extended as the loan was misappropriated/siphoned off and was never returned to RFL. The said 19 entities and the details of their Directors at the relevant point of time have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s revoked by the new management. 2.14. Upon completion of investigation, the chargesheet in the present case was filed on 06.01.2020 under Sections 120B/409/420 of the IPC qua Malvinder Mohan Singh, Shivinder Mohan Singh, Kavi Arora, Anil Saxena, the applicant and RHC Holding Pvt. Ltd. 2.15. Narendra Kumar Goushal and Maninder Singh were arrested on 27.10.2020 and Rajendra Prasad Aggarwal was arrested on 07.12.2020. Thereafter, a supplementary chargesheet in the present case was filed on 20.01.2021 under Sections 120B/477A/420/409 of the IPC qua the following persons/companies: i. Maninder Singh ii. Narender Kumar Goushal iii. Rajender Prasad Aggarwal iv. M/s A A Capital Services Pvt. Ltd. v. M/s Abhiruchi Distributors Pvt. Ltd. vi. M/s Ad Advertising Pvt. Ltd. vii. M/s Annies Apparel Pvt. Ltd. viii. M/s Artifice Properties Pvt. Ltd. ix. M/s Gurudev Financial Services Pvt. Ltd. x. M/s Modland Wears Pvt. Ltd. xi. M/s Platinum Infrastructure Pvt. Ltd. xii. M/s Rosestar Marketing Pvt. Ltd. xiii. M/s Star Artwors Pvt. Ltd. xiv. M/s Torus Buildcon Pvt. Ltd. xv. M/s Tripoli Investment Trading Pvt. Ltd. xvi. M/s Volga Management Consultancy Pvt. Ltd. xvii. M/s Zolton Properties Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to misappropriation of funds. He used to draw a considerable sum of money as salary was entitled to several other benefits. He turned a blind-eye to the issues with the CLB and the siphoning- off of money in favour of the company owned by Malvinder Mohan Singh and Shivinder Mohan Singh. 3.6. During the course of investigation, co-accused Malvinder Mohan Singh claimed that the applicant had received a loan of approximately Rs. 40 crores from Fern Healthcare Pvt. Ltd. which belonged to RHC Holdings Pvt. Ltd. in 2012. He further disclosed that the loan documents were executed by the applicant himself alongwith a demand promissory note. Investigation with regard to the said loan revealed that the loan extended by Fern Healthcare Pvt. Ltd. to the applicant on 30.03.2012 were actually disbursed by RFL. It was routed and re-routed through various entities to conceal the transaction. The amount so disbursed is alleged to have been finally received by the applicant who used his influence to show the same as a loan from the shell entity, Fern Healthcare Pvt. Ltd. A diagrammatic representation of the disbursement of the said loan amount is as under: Submissions on behalf of the Applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Board meeting dated 06.09.2016 and thereupon the applicant was once again demoted and removed from the position of CEO and whole time Director to Non Key Managerial Personnel on 21.10.2016 and was removed from all working committees. Immediately, the applicant s e- mail ID was blocked and office of the applicant was taken over and thereafter, the applicant seized to have any executive post and he did not even attend office. 4.5. Till the time the applicant was in REL, he duly worked on lowering of CLB and also ensured that in compliance of undertaking given to RBI neither the exposure benchmark as undertaken is breached and also no CLB loan is rolled over. It was further submitted that 13 of the 19 loans objectionable loans were disbursed after the applicant resigned from his position as Whole- Time Director on 21.10.2016. 4.6. The applicant was also not a part of any of the committees responsible for sanctioning of loans. 4.7. The case of the prosecution against the present applicant, and more particularly, the suggestion that he was also responsible for approval of laons is based on e-mails in relation to approval of six out of the 19 loans. It was submitted that the applicant w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of Petitioner are well within the four corners of law. Interestingly other members of the RPT Sub-Committee, i.e., A C Mahajan, Rashi Dhir and Harpal Singh have not been arrested and were later chargesheeted without arrest, even though they all have given similar approvals. 4.9. In the chargesheet, the offence complained of and investigated, is in respect to the 19 entities to which allegedly loans were extended by RFL, but never repaid back and instead alleged to be misappropriated and siphoned off. Upon a perusal of the chargesheet, at best, the applicant can be said to have knowledge of only 6 out of 19 problematic loans mentioned in charge sheet, and even out of those 6 loans, 3 were secured loans against property and the remaining 3 unsecured loans were opined as arm s length transaction by the Company Secretary and approved by the relevant credit committees. Thirteen out of nineteen objectionable loans admittedly have been disbursed only after 21.10.2016, when the applicant was removed from the post of CEO and all committees and was made a Non-Key Managerial Person, having no executive powers. 4.10. As far as the amount of Rs. 34.20 Crores alleged to have been received by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on between the funds of RFL received by RHC Holdings Pvt. Ltd. and the transactions mentioned in the chargesheet. It was further submitted that the applicant has not held the amount or diverted the same for his own use. The same was immediately transferred to RHC Holdings Pvt. Ltd. and the same was done on account of consolidation of loans by the promoters in their company, i.e., Fern Healthcare Pvt. Ltd. It was further submitted that for recovery of the said amount alongwith interest, garnishee proceedings are pending. Lastly, it was submitted that it is not a case of the prosecution that Fern Healthcare Pvt. Ltd. is an entity related to the applicant and the loans disbursed to the same were proposed or approved by him. 4.11. It was further submitted that the FIR is based on a forensic audit done by AZB Partners. A perusal of the report dated 27.09.2010 of the said forensic audit shows that the promoters were the beneficiaries of the said loans. No involvement of the applicant has been recorded in the report. It was submitted that the report also confirms that the loans were orchestrated by Hemant Dhingra and Narendra Kumar Ghoushal. 4.12. It was further submitted that the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of loans by RFL: 2.4 We understand that while the primary business of RFL is SME Lending, one of the loan products offered by RFL included unsecured lending to corporate entities. These loans are classified by RFL as Corporate Loan or CLB Loans and the entire portfolio of CLB Loans is referred to as CLB or CLB portfolio. The total exposure of RFL Identified Loans in the CLB portfolio as of March 31, 2018 was approximately INR 2,086.7 crores (Indian rupees two thousand eight six crores seventy lakhs). 2.5 We understand that the CLB portfolio has been subject to regulatory scrutiny in the recent past. The RBI had during its inspection on RFL with respect to its financial position as on March 31, 2013 raised the following observation . despite having a competent and highly qualified Top Management, its ability to oversee the professional functioning of the Company and general quality of Corporate Governance was not considered satisfactory by the Inspection, as exercise of undue influence of the promoter group was reflected, particularly in the conduct of its CLB. It was submitted that a bare perusal of the aforesaid paragraphs reflects that the promoter group of REL, i.e., Malvinder ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ena, Sunil Garg and Nalin Nayyar. vii. The report also lays out the relationship between the borrower entities and the promoters of REL. It is noted that while no direct relationship between the two existed, commonalities were found in shareholders, directors and registered offices. Circumstancial evidence qua a relationship between the promoters and borrower entities was uncovered viii. Evergreening of loans was enabled to prevent them from being categorized as an NPA. CLB loans were typically granted for a period of twelve months. A loan would be classified as an NPA if the principal/interest remained overdue for a period of time. It was noted that fifteen out of twenty loans were granted only to cause repayment of existing loans, which would have otherwise been categorized as an NPA. The cheque against the payment of an existing loan would be deposited only once specific instructions in that regard were received either from the concerned borrower or Hemant Dhingra. The said cheque would typically be cleared shortly after disbursal of another loan. ix. It was also noted that RFL did not execute loan agreements as a matter of practice. Instead a system generated document referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case as also the pertinent observations of the Hon ble Supreme Court in various decision, I have no hesitation to hold that the impugned order suffers from serious infirmities, resulting in miscarriage of justice. Moreover, continued detention of respondent No.2 in this FIR case is necessary not only to unearth the conspiracy hatched by him, but also to derive out/trace the siphoned money which he has credited for his personal benefit. 57. In view of afore-going narration the impugned order dated 03.03.2021 passed by the learned trial court i set aside. Consequentially, the bail granted to respondent No.2 in this FIR case by the trial court is also set aside. 58. With aforesaid observations, the present petition is allowed and is accordingly disposed of. Pending applications are disposed of as infructuous. 59. A copy of this order be transmitted to the Trial Court and Jail Superintendent concerned for information. 5.5. Learned Senior Counsel appearing for the complainant company, RFL submitted that before the learned National Company Law Tribunal ( NCLT ), the companies named in the present case were proceeded against and in the said proceedings, it has come on record that the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ords that the real source of the said money was the complainant company. The bank statements filed by the I.O. pursuant to Order dated 02.07.2020 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 was submitted that subsequently, by way of supplementary chargesheet, it came on record that the loans given to the applicant by RHC Holdings Pvt. Ltd. started from the year 2006, even before REL became a public listed company or RFL got established. It was submitted that the same continued form year to year and eventually in the year 2012, the promoters got the said loans transferred to their other company, i.e., Fern Healthcare Private Limited. It was submitted that interest/ repayments have been made by the applicant from his own funds in the said period and the said amount was a loan only. It was the contention of learned Senior Counsel that this in itself, amounts to a change in circumstance in support of the maintainability of a second application for bail. On a pointed query from this Court, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form part of the chargesheet. 10. It has been contended that the applicant was arrested on 10.10.2019 and the chargesheet qua him was filed on 06.01.2020. Two supplementary chargesheets were filed on 20.01.2021 and 15.12.2021. The investigation qua the applicant stands complete. In the main chargesheet and the first supplementary chargesheet, the prosecution has cited 78 witnesses and the list of accused includes 34 persons. It was further urged that the documentary evidence in the present case is voluminous in nature and the trial is not likely to conclude in the near future and admittedly, the trial is at the stage of scrutiny of documents. On the other hand it has been contended that the filing of the chargesheet does not lessen the allegations of the prosecution. Instead, it establishes that incriminating evidence has come on record against the accused person and therefore, it further strengthens the case against grant of bail. It has been further contended that since the offence under Section 409 of the IPC provides for life imprisonment, therefore, the period of custody in the present case will not give any benefit to the applicant for grant of bail. It is further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Apex Court is silent about the life imprisonment which the offence carries. In this regard, I feel merit in the contention of Mr. Ahmed, the learned senior counsel for the petitioners that although the Apex Court order does not find the mention of the word 409 IPC or the factum of life imprisonment which could be imposed for the said offence in the order, but it was cognizant of the fact that the all co-accused persons in the bail applications which were under its consideration were charged so. In addition to this, while dealing with the facts of the case in the batch of applications of Sanjay Chandra s case(supra) it had taken the charges against all the co-accused as a whole and not individual charges, therefore, if that be the position, this Court ought not to deny the bail to the petitioners on account of the omission, though inadvertent, in the order of the Apex Court. I am of the view that when the Supreme Court has reproduced the facts of the case, given the magnitude of the offence, the severity of the punishment which it entails, it has taken into note of the fact of the accused persons in general being charged for an offence under Section 409 IPC or the conspiracy thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the omission to mention of Section 409 IPC or the absence of the word life imprisonment in the Supreme Court order cannot be interpreted in a manner which may be detrimental to the interest of the petitioners on account of Article 141 of the Constitution of India as the Supreme Court has dealt with the facts of the case as a whole and was cognizant of the fact that the charges against all the petitioners had crystallized. It Was also aware that common charges with regard to the commission of offence were framed against all the accused persons, which entailed imposition of life imprisonment, yet it consider the case of the co- accused Sanjay Chandra s Case (supra) fit to grant bail. These judgments are Official Liquidator v. Dayanand, (2008) 10 SCC 1, State of Bihar v. Kalika Kuer @ Kalika Singh, (2003) 5 SCC 448, Ajmer Singh v. State of Haryana, (2010) 3 SCC 746, Izharul Haq Abdul Hamid Shaikh v. State of Gujarat, (2009) 5 SCC 283, Dinbandhu, Sharma v. State, 87 (2000) DKT 149 : 2000 (55) DRJ 96, Director of Settlements, A.P. v. M.R. Apparao, (2002) 4 SCC 638, Saganthi Suresh Kumar v. Jagdeeshan, (2002) 2 SCC 420 and Indian Airlines v. Union of India, 128 (2006) DLT 505 (DB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of grave offence and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nviction, to assure that he will submit to the jurisdiction of the court and be in attendance thereon whenever his presence is required. *** 46. We are conscious of the fact that the accused are charged with economic offences of huge magnitude. We are also conscious of the fact that the offences alleged, if proved, may jeopardise the economy of the country. At the same time, we cannot lose sight of the fact that the investigating agency has already completed investigation and the charge- sheet is already filed before the Special Judge, CBI, New Delhi. Therefore, their presence in the custody may not be necessary for further investigation. We are of the view that the appellants are entitled to the grant of bail pending trial on stringent conditions in order to ally the apprehension expressed by CBI. Role of the court 93. The rate of conviction in criminal cases in India is abysmally low. It appears to us that this factor weighs on the mind of the Court while deciding the bail applications in a negative sense. Courts tend to think that the possibility of a conviction being nearer to rarity, bail applications will have to be decided strictly, contrary to legal principles. We cannot mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional rights and limitations; yet it recognised the inherent power in Section 561-A. Post- Independence, the recognition by Parliament [ Section 482CrPC, 1973] of the inherent power of the High Court must be construed as an aid to preserve the constitutional value of liberty. The writ of liberty runs through the fabric of the Constitution. The need to ensure the fair investigation of crime is undoubtedly important in itself, because it protects at one level the rights of the victim and, at a more fundamental level, the societal interest in ensuring that crime is investigated and dealt with in accordance with law. On the other hand, the misuse of the criminal law is a matter of which the High Court and the lower courts in this country must be alive. In the present case, the High Court could not but have been cognizant of the specific ground which was raised before it by the appellant that he was being made a target as a part of a series of occurrences which have been taking place since April 2020. The specific case of the appellant is that he has been targeted because his opinions on his television channel are unpalatable to authority. Whether the appellant has established a case f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s into consideration various factors. It is an attempt to have a comprehensive law dealing with bails by following a simple procedure. The Act takes into consideration clogging of the prisons with the undertrial prisoners, cases involving the issuance of warrants, granting of bail both before and after conviction, exercise of the power by the investigating agency and the court, violation of the bail conditions, execution of bond and sureties on the unassailable principle of presumption and right to get bail. Exceptions have been carved out as mentioned in Schedule I dealing with different contingencies and factors including the nature and continuity of offence. They also include Special Acts as well. We believe there is a pressing need for a similar enactment in our country. We do not wish to say anything beyond the observation made, except to call on the Government of India to consider the introduction of an Act specifically meant for granting of bail as done in various other countries like the United Kingdom. Our belief is also for the reason that the Code as it exists today is a continuation of the pre-Independence one with its modifications. We hope and trust that the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Nagendra v. King- Emperor [AIR 1924 Cal 476, 479, 480 : 25 Cri LJ 732] that the object of bail is to secure the attendance of the accused at the trial, that the proper test to be applied in the solution of the question whether bail should be granted or refused is whether it is probable that the party will appear to take his trial and that it is indisputable that bail is not to be withheld as a punishment. In two other cases which, significantly, are the Meerut Conspiracy cases observations are to be found regarding the right to bail which deserve a special mention. In K.N. Joglekar v. Emperor [AIR 1931 All 504 : 33 Cri LJ 94] it was observed, while dealing with Section 498 which corresponds to the present Section 439 of the Code, that it conferred upon the Sessions Judge or the High Court wide powers to grant bail which were not handicapped by the restrictions in the preceding Section 497 which corresponds to the present Section 437. It was observed by the court that there was no hard and fast rule and no inflexible principle governing the exercise of the discretion conferred by Section 498 and that the only principle which was established was that the discretion should be exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the conflict between the police power to restrict liberty of a man who is alleged to have committed a crime, and presumption of innocence in favour of the alleged criminal. An accused is not detained in custody with the object of punishing him on the assumption of his guilt. 14.4. In Kalyan Chandra Sarkar v. Rajesh Ranjan, (2005) 2 SCC 42, the Hon ble Supreme Court had held as under: 18. It is trite law that personal liberty cannot be taken away except in accordance with the procedure established by law. Personal liberty is a constitutional guarantee. However, Article 21 which guarantees the above right also contemplates deprivation of personal liberty by procedure established by law. Under the criminal laws of this country, a person accused of offences which are non-bailable is liable to be detained in custody during the pendency of trial unless he is enlarged on bail in accordance with law. Such detention cannot be questioned as being violative of Article 21 since the same is authorised by law. But even persons accused of non-bailable offences are entitled to bail if the court concerned comes to the conclusion that the prosecution has failed to establish a prima facie case again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for grant of bail to other co-accused persons in the case. Co-accused Krishnan Subramanium was granted bail vide order dated 10.05.2022, passed by a co- ordinate bench of this Court in BAIL APPLN. 679/2022. Co-accused Narender Kumar Ghoushal was released on bail vide order dated 14.01.2021, passed by the learned ASJ. The said order was challenged by the complainant company RFL in CRL.M.C. 128/2021 and the same is pending adjudication. It was further submitted that Pankaj Sharma, Avinash Chander Mahajan, Sunil Kumar Garg, Rashi Dheer and Harpal Singh who were all members of the CC-II, RMC and RPT Committee and were also responsible for approval of the subject loans, have been chargesheeted in the second supplementary chargesheet, without arrest. The learned ASJ granted bail to Sunil Kumar and Harpal Singh vide order dated 06.04.2022 and to Pankaj Sharma vide order dated 04.05.2022. It is not the case of the prosecution that any impediment has been caused in the trial in the present case on account of bail being granted to the said co-accused persons. 17. Admittedly, the investigation in the present case in complete and the main chargesheet, as well as the supplementary chargesheets ..... X X X X Extracts X X X X X X X X Extracts X X X X
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