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TMI Blog2022 (10) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 2013. Though there are several statements recorded from the witnesses, the statement recorded from one of the Statutory Auditors viz., Geetha Suryanaranayan under Section 217 of the Companies Act reveals that the petitioner had played a key/pivotal role in the organisation. Further, a perusal of the statements recorded from other witnesses also show that the petitioner is the person, who is responsible for floating puppet and shell Companies in the name of their employees, poor relatives and round tripping and layering of money - A perusal of the materials reveals that the petitioner is the person who has signed in various documents as person in charge of commercial/financial transactions of Surana Power Limited. Apart from the above, the statement recorded from Banvarlal Sharma discloses about the role played by the petitioner and other accused for defrauding the banks and embezzlement of funds. The golden principle has been time and again held by various courts that no person shall be deprived of his life or personal liberty except according to a procedure established by law. But, at the same time, the courts must strike a balance between the interest of the society in gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns Private Limited (FGPL) 12. Grant Logistics Limited (GLL) 13. Natural Coal Private Limited (NCPL) 14. Sayso Exim Private Limited (SAYSO) 15. Thribhuvan Enterprise Private Limited (TEPL) (ii) On the basis of the SFIO Investigation Report into the affairs of Surana Industries Limited and 14 other Companies, the respondent had filed a complaint against the petitioner and 89 others under Section 439(2) r/w. Section 436(1)(A),(D), & (2) r/w Section 212(6) r/w 212(15) of the Companies Act, 2013, r/w Section 621(1) of the Companies Act, 1956, & Section 193 of the Code of Criminal Procedure, 1973 seeking to prosecute them for the offence under Sections 36(c) r/w 447, 143 r/w 147, 178(8), 188, 447, "448 r/w 129, 131 & 447", 448 of the Companies Act, 2013; Section 227 r/w 233, 628 r/w 211, 628 of Companies Act, 1956; and Section 420 r/w 120 B of the Indian Penal code, 1860. (iii) During the course of investigation, the respondent investigation team arrested Rahul Dinesh Surana, on 13.07.2022, Dinesh Chand Surana, on 02.08.2022, Vijayraj Surana, on 02.08.2022 and Devarajan K.E. on 05.08.2022. (iv) The Surana Group of Companies (Surana GOC) consists of three flagship companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties SAYSO, TEPL. ● The petitioner, in connivance with his father Dinesh Chand Surana and Yashpal, had siphoned out Rs.115.99 Crores from SIL to RIPL and RVPL. ● The petitioner, in connivance with his father Dinesh Chand Surana and Anandh, had willfully mismanaged SIL between F.Y. 2014-15 and F.Y. 2016-17 for the benefit of Sakthi GOC. The petitioner, in connivance with his father Dinesh Chand Surana and Yashpal Sharma (Yashpal) of Radha GOC, had siphoned out monies to Radha GOC. The petitioner further, in connivance with his father Dinesh Chand Surana, Anandh and Yashpal, had amassed properties at MSS Purasaiwakkam, Victory foundation and Aagam Realty at Anna Nagar, which are being in the custody and enjoyment of the petitioner and his father Dinesh Chand Surana. ● The petitioner, in connivance with his father Dinesh Chand Surana and Deepak Kothari, had utilized three fake transport firms to siphon funds of Rs 14.32 Cr from SIL, which were borrowed from banks. ● The petitioner, in connivance with his father Dinesh Chand Surana, had floated an entity BELL Tower Enterprises LLP(BELL) by employees and subsequently replaced the employees on 10.07.2015 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner over Technical Department, Finance Department, Accounts Department, HR & Admin. Department, Systems Department and Company Secretary. He not only attended most of the BOD Meetings of SPL, but was also part the Management Committee, Steering Committee of SPL. His role in fraudulent conduct of affairs of SPL is as listed below; a. The petitioner had remained at the helm of the Power Plant Construction and he had inflated the project cost of the 420 MW through entities controlled through employees (Puppet-I) to enable SBs divert all of the monies invested in SPL as share capital back to SIL. This manner was carried out with the intent to defraud banks by not bringing in any promoter contribution. b. The petitioner had made various false representations to banks inthe form of e-mail correspondences with banks seeking disbursements. c. During his tenure as Group CEO of SIL & SPL, he had written off Rs.86.24 Crores, in connivance with his father Dinesh Chand Surana, receivable from VIL and BKPL as disclosed in its audited financial statements for FY 2014-15, resulting in loss of monies borrowed from banks and causing siphoning of funds of SPL of Rs.86.24 Crores. 8. The petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring for the petitioner would submit his arguments as under:- (i) The petitioner was appointed as a Vice President (Projects) of Surana Power Limited and he is neither a member of Board of Directors of Surana GOC nor a key managerial personnel as required under Section 203 of the Companies Act, 2013. The petitioner's role as Vice President (Projects) from 2008 was only to take care of the technical aspects of Surana GOC and to look after and manage the projects and later during 2012-13, he was made as Vice President (Operations). He was not incharge and responsible for the conduct of Surana GOC and though he was appointed as a Group CEO, on 27.05.2015 in respect of Surana Industries Limited and Surana Power Limited, he had been appointed only for the purpose of reviving and rehabilitating the Company and later, he resigned from both the Companies on 05.11.2017. Other than being incharge of the projects, he has nothing to do with the borrowals from various Banks and management of finance of the company. (ii) The fact remains that CBI & BF had registered a case in Crime No.11 of 2019 against the promoters and Directors of Surana Industries Limited for alleged offence under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2022 and remanded to judicial custody on 14.7.2022. Even thereafter the respondent had taken custody of the petitioner for two days for the purpose of investigation. After investigation in respondent's custody, the petitioner was sent back to judicial custody. When the NCLT as well as this Court by detailed and meticulous orders held that the petitioner had not committed any fraud, the respondent, without any basis, has filed the complaint and arrested the petitioner. (vi) The investigation has been completed and the complaint has also been taken on file. There are 125 witnesses and 89 co-accused and there is no likelihood of the trial being completed in an early date. The co-accused K.E.Devarajan, who has been similarly placed, has been directed to be released on bail in Crl.O.P.No.22595 of 2022 by order dated 11.10.2022. (vii) The petitioner has not committed any fraud and that there are reasonable grounds for believing that he is not guilty of such offences and that he is also not likely to commit any offence while on bail and thereby the petitioner, having satisfied the twin conditions specified under Section 212(6) of the Companies Act, 2013 and thereby he is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... verviewing the day to day financial operations of the Company. (iii) Apart from the above, he is the person coordinating with various contracts in the operation. The petitioner, in connivance with other accused, had floated shell Companies by inducting employees of Surana group Companies as Directors in the Shell Companies. Fake transactions were done as if amounts were paid to the shell Companies and they were siphoned off. In all the correspondence, the petitioner is shown as the person in charge of Commercial and Financial transactions of the Company and the petitioner was aware of the fraudulent activities and embezzlement of funds. (iv) Though it was claimed by the petitioner that due diligence was exercised by the Lenders' Independent Engineers, it was found that the report was given based on false representation made by the accused. (v) Further, all the correspondence obtained from Mott MacDonald, reveal that the petitioner was the person in charge of the business of the Company. The petitioner, alongwith other accused, indulged in circulation of funds and had, by embezzling the funds and fabrication of documents, have projected the borrowed money as their money. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the co-accused was never shown as a key managerial person and that he was not the Founder or Promoter of the Company and he is only a Chartered Accountant by profession and he has done his duty as a Chartered Accountant without knowing the physical activities of the Company, granted bail, whereas the petitioner totally stands on a different footing. (xiv) The petitioner has been arrested very recently and that the respondents may also require to conduct further investigation and thereby the bail application is liable to be dismissed. 12. Heard the learned Senior Counsel appearing for the petitioner and the learned Special Public Prosecutor and perused the materials available on record. 13. Despite the fact that the court is overwhelmed with factual aspects which the parties have, unavoidably, produced, the issue before this court is whether the petitioner, who is one among the accused alleged with an offence of siphoning of public money in a fraudulent manner, is entitled for bail or not. 14. The crux of the stand taken by the petitioner seeking bail is as under: (i) He is an innocent person and he was not in charge and responsible for the conduct of Surana Group of Compani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s sort of white-collar crimes are particularly harmful to society as they are committed by not just literated, but, well educated and influenced persons, who are expected to set a moral example and behave responsibly. The fraudulent activity in siphoning of pubic money by defrauding the financial institutions is unlike any other offence which could have been committed by sudden provocation as it is a well calculated one with the deep understanding as to the consequences and with the idealogy to conquer them. Therefore, if the court finds a prima facie case against the accused in such cases, it cannot come to a satisfaction that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail as specified in Section 212 (6)(ii) of the Companies Act, 2013. 18. Though the petitioner claims to be an innocent and he was only the Vice President (Operations), from the materials submitted alongwith the Application, it is clear that the petitioner has played a major role in the affairs of the Company. He himself claims to have been appointed as a Group CEO only for the purpose of reviving and rehabilitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h offence. 22. Similarly, the petitioner cannot take a shelter by contending that the loans were disbursed only on the basis of the Report of the Lender's Independent Engineer and thus, he had not defrauded the Banks as the correspondences produced by the respondent reveal that such a Report was produced only on the basis of the information/inputs provided by the petitioner' Group of Companies. 23. The petitioner cannot contend that in a proceedings before NCLT, a finding was given in favour of the Group of Companies which affirms that he too had not indulged into any fraud as such a finding is based on the report of the Insolvency Resolution Professional, who has given the report based on the inputs given by the petitioner group Companies in respect of which, no in-depth investigation had been done. 24. Sofar as the stand taken by the petitioner that a co-accused has been granted bail by this court and thus, he is also entitled to grant of bail, it is seen that such a co-accused is a Chartered Accountant and this Court had granted bail to him on the ground that he is not a Founder or Promoter of the group Companies and that the other accused belonging to the Promoter fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with, the larger interests of the public/State and other similar considerations." This Court has adopted this position in several decisions, including Gautam Kundu v. Directorate of Enforcement [Gautam Kundu v. Directorate of Enforcement, (2015) 16 SCC 1 : (2016) 3 SCC (Cri) 603] and State of Bihar v. Amit Kumar [State of Bihar v. Amit Kumar, (2017) 13 SCC 751 : (2017) 4 SCC (Cri) 771] . Thus, it is evident that the above factors must be taken into account while determining whether bail should be granted in cases involving grave economic offences." 27. Having perused the entire materials available on record, as of now, this court is of the opinion that the petitioner has not satisfied the conditions imposed under Section 212(6)(ii) of the Companies Act for grant of bail for the offence punishable under Section 447 of the Companies Act. Further, it is a case of economic offence of such a huge magnitude affecting t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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