The interpretation of the term 'predicate offence' in the context of the Supreme Court's orders and the wide amplitude of the definition of fraud under Sec. 447 of the Companies Act, 2013.

JUDGMENT

1. The matter was heard yesterday, primarily on the ground of interim relief.

2. Mr. Chaudhary, the learned Senior Counsel canvassed the submissions on behalf of the applicant. Mr. Venegaonkar, the learned Special Counsel, advanced the submissions on behalf of the respondent - Serious Fraud Investigation Office ("SFIO").

3. The matter came to be posted today for making a statement on behalf of the respondent as to the purport of the order passed by the Supreme Court on 26/4/2022, from the perspective of the Counsel, who appeared for the respondent in Writ Petition (Criminal) No.37 of 2020.

4. The applicants urged that despite the orders of the Supreme Court passed on 18/1/2022 and 26/4/2022, which was corrected by the order dated 27 th April, 2022, the Special Judge has rejected the prayer of the applicants to release them.

5. The Court finds that the application is silent about these developments. Even there is no prayer.

6. When confronted, the learned Counsel for the applicants seeks leave to amend the application. Since the Court has heard the matter, it would be appropriate to allow the applicants to amend the application and raise the grounds as may be advised and also annex the copies of the orders passed by the learned Special Judge.

7. Let the amendment be carried out forthwith.

8. Applicant no.1 held the office of Vice President and Head of Finance of M/s. Sterling Biotech Limited (SBL). Applicant no.2 has been an independent Director in SBL. Applicant no.3 had also been working as an independent Director with SBL since 1990. Applicant no.4 was working as a Company Secretary of SBL and later on became the Vice President - Legal of SBL.

9. It is asserted in the application that SBL was set up in the year 1997 as a producer of gelatin. It had a strong corporate presence. SBL faced financial challenges due to extraordinary factors like sudden change in pollution discharge facility standards and SEZ taxation policy, etc.

10. In the wake of the financial problems, initially FIR bearing No. RC8(A)/AC-III/2017, for the offence punishbable under Sec. 13(2) read with Sec. 13(1)(d) of the Prevention of Corruption Act, 1988 ("PC Act") came to be registered on 30 th August, 2017. On 25/10/2017 another FIR bearing No.RCBD1/2017/E/007 came to be registered by CBI, BS and FC, New Delhi, against SBL, for the offences punishable under Sec. 13(2) read with Sec. 13(1)(d) of the PC Act and Ss. 120B, 420, 467, 468 and 471of the Indian Penal Code, 1860, ("the Penal Code"). In the meanwhile, on 10 th April, 2018 SFIO - the respondent commenced investigation into the affairs of the various companies. The applicants avered that, in connection with the said investigation, the applicants were arrested and produced before the Special Court in Remand Application No.303 of 2022. By an order dtd. 22/3/2022 the Special Judge initially remanded the accused in SFIO custody and, later on, by order dtd. 24/3/2022, they were remanded to judicial custody.

11. The applicants approached the Court primarily on the ground that the remand orders have been passed in a patently routine and mechanical manner without application of mind.

12. As indicated above, applicant no.3 Hemant S. Hathi filed a Writ Petition (Criminal) No.37 of 2020 before the Supreme Court. The petitioner had, inter alia, prayed for quashing the RC8(A)/AC/III/2017 dtd. 30/8/2017, registered by CBI AC-III, New Delhi, under Sec. 13(2), 13(1)(d) of the PC Act and all conequential proceedings arising threrefrom, and FIR RCBD1/2017/E/007 dtd. 25/10/2017 registered by CBI BS and FC, New Delhi, under Sec. 13(2), 13(1)(d) of the PC Act and Sec. 120B read with Ss. 420, 467, 468 and 471 of the Penal Code.

13. In the said writ petition, on 7/2/2020, the following order was passed by the Supreme Court:

"Learned Senior counsel for the petitioner states that banks are willing to close the issue and he has obtained OTS from about fifteen out of twenty banks. It is his submission that if notice is