Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Del) 1314

IN THE HIGH COURT OF DELHI AT NEW DELHI
Manoj Kumar Ohri, J.
Sidharth Chauhan - Appellant
Versus
State (Govt. Of NCT Of Delhi) Through Sho - Respondent
Bail Application No. 2722, 2746 of 2021, Criminal Miscellaneous (Bail) No. 986, 995, 13268, 13269, 13545, 14956, 14957, 15515, 15516 of 2021
Decided On : 13-12-2021

Advocates appeared:
Maninder Singh, Advocate, R.K Handoo, Advocate, Niranjan Singh, Advocate, Shiv Mangal Sharma, Advocate, Saurabh Rajpal, Advocate, Rajiv Singh Pilania, Advocate, Neelam Sharma, Advocate, Ajay Laroia, Advocate, Tarun Gupta, Advocate, Madhu Laroia, Advocate, Jainika Mohan, Advocate, Rajinder Kumar, Advocate, Sandesh Kumar, Advocate

The judgment emphasizes the seriousness of economic offences, the need for custodial interrogation in such cases, and the adverse impact of granting anticipatory bail in cases involving misappropriation of funds and fraudulent activities.

Headnote:
BAIL APPLICATIONS - Section 438 Cr.P.C. - FIR Nos. 97/2018 and 118/2018 - Summary of Acts and Sections: Sections 406/420/409/120B IPC, IBC, 2016, Section 7, 19(2), 70, 60(5) - The court discussed the allegations of misappropriation and diversion of funds, delay in construction, fraudulent activities, and threats made by the applicant. The court referred to the Forensic Audit reports, RERA reports, and observations from the NCLT. The legal provisions were interpreted to emphasize the need for custodial interrogation and the seriousness of economic offences.
Fact of the Case:

The bail applications were filed under Section 438 Cr.P.C. seeking anticipatory bail in FIR Nos. 97/2018 and 118/2018, both registered under Sections 406/420/409/120B IPC at Police Station Economic Offences Wing, Mandir Marg, New Delhi. The applicant, the Managing Director of the accused Company, was alleged to have misappropriated and siphoned-off funds collected from homebuyers and Banks.
Finding of the Court:

The court found that the applicant had misappropriated and siphoned-off funds, engaged in fraudulent activities, and threatened witnesses. The court emphasized the need for custodial interrogation and the seriousness of economic offences.
Issues: The issues involved delay in construction, misappropriation of funds, fraudulent activities, threats to witnesses, and the seriousness of economic offences.
Ratio Decidendi: The court's decision was based on the need for custodial interrogation to unearth the money trail of the siphoned-off amounts and to prevent tampering with evidence and threats to witnesses. The court also highlighted the adverse impact of granting anticipatory bail in a case of such magnitude.
Final Decision: The interim protection granted to the applicant was withdrawn, and the bail applications were dismissed.

JUDGMENT

Manoj Kumar Ohri, J. - The above-noted bail applications have been filed under Section 438 Cr.P.C. on behalf of the applicant seeking anticipatory bail in FIR Nos. 97/2018 and 118/2018 both registered under Sections 406/420/409/120B IPC at Police Station Economic Offences Wing, Mandir Marg, New Delhi.

2. Since the applicant and respective counsels in both the bail applications are same and common arguments have been advanced in both the cases, the above-noted applications shall be disposed of vide a common judgment.

3. While BAIL APPLN. 2722/2021 pertains to FIR No. 97/2018 which was registered with respect to project "Estella", measuring 15.74 acres, housing 850 residential units in 16 towers, located in Sector-103, Gurugram, Haryana, the BAIL APPLN. 2746/2021 pertains to FIR No. 118/2018 registered with respect to project "NCR One", measuring 10.712 acres, housing total of 552 residential units in 10 towers and 5 executive floors, located in Sector-95, Gurugram, Haryana.

As per the allegations levelled in the FIR, while project "Estella" is being jointly developed by M/s Sidhartha Buildhome Pvt. Ltd. (hereinafter referred to as the accused Company) and Ansal Housing & Construction Ltd., project "NCR One" is being developed by M/s Sidhartha Buildhome Pvt. Ltd.

The applicant is stated to be the Managing Director of the accused Company, holding 97% shareholding in the share capital thereof.

4. Mr. Maninder Singh, learned Senior Counsel for the applicant, contended that no criminality is involved in the present cases, and rather, the dispute relates to delay in construction of flats. He submitted that both the FIRs pertain to the year 2018 and upon issuance of notices under Sections 91 and 41A Cr.P.C. by the Investigating Officer, the applicant has joined the investigation on more than 20 occasions and furnished all the documents sought by the Investigating Officer. He further submitted that the entire record relating to the construction of the projects is with the Investigating Officer and no custodial interrogation of the applicant is required.

5. Learned Senior Counsel, while challenging the conclusions of the Forensic Audit conducted by the Interim Resolution Professional (IRP), submitted that as per the Status Reports filed before the Sessions Court the total proceeds obtained by the accused Company from the homebuyers as well as the Banks, combined for both the projects, amount to approx. Rs.557 crores, whereas the valuation of both the projects is to the extent of Rs.566.33 crores. Thus, the conclusion in the Forensic Audit Report of the IRP, that funds to the tune of Rs.408 crores were diverted by the accused Company, is ill-founded. It was further submitted that the said Forensic Audit is also at variance from the audit conducted by the Oriental Bank of Commerce (now merged with PNB and hereinafter referred to as OBC) inasmuch as, the Forensic Audit conducted by OBC shows that an amount of Rs.62 crores out of the sanctioned loan amount was utilized in the construction of project "Estella", but the Forensic Audit conducted by the IRP shows that an amount of Rs.22.90 crores, out of the sanctioned loan of Rs.75 crores (the disbursed amount being Rs.65.42 crores) from PNB, was mis-utilized.

6. Learned Senior Counsel further submitted that the action of the Investigating Officer in not filing the charge sheets even after a lapse of more than three years since registration of the FIRs shows mala fides as according to the Status Report placed on record, entire documentary record has been collected. He also submitted that the reasons stated in the Status Report for seeking custodial interrogation of the applicant are misconceived.

7. It was next contended on behalf of the applicant that the ingredients of the offence of cheating are not made out in the present cases, as the applicant is still desirous of completing the projects and is ready to raise funds through sale of personal assets and assets of related entities. It was