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IN THE HIGH COURT OF DELHI AT NEW DELHI
Anu Malhotra, J.
Prabhat Kumar Srivastava - Appellant
Versus
Serious Fraud Investigation Office - Respondent
Bail Application No. 463 of 2021
Decided On : 25-03-2021
The applicant, vide the present application seeks the grant of regular bail in complaint No.149/2020 pending before the learned Special Judge, Companies Act, Dwarka District Courts in the complaint titled as "Serious Fraud Investigation Officer (SFIO) Vs. Rockland Hospitals Ltd. & Ors." in which the applicant vide order dated 29.02.2020 of the learned Trial Court has been summoned for the alleged commission of offences punishable under Sections 36(c), 128, 129, 134, 188(5), 447, 448 of the Companies Act, 2013 and Section 211, 217, 628 of the Companies Act, 1956.
Fact of the Case:
The petitioner and other persons arrayed as accused, connived and siphoned of funds of RHL by way of separate/distinct transactions. Seven distinct transactions are alleged to have taken place during the functioning of RHL whereby the funds of the said company are stated to have been siphoned of. The details of such transactions as have been depicted in the order on summoning whereby the petitioner has been summoned to face trial have been put forth as also in the written submissions submitted on behalf of the SFIO to submit to the effect:-
Finding of the Court:
The Court does not consider it appropriate to grant the bail to the applicant in terms of Section 212(6) and the proviso thereto in the category of being a sick person or infirm person, nevertheless, in as much as, the applicant does require medical care despite the factum that it is the applicant who has chosen to get his angiography done in the month of April, 2021 conducted after his eye treatment, it is considered appropriate to extend the period of interim bail granted to the applicant vide order dated 08.04.2020 for a period of 60 days at the maximum whereupon he is directed to surrender without default.
Issues: Whether the applicant is entitled to be released on bail.
Ratio Decidendi: The Court held that the applicant is not entitled to be released on bail. The Court observed that the applicant is involved in an economic offence affecting the economy of a country as a whole and posing a serious threat to the financial health of the country, ought not to be released on bail. The Court further observed that grave immense irreversible damage has been caused to the economy of the country and public interest by the applicant.
Final Decision: The application is disposed of accordingly.
JUDGMENT
Anu Malhotra, J. - The applicant, vide the present application seeks the grant of regular bail in complaint No.149/2020 pending before the learned Special Judge, Companies Act, Dwarka District Courts in the complaint titled as "Serious Fraud Investigation Officer (SFIO) Vs. Rockland Hospitals Ltd. & Ors." in which the applicant vide order dated 29.02.2020 of the learned Trial Court has been summoned for the alleged commission of offences punishable under Sections 36(c), 128, 129, 134, 188(5), 447, 448 of the Companies Act, 2013 and Section 211, 217, 628 of the Companies Act, 1956.
2. As per the observations in the order on summoning dated 29.02.2020 of the learned Special Judge, Companies Act, the Central Government under powers conferred under Section 206 (4) directed the conducting of an inquiry vide order dated 20.11.2017 which culminated into submission of an inquiry report dated 19.02.2018 under Section 208 of the Companies Act to the Central Government as a consequence of which the Ministry of Corporate Affairs, Government of India in terms of the exercise of power under Section 212(1)(a), (b) & (c) of the Companies Act, 2013 assigned the investigation into the affairs of Rockland Hospitals Limited (RHL) now M/s Medeor Hospital Limited vide order dated 31.05.2018 and also accorded approval to carry out the investigation into the affairs of four other group companies of the complainant i.e. Rockland Hotels Limited (RHOL), Somya Constructions Private Limited (SMCL), Rockland Media and Communication Private Limited (RMCPL) and RSH Meditech Systems Pvt. Ltd. vide order dated 30.09.2019 and that the Director SFIO in turn appointed officers of the SFIO as inspectors to exercise all the powers under Section 212(1) (c) of the Companies Act, 2013 and to carry out investigation of the above captioned companies vide order dated 08.06.2018 which was modified vide order dated 22.06.2018 and 10.05.2019; information is also stated to have been collected from various agencies including MCA Portal, Regional Director/ROC, Banks, Government Departments, Statutory Auditors and statements of various persons were recorded.
3. As per the investigation conducted, the petitioner and other persons arrayed as accused, connived and siphoned of funds of RHL by way of separate/distinct transactions.
4. Seven distinct transactions are alleged to have taken place during the functioning of RHL whereby the funds of the said company are stated to have been siphoned of. The details of such transactions as have been depicted in the order on summoning whereby the petitioner has been summoned to face trial have been put forth as also in the written submissions submitted on behalf of the SFIO to submit to the effect:-
"23. That the investigation established the following facts which clearly established that the applicant in connivance with co-accused committed offences mentioned above by way of various separate/ distinct instances/modus operandi. The Investigation Report establishes that the total amount of siphoning off the RHL funds from 12.09.2013 onwards against instance 1, 2, & 4 was Rs.87.93 Crore. The total unlawful gain by sale of shares of Layer-1 Companies (Instance 3) is Rs. 102.85 Crore and by purchase and resale of share of IFC to VPS is Rs. 8.15 Crore.
24. The separate instances of fraud and the modus operandi adopted by the Applicant in connivance with other individuals has been explained below in brief:
A. First Instance: Investigation established that the applicant, in conspiracy with co-accused Aditya Kumar Bhandari, Rishi Kumar Srivastava, siphoned off the funds of RHL which were received from South Delhi Municipal Corporation (SDMC) as refund of the additional FAR charges. It is established that an amount of Rs.13.21 crores were paid from joint account of RHL & FARC (Trust) by taking a term loan in the name of RHL. While the aforesaid payment to MCD was paid from a joint account of RHL and FARC (Trust), the refund made by SDMC was intent
The gravity of an offence is a factor to be considered when granting bail, but it is not the only criterion. Other factors to be considered include the stage of the investigation, the nature of the e....
Economic offence allegations do not automatically justify remand; court must consider specific evidence of risk before denying bail, particularly for women under the Companies Act.
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