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IN THE HIGH COURT OF DELHI AT NEW DELHI
Amit Sharma, J.
Sunil Naraindas Godhwani – Appellant
Versus
State (NCT of Delhi) – Respondent
Bail Appln. 1005 of 2022
Decided On : 02-06-2023
The court granted bail to the applicant, Sunil Naraindas Godhwani, who was accused of criminal conspiracy, cheating, and criminal breach of trust in relation to a financial fraud perpetrated by the promoters of Religare Enterprises Limited (REL) and its subsidiary, Religare Finvest Limited (RFL). The court considered the gravity of the offenses, the applicant's role in the alleged scheme, the stage of the investigation, the applicant's personal circumstances, and the principles of bail jurisprudence. The court found that the applicant had deep roots in society, had no criminal history, and had cooperated with the investigation. The court also noted that the investigation was complete, the chargesheet had been filed, and the trial was likely to take a long time. The court concluded that the applicant was entitled to bail on stringent conditions to ensure his presence at trial and to prevent him from tampering with evidence or influencing witnesses.
Fact of the Case:
The applicant, Sunil Naraindas Godhwani, was associated with REL from 2006 to 2017. During that period, he held various positions, including Chairman and Managing Director. The applicant was accused of being involved in a conspiracy with the promoters of REL and RFL to disburse unsecured loans to shell companies controlled by the promoters. These loans were allegedly used to siphon off funds from RFL, resulting in a loss to the company and its shareholders. The applicant was arrested on 10 October 2019 and has been in custody since then.
Finding of the Court:
The court found that the applicant had deep roots in society, had no criminal history, and had cooperated with the investigation. The court also noted that the investigation was complete, the chargesheet had been filed, and the trial was likely to take a long time. The court concluded that the applicant was entitled to bail on stringent conditions to ensure his presence at trial and to prevent him from tampering with evidence or influencing witnesses.
Issues: 1. Whether the applicant was entitled to bail considering the gravity of the offenses and the stage of the investigation. 2. Whether the applicant's personal circumstances and cooperation with the investigation weighed in favor of granting bail.
Ratio Decidendi: The court applied the principles of bail jurisprudence, which emphasize that bail is the rule and jail is the exception. The court considered the gravity of the offenses, the applicant's role in the alleged scheme, the stage of the investigation, the applicant's personal circumstances, and the likelihood of tampering with evidence or influencing witnesses. The court found that the applicant had deep roots in society, had no criminal history, and had cooperated with the investigation. The court also noted that the investigation was complete, the chargesheet had been filed, and the trial was likely to take a long time. The court concluded that the applicant was entitled to bail on stringent conditions to ensure his presence at trial and to prevent him from tampering with evidence or influencing witnesses.
Final Decision: The court granted bail to the applicant, Sunil Naraindas Godhwani, on stringent conditions, including a personal bond of Rs. 10,00,000/- and two sureties of like amount, a prohibition on leaving India without the court's permission, a requirement to provide all mobile numbers to the Investigating Officer and keep them operational, a prohibition on tampering with evidence or influencing witnesses, and a provision for cancellation of bail if the applicant attempted to tamper with evidence.
JUDGMENT
Amit Sharma, J.
1. The present application under Section 439 of the Code of Criminal Procedure, 1973 (`CrPC') seeks regular bail in case FIR No. 50/2019 dated 27.03.2019, under Sections 420/409/120B of the Indian Penal Code, 1860 (`IPC') registered at PS Economic Offences Wing.
1.1. By separate judgments of the same date, this Court has disposed of applications seeking regular bail filed on behalf of the other co-accused in the present FIR -Malvinder Mohan Singh (BAIL APPLN. 2810/2021), Kavi Arora (BAIL APPLN. 1059/2022) and Rajender Aggarwal (BAIL APPLN. 1384/2021).
Factual Background
2. The FIR in the present case was registered upon a complaint received from Mr. Manpreet Singh Suri, Authorized Representative of Religare Finvest Limited (`RFL') alleging a financial fraud perpetrated by the promoters of Religare Enterprises Limited (`REL') -Shivinder Mohan Singh and Malvinder Mohan Singh, the then Chairman-cum-Managing Director - Sunil Godhwani (applicant herein) and Narendra Kumar Ghoushal.
2.1. RFL is a company registered with the Reserve Bank of India (`RBI') and is licensed to undertake the business of financial services as a Non- Banking Financial Company (`NBFC'). It operates as an NBFC focused on financing small and medium enterprises (`SME') and extends SME working capital loans, secure SME business expansions, loans, short term trade finance and other loans to various entities. The complainant company is a subsidiary of REL which is a public company listed on the stock exchange. The majority shareholding of REL was owned by Malvinder Mohan Singh 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 related, controlled or associated with the promoters, all of who had been provided the subject loans from RFL on a non-arms' length basis. The primary allegation against the applicant was that he, in conspiracy with Malvinder Mohan Singh and Shivinder Mohan Singh caused RFL to give unsecured loans to the tune of Rs. 2,397 Crores, on a non-arms' length basis and without proper documentation, to shell companies related to them and these entities, willfully defaulted in making the repayments. As on the date of the FIR, i.e., 27.03.2019, nineteen such entities were identified which had defaulted on their borrowings from RFL.
2.3. Enquiries further brought to light that the Securities Exchange Board of India (`SEBI') and the Serious Fraud Investigations Office (`SFIO') were already investigating the transactions involving REL and related entities. A review of the records revealed that the RBI had, from time to time, expressed concerns about the CLB portfolio of RFL. However, these concerns were allegedly never addressed by the promoters. The RBI had raised concerns about the promoters disbursing high value unsecured loans to entities with no financial standing. In its inspection report dated 06.01.2012, the
The judgment emphasizes the importance of balancing personal liberty with the security of the community and the presumption of innocence until proven guilty.
Grant of Bail - Jurisdiction to grant bail must be exercised on the basis of the well-settled principles having regard to the facts and circumstances of each case.
Bail may be denied in serious economic offences if the accused poses a risk of tampering with evidence and if public money is involved. Court must ensure proper application of mind during bail decisi....
The triple test for grant of bail in cases involving economic offences under the PMLa is:
* Whether there are reasonable grounds for believing that the accused is not guilty of the offence;
The main legal point established in the judgment is that the grant of bail is the rule and refusal is the exception, and the gravity of the offence is an aspect to be kept in view by the Court. The c....
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