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IN THE HIGH COURT OF DELHI AT NEW DELHI
Amit Sharma, J.
Rajender Aggarwal – Appellant
Versus
State & Anr. – Respondents
Bail Appln. 1384 of 2021 & Cr.M.A. 17699 of 2021, 6975 of 2022
Decided On : 02-06-2023
BAIL - SECTION 439 CRPC - ECONOMIC OFFENCES - GRAVITY OF OFFENCE - CONSIDERATION FOR GRANT OF BAIL - APPLICANT'S ROLE - INVESTIGATION COMPLETE - EVIDENCE DOCUMENTARY IN NATURE - NO ATTEMPT TO TAMPER WITH EVIDENCE OR INFLUENCE WITNESSES - BAIL GRANTED.
Fact of the Case:
The applicant, a chartered accountant, was arrested in connection with a case of financial fraud involving Religare Finvest Limited (RFL). The FIR alleged that the applicant, in conspiracy with the promoters of RFL, caused the company to give unsecured loans to shell companies controlled by them, which were then defaulted on. The applicant was charged with offences under Sections 120B/409/420 of the Indian Penal Code (IPC).
Finding of the Court:
The court noted that the investigation in the case was complete and that the evidence was primarily documentary in nature. It also noted that the applicant had not attempted to tamper with evidence or influence witnesses while on interim bail. The court further observed that the applicant was not a beneficiary of the loans and that his role was limited to aiding the co-accused to route the money.
Issues: Whether the applicant should be granted bail under Section 439 of the Code of Criminal Procedure (CrPC).
Ratio Decidendi: The court held that the gravity of an offence is a factor to be considered when granting bail, but it is not the only criterion. The court also considered the fact that the investigation was complete, the evidence was documentary in nature, and the applicant had not attempted to tamper with evidence or influence witnesses while on interim bail. The court further noted that the applicant was not a beneficiary of the loans and that his role was limited to aiding the co-accused to route the money. Based on these factors, the court granted the applicant bail.
Final Decision: The court allowed the applicant's bail application and directed him to furnish a fresh personal bond and two sureties of like amount. The court also imposed certain conditions on the applicant, including that he should not leave India without permission, should not tamper with evidence or influence witnesses, and should keep his mobile numbers operational at all times.
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 Sunil Naraindas Godhwani (BAIL APPLN. 1005/2022).
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 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 in the present case is that Sunil Godhwani, 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 RB
The judgment emphasizes the importance of balancing personal liberty with the security of the community and the presumption of innocence until proven guilty.
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....
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.
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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