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IN THE HIGH COURT OF DELHI AT NEW DELHI
Vikas Mahajan, J.
Sanjeeva Shukla – Appellant
Versus
State Through Eow – Respondent
Bail Appln. 832 of 2023 & Cr.M.A. 9680 of 2023
Decided On : 29-08-2023
BAIL - Criminal Law - Sections 420/409/120B IPC - Indian Companies Act, 2013, and Rule 19(1) of the Companies Share Capital and Debentures Rules, 2014 - [Financial Irregularities, Corporate Failure, and Fraudulent Activities] - [Sections 420/409/120B IPC, Indian Companies Act, 2013, Rule 19(1) of the Companies Share Capital and Debentures Rules, 2014] - The court analyzed the allegations of financial irregularities, corporate failure, and fraudulent activities under Sections 420/409/120B IPC and relevant provisions of the Indian Companies Act, 2013. The court considered the petitioner's role, diversion of funds, and the impact of the COVID-19 pandemic on the company's financial position. The court emphasized the presumption of innocence, the need for stringent conditions for bail, and the importance of safeguarding constitutional values and liberty.
Fact of the Case:
The petitioner sought regular bail in a case involving allegations of financial irregularities, corporate failure, and fraudulent activities under Sections 420/409/120B IPC. The complainant alleged that the company's directors induced investors to purchase Compulsorily Redeemable Preference Shares, failed to repay substantial amounts, and diverted funds. The petitioner argued that the company's financial difficulties were due to the COVID-19 pandemic and denied willful default. The complainant, however, claimed that the petitioner was actively involved in defrauding investors.
Finding of the Court:
The court considered the petitioner's equity shareholding, diversion of funds, and the role of co-accused. It noted the completion of the investigation, the presumption of innocence, and the need for stringent conditions for bail. The court emphasized the importance of safeguarding constitutional values and liberty, and granted bail to the petitioner.
Issues: The issues involved allegations of financial irregularities, corporate failure, and fraudulent activities under Sections 420/409/120B IPC, and the petitioner's role in the alleged offenses.
Ratio Decidendi: The court's decision was based on the presumption of innocence, completion of the investigation, and the need for stringent conditions for bail. It emphasized the importance of safeguarding constitutional values and liberty.
Final Decision: The petitioner was granted bail subject to stringent conditions, considering the completion of the investigation, the presumption of innocence, and the need to safeguard constitutional values and liberty.
JUDGMENT
Vikas Mahajan, J. The present petition has been filed under Section 439 CrPC seeking regular bail in FIR No. 97/2021 under Sections 420/409/120B IPC registered at Police Station EOW Delhi.
FACTS
2. The FIR was registered at the instance of the complainant, namely, Abhenav Khettry on behalf of about 100 investors (who are mentioned in Table A which has been annexed to the FIR) alleging that the individuals who had invested in the Compulsorily Redeemable Preference Shares Schemes of the Company M/s. Credforce Asia Limited have been duped of their hard-earned monies. It was further the allegation of the complainant that the directors and the top management of the company are siphoning off the money outside India and have stopped paying the amounts due to the investors since February, 2020.
3. The complainant stated that all the investors can be grouped into three different categories, which can be stated as under:
a. Category A: Alleged investors whose dividends were not paid after they became due on 31st March, 30th June & 30th September.
b. Category B: Alleged investors whose principal amount was not returned regardless of the maturity date.
c. Category C: Alleged investors who had paid the principal amount for issuance of share certificates but the said certificates were not issued by the company.
4. It is the allegation of the complainant that the directors and promoters of the company namely, (1) Rajiv Gupta, (2) Mr. Sanjeev Dhingra (3) Mr. Sanjeeva Shukla (petitioner herein) by promising lucrative returns on investment, induced the investors to invest their money by purchasing Credforce Compulsorily Redeemable Preference Shares with quarterly payment of dividend and payment of the maturity amount at the end of the term. It is alleged that the company thereafter failed to repay a total sum of Rs.16,57,66,800 (Rupees Sixteen Crores Fifty-Seven Lakhs Six Thousand Eight Hundred only). The breakup of the alleged amount is as under:
a. Category A: A sum of Rs.Rs.1,93,74,604/- (Rupees One Crore Ninety Three Lakhs Seventy Four Thousand Six Hundred and Four Only) and interest accrued on these amounts, calculated till Sep 30, 2020, is allegedly due to the investors in Category A.
b. Category B: A sum of Rs.10,23,92,196/- (Rupees Ten Crores Twenty-Three Lakhs Ninety Two Thousand One Hundred and Ninety-Six) along with interest accrued on these amounts, calculated till Oct 11, 2020, is due to the investors in Category B.
c. Category C: A sum of Rs.4,40,00,000 (Rupees Four Crores Forty Lakhs) has been paid by 38 investors of Category C, however, the company has allegedly failed to provide the requisite documentation confirming the allotment of these shares.
5. The complaint further alleged that the investors were informed by a senior employee of the company that there is a likelihood that the funds deposited in the bank account of the company could be siphoned off to a different bank account of the company held overseas.
6. A complaint premised on the aforesaid allegations culminated in the registration of the aforesaid FIR dated 13.07.2021 under Sections 420/409/120B. The petitioner was arrested by the Police in the present FIR on 27.09.2022 and produced before the Court of Ld. Jurisdictional Magistrate on 28.09.2022 and his police custody remand was allowed for a period of 2 days, which was subsequently extended by a period of 3 days.
7. Two of the investors have also filed separate FIRs in Kolkata and the petitioner was produced before the concerned Court in Kolkata and he has been granted bail in case FIR No. 121/2021 registered at PS Shakespeare Sarai Kolkata, West Bengal, on 23.02.2023.
SUBMISSIONS ON BEHALF OF THE PETITIONER
8. Mr. Siddharth Aggarwal, learned senior counsel appearing on behalf of the petitioner submits that M/s. CredForce Asia is an unlisted public company dealing in providing consultancy services and the company had issued `Compulsorily Redeemable Preference Shares' to tap international opportunities to ex
The presumption of innocence, completion of the investigation, and the need for stringent conditions for bail were central legal points established in the judgment.
The court balanced the right to personal liberty with the need for the accused's presence at trial, emphasizing that continued custody should be based on the risk of interference in the administratio....
Bail should not be denied solely based on the seriousness of the charges; considerations must include the necessity of ensuring the accused's presence at trial and not obstructing justice.
It is made clear that these observations are only for purpose of disposal of present bail applications, and will not prejudice parties in trial.
The judgment establishes that the grant of anticipatory bail in economic offences is an extraordinary remedy and should be considered only in exceptional cases, balancing the rights of the accused wi....
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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