IMPORTANT POINT
The court denied bail due to substantial evidence indicating the petitioner's involvement in serious economic offences, emphasizing the gravity of the allegations and the need for accountability.

JUDGMENT :

ANOOP KUMAR MENDIRATTA, J.

1. An application for bail under Section 439 of Code of Criminal Procedure, 1973 (‘Cr.P.C.’) has been preferred on behalf of petitioner Siddharth Kumar seeking regular bail in ECIR/ 12/DLZO-I/2021 dated 31.01.2021 registered under Section 3/4 of Prevention of Money Laundering Act, 2002 (‘PMLA’).

2. Brief facts for the purpose of disposal of present application are culled out from para ‘3’ of order dated 29.01.2023 passed by the Hon’ble Apex Court on an application for bail preferred on behalf of co-accused Tarun Kumar which has been reported as Tarun Kumar v. Assistant Director Directorate of Enforcement, 2023 SCC OnLine SC 1486. The application preferred on behalf of co-accused Tarun Kumar was thereby dismissed:

“3. The broad facts and events as discernible from the record may be stated as under:

(i) M/s. Shakti Bhog Foods Ltd. (SBFL) was engaged in manufacturing and selling food items under the brand name of “Shakti Bhog”. The company was managed through its Directors/Guarantors - Sh. Kewal Krishan Kumar, Sh. Siddharth Kumar and Smt. Sunanda Kumar. The appellant is the nephew of Sh. Kewal Krishan Kumar, and was shown as one of the employees in SBFL.

(ii) The consortium of banks led by the State Bank of India vide the Letter of Engagement dated 18.05.2018 engaged the services of a Forensic Auditor - BDO India LLP for conducting the Forensic Audit of SBFL.

(iii) The Forensic Auditor conducted audit review for the period 01.04.2013 to 31.03.2017 and submitted the report on 25.06.2019, disclosing several financial irregularities and discrepancies in the functioning of SBFL, and alleged that SBFL had failed to discharge its loan liability and caused loss to the consortium member banks to the tune of Rs. 3269.42 crores.

(iv) An FIR being NO. RC0742020E0014 came to be registered on 31.12.2020 by the CBI, Bank Securities and Fraud Cell, New Delhi for the offences under Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 and under Section 120B read with Sections 420, 465, 467, 468 and 471 of IPC, on the basis of a written complaint given by the Bank Officials against the Directors/Guarantors of SBFL and against the Employees/servants and other unknown persons.

(v) Since the offences under Section 120B read with Sections 420, 467 and 471 of IPC and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act were specified as the scheduled offences under the Schedule to the PML Act, an ECIR bearing No. ECIR/DLZO-1/12/2021 came to be recorded on 31st January, 2021 against SBFL and others with regard to the said FIR registered by the CBI against the accused for investigation of the commission of offence under Section 3 punishable under Section 4 of the PML Act.”

3. It is further the case of Enforcement Directorate that the consortium of banks led by State Bank of India engaged the services of BDO India LLP for conducting forensic audit of SBFL and the Forensic Auditor submitted the Audit Review for the period of 01.04.2013 to 31.03.2017 vide report dated 25.06.2019.The Forensic Auditor reported many discrepancies and investigation revealed that accused including Siddharth Kumar (petitioner) and Tarun Kumar were actively involved in the illegal transactions mentioned in the Forensic Report. SBFL was further found to have resorted to diversion of loan funds, round tripping and money laundering.

It was also revealed that SBFL was a family managed business mainly for the profit of Kewal Krishan Kumar and other family members and the key decision making was kept in the hands of Kewal Krishan Kumar, Siddharth Kumar (petitioner), Tarun Kumar, Divyarth Kumar and Sunanda Kumar by virtue of Directorship, Shareholding or being Authorized Signatories. The inflated inventory/stocks in the Books of Accounts was accompanied with increased borrowings and the loans were taken keeping