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 decisions.

JUDGMENT

1. Petitioner, a non-banking financial company, is aggrieved by the order dated 03.03.2021 passed by the learned trial court, vide which respondent No.2-Shivender Mohan Singh, has been granted bail in FIR No. 50/2019, under Sections 409 /420/120-B IPC, registered at Economic Offences Wing (EOW), New Delhi. The aforesaid order dated 03.03.2021 passed by the learned trial court is under challenge in this petition.

2. As per the final report dated 06.01.2020, the facts of the present case are that complainant-company-Religare Finvest Limited (RFL) is registered with the Reserve Bank of India (RBI) and is licensed to undertake the business of financial services as a non-deposit taking/lending Non-Banking Financial Company (NBFC). It operates as a small and medium enterprise (SME) financing focused NBFC and is in the business of extending SME working capital loans, secure SME business expansion, loans, short term trade finance and other loans to various entities. The complainant-company is classified as a `systematically important NBFC' by the RBI and is a subsidiary of Religare Enterprises Limited (REL), which is a public company, listed on stock exchanges.

3. Pertinently, respondent No.2-Shivender Mohan Singh, the accused in FIR in question, was the Promoter along with the entities controlled by him and with persons acting in concert with him, owned the majority shareholding of REL till June 2017 and was as such classified as the Promoter of REL. Effectively, he continued to control REL till February, 2018, i.e. till the time he remained on the Board of Directors of REL and thereby, since the complainant-company was a subsidiary of REL, he also controlled the complainant-company i.e. RFL. Thus, he allegedly played a significant role in the management and conduct of affairs of the complainant-company and exercised deep and pervasive control over its management.

4. In February, 2018, respondent No.2-Shivender Mohan Singh and his brother, Malvinder Mohan Singh, who was also the Promoter, lost complete control over REL and its subsidiaries, including the complainant-company, pursuant to invocation of the shares pledged by them and other promoter entities with various banks. After their exit from the Board of Directors of REL, a fresh Board of Directors was constituted to manage the affairs of REL and its subsidiaries.

5. Upon taking over the reins, the new Board and management realized that REL and its subsidiaries were in terrible financial condition and they sought to ascertain the reason(s) for such bad financial position. Internal inquiries showed that the poor financial condition of the complainant-company was to a large extent on account of wilful 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 them had been provided the subject loans from the complainant-company on a non-arms' length basis, in violation of corporate governance norms and in contravention of policies and prudential behaviour expected of a NBFC registered with the RBI. Further, the new Management of REL became aware of the investigations carried out by Serious Fraud Investigation Office (SFIO) and Securities and Exchange Board of India (SEBI) into various related party and non-arms' length transactions, involving REL and its subsidiaries, including the complainant-company.

6. From the review of the record, it came to be noted that RBI (being the regulator for NBFCs) had from ti