The principle of 'bail and not jail' was central to the decision, considering the documentary nature of the case and ongoing investigation.

ORDER :

1. Rule returnable forthwith. Ms. Jirga Jhaveri, learned Additional Public Prosecutor waives service of notice of rule for and on behalf of respondent No.2 Mr. R.C. Kodekar, learned Special Public Prosecutor waives service of notice of rule for and on behalf of respondent No.1.

2. Applicant seeks regular bail under section 439 of the Code of Criminal Procedure in connection with RC No.RC0292018A0006 dated 26.03.2018 registered with CBI/ACB, Gandhinagar for the offences punishable under section 120-B read with sections 420, 467, 468 and 471 of the Indian Penal Code, 1860 and section 13(2) read with section 13(1)(f) of the Prevention of Corruption Act, 1988, investigated by the Central Bureau of Investigation (C.B.I.).

3. Brief facts, as alleged in the First Information Report, are as follows:

3.1 The Company viz. Diamond Power Infrastructure Limited, Vadodara (hereinafter referred to as 'the Company') had obtained borrowings from different banks, although, the Company had appeared in the defaulter list of the Reserve Bank of India (R.B.I.). It is also alleged by the prosecution that the actual turnover of the company was much less than the projected turnover and the false statements and documents were created so as to avail more drawing power under cash credit facilities.

3.2 The letters of credit by the bank were issued in favour of sister concern of the company without following R.B.I. Guidelines. The company also gave loan worth of Rs.16.70 Cr. and Rs.32.96 Cr. to the associates, relatives and family members. It is also further alleged that the company without the permission of the bank had opened the account outside the consortium and the receivable which should have been repaid in clearing the dues, were diverted in those accounts.

3.3 It is the say of the applicant that the loan transaction is a genuine transaction de-hors any fraud or criminality. The company is one of the largest cable and conductor manufacturers in India and is in the said business since 1971. The company has incurred an accumulated loss of over Rs.1,500 Cr. in last 20 quarters (five years), which was not on account of alleged act of any fraud committed by the directors. However, the expansion plant of the company to expand its conductor manufacturing capacity and an ancillary unit at Baroda, Gujarat was to be established, for which, a consortium of Banks led by the Bank of India advanced the finances. It is the say of the applicant that due to slowdown of the domestic economy as well as delayed realization of receivables, there was a mismatch of cash flow. The company had faced financial distress in the year 2014-2015. It was emphasized repeatedly that it is not the allegation in the F.I.R. that company wanted to defraud the bank. On the contrary, the account was regular till 2014, however, in view of depressed market scenario and non-realization of the funds envisaged, the company had suffered heavily in revenue generation and could not achieve the result as expected. It is urged that, due to (i) increase in key raw material prices, (ii) delayed expansion leading to cost and time over run, (iii) lack of adequate working capital, (iv) elongated working capital cycle, and (v) delayed realization of receivables, there was liquidity constraint faced by the company.

3.4 It is also the say of the applicant that there was no question of fund diversion and from the year 2013 till 2018, lenders had only released fresh banking limits and not a single rupee extra has been released and kept the account standard. The company from the year 2013 had already paid Rs.1057 Cr. as interest and banking charges and Rs.900 Cr. on closely monitored expansion project. The funds were never given to the company in post 2013 period and merely interest recovery has been pressed. The company also faced according to the applicant, a cash drain out of over Rs.740.82 Cr. in th