Prolonged incarceration and trial delay alone do not constitute a substantial change in circumstances for a second successive bail petition under Section 212(6) of the Companies Act, 2013, when the previous dismissal has been upheld.

MANISHA BATRA, J (ORAL):-

In the instant petition, indulgence of this Court is sought for grant of regular bail to the petitioner, in criminal complaint bearing CIS No. COMA/05/2019 titled as SFIO versus Adarsh Build Estate and others, filed by the respondent under Sections 417, 418, 420 and 477-A of IPC read with Section 120-B of IPC, Sections 147 and 447 of the Companies Act, 2013 (For short ‘Companies Act’) and Sections 58-A , 211(7), 227 and 628 of Companies Act, 1956, as pending in the Court of learned Additional Sessions Judge/Special Court, Gurugram.

2. The aforementioned complaint has arisen out of order dated 20.06.2018 passed by the Central Government through Ministry of Corporate Affairs (hereinafter referred to as “MCA”), whereby the MCA, in exercise

of the powers conferred under Section 212(1)(c) of the Companies Act and Section 43(2)(3)(c)(i) of the Limited Liability Partnership Act, 2008 (For short “LLP Act”), ordered an investigation into the affairs of Adarsh Group of Companies and its 125 Limited Liability Partnership Companies (hereinafter referred to as ‘companies under investigation’ or ‘CUIs’) by the Serious Fraud Investigation Office (for short “SFIO”) on the allegations of siphoning of funds of Adarsh Credit Cooperative society Limited (For short “ACCSL”). As per the investigation conducted, huge amount of funds of ACCSL, which actually belonged to two lakh depositors and were running into several crores of rupees, were received by the CUIs on unsubstantial and questionable projected balance sheet and financial statements. Both CUIs as well as ACCSL were controlled by Mukesh Modi who along with his family members and associates, was found involved. In a complaint submitted by the complainant, the present petitioner was arrayed as accused No.177. This complaint has to be considered as a report presented under Section 173 of the Code of Criminal Procedure in terms of the provisions of Section 212(15) of the Companies Act.

3. Vide order dated 03.06.2019 passed by learned Sessions Judge-cum-Special Judge under Companies Act, the petitioner was summoned under Section 447 of the Companies Act, whereas process was issued against the other individuals and companies arraigned as accused for commission of offences punishable under different provisions of Indian Penal Code as well as under Section 447 of the Companies Act. The petitioner, who was a partner to the extent of 18% in the ABL, project that was started at Dehradun by Adarsh Build Estate

Limited (for short, ‘ABEL’), one of the 70 CUIs, was brought under the fold of investigation on the allegations that he being an authorized signatory of ABL project, siphoned off funds in an illegal manner by securing the same from ACCSL. He allegedly siphoned off a sum of Rs. 45.20 crores by misusing his authorization and by taking benefit of his position, on the pretext of work of the project but the above said amount was utilized for his personal benefits and benefits of associated individuals/entities. He had also withdrawn an amount of Rs. 19.93 crore from ABL project in the form of advances but only an amount of Rs. 9.72 crore was explained subsequently. The petitioner was arrested on 22.07.2022.

4. It is argued by learned counsel for the petitioner that he has been in continuous incarceration for a period of about 03 years and about 05 months. He had joined investigation several times before filing of complaint but was never arrested during the course of investigation and, as such, there existed no justification for arresting him or keeping him in custody after filing of the complaint. He has been extended the benefit of bail in other cases relating to ACCSL and registered in the State of Rajasthan. In the complaint/investigation report, he has been categorised under the category of Directors/employees, though he was neither a director nor an employee of ABL. He cannot be kept in custody for an indefinite period even in cases of application of twin conditions under Sect