Case Details: Serious Fraud Investigation … Continue reading “HC Can’t Quash Woman’s Bail in Corporate Fraud Case if Order Considers Sec. 212 Factors”
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Case Details: Serious Fraud Investigation Office v. Aarti Singhal – [2023] 150 taxmann.com 1 (HC-Delhi)
Judiciary and Counsel Details
Dinesh Kumar Sharma, J.
Kirtiman Singh, CGSC & Ms Vidhi Jain, Adv. for the Appellant.
N. Hariharan, Sr. Adv., Ms Ranjana Roy Gawai, Akshdeep Singh Khurana, Ms Ujjmal Jain, Ms Shambhavi Kashyap, Vijay Poonia & Ms Janvi Sharma, Advs. for the Respondent.
Facts of the Case
In the instant case, the petitioner (i.e. Serious Fraud Investigation Office) filed a petition to set aside the order passed by the Special Judge under the Companies Act, 2013. The Special Judge had granted regular bail to the respondent (i.e. accused) regarding the offence u/s 447 of the Companies Act, 2013.
The petitioner investigated the offence under the proviso to Section 212(6) of the Companies Act, 2013, and claimed that the Special Judge misinterpreted the beneficial proviso stated in Section 212(6) of the Companies Act, 2013.
Section 212(6) read as follows –
Notwithstanding anything contained in the Code of Criminal Procedure, 1973, offence covered under section 447 of this Act shall be cognizable and no person accused of any offence under those sections shall be released on bail or on his own bond unless:
(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail:
Provided that a person, who, is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs
The petitioner contended that the Special Judge didn’t properly consider the respondent’s detailed role in the fraud and made a mistake by accepting the respondent’s claim that she was simply following her husband’s instructions as a dutiful wife. Additionally, the petitioner argued that the respondent was a flight risk.
The petitioner, further submitted that the investigation revealed the detailed role played by the respondent in the transactions of fraud in siphoning off materials from BPSL Plant, diversion of funds from BPSL in the form of bogus capital advances etc.
High Court Held
The High Court observed that where Special Judge enlarged the respondent on bail taking into account salient factors, namely the beneficial first proviso contained under Section 212(6) Companies Act, 2013, the role attributed to the respondent in the said fraud.
The High Court noted that since the offence is by and large documented and there was no likelihood that the respondent would flee from justice or evade trial, there was no reason for the High Court to interfere and quash or set aside the bail order u/s 482 of Cr.PC.
The High Court further observed that the order granting bail was well-reasoned and based on proper material on record. There was neither any infirmity nor perversity with the order that would require the interference of the Court under its inherent jurisdiction. The Special Judge had propounded cogent reasoning for granting bail to the respondent in terms of the beneficial proviso in section 212 (6) of the Companies Act.
In the absence of any cogent, supervening circumstances necessitating the cancellation of bail of the respondent, the High Court held that it cannot merely cancel the bail granted as there was nothing on record to show that the respondent had misused her bail or had not adhered to the conditions so imposed.
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