The Madras High Court recently comprising of a bench of Justice AD Jagadish Chandira denied bail to Rahul Dinesh Surana - one among the accused in the 10,000 crore bank fraud case involving Surana Group of Companies. (Rahul Dinesh Surana v. The Senior Assistant Director, Serious Fraud Investigation Office)
The bench observed, "The fraudulent activity in siphoning of pubic money by defrauding the financial institutions is unlike any other offence which could have been committed by sudden provocation as it is a well calculated one with the deep understanding as to the consequences and with the idealogy to conquer them. Therefore, if the court finds a prima facie case against the accused in such cases, it cannot come to a satisfaction that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail as specified in Section 212 (6)(ii) of the Companies Act, 2013."
The bench observed that white collar crimes involving embezzlement of thousands of crores of rupees offered as loans by banks are highly harmful to society for they are committed by well-educated and influential people who are otherwise expected to set a moral example.
Facts of the case
The accused Rahul Dinesh Surana, served as a CEO of Surana Group of Companies between 2015 and 2017, in a prosecution initiated by the Serious Fraud Investigation Office (SFIO) he was charged for having defrauded various banks to the tune of over ₹10,000 crore.
The petitioner was arrested and remanded to judicial custody on July 14 for alleged offence under Section 447 (Fraud in relation to affairs of a company) of the Companies Act. Therefore the present bail application was filed before the Court.
Courts Observation and Judgment
The bench at the very outset observed, "Though the petitioner claims to be an innocent and he wasonly the Vice President (Operations), from the materials submitted alongwith the Application, it is clear that the petitioner has played a major role in the affairs of the Company. He himself claims to have been appointed as a Group CEO only for the purpose of reviving and rehabilitating the company."
The bench further observed that Section 212 (6) of the Companies Act of the 2013 states that a court should not grant bail to a person accused of offences under it without hearing the Public Prosecutor and without being satisfied that there were reasonable grounds for believing that the petitioner was not guilty. In the present case, though the petitioner claimed to be innocent, the materials on record prima facie lead to a conclusion that he had a major role in the affairs of the group’s companies.
The bench dismissing the appeal remarked, "Having perused the entire materials available on record, as of now, this court is of the opinion that the petitioner has not satisfied the conditions imposed under Section 212(6)(ii) of the Companies Act for grant of bail for the offence punishable under Section 447 of the Companies Act. Further, it is a case of economic offence of such a huge magnitude affecting the society and thus, this court find that it is highly premature at this stage to grant bail to the petitioner. Accordingly, the Criminal Original Petition stands dismissed"
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