The Delhi High Court granted bail to the director of M/s Parul Polymers Pvt Ltd, Suman Chadha, who was facing charges under Section 447 of the Companies Act, 2013, for alleged involvement in a fraud case. Justice Anup Jairam Bhambhani, presiding over the Single Bench, emphasized that the severity of allegations alone cannot be used to justify pre-trial incarceration and stated that punishment should follow conviction.
Brief Facts:
The case against M/s Parul Polymers Pvt Ltd, a company primarily engaged in the trade of plastic granules, involved allegations of cash sales, fictitious transactions, and the creation of false accounting entries. The company was also accused of misusing cheque discounting facilities and diverting funds to sister concerns instead of using them for legitimate business activities.
Suman Chadha, as the director of the company during the relevant period, was implicated as an "officer who is in default" under Section 2(60) of the Companies Act. He had been in custody for over six months when he sought regular bail as one of the 12 accused in the case.
Contentions of the Petitioner:
The petitioner's counsel argued that Suman Chadha had never been arrested throughout the course of the investigation, further investigation, and pre-cognizance stages, which spanned more than six years. This suggested that the investigating officer did not find it necessary to arrest Chadha based on the available evidence.
Contentions of the Respondent:
The petitioner's counsel argued that Suman Chadha had never been arrested throughout the course of the investigation, further investigation, and pre-cognizance stages, which spanned more than six years. This suggested that the investigating officer did not find it necessary to arrest Chadha based on the available evidence. The respondent argued that economic offences, including fraud, are serious in nature, and the allegations against Chadha and other co-accused needed to be treated with appropriate severity, emphasizing the importance of ensuring a fair trial and proper punishment if the charges were proven.
Observations by the Court:
The court took note of the fact that the investigating officer had not arrested Chadha throughout the investigation, further proceedings, and pre-cognizance stages, which spanned more than six years. Despite the absence of any request for arrest or judicial custody by the investigating officer when Chadha appeared before the court in compliance with the summons, the learned Special Judge had remanded him to judicial custody, leading to his detention for about 14 months as an under-trial.
Justice Bhambhani referred to the Supreme Court's ruling in Moti Ram & Ors. vs. State of Madhya Pradesh, which highlighted the adverse consequences of pre-trial detention, subjecting under-trials to psychological and physical hardships often surpassing those faced by convicts.
The court observed that the application of Section 212(6) of the Companies Act by the learned Special Judge was misplaced, as it was not the stage for the grant of bail but rather the stage to consider the need for remanding the petitioner to judicial custody.
The decision of the Court:
While granting bail to Suman Chadha, the court imposed several conditions, including a request to the Bureau of Immigration, Ministry of Home Affairs, or an appropriate authority, to open a "Look-out-Circular" in Chadha's name, preventing him from leaving the country without the permission of the learned Special Judge.
Case Name: Suman Chadha v. SFIO
Coram: Hon’ble Mr. Justice Anup Jairam Bhambhani
Case No.: Bail Appln. 1741/2022 & CRL.M.A.14727/2022
Advocates of the Petitioners: Mr. Neeraj Kumar, Mr. Himanshu Bhasin, Mr. Vilas Sharma, Advocates
Advocates of the Respondent: Mr. Harish Vaidhyanathan Shankar, CGSC with Mr. Srish Kumar Mishra, Mr. Sagar Mehlawat and Mr. Alexander Mathai Paikaday, Advocates.
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