Kamla Luthra vs Serious Fraud Investigation ...
2019 Latest Caselaw 5599 Del

$~40

*       IN THE HIGH COURT OF DELHI AT NEW DELHI
                                    Date of decision: 14.11.2019
+       W.P.(CRL) No. 3175/2019, CRL. M.A. 40150/2019 & CRL
        M.A. 40151/2019
        KAMAL LUTHRA                            ..... Petitioner

                          Through   Mr. N.Hari Haran, Sr. Adv.
                                    with Mr. Narendera M.Sharma,
                                    Mr. Ankur sood, Mr. Sachin
                                    Mittal, Mr. Abhishek Sharma,
                                    Mr. Pravesh Khyalia,
                                    Mr.Siddhartha Jain, Mr. Aditya
                                    Singh and Mr. Akshay Arya,
                                    Advocates.
                          versus
        SERIOUS FRAUD INVESTIGATION OFFICE

                                                    ..... Respondent
                          Through   Mr. Rahul Arora, Sr. Prosecutor
                                    for state.
                                    Mr.Anurag Ahluwalia-CGSC
                                    with Mr. S.S.Sahni, Assistant
                                    Director, Sh. P.C.Maurya,
                                    Additional director and Ms.
                                    Ruhi Arora, Sr. A.D. for R-
                                    1(SFIO).
        CORAM:
        HON'BLE MR. JUSTICE BRIJESH SETHI

                          JUDGMENT

BRIJESH SETHI,J (Oral)

1. Vide this order, I shall dispose of Writ Petition filed under

article 226 of the constitution of India read with Section 482 of the

Cr.P.C. for quashing of the order Dated 14.10.2019 and 11.11.2019

passed by Ms. Neelam Singh, Ld. ASJ-03 cum special

Judge(Companies Act), South West District, Dwarka Courts in

Criminal complaint no. 770/2019 directing issuance of NBW issued

against the petitioner.

2. Ld. Counsel for the petitioner has prayed for quashing of the

order dated 14.10.2019 and 11.11.2019 on the ground that petitioner

was unaware about the said criminal case and the summons previously

issued by the Ld. Trial court for 14.10.2019 remained unserved as per

the report of the process server. The petitioner was intimated about

the pendency of the complaint and issuance of summons for

14.10.2019 by one of the co-accused and on becoming aware about

the same, the petitioner through counsel inspected the court records

pertaining to the compliant and immediately filed two applications viz

an application for cancellation of NBWs and another application

under section 438 Cr.P.C. seeking anticipatory bail on 07.11.2019. Ld.

Trial court without considering the said applications passed the

impugned order dated 11.11.2019 directing that NBW issued vide

order dated 14.10.2019 becomes operative.

3. It is further submitted that in connection with the same

complaint, this Hon'ble Court has already granted protection to co-

accused Shri Brij Bhushan Singhal (A-158) in bail petition No.

2454/2019 vide order dated 10.10.2019 and petitioner is on a better

footing than the above mentioned co-accused as he is not even alleged

to be involved in the affairs of any of the companies under

investigation.

4. It is further submitted that Petitioner is residing in the given

address for the last 35 years along with his family. Petitioner is a

senior citizen aged 64 years old and suffering from various serious

medical problems including heart and lung ailments and detailed list

of the same is as follows:-

a) The petitioner underwent a major invasive heart surgery

in 2002 at Sir Ganga Ram hospital for Perculaneous

Transluminal coronary angioplasty and stent to left anterior

descending artery.

b) In December, 2004, the Petitioner developed a severe

condition of lung silicosis and underwent treatment at the Delhi

Heart and Lung Institute.

c) The petitioner underwent another major heart surgery in

June, 2006. The Petitioner had to undergo a coronary artery

bypass grafting surgery at the Delhi Heart and Lung Institute.

d) The petitioner has also developed arrhythmia in 2018,

which causes irregular or abnormal heart beat. The condition, if

not treated on a regular and consistent basis, can cause sudden

cardiac arrest with potentially fatal consequences. The petitioner

is undergoing regular treatment at Medanta hospital, Delhi Heart

and Lung Institute and PSRI Heart Institute.

e) The petitioner also suffers from Hypothyroidism and

diabetes.

f) Since 2006, the petitioner has been on anti-depressants

and is required to take medication daily to maintain his mental

health due to depression and anxiety. Any physical or mental

stress can have serious consequences on the petitioner's health.

5. As part of his treatment, the petitioner has to take number of

medicines on a daily basis and also has to get regular check-up done

with the doctor. The petitioner may also require surgery if the

prescribed medicines do not prove effective.

6. Vide various orders, the Ministry of Corporate Affairs had

ordered an investigation into the affairs of various companies

including BSL, by the Serious Fraud Investigation Officer. The

petitioner had joined the investigation and after completion of

investigation, the complaint was filed in the court of Ld. ASJ/Special

Judge (Companies Act) naming 287 persons as accused. The

petitioner has been named as accused no. 189 for doing business

through a proprietary concern under the name and style of M/s KNK

Traders (KNK).

7. Vide order dated 16.08.2019, Ld. ASJ/Special Judge

(Companies Act) had taken cognizance of the offences mentioned in

the said complaint and directed issuance of summons for the offences

under Section 447 of the Companies Act. Ld. ASJ/Special Judge

(Companies Act) had also directed appearance of petitioner for

14.10.2019. Till date, no summon has been served on the petitioner.

It appears from the record that when the process server visited the

petitioner's residence, he was informed by the security guard that the

petitioner was not in town and therefore, the petitioner was not served

with the summons issued against him directing him to appear before

the special Court on 14.10.2019.

8. On becoming aware about the order dated 14.10.2019, the

petitioner acted with urgency and conducted inspection through his

counsel on 30.10.2019, i.e. immediately on re-opening of the courts

after Diwali vacation. Thereafter petitioner filed two separate

applications; first seeking Anticipatory bail and second for

cancellation of NBW issued vide order dated 14.10.2019 and both the

applications were directed to be listed on 11.11.2019. On 11.11.2019,

due to the on-going strike and call of abstinence of work by the

District Bar Associations before the District courts in Delhi, the

counsel for the petitioner was unable to attend the case. The petitioner

was also unable to attend on the said date on account of his being out

of town and the medical advice to take rest and avoid any stress till at

least 13.11.2019. In such circumstances, petition's son appeared and

submitted before the Special court on behalf of the petitioner, an

application seeking exemption of the petitioner from personal

appearance on medical ground but vide the impugned order dated

11.11.12019, Ld. Special Court wrongly issued NBW against the

petitioner. Ld. Counsel for the petitioner further submitted that the

petitioner was not arrested during investigation and there is no legal

justification for issuance of NBWs against him. The petitioner has

apprehension that he will be sent to custody upon appearance before

the Ld. ASJ/Special Judge (Companies Act). It is, therefore,

submitted that NBWs issued vide order dated 14.10.2019 against the

petitioner is unjustified and without any basis. The summons were

never served upon the petitioner. Only a submission has been made

by SFIO that the petitioner was aware about the development of the

case and deliberately avoiding his appearance before the Ld.

ASJ/Special Judge (Companies Act) on 14.10.2019. The same is

without any basis and no material was placed before the Ld.

ASJ/Special Judge (Companies Act). Issuance of NBWs by the Ld.

ASJ/Special Judge (Companies Act) is contrary to law laid down by

the Hon'ble High Court. Ld. Counsel for the petitioner has relied

upon "Inder Mohan Goswami & Anr. v State of Uttaranchal & Ors."

reported in (2007) 12 SCC 1. It is further submitted that investigation

in the instant case has already been completed. Since the petitioner

was not arrested during investigation, there is no ground for the SFIO

to oppose the bail or seek custody before the Ld. ASJ/Special Judge

(Companies Act). It is submitted that petitioner is aged and needs

constant medical support. It is further submitted that since the

investigation is complete and no recovery is to be effected at the

instance of the petitioner, no useful purpose would be served by

sending the petitioner to jail. It is submitted that in similar

circumstances, another Bench of this court has granted relief to

similarly placed co-accused Sh. Dharmender Gupta in Bail

Application No. 1615/2019 vide Order dt. 11.07.2019. It is submitted

that there are 287 accused persons and prosecution has relied upon

record running into several thousands of pages. Proceedings in such

cases are likely to take time. The petitioner has never made any

attempt to influence the witnesses, tamper with documentary evidence

or in any other manner, hampered the investigation or judicial process.

He has never evaded the process of law. He undertakes to be bound

by the conditions imposed upon him by the court and he be, therefore,

released in the event of his arrest.

9. It is, therefore, prayed that impugned order dated 14.10.2019

and 11.11.2019 be Quashed in the complaint case in question pending

before the court of Ld. ASJ/Special Judge (Companies Act).

10. The quashing petition is opposed by Mr. Anurag Ahluwalia, Ld.

CGSC on the ground that the allegations against the petitioner are

serious in nature. A complaint has been filed against the petitioner for

the offences punishable under Section 447 of the Companies Act,

2013. Ld. CGSC has further argued that High Court had granted bail

to one co-accused Nitin Johri. However, the said bail order has been

stayed by the Hon'ble Supreme Court. Ld. CGSC has further argued

that petitioner is supposed to approach the Ld. ASJ/Special Judge

(Companies Act) for cancellation of NBWs as well as for grant of

bail. All the submissions made by the Ld. Sr. Counsel before this

Court should be made before the court of Ld. ASJ/Special Judge

(Companies Act). He has, therefore prayed for dismissal of the

quashing petition.

11. I have considered the rival submissions. Prima facie there are

allegations of fraud committed by the petitioner. Perusal of the order-

sheet dated 11.11.2019 of Ld. Special Judge reveals that some co-

accused persons have appeared before the Ld. ASJ/ Special Judge and

moved an application for seeking bail. Ld. Counsel for the FSIO has

accepted notice and sought time to file reply to the said bail

application. So far as petitioner is concerned, he was absent on the

said date and in these circumstances, NBWs were issued against him.

12. Per contra, Ld. Counsel for the petitioner has argued that

petitioner could not appear on 11.11.2019 as he was not well. On the

earlier dater i.e.14.10.2019, he could not appear as he was not served.

13. I have given my though to the matter. In case, the petitioner is

correct to the extent that he was not duly served for 14.10.2019 and

was not well on 11.11.2019, the Ld. ASJ/ Special Judge after

considering the submission of Ld. Counsel for petitioner and Ld.

Counsel for SFIO and perusal of report on summon and after seeing

the medical documents/report/certificate can pass the appropriate

order in accordance with law. In these circumstances, it will be

appropriate for the petitioner to approach the Ld. ASJ/ Special Judge

and make all his submissions made herein, before the Ld. Trial court

as well. However, no doubt there is a reasonable apprehension that

before the petitioner is able to approach the Ld. Special Court, he may

be arrested by prosecuting agency in pursuance of NBWs issued

against him. In the opinion of this Court, the petitioner needs to be

protected to that extent and it is, therefore, ordered that till next

date of hearing i.e. 16.11.2019, the NBWs issued by Ld.

ASJ/Special Judge be kept in abeyance.

14. In view of the above discussion and keeping in mind the facts

and circumstances of the case and nature of offence, no grounds for

quashing of the impugned order dated 14.10.2019 and 11.11.2019 are

made out. However, the NBWs issued against the petitioner be kept

in abeyance till next date of hearing i.e. 16.11.2019 before the Ld.

ASJ/Special Judge (Companies Act). Let the petitioner appear before

the court concerned and Ld. ASJ/Special judge will consider his

application for cancellation of NBWs and for bail in accordance with

law uninfluenced by the observations made by this Court.

15. The quashing petition along with all pending applications is

disposed of accordingly.

BRIJESH SETHI, J NOVEMBER 14, 2019 Ak