Rajender Aggarwal Vs State & Anr (Delhi High Court)
Delhi High Court in the case of alleged misappropriation of funds of Religare Finvest Ltd granted the bail as investigation is complete and main chargesheet as well as supplementary chargesheet filed before the learned Trial Court.
Facts- The FIR in the present case was registered upon a complaint received from Mr. Manpreet Singh Suri, Authorized Representative of Religare Finvest Limited (‘RFL‘) alleging a financial fraud perpetrated by the promoters of Religare Enterprises Limited (‘REL‘) – Shivinder Mohan Singh and Malvinder Mohan Singh, the then Chairman-cum-Managing Director – Sunil Godhwani and Narendra Kumar Ghoushal.
During the course of investigation, it was alleged that the applicant was the director as well as a shareholder of M/s Tara Alloys Pvt. Ltd. when a loan of Rs. 85 crores was extended to the said company by RFL. He was also the director and shareholder of M/s Neelanchal Holding Pvt. Ltd. to which Rs. 59 Crores were diverted from M/s Tara Alloys Pvt. Ltd. It was further alleged that a loan of Rs. 92.50 crores was received by M/s Sridham Distributors Pvt. Ltd. which was also controlled by the applicant and out of the said Rs. 92.50 crores, Rs. 66.40 crores was further diverted to M/s Neelanchal Holdings Pvt. Ltd.
The primary allegation against the applicant is that he in conspiracy with Narendra Kumar Ghoushal facilitated the promoters, i.e., Malvinder Mohan Singh and Shivinder Mohan Singh to divert money from RFL. For the said purpose he provided shell companies controlled by him and his associates to route and re-route the money through various entities which was finally diverted to RHC Holdings Pvt. Ltd., which, as aforesaid was owned by Malvinder Mohan Singh and Shivinder Mohan Singh.
Conclusion- Held that gravity of an offence would be a factor at the time of consideration for grant of bail, but, at the same time, it cannot be the only criteria for denying bail either. As laid down in the aforesaid precedents, the object of bail is neither punitive nor preventative and the same is to secure the presence of the accused at the trial. The underlying principle in the aforesaid judicial pronouncements is that a person, who otherwise has roots in the society and is satisfying the other general conditions for grant of bail should, after completion of investigation, should not be kept in continued judicial incarceration as a matter of punishment, even before the conclusion of trial. In the present case, this Court is of the opinion that no possible prejudice can be caused to the case of the prosecution before the learned Trial Court if the applicant is released on bail with necessary considerations, safeguarding the interests of the prosecution, especially when other co-accused persons have also been granted bail.
The investigation in the present case in complete and the main chargesheet, as well as the supplementary chargesheets stand filed before the learned Trial Court. It is also an admitted case that the evidence in the present case, primarily, is documentary in nature; all material documents have been recovered and are in the custody of the prosecution. It is also pertinent to note that no material has been placed on record to demonstrate that while the applicant was on interim bail, he tried to influence the witnesses, tamper with evidence or misuse his liberty in any manner. In view of the law laid down in the judicial precedents cited hereinabove and in view of the facts and circumstances of the present case, the present application is allowed.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The present application under Section 439 of the Code of Criminal Procedure, 1973 (‘CrPC‘) seeks regular bail in case FIR No. 50/2019 dated 27.03.2019, under Sections 420/409/120B of the Indian Penal Code, 1860 (‘IPC‘) registered at PS Economic Offences Wing.
1.1. By separate judgments of the same date, this Court has disposed of applications seeking regular bail filed on behalf of the other co-accused in the present FIR – Malvinder Mohan Singh (BAIL APPLN. 2810/2021), Kavi Arora (BAIL APPLN. 1059/2022) and Sunil Naraindas Godhwani (BAIL APPLN. 1005/2022).
Factual Background
2. The FIR in the present case was registered upon a complaint received from Mr. Manpreet Singh Suri, Authorized Representative of Religare Finvest Limited (‘RFL‘) alleging a financial fraud perpetrated by the promoters of Religare Enterprises Limited (‘REL‘) – Shivinder Mohan Singh and Malvinder Mohan Singh, the then Chairman-cum-Managing Director – Sunil Godhwani and Narendra Kumar Ghoushal.
2.1. RFL is a company registered with the Reserve Bank of India (‘RBI‘) and is licensed to undertake the business of financial services as a Non-Banking Financial Company (‘NBFC‘). It operates as an NBFC focused on financing small and medium enterprises (‘SME‘) and extends SME working capital loans, secure SME business expansions, loans, short term trade finance and other loans to various entities. The complainant company is a subsidiary of REL which is a public company listed on the stock exchange. The majority shareholding of REL was owned by Malvinder Mohan Singh and Shivinder Mohan Singh till June, 2017, i.e., till when they were classified as promoters of REL. Thereafter, till February 2018, they remained on the Board of Directors of REL. Effectively, since Malvinder Mohan Singh and Shivinder Mohan Singh had control over REL, they also had control over its subsidiary – RFL, the complainant company. Shivinder Mohan Singh held the position of Non-Executive Director of REL from 13.12.2004 till 06.04.2010 and thereafter, he held the position of Non-Executive Director and Vice-Chairman of REL from 29.07.2016 till 14.02.2018. Malvinder Mohan Singh, held the position of Non-Executive Chairman of REL from 13.12.2004 till 06.04.2010 and thereafter, from 29.07.2016 till 14.02.2018.
2.2. The shareholding and Board of REL was reconstituted in the year 2018 after Shivinder Mohan Singh and Malvinder Mohan Singh lost control pursuant to invocation of shares pledged by them with various banks in February 2018. After the said reconstitution, the new management conducted internal enquiries and discovered willful defaults on significant unsecured loans, defined for internal purposes as the Corporate Loan Book (‘CLB‘), by borrower entities, either related, controlled or associated with the promoters, all of who had been provided the subject loans from RFL on a non-arms‘ length basis. The primary allegation in the present case is that Sunil Godhwani, in conspiracy with Malvinder Mohan Singh and Shivinder Mohan Singh caused RFL to give unsecured loans to the tune of Rs. 2,397 Crores, on a non-arms‘ length basis and without proper documentation, to shell companies related to them and these entities, willfully defaulted in making the repayments. As on the date of the FIR, i.e., 27.03.2019, nineteen such entities were identified which had defaulted on their borrowings from RFL.
2.3. Enquiries further brought to light that the Securities Exchange Board of India (‘SEBI‘) and the Serious Fraud Investigations Office (‘SFIO‘) were already investigating the transactions involving REL and related entities. A review of the records revealed that the RBI had, from time to time, expressed concerns about the CLB portfolio of RFL. However, these concerns were allegedly never addressed by the promoters. The RBI had raised concerns about the promoters disbursing high value unsecured loans to entities with no financial standing. In its inspection report dated 06.01.2012, the RBI has observed that the RFL had a practice of parking a major chunk of surplus funds with fellow subsidiary/group companies/other companies which were often being used for taking positions in securities. RBI had further pointed out that the reports pertaining to monitoring of the said loans was not available on record. The RBI had also pointed out that the top borrowers of RFL under the CLB portfolio were related entities. There were inter-linkages between the borrowers, as funds were routed from one borrower to another.
2.4. During the course of investigation, it was revealed that REL was a public listed Core Investment Company (‘CIC‘), which had made major investments in its subsidiary companies, i.e., RFL, Religare Health Insurance Co. Ltd. (‘RHL‘) and Religare Broking Limited (‘RBL‘). REL had invested 57.77% percents of its assets and 89.78% of its net-worth in RFL. REL owned 85.64% of the equity-share capital in RFL. Since REL had major investments in RFL, any loss caused to RFL due to the alleged diversion of funds resulted in a direct loss to the shareholders of REL. Investigation revealed that the CLB was created since the inception of RFL, primarily for the purpose of utilization of funds by the promoters. The modus-operandi, as alleged by the investigating agency, was that inter-corporate loans were disbursed to various companies controlled by the promoters, through which funds were routed to companies owned by the promoters, who were the ultimate beneficiaries. The CLB increased gradually because the amounts due towards re-payment of loans were funded through new loans.
2.5. Furthermore, it was found that the CLB Loans were granted on the basis of verbal instructions. RFL did not receive any official request from the borrowers requesting such loans. The only written communications available with respect to the initiation of the said loans were e-mails circulated by Mr. Pawan Seth to Ms. Rajni Barnwal, requesting her to initiate the underwriting process, and emails from Ms. Rajni barnwal to Mr. Punit Arora requesting him to initiate the RMC approval process.
2.6. Nineteen entities to which loans were extended were indentified. It was alleged that the amount extended as the loan was misappropriated/siphoned off and was never returned to RFL. The said entities and the details of their Directors at the relevant point of time have been placed on record in the chargesheet.
2.7. During the course of investigation, RFL also provided details of the persons who approved the loans extended to the said 19 entities. A tabular representation of the same has been given in the chargesheet.
2.8. During the course of investigation, a report dated 27.01.201 was obtained from the General Manager of the RBI, wherein certain observations pertaining to the CLB portfolio of RFL were made.
2.9. In a forensic audit conducted by SEBI, utilization of loans disbursed by RFL was scrutinized and it was revealed that Rs. 1,260 Crores had been diverted to various companies including RHC Holdings Pvt. Ltd. and ANR Securities Pvt. Ltd. belonging to the promoters, i.e., Malvinder Mohan Singh and Shivinder Mohan Singh. A report from the Registrar of Companies (‘ROC’) confirmed that Malvinder Mohan Singh and Shivinder Mohan Singh own 50% each of the shareholding of RHC Holdings Pvt. Ltd.
2.10. During the course of investigation, Shivinder Mohan Singh, Sunil Godhwani, Anil Saxena and Kavi Arora were arrested on 10.10.2019 and Malvinder Mohan Singh was arrested on 11.10.2019.
2.11. Vide letter dated 29.12.2014, Malvinder Mohan Singh and Shivinder Mohan Singh had assured Sunil Godhwani, the then Chairman and Managing Director of REL that they are willing to purchase the CLB from RFL upon completion of the sale of a substantial part of their shareholding in REL to one or more institutional/strategic investors.
2.12. An investigation report received from the SEBI further revealed that out of Rs. 676.10 Crores lent by RFL to 5 companies under Group-2, Rs. 210.05 Crores was diverted for the benefit of RHC Holding Pvt. Ltd.
2.13. An Indemnification-cum-Release Agreement dated 14.11.2017 was signed between Malvinder Mohan Singh, Shivinder Mohan Singh, RFL, Religare Securities Ltd., Religare Commodities Ltd., Religare Capital Market Ltd. and Religare Comtrade Ltd. At that point in time, the accused persons were on the Board of Directors and they diverted funds from the complainant company, i.e., RFL to square off the liabilities/borrowings from lenders in their parent company – RHC Holdings Pvt. Ltd. to the tune of Rs. 1,260 Crores. With respect to the liability created with RFL, over which they had control by virtue of their positions at REL, the accused persons indemnified themselves. The said Indemnification-cum-Release Agreement was revoked by the new management.
2.14. Upon completion of investigation, the chargesheet in the present case was filed on 06.01.2020 under Sections 120B/409/420 of the IPC qua Malvinder Mohan Singh, Shivinder Mohan Singh, Kavi Arora, Anil Saxena, Sunil Naraindas Godhwani and RHC Holding Pvt. Ltd.
2.15. Narendra Kumar Goushal and Maninder Singh were arrested on 27.10.2020 and the applicant was arrested on 07.12.2020. Thereafter, a supplementary chargesheet in the present case was filed on 20.01.2021 under Sections 120B/477A/420/409 of the IPC qua the following persons/companies:
i. Maninder Singh
ii. Narender Kumar Goushal
iii. Rajender Prasad Aggarwal
iv. M/s A&A Capital Services Pvt. Ltd.
v. M/s Abhiruchi Distributors Pvt. Ltd.
vi. M/s Ad Advertising Pvt. Ltd.
vii. M/s Annies Apparel Pvt. Ltd.
viii. M/s Artifice Properties Pvt. Ltd.
ix. M/s Gurudev Financial Services Pvt. Ltd.
x. M/s Modland Wears Pvt. Ltd.
xi. M/s Platinum Infrastructure Pvt. Ltd.
xii. M/s Rosestar Marketing Pvt. Ltd.
xiii. M/s Star Artwors Pvt. Ltd.
xiv. M/s Torus Buildcon Pvt. Ltd.
xv. M/s Tripoli Investment & Trading Pvt. Ltd.
xvi. M/s Volga Management & Consultancy Pvt. Ltd.
xvii. M/s Zolton Properties Pvt. Ltd.
xviii. M/s Fern Healthcare Pvt. Ltd.
xix. M/s Tara Alloys Pvt. Ltd.
2.16. By way of the said supplementary chargesheet, details of the transactions relating to the loans disbursed to the 5 Group-2 companied referred to in Para 2.12 hereinabove were placed on record.
Role of the Applicant
3. The applicant is a chartered accountant by profession and he was the Audit Assistant for the following companies:
i. M/s Tara Alloys Pvt. Ltd.
ii. M/s Sridham Distributors Pvt. Ltd. (earlier known as M/s Abhiruchi Distributors Pvt. Ltd.)
iii. M/s Gurudev Financial Services Pvt. Ltd.
iv. M/s Annies Apparel Pvt. Ltd.
v. M/s Neelanchal Holdings Pvt. Ltd.
3.1. During the course of investigation, it was alleged that the applicant was the director as well as a shareholder of M/s Tara Alloys Pvt. Ltd. when a loan of Rs. 85 crores was extended to the said company by RFL. He was also the director and shareholder of M/s Neelanchal Holding Pvt. Ltd. to which Rs. 59 Crores were diverted from M/s Tara Alloys Pvt. Ltd. It was further alleged that a loan of Rs. 92.50 crores was received by M/s Sridham Distributors Pvt. Ltd. which was also controlled by the applicant and out of the said Rs. 92.50 crores, Rs. 66.40 crores was further diverted to M/s Neelanchal Holdings Pvt. Ltd.
3.2. The primary allegation against the applicant is that he in conspiracy with Narendra Kumar Ghoushal facilitated the promoters, i.e., Malvinder Mohan Singh and Shivinder Mohan Singh to divert money from RFL. For the said purpose he provided shell companies controlled by him and his associates to route and re-route the money through various entities which was finally diverted to RHC Holdings Pvt. Ltd., which, as aforesaid was owned by Malvinder Mohan Singh and Shivinder Mohan Singh. The modus operandi, as alleged, was to obtain amount in the form of unsecured loans in his companies and transfer the same amount to different entities which eventuall misappropriated the funds for the benefit of RHC Holdings Pvt. Ltd. The amounts so obtained are outstanding in the books of the companies owned by the applicant.
Submissions on behalf of the Applicant/Rajender Aggarwal
4. Learned Senior Counsel appearing on behalf of the applicant made the following submissions:-
4.1. It was submitted that the applicant was not named as an accused in the FIR, although certain companies of which he was a shareholder and irector were named. The applicant was not chargesheeted in the main chargesheet dated 06.01.2020. The applicant and the concerned companies were arrayed as accused later on in the supplementary chargesheet dated 21.01.2021.
4.2. It was submitted that the aforesaid FIR and chargesheets identify 19 entities to which loans were extended by RFL at the behest of its parent entity REL, which were then defaulted on. Out of the said 19 entities, four were directly controlled by co-accused Narendra Kumar Ghoushal and five were indirectly controlled by him through the applicant. The said entities were Neelanchal Holdings Pvt. Ltd., Gurudev Financial Services Pvt. Ltd., Annies Apparel Pvt. Ltd., Shridham Distributors Pvt. Ltd., and Tara Alloys Pvt. Ltd. It is alleged that the applicant in conspiracy with Narendra Kumar Ghoushal facilitated the diversion of money from RFL to shell entities through companies where he was a shareholder or director. It is also alleged that amounts are outstanding on the books of the Applicant‘s companies.
4.3. As on date, the investigation qua the applicant is complete. Evidence in this matter is documentary in nature and therefore there is no question of tampering with the same. The applicant is also currently enlarged on interim bail on medical grounds granted by this Court on 20.05.2021 that has been extended from time to time. During the entire time that the applicant has been enlarged on bail he has not violated any bail conditions imposed on him and is not a flight risk. Further, the applicant has made no attempt to approach, influence or intimidate any witnesses in this matter. Learned Senior Counsel submitted that the applicant satisfies the ‗triple test‘ laid down by the Hon‘ble Supreme Court in P.Chidambaram v. Directorate of Enforcement, 2019 SCC OnLine SC 1549. Moreover, the applicant is a senior citizen aged about 65 years and is in poor health due to chronic respiratory ailments and there is no need for his custody in the matter. It is also submitted that the principal object of Bail is to secure the attendance of the accused at trial.
4.4. Learned Senior Counsel drew the attention of this Court to the aforesaid companies alongwith the specific position of the applicant qua them in the following manner:
i. Neelanchal Holding Private Limited – While the applicant was a director in the NBFC, all transactions occurred in the ordinary course of its business. The entire loan amounts received since 2009 from the complainant RFL were repaid during the tenure of the Applicant/Accused as Director.
ii. Gurudev Financial Services Pvt. Ltd. – The applicant accused is neither a Director nor an authorized signatory of this entity, he is simply a shareholder. Without prejudice to the aforesaid, the company is not a sham one and has conducted all transactions in the ordinary course of business. The company has also repaid almost 3/4th of the loan amounts.
iii. Annies Apparel Pvt. Ltd. – The applicant accused is neither a Director nor an authorized signatory of this ntity, he is simply a shareholder. He was not involved in the day-to- day functioning of this business and did not have any executive decision-making authority. No transactions from this company were governed by his wishes.
iv. Shridham Distributors Pvt. Ltd. – The applicant accused is neither a Director nor an authorized signatory of this entity, he is simply a shareholder, and his shareholding was miniscule. He had no say in the day-to-day functioning of the entity and exercised no influence over the decision-making of the same.
v. Tara Alloys Pvt. Ltd. – The applicant was a Director in the said company, and the same was profitable till 2017, so it cannot be said that it was a shell company. All transactions concerned were Inter Corporate Deposits (ICDs) in the ordinary course of business. The sum of ₹85 Cr loaned by the Complainant was further loaned to Yashodham Merchant Pvt. Ltd (₹26 Cr) and Nikhil Holdings (₹59 Cr). These two companies defaulted on their obligation to Tara and therefore Tara had to default on its own obligation to the Complainant RFL. It is also pertinent to mention that these two entities are neither related to the applicant and nor are they related to the co-accused and alleged coconspirator Narendra Kumar Gaushal.
It was submitted that a perusal of the specific position of the entities demonstrates that for the company of which that the applicant was a director or an authorized signatory, i.e., Neelanchal Holding Pvt. Ltd., the unsecured loans were repaid during his tenure. The only other entity in which the applicant was a Director, which had extended loans to other entitites which defaulted is Tara Alloys Pvt. Ltd. In the case of other entities, where loan amounts are outstanding, the applicant was a mere shareholder, either individually or as part of HUF and had no active participation in the day-to-day affairs of those entities. It was submitted that it is an admitted position that the applicant was not a beneficiary of any of these loans or transactions. His role, as alleged, is limited to aiding co-accused to route the money.
Submissions on behalf of the State and the Complainant Company/RFL
5. Learned Additional Standing Counsel (‗ASC‘) appearing for the State alongwith learned Senior Counsel appearing on behalf of the complainant company/RFL, made the following submissions:-
5.1. It was submitted that the applicant, in conspiracy with Narendra Kumar Ghoushal facilitated the promoters, i.e., Malvinder Mohan Singh and Shivinder Mohan Singh to divert money from RFL. For the said purpose he provided shell companies controlled by him and his associates to route and reroute the money through various entities which was finally diverted to RHC Holdings Pvt. Ltd
5.2. At the outset, attention of this Court was drawn to the report of AZB & Partners, wherein the following observations have been made:
i. REL is the holding company of RFL and presently holds approximately 85.64% of the equity share capital of RFL. Since REL is a public listed company, the funds of RFL are also public money and therefore, by committing the alleged offence and siphoning of the funds, the accused persons in the present case have caused loss of public money.
ii. The following observations made in the aforesaid report also point towards the influence of the promoters over the process of disbursement of loans by RFL:
“2.4 We understand that while the primary business of RFL is SME Lending, one of the loan products offered by RFL included unsecured lending to corporate entities. These loans are classified by RFL as ―Corporate Loan” or ―CLB Loans” and the entire portfolio of CLB Loans is referred to as CLB or CLB portfolio. The total exposure of RFL Identified Loans in the CLB portfolio as of March 31, 2018 was approximately INR 2,086.7 crores (Indian rupees two thousand eight six crores seventy lakhs).
2.5 We understand that the CLB portfolio has been subject to regulatory scrutiny in the recent past. The RBI had during its inspection on RFL with respect to its financial position as on March 31, 2013 raised the following observation….”despite having a competent and highly qualified Top Management, its ability to oversee the professional functioning of the Company and general quality of Corporate Governance was not considered satisfactory by the Inspection, as exercise of undue influence of the promoter group was reflected, particularly in the conduct of its CLB.”
It was submitted that a bare perusal of the aforesaid paragraphs reflects that the promoter group of REL, i.e., Malvinder Mohan Singh and Shivinder Mohan Singh had an undue influence in conduct of the CLB. Concerns regarding the same were also raised by the RBI, which also observed that the general quality of corporate governance was not satisfactory.
iii. It was submitted that even after that, the RBI continued to express concerns about the health of the CLB portfolio. The management of RFL and REL, by way of a joint letter dated 12.07.2016 provided an undertaking to the RBI to not increase its exposure in the CLB beyond Rs. 1,719.65 Crore. Despite assurances, because no action was taken, the RBI addressed a letter dated 27.01.2017 making specific observations regarding the CLB and asked for a month-wise plan for liquidating the CLB portfolio.
iv. During audit of records of financial year 2017-18, the auditors of RFL also raised concerns about the CLB portfolio. In the said report, the auditors also identified certain material weaknesses, which are as under:
“a.) The Company‘s internal financial control system over financial reporting is not operating effectively in respect of Corporate Loan Book, loan against property & loan against shares due to weak credit appraisal, no system for verification of end use of money after sanction. loan sanctioning mechanism & assessment of credit worthiness of the borrower, documents for follow up post disbursement were not operating effectively.
b) Updated documentation for Micro Small & Medium Enterprises as per MSMED Act 2006 and control over Information Technology General Controls.
c) The Company‘s internal control process for its business in respect of the following needs to be strengthened in respect of regular updation of risk control matrix, comprehensiveness for coverage of all process.”
v. A preliminary review of the ledger of the subject loans suggested that certain loans were extended to repay twelve other loans extended by RFL to some entities which were disbursed prior to the review period, i.e., 01.09.2016 to 30.09.2017.
vi. Disbursal of loans under the CLB portfolio was initiated on the basis of oral instructions received either from Hemant Dhingra or Narendra Kumar Ghoushal. These instructions would then be communicated to Kavi Arora (erstwhile CEO) or Bipin Kabra (erstwhile CFO). The said instructions, in some cases would also be routed through the senior management team at REL comprising of the applicant, Maninder Singh, Anil Saxena, Sunil Garg and Nalin Nayyar.
vii. The report also lays out the relationship between the borrower entities and the promoters of REL. It is noted that while no direct relationship between the two existed, commonalities were found in shareholders, directors and registered offices. Circumstancial evidence qua a relationship between the promoters and borrower entities was uncovered
viii. Evergreening of loans was enabled to prevent them from being categorized as an NPA. CLB loans were typically granted for a period of twelve months. A loan would be classified as an ‘NPA’ if the principal/interest remained overdue for a period of time. It was noted that fifteen out of twenty loans were granted only to cause repayment of existing loans, which would have otherwise been categorized as an NPA. The cheque against the payment of an existing loan would be deposited only once specific instructions in that regard were received either from the concerned borrower or Hemant Dhingra. The said cheque would typically be cleared shortly after disbursal of another loan.
ix. It was also noted that RFL did not execute loan agreements as a matter of practice. Instead a system generated document referred to as an MoU containing basic details such as loan amount, borrower‘s name, tenure and rate of interest etc. was printed and executed on a stamp paper.
x. Attention of this Court was drawn to the final conclusion of the report, and in particular, to the following portions thereof:
“5.5.1 Subject to the specific area of reviews undertaken in line with the engagement and scope of work listed in Section III, the limitations set out in Section VII, the summary of our findings is as under:
(i) Based on the desktop RoC search carried out by us, we did not come across any direct shareholding or directorship of the Promoters in the 20 (twenty) borrower entities, the loans given to whom were outstanding as of March 31, 2018 (INR 2,086.7 crore). However, we are of the view that the circumstantial evidence suggests linkages between the above referred 20 (twenty) borrower entities and the Promoters.
(iii) The RBI had regularly been making adverse remarks against the CLB portfolio of RFL since the Financial Year 2012-13. RFL had on more than one occasion committed to RBI that (i) it will not roll-over any of its existing loans; and (ii) there will be no additional increase to the principal amount of the CLB. The RBI Exposure Limit was however breached from time to time and despite concerns being raised and discussed during the RMC meetings, loans were ultimately disbursed to the proposed borrower based on a convenient interpretation, as discussed in paragraph 5.4.3 above.”
5.3. It was submitted that in the present FIR, a coordinate bench of this Court, vide judgment dated 14.06.2021 passed in CRL.MC. 796/2021 titled ‘Religare Finvest Ltd. v. State of NCT of Delhi & Anr.‘ cancelled the bail granted by the learned Trial Court to co-accused Shivinder Mohan Singh in the present FIR. It was held as under:
“55. In the present case, nature and gravity of accusation again t respondent No.2 is serious. The grant of bail in a case involving cheating, criminal breach of interest by an agent of such a large magnitude of money, affecting a very large number of people would also have an adverse impact not only on the progress of the case but also on the trust of the criminal justice system that people repose. Thus, the parameters set out by the Hon ‘ble Supreme Court for cancellation of bail in Kanwar Singh Meella (Supra), have been met out.
56. Keeping in mind the factual matrix of the present case as also the pertinent observations of the Hon‘ble Supreme Court in various decision, I have no hesitation to hold that the impugned order suffers from serious infirmities, resulting in miscarriage of justice. Moreover, continued detention of respondent No.2 in this FIR case is necessary not only to unearth the conspiracy hatched by him, but also to derive out/trace the siphoned money which he has credited for his personal benefit.
57. In view of afore-going narration the impugned order dated 03.03.2021 passed by the learned trial court i set aside. Consequentially, the bail granted to respondent No.2 in this FIR case by the trial court is also set aside.
58. With aforesaid observations, the present petition is allowed and is accordingly disposed of. Pending applications are disposed of as infructuous.
59 . A copy of this order be transmitted to the Trial Court and Jail Superintendent concerned for information.‖
5.4. Learned Senior Counsel appearing for the complainant company, RFL submitted that before the learned National Company Law Tribunal (‘NCLT’), the companies named in the present case were proceeded against and in the said proceedings, it has come on record that the loans disbursed to them were a sham. Attention of this Court was drawn to the reply filed by Modland Wears Pvt. Ltd., which is one of the nineteen entities named hereinabove, to a petition filed by RFL for initiation of Corporate Insolvency Resolution Process before the learned NCLT, Principal Bench at New Delhi, wherein the said compant has come on record to state that the money advanced to them by RFL was towards their own purpose and not as a financial aid. It has further come on record that the moneys were advanced to Modland Wears Pvt. Ltd. by RFL with specific instructions as to where it was to be deployed. The said company was a mere vehicle for disbursement used by RFL to advance moneys to intended recipients.
Discussion
6. Heard learned counsel for the parties and perused the record.
7. Learned Senior Counsel submitted that the allegations in the chargesheet are in relation to nineteen entities to which the loans were extended. As per the chargesheet, five companies were in indirect control of the applicant. As pointed out hereinabove, the applicant has placed on record his position as obtained from the Director‘s Report, and DIR 12 and the Ledgers. It was pointed out that in all the said companies, the applicant is not a majority shareholder and not involved in the day-to-day working of their business. It is further submitted that the applicant is not a beneficiary, role is limited to aiding co-accused to route the sums. To clarify his position qua the five aforesaid fiver companies, the following tables were placed on record:
i. Neelanchal Holding Private Limited
