Case Law Details
Ashwini Mehra Vs State of Odisha (Orissa High Court)
Orissa High Court held that contractual dispute cannot be tainted with criminality. Accordingly, pre-arrest bail granted to the company liquidator [petitioner] since insolvency proceedings are pending before NCLT.
Facts- The Petitioners are seeking pre-arrest bail in connection with Kamakhya Nagar P.S. Case pending in the court of learned Court in seisin for commission of offences punishable under Sections 418/420/34 IPC.
It is submitted that contractual disputes between the Informant and the accused persons, save and except the Petitioner (Ashwini Mehra) in ABLAPL No.5818 of 2025, who is the official liquidator, is being cloaked with criminality making false allegations against the Petitioners. As such they are entitled to be protected by pre-arrest bail.
Conclusion- Held that it is apt to note that on the date of registration of the FIR the Informant was evidently aware of the institution of the proceeding before the National Company Law Tribunal, Principal Bench, New Delhi as he has cited Mr. Ashwini Mehra, Petitioner in ABLAPL No.5818 of 2025 in his capacity as “Resolution Professional”. Evidently the claim in the FIR prima facie arises out of and in connection with the contract between the Informant and the Corporate Debtor Punj Lloyd Ltd. whose officials are Petitioners in ABLAPL Nos.4807, 5819, 5822 and 5839 of 2025. It is indeed baffling that the statutory provisions contained in the Insolvency and Bankruptcy Code, 2016 were not taken into account by the investigating agency.
Held that in the light of the judgment of the Apex Court in the case of Gurbaksh Singh Sibbia & Others Vrs. State of Punjab and Satender Kumar Antil the Petitioners are entitled to the exceptional remedy of pre-arrest bail.
FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT
Since all these ABLAPLs relate to the same FIR, on the consent of the learned counsel for the parties, they are taken up together and are disposed of by this common judgment.
2. Heard Mr. Mahanti, learned Senior Advocate for the Petitioners in ABLAPL Nos.5818 of 2025, 5819 of 2025, 5822 of 2025 and 5839 of 2025 and Mr. Tripathy, learned counsel for the Petitioner in ABLAPL No.4807 of 2025, Mr. Panda, learned Addl. Standing Counsel and Mr. Nayak, learned counsel for the Informant in all the ABLAPLs.
3. The Petitioners are seeking pre-arrest bail in connection with Kamakhya Nagar P.S. Case No.644 of 2024 pending in the court of learned Court in seisin for commission of offences punishable under Sections 418/420/34 IPC.
4. It is submitted by the learned Senior Advocate that contractual disputes between the Informant and the accused persons, save and except the Petitioner (Ashwini Mehra) in ABLAPL No.5818 of 2025, who is the official liquidator, is being cloaked with criminality making false allegations against the Petitioners. As such they are entitled to be protected by pre-arrest bail. In this context, learned Senior Counsel relies on the judgment of the Apex Court in the case of Shikhar Chemicals vrs. State of Uttar Pradesh and another1.
It is the further submission of the learned Senior Counsel that in terms of the order passed by this Court all the Petitioners except the Petitioner-Rahul Maheswari in ABLAPL No.5822 of 2025 have joined the investigation. Since they have joined and cooperated with the investigation, the same should weigh with this Court in considering the prayer for pre-arrest bail.
5. Such submission is opposed by the learned counsel for the State, Mr. Panda, inter alia, on the ground that though the Petitioners have appeared, they have not given necessary clarifications.
5-A Learned counsel for the Informant, Mr. Nayak submitted that from the very inception, the Petitioners had intention of committing the offence under Section 420 IPC and taking a cue from the learned Public Prosecutor that the accused Petitioners have not extended the desired cooperation submitted that they should not be granted exceptional remedy of pre-arrest bail.
5-B Learned Senior Advocate, Mr. Mohanty instructed by Ms. Tripathy appearing for the Petitioners submitted that in view of the constitutional shield provided under Article 20(3) of the Constitution of India2 the Petitioners cannot be compelled to give statement implicating themselves. Referring to the very submissions of the learned Public Prosecutor and learned counsel for the Informant, Mr. Nayak, it is stated that considering the overzealous manner in which the investigating agency is proceeding insisting on self-incrimination, the Petitioners have made out more than a prima facie case to be protected by pre-arrest bail.
6. Mr. Mohanti, learned Senior Advocate for the Petitioners in ABLAPL Nos.5818 of 2025, 5819 of 2025, 5822 of 2025 and 5839 of 2025 and Mr. S.S. Tripathy, learned counsel for the Petitioner in ABLAPL No.4807 of 2025 relied on the provisions contained under Chapter III of the Insolvency and Bankruptcy Code, 2016 (Code) under the heading “Liquidation Process” and placed reliance on the provisions contained in Section 33(3), 33(5) and 33(7)3 as well as Section 2334 of the Code. Since, admittedly, National Company Law Tribunal, Principal Bench, New Delhi is in seisin of the dispute in a proceeding under the IBC Code, 2016 instituted by the Financial Creditor, ICICI Bank in respect of which the FIR has been filed.
6-A. Per contra, learned counsel for the Informant submitted that merely because of pendency of the proceeding before the NCLT the Petitioners ought not to be ensconced by an order of pre-arrest bail since there is no bar or institution of the FIR when a prima facie case is well made out and more so since the Petitioners are not willing to cooperate with the ongoing investigation, as stated by the learned Public Prosecutor.
7.In its recent dictum in the nature of continuing mandamus the Apex Court in the case of Satender Kumar Antil vrs. Central Bureau of Investigation and another5 has laid down the principles which ought to guide a Court while considering the prayer for pre-arrest bail.
8. The arguments advanced by the parties have to be considered and decided on the touchstone of the law as laid down by the Apex Court in the case of Satender Kumar Antil (supra)6.
9. The recital of the FIR which is relevant for consideration of the submission of the parties is extracted hereunder for convenience of reference;
“xxx xxx xxx
The Company, M/s Punj Lloyd Ltd. took up a contract work for the construction of Steel Pipeline along with associated facilities from Dhamra to Angul i.e., 0 to 207kms. This work order was taken from GAIL (Gas Authority of India Ltd.). However, Punj Lloyd Ltd. sub- ontracted the work to many other contractors out of which we (DSP Infracon Pvt. Ltd. were one of the sub-contractors.
We then took up the work of laying and construction of steel pipeline along with associated facilities in Dhenkanal District from village Jamunakot to village Tumusingha from 140.00km to 170.000kms of Dhamra to Angul Pipeline Project. The same was done vide work order no. 523132 dated 18.01.2021 for a total cost of 32.67 crores.
The contract between GAIL and Punj Lloyd Ltd. was terminated from the side of GAIL on 22.03.2022 which was during the course of execution of the work order. Consequent to termination GAIL has awarded the balance work to M/s. Amprocon Infrastructure, which could not be executed smoothly as local and outside vendors have not allowed them to work in the project without their outstanding being cleared by us. On the date of termination we have an outstanding liability of vendors Rs. 9.74 crores, which was partially settled by GAIL directly with our vendors against our “work done but not billed”.
We had completed almost 90% (Rs. 29.40 crores) approx. and we had billed them only Rs. 19.17 crores due to various milestones, with remaining work done but not billed Rs.10.23 crores. Out of the total amount billed Rs. 19.17 crores, Punj Lloyd still owes Rs. 3.28 crores. (comprising Invoice No. RA13-Rs 2.32 cr + Retention Rs 0.71+ Equipment RentelRs 0.25).Punj Lloyd RP AshwiniMehra along with CEO Manoj Mamgaine, Project head Mukesh Kumar Jiswal, Odisha Project Manager RajibBanarjee, CFO Rahul Maheswari, conjointly withhold the outstanding amount and deceitfully availed the GST amount of Rs. 35.95 lakh against Invoice RA 13 (enclosed form 2B of GST department) with the intention to cheat the outstanding amount and unattended since the year end of 2022.
Therefore humbly request to initiate legal action against M/s. Punj Lloyd RP AshwiniMehra along with CEO Manoj Mamgaine, Project head Mukesh Kumar Jiswal Odisha Project Manager RajibBanarjee, CFO Rahul Maheswari for cheating of my toilsome amount and made us bad debt resulting company financial distress.
xxx xxx xxx”
(Emphasized)
10-A. Factual matrix of the case runs thus :
Gas Authority of India Ltd. (GAIL) awarded a contract for the construction of steel pipeline along with associated facilities from Dhamra to Angul i.e. 0 to 207 kms to one M/s. Punj Lloyd Ltd. The Informant-Dwarkamai Sai Prasad Infracon Private Limited was one of the Sub-Contractors engaged by M/s. Punj Lloyd Ltd. to execute the work in question.
The work entrusted to the Informant- DSP Infracon Pvt. Ltd. was from the village Jamunakot to village Tumusingha i.e. from 140.00 km to 170.000 kms of Dhamra to Angul Pipeline Project. And, the said work was awarded as per the Work Order No.523132 dated 18.01.2021 for a total cost of Rs.32.67 Crores.
The principal GAIL terminated its contract with Punj Lloyd Ltd.
In this background the allegation is made that though the Informant has completed 90% of the work, out of total amount of Rs.19.17 crores, Punj Lloyd Ltd. still owes Rs.3.28 crores, which is covered, inter alia, by invoice No. RA 13. It is the further allegation that they have availed the “GST amount of Rs.35.95 lakh”.
11. Prima facie FIR in question is an offshoot of the contractual obligation inter se between the parties. Admittedly, the matter is pending before the NCLT at the instance of the Financial Creditor ICICI Bank Limited wherein Punj Lloyd Ltd. is cited as a corporate debtor.
11-A. In ABLAPL No.4807 of 2025, the order dated 27.05.2022 of the NCLT is on record by which the Petitioner-Ashwini Mehra has been appointed as a liquidator and Paragraph-e thereof reads as under;
“e. This order shall be deemed to be notice of discharge to all the officers, employees and the workmen of the corporate debtor as per Section 33(7) of the Insolvency and Bankruptcy Code, 2016.”
12. On a perspicuous analysis of the materials on record, this Court finds merit in the submissions made by the learned Senior Advocate, Mr. Mohanti and Mr. Tripathy that contractual dispute is being tainted with criminality.
It is apt to note that on the date of registration of the FIR the Informant was evidently aware of the institution of the proceeding before the National Company Law Tribunal, Principal Bench, New Delhi as he has cited Mr. Ashwini Mehra, Petitioner in ABLAPL No.5818 of 2025 in his capacity as “Resolution Professional”.
Evidently the claim in the FIR prima facie arises out of and in connection with the contract between the Informant and the Corporate Debtor Punj Lloyd Ltd. whose officials are Petitioners in ABLAPL Nos.4807, 5819, 5822 and 5839 of 2025.
It is indeed baffling that the statutory provisions contained in the Insolvency and Bankruptcy Code, 2016 were not taken into account by the investigating agency.
13. On a conspectus of the materials on record, considering the nature of allegations, this Court is persuaded to hold that in the light of the judgment of the Apex Court in the case of Gurbaksh Singh Sibbia & Others Vrs. State of Punjab6 and Satender Kumar Antil (supra)6 the Petitioners are entitled to the exceptional remedy of pre-arrest bail.
Accordingly, it is directed that in the event of arrest of the Petitioners in connection with the aforesaid case, they shall be released on bail by the Arresting Officer on such terms and conditions deemed just and proper.
14. It is needless to state that the observations made hereinabove are only for the purpose of consideration of the Petitioners’ prayer for pre-arrest bail and the same ought not to be considered as this Court expressing any opinion regarding complicity of the Petitioners which has to be probed independently.
The ABLAPLs are accordingly disposed of.
Notes:
1 2025 SCC Online SC 1643
20.Protection in respect of conviction for offences.-
(1) & (2) xxx xxx xxx
(3). No person accused of any offence shall be compelled to be a witness against himself.
2 33. Initiation of liquidation.
(1) & (2) xxx xxx xxx
(3) Where the resolution plan approved by the Adjudicating Authority [under section 31 or under sub-section (1) of section 54L,] is contravened by the concerned corporate debtor, any person other than the corporate debtor, whose interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a liquidation order as referred to in sub-clauses (i), (ii) and (iii) of clause (b) of sub-section (1).
(4) xxx xxx xxx
(5) Subject to section 52, when a liquidation order has been passed, no suit or other legal proceeding shall be instituted by or against the corporate debtor:
Provided that a suit or other legal proceeding may be instituted by the liquidator, on behalf of the corporate debtor, with the prior approval of the Adjudicating Authority.
(6) xxx xxx xxx
(7) The order for liquidation under this section shall be deemed to be a notice of discharge to the officers, employees and workmen of the corporate debtor, except when the business of the corporate debtor is continued during the liquidation process by the liquidator.
3 2023 SCC OnLine SC 452
“11……. We would like to clarify that what we have enunciated qua bail would equally apply to anticipatory bail cases. Anticipatory bail after all is one of the species of a bail.”
4 (1980) 2 SCC 565
Author Bio
