Serious Fraud Investigation Office Vs Nittin Johari & Anr. (Supreme Court)
Summary: The Supreme Court examined an appeal by the Serious Fraud Investigation Office (SFIO) against the Delhi High Court’s order dated 14 August 2019 granting bail to Nittin Johari, former Chief Financial Officer and Whole Time Director (Finance) of Bhushan Steel Limited. The prosecution alleged that during financial years 2009–10 to 2016–17, the company’s promoters and associates used 157 companies to divert funds, obtain credit fraudulently and manipulate accounts, allegedly causing losses of ₹20,879 crore to lenders and gains of approximately ₹3,500 crore to the promoters and their families. Johari was accused of facilitating fraudulent letters of credit, inflated stock-in-transit figures and misleading financial statements. Arrested on 2 May 2019, he had twice been refused bail by the Special Court before obtaining relief from the High Court.
SFIO argued that the High Court failed to consider the magnitude of the alleged economic offences, Johari’s alleged individual role and the mandatory twin conditions in Section 212(6)(ii) of the Companies Act, 2013, applicable to fraud under Section 447. It contended that the court must have reasonable grounds to believe the accused was not guilty and would not commit an offence on bail, where the prosecutor opposed release. The agency also disputed reliance on parity with Neeraj Singal or the non-arrest of Brij Bhushan Singal, arguing that those circumstances did not justify Johari’s release. It relied on precedents requiring particular caution in serious economic offences.
