04.2024 SUDHIR PUNIA v. SERIOUS FRAUD INVESTIGATION OFFICE

co-accused namely Deepak Shrimali was granted pre-arrest bail. Ld. Senior counsel submits that the allegations being faced by the petitioner are similar to those which are being faced by Deepak Shrimali. Both being employees signed the financial statements and thus the petitioner would be entitled for grant of regular bail especially when he has already undergone actual custody of 5 months and 10 days and the complaint stands filed that indicates towards completion of investigation.

4. Per contra, the bail plea is being opposed by the counsel appearing for SFIO. Reliance is being placed upon order passed by this Court in CRM-M No.15759 of 2023 dated 9th of November, 2023 whereby regular bail plea of co-accused Rajeev Kumar Rana was rejected observing as under: “8. Having heard rival contention of the parties and after going through the records of the case, this Court finds that the present petitioner has been arraigned as accused qua offence punishable under Section 447 of the Companies Act. The same reads as under:- Deepak Kumar 2024.04.20 17:05 I attest to the accuracy and integrity of this document CRM-M-2651-2024 6 “Section 447: Punishment for fraud.

447. Without prejudice to any liability including repayment of any debt under this Act or any other law for the time being in force, any person who is found to be guilty of fraud 1[involving an amount of at least ten lakh rupees or one per cent. of the turnover of the company, whichever is lower], shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud: Provided that where the fraud in question involves public interest, the term of imprisonment shall not be less than three years. 1[Provided further that where the fraud involves an amount less than ten lakh rupees or one per cent. of the turnover of the company, whichever is lower, and does not involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to five years or with fine which may extend to 2[fifty lakh rupees] or with both.] Explanation.—For the purposes of this section— (i) “fraud” in relation to affairs of a company or any body corporate, includes any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss; (ii) “wrongful gain” means the gain by unlawful means of property to which the person gaining is not legally entitled; (iii) “wrongful loss” means the loss by unlawful means of property to which the person losing is legally entitled.”

9. The allegation against the petitioner is of having misused his position as an authorized signatory of ABL-the company. It has also come on record that the amounts which were being used by ABL for its project which the petitioner is accused of having misused in fact were the amounts that form liability of ACCSL-a cooperative society. Meaning thereby, that ultimately it is the lower income group innocent persons who were investing these monies in the hope of getting their own house.” Deepak Kumar 2024.04.20 17:05 I attest to the accuracy and integrity of this document CRM-M-2651-2024 7

5. Ld. Senior Counsel however submits that the petitioner cannot be equated with Rajeev Kumar Rana against whom the allegation was that almost an amount of Rs.74.00 crores travelled to his private account. There being no such allegation against the petitioner the said order will not be applicable to the case of the present petitioner.

6. I have heard counsel for the parties and have gone through records of the case.

7. The whole issue involved in the present case is of usurping the money collected from the persons belonging to lower middle class by creating a Cooperative Society under the name of ACCSL and using the cash collected for siphoning off those funds of the Cooperative Society on pretext of extending loan to the company. Petitioner remained Director of 6 companies of the Adarsh Group for the period ranging from 13th of July, 2011 till 8th of July, 2015. The precise allegation against the petitioner is that during that course he not only signed the falsified/misstated balance sheets of the company but also was signatory to the loan application form/ projected financials of the company. Though the Senior Counsel claims that the petitioner was merely an employee. However, this Court cannot loose sight of the fact that in corporate offences the persons managing the company while serving at the level of Director are the one who act as arms, hands and mind of the company. Thus to say that the petitioner cannot be held guilty for offence punishable under Section 447 only for the reason that he merely signed the loan applications, cannot be considered at this stage. Deepak Kumar 2024.04.20 17:05 I attest to the accuracy and integrity of this document CRM-M-2651-2024 8

8. Keeping in view the extent of fraud and the money involved, this Court does not find it to be a case for grant of regular bail. Resultantly, the same is dismissed. April 19, 2024 Dpr Whether speaking/reasoned Whether reportable : : (Pankaj Jain) Judge Yes/No Yes/No Deepak Kumar 2024.04.20 17:05 I attest to the accuracy and integrity of this document