Punjab-Haryana High Court
Dortse vs Serious Fraud Investigation Office on 24 May, 2023
Author: Sandeep Moudgil
Bench: Sandeep Moudgil
Neutral Citation No:=2023:PHHC:079881
HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
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CRM-M-22247-2023 (O&M)
Decided on 24.05.2023
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Dortse ... Petitioner
VS.
Serious Fraud Investigation Office ... Respondent
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CORAM: HON'BLE MR.JUSTICE SANDEEP MOUDGIL
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Present: Messrs Abhinav Sood, Anmol Gupta, and Vardaan Malhotra,
Advocates for the petitioner
Ms. Puneeta Sethi, Advocate for the respondent
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Sandeep Moudgil, J. (Oral)
The petitioner seeks grant of regular bail in respect of complaint file No.3/342/2019 filed by SFIO for offence under Section 447 of the Companies Act, pending before the Addl. Sessions Judge, Gurugram.
It is the prosecution case that as per the report of the investigation which was carried out into the affairs of Jilian Consultants India P.Ltd. (JCIPL) and 32 other companies by SFIO, racket of paper companies was unearthed with dummy directors created by JCIPL and around 30 such companies are using the email IDs of JCIPL. Various incriminating documents were found at different locations showing evidence that the company is involved with incorporation of hundreds of shell companies, recruitment of Indian and Foreign dummy directors and providing false accounting entries. These companies were running illegal businesses like loan Apps, gaming Apps, Crypto Mining Apps etc. for swindling money from general public and vanish thereafter.
Learned counsel for the petitioner contended that the petitioner was positioned as a director of the firm which is mainly a consultancy firm. For Subsequent orders see CRM-26211-2023 Decided by HON'BLE MR. JUSTICE SANDEEP MOUDGIL 1 of 6 ::: Downloaded on - 13-06-2023 16:37:26 ::: Neutral Citation No:=2023:PHHC:079881 CRM-M-22247-2023 -2- JCIPL is only concerned with helping the companies set up their base in India and has not been indulged in any anti-national activity to threaten the security of the country. Reliance has been placed on Girdhari Lal Gupta vs. DH Mehta & Anr. (1971) 3 SC 189 to contend that the petitioner's mere occupation of the position of director does not ipso factor imply that he was the director since it is well settled that a person incharge is different from a person who merely holds the position. It was Wan Jun was initially the director of the JCIPL and petitioner was positioned as nominal director that too much later on 06.06.2018 prior to incorporation of JCIPL on 07.08.2017.
It is further contended that the "confession" recorded by the respondent is hit by the provisions of Section 25 of the Indian Evidence Act which specifically mandates that no confession made to a police officer (SFIO in the present case) shall be proved against the accused and that such statement, having bee obtained from the petitioner under custody, shall be inadmissible in the eyes of law as has been held by the Supreme Court in Tofan Singh vs. State of Tamil Nadu (2021) 4 SCC 1.
Learned counsel further asserted that the petitioner has been falsely implicated in the present case. There is no progress in the trial. The petitioner is the victim of protracted trial. The allegations levelled by the respondent nowhere suggest that the petitioner had been the beneficiary of the entire transaction since the entire matter is based upon documentary evidence.
On the other hand, Ms. Puneeta Sethi, learned Sr. Panel Counsel, Union of India appearing for respondent-SFIO has filed reply, which is taken on record. She submitted that the petitioner is being For Subsequent orders see CRM-26211-2023 Decided by HON'BLE MR. JUSTICE SANDEEP MOUDGIL 2 of 6 ::: Downloaded on - 13-06-2023 16:37:26 ::: Neutral Citation No:=2023:PHHC:079881 CRM-M-22247-2023 -3- prosecuted being a Director of the company and being as such, the petitioner misused his position. She asserted that the premises of M/s JCIPL was searched/seized by the office of Registrar of Companies Delhi after obtaining orders from learned Sessions Judge, Gurugram dated 8.9.2022. Digital record and other necessary articles were taken into possession. It is also admitted that petitioner is one of the director of JCIPL. He is having connections with another Director namely, Wan Hul. The said lady director is stated to be settled at China. According to investigation, JCIPL mainly operating through petitioner in India. He is engaged in appointing dummy directors having maximum qualification of 12th standard and graduate. JCIPL company, through the petitioner, used such 'dummy directors' for investment purposes. He also mis-utilized the documents of the dummy directors relating to identity. During the investigation, it was also found that one Mad Elephant Network Technology Pvt Ltd. was incorporated by the JCIPL. Approximately 3,68,000/- equity shares of Rs. 10/- each to Ruming (Hong Kong) Network Technology Ltd, Hong Kong was flouted by them. That apart, he also made numerous shell companies in order to siphon off the Indian Money. It is also alleged that the petitioner along with Wan Jun ("Aliena") i.e. the other director of JCIPL, was the ultimate decision maker, controller and managing the business of JCIPL. It is also the allegation against the petitioner that he, under the garb of consulting services, indulged in the acts of concealment, fabrication and forgery of legal documents with intent to deceive the government authorities and public at large. He has signed the financial statements for FY 2018-19 to 2020-21 and filed the same with ROC.
For Subsequent orders see CRM-26211-2023 Decided by HON'BLE MR. JUSTICE SANDEEP MOUDGIL 3 of 6 ::: Downloaded on - 13-06-2023 16:37:26 ::: Neutral Citation No:=2023:PHHC:079881 CRM-M-22247-2023 -4- Learned counsel for the respondent, on instructions, informed that the petitioner was taken into custody on 10.09.2022 and the investigation of the case is already complete, challan stands presented and that nothing further is to be recovered from the petitioner.
Heard learned counsel for the parties and gone through the record.
The Supreme Court while granting regular bail on 18.04.2022 to an accused in SFIO matter viz. Jainam Rathod vs. State of Haryana & Ors. Criminal Appeal No.640 of 2022 observed that "while the provisions of Section 212(6) of the Companies Act, 2013 must be borne in mind, equally, it is necessary to protect the constitutional right to an expeditious trial in a situation where a large number of accused implicated in a criminal trial would necessarily result in delay in its conclusion. The role of the appellant must be distinguishable from the role of the main accused".
The petitioner is already in custody since 10.09.2022 and as per the principle of the criminal jurisprudence, no one should be considered as guilty till the guilt is proved beyond reasonable doubt, whereas in the instant case, trial is prolonged and likely to take long time in the light of the fact that out of 17 prosecution witnesses, none have been examined and detaining the petitioner behind the bars for an indefinite period would amount to violation of Article 21 of the Constitution of India and is against the principle elucidated in the judgment of Apex Court in Dataram Singh vs. State of Uttar Pradesh and another;, (2018) 3 SCC 22.
'Bail is rule, jail is an exception' is a legal principle that was laid down by the Supreme Court in a landmark judgment of State of For Subsequent orders see CRM-26211-2023 Decided by HON'BLE MR. JUSTICE SANDEEP MOUDGIL 4 of 6 ::: Downloaded on - 13-06-2023 16:37:26 ::: Neutral Citation No:=2023:PHHC:079881 CRM-M-22247-2023 -5- Rajasthan v. Balchand alias Baliya 1977 AIR 2447. His Lordship Hon'ble Mr. Justice Krishna Iyer, speaking on behalf of the Bench, held that bail and not jail would be the basic Rule in ordinary circumstances, when His Lordship observed, "The basic Rule may perhaps be tersely put as bail, not jail, except where there are circumstances suggestive of fleeing from justice or thwarting the course of justice or creating other troubles in the shape of repeating offences or intimidating witnesses and the like......''. The judgment was based upon several rights that have been guaranteed by the Constitution of India with Article 21 being the most important one. Detention of an individual infringes his right to life and liberty as guaranteed under Article 21 of the Constitution of India. The main purpose of detention is to ensure easy proceedings by availing the accused for the trials without any inconvenience. Thus, if it can be ensured that the accused will be available as and when required for the trial, then, detaining the person is not necessary. Therefore, it was held that the provisions of the Criminal Procedure Code, 1973 (CrPC) regarding the arrest of an individual must be interpreted in a sense that unless indispensable, detention of a person must be avoided.
In this view of the matter and also taking into consideration the fact that investigation of the case is complete; nothing more is to be recovered from the petitioner; also keeping in view the education, antecedents and character of the present petitioner, he is not likely to flee from the course of justice as he is not a habitual offender and there is no other case pending against him, and also the fact that the trial is likely to take some time, therefore, no fruitful purpose will be served by keeping the For Subsequent orders see CRM-26211-2023 Decided by HON'BLE MR. JUSTICE SANDEEP MOUDGIL 5 of 6 ::: Downloaded on - 13-06-2023 16:37:26 ::: Neutral Citation No:=2023:PHHC:079881 CRM-M-22247-2023 -6- petitioner behind bars, the petitioner is directed to be released on regular bail on furnishing bail and surety bonds to the satisfaction of the Chief Judicial Magistrate/Duty Magistrate concerned.
The present petition is, therefore, allowed.
24.05.2023 (Sandeep Moudgil) V.Vishal Judge
1. Whether speaking/reasoned? Yes/No
2. Whether reportable? Yes/No Neutral For Subsequent orders see CRM-26211-2023 Decided by HON'BLE MR. CitationSANDEEP JUSTICE No:=2023:PHHC:079881 MOUDGIL 6 of 6 ::: Downloaded on - 13-06-2023 16:37:26 :::