Scamsters, Fraudsters resorting to Articles 226, 32 for interim relief, Solicitor General Tushar Mehta to SC

Solicitor General Tushar Mehta today took objection to the trend of those alleged to be involved in financial frauds resorting to Article 226 and 32 petitions for interim relief..“(Sections) 438, 439 of CrPC are only left for the petty criminals now.̣..and scamsters and fraudsters of our country resort to Article 226 or Article 32 seeking interim relief”, said Mehta..He was appearing for Serious Fraud Investigation Office (SFIO) in an appeal against an order of the Bombay High Court in a case against Managing Director of IL&FS Financial Services Limited, (IFIN) Ramesh C Bawa..In exercise of powers granted u/s 212(1)(a) and (c) of the Companies Act, 2013, Central Government had directed investigation into the affairs of Infrastructure Leasing & Financial Services Ltd. (IL&FS) and its subsidiary companies. The allegation against IL&FS pertains to loans to the sum of Rs. 89,000 crore..IFIN is the NBFC arm of IL&FS. IFIN has been alleged to have extended dubious loans to the extent of Rs. 17,000 crore..The allegation against Ramesh C Bawa, is that as the Managing Director of IFIN, he was instrumental in procuring fraudulent and window dressed borrowings..Bawa was summoned on numerous occasions during the investigation. As the investigation was progressing, he filed a writ petition in Bombay High Court seeking relief in the nature of anticipatory bail..He challenged the twin conditions for bail set out in Section 212(6)(ii) of the Companies Act and also sought quashing of SFIO proceedings on the ground that Chapter XII of CrPC was not followed..The Bombay High Court after being informed of the pendency of a similar petition by Neeraj Singal in the Bhushan Steel case in the Supreme Court allowed the withdrawal of the petition. However, it granted interim protection from arrest till April 10, 2019 to Bawa in order to enable him to approach the Supreme Court..This order has now been challenged in Supreme Court..The SFIO has contended that the High Court ought to have appreciated that the petition by Bawa in Bombay High Court was, in fact, an anticipatory bail application disguised as a writ petition..The High Court did not render any finding of prima facie case or otherwise on any of the legal issues raised by the Ramesh Bawa. Further, the issues raised by Bawa is already pending consideration by the Supreme Court in Neeraj Singhal case, the petition states..The petition also alludes to the various factors to be weighed by the Court while granting bail in economic offences..Regarding the validity of the twin conditions in Section 212 (6) of the Companies Act, the petition contends that the said conditions are similar to the conditions provided in various other statutes like NDPS Act, TADA etc..A Bench of Chief Justice of India, Ranjan Gogoi and Justices Deepak Gupta and Sanjiv Khanna issued notice in the matter and listed the case for further hearing on April 15..The exercise of powers by SFIO under Section 212 of Companies Act has been a matter of debate for quite some time now..In August 2018, the SFIO in a first of its kind case had arrested Neeraj Singal (promoter of Bhushan Steel) for alleged loan fraud..The Delhi High Court had granted interim bail to Singal in a Habeas Corpus writ petition filed by Singal’s mother against his arrest by the SFIO..However, the Supreme Court has subsequently, stayed the interim order passed by the Delhi High Court and transferred the matter to itself. The case is pending before the Supreme Court..Read the order below.