Delhi High Court grants bail to accused linked to Crores Bank Loan fraud

Sushree Mohanty

The Delhi High Court has allowed bail to a person accused of bank loan fraud. Said person was detained by the Enforcement Directorate under the Prevention of Money Laundering Act, 2002 (PMLA).

While granting bail to the accused, the bench of Justice Rajnish Bhatnagar dismissed the contentions of the Enforcement Directorate alleging that the petitioner (Sai Chandrasekhar, the accused) has influenced the witnesses of the case or tampered with evidence.

The case has been called as “one of its kind” and relates to a bail plea filed by the accused in the matter, Sai Chandrasekhar for fraud with the organization.

As per the facts of the case, a First Information Report was registered by the Economic Offences Wing (EOW) on the grievance about the offense under sections 409/420 and 120 B  of the Indian Penal Code.

The complaint alleged that there was an act of intentionally controlling/manipulating the stocks, inventories of M/s Bush Foods Pvt. Ltd which lead to record fraud amounting to roughly about Rs.1000 crore.

It was additionally discovered that M/s Bush Foods had availed material working capital loan from different public Sector banks under the consortium arrangement in the year 2012.

The arrangement was executed between the organisation and several consortium banks comprising Bank of India, Allahabad Bank, Bank of Baroda, Central Bank of India , Punjab National Bank, Exim Bank, Standard Chartered Bank etc.

The credit was sanctioned on the basis of the inventory available with M/s Bush Foods and was verified by the banks. It was later hypothecated by the concerned banks.

Later, the Complainant was made aware that the current sum under the credit loan amounted to more than 714 crore which surpasses the authorized credit amount of Rs.700 crore.

Mr. Tanveer Ahmed Mir, the advocate on behalf of the petitioner presented that the objection in accordance with the examination has been applied for and the examination of it was recently completed.

He further submitted that further examination cannot be a ground for continued detainment and dismissal of bail.

Mr. Ahmed likewise refuted the allegations made against Sai accusing him of tampering with the evidence and contended that all evidence in the matter, including electronic devices like hard drives, mobiles, etc are currently under the authority of the Directorate and therefore the claims are groundless.

The Enforcement Directorate further asserted that the accused was personally involved in conspiring with rival companies to commit fraud and cheat the organisation and therefore had himself taken interest in verification of the inventories.

Additionally, it was contended that the court shall take cognizance on how the current case includes the commission of the grave economic and financial offense of laundering proceeds of crime.

Justice Rajnesh Bhatnagar noticed that since the twin conditions for bail enumerated under section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) have been struck down by the Hon’ble Supreme Court and the equivalent are neither resuscitated nor revived by the Amending Act, therefore there was no deliberation as to rejecting the bail plea of the accused under Section 45(l)(ii) of the said Prevention of Money Laundering Act.

He further stated that the provisions under section 439 of Code of Criminal Procedure and the conditions mentioned there will be applicable for the grant of bail of the petitioner.

The court further observed that that the petitioner has been detained in police custody since October 27, 2020, and nothing has been produced as documents or on record to prove that the accused might attempt to flee or avoid prosecution.

Additionally, it was submitted that the accused was allowed to go to Sri Lanka for about fourteen days and had returned on expiration of the time limit as per court orders, further proving his willingness to co-operate to which the Directorate too agreed upon.

While deliberating upon the allegation of tampering of evidences, the Court observed that all the evidence were documentary in nature and the digital documents were under the authority of the prosecution agency.

The Court allowed the bail to Sai Chandrasekhar on depositing a personal bond of Rs. 1,00,000/- with surety to the Trial Court.

Additionally, the Court directed Chandrasekhar to deposit his passport with the Special Court and not leave the country without prior permission from the said Court.

He was further issued warnings against attempting to flee from the country or tampering evidence or influencing witnesses and was requested to present himself for investigation as per the requirement of the prosecuting authority.

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