# Rahul Kothari (In Custody) v. Union of India

- **Citation:** Crl. Misc. Bail Application No. 12048 of 2020
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-05-05
- **Case number:** Crl. Misc. Bail Application No. 12048 of 2020
- **Bench:** Ramesh Sinha
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/rahul-kothari-in-custody-v-union-of-india-46323
- **Pages:** 10

## Headnote

Law-
Code
of
Criminal
Procedure,1973-Section 439 & Companies
Act,
2013-Section
212-applicationrejection-applicant prayed for bail owing
to Corona Virus Spread-he sought relief
indirectly which he could not seek directly
in the name of corona virus as per Apex
court Order in this regard-applicant did
serious fraud of crores in the companypunishment for such fraud is 10 years as
per
companies
act-while
apex
court
ordered for the release of only convicted
persons on parole for 8 weeks and
undertrial
prisoners
who
are
facing
maximum 7 years sentence.(Para 9 to 17)

The applicant involved in grave offences having
deep rooted conspiracies and huge loss of public
funds affecting the economy of country and
posing serious threat to the company's financial
health.(Para 9)

The application is rejected. (E-6)

List of Cases Cited:

## Text

3-5 All. Rahul Kothari Vs. Union of India
1339
prisoners detained in jail throughout the
State.

20. It is further directed that the
respondent no. 2 shall expedite the
investigation of the present case and
conclude the same at the earliest.

21. It is made clear that any
observation made by this Court would not
prejudice the right of the applicant for
considration of his regular bail application
under section 439 Cr.P.C., if any, filed
before this Court or the Court below, as the
case may be, as the same has been made
only for the disposal of the present
application.

22. Copy of this order shall be
produced by the counsel for the applicants
before I.G. (Prison) State of U.P. Lucknow
for necessary information and follow up
action. The learned Assistant Solicitor
General shall also forward a copy of this
order to the I.G. (Prison) State of U.P.
Lucknow for its immediate follow up and
compliance, forthwith.
----------
(2020)03-05ILR A1339
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 05.05.2020

BEFORE

THE HON'BLE RAMESH SINHA, J.

Crl. Misc. Bail Application No. 12048 of 2020

Rahul Kothari ...Applicant (In Custody)
Versus
Union of India ...Opposite Party

Counsel for the Applicant:
Sri Rahul Agarwal

Counsel for the Opposite Party:
A.S.G.I.

A.
Criminal
Law-
Code
of
Criminal
Procedure,1973-Section 439 & Companies
Act,
2013-Section
212-applicationrejection-applicant prayed for bail owing
to Corona Virus Spread-he sought relief
indirectly which he could not seek directly
in the name of corona virus as per Apex
court Order in this regard-applicant did
serious fraud of crores in the companypunishment for such fraud is 10 years as
per
companies
act-while
apex
court
ordered for the release of only convicted
persons on parole for 8 weeks and
undertrial
prisoners
who
are
facing
maximum 7 years sentence.(Para 9 to 17)

The applicant involved in grave offences having
deep rooted conspiracies and huge loss of public
funds affecting the economy of country and
posing serious threat to the company's financial
health.(Para 9)

The application is rejected. (E-6)

List of Cases Cited:

1.
Gurucharan
Singh
Vs.
St.
(Delhi
Administration),(1978) 1 SCC 118

2. Sanjay Chandra Vs. CBI, (2012) 1 SCC 40

3. S.F.I.O. Vs. Nittin Johari & anr. (Crl Appeal
No. 1381 of 2019)

(Delivered by Hon'ble Ramesh Sinha, J.)

1. The present bail application under
section 439 Cr.P.C. has been filed by the
applicant. The prayer made in the bail
application is reproduced here under:-

"Pass an order directing the
immediate release of the applicant in the
case
pertaining
to
the
order dated
21.02.2018 bearing no. 03/117/2018-CL-I
(NR) passed by the Central Government
1340 INDIAN LAW REPORTS ALLAHABAD SERIES
under section 212 of the Companies Act,
2013 directing the SFIO to investigate into
the affairs of Rotomac Global Pvt. Ltd., in
light of the threat posed to the life and
personal liberty of the applicant because of
rampant spread of Corona Virus/Covid-19
till such time that the pandemic is
curtailed, on such terms and conditions as
this Hon'ble Court deems fit and necessary;
and

pass an order to enlarge the
accused applicant on interim bail in the
case
pertaining
to
the
order dated
21.02.2018 bearing no. 03/117/2018-CL-I
(NR) passed by the Central Government
under section 212 of the Companies Act,
2013 directing the SFIO to investigate into
the affairs of Rotomac Global Pvt. Ltd. till
disposal of the bail application moved by
the applicant on such terms and conditions
as are deemed fit and proper in the
circumstances of the case and in the
interest of justice as well;"

2. The present matter has been
nominated to this Bench by Hon'ble The
Chief Justice vide order dated 30.4.2020
and the same was heard through video
conferencing
and
judgment/order
was
reserved by this Court on 1.5.2020.

3. Heard Sri S.V. Raju, learned Senior
Advocate assisted by Sri Rahul Agarwal
and Sri Pranjal Krishna, learned counsels
for the applicant and Sri Gyan Prakash,
learned Assistant Solicitor General of India
appearing on behalf of the respondent.

4. Pleadings between the parties have
been exchanged through e-mail which are
on record.

5. The brief facts of the case are that
on 21.2.2018 vide letter no. 03/117/2018CL-I
(NR)
passed
by
the
Central
Government under section 212 (1) (c) of
the Companies Act, 2013 (hereinafter
referred as 'the Companies Act) directing
the Special Fraud Investigation Office
(hereinafter referred to as 'SFIO') to
investigate into the affairs of Rotomac
Global Pvt. Ltd. (hereinafter referred to as
'the RGPL') and 10 others and Frost
International Limited (hereinafter referred
to as 'FIL') in the public interest. The
applicant was arrest by SFIO at New Delhi
vide
Arrest
Order
dated
19.3.2020.
Thereafter, the SFIO obtained his transit
remand from the court at Delhi and brought
the
applicant
to
Kanpur
Nagar
on
21.3.2020.
Thereafter,
the
Additional
Session Judge/Special Judge, Court No. 9,
Kanpur Nagar which is the designated
Court under section 436 of the Companies
Act, 2013 remanded the applicant to
judicial custody on 21.3.2020. A copy of
the arrest order dated 19.3.2020 is annexed
with the present bail application.

6. The applicant before approaching
this Court for the prayers aforesaid has
approached the Apex Court vide Writ
Petition (Criminal) No. 125 of 2020 for
grant of bail in view of the threat posed to
his life in the light of Covid-19.

7. The Apex Court on 1.4.2020 was
pleased to dispose of the said writ petition
and directed the applicant to approach High
Court by filing bail application, thus the
applicant has filed the present bail
application before this Court seeking bail
for limited period, i.e., till such time that
pandemic COVID-19 (Corona Virus) is
curtailed.

8. Sri S.V. Raju, learned Senior
Advocate appearing on behalf of the
applicant has basically argued that in view
of the rampant spread of Covid-19 (Corona
3-5 All. Rahul Kothari Vs. Union of India
1341
Virus) the applicant may be released on
bail in the present case till such time when
the pandemic is curtailed and further
interim bail may be granted to him till the
disposal of the present bail application. He
submitted that the applicant is aged about
33 years and he is having a family of which
he is the sole bread earner. The applicant
has the liability of septuagenarian parents,
who
suffer
from
serious
medical
conditions. He has also the liabilities of his
five year old son and his wife. It is further
stated that the applicant himself is suffering
from urinary infection which is not
subsidizing and increasing the blood sugar
level and he was also admitted on
27.3.2020 in the jail hospital, hence there is
grave and impeding threat to his life on
account of his arrest in the wake of rampant
spread of the Corona Virus, hence the
applicant be released on this ground alone.
He further pleaded in para-32 of the
affidavit filed in support of the bail
application that the applicant reserves
liberty to file another bail application (if
the need so arise, at a later stage). It is
further argued by learned counsel for the
applicant that the SFIO was directed vide
order dated 21.2.2018 to investigate into
the affairs of RGPL pursuant to the
registration of F.I.R. by the C.B.I. on
18.2.2018. It is stated that the allegation
made in the F.I.R. dated 18.2.2018 and the
investigation being conducted by the SFIO
are
pari-materia.
On
22.2.2018,
the
applicant was arrested by the CBI in
pursuance of the F.I.R. dated 18.2.2018 and
after his arrest, the applicant was granted
bail by the Lucknow Bench of this Court
vide order dated 30.11.2018 passed in Bail
Application No. 3492 of 2018 copy of
which is annexed as annexure-4 to the
present bail application. Being aggrieved
by the said bail order, the C.B.I. filed an
SLP before the Apex Court being S.L.P.
(Crl.) No. 5931 of 2019 titled as "State
through CBI/BS & FC/ v. Rahul Kothari".
The
Apex
Court
vide
order
dated
22.11.2019 refused to interfere with the
judgment of the High Court and dismissed
the S.L.P., copy of which is also annexed
as annexure-5 to the bail application. He
submitted that as the applicant has already
been granted bail in case crime no.
RC/BD1/2018/E/0001
for
the
offence
under sections 120-B I.P.C. read with
section 420, 467, 468, 471 I.P.C. and
section 13 read with section 13 (1) (d) of
the Prevention of Corruption Act, 1988,
police station CBI/BS & FC/New Delhi,
District Kanpur/Delhi, he is entitled to be
released on bail in this case also for the
offence under section 447 and 448 of the
Companies Act which is punishable upto
10 years as in the case, registered by the
C.B.I., in which he has been granted bail,
the offences are punishable upto seven
years and life imprisonment. He further
submitted that the case of the applicant may
be considered in the light of the judgment
of the Apex Court passed in Suo Motu Writ
Petition (Civil) No. 1 of 2020 wherein the
Apex Court has directed the States/Union
Territories to constitute a High Powered
Committee to determine which class of
prisoners can be released on parole or
interim bail for such period as may be
thought appropriate. The Apex Court
further directed to consider the release of
the prisoners, who have been convicted or
under trial for the offence for which
prescribed punishment is upto 7 years or
less, with or without fine and the prisoners
has been convicted for lesser number of
years than the maximum. He has pointed
out that the applicant before approaching
this Court, has approached the Apex Court
by filing S.L.P. (Crl.) No. 125 of 2020 in
which the Apex Court vide order dated
1.4.2020 has given liberty to the applicant
1342 INDIAN LAW REPORTS ALLAHABAD SERIES
to file a bail application before this Court
copy of the same is annexed as annexure12 to the bail application, hence the
applicants has approached this Court by
means of filing this application for bail till
the curtailment of pandemic Corona Virus
(COVID-19). Learned counsel for the
applicant further submits that the applicant
has
been
co-operating
with
the
investigation at regular intervals since 2018
and on 18.3.2018, a day prior to his arrest,
he had gone to New Delhi for the purpose
of interrogation and the applicant is not at
flight risk as he has already surrendered his
passport before the Special Judge, Anti
Corruption, C.B.I. at Lucknow. He also has
argued that so far as the bar contained
under section 212 (6) (ii) of the Companies
Act,2013 will not apply while dealing with
an application for bail on medical grounds
in view of the Proviso to Section 212 (6)
(ii) of the Companies Act, 2013 as
compared to Section 37 of the Narcotic
Drugs and Psychotropic Substances Act,
1985 (hereinafter referred to as 'the
N.D.P.S. Act') as there is no such proviso
under section 37 (1) (b) (11) in the
N.D.P.S. Act and the applicant being a sick
person, the bar does not apply on him in
view of the proviso to section 212 (6) (ii) of
the Companies Act, 2013, hence the
applicant may be released on bail. Learned
counsel for the applicant has relied upon
para-22 of the judgment of the Apex Court
in the case Gurucharan Singh vs. State
(Delhi Administration), (1978) 1 SCC 118
and further relied on para-30 of the
judgment of the Apex Court in the case of
Sanjay Chandra vs. CBI, (2012) 1 SCC 40
relating to grant of bail.

9. Per contra, learned Assistant
Solicitor
General
Sri
Gyan
Prakash
appearing on behalf of the respondent
opposed the prayer made in the present
application and has vehemently argued that
the applicant was arrested along with two
other persons for commission of offence of
fraud with Public Sector Banks involving
total
amount
of
Rs.
7500/-
crores
approximately for the
offence under
sections 447, 448 of the Companies Act,
2013
which
provides
for
maximum
punishment upto ten years. The Ministry of
Corporate Affairs in exercise of its power
under section 212 (1) (c) of the Companies
Act, 2013 vide order dated 21.2.2018 has
ordered investigation in the affairs of 11
Companies of Rotomac Group. On the
basis
of
material
collected
during
investigation an approval was sought from
the Ministry of Corporate Affairs to
investigate into the affairs of another
Company, i.e., Frost International Ltd. and
the Ministry of Corporate Affairs vide
order dated 22.8.2019 granted the said
approval. The provisions contained under
sections 212 (3) of the Companies Act,
2013,
empowers
certain
category
of
officials of SFIO to arrest any person on
the basis of material collected during
investigation and after recording reasons to
believe that any person is guilty of offence
punishable under section 447 of the
Companies Act, 2013. In exercise of the
aforesaid powers granted under section 212
(3) of the Companies Act, 2013 and after
recording reason to believe in this regard
on the basis of material collected during
investigation since 21.2.2018 qua Rotomac
Group of Companies and since 22.8.2019
qua Frost International Ltd., the applicant
along with two others was arrested on
19.3.2020 for the offence punishable under
section 447 of the Companies Act, 2013.
The applicant has been arrested after there
being
sufficient
material
which
was
collected and obtained by respondent on
19.3.2020 and arrest was made by the
Arresting Officer after recording reason to
3-5 All. Rahul Kothari Vs. Union of India
1343
believe and taking approval to arrest the
aforesaid persons as per the prescribed
rules. The applicant after being brought on
transit remand was produced before the
Special Judge (Companies Act) at Kanpur
Nagar an application was moved by the
applicant for seeking relief of interim
bail/house arrest, home cooked food,
bedding, clothes and medicines etc. on the
ground
of
spread
of
Corona
Virus
(COVID-19) in pursuance of the order
dated 16.3.2020 passed by the Apex Court
in the aforesaid case, the Special Judge
(Companies Act) rejected his prayer for
interim bail/house arrest but the other
prayers for home cooked food, bedding,
clothes and medicines etc. was not opposed
by SFIO and as such the same are being
provided to the applicant while being in jail
and remanded him to judicial custody. He
submitted that the plea of sickness which
has been taken by the applicant due to
coming in contact with Corona Virus
(COVID-19) infected persons, does not
appeal to reason as the applicant is not such
a sick person as has been argued as he is
only suffering from urinary infection and
making emotional argument before this
Court for taking care of old parents and
family though he is involved in an offence
of fraud in the affairs of Company of
Rotomac group which are 11 in number. So
far as the argument of learned counsel for
the applicant that on the instructions of
SFIO, the CBI has registered an F.I.R.
against the applicant for the offence in
question, is absolutely incorrect and denied,
as the C.B.I. has investigated into the
offences other than the Companies Act,
2013 which is a Special Act. The CBI has
not investigated the fraudulent affairs of
Rotomac Group which consists of RGPL
and 10 other Companies and FIL as has
been ordered by the Ministry of Corporate
Affairs. He argued that SFIO is a statutory
Investigation Office established under
Section 211 of the Companies Act, 2013
and in terms of Section 212 of the
Companies Act, 2013 it may conduct
investigation into the affairs of the
Company under the order of Ministry of
Corporate
Affairs.
Moreover,
the
investigation in question has been ordered
by the Central Government in exercise of
its power under section 212 (1) (c) of the
Companies Act, 2013 in the instant case
and not on the basis of registration of F.I.R.
by C.B.I. He has drawn the attention of the
Court towards paras-25 to 28 of the written
submissions regarding denial made by
respondent SFIO with respect to the
averments made in para-14 of the affidavit
filed in support of the bail application
categorically. So far as the argument of
learned counsel for the applicant with
respect to the bar contained under section
212 (6) (ii) of the Companies Act will not
apply while dealing with the application for
bail on medical ground is concerned, it
appears to be also not correct in view of the
fact that the applicant is not such a sick
person, who is not able to perform normal
pursuits of his life as he is only suffering
from urinary infection and stated to be
having low blood sugar. He has drawn the
attention of the Court towards the averment
made in the written objection in para-32 in
which it had referred to the judgment of
the Supreme Court dated 12.09.2019 in
the matter of S.F.I.O. v. Nittin Johari
and another (Criminal Appeal No. 1381
of 2019) wherein the Apex Court has set
aside order of the Delhi High Court on the
said issue and remanded the matter to the
High Court and thereafter the Delhi High
Court rejected the bail application of the
said accused as has been stated in para-34
of the written objection. Learned Assistant
Solicitor
General
in
support of his
argument has relied upon the judgment of
1344 INDIAN LAW REPORTS ALLAHABAD SERIES
the Supreme Court in the case of Serious
Fraud Investigation Office vs. Nittin Johari
and another (Criminal Appeal No. 1381 of
2019, P Chidrambaram vs. Directorate of
Enforcement (2019) 9 SCC 24, Y.S. Jagan
Moham Reddy vs. Central Bureau of
Investigation, reported in 2013 (7) SCC
439, and in Rohit Tandon vs. Directorate of
Enforcement, (2018) 11 SCC 46 and State
of Gujarat vs. Mohanlal Jitamalji Porwal,
(1987) 2 SCC 364 in which the Court has
observed that economic offences constitute
a class apart and need to be visited with a
different approach in the matter of bail.
The economic offence having deep rooted
conspiracies and involving huge loss of
Public funds, needs to be viewed seriously
and considered as grave offences affecting
the economy of the country as a whole
and thereby posing serious threat to the
financial health of the companies. The
court thus observed that while granting
bail, the court has to keep in mind the
nature of accusations, nature of evidence
in
support
thereof,
the
severity
of
punishment which conviction will ential,
the larger interest of the public/State and
other similar considerations.

10. Considered the rival submissions
made by learned counsel for the parties and
perused the record.

11. It transpires from the record that
the applicant before approaching this Court
has filed Writ Petition (Crl.) No. 125 of
2020 before the Apex Court and on 1st
April, 2020, the Apex Court passed the
following order:-

"The above writ petitions are
filed for grant of bail in favour of the
petitioners in veiw of the threat posed to
their lives in the light of COVID-19. Notice
was issued on 27.03.2020.

Today, we are informed that the
High Court of Allahabad is taking up
matters which are of urgent nature. As the
Writ Petitions pertain to grant of bail, we
are of the opinion that the petitioners
should withdraw these writ petitions to
approach the High Court by filing bail
applications. The High Court of Allahabad
is requested to take up the bail applications
at the earliest. We make it clear that we
have ot heard the matters on merit.

The
writ
petitions
are,
accordingly, disposed of as withdrawn."

12. From a perusal of the aforesaid
order passed by the Apex Court, it is
apparent that the applicant was given
liberty to approach this Court by filing bail
application and the applicant in pursuance
of the said order, had filed the present
application under section 439 Cr.P.C. for
immediate release on bail taking into
account serious threat to his life because of
the illness, from Corona Virus. Thus, it is
clear that he has not moved a regular bail
application under section 439 Cr.P.C.
before this Court in the present case and
has come with a limited prayer to
immediately be released till such time that
the pandemic COVID-19 (Corona Virus) is
curtailed and further reserved his right to
move another application (if need so arise,
at a later stage) as has been averred by him
in para-32 of the affidavit file in support of
the bail application which speaks a lot of
his conduct and the contention of learned
counsel for the respondent appears to be
justified to a great extent that the applicant
want to seek relief indirectly which he
cannot seek directly being a difficult task
realizing the nature and gravity of the
offence as nothing had stopped him to file a
regular bail application before this Court on
merits which this Court is also hearing,
showing urgency in the matter.
3-5 All. Rahul Kothari Vs. Union of India
1345

13. Be that as it may. The applicant
has chosen to file the present bail
application under sections 439 Cr.P.C. for
immediate release till such time that the
pandemic COVID-19 (Corona Virus) is
curtailed, the Court in the interest of justice
proceeds to decide the same with the
prayers made therein.

14. The main argument of learned
counsel for the applicant is that due to
Covid-19 (Corona Virus) infection, the
applicants being a sick person has great risk
to his life if he is kept in jail where there
are much chances of he being infected by
said Corona Virus. Due to over crowding in
District Jail where he is confined, he cannot
follow the guideline of social distancing
measures, including significantly limiting
face to face interaction and due to lack of
medical care regarding his life in the
prevalent environment in jail, he may be
released immediately on bail by this Court.
In this regard, the applicant's counsel has
also drawn the attention of Court towards
the order dated 23.3.2020 passed by the
Apex Court Suo Motu in the aforesaid writ
petition and also circular dated 18.3.2020
of this Court whereby the working of court
below has been suspended. So far as the
order dated 23.3.2020, it is evident that the
Apex Court has directed each State/Union
Territories to constitute a High Powered
Committee to determine which class of
prisoners can be released on parole or on
interim bail for said period as may be
thought appropriate. The Court has directed
that the State/Union Territories could
consider the release of the prisoners, who
have been convicted or under trial for the
offence which prescribed punishment upto
7 years or less, with or without fine and the
prisoners, who have been convicted for
lesser number of years than the maximum.
The Apex Court further left it open for the
High Powered Committee to determine the
category of prisoners, who should be
release as aforesaid, depending upon
gravity and the nature of offence and other
relevant factor thereto. In pursuance of the
same, High Powered Committee had been
constituted in the State of U.P. as has been
informed by the Secretary U.P. Legal
Services Authorities Lucknow vide order
dated 27th March, 2020 and as per the
resolution of the High Powered Committee
in its meeting dated 27.3.2020 had issued
certain directions regarding convicted and
under trial prisoners and has resolved as
follows:-

"The Committee has resolved
that the following category of convicted
prisoners (excepts who are Foreign
Nationals) to be released on parole on
furnishing
personal
bond
with
the
undertaking written on the personal bond
itself that he/she shall surrender before
the prison authority after expiry of the
parole period.:-

a) Convicts already on parole
would get extended special parole of 08
additional weeks.

b) Convicts who have already
availed
01
parole
peacefully
and
surrendered on time will be granted afresh
one-time special parole for 08 weeks.

c) Convicts who are not facing a
sentence of more than 7 years shall be
released on special parole for 08 weeks.

The Committee further resolved
that following category of under trial
prisoners (except prisoners who are
Foreign Nationals) may be released on
Interim Bail.

a) Under trial prisoners facing
criminal cases in which maximum sentence
is 07 years and presently confined in jails
may be released on interim bail for 08
weeks by the Sessions Court, Additional
1346 INDIAN LAW REPORTS ALLAHABAD SERIES
Sessions Court or the Chief Judicial
Magistrate
including
other
Judicial
Magistrates, as the case may be, on
furnishing personal bond with the under
taking written on the personal bond itself
that he/she shall surrender before the
Court after expiry of the interim bail
period. Other conditions may be imposed
by the Court if it thinks fit, considering the
circumstances of the case.

b) The grant of interim bail may
be done by visiting the jails, on alternate
days, by the Sessions Judge/Additional
Sessions
Judge/the
Chief
Judicial
Magistrate/other Judicial Magistrates, as
the case may be, on the bail applications at
the jails itself and it shall be done
forthwith. For drafting bail applications, to
be
moved
by
under
trial
prisoners
assistance and services of prison officers,
jail staff, jail Para Legal Volunteers (PLVs)
and Panel Lawyers empanelled with the
District Legal Services Authority (DLSA)
may be utilized under intimation to the
Secretary, DLSA of the concerned district.
For this purpose passes shall be issued to
the Judges/Magistrate & Panel Lawyers
during lock down period by the District
Administration.

c)
The
Undertrial
Review
Committee contemplated by the Hon'ble
Supreme Court in Re Inhuman Conditions
in 1382 prisons, (2016) 3 SCC 700, shall
meet every week and take such decisions in
consultation with the concerned district
authority as per the said judgment.

d) Jail Superintendent shall be in
continuous touch with concerned Secretary,
District Legal Services Authority regarding
disposal of interim bail applications moved
by the under trial prisoners so that proper
arrangements may be made."

15. From a perusal of the resolution of
the said Committee, it is apparent that the
Committee has resolved to release the
under trial prisoners on interim bail, who
are facing criminal cases in which the
maximum sentence is of 7 years and
presently confined in jails, for a period of
eight weeks by the competent courts. Thus,
the
contention
of
Assistant
Solicitor
General Sri Gyan Prakash appearing on
behalf of the respondent, who vehemently
argued that the applicant is not entitled for
bail/interim bail as per the order passed by
the Apex Court Suo Motu in the aforesaid
writ petition by which a High Powered
Committee has been constituted as the case
of the applicant is distinguishable from the
under trial prisoners as the offence in which
the applicant has been confined in jail is
punishable with a maximum sentence upto
10 years, appears to have substance.
Moreover, so far as the risk of applicant
being infected due to Corona Virus because
of his illness in the lack of following strict
norms of social distancing measures
including face to face interaction is
concerned, it has been pointed by learned
Assistant
Solicitor
General
that
the
applicant is not such a sick person, who is
not able to perform normal pursuits of his
life as he is only suffering from urinary
infection and stated to be having low blood
sugar for which there is adequate facility of
his treatment in the jail hospital and the
applicant had himself admitted that he was
admitted in the jail hospital on 27.3.2020.
Moreover, the applicant had moved an
application before the Special Judge
(Companies
Act)
Kanpur
Nagar
for
providing him home cooked food, clothes,
bedding and medicines etc. was not
opposed by the S.F.I.O. which is being
provided to him and the said fact has not
been denied by learned counsel for the
applicant. So far as the argument of learned
counsel for the applicant with respect to the
fact that the applicant had already been
3-5 All. Rahul Kothari Vs. Union of India
1347
released on bail in the F.I.R. lodged by the
C.B.I. with respect to Rotomac Global Pvt.
Ltd. for the offence in case crime no.
RC/BD1/2018/E/0001 under sections 120B I.P.C. read with section 420, 467, 468,
471 I.P.C. and section 13 read with section
13 (1) (d) of the Prevention of Corruption
Act, 1988 by the Lucknow Bench of this
Court on 30.11.2018 against which the
S.L.P. filed by the C.B.I. before the Apex
Court was dismissed on 22.11.2019 is
concerned, it appears from the order passed
by the Lucknow Bench of this Court that
the applicant, who was one of the Director
of the said Company and his father Vikram
Kothari was Managing Director, Ms.
Sadhna Kothari, who belong to his family
were involved along with other public
servants, who were Bank officials and the
F.I.R. was lodged by the C.B.I. was on the
complaint lodged by the Bank of Baroda
against RGPL which was aggrieved by
some of the transactions of the Company
and the officials of the Bank of Baroda in
collusion with the applicant and Vikram
Kothari, who is the father of the applicant,
were involved in forging and fabricating
letter of credit and the charge-sheet has
been submitted against the applicant and
his father Vikram Kothari in the said case.
It appears that because of Bank of Baroda
being
aggrieved
by
some
of
the
transactions of RGPL had individually
made a complaint to C.B.I to investigate
the case and the C.B.I. had registered a case
on its complaint against the Company in
question in which the applicant and his
father was Managing Director, hence the
said bail order cannot be of any help to the
applicant in the present case as the
investigation in the present case ordered by
the Ministry of Corporate Affairs, by the
Central Government in pursuance of the
order passed on 21.2.2018 into the
fraudulent affairs of RGPL and 10 others
and F.I.L. by the SFIO is in public interest
in view of Section 212 (1) (c) of the
Companies Act, 2013 which is a Special
Act. It appears from the grounds of arrest
received by the applicant on the date of his
arrest on 19.3.2020 that the applicant was
found to be functioning as the Director of
RGPL on 1.12.2004 and as a whole time
Director on 16.8.2014 and under his
direction he used Mercantile Trade for
rotation
of
funds
continuously
manipulating and falsified books of account
and financial statements of the Company to
fraudulently inducing the banks and public
financial institutions for obtaining credit
facilities. As a result of fraudulent activities
the
Company
has
defaulted
against
outstanding liabilities of Rs. 2886/- crores
approximately to banks and public financial
institutions thereby causing wrongful loss
to them and his act and omission are
punishable under section 447 and 448 of
the Companies Act, 2013. He stated that
the applicant has been co-operating in the
investigation and a day prior to his arrest
by respondent, the applicant went for the
purpose of interrogation on 19.3.2020 at
Delhi and no complaint has been filed till
date under the Companies Act, 2013.
Learned
Assistant
Solicitor
General
appearing on behalf of the respondent
through his objection filed has drawn the
attention of the Court that the applicant has
been arrested for the commission of
offence of fraud with Public Sector Banks
and Financial Institutions involving total
amount of Rs. 7500/- crores approximately
(Rs. 4000/- crores approximately in RGPL
and Rs. 3500/- crores in F.I.L.) and the
Ministry of Corporate Affairs vide order
dated 21.2.2018 ordered investigation into
the affairs of 11 Companies of Rotomac
Group and Frost International Ltd. and
during investigation, it has been revealed
that the approval was taken from Ministry
1348 INDIAN LAW REPORTS ALLAHABAD SERIES
of Corporate Affairs to investigate the
affairs of another Company, i.e., F.I.L. and
Ministry of Corporate Affairs vide order
dated 22.8.2019 granted the said approval.
There is also a criminal antecedent of the
applicant which has been registered by the
C.B.I. at the instance of Bank of Baroda in
which the C.B.I. has submitted chargesheet against the applicant and his father
Vikram Kothari and is pending trial before
the Special Judge, Anti Corruption, CBI
Court at Lucknow.

16. Thus, taking into account the
nature and gravity of the offence which
shakes the conscience of the society and
public at large, investigation being still
pending and there are strong apprehension
that there would be chances of tampering of
evidence by the applicant, the prayer of the
applicant for grant of immediate release till
such time that pandemic COVID-19
(Corona Virus) is curtailed, is hereby
refused.

17. Accordingly, the prayer made in
the present bail application for immediate
release on bail till such time that pandemic
COVID-19 (Corona Virus) is curtailed to
the applicant, namely, Rahul Kothari
pertaining to the Order dated 21.02.2018
issued by respondent no. 2 in furtherance of
Order No. 03/117/2018-CL-II (NR) dated
21.02.2018 and Order No. 7/117/2108/CLII (NR) dated 22.08.2019 under sections
447 read with 36 (c) and 448 of the
Companies Act, 2013, is hereby rejected.

18. However, it is directed that the
I.G. (Prison) State of U.P. Lucknow is
directed to ensure that the applicant is kept
safely in District Jail, Kanpur Nagar where
he is stated to be confined as on date taking
all necessary precautions as has been issued
by the State of U.P. in the context of
Corona Virus (COVID-19) particularly, if
any, also with respect to prisoners detained
in jail throughout the State.

19. It is further directed that the
respondent shall expedite the investigation
of the present case and conclude the same
at the earliest.

20. It is made clear that any
observation made by this Court would not
prejudice the right of the applicant for
consideration of his regular bail application
under section 439 Cr.P.C., if any, filed
before this Court or the Court below, as the
case may be, as the same has been made
only for the disposal of the present bail
application.

21. Copy of this order shall be
produced by the counsel for the applicants
before I.G. (Prison) State of U.P. Lucknow
for necessary information and follow up
action. The learned Assistant Solicitor
General shall also forward a copy of this
order to the I.G. (Prison) State of U.P.
Lucknow for its immediate follow up and
compliance, forthwith.
----------
(2020)03-05ILR A1348
ORIGINAL JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 07.04.2020

BEFORE

THE HON'BLE DINESH KUMAR SINGH, J.

Bail No. 12506 of 2019
&
Bail No. 873 of 2020

Sudhanshu Dwivedi ...Appellant
Versus
State of U.P. ...Opposite Party

Counsel
for
the
Appellant: