# Sujay Desai & Anr v. Union of India & Anr

- **Citation:** Crl. Misc. Bail Application No. 12047 of 2020
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2020-05-05
- **Case number:** Crl. Misc. Bail Application No. 12047 of 2020
- **Bench:** Ramesh Sinha
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/sujay-desai-anr-v-union-of-india-anr-46321
- **Pages:** 10

## Headnote

A. Criminal Law- Companies Act,2013Sections
447,448-Code
of
Criminal
Procedure,1973-Section
439
&
-
application-rejection-applicantapproached
the Apex Court for interim bail due to
pandemic-applicant directed to approach
the High Court for seeking relief-applicant
prayed that they are diabetic patient
suffering from ill health for a long timeoffences committed by the applicants are
of grave nature and punishable upto 10
years-in pursuance of the order of the
Apex Court in Sou Motu Petition, the
applicant cannot claim any relief.(Para 10
to 18)

The Apex court ordered each State/Union
Territories to constitute a
High Powered
Committee for the release of only convicted
persons on parole for 8 weeks and undertrial
prisoners who are facing maximum 7 years
sentence.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 10)

The application is rejected. (E-6)

List of Cases Cited:-

## Text

1330 INDIAN LAW REPORTS ALLAHABAD SERIES
offence and that he is not likely to commit
any offence while on bail.

23. The judgement of the Supreme
Court in the matter of Sujit Tiwari19,
that has been relied upon by the learned
counsel for the applicant, cannot be of
any assistance to the applicant as that
case is based on its own unique facts,
with the Supreme Court observing that
the case of the appellant therein was
totally different from the other accused.
There is no dilution of the principles for
grant of bail in such cases.

24. In view of the aforesaid facts
and circumstances, this bail application
is rejected at this stage.

25. It is clarified that
the
observations with regard to the case of
the applicant, made in this order are
strictly confined to the disposal of this
bail application and must not be
construed to have any reflection on the
ultimate merits of his case.

26. Given the fact that the
applicant is in jail since 25.11.2019 the
trial of the case is expedited.
----------

(2020)03-05ILR A1330
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 05.05.2020

BEFORE

THE HON'BLE RAMESH SINHA, J.

Crl. Misc. Bail Application No. 12047 of 2020

Sujay Desai & Anr. ...Applicants
Versus
Union of India & Anr. ...Opposite Parties

Counsel for the Applicants:
Ms. Gunjan Jadwani, Sri Anurag Khanna

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

A. Criminal Law- Companies Act,2013Sections
447,448-Code
of
Criminal
Procedure,1973-Section
439
&
-
application-rejection-applicantapproached
the Apex Court for interim bail due to
pandemic-applicant directed to approach
the High Court for seeking relief-applicant
prayed that they are diabetic patient
suffering from ill health for a long timeoffences committed by the applicants are
of grave nature and punishable upto 10
years-in pursuance of the order of the
Apex Court in Sou Motu Petition, the
applicant cannot claim any relief.(Para 10
to 18)

The Apex court ordered each State/Union
Territories to constitute a
High Powered
Committee for the release of only convicted
persons on parole for 8 weeks and undertrial
prisoners who are facing maximum 7 years
sentence.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 10)

The application is rejected. (E-6)

List of Cases Cited:-

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

2. P. Chidambaram Vs. ED (2019) 9 SCC 24

3. Y.S. Jagan Mohan Reddy Vs. CBI (2013) 7
SCC 439

4. Rohit Tandon Vs. ED (2018) 11 SCC 46

5. St. Of Guj. Vs. Mohanlal Jitamalji Porwal
(1987) 2 SCC 364

(Delivered by Hon'ble Ramesh Sinha, J.)
3-5 All. Sujay Desai & Anr. Vs. Union of India & Anr.
1331

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

"This
Hon'ble
Court
may
graciously be pleased to consider this
matter as imminently urgent and allow this
application. It is to be noted here that the
WHO has declared Coronavirus as a
Public
Health
Emergency
and
has
categorically
stated
that
individuals
suffering from diabetes of any kind, are at
increased risk of severe illness from
Coronavirus
and
they
should
be
particularly stringent in following social
distancing
measures,
including
significantly
limiting
face
to
face
interaction. Therefore, it is imperative that
this Hon'ble Court may hear the matter and
pass some interim order/grant interim bail
to the applicants in Arrest Order dated
19.3.2020 issued by respondent no. 2 in
furtherance of Order No. 03/117/2018-CLII (NR) dated 21.02.2018 and Order No.
7/117/2108/CL-II dated 22.08.2019 under
sections 447 and 448 of the Companies Act,
2013 or else the applicants shall suffer
irreparable loss and injury which could not
be compensated, as this matter rquired
urgent hearing by this Hon'ble Court"

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 Anurag Khanna,
learned Senior Advocate assisted by Ms.
Gunjan Jadwani, learned counsel for the
applicants and Sri Gyan Prakash, learned
Assistant Solicitor General of India for
the respondents.

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

5. The brief facts of the case are
that the applicants have been arrested in
pursuance of the arrest order dated
19.3.2020 by the Arresting Officer, who
is Assistant Director of Ministry of
Corporate Affairs for the offence under
sections 447 and 448 of the Companies
Act, 2013 from Delhi and Mumbai
respectively. Copies of grounds of arrest
were also served on the applicants on
19.3.2020. In pursuance of Order No.
03/117/2018-CL-II
(NR)
dated
21.02.2018
and
Order
No.
7/117/2108/CL-II
dated
22.08.2019
under sections 447 and 448 of the
Companies Act, 2013 issued by the
Ministry
of
Corporate
Affairs,
Government
of
India
(hereinafter
referred to as the MCA) which in
exercise of power under sections 212 (1)
(c) of the Companies Act, 2013 had
ordered for investigation into affairs of
Rotomac Global Pvt. Ltd. (hereinafter
referred to as the 'RGPL') and 10 others
and Frost International Ltd. (hereinafter
referred to as 'F.I.L.') by the Serious
Fraud Investigation Office-respondent
no. 2 (hereinafter referred to as 'the
SFIO') in the public interest. Pursuant
to the order of MCA, Director SFIO vide
Order No. SFIO/Inv./AOI/2018-19 dated
20.06.2018 had appointed a team of
officers for carrying out investigation
into the affairs of the Company. The
applicant no. 1 is the Director and CEO
of M/s F.I.L. and applicant no. 2 is the
Managing Director of F.I.L.
1332 INDIAN LAW REPORTS ALLAHABAD SERIES

6. The applicants before approaching
this Court for interim bail have approached
the Apex Court due to present pandemic
and spread of Covid-19 (Corona Virus) due
to which working of all the Courts were
suspended in the State and filed Writ
Petition (Crl.) No. 126 of 2020 for seeking
following relief:-

"Pass a writ, order or direction in
the nature of mandamus or any other
appropriate writ for seeking of immediate
release of the petitioners in light of the
threat posed to the life and personal liberty
of the petitioners in light of the Covid-19."

7. The Apex Court on 1.4.2020 was
pleased to dispose of the said writ petition
and directed the applicants to approach
High Court by filing bail applications thus,
the applicants have filed the present bail
application before this Court seeking
interim bail.

8. Learned counsel for the applicants
submits that applicant no. 1 is suffering
from Type-II diabetes and is also asthmatic
patient
and
suffered
from
frequent
asthmatic attack and he is required to take
insulin injection as well as other medicines
for asthma to maintain his health. So far as
applicant no. 2 is concerned, he is Senior
citizen aged about 63 years and is also
Type-II diabetic patient suffering from ill
health for a long time. Further he is
overweight and has a diminished lung
capacity and he is also required to take
insulin injection as well as other medicine
in order to maintain his health. It has been
vehemently argued by learned counsel for
the applicants that due to Covid-19, the life
of the applicants is under great threat and
particularly when they are also suffering
from the disease of diabetes and asthma
and there are increased risk of severe
suffering from Corona Virus and they
should
be
particularly
stringent
in
following
social
distancing
measures
including significantly limiting face to face
interaction.
He
submitted
that
the
applicants are presently confined in District
Jail, Kanpur Nagar which is over crowded
and due to large number of persons in the
said jail, the inmates are highly suspected
to come into contact of Covid-19 (Novel
Corona Virus). He submitted that the Apex
Court taking suo motu cognizance of the
threat to prisoners of various prisons in
India, into the light of Corona Virus, on
16.3.2020 passed an order in Suo Motu
Writ Petition (Civil) No. 1 of 2020 and
thereafter passed an order in the said
petition on 23.3.2020 for releasing the
inmates of jail directing the respective
States/Union Territories to constitute a high
power committee and consider the release
of prisoners, who have been convicted or
under trial for the offence for which
prescribed punishment are about 7 years or
less, with or without fine and the prisoners
has been convicted for lesser number of
years than the maximum. Learned counsel
for the applicants has placed reliance on the
order of the Delhi High Court in the case of
Arvind Yadav vs. N.C.T. Delhi being
numbered as Bail Application No. 778 of
2020 where the Delhi High Court vide
order dated 22.4.2020 was pleased to grant
interim bail to the accused, who was
involved under the N.D.P.S. Act, 1985
considering the lock down due to Covid-19.
He also placed reliance on another
judgment of the Delhi High Court in the
case of Babulal vs. N.C.T. Delhi in Crl.
Appeal No. 291 of 2020 by which the Delhi
High Court vide order dated 20.4.2020 was
pleased to grant interim suspension of
sentence to the appellant, who was
sentenced for heinous crimes under the
POCSO
Act,
considering
the
3-5 All. Sujay Desai & Anr. Vs. Union of India & Anr.
1333
"unprecedented circumstances of a public
health emergency that prevail today and
the consequent need to decongest prisons
for overall medical safety of all the
prisoners...".

9.

Learned
counsel
for
the
applicants further placed reliance on an
order passed by Lucknow Bench of this
Court in Crl. Misc. Bail Application
No. 2013 of 2020 Subhash Chandra
Agarwal vs. State of U.P. passed on
30.4.2020 in which interim bail has
been granted to the accused in the said
case for the offence under sections 419,
420, 467, 468, 471 I.P.C. He also
submitted that the investigation of the
present case is pending since June, 2018
and the applicants have been cooperating in the investigation being
conducted by the SIFO. He submitted
that applicant no. 1, who had gone to
New
Delhi
for
the
purpose
of
interrogation in the present case on
19.3.2020, was detained and arrested by
the Arresting Officer whereas applicant
no. 2 was arrested from Mumbai in the
present case. He further pointed out that
since the date when the applicants were
arrested and were lodged in Kanpur
District Jail, the Investigating Officer
has not visited in jail for the purpose of
investigation and the allegation against
the applicants is that they committed
fraud in the affairs of 11 Companies
and
have
further
not
furnished
documents to the Investigating Officer,
is not correct as the applicants have
supplied voluminous documents to the
respondent no. 2. There would not be
any fruitful purpose to detain them in
jail as till date no complaint has been
filed by respondent no. 2 against them
for offences under sections 447, 448 the
Companies Act, 2013. They have no
flight risk. They are ready to abide by
the conditions which may be imposed
by this Court.

10. Per contra, Sri Gyan Prakash,
learned Assistant Solicitor General of India
appearing
for
the
respondents
has
submitted that the applicants were arrested
on
19.3.2020
and
they
being
the
Directors/Controllers, used the corporate
identities of the respective Companies of
Rotomac Group, i.e., Rotomac Global Pvt.
Ltd., Rotomac Exports Pvt. Ltd., Crown
Alba Writing Instruments Pvt. Ltd, Kothari
Foods & Fragrances Pvt. Limited, Mohan
Steels Ltd. and Frost International Ltd. to
deceive
the
Public
Financial
Institutions/Banks
in
obtaining
credit
facilities in the form of Letter of Credits
and otherwise against which they defaulted
to
the
tune
of
Rs.
4,000/-
crores
approximately in the case of RGPL and Rs.
3500/- crores approximately in the case of
FIL which amounts continue as outstanding
liabilities in the respective Companies. The
applicant no. 1 is the Director & CEO, the
signatory of the financial statements of FIL
for the financial year 2013-14 to 2017-18.
Applicant no. 1 along with his father
applicant no. 2, who is the Managing
Director were ultimate decision makers of
the business of F.I.L. which have been also
accepted by all the others Directors and
employees of the F.I.L. whose statements
were recorded under oath. They under the
garb
of
Merchantile
Trade
have
fraudulently induced the Banks & Public
Financial Institutions to obtain credit
facilities. He had knowingly falsified the
books of account and the financial
statements of F.I.L. deliberately concealing
material facts thereby inducing BFIs to
fraudulently extending credit facilities to
F.I.L.
which
ultimately
remained
outstanding as account of F.I.L. became
1334 INDIAN LAW REPORTS ALLAHABAD SERIES
N.P.A. The falsified financial statements
signed by the applicant no. 1 for the
financial year 2013-14 to 2017-18 that was
filed with ROC and that submitted to BFIs
depicted false MT trade receivables to the
tune of approx. Rs. 3500 crore in F.I.L. as
per financial statements for financial year
2017-18. He submitted that the offence
committed by the applicants being the
Director and the Managing Director of
F.I.L., has come into light during the
investigation, is of grave nature. The plea
which has been taken by the applicants for
granting them interim bail in view of
spread of Covid-19 (Corona Virus) is only
an attempt to claim a relief indirectly which
they cannot seek directly in such a offence
of high magnitude amounting to thousands
of crores. As this stage, their release would
definitely hamper the investigation and
further there
are strong chances of
tempering with the investigation of the
present case. He further argued that so far
as the judgment the Apex Court passed in
Suo Motu Writ Petition (Civil) No. 1 of
2020 is concerned that relates to the
offence which are punishable maximum
upto 7 years and the Apex Court has
categorically made it clear in its order that
while considering the case of the said
accused persons, the nature and gravity of
the offence should be also taken into
account by the High Powered Committee
constituted in the light of the order of the
Apex Court dated 23.3.2020. In the present
case the offences under Sections 447 and
448 of the Companies Act, 2103 for which
the applicants have been charged is
punishable maximum upto 10 years and is
of grave nature, hence the applicants cannot
claim any relief in pursuance of the order
of the Apex Court passed in Suo Motu writ
petition.
Therefore,
their
case
is
distinguishable from category/class of
those prisoners. He next pointed that the
applicants have made an application before
the
Additional
Session
Judge/Special
Judge, Court no. 9 Kanpur Nagar which is
the designated Court under section 436 of
the Companies Act, 2013 that they may be
permitted to have home cooked food,
clothes, bedding and medicine etc. which
was not opposed by the respondent no. 2
S.F.I.O. and in pursuance thereof they are
being given the said facilities. He further
submitted that the applicants are also being
given their regular medicines for their
ailment in jail. So far as the case which
have been relied upon by the learned
counsel for the applicants with respect to
release on interim bail by the Delhi High
Court with respect to accused involved in
serious offences are concerned, it was a
short period for operating Bank account
and taking care of mentally retarded child
of the said accused. He submitted that
looking into the gravity and nature of
offence committed by the applicants where
they have deceived the Public Financial
Institutions/Banks
worth
thousands
of
crores, this Court should not exercise its
discretion in grant of interim bail to the
applicants and the same be rejected.
Learned Assistant Solicitor General in
support of his argument has relied upon the
judgment of the Apex 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
3-5 All. Sujay Desai & Anr. Vs. Union of India & Anr.
1335
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.

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

12. It transpires from the record that the
applicants before approaching this Court has
filed Writ Petition (Crl.) No. 126 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."

13. From a perusal of the aforesaid order
passed by the Apex Court, it is apparent that the
applicants were given liberty to approach this
Court by filing bail application and the
applicants in pursuance of the said order, had
filed the present application under section 439
Cr.P.C. for interim bail taking into account
serious threat to their lives because of the severe
illness, from Corona Virus. Thus it is clear that
no regular bail application has been filed by the
applicants nor the same is pending before this
Court or before the Special Judge, (Companies
Act, 2013) at Kanpur Nagar. The applicants
without moving regular bail application before
this Court in the present case, have come up
with a prayer only for grant of interim bail due
to Covid-19 (Corona Virus) which speaks of lot
of their conduct and the contention of counsel
for the respondent appears to be justified to a
great extent that the applicants want to seek
relief indirectly which they cannot seek directly
being a difficult task, realizing the nature and
gravity of the offence as nothing had stopped
them to file a regular bail applications before
this Court on merits which this Court is also
hearing showing urgency in the matters.

14. Be that as it may. The applicants
have chosen to file the present bail
application under sections 439 Cr.P.C. for
interim bail, the Court in the interest of
justice proceeds to decide the same with the
prayer made therein.

15. The main thrust which has been
canvassed by learned counsel for the
applicants is that due to Covid-19 (Corona
Virus) infection, the applicants being
diabetic patients have great risk to their
lives if they are kept in jail where there are
much chances of they being infected by
Corona Virus. The applicant no. 1 is the
son of applicant no. 2 and further claims
that he is also a patient of Asthma. Due to
over crowding in District Jail where they
are confined they cannot follow the
guideline of social distancing measures,
1336 INDIAN LAW REPORTS ALLAHABAD SERIES
including significantly limiting face to face
interaction and due to lack of medical care
regarding their lives in the prevalent
environment in jail, they may be released
on interim bail by this Court. In this regard,
the applicant's counsel have 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
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
3-5 All. Sujay Desai & Anr. Vs. Union of India & Anr.
1337
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."

16. 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 respondents, who vehemently
argued that the applicants are not entitled
for 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 their
case is distinguishable from under trial
prisoners as the offence in which the
applicants have been confined in jail is
punishable with a maximum sentence upto
10 years, appears to have substance.
Moreover, so far as the risk of applicants
being infected due to Corona Virus because
of their severe 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
applicants had moved an application before
the Special Judge (Companies Act) Kanpur
Nagar for providing them home cooked
food, clothes, bedding and medicines etc.
was not opposed by the S.F.I.O. on account
of which the same are being provided to
them and the said fact has not been denied
by learned counsel for the applicants but he
has submitted that the said facilities is not
adequate for the applicants to run the risk
of their lives as the present interim bail
application has been filed only on the
ground of risk to life of the applicants
because of their illness and coming in
contact with Covid-19 (Corona Virus)
infected persons. The main thrust of the
argument of learned counsel for the
applicants was only on the said issue
though he tried to argue on the merits of the
case in short stating that the Central
Government has ordered for investigation
by Serious Fraud Investigation Officer
through its Director-respondent no. 2 by its
order dated 21.2.2018 and 22.8.2019
respectively as is apparent from the
grounds of arrest which has been enclosed
along with the present application but the
same has yet not been concluded by the
Investigating Officer nor report has been
submitted to the Central Government by it,
hence no fruitful purpose would be served
if the applicants are being detained in jail
as no investigation is taking place and no
Inspector of respondent no. 2 has visited
the jail for the purpose of investigation
since the date, i.e., 19.3.2020 they have
been detained in jail. He stated that the
applicants have been co-operating in the
1338 INDIAN LAW REPORTS ALLAHABAD SERIES
investigation and the applicant no. 1 was
arrested by the respondent no. 2 when he
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 in pursuance of the said
investigation. With respect to the argument
of learned counsel for the applicants, the
Court only wants to observe that from a
perusal of the ground of arrest, it is
apparent that applicant no. 1 Sujay Desai
was the Director/CEO of F.I.L. and along
with said Company, the investigation has
been ordered and is underway into the
affairs of Rotomac Global Pvt. Ltd. and 10
other Companies and Frost International
Limited by S.F.I.O. in public interest under
the order dated 21.2.2018 and 22.8.2019
respectively of Ministry of Corporate
Affairs, Government of India and applicant
no. 2 Uday J. Desai was functioning as
Director of Frost International Limited
from 31.5.1995 onward and as Managing
Director of the said Company from
29.12.2008
onward
and
under
their
direction they used Merchantile 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. 3578/-
crores approximately to Banks and Public
Financial
Institutions
thereby
causing
wrongful loss to them and their acts and
omission are punishable under section 447
and 448 of the Companies Act, 2013.
Learned
Assistant
Solicitor
General
appearing on behalf of the respondents
through his objection filed has drawn the
attention of the Court that the applicants
have 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
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.

17. Thus, taking into account the
nature and gravity of the offence which
shakes the conscience of the society and
public at large, the investigation being still
pending and there are strong apprehensions
that there would be chances of tampering of
evidence by the applicants, the prayer for
grant of interim bail is hereby refused.

18.

Accordingly,
the
present
application for grant of interim bail to the
applicants, namely, Sujay Desai and Uday
J. Desai in Arrest Order dated 19.3.2020
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 dated 22.08.2019 under sections 447 and
448 of the Companies Act, 2013, is hereby
rejected.

19. However, it is directed that the
I.G. (Prison) State of U.P. Lucknow is
directed to ensure that the applicants are
kept safely in District Jail, Kanpur Nagar
where they are 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
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