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Case Details: Arun Kumar Aggarwal v. Serious Fraud Investigation Office - [2023] 154 taxmann.com 549 (HC - Delhi)

Judiciary and Counsel Details

• Amit Sharma, J.
• Arvind K. Nigam, Sr Adv., Abhir Datt, Manu Padalia, Bhanu Sanoriya & Rohit Hooda, Advs. for the Applicant.
• Ripu Daman Bhardwaj, CGSC, Kushagra Kumar, GP Nitin Agnihotri, Prosecutor SFIO, Shriram & Salman, Advs. for the Respondent.

Facts of the Case

In the instant case, the SFIO investigated the affairs of BPSL and its group companies. The report of SFIO alleged that the promoters and controllers of BPSL availed loans and credit facilities from banks on false financial statements, bogus infusion of equity through entry operators and dummy entities and through the instrument of Inland Letter of Credits (LCs) on the basis of false documents.

The applicant, a Chartered Accountant, was associated with BPSL since the year 2000 till May 2019, handling the company’s financial matters. Based on the findings of an investigation report, the SFIO in the complaint filed under section 447, read with section 212 of the Companies Act, 2013 levelled charges against the appellant of siphoning of funds from BPSL in the form of bogus capital advance and routing same as equity or unsecured loans to related entities of BPSL, in form of bogus advances to suppliers through entry operators, through purchase of property through dummy entity; false representations in financials and falsification of books for not providing true and fair view of financials of BPSL.

The SFIO arrested the applicant and he has been in judicial custody since then. The applicant filed a bail application. He denied all allegations levelled against him and contended that he was just a namesake CFO and he did not work in the capacity of CFO.

It was found that none of the entry operators or co-accused through whom aforesaid siphoning of funds was allegedly done named the applicant. Further, the material on record, by way of statements made by entry operators, co-accused, employees of companies, documents including attendance registers of board meetings as well as meetings of the audit committee, prima facie indicated that the applicant was not the key managerial person and he never attended board meetings as well as the audit committee.

High Court Held

The High Court held that the records further revealed that most of the co-accused persons in the complaint were on bail or were not arrested. Thus, nothing had been brought on record by the respondent to show that the applicant was capable of tampering with evidence or was a flight risk. Therefore, the applicant’s bail application was to be allowed subject to certain conditions.

List of Cases Referred to

• Jainam Rathod v. State of Haryana [Criminal Appeal No. 640 of 2022, dated 18-4-2022] (para 18),
• Sanjay U Desai v. SFIO [2022] 142 taxmann.com 300/173 SCL 671 (SC) (para 18),
• Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra [2005] 5 SCC 294 (para 21.1),
• Vijay Madanlal Choudhary v. Union of India [2022] 140 taxmann.com 610 (SC) (para 21.2),
• Anil Vasantrao Deshmukh v. State of Maharashtra [2022] 143 taxmann.com 83 (Bom.) (para 21.3),
• Gurbaksh Singh Sibbia v. State of Punjab [1980] 2 SCC 565 (para 21.6),
• Dr. Bindu Rana v. Serious Fraud Investigation Office [2023] 146 taxmann.com 562/177 SCL 100 (Delhi) (para 21.7),
• Narcotics Control Bureau v. Mohit Aggarwal 2022 SCC OnLine SC 891 (para 33.2),
• SFIO v. Nittin Johari [2019] 109 taxmann.com 224/156 SCL 500 (SC) (para 33.3),
• Satender Kumar Antil v. CBI [2021] 10 SCC 773 (para 33.4),
• DOE v. M. Gopal Reddy [2023] 147 taxmann.com 539/177 SCL 170 (SC) (para 33.5),
• Mohd. Muslim alias Hussain v. State (NCT of Delhi) 2023 SCC online SC 352 (para 46) and
• Ashish Mittal v. SFIO [2023] 150 taxmann.com 104 (Delhi) (para 47).