Bhushan Steel ex-promoter to remain out on interim bail; SC transfers case to itself

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New Delhi | Published: September 5, 2018 2:31:17 AM

The Supreme Court on Tuesday continued the Delhi High Court order that granted interim bail to Bhushan Steel’s erstwhile promoter Neeraj Singhal who was arrested by the Serious Fraud Investigation Office.

Bhushan Steel ex-promoter to remain out on interim bail

The Supreme Court on Tuesday continued the Delhi High Court order that granted interim bail to Bhushan Steel’s erstwhile promoter Neeraj Singhal who was arrested by the Serious Fraud Investigation Office (SFIO) for allegedly siphoning off more than Rs 2,000 crore from the loans availed by the company. However, it stayed a part of the HC order that directed how the SFIO should conduct proceedings in the case.

A bench comprising Chief Justice Dipak Misra and justices AM Khanwilkar and DY Chandrachud stayed the operation of the HC order but continued the interim relief granted to Singhal subject to conditions imposed by the HC for his release and additionally to report to the concerned officer of SFIO on every Monday and Thursday and on such other day or time as directed by the officer concerned.

“We make it clear that the directions given in the interim order shall remain stayed in view of the order of stay of operation of the impugned order, in particular, paragraph 71(iv) of the impugned order, namely, Singhal shall not be compelled by the SFIO to sign his statement under Section 217(4) read with Section 217(7) of the Companies Act,” the top court said.

“Considering the fact that prima facie we find that the observations made in the impugned order may have far reaching consequences and deprive the Competent Authority or the Statutory Authority to proceed in the matter in accordance with the provisions of the Companies Act, 2013 in respect of investigations and including filing of complaint/police report concerning the offences involving serious financial frauds or economic misdemeanor, the impugned order, therefore, deserves to be stayed.

While transferring to itself the Singhal’s petition pending before the HC, it also granted liberty to SFIO to file a separate application seeking recall of interim protection or for modification and/or imposing further conditions for the release of Singhal.

The order came on two appeals filed by SFIO and the government opposing the interim bail granted to Singhal on the grounds that funds were siphoned off by Singhal using more than 80 shell companies. Singhal, who is the first person ever to be arrested by the SFIO after it was granted the power to arrest in August 2017, has been in the judicial custody since August 8.

The SFIO had arrested him in relation to investigations into the affairs of Bhushan Steel and Bhushan Steel and Power, pursuant to a May 2016 order of the Centre under the Companies Act. After insolvency resolution, the ownership and control of BSL was transferred to the Tata Group.

Challenging Section 212(6)(ii) of the Companies Act, 2013, a writ of Habeas Corpus filed by Singhal’s mother against his arrest had alleged that his arrest was illegal as no grounds for arrest were communicated to him orally or in writing by the probe agency at the time of arrest.

She said that the provision imposed unreasonable restrictions for grant of bail to persons arrested under the Act, thereby being violative of fundamental rights.

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