Supreme Court defers bail plea of fraudulent merchanting trade owner

The Supreme Court deferred the bail plea of Sujay U. Desai, Director and CEO of M/s F.I.L. Public Limited Company who was alleged for running a fraudulent Merchanting Trade (MT) business and submits deceptive statements/financials to various Banks to avail credit facility in the form of opening of Letter of Credit, thereby caused loss to Public Sector Banks. The Petitioner Sujay U. Desai, challenged the judgment dated 28.01.2022 of Allahabad High Court. Senior Advocate Siddharth Aggarwal and Mukul Rohatgi appeared for Sujay U. Desai, while on the other hand, Sr. Adv K.M. Natraj represented on behalf of Serious Fraud Investigation Office. The Bench of Justice D.Y.Chandrachud and Justice Surya Kant issued notice and granted leave of the Petitioner on 14.03.2022.
Senior Counsel Siddharth Aggarwal makes opening statement by arguing before bench that he is languishing in Judicial Custody since 2020 i.e. approximately 2.5 years out of the maximum prescribed sentence of 3 years as mentioned under section 447 of Companies Act,2013.

The term of punishment is 10 years which can be extended to under section 447 of Companies Act,2013 submits Siddharth, for Petitioner.

For SFIO , K.M. Nataraj argues before the Division Bench of the apex court that there has been a a siphoning of 800 crores amount, which is on record.
Justice D.Y. Chandrachud submits that there are 69 accused persons involved in the said offence and they are all in abroad wherein they are yet to be traced.
SFIO submissions is that despite some of them could not b traced, the ld. Special court framed charges and went ahead with it.

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Section 447 companies act prescribes the term of punishment of minimum 3 years of jail for committing the fraud, states Justice Chandrachud.

J.Chandrachud asks senior counsel Nataraj, appearing for investigation agency - How are you going to catch 69 persons living in abroad?
J. Kant further states that – atleast 18 accused persons are living in abroad. What is the guarantee that you are going to nab them on 4th June.
J. Kant further says that You are required to set procedure , follow it. Trial has adjourned time and again.
Nataraj prays the Bench that on the grounds of parity, bail cannot be granted to the Petitioner.
Both got anticipatory bail , Justice Surya Kant observes.
Mr. Rohatgi appearing for Sujay U. Desai, Director and CEO of M/s F.I.L. Public Limited Company, submits that I have been granted bail by Enforcement Directorate. Not only that I have already been granted interim bail once.
We filed petition before the High Court and RBI order got it quashed, submits Mr. Rohatgi.
The High court of Allahabad while dealing with the bail application preferred u/s 439 CrPc , dismissed the same by holding that the offence committed by Petitioner is an economic offence of huge magnitude affecting the economy of the nation and interest of public/State and, therefore, requires a stringent approach for grant of bail. The offence has been committed with prior planning with an eye on personal profit totally disregarding the interest of the community and causing damage to the economy and ignoring national interest.

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Ld. Single Judge, Shekhar Kumar Yadav, while dismissing bail, relied upon case of Anil Kumar Yadav vs. State (N.C.T.) of Delhi and another, (2018 (1) CCSC 117) which held that the mere fact that the accused is in custody for more than one and half years, may not be a relevant consideration to release such accused on bail .
Sujoy U. Desai, CEO of M/s F.I.L. Public Limited Co. arrested in pursuance of a complaint filed by SFIO team in connection of violation of Section 447 of Companies Act. further the complaint was registered by filed on 15.5.2020 before concerned Court against 69 accused persons.
The allegations against Director and CEO Mr. Sujay U. Desai were that he along with similarly placed other co accused persons knowingly submitted Letter of Credit opening request along with false/ deceptive and misleading documents so as to induce the banks to rely upon the said documents and to give credit facility to them in the form of opening of Letter of Credit.
They were also secured financing for their MT Business and violated regulations/guidelines issued by RBI.
The averment also states that the director Sujoy caused financial loss of Rs. 7820/- crores to Public Sector Banks in collusion with other co accused foreign entities and other Directors.
SFIO alleged that the Petitioner and other persons caused wrongful loss of Rs. 4041/- crores to Public Sector Banks. The petitioner Sujoy with the help of others manipulated with books of FIL by showing fake and unrecoverable MT Trade receivables to tune of Rs. 3537 crores to deceive Public Sector Banks and allured them to obtain credit facilities.
The bail application filed by Petitioner in case of SFIO V. Rotomac Global Pvt. Ltd. under Section 212 (14) of the Companies Act, 2013 in respect of offences under Sections 36(c) r/w/s. 447, 448 of the Companies Act, 2013 and Section 211 r/w/s 628 of the Companies Act, 1956

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