Long Incarceration No Ground To Allow Successive Bail When First Plea Rejected By Passing Detailed Order: Punjab & Haryana High Court

The Punjab and Haryana High Court has dismissed a second petition filed by an accused in the SFIO investigation into the Adarsh Group of Companies seeking regular bail, holding that while a successive bail application is not barred per se, however mere long incarceration cannot be the sole ground to allow the plea.Justice Manisha Batra said, "Though, a second/successive regular bail application cannot be rejected solely on the ground of maintainability thereof, but for such petition to succeed, the petitioner is required to show some substantial change in circumstances. In the considered opinion of this Court, however, he has not been able to point out any such substantial change. Merely on the ground of his prolonged incarceration, he cannot be held entitled to seek benefit of bail in this petition especially in the circumstance when his previous petition had been dismissed by passing a detailed order and that order stands upheld by Hon'ble Apex Court."The Court was hearing a petition seeking regular bail in a criminal complaint titled SFIO v. Adarsh Build Estate and Others, pending before the Special Court, Gurugram. The complaint was filed by the Serious Fraud Investigation Office (SFIO) for offences under various provisions of the Indian Penal Code, the Companies Act, 2013, and the Companies Act, 1956, including Section 447 of the Companies Act dealing with fraud.The proceedings stem from an order dated 20 June 2018 passed by the Ministry of Corporate Affairs (MCA), directing SFIO to investigate the affairs of the Adarsh Group of Companies and 125 LLPs under Section 212 of the Companies Act. The investigation revealed alleged large-scale siphoning of funds belonging to the Adarsh Credit Cooperative Society Limited (ACCSL), affecting nearly two lakh depositors and involving transactions running into several crores.The petitioner was arrayed as Accused and was summoned under Section 447 of the Companies Act. He was arrested on 22 July 2022. It was alleged that as an authorised signatory and 18% partner in a real estate project of Adarsh Build Estate Limited, he siphoned off approximately ₹85 crore, misusing his position.The petitioner contended that he had been in continuous custody for over three years, that charges had not yet been framed, and that the trial involving over 100 companies and 75 individuals was unlikely to conclude in the near future. It was argued that prolonged incarceration amounted to punishment without trial, violating Article 21 of the Constitution.Reliance was placed on several Supreme Court decisions, including Sujay U. Desai v. SFIO, Jainam Rathod v. State of Haryana, and Union of India v. K.A. Najeeb, to underscore that the stringent twin conditions under Section 212(6) of the Companies Act could be relaxed in cases of inordinate delay.Opposing the plea, SFIO argued that the petition was not maintainable, as the petitioner's earlier bail plea had been dismissed by the High Court in November 2023, and the dismissal was subsequently upheld by the Supreme Court in May 2024. It was further contended that there was no material change in circumstances since the earlier rejection.SFIO emphasised that the petitioner was involved in a serious economic offence, that proclamation proceedings had earlier been initiated against him, and that there was a risk of absconding if released on bail.After hearing the submission, the High Court observed that although a second or successive bail application cannot be rejected solely on the ground of maintainability, the petitioner must establish a substantial change in circumstances for the Court to reconsider the matter.It noted that, "the petitioner has been summoned under Section 447 of the Companies Act which is a serious offence inviting punishment of imprisonment up to ten years. He formed a partnership firm with one of CUIs of Adarsh Group of Companies and as per allegations, swindled an amount of Rs.85 crores by misusing his position as an authorized signatory of ABEL project."While acknowledging that prolonged incarceration and trial delay can, in appropriate cases, justify dilution of the twin conditions under Section 212(6), the Court noted that the petitioner's previous bail rejection had been affirmed by the Supreme Court and no new material or change in circumstances had been shown.It considered that the allegations involved a serious economic offence with huge public loss and Section 447 offences carry punishment up to 10 years' imprisonment.The Court held that mere passage of time in custody, without more, was insufficient to grant bail in the facts of the case.While dismissing the bail petition, the High Court directed the trial court to expedite the proceedings, including by separating the trial of accused persons whose presence has not yet been secured, to avoid further delay.Mr. Vinod Ghai, Senior Advocate with Mr. Arnav Ghai, Advocate and Mr. Nitin Gupta, Advocate for the petitioner.Ms. Puneeta Sethi, Senior Panel Counsel and Mr....

Long Incarceration No Ground To Allow Successive Bail When First Plea Rejected By Passing Detailed Order: Punjab & Haryana High Court

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Long Incarceration No Ground To Allow Successive Bail When First Plea Rejected By Passing Detailed Order: Punjab & Haryana High Court

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