Bombay HC Quashes Non Bailable Warrant Issued Against Former NSEL Director [Read Judgment]

The Bombay High Court quashed and set aside a non-bailable warrant issued against one Vaidyalingam Hariharan, former Director of National Spot Exchange Limited. Court held that the said NBW issued by an MPID Court was "unnecessary, unjustified and result of non-application of judicial mind".

Division bench of Justice Indrajit Mahanty and Justice AM Badar heard the appeal filed by Hariharan challenging order of issuance of non-bailable warrant by Special Judge, MPID Court.

Case Background

The Economic Offences Wing investigating the NSEL scam had filed an application before MPID Court alleging that the appellant was a whole time Director of NSEL from May 2005 to June 2011 and was also a "key management person". Also, the appellant had left the country to look after Singapore Exchange of Financial Technologies Singapore PTE Ltd, a subsidiary company of 63 Moon Technologies Ltd. (erstwhile FTIL).

It was further alleged that the appellant was responsible for all criminal activities of NSEL including illegal pair contracts, not keeping sufficient stocks in NSEL Godowns, fictitious trades on NSEL platform, misuse of SGF fund. He was in loop through email with CEO Anjani Sinha and others while taking important decisions and thus he was involved in day to day affairs of the company.

EOQ alleged that the appellant was one of the absconding accused and though the Investigating Officer had tried to contact the appellant through various modes of communication but same proved to be futile.

Submissions

Advocates Sanjeev Kadam, Pankaj Uttaradhi and Sabeena Mahadik appeared on behalf of the appellant, whereas Advocate Rebecca Gonsalves appeared for the State (EOW).

Kadam argued that the said order issuing NBW against Hariharan was passed without applying judicial mind and in a mechanical manner. He asserted that his client had appeared before the investigating officer in the case as and when required before leaving the country in 2011. However, pointing to the affidavit filed by ACP, Economic Offences Wing, NSEL SIT, Mumbai, Kadam said it clearly indicates that the prosecution was aware that the appellant had left the country in the year 2011.

Hariharan resigned from NSEL on December 20, 2011, after that he left for Singapore and started working in United States since June 2014, Kadam submitted. He further argued that if the investigating authorities required his client's presence such information could have been obtained from the appellant's counsel, who was already appearing in a parallel proceeding relating to attachment of immovable properties belonging to the appellant pending before the same court.

Judgement

Court examined judgement of the Supreme Court in Inder Mohan Goswami and another vs. State of Uttaranchal and others which deals with issue of personal liberty and interest of the State. the said judgement also elucidates when non-bailable warrants should be issued.

The bench noted that the appellant has complied with his undertaking submitted before the High Court and has appeared on several dates before the Investigating Officer. Quashing the NBW, Court observed-

"We are of the considered view that in the present fact situation, necessary steps required to be taken by the investigating authorities to summon a person in the present case were wholly inadequate. The Investigators were fully aware that the appellant had left India in the year 2011; that they had initiated necessary steps to attach the immovable assets of the appellant and the appellant was contesting that matter and had appeared through Counsel.

We are of the considered view that the telephone number on which attempts were made to contact the appellant was erroneous and the investigating officer should have also issued a summons by serving it through Counsel appearing for the appellant before the same court, of course in a parallel proceeding regarding attachment.

Also, the appellant has been referred to as an accused in various paras of the affidavit filed by the investigating officer, yet admittedly, he has not been named as an accused in any of the charge sheets submitted till date. Even though investigation is still going on for more than six years and four supplementary charge sheets have also been filed.

Consequently, while the investigation is still in progress, we are of the considered view that issue of NBW in the present situation was wholly unnecessary, unjustified and result of non-application of judicial mind."

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