Religare Finvest Scam: Delhi Court Dismisses Second Bail Application Of Religare's Ex Promoter Malvinder Mohan Singh

A Delhi Court on Thursday rejected the second bail application filed by Religare Finvest's ex Promoter, Malvinder Mohan Singh who, along with Shivender Singh, Sunil Godhwani, NK Ghoshal and others, is accused of committing financial fraud running into 2397 crores, which is dated to the period of their ownership of Religare Finvest.

Additional Sessions Judge Sandeep Yadav denied the bail application after observing thus:

"The present case also pertains to fraud of the magnitude of Rs.2397 crores. Public money to the tune of Rs.2397 crores has been swindled by applicant/accused in conspiracy with other accused Amount of Rs.2397 crores was siphoned off to other companies layer transaction in CLB."

FIR No. 50/19 was registered by Economic Offence Wing of Delhi Police on the complaint of Manpreet Singh Suri, Authorised Representative of Religare Finvest Limited under sec. 409, 420 and 120B of IPC.

According to the said FIR, the accused persons were alleged to have an absolute control in Religare Enterprises Ltd. and it's subsidiaries who allegedly put RFL in "poor financial condition" by advancing loan to companies having no financial standing and control by the said accused persons. According to the FIR, the accused persons in connivance with each other swindled public money to the tune of Rs.2397 crores.

Furthermore, it was alleged that such entities wilfully defaulted in repaying the loans and thereafter caused wrongful loss of about Rs. 2397 Crores to RFL. The FIR also states that the said discrepancies were noted by the Reserve Bank of India.

Malvinder Mohan Singh was arrested on 11.10.2019 in the present FIR. First charge sheet was filed on 06.01.2020 and cognizance of the offence was taken on 15.01.2020 by the Court. Thereafter, supplementary chargesheet was also filed in the matter.

Advocate Manu Sharma appearing on behalf of Singh submitted that RFL was made aware of the outstanding loan and therefore all the allegations levelled against him were false and baseless.

On the other hand, Additional Public Prosecutor LD Singh appearing for the State argued that the bail application should be rejected by putting reliance on the first bail application which was also rejected by the Court in 2020.

Holding that accused being a banker will be a public servant within the meaning of sec. 409 of IPC, the Court relied on the judgment of R. Venkatakrishnan Vs. CBI-AIR 2010 SC 1812 wherein the Apex Court held that sec. 409 classes together public servants, bankers, merchants, factors, brokers, attorneys and agents.

"Disclosure of transactions to the board is one thing while approval of related party transaction by board at various level as required by Companies Act is another thing. Thus, the reliance placed by Mr. Manu Sharma, ld. counsel for applicant/accused, on the statement of witnesses like Sachindernath who stated that transactions are being disclosed to the board are of no consequence as none of the witnesses have stated that related party transaction had approval of board various levels." the Court observed at the outset.

On the question of granting bail to the said accused, the Court placed reliance on the judgment of Y.S. Jagan Mohan Reddy Vs. Central Bureau of Investigation (2013) 7SCC 439 wherein the Apex Court observed that "The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing a serious threat to the financial health of the country. While granting bail, the court has to keep in mind the nature of accusations, the nature of evidence in support thereof, the severity of the punishment which conviction will entail, the character of the accused, circumstances which are peculiar to the accused, reasonable possibility of securing the presence of the accused at the trial, reasonable apprehension of the witnesses being tampered with the larger interests of the public/State and other similar considerations"

Therefore, while observing that the accused person along with other accused siphoned off Rs.2397 crores to other companies, the Court denied bail to Singh on account of the magnitude of the fraud and denial of first bail application.

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