Economic Offences Constitute A Class Apart: SC Cancels Bail Granted To Bhushan Steel Ltd CFO Nittin Johari [Read Judgment]

Serious Fraud Investigation Office had approached the Apex Court challenging the bail granted by the Delhi High Court to Nittin Johari.

Allegation against Nittin Johari, is that he has been a close associate of the promoters, Brij Bhushan Singal and Neeraj Singal and played a central role in perpetrating frauds. Brij Bhushan Singal and Neeraj Singal, assisted by employees and close associates, are accused of having used a complex web of 157 companies to siphon off funds from BSL for various purposes, and also fraudulently availed of credit from various lender banks and manipulated the books of accounts and financial statements of BSL, causing wrongful loss to banks and financial institutions amounting to Rs. 20,879 crores and causing wrongful gain to the promoters and their family members, amounting to around Rs. 3500 crores.

Allowing the appeal, the bench comprising of Justice NV Ramana, Justice Mohan M. Shantanagoudar and Justice Ajay Rastogi observed that the High Court has failed to apply its mind to all the circumstances that were required to be considered while granting bail, particularly in relation to economic offences

The bench noted that that even as per Section 212(7) of the Companies Act, the limitation under Section 212(6) with respect to grant of bail is in addition to those already provided in the Cr.P.C. It said:

"Thus, it is necessary to advert to the principles governing the grant of bail under Section 439 of the Cr.P.C. Specifically, heed must be paid to the stringent view taken by this Court towards grant of bail with respect of economic offences."

The bench also referred to these observations made in the judgment in Y.S. Jagan Mohan Reddy v. Central Bureauof Investigation :

• Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deeprooted 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 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.

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