While holding that economic offences, committed with “cool calculation” merit compounded scrutiny, the Delhi High Court dismissed the regular bail application of a director and KMP of an NBFC accused of siphoning Rs. 315 crores raised as debt from investors and creditors. The Court held that in cases of economic offences involving siphoning and diversion of funds from companies through related-party transactions and shell entities, the High Court cannot grant bail mechanically by merely observing that the case arises out of a commercial transaction and the dispute is of a civil nature, as held by the Supreme Court in Centrum Financial Services Ltd. v. State of NCT of Delhi [(2022) 13 SCC 286].
The Court pointed that the relevant considerations for grant of bail include the nature and seriousness of the offence, the character of the evidence and circumstances peculiar to the accused, the likelihood of the accused fleeing from justice, the impact of release on prosecution witnesses and society, and the likelihood of tampering, as enumerated by the Supreme Court in Anil Kumar Yadav v. State (NCT of Delhi) [(2018) 12 SCC 129].
The Court held that where the applicant is a Director and Key Managerial Person of the company with dominion and control over its funds, and is found to have actively participated in board meetings, approved board resolutions, sanctioned loan transactions without proper due diligence, and facilitated diversion of funds through related-party transactions in violation of approved board resolutions, the grant of bail is not warranted, particularly where the applicant has a history of non-cooperation, violated court undertakings, and remained an absconder for a substantial period.
A Single Judge Bench of Justice Purushaindra Kumar Kaurav observed that for the purposes of establishing criminal breach of trust, the entrustment of property need not necessarily be of the complainant themselves, as the wheels of criminal law can be set in motion by any person and there is no locus standi that a complainant needs to prove in order to inform investigative agencies about the commission of a cognizable offence. The Court observed that a director is not only an agent but is in the position of a trustee of the company’s money and property, and therefore has dominion and control over the same.
The Court rejected the applicant’s contention that all loans, except one, had been repaid, observing that it is the original act of misappropriation, siphoning off, diversion and misutilisation that forms the offending act, and subsequent repayment, which may have happened with collusion, has no bearing on the same. The Court further observed that the management of the company is separate from its owners, i.e., the shareholders, and whatever be the shares held by the applicant, the fact that he is the Executive Director of ECL is the material fact having a bearing on the allegations.
The Court noted that economic offences deserve a compounded scrutiny, as financial crimes take place with cool calculation with the sole intent to hurt and injure the victims, and while conventional crimes may occur owing to a rise in passions, a financial crime is premeditated. The Court also noted that the applicant had violated his own undertaking given before the Court on Jan 15, 2026 to join the investigation, and despite specific written intimations, he failed to join the investigation.
The Court further observed that the accused persons had been undertaking various transactions on a daily basis below the limit of Rs. 10 Lakhs in a manner such that they were not required to be brought to the notice of the Observer appointed by the NCLT, in an attempt to render the Supreme Court’s order futile. The Court also took note of the fact that the State had filed an application seeking cancellation of bail granted to co-accused Mr. Bagla on the grounds that he had siphoned off money after being enlarged on bail, and observed that the possibility of the present applicant, a Chartered Accountant who remained successful in evading arrest for 5 full months, not making himself available for trial and/or tampering with the complex financial trails, cannot be ignored.
Briefly, the applicant, Achal Kumar Jindal, who is the Executive Director of M/s Exclusive Capital Limited (ECL), an NBFC, sought regular bail in connection with FIR registered at Police Station Economic Offences Wing (South), Delhi, for offences punishable under Sections 420, 409, 468, 471, 477A and 120B of the Indian Penal Code, 1860. The FIR was registered on the complaint of Mr. Satish Kumar Aggarwal and Ms. Kanta Agarwal, alleging criminal breach of trust, cheating, criminal conspiracy, misappropriation and diversion of funds of ECL through related party transactions and fabricated documents, against the Directors and Key Managerial Persons of ECL, including the applicant.
It was alleged that the accused persons, being under a fiduciary duty to utilise ECL’s funds for the benefit of the company and shareholders, siphoned off and diverted funds of investors and creditors to the tune of Rs. 315 Crores, which had been raised as debt for expanding operations and increasing shareholder value. The chargesheet disclosed a three-fold modus operandi: first, undertaking related-party transactions by offering loans without any security or interest, the beneficiaries of which were ultimately the accused persons; second, offering loans to entities with no business or repayment capacity without obtaining any security or initiating recovery in case of default; and third, purchasing luxury cars from related entities at inflated prices without any board approval, which were not used for business purposes.
Illustratively, ECL transferred Rs. 9.09 Crores to M/s Luxus Retail Pvt Ltd. (in which the applicant is a Director and Shareholder), which was subsequently squared off through an inflated invoice reflecting the sale of a used Bentley Mulsanne car, even though the actual cost of the car was only Rs. 6.81 Crores. Further, ECL granted unsecured loans of Rs. 17 Crores to M/s Sulojay Realty Pvt Ltd. (in which the applicant is a Director), a company with no business operations, revenue or unencumbered assets, in violation of ECL’s own Board Resolution dated Sep 27, 2022 restraining transactions above Rs. 10 Crores with related parties in a financial year.
The applicant was found to be the authorised signatory of ECL’s bank accounts and authorised to execute documents on behalf of ECL, and despite being a Chartered Accountant, he was not drawing a salary as Executive Director, which was indicative of compensation through other means. The applicant had earlier sought quashing of the FIR, wherein he gave an undertaking that he would join the investigation as and when directed by the IO, which undertaking was violated by him. The applicant remained an absconder for about 5 months and surrendered only after proceedings for declaring him as a proclaimed offender were initiated, and even during the one-day police custody granted, he did not extend cooperation to the police.
