Deekshitha Sharmile

The High Court of Punjab and Haryana Single Bench of Justice Manisha Batra dismissed a second regular bail petition by an accused facing prosecution arising from an SFIO probe into the Adarsh Group of Companies, linked to alleged diversion of depositors’ money from a credit cooperative society through group entities and real-estate transactions. The Court held that a successive bail plea is not automatically barred, but the applicant must demonstrate a material change in circumstances, which was not shown. It further found that continued custody, by itself, could not justify bail, particularly where an earlier detailed refusal had already been affirmed by the Supreme Court. The trial court was directed to make efforts to expedite the proceedings.

The matter arose from an investigation ordered by the Ministry of Corporate Affairs in June 2018 into the affairs of Adarsh Group of Companies and its associated limited liability partnerships. The Serious Fraud Investigation Office conducted the probe on allegations of siphoning funds belonging to depositors of Adarsh Credit Cooperative Society Limited. The petitioner was arrayed as one of the accused in the subsequent complaint filed before the Special Court at Gurugram.

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The petitioner was alleged to have misused his position as an authorized signatory in a project of Adarsh Build Estate Limited, one of the companies under investigation. It was claimed that he siphoned off funds amounting to several crores, including withdrawals of advances, part of which remained unexplained. He was arrested in July 2022.

The petitioner sought bail, contending that he had already spent over three years in custody, had cooperated during investigation, and had repaid significant sums through banking channels. He argued that prolonged incarceration without trial violated constitutional rights. The respondent opposed bail, citing the seriousness of the offence, past conduct of avoiding apprehension, and absence of material change in circumstances. The statutory provisions invoked included Sections 417, 418, 420, 477-A, 120-B IPC, Sections 147 and 447 of the Companies Act, 2013, and related provisions of the Companies Act, 1956.

Justice Manisha Batra recorded: “There was no question of an accused getting an automatic right to bail if he appears before the Court pursuant to the summons issued by a Court.” The Court stated: “The petitioner has been summoned for commission of offence punishable under Section 447 of the Companies Act for committing an economic offence.”

It was observed: “Such offences constitute a class apart and need to be visited in a different approach in the matter of bail.” The Court noted: “As such offences are having deep rooted conspiracies and involve huge loss of public funds, they need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby passing serious threat to the financial health of country.”

The Court referred to statutory provisions: “No person accused of any offence under Section 447 of the Companies Act, shall be released on bail on his own bond unless the public prosecutor is given an opportunity to oppose the application for such release; and where the public prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail.”

The Court recorded: “The conditions enumerated in this section were mandatory and should be complied with even in support of an application for bail moved under Section 439 of the Code of Criminal Procedure.” It was further stated: “The limitation under Section 212(6) with respect to grant of bail is in addition to those already provided in Cr.P.C. and that it is thus necessary to advert to principles governing grant of bail under Section 439 of Cr.P.C.”

The Court noted: “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.”

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Finally, the Court observed: “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 directed: “Accordingly, the same is dismissed. The trial Court is, however, directed to expedite the trial by making all possible efforts which may include separation of trial against the accused whose presence has not been secured so far. The observations made hereinabove shall not be construed as an expression of opinion on the merits of the case and shall not influence the outcome of the trial. Since the main petition has already been decided, pending application, if any, is rendered infructuous.”

Advocates Representing the Parties

For the Petitioners: Mr. Vinod Ghai, Senior Advocate with Mr. Arnav Ghai, Advocate and Mr. Nitin Gupta, Advocate
For the Respondents: Ms. Puneeta Sethi, Senior Panel Counsel and Mr. Y.S. Thakur, Advocate

Case Title: Rajeev Kumar Rana vs. Serious Fraud Investigation Office
Neutral Citation: 2025:PHHC:177489
Case Number: CRM-M-23555-2025
Bench: Justice Manisha Batra