[Delhi HC] Evasive Replies During Interrogation Cannot Disentitle A Person From The Grant Of Bail

The Delhi High Court, in Bindu Rana vs Serious Fraud Investigation 2023 SCC OnLine Del 276, has recently held in a decision that evasive replies during the interrogation cannot disentitle an accused from the grant of bail, thus protecting the applicant's right against self-incrimination.

Brief Facts

• The Serious Fraud Investigation Office ('SFIO') conducted investigation u/s 212 of the Companies Act, 2013 ('Companies Act') against one Educomp Solutions Limited and several related / group companies ('Educomp').
• The Applicant, Bindu Rana, was a director in certain Educomp companies and also holding certain executive responsibilities including being the Ex-Research Head of Educomp. She also allegedly used to sign the financial statements of certain group companies.
• She also received certain huge amounts of monies into her personal bank account from the promoter of Educomp and from his daughter, thus allegedly facilitating the siphoning off of funds from Educomp for various purposes, including indirectly buying a land to protect the same from being sold under corporate debt restructuring and also to build a school.
• The applicant was charged under Section 447 of the Companies Act and arrested on 14.10.2022. The SFIO filed their complaint on 12.12.2022.

Held

• The court held that the argument by SFIO that the applicant was evasive in her interrogation cannot be an allegation of such nature so as to disentitle an accused from the grant of bail, particularly when the investigation in relation to the applicant is stated to be complete (the Court pointed out that it is not SFIO's argument that the complaint filed was incomplete).
• The court held that though it is true that no person accused of an offence under Section 447 shall be released on bail unless the Court is satisfied regarding the twin conditions prescribed under section 212(6) of the Companies Act, a woman is exempted from these conditions. Nevertheless, this doesn't mean that a woman should necessarily be released on bail and the basic jurisprudence to bail still has to be applied.
• The economic offences are considered under the category of grave offences and are a factor that has to be kept in mind in addition to the triple test. However, only because the allegations are of grave economic offences, it is not a rule that the bail has to be denied in every case.
• The investigation in the present case is already complete, which has culminated in a criminal complaint filed before the concerned Special Court. Thus, the possibility of tampering with evidence or the chances of influencing the witnesses is not there. Further, the flight risk can be controlled by putting a few conditions on the applicant.
• Moreover 53 out of 55 accused persons including the main accused have not been arrested by the SFIO, thus, it doesn't make much sense to keep the applicant in custody.

Our Analysis

Right against self-incrimination is enshrined as a fundamental right in our Constitution, under Article 20(3). The courts, as a matter of procedure, are used to understanding this aspect and refrain from allowing questions, either during examination-in-chief or cross-examination, which impinge on this right. Any questions posed to a witness which he denies to answer pleading the right against self-incrimination ideally should not be asked.

However, with the power given to authorities to record statements which are admissible as evidence in law (e.g., under section 217(4) of the Companies Act, 2013, or section 50 of the Prevention of Money Laundering Act, 2002), much concern has arisen. Authorities are forceful in their questions and often go beyond the scope of this right, and when the witness or the deponent denies answering the same, this would form the basis of coercive action against him including arrest on the ground of non-cooperation. The key takeaway from this decision is that this right is sacrosanct and cannot be infringed, and authorities need to become habitual of accepting the pleading of this right during the recording of statements.

Another aspect in the present case relates to twin conditions. The decision has further cemented the proposition of law that the twin conditions prescribed under Section 212(6) for the bail will not be applied to women as recently, in the case of Komal Chadha v SFIO 2022 SCC OnLine Del 4543 the Delhi High Court had observed the same ruling. However, it is to be noted that though twin conditions may not apply while considering bail, this may not automatically entitle a person to bail unless s/he is thought fit to be granted bail u/s 439 of CrPC. [Read about the Komal Chadha decision here.]

January 30, 2023

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