A Delhi court Friday dismissed a bail plea of former Fortis Healthcare promoter Shivinder Mohan Singh in a case related to alleged misappropriation of funds at Religare Finvest Ltd (RFL), saying economic offences having deep rooted conspiracies needed to be considered as grave offences affecting the economy of the country.
It also said that the possibility of the witnesses being influenced by Shivinder Singh cannot be ruled out as during investigation statements of directors of the companies to which loans were extended by RFL were recorded and they were found to be associated with him.
Additional Sessions Judge Sandeep Yadav said it was prima-facie established from the investigation that Shivinder Singh in conspiracy with others caused wrongful gain to RFL to the tune of Rs 2,397 crore.
"The money which was given by RFL to 14 companies ultimately reached RHC Holding Pvt Ltd, a company controlled and owned by Shivinder Mohan Singh and Malvinder Mohan Singh. Thus, applicant (Shivinder) enriched himself illegally at the cost of RFL. Applicant was exercising deep control over the affairs of RFL through REL.
"Various committees which approved the loan from RFL had members from RFL and REL. Thus the applicant cannot distance himself from the affairs of RFL. It is the case involving huge economic fraud. Offences committed in such cases are to be treated as serious offences," the court said in its order.
It further said in the economic offences, it was the magnitude of the offence which will determine the severity of the offence.
"It has been held in catena of judgments that economic offences constitute a class apart and need to be visited with different approaches in the matter of bail. Economic offences having deep rooted conspiracies and involving loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country," it said.
"Loans were extended by RFL to the entities only on the ground that these entities were known to the promoters. Thus, prima facie it is established that RFL was put to wrongful loss and wrongful gain was extended to RHC Holding Pvt Ltd which is controlled by Malvinder Mohan Singh and Shivinder Singh," it said.
The court further said, "Considering the seriousness and gravity of allegations, particularly the magnitude of amount involved besides the possibility of accused tampering with evidence and influencing witnesses, it is concluded that accused is not entitled to bail."
It, however, clarified that nothing stated in the order would tantamount to the merits of the case.
Shivinder Singh's brother Malvinder Singh, 46, also a former Fortis Healthcare promoter, former CMD of Religare Enterprises Ltd (REL) Sunil Godhwani, 58, Kavi Arora, 48, and Anil Saxena were arrested by the Economic Offences Wing (EOW) of Delhi Police last year, for allegedly diverting RFL's money and investing in other companies.
During the hearing, senior advocate N Hariharan, appearing for Shivinder Singh, told the court the entire evidence was documentary in nature and has been seized and thus there was no possibility of evidence being tampered with by him.
"Transaction in question was purely mercantile transaction which went awry and hence no criminality is involved. RFL is an independent entity and can take its own decision and the applicant/accused (Shivinder) was not involved in the decision making process of RFL," his counsel argued.
N Hariharan further argued that the kinds of loans which were extended by RFL in the present case are practice in the mercantile world and there was nothing illegal in the transaction.
"RBI cautioned RFL but did not take any action against RFL to prevent it from extending loans which shows that no irregularity was committed by RFL. Applicant was never on the board of RFL and hence not responsible for loans granted by RFL. Every transaction had to go through various committees in which the accused has no say," he argued.
Additional Public Prosecutor L D Singh, appearing for the police, opposed the bail plea saying huge financial fraud has been committed in the case and hence, Shivinder Singh was not entitled for bail.
Senior advocate Mohit Mathur, appearing for complainant RFL, also opposed the bail plea saying RFL did not get back its money and suffered losses because of the acts and omissions of Shivinder Singh and other persons.
He alleged it was the public money which was swindled by Shivinder Singh.
Mr Mathur further said the related party transaction committee had members from RFL and REL and therefore, Shivinder Singh cannot contend that he has no role in the transaction of RFL.
"Shivinder was also the director of two shell companies namely Fern Healthcare and Modland Company to whom loans were extended and thus, his objective was to keep the money his company," he alleged.
Advocate Sandeep Das, also appearing for RFL, submitted that further investigation was in progress and releasing Shivinder Singh on bail may hamper further investigation.
The EOW registered an FIR in March last year after it received a complaint from RFL's Manpreet Suri against Shivinder Singh, Sunil Godhwani and others, alleging that loans were taken by them while managing the firm but the money was invested in other companies. ED lodged a money laundering case based on this.
RFL is a group firm of REL, which was earlier promoted by Malvinder Singh and his brother Shivinder.