HC seeks govt's stand on Bhushan Steel's promoter's plea against his arrest

The Delhi High Court on Monday sought the Centre's stand by tomorrow on Bhushan Steel's erstwhile promoter Neeraj Singal's plea against his arrest by the Serious Fraud Investigation Office (SFIO) for allegedly siphoning off funds worth over Rs 20 billion.

A bench of justices S Muralidhar and Vinod Goel issued notice to the Centre on Singal's plea, which sought bail apart from challenging the powers of arrest granted to SFIO in August last year under the Companies Act.

During the hearing, the bench appeared inclined to grant interim bail with the conditions that Singal would be available for questioning and cannot travel abroad without permission.

 

"What is the need for continued custody? Somebody's personal liberty is involved. Tell us what the serious fraud is," the bench said and added that use of adjectives like "serious fraud" would not suffice before the court.

The court listed the matter for hearing tomorrow after Additional Solicitor Generals (ASGs) Tushar Mehta and Maninder Acharya "vehemently opposed" grant of bail on the grounds that investigation was at an initial stage and serious fraud has been allegedly committed by Singal, who was arrested on August 8.

The ASGs also sought time till August 24 to file their reply, which was opposed by senior advocates Kapil Sibal and Siddharth Luthra, appearing for Singal.

Sibal, along with advocate Pramod Kumar Dubey, also said that his client has been granted bail in a connected case being investigated by the CBI.

The bench declined the Centre's repeated oral plea to hear the matter on August 24, saying a person's "liberty was at stake".

The court directed the SFIO, which comes under the central government, to file a short affidavit and also bring the relevant records tomorrow.

It also asked the Centre why it allowed the Tatas to take over Bhushan Steel if there was criminality associated with the latter.

"Did the corporate criminality emerge after take over by Tatas? If the criminality was already there, why did you permit the take over or sale," the court asked the Centre and said it wants an answer to -- "what happens to the criminal liability after a take over? Can it be transferred?"

Singal was arrested in relation to an investigation being carried out by SFIO into the affairs of Bhushan Steel Ltd and Bhushan Steel and Power Ltd pursuant to a May 2016 order of the central government under the provisions of the Companies Act.

The plea of habeas corpus, filed by Singal's mother, has sought his release from alleged illegal arrest and custody.

He was arrested on August 8 and has been in judicial custody since then.

The court was of the view that there was merit in the petitioner's plea challenging the validity of the power of arrest of the SFIO.

However, the government was opposed to grant of any interim relief, saying it would amount to allowing the petitioner's plea.

In his plea, Singal has challenged certain provisions of the Companies Act for grant of bail to persons arrested under the Act, claiming that it was violative of fundamental rights as it imposed "unreasonable restrictions".

The petition has claimed that the arrest was illegal as no grounds or reasons of arrest were communicated to him, orally or in writing, by the probe agency at the time of arrest.

It added that the power of arrest cannot be exercised retrospectively for the offences allegedly committed prior to coming into force of the provisions of the Act.

According to the SFIO officials, it was the first time that the agency has arrested a person for fraudulent activities.