The Delhi High Court today asked the Centre what was the need for continuing the judicial custody of Bhushan Steel's erstwhile promoter Neeraj Singal if the government has determined that he is guilty of allegedly siphoning off funds worth over Rs 20 billion.
A bench of Justices S Muralidhar and Vinod Goel said that under the powers of arrest granted to the Serious Fraud Investigation Office (SFIO), the agency has to be fully satisfied of the guilt of a person before taking him into custody.
"They (SFIO) have set a high threshold for themselves," the court said and asked the agency "if you have arrived at determination of guilt, then what is the need for judicial custody".
The court also observed that the agency, which comes under the Ministry of Corporate Affairs, has "made a hodge-podge" of the matter. SFIO was granted the power of arrest in August last year.
Singal's lawyers -- senior advocates Kapil Sibal and Siddharth Luthra -- told the court that their client's arrest and custody was illegal and therefore, the SFIO should not be permitted to question him till the plea seeking his release on interim bail is decided.
The SFIO's lawyers told the bench there was no need for any interim order, as it will not press its application before a special judge of the trial court for questioning Singal, who was also represented by advocate Pramod Kumar Dubey.
SFIO's application for permission to question Singal is listed for hearing before the trial court tomorrow.
In view of the statement made by the agency, the high court listed the matter for further arguments tomorrow when SFIO will argue on why Singal's judicial custody should continue.
Singal was arrested on August 8 in relation to an SFIO investigation into the affairs of Bhushan Steel Ltd and Bhushan Steel and Power Ltd, pursuant to a May 2016 order of the Centre under the Companies Act.
The plea of habeas corpus, filed by Singal's mother, has sought his release from alleged illegal arrest and custody.
The petition has also challenged certain provisions of the Companies Act on grant of bail to persons arrested under the Act, claiming that it was violative of fundamental rights as it imposed "unreasonable restrictions".
It has claimed that the arrest was illegal as no grounds for arrest were communicated to him orally or in writing, by the probe agency at the time of arrest. It also said 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.
Disclaimer: No Business Standard Journalist was involved in creation of this content
