The Detaining order by Hon Supreme Court of Sahara Subrata Roy

The Hon SC appears to have missed to read S.440 CrPC. The order violates that.

The Assessment

Not only the detaining of Mr Subrata Roy by Hon SC is flawed but the argument proposed on behalf of Mr Subrata Roy was out of the place.

The Problem in the argument

The Hon Apex court was bound to feel upset when a writ petition was filed against its earlier order. The judicial orders are not under the writ scrutiny as mistakenly believed by Sahara counsels, and we must not forget that these counsels were none other than the top most lawyers of this country. The Hon Apex Court was right in rejecting the writ leaving no scope for Mr Roy to come out.

The Hon Apex court in its order Dtd. 6^th May 2014  Subrata Roy Sahara Vs. Union of India and others really did leave nothing flattering for the top most lawyers of this country. Can it be imagined that Mr. Ram Jethmalani, Dr. Rajeev Dhawan, Mr. Rakesh Dwivedi, Mr. S. Ganesh, Mr. Ravi Shankar Prasad, all are lawyers of eminence, filed a writ petition to Supreme Court against the order of the Supreme Court only? It will not be far fetched to say that these top lawyers ensured continued incarceration of Subrata Roy, they started teaching legal niceties to Hon Supreme Court rather than concentrating on the immediate job in hand.

The Discussion

With this background what is the best course available with Mr Subrata Roy and other two directors to get released from the jail? Can’t these top lawyers and including Kapil Sibal do some legal justice to their client? Or have they stuck in a mess created by them?

The answer lies in the order of Hon Apex court Securities and Exchange  Board of India (SEBI) & Anr.Vs. Sahara India Real Estate Corpn. Ltd. & Ors Dtd 19.06.2015, the Para # 4 of this order is a silver lining for Mr Subrata Roy and other two directors, the same is reproduced below.

  

…………The matter came up for hearing on 26.03.2014 again and the three contemnors committed to judicial custody prayed for grant of bail on that day. The Court passed conditional order of bail on that day. The condition was that the contemnors deposit 10,000 Crores – 5000 crores in cash and balance of 5000 crores in the form of bank guarantee of a nationalised bank, to be furnished in favour of SEBI. It was specifically directed that upon compliance with these conditions the contemnors would be released from the custody…..

In various paragraphs of various orders, Hon Apex court has justified its stand almost claiming itself to be extremely powerful, almost justifying that for a larger public good individual liberty can be put to task. In fact at some places it is vague why these three gentlemen are behind the bars? Hence I have chosen this paragraph, which in simple terms means that Mr Subrata Roy and others have been granted conditional bail by the Hon Apex Court subject to their depositing Rs. 10,000 Crore.

The questions in front of these topmost lawyers of the country who charge hefty fee are very simple:

Q1. Is this condition justifiable?

Q2. Is this condition legal ?

Q3. Does Hon Apex Court has discretion if the same is not granted by the law?

In my humble opinion the answer to all these three questions is simple ‘NO’.

The Remedy

Argument is very simple and very straight forward.

Argument # 1

An immediate reference to Chapter No. 33 Section 440 CrPC helps and possibly acts as savior to all these three gentlemen. The same is being reproduced below,

440. Amount of bond and reduction thereof.

(1) The amount of every bond executed under this chapter shall be fixed with due regard to the circumstances of the case and shall not be excessive.

Do we have to really argue that an amount of Rs.10000 crore is not excessive for Mr Subrata Roy and other two directors? Can’t we get their personal last 5 years Income Tax returns to justify that they cannot organize that much money to secure their release? Will the Hon Apex Court take umbrage that this Rs. 10000 crore is not the bond but the money due? Would the top most court of this country really play with the words? Possibly the top most court of this country missed to assess the strength of S.440 CrPC granted by legislature to protect the liberty of its citizen, in case the courts put up a ridiculously high security for granting bail.

The Hon Delhi High court in Court On Its Own Motion vs Central Bureau Of Investigation on 28 January, 2004 rules as under..

........(vi) That the Court shall always keep the mandatory provisions of Section 440, Cr.P.C. in mind while fixing the amount of bail bond or surety bond which provides that the amount of bond shall never be "excessive" amount and take into consideration the financial condition, the nature of offence and other conditions, as "Excessive" amount of bond which a person is not in a position to furnish amounts to denial of bail in a non-bailable offence and conversion of bailable offence into non-bailable offence as the fundamental concept of granting bail on bond is security of appearance of the accused person to answer the charges and face the trial. Nothing more nothing less........


In Keshab Narayan Banerjee v. The State of Bihar, , while considering correctness of the order whereby the Court had directed that the accused shall furnish security of rupees one lakh in cash or in fixed deposit in any Nationalised Bank, in Bihar, with two sureties residing in the State of Bihar, each for a like amount, it was held by the Apex Court, thus : "... in the circumstances of this case, it virtually amounts to denial of bail itself." The Apex Court, therefore, reduced the amount of bail to Rs. 25,000 (Rupees twenty five thousand) with two sureties each for the like amount.

The Hon Madras High court has specifically responded to the this apparent mistake by the Hon Supreme Court in imposing this unmeetable condition for release of Subrata Roy and others.

after discussing various orders rules clearly that unacceptable and exorbitant conditions cannot be imposed while granting the bail.  The most of the operative part of the order is reproduced below. It is not to be forgotten that Hon apex Court has clarified that he is released on bail subject to payment of Rs. 10000 Crore, this condition is against the Hon Apex Court guidelines as well as S.440 CrPC.

The madras High Court in

Amaldoss vs State on 5 February, 2015

11. Keeping in view of the above, the issue for consideration is whether the Court below can insist for deposit of money as a condition for grant of bail to the petitioners?

12. In fact, this issue is no longer res integra as in catena of decisions, various High Courts as well as the Hon?ble Supreme Court have consistently held that imposing condition of depositing money is excessively onerous and unreasonable and such condition may even amount to denial of bail itself.

13. In ?Sreenivasulu Reddy versus State of Tamil Nadu? reported in (2002) 10 SCC 653, wherein, this Court granted anticipatory bail to the accused on condition to deposit total Rs.50 crores apart from other conditions, which was also complied with by the accused, however aggrieved by imposition of such condition, the accused preferred appeal before the Hon?ble Apex Court. While dealing with the same, the Hon?ble Supreme Court had emphasized that while exercising jurisdiction under Section 438(2) of the Cr.PC, the Court ought only to impose such conditions/terms for enlarging an accused on bail as would ensure that the accused does not abscond. In para 6, it has been held as under:

?6. Having considered the rival submissions and the provisions of Section 438 Cr. PC, we are of the considered opinion that the Court while exercising jurisdiction under Section 438 Cr. PC, must bear in mind and be satisfied that the accused will not abscond or otherwise misuse liberty and this can be ascertained from several factors like conduct of the accused in the past, his assets in the country and so on. But, while granting such anticipatory bail, though the Court may impose such conditions as it thinks fit, but the object of putting conditions should be to avoid the possibility of the person hampering investigation. The discretion of the Court while putting conditions should be an exercise of judicial discretion. ?.

14. In ?Sandeep Jain v. State of Delhi? reported in (2000) 2 SCC 66, wherein, a direction of the Metropolitan Magistrate, to deposit Rs. 2 lacs apart from furnishing of a bond of Rs. 50,000 with two solvent sureties as a condition precedent for bail, was held to be unreasonable. In ?Sheikh Ayub v. State of M.P.? (2004) 13 SCC 457, wherein, the Supreme Court deleted the direction to deposit a sum of Rs. 2,50,000/-, which was the amount allegedly misappropriated by the accused.

15. In ?Shyam Singh v. State? reported in (2006) 9 SCC 169, wherein, the Hon?ble Supreme Court, has held in para 4 as under :

?4. We are unable to appreciate even the first order passed by the Metropolitan Magistrate imposing the onerous condition that an accused at the FIR stage should pay a huge sum of Rs 2 lakhs to be set at liberty. If he had paid it is a different matter. But the fact that he was not able to pay that amount and in default thereof he is to languish in jail for more than 10 months now, is sufficient indication that he was unable to make up the amount. Can he be detained in custody endlessly for his inability to pay the amount in the range of Rs 2 lakhs? If the cheques issued by his surety were dishonoured, the Court could perhaps have taken it as a ground to suggest to the payee of the cheques to resort to the legal remedies provided by law. Similarly if the Court was dissatisfied with the conduct of the surety as for his failure to raise funds for honouring the cheques issued by him, the Court could have directed the appellant to substitute him with another surety. But to keep him in prison for such a long period, that too in a case where bail would normally be granted for the offences alleged, is not only hard but improper. It must be remembered that the Court has not even come to the conclusion that the allegations made in the FIR are true. That can be decided only when the trial concludes, if the case is charge-sheeted by the police.?

16. In ?Keshab Narayan versus State of Bihar? reported in AIR 1985 SC 1666, the Hon?ble Supreme Court held that the condition to furnish cash security with sureties for the likesum appears to be excessively onerous and such conditions may virtually amount to denial of bail itself.

17. In ?Hussainara Khatoon (I) v. Home Secy., State of Bihar, reported in (1980) 2 SCC 81, the Hon?ble Supreme Court has held as under in para 3: ?3. Now, one reason why our legal and judicial system continually denies justice to the poor by keeping them for long years in pre-trial detention is our highly unsatisfactory bail system.

Argument # 2

Very simple questions with established answers under the Indian Jurisprudence.

1. What is the liability of a director of a company?
2. Even if we presume for argument sake that the money was acquired by these companies illegally, then can this liability in the civil case be of directors?
3. Is a company lawfully bound to organize the bail bond amount for its directors? Can’t the share holders object to that?
4. Is the act of contempt (if at all their incarceration is under that) by the directors be that of company?
5. What if Subrata Roy and others duck and resign from the Board of these companies?
6. Is Hon Apex Court helpless in recovering the required money through open auction?

Basically the moot point is that under no circumstances as per CrPC and also as per Companies Act the bail bond can be so high, the Hon Apex court must be approached humbly with these arguments. There shall not be any reason for Hon Apex court to look into the matter afresh and correct the injustice meted out to these men.

In all humility I must say that Hon Supreme Court has failed to justifiably handle this case, it is not that the value of Sahara Group is increasing day by day rather the liability is increasing due to interest components, so the ideal and just resolution of the matter would be..

1. To release Subrata Roy and other two directors with reasonable bail bond.
2. Give a six months time of Sahara for settlement of dues to SEBI as per Hon Apex Court Orders.
3. If Sahara fails to fulfill this then appoint a liquidator and realize the money, whatever comes by.

Keeping these guys behind the bars will serve no purpose.

They can contact us for preparing the argument if they so desire at indway99@gmail.com

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