Sidharth Chauhan v. State Govt of NCT of Delhi

1. These are two applications filed by the petitioner under Section 482 CrPC seeking interim anticipatory bail in two separate Bail Applications under section 438 CrPC seeking anticipatory bail in FIR Nos. 97/2018 and 118/2018, both registered under Sections 406/420/409/120B IPC at Police Station EOW, Mandir Marg, New Delhi.

2. CRL.M.A. 16406/2023 has been filed in Bail Application 2035/2023. It concerns FIR No. 118/2018 which has been registered in respect of “NCR One/ NCR Green” project, the development of which has been undertaken by petitioner’s company namely M/s Sidhartha Build Home Private Limited. The said FIR has been registered at the instance of home buyers of the said project. The allegation in brief as borne out from the aforesaid FIR, is that the home buyers had booked their respective flats in the aforesaid project and had paid 95 % of the total sale consideration. The builder had promised that the possession of the units in the said project will be handed over within a period of 36 months plus grace period of six months. However, more than 3 to 3.[5] years have passed besides the promised period of 36 months but the flats have not been delivered to the home buyers. It is also alleged that the accused has diverted the funds collected from home buyers and thus committed offences under Sections 406/420/409/120B IPC.

3. Similarly, CRL.M.A. 16417/2023 has been filed in Bail Application 2037/2023. It concerns FIR No. 97/2018 which has been registered in respect of another project by the name of “Estella”, the construction of which was jointly undertaken by M/s Sidhartha Build Home Pvt. Ltd. and Ansal Housing and Construction Limited over land measuring 15.74 acres, situated at Sector- 103, Gurugram, Haryana. In this FIR also similar allegations of inordinate delay in handing over possession of the flats and diversion of funds collected from home buyers, have been made.

4. This is the second round in which the petitioner is seeking anticipatory bail. Earlier the petitioner’s anticipatory bail applications were dismissed by this court vide order dated 13.12.2021 passed in Bail Application 2722/2021 qua FIR No. 97/2018 and Bail Application No. 2746/2021 qua FIR NO. 118/2018.

5. Against the aforesaid order, the petitioner preferred SLP (Crl.) Nos. 9852-53/2021 titled as Sidharth Chauhan vs. State (NCT of Delhi) & Ors., in which the petitioner had been granted interim protection from arrest by the Hon’ble Supreme Court from 17.12.2021 till 02.05.2023, when the petitioner withdrew the said SLP and resultantly, the interim protection granted also stood dissolved.

6. In the main Bail Applications, the petitioner has challenged the order dated 07.06.2023 passed by the learned ASJ-05, South-East District, Saket Courts, New Delhi, whereby the application filed by the petitioner seeking anticipatory bail in the second round has been dismissed. Additionally, it has been prayed that the petitioner be granted anticipatory bail in aforesaid FIRs on such terms and conditions which this court may deem fit and proper.

7. In the main Bail Applications notice was issued vide order dated 12.06.2023 and the State has been directed to file the status report before the next date i.e. 10.08.2023.

8. Confining his arguments to grant of interim anticipatory bail, Mr. Maninder Singh, learned Senior Counsel for the petitioner, made the following submissions: i. The petitioner’s banker namely Punjab National Bank (erstwhile Oriental Bank of Commerce), who had advanced loan to the petitioner’s company/corporate debtor, initiated proceedings by filing an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 account of default in repayment of loan. The said petition was registered as CP(IB)-717 (ND)/2019. ii. In the said petition, CIRP process commenced pursuant to the order dated 04.03.2021 passed by NCLT, New Delhi, whereby the aforesaid application under Section 7 of the IBC was admitted. Thereafter, the NCLT vide order dated 27.09.2021 appointed Mr. Dharmendra Kumar, as the Authorized Representative of the class of Financial Creditors. iii. Sequel to above, some revival plans/withdrawal proposals came to be submitted but the same did not find favour with the Committee of Creditors (CoC). iv. When things stood thus, the Hon’ble Supreme Court vide its order dated 11.10.2022 passed in the aforesaid SLP filed by the petitioner observed that “on the next date of hearing, Ld. Counsel for the parties shall come up with solution which will be broadly acceptable to all the stakeholders”. It is at that stage that the petitioner on 26.12.2022 submitted another revival plan/withdrawal proposal under Section 12A of the Code with better terms and conditions for the revival of his company/corporate debtor. v. Aforesaid revival plan/withdrawal proposal under Section 12A of the Code, 2016 was put to voting before the Committee of Creditors (“CoC”) and the same was approved on 22.01.2023 with 92.85% votes in its favour. vi. The learned Senior Counsel submits that since the approval of the revival plan by the NCLT was taking time, the petitioner was constrained to withdraw the SLP on 02.05.2023. He further submits that the revival plan was eventually approved by the NCLT vide its order dated 24.05.2023, only after the petitioner had withdrawn the SLP. vii. He invites attention of the court to the clause pertaining to the feasibility and viability of the revival plan, to contend that an amount of Rs.100 crores shall be infused by the petitioner towards construction and financial settlement in a phased manner as mentioned therein. viii. He contends that Rs.[5] crores were infused by the petitioner in June 2022 and a further amount of Rs.15 crores have been infused on 06.06.2023. To buttress his contention, he invites the attention of the court to Annexure P-23, which is a proof of deposit of Rs.[5] crores, and to Annexure P-34, which is a proof of deposit of Rs.15 crores. He further submits that the infusion of balance amount in terms of the revival plan shall be scrupulously done by the petitioner. He submits that the amount so infused will be utilized by the Monitoring Committee proposed to be constituted under the withdrawal proposal/revival plan. ix. Furthermore, he submits that with an intent to implement the approved revival plan in its letter and spirit, the counsel of the petitioner had sought consent of Hon’ble Mr. Justice R.S Chauhan (Former Chief Justice of High Court of Uttarakhand/Telangana) to act as the Chairman of the monitoring committee and consent dated 03.06.2023 in that regard has been received from Justice R.S. Chauhan (Retd.), which is placed at Annexure P-29 of the bail application. x. It is further contended that in terms of the revival plan, project NCR One/NCR Green shall be completed within six months from the date of approval of withdrawal proposal by the NCLT whereas Project Estella shall be completed within 12 months from the date of said approval. Inviting attention of the court to the photographs of the project, which have been placed at Annexure P-35, the learned senior counsel contends that labour has been mobilized by the petitioner and construction work has already commenced. xi. Again, inviting attention of the court to another set of photographs placed at Annexure P-8, the learned senior counsel submits that the towers in the aforesaid projects have been constructed and this itself goes to show that the intention of the petitioner was not dishonest from inception. According to the learned senior counsel, it is a case where the construction got delayed for the reasons beyond petitioner’s control. xii. Referring to the Status Report dated 28.05.2021 (Annexure P-6), Mr. Singh, the learned Senior counsel for the petitioner submits that the petitioner has throughout cooperated with the investigation and has appeared before the Investigating Officer (I.O) on more than 25 occasions pursuant to notices issued under Section 41A and 91 CrPC and has furnished every document demanded by the I.O. xiii. He further submits that home buyers are a class in itself and they were a part of the Committee of Creditors which has approved the withdrawal proposal/revival plan. He, therefore, urges that once the home buyers as a class have approved the withdrawal proposal/revival plan, individual home buyers who did not vote in favour of the said plan or otherwise abstained from voting, cannot be permitted to stall the implementation of the approved revival plan. xiv. Reference is also made to the financial proposal under the revival plan to contend that it has been decided by the stakeholders that they shall not pursue the FIR and the civil or criminal cases related to the aforesaid two projects after the withdrawal proposal/revival plan is approved by the CoC and the NCLT. xv. To conclude, the learned senior counsel submits that the approved revival plan/withdrawal proposal can be implemented effectively in its true letter and spirit only if the petitioner is enlarged on bail and is not taken into custody.

9. Per contra, Mr. Ritesh Kumar Bahri, the learned APP for the State submits thati. The petitioner is indulging in forum shopping, in as much as, the petitioner withdrew the SLP before the Hon’ble Supreme Court without informing that he intends to file a similar application before the Sessions Court. ii. The allegations against the petitioner are serious in nature and he has been accused of swindling the money of the home buyers, therefore, merely because the NCLT has approved the revival plan, the criminality involved shall not get wiped out. iii. The petitioner has been promising to infuse funds in the two projects but has never infused the funds, which shows dishonest intention on part of the petitioner. iv. He urges that no genuine efforts to complete the projects and handover the possession of the units has been made, therefore, no interim protection ought to be granted to the petitioner.

10. I have heard the learned Senior Counsel for the petitioner, as well as, the learned APP for the State and have perused the material on record.

11. At the outset, it may be noticed that after the withdrawal of the SLP before the Hon’ble Supreme Court on 02.05.2023, the revival plan/withdrawal proposal was approved by the NCLT on 24.05.2023, which itself is a change in circumstance to maintain a fresh anticipatory bail application. The factum of approval of revival plan/withdrawal proposal by the NCLT has not been disputed by the prosecution.

12. There also appears to be merit in the submission made by the learned senior counsel that the petitioner has shown his bona fide by submitting a reasonable revival plan which found favour with the Committee of Creditors (CoC) and was eventually approved by the NCLT, and in terms thereof, the petitioner has infused an amount of Rs.20 crores, of which Rs.15 crores were infused on 06.06.2023 after the revival plan was sanctioned by the NCLT on 24.05.2023. Undoubtedly, recent deposit of Rs. 15 crores prima facie shows some amount of seriousness on part of the petitioner to complete the two projects.

13. Yet another submission of the learned senior counsel that the approved revival plan/withdrawal proposal can turn into a reality only when the petitioner is not confined to custody, does not seem to be without substance at this stage.

14. Notably, it is the Committee of Creditors (CoC) which approved the revival plan/withdrawal proposal. Needless to say, that the decision of the CoC has to be given due weightage having regard to the fact that the CoC includes the home buyers as a class and it would not approve a plan which would be contrary to the interest of home buyers. Incidentally, the revival plan/withdrawal proposal, as noted by the NCLT in its order dated 24.05.2023, was put to voting before the Committee of Creditors (“CoC”) and the same was approved on 22.01.2023 with 92.85% votes in its favour.

15. At this juncture, it is also apt to note that home buyers are a class of financial creditors and any decision of that class taken by more than 50% of the voting share would bind all home buyers/creditors in such class.[1]