Sterling Biotech Money Laundering Case: Relief to co-accused as Delhi HC junks ED plea to cancel bail

Justice Sunil Gaur said the accused deserve bail on merits and the orders granting them relief is not liable to be interfered with as the impugned orders do not suffer from any infirmity or illegality.

NEW DELHI: The Delhi High Court has dismissed the Enforcement Directorate's (ED) pleas seeking cancellation of bail to a businessman and a co-accused in the over Rs 8,000-crore money laundering case involving Gujarat-based Sterling Biotech Ltd.

ED had challenged two separate orders of the trial court granting bail to Delhi-based businessman Gagan Dhawan and another accused Ranjit Malik alias Johny -- who was earlier arrested by the agency for allegedly sending through a man, Rakesh Chandra, Rs 25 lakh to a prominent senior Congress leader's residence in the national capital.

Justice Sunil Gaur said the accused deserve bail on merits and the orders granting them relief is not liable to be interfered with as the impugned orders do not suffer from any infirmity or illegality.

"There is no basis for this court to conclude that the court below has erroneously exercised its discretion in granting bail to respondents - accused persons or that the exercise of discretion in granting bail to respondents - accused persons is arbitrary," the high court.

It dismissed the petitions, making it clear that any observation made will have no bearing on merits at the trial.

The ED has alleged that Dhawan had facilitated the directors of Gujarat-based pharma firm Sterling Biotech Ltd (SBL) in the purchase of several properties and helped in misuse and diversion of credit facilities of several bank totalling over Rs 8,000 crore.

ED challenged the trial court's orders granting bail to Dhawan and Malik on the ground that they disclose utter non-application of mind and that gravity of offence has not been considered.

The counsel for the two accused opposed the stand taken by the agency and submitted that the gravity of offence cannot be the sole consideration for grant or refusal of bail.

The high court, in its order, said: "It is settled the position of law that the parameters for cancellation of bail and the grounds for challenging the order of grant of bail on the ground of arbitrary exercise of discretion are altogether different. In matters of a grant of bail, the merits of the case are not required to be gone into in detail."

"The court below in the impugned orders has taken note of the gist of the offence alleged against respondent-accused persons and has thereafter, taken into consideration the fact that the final report had been filed," it said.

It said that in case of Dhawan, the extent of money laundering alleged is of Rs 1.5 crore and said noted that during the investigation, attachment of the accused' property to the extent of Rs 1.17 crore has already taken place and a supplementary complaint has already been filed and the case is at the stage of framing charges.

So far, the agency has charge-sheeted 191 accused, including seven individuals and 184 companies.

The court had earlier issued open-ended non-bailable warrants against pharma firm's directors, including Nitin Jayantilal Sandesara, Chetan Jayantilal Sandesara and his wife Dipti Chetan Sandesara.

The accused included main promoters of Sterling Group -- Sandesaras, Rajbhushan Dixit, Hitesn Patel, Chartered Accountant Hemant Hathi and middleman Gagan Dhawan.

The companies include Sterling Biotech Ltd, PMT Machines Ltd, Sterling SEZ and Infra Ltd, Sterling Port Ltd, Sterling Oil Resources Ltd and 179 shell companies.

The charge sheet has said that the accused manipulated figures in the balance sheets of their flagship companies and induced banks to sanction higher loans.

"After obtaining loans, they diverted the loans funds to non-mandated purposes through a web of shell companies.

"Thus, the loan funds were diverted, layered and laundered by the promoters for their personal purposes. A total amount of loan fraud as on date is Rs 8,100 crore. The loan frauds pertain to domestic as well as offshore branches of Indian Banks," it has said.

Besides Dhawan and Malik, the ED had earlier arrested a former director of Andhra Bank, Anup Prakash Garg in the case. He is out on bail.

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