BPSL scam: Delhi HC grants bail to Aarti Singal

Mumbai: The Delhi high court (HC) Thursday granted bail to Aarti Singhal, director of Bhushan Power and Steel Ltd. (BPSL). Singhal, the wife of Sanjay Singhal, Chairman & MD of BPSL was arrested by the Serious Fraud Investigation Office (SFIO) in March last year over alleged irregularities at the company.

The agency has pegged the fraud amount to Rs. 5,431 crores. Other than the SFIO, the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) are also probing the said matter.

The HC held that in the absence of any cogent, supervening circumstances necessitating cancellation of bail of the accused. “...There is neither any infirmity nor perversity with the order which would require interference of this Court under its inherent jurisdiction. Ld. Spl. Judge has propounded cogent reasoning for granting bail to the respondent accused in terms of the beneficial proviso in section 212 (6) of the Companies Act,” Justice Dinesh Kumar Sharma opined.


“...This court does not sit as a court of appeal and cannot reappreciate evidence and substitute its view with that of the subordinate court merely because another plausible view was taken,” it further held.

The SFIO had contested the bail granted by the special judge, Companies Act claiming that the judge had erroneously relied upon the fact of not impleading the respondent as an accused by other agencies such as Enforcement Directorate. The judge also failed to consider that the ambit and scope of the investigation conducted by SFIO is at larger footing and as per Companies Act, 2013 and investigation conducted by SFIO has clearly established the role played by the respondent in commission of serious economic offence.

The special judge while granting bail had opined that “...the respondent accused of being a dutiful wife was in all probability acting at the behest of her husband”.

As per the SFIO’s case,Singhal in her capacity as a director, attended 12 board meetings during the relevant period and even chaired five such meetings. She and along with her husband were authorised signatories in all bank accounts of BPSL along with its 30 associated companies, which are under investigation. Funds allegedly siphoned off were used to purchase real estate in Mumbai and Delhi.

According to the prosecution complaint (PC) filed by the SFIO in the case, finished goods lying in the plant of BPSL worth 1023 Crore were systematically removed and without issuing sale invoices were sold in the open market. “Funds so generated were not given to BPSL/ reflected in the books of accounts. It has been submitted that such goods were security for BPSL loans,” said the SFIO PC (equivalent to a chargesheet states).

The agency has alleged that BPSL funds were diverted to paper companies as 'capital advances' which, through a web of other companies, infused back into the associated companies from the F.Y 2009-2010 to 2017-18. “...Funds were infused as share capital, diverted for purchase of shares or purchase of assets in the name of the respondent, her husband and the partnership firm of which her daughters are partners. As per balance sheet of BPSL for the F.Y 2016-17, a provision of Rs. 2606 crore of capital advances and raw material was made,” the SFIO had alleged. “....Aarti Singhal, along with her husband, family members etc., availed bogus LTCG to the tune of Rs 1084.93 crore during the F.Y 2009-10 to 2016-17,” the PC further alleges.