The 66-year-old former vice-chairman of the Infrastructure Leasing and Financial Services (IL&FS), Hari Sankaran, was on Tuesday granted temporary bail for eight weeks by a trial court on his furnishing a surety of ₹50,000.
The interim relief comes after a Bombay High Court Bench of former Chief Justice B.P. Dharmadhikari and Justice N.R. Borkar on April 22 quashed and set aside all criminal proceedings that the Serious Fraud Investigation Office (SFIO) had initiated against auditors BSR Associates and Deloitte Haskins & Sells. The Bench has stated that there appeared to be non-application of mind in the manner in which the Centre directed the SFIO to initiate prosecution within 30 hours of receiving a report running into over 30,000 pages.
Mr. Sankaran, like the auditors and others, too had challenged the May 29, 2019 order of the Ministry of Corporate Affairs (MCA) to prosecute him. He was arrested by the SFIO in April 2019 in connection with the IL&FS case for alleged irregularities that have resulted into severe crisis. The SFIO had claimed that IL&FS extended loans to external parties, many of which had already begun defaulting. These included loans given to the Siva Group, apart from those given to its own group of companies.
The High Court had noted that directions issued by the Ministry of Corporate Affairs to the SFIO under provisions of the Companies Act, 2013 were “not sustainable” and quashed the prosecution by SFIO as “not maintainable.” However, the court had also stayed the judgment for eight weeks for the SFIO to appeal against it in the Supreme Court.
The High Court had also mentioned that the trial court had yet to take cognisance of the SFIO’s report and noted that ‘the court may not have the power to remand and detention’. Mr. Sankaran then approached the trial court on Monday and sought bail which was granted by the trial court for eight weeks.
Earlier on April 3, a special court had granted temporary bail to Mr. Sankaran and Ramesh Bawa, former managing director of IL&FS, considering the spread of COVID-19, the ill-health and old-age of the petitioners. But their bail was stayed by the High Court on April 5 and it was extended till April 30.
