Supreme Court Put Stay on Bail granted to Unitech Promoters; Expresses Disapproval at Orders of Delhi High Court/ Magistrate

Supreme Court Put Stay on Bail granted to Unitech Promoters; Expresses Disapproval at Orders of Delhi High Court/ Magistrate

The Supreme Court (SC) stayed the order of the Chief Metropolitan Magistrate, Patiala House Courts wherein it passed an order of releasing Sanjay Chandra and Ajay Chandra on bail and ordered them to surrender to the Tihar jail on or before 22 March 2021.

The SC bench comprising of Justices DY Chandrachud and MR Shah on 18 March 2021, in the case titled Bhupinder Singh (Appellants) v. Unitech Ltd. (Respondents) expressed its strong disapproval at the orders passed by the Delhi High Court (HC) and a Chief Metropolitan Magistrate (CMM) which eventually culminated in bail being granted to Unitech promoters, Sanjay Chandra and Ajay Chandra.

The Apex Court was hearing a plea filed by the Economic Offences Wing of the Delhi Police for staying the order passed by CMM of granting bail to the accused, Sanjay Chandra and Ajay Chandra.

Sanjay Chandra was arrested by the Economic Offices Wing of the Delhi police in March 2017 based on a 2015 complaint registered by home buyers. Investigating authorities have maintained that prima facie probe indicated that money, which had been realized from the flat buyers, was siphoned off.

A forensic audit report submitted before the SC by Grant and Thornton in December 2019 revealed that an amount of Rs. 14,270 crore was collected by Unitech from 29,800 homebuyers. Out of that amount, Rs. 13,364 crores was traced to the bank statements.

The SC declined to grant bail to the Chandra brothers on 14 August. The Court mentioned in its order that the two brothers had not complied with the order of October 2017. As per the said order, the brothers had to deposit Rs. 750 crore to be eligible for bail with the registry of the Court by 31 December 2017.

The Court added that "Since the conditions which were imposed in the order dated 30 October 2017 have not been complied with, we are unable to accept the submission that the applicants should be released from custody."

It further observed that the HC passed an order wherein it granted liberty to the Chandra brothers to move CMM for bail. CMM granted bail to Chandra brothers was strongly disapproved by the Apex Court.

The SC stated that "Prima facie, at this stage, we are of the view that the manner in which the accused were granted liberty by the Delhi High Court to move the Metropolitan Magistrate for the grant of bail and the order of the Metropolitan Magistrate is a shocking exercise of judicial power and a breach of judicial discipline."

It put a stay on the order of the CMM wherein it released the Chandra brothers on bail. The SC added that "In the teeth of the observations of this Court, we find that the conduct of the accused in moving an application for withdrawal before the Delhi High Court with the liberty to move the Magistrate for bail and seeking regular bail before the Metropolitan Magistrate is an overreach of the jurisdiction of this Court."

After the Top Court rejected the bail application of Chandra Brothers, an application was moved before the HC to withdraw the bail application pending before it. Further seeking liberty to approach the Trial Court for bail since chargesheet had been filed. The HC allowed it and consequently, a plea for regular bail was filed before the trial court.

The Top Court noted that the CMM had recorded in his order that the accused have already deposited more than Rs. 750 crores "as directed by the Supreme Court". It stated that "It is incorrect and a deviation from the findings specifically recorded in the order dated 30 October 2017."

The SC bench said that "This Court is seized of the entire dispute about the defaults by Unitech Limited and a Board of Management appointed by the Union of India has been placed in charge, several other steps have been taken including conducting a forensic audit and directing the agencies of the Union of India to investigate into all aspects of the matter."

It added, "In this backdrop, it would be unacceptable for the accused, during the pendency of the proceedings before this Court to seek the liberty of the Delhi High Court and then move the Chief Metropolitan Magistrate and obtain an order of bail."

The SC ordered that "We are constrained to issue the notice which we hereby do to the accused, Mr Sanjay Chandra and Mr Ajay Chandra. In the meantime, we order and direct that pending the return of notice; the accused shall on or before 22 March 2021 surrender to the Tihar Jail."

It has put a stay on the order of the CMM and posted the matter on 17 April 2021 for the next date of hearing.