The question posed before the Delhi HC was, whether the bail application, here concerned, had merits to be accepted by this honorable High Court. The present matter of Kashish Jain vs. The State, [BAIL APPLN.-1788/2020],was brought before Justice BrijeshSethi, who rejected the bail application stating that no grounds of the regular bail are met in the present case and further, nothing stated in this application opines about the merit of the case, which as per the Learned senior council for the petitioner, was suppose to be the main argument.

The petitioner here was 26 year old, young man. On 24^th November 2018, he was taken into the judicial custody along with his parents, who are the co-accused in the case for the crime of cheating. After the completion of the investigation, the investigation agency filed the charge-sheet on 23^rd January, 2019. The co-accused (parents of the petitioner) was granted interim protection by the court on 13^th February, 2019, but the same was rejected for the petitioner on his earlier bail application, dated 31^st October, 2019.This subsequent bail application was filed by the petitioner u/s 482 of Cr.P.C, to grant regular bail to the petitioner.

The council for the petitioner contended that, the there is no point in keeping the accuse under judicial custody when the investigation for the present matter is already complete and charge-sheet filed, the petitioner further contends that, even after the filing of the charge-sheet on January of 2019, no charges are yet framed due to which there had been a delay in the commencement of the trial, which adversely affected the petitioner.

As a reply to the contentions forwarded by the petitioner, the Learned Additional Public Prosecutor for the State the the delay in the trial was not due to the investigation agencies fault, but it’s due to the incompliance of co-accuse in the investigation procedure &due to this the supplementary charge-sheet is yet to be filed.

The HC after considering all the submissions in this matter, came to a view that, the petitioner was a direct beneficiary of the cheated amount, he was involved as a co-applicant and had forged fake documents to get the loan form Cholamamdalam Ltd.. The HC agrees to the public prosecutors’ view on the cause of the delay of the commencement of the trial, where the court belived that, “There is no delay on the part of investigating agency in filing supplementary charge-sheet. Rather, it is because of the non-cooperation of the co-accused i.e. parents of the petitioner that the supplementary charge-sheet is not being filed.”

The HC after considering all the said contentions and forwarded opinions, the court dismissed the bail application calling that, “…no grounds for regular bail are made out at this stage. The bail application is, therefore, dismissed and stands disposed of accordingly.”

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The non- implementation of the Act holds adverse consequence on the dispensation of administration of justice. The present case deals with the answers to – “Why is it that the owners of the property are forced to approach this Court for release of the vehicles or property? Is it that there is no mechanism under the Act for initiating confiscatory proceedings at the earliest? Is it that there is insufficient infrastructure with the State Government for ensuring implementation of the provisions of the Act?” This matter was taken before the Hon’ble the Chief Justice and Hon’ble Mr. Justice S. Kumar in the matter of Manoj Purwe versus The State of Bihar and Others [Civil Writ Jurisdiction Case No.6400 of 2020].

Despite of the observations made by the court, the appropriate authorities did not take any action in initiating the proceedings for confiscation of the property under the Act. Thus the litigants were forced to approach this Court by way of filing separate petitions.

The petitioner prayed before this court to issue a writ petition to direct the respondents to release the Three Wheeler Passenger Vehicle which was seized in relation with Exercise case for the offence under section 30(a) of Bihar Prohibition and Exercise Act 2016 added by the Bihar Prohibition and Exercise act 2018; and to grand reliefs for which the petitioner was entitled in relation with the release of the vehicle.

The court made a reference to the Bihar Prohibition and Exercise Act, 2016 which states that “(hereinafter referred to as the Act) prohibits the manufacture, storage, distribution, transportation, possession, sale, purchase and consumption of any intoxicant or liquor, unless so allowed in terms of the Act. (Section 13). In addition to the penalty imposed for committing such an offence, Section 56 of the Act lays down the procedure for confiscation of “things” used for in the commission of such an offence”.

This court made following directions to the parties in the case of Md. Shaukat Ali Vs. The State of Bihar & Ors CWJC No.20598 of 2019: “Without adjudicating the petitioner’s petition on merits, we are of the considered view that interest of justice would be best met, if the petition is disposed of.”

The court held that “We only hope and expect that the Authorities under the Act shall take appropriate action at the earliest and in accordance with law, within the time schedule fixed, failing which the vehicle/property/things liable for confiscation shall be deemed to have been released without any further reference to this Court”.

Also the court opined that “Liberty reserved to the petitioner to take recourse to such remedies as are otherwise available in accordance with law if the need so arises subsequently”.

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The Delhi High Court was posed with the question of whether an application for a bail under Section 439 Cr.P.C. would be sufficient for a court to construe that the accused had availed of his right to be released on bail under the provisions of Section 167(2) of the Cr.P.C. if the condition stipulated therein were met in the matter of Subhash Bahadur @ Upender v The State (N.C.T. Of Delhi), [BAIL APPLN. 3141/2020].

In the present case, the petitioner and 2 others were accused of trying to snatch a mobile phone from the complainant and in the process shot the complainant in the leg. Out of the 3 accused, the petitioner and another accused refused to participate in the TIP and the one who did participate could not be successfully recognized by the complainant. All 3 of the accused were using a stolen motorcycle for carrying out this crime.

The petitioner prayed for bail at the Trial Court which was rejected for the reason that the seriousness of the allegations of the crime committed by the accused do not justify the grant of bail. And the submission of the complainant not being influenced by the petitioner cannot be ruled out. The second bail application by the petitioner was also dismissed by the Trial Court. Therefore, the petitioner moved to the Delhi HC praying for bail.

Counsel for the petitioner contended that there is no risk that the petitioner seeking bail would influence any witness; tamper any evidence or; flee from the law and that the petitioner has been falsely implicated without any material witness or evidence of his involvement in the offence. He further shed light on the petitioner being entitled to compulsory bail under Section 167(2) of the Code of Criminal Procedure (Cr.P.C.) but his applications for bail were rejected and the petitioner was not informed of his rights.

The learned APP contended that application for bail.it is not sufficient that the petitioner had made and that the accused should have applied bail specifically mentioning the provisions of Section 167(2) of the Cr.P.C. and any application moved under Section 439 of the Cr.P.C. could not be construed as the accused availing of his indefeasible right to default bail.

The bench of the Delhi HC consisting of Hon’ble Mr. Justice Vibhu Bakhru  held that, “In the present case, there is no doubt that the petitioner had applied for being released on bail and had offered to abide by the terms and conditions of bail. Bearing that in mind, it is at once clear that the petitioner would be entitled to default bail even though he had not specifically mentioned the provisions of Section 167(2) of the Cr.PC in his application.

There is no controversy that it is necessary that the accused offers to furnish bail in order to avail of his right to default bail. If the accused offers to furnish bail he would comply with the condition as set out in proviso (a) to section 167(2) Cr.PC. In this case, the said condition has been met. Undisputedly, the petitioner had made an application, albeit under Section 439 of the Cr PC, offering to furnish bail. In view of the decision in Rakesh Kumar Paul (supra), even an oral plea for default bail is compliant with the proviso(a) to Section 167(2) Cr.PC. Thus, it would be apposite to consider an application for bail filed on expiry of stipulated period of filing chargesheet, as an application for bail under the provisio to Section 167 (2), since it does indicate that the accused is prepared to furnish bail. The second requirement is that the prosecution agency must be put to notice of the ground on which the bail is being granted in order for the prosecution agency to point out if there is any reasons why the accused is not entitled to such bail”.

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A company and its employees are to be treated as separate identities since and there should exist no concept of vicarious liability in terms of repayment of loans on the part of the employees, unless the contrary is stated in express terms. The lifting of the corporate veil was observed by the Supreme Court in the matter of Sanjiv Kumar Mittal V Deputy Commissioner (Trc), Cgst Commissionerate Delhi South & Ors., [W.P. (C) 5590/2020 & CM APPL.20200/2020].

The Petitioner being a former Director of a company (also the respondent no. 6) was  aggrieved after his personal bank account was attached by respondent-Service Tax Authorities towards recovery of dues from the assesses-company under the Finance Act, 1994. The counsel for the petitioner argued that the petitioner had agreed to his appointment as a Director in good faith and that too at the behest of his cousin, Mr. Ram Mohan Gupta, who was the founder Director of the assesses-company. Further, It is also stated in the writ petition that even prior to petitioner’s appointment as an Additional Director the assesses-company was under investigation by the anti-Evasion branch of Service Tax, Delhi-I, Commissionerate. After the petitioner resigned as a Director, a show cause notice was issued to the company demanding the recovery of service tax along with interest and penalties against the company.

There was no material to indicate that the funds in the petitioner’s personal bank account were due and payable to, or held on behalf of the company keeping in mind Section 87(b)(i) of the Finance Act and prosecution against petitioner was baseless.

Lastly, it was submitted on behalf of the petitioner that there was no provision in the Finance Act making Directors personally liable for the tax liabilities of a company or empowering the respondent-authorities to recover such liabilities of the company from the personal assets of its Directors.

Counsel for the respondent contended that at being a Director in a Company, a person is deemed to have knowledge of the affairs of the same and a bald assertion that he took up Directorship “in good faith and was not actively involved” cannot be accepted. The counsel for the respondent submitted that a vicarious liability is cast upon the Directors of the company to pay/deposit service tax with the Government exchequer. He stated that Section 87(b)(i) of Chapter V of the Finance Act as amended provides for a mode of recovery of any amount due to the Central Government.

The Supreme Court opined that, “A company and its directors are separate and distinct juristic entities and this distinction cannot be jettisoned unless there is a specific statutory provision to the contrary or till a case for lifting of the corporate veil is made out. This Court is in agreement with the submission of learned counsel for petitioner that the impugned attachment order is beyond the purview of Section 87(b)(i) of the Finance Act as the said provision provides for a garnishee order only – i.e. provides for attachment of funds of an lying with third parties. Accordingly, Section 87(b)(i) of the Finance Act does not entitle the revenue to attach personal bank accounts of a director like the petitioner, for recovery of dues of the company, on the assumption that money is due or may become due from the Petitioner to the company. This perspective is wholly misconceived, contrary to the basic tenets of liability of the Company law in the absence of a specific provision and given a company’s separate legal personality, the petitioner/ex-Director, even if having knowledge of affairs of the company, is not vicariously or jointly liable for the dues of the company. The onus of proof shall remain on the department/respondents to show that a Director is personally liable for the dues of the company at the stage of issuing show-cause notice under Section 73 of the Finance Act”.

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The Delhi HC permitted the writ petition to stand still and the court decided to quash all impugned orders made by the respondent (service tax authority) because it was found to be ultra vires to Sec. 87(b) (i) of the finance act 1994. The bench in the matter of Sanjiv Kumar Mittal vs Deputy Commissioner (TRC), CGST Commissionerate Delhi South & Ors, [W.P. (C) 5590/2020 & CM APPL.20200/2020] was headed by J. Manmohan & J. Sanjeev Narula, who opined that Single director can’t be selectively targeted to make payments in recovery of past dues on behalf of the whole company, it’s against the rule of natural justice.

The petitioner was a former director in the respondent’s (no. 6’s) company & he resigned from this post within a year of his appointment (22^nd august 2014 to 8^th July 2015). The petitioner filed the writ before the honorable Delhi HC challenging the act of the respondent (service tax authority), who initiated several orders selectively targeting only the petitioner for recovery of its tax dues from the company for which they relied upon the finance act of 1994.

The council for the petitioner argued that the directors of the company and company are two separate juristic entities, further the show cause notice was not issued to the petitioner but only to the company and that had no relation or reference to the petitioner in his personal capacity. Contradicting the above view, the council for the respondent argued that the directors of the company possess a vicarious liability for all the acts of the company and can’t take the defense of being in good faith. The court here recalled the judgment of the Bacha F. Guzdar, Bombay vs. Commissioner of Income Tax, Bombay, AIR 1955 SC 74, stated that, “…a company and its directors are separate and distinct juristic entities and this distinction cannot be jettisoned unless there is a specific statutory provision to the contrary or till a case for lifting of the corporate veil is made out.”

The council for respondent referred to Sec. 9AA of the central excise act 1944 to argue that the impugned order is not ultra vires to Sec.87(b)(i) of the finance act 1994. Opposing the above view the petitioner’s counsel argued that Sec. 87(b) (i) of the finance act only provides for a “garnishee order” and not otherwise. The court here supporting the arguments raised by the petitioner’s council states that, “Section 87(b)(i) of the finance act provides for a garnishee order only – i.e. Provides for attachment of funds of an assessee lying with third parties. There is no provision in the finance act making an ex-director, even if having knowledge of affairs of the company, vicariously or jointly liable for the dues of the company.”

The Delhi HC while delivering the relief held that “The present writ petition is allowed without costs and the Demand notices dated 21st May, 2019 (Annexure P-5) as well as 08th November, 2019 (Annexure P-6) and attachment order dated 08th June, 2020 (Annexure P-11) are quashed.” Further the court continued stating that, “Any action taken by the respondents in pursuance to the impugned notices/order and OIO dated 08th August, 2018 against the petitioner are also set aside.”

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