The Delhi High Court granted interim bail to founder and MD of Adarsh Credit Cooperative Society, Mukesh Modi and Rahul Modi, arrested by Serious Fraud Investigation Office (SFIO) for committing alleged fraud by siphoning over Rs 200 crore.
A bench of Justice Siddharth Mridul and Justice Sangita Dhingra Sehgal observed that the arrest of the two on December 10, was “absolute illegal and patently suffers from vice of lack of legal sanction and jurisdiction”.
The bench directed their release on furnishing of a personal bond of Rs 5,00,000 each with two local sureties each of the like amount. It also asked them to not leave Delhi and co-operate with the investigation, as and when called upon to do so.
The bench also asked them to surrender their passports with the concerned IO, SFIO in this case, forthwith.
Giving special importance to their “deep roots is society” and that the two “belong to a respectable business family”, the bench said “no cogent material” has been brought before it to show that the two “are a flight risk or that they will misuse the liberty granted to them by this court”.
The court’s direction on a habeus corpus plea filed by the two alleging that their arrest was without jurisdiction and illegal.
Senior advocate Kapil Sibal, appearing for the two, argued that pursuant to the June 20 order of the competent authority, SFIO failed to complete its investigation within the stipulated three months time. He argued the original time granted to carry out the investigation had come to an end on September 19.
Agreeing with the accused counsel contention, the bench said, “A statutory body must be strictly held to the standards by which it professes its conduct to be judged”.
It said the period of investigation had already elapsed and the extension was only granted on December 14.
“…with the norms set out by the SFIO itself, warranting investigation to be completed within the timeframe, stipulated by the Central Government, that we are of the considered view that the order of arrest suffers from the vice of lack of jurisdiction, unlawful and illegal…”
Mukesh Modi and his family members were reportedly running Ponzi schemes, duping over 20 lakh depositors. The Ahmedabad-based Adarsh Credit Cooperative Society had started its operations in 1999.
The deposits collected from members of the Adarsh Credit Cooperative Society were used for the benefit of a few family members belonging to the Mukesh Modi family, therefore violating cooperative principles.