IN BAIL APPLN 2035 OF 2023- DEL HC- Delhi High Court grants anticipatory bail to builder accused of duping, misappropriating, siphoning off funds collected from homebuyers, upon approval of revival plan by NCLT
Justice Vikas Mahajan [23-06-2023]

Read more: Sidharth Chauhan v State Government of NCT of Delhi

Simran Singh

New Delhi, June 26, 2023:  The Delhi High Court has granted anticipatory bail to Siddharth Chauhan, Managing Director of M/s Sidhartha Buildhome Pvt. Ltd, in the two FIRs registered over misappropriation and siphoning off of funds collected from homebuyers upon the approval of revival plan by National Company Law Tribunal (NCLT) which had 92.85% votes of the Committee of Creditors (CoC) in its favour.

The Bench was of the view that the applicant had shown his bona fide by submitting a reasonable revival plan which found favour with the CoC and was eventually approved by NCLT, and in terms thereof, the applicant had infused an amount of Rs.20 crores, of which Rs.15 crores were infused  after the revival plan was sanctioned by the NCLT. “Undoubtedly, recent deposit of Rs. 15 crores prima facie shows some amount of seriousness on part of the petitioner to complete the two projects.” stated the Court

The Single Bench of Justice Vikas Mahajan agreed with the submission of the applicant that the approved revival proposal could  turn into a reality only when he was  not confined to custody.

The Bench further stated that the applicant had cooperated with the investigation, inasmuch as, he had joined the investigation on more than 25 occasions and had also furnished all requisite documents which had been demanded by the Investigating Officer (IO).

In view thereof, the Bench held that the applicant had made out a case for grant of interim protection till the next date of hearing. Accordingly, it was directed that no coercive action would be taken against the applicant, till the next date, subject to his joining the investigation as and when directed by the I.O concerned.

In the matter at hand, the first application had been filed under Section 482 Criminal Procedure Code,1973 seeking interim anticipatory bail in the FIR which was registered under Section 406, 420, 409 and 120B of Indian Penal Code, 1860 under the instance of home buyers of the applicant company’s project namely M/s Sidhartha Build Home Private Limited. It was alleged that the home buyers had booked their respective flats in the aforesaid project and had paid 95 % of the total sale consideration. The builder had promised that the possession of the units in the said project would be handed over within a period of 36 months plus grace period of 6 months. However, more than 3 to 3.5 years have passed besides the promised period of 36 months but the flats had not been delivered to the home buyers. It was also alleged that the accused had diverted the funds collected from home buyers.

The second application was concerned with the FIR which had been registered  in respect of another project by the name of ‘Estella’, the construction of which was jointly undertaken by M/s Sidhartha Build Home Pvt. Ltd. and Ansal Housing and Construction Limited. In this FIR, similar allegations of inordinate delay in handing over possession of the flats and diversion of funds collected from home buyers, had been made.

In the year 2021, the Court vide order dated 13-12-2021 had rejected the applicant’s plea seeking anticipatory bail against which the applicant had preferred a Special Leave Petition (SLP) in which he was granted interim protection from arrest by the Supreme Court from 17-12-2021 till 02-05-2023 which stood absolved upon the withdrawal of the said petition.

The Bench noted that after the withdrawal of the SLP before the Supreme Court, the revival plan was approved by NCLT which itself was a change in circumstance to maintain a fresh anticipatory bail application and the said factum had not been disputed by the prosecution.

The Bench noting that the revival plan was approved by the CoC with 92.85% votes in its favour stated that “Notably, it is the Committee of Creditors (CoC) which approved the revival plan/withdrawal proposal. Needless to say, that the decision of the CoC has to be given due weightage having regard to the fact that the CoC includes the home buyers as a class and it would not approve a plan which would be contrary to the interest of home buyers.”