A Delhi court has denied bail to Sunil Godhwani, former chairman and managing director of Religare Enterprises Limited (REL), in a case related to alleged misappropriation of funds, noting the seriousness of allegations, loan amount involved and his role in the transactions.

 The court said that economic offences are considered to be grave, especially when public money is involved and courts have to be careful in granting bail in such cases.

According to prosecution, Godhwani and others had put Religare Finvest Limited (RFL), a group firm of REL, in poor financial condition by disbursing loans to entities having no financial standing. Those entities then allegedly willfully defaulted in repayments and caused wrongful loss to RFL to the tune of Rs 2,397 crores.

In 2019, police registered an FIR against Godhwani, Malvinder Mohan Singh, Shivinder Mohan Singh, and others on a complaint from RFL's authorised representative (AR) for allegedly diverting the company's money and investing in other companies. REL was earlier promoted by the Singh brothers.

“Keeping in mind the conduct of accused, seriousness of allegations, loan amounts involved, the alleged role of accused in the loan transactions and other circumstances of this case, bail application of accused Sunil Godhwani stands dismissed,” Additional Sessions Judge Prashant Sharma ordered.

ASJ Sharma noted that the allegations against the accused are that he is involved in the illegal transfer of huge loan amounts to the tune of Rs 2,000 crores. "The cash amount involved in this case is public money/investor money," the judge said.

“Coupled with the same, the accused was arrested from the airport, as per record, after registration of FIR in question. Accused was occupying a significant top position in REL company. In such circumstances, the possibility of the accused fleeing from justice and influencing witnesses or tampering with evidence, cannot be ruled out,” he added.

The investigating officer, in the reply to the bail plea, alleged that the loans were illegally extended to companies known to the promoter group on Godhwani's instructions without any due diligence and proper documentation. The IO added that the accused misused his position. Godhwani was arrested in 2019. The accused sought bail on the grounds that he is a senior citizen, suffering from various ailments, and can have health issues in jail considering the third wave of the pandemic.

The allegations in the case were that Godhwani, along with co-accused, in connivance with each other swindled the public money. According to the police, the Reserve Bank of India (RBI) pointed out the discrepancies in its analysis to the effect that top borrowers of RFL under the Corporate Loan Book (CLB) portfolio were related entities.

India's central bank stated that those entities had interlinked between the borrowers, as funds were rooted from one borrower to another. It was also noted that the loan amount ultimately came back to the group of companies of RFL. Godhwani and the other accused were major shareholders till June 2017 and remained in control of companies till February 2018. After new management took over, it was found that RFL was put to a loss of Rs 2,397 crores approximately, the police said.

The accused, through his lawyer, however, stated that he was never involved in sanctioning and disbursal process and it was the responsibility of committees to ensure that all procedures and processes were adhered to in the sanctioning and disbursement of loans.

The accused are facing charges of 420 (cheating), 409 (criminal breach of trust), and 120B (criminal conspiracy) under the Indian Penal Code (IPC). The case is being probed by Delhi Police's economic offence wing.