Supreme Court stays bail granted to Unitech Promoters; berates Delhi High Court, Magistrate for "shocking exercise of judicial power"

The Supreme Court on Thursday expressed its strong disapproval at the orders passed by the Delhi High Court and a Chief Metropolitan Magistrate (CMM) which eventually culminated in bail being granted to Unitech promoters, Sanjay Chandra and Ajay Chandra.

The Court observed that the Delhi High Court order granting liberty to Chandra brothers to move CMM for bail and order of CMM granting bail were in the teeth of the Supreme Court's observations made on August 14, 2020 in the case against the two promoters.

"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 are a shocking exercise of judicial power and a breach of judicial discipline," the Supreme Court said.

A Bench of Justices DY Chandrachud and MR Shah, therefore, stayed the order of the Chief Metropolitan Magistrate, Patiala House Courts releasing the Chandra brothers on bail and ordered that they surrender to the Tihar jail on or before March 22, 2021.

"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 liberty to move the Magistrate for bail and seeking regular bail before the Metropolitan Magistrate is an overreach of the jurisdiction of this Court," the Court added.

The Court was hearing a plea by the Economic Offences Wing of the Delhi Police for staying the order passed by Dr. Pankaj Sharma, Chief Metropolitan Magistrate, Patiala House Courts, New Delhi on January 13, 2021 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 realised from the flat buyers, was siphoned off.

A forensic audit report submitted before the Supreme Court 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. Almost 90 per cent of the money was received between 2006 to 2014, the report said.

The top court had, on August 14, declined to grant bail to the Chandra brothers.

The Court in its order passed that day had noted that the two brothers had not complied with the October 2017 order of the Supreme Court as per which Rs 750 crore was to be deposited with the registry of the court by December 31, 2017, to be eligible for bail.

“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,” the court said.

The two brothers had claimed in their bail application that they had deposited more than Rs 770 crore and were, therefore, eligible for bail.

The Court, had however, noted that the deposit was made after the deadline of December 31, 2017.

Moreover, a part of the deposited with the Court came from monetization of assets of Unitech Limited.

“We find that neither of the conditions for deposit has been complied with by the applicants (Sanjay Chandra and Ajay Chandra). Admittedly, an amount of Rs 750 crores was not deposited by 31 December 2017. The amount which has been deposited in the Registry of this Court has been realised as a result of the demonetisation of the assets of Unitech Limited,” the Court had noted on August 14, 2020.

After Supreme Court rejected their bail plea in August, 2020, an application was moved before the High Court of Delhi to withdraw the bail application pending before the High Court and also seeking liberty to approach the trial court for bail in view of the fact that chargesheet had been filed.

This plea was allowed and consequently, a plea for regular bail was filed before the trial court.

Eventually in January 2021, the CMM at Patiala House Court, directed that the accused be released on bail.

The Supreme Court noted that the CMM had recorded in his order that that the accused have already deposited more than Rs 750 crores “as directed by the Supreme Court” with its Registry.

This, the top court said, "is plainly incorrect and a deviation from the findings specifically recorded in the order dated October 30, 2017."

Therefore, the Court said that an attempt has been made to overreach the process of the Court and an order of bail has been sought and obtained, to defeat the control which is being exercised by this Court.

"In these circumstances, we are constrained to issue 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. The order of the Chief Metropolitan Magistrate, Patiala House Courts dated 13 January 2021 is stayed pending further orders," the Court ordered.

The matter will be heard again on April 7.

[Read Order]