SC stays HC order in fraud case involving Bhushan Steel ex-promoter Neeraj Singal

New Delhi: The Supreme Court on Tuesday stayed the operation of a Delhi High Court verdict that had held that Neeraj Singal, ex-promoter of Bhushan Steel and an accused in an alleged Rs 2,500-crore fraud case, could not be compelled by the Serious Fraud Investigation Office (SFIO) to sign documents under the companies law.

The apex court, however, did not interfere with the high court order granting interim bail to Singal and said he can remain out, subject to observing certain conditions including reporting to the SFIO officer concerned.

A bench comprising Justices A M Khanwilkar and D Y Chandrachud, however, took strong note of the haste shown by the high court in executing its order granting bail to Singal on August 29, despite the fact that the top court had kept the appeal of SFIO against the order for hearing the next day.

"We may only observe that urgent mentioning of the case was made before the bench presided over by the Chief Justice of India and hearing thereon continued after court hours on August 29.

"The matter was directed to be listed on the next day on August 30. Propriety demanded that the high court should have showed deference and awaited orders in the present proceedings.

"The haste with which the high court was moved on the evening of August 29 at around 5:20 PM to implement its order, despite this court being seized of the proceedings would indicate an attempt by Neeraj Singal to pre- empt the hearing before this court by securing release. We express our disapproval," the bench said.

The bench then transferred to itself the plea filed by Singal in the high court and said the observations of the high court with regard to the constitutional validity of sections 212(6)(ii) and 212(7) (which deals with the power of SFIO to probe fraud cases) of the Companies Act "ought not to have weighed with the high court for grant of interim relief".