The article is written by Dhruv Kumra, Advocate, Dhruv Kumra & Associates. He specializes in commercial disputes pertaining to arbitration, money recovery, drafting of contract, agreements and real estate. 

There has been a steep increase in defaults being made by many borrowers causing volatility in the `Market.

There are big names surfacing with frauds of several hundred crores.

Some honest businessmen who have not been able to pay their bills have been colored with criminal antecedents as if they have done some heinous offense.

A businessman is looked at as a trickster at the very first instance by various agencies. However, it is not always the case.  In fact, in many situations, he might be a victim of various factors like market volatility, personal issues or some unforeseen circumstances.

It does not mean that he has done fraud in making payment. However, in today’s times, it is seen as a crime of the highest order. Nobody comes forward to ask that man as to why he is into this situation.

A bank must also get its dues.

So, how does the wheel of action start? More importantly, what respite can be offered to bail him out of the embarrassing situation?

In recent times, it has been observed that the account of the borrower is declared as Non-Performing Asset within no time. The bank follows It up by making various criminal complaints either to CBI or EOW.  FIR is registered consequently against a helpless businessman who feels trapped and is labeled as a criminal.

Once, this stigma is attached, all support systems which can aid in bringing him out of that situation look at him with suspicious eyes and withdraw from his company.

Steps and precautions to be taken

Apply for anticipatory bail

At the very outset, if any such FIR is registered, against a legal entity e.g. company, firm, society, association etc, the office bearers directly involved should apply for Anticipatory Bail.

Caution: Thou shall not take assurances for granted, nor expect any leniency

A consoling hand might come from various corridors after registration of FIR stating that there will be no arrest. However, there is no thumb rule as to whether the Investigating officer will arrest you or not.

Do not expect any leniency even if the investigating officer seems assuring or the case appears to be frivolous.

Thou shall align your books, procure all the documents and be prepared.

The authorities might ask you everything under the sun, irrespective of whether their queries sound relevant to you or not.

A common situation we as legal practitioners encounter most of the times is that the person acquainted with the entire books, transactions are usually arrested and the people who engage a lawyer on his behalf are not able to answer his queries as they are oblivious to the entire business.

Caution: Make summarised copies of documents

Therefore, whenever any such situation is apprehended, it is advised to make copies of vital documents and books immediately

Give it to near and dear ones with the synopsis as they can be of assistance in preparing the case or at the time of presentation before relevant authorities

Never run from the judicial mechanism, keep calm and attend court proceedings.

Many people are very afraid of the courts. They do not even go to courts fearing as to what might happen there. Just relax, take a deep breath. A judge is a person who has a judicious mind and is also a human being. One automatically prejudices its case by not going to court. Negative inferences are drawn in his absence. So a piece of advice from the wise is that always attend court proceedings.

How to deal with surprising situations wherein the Investigating Officer states that the accused is not co-operating in the investigation?

Many people who have been arrayed as an accused in criminal proceedings have encountered a surprising situation. The investigating officer states that the person is not coming forward to assist him even when the accused might have visited him an ample number of times and submitted all the documents sought by the officer.

Precautionary step:

Take proper receiving from the officer or have some substantive proof that you have joined the investigation.