State Nct Of Delhi vs Inderpreet Singh & Anr.
2016 Latest Caselaw 2025 Del

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*    IN THE HIGH COURT OF DELHI AT NEW DELHI
                               Judgment delivered on: 15th March, 2016
+                           CRL.M.C. No.1922/2012
      STATE NCT OF DELHI
                                                           ..... Petitioner
                            Represented by:   Mr.Rahul Mehra, Sr
                                              Standing Counsel,
                                              Ms.Nandita Rao, ASC
                                              with Mr.Satya Narain
                                              Vashisht, APP for the
                                              State with SI S S Rana,
                                              PS EOW in person.
                    versus
      INDERPREET SINGH & ANR.
                                                       ..... Respondents
                            Represented by:   Mr.K.K.Manan, Sr
                                              Advocate with
                                              Mr.Ankush Narang,
                                              Mr.Nipun Bhardwaj, and
                                              Ms.Ranuaq Anand Advs.
CORAM:
HON'BLE MR. JUSTICE SURESH KAIT

SURESH KAIT, J. (Oral)

1. By way of this petition filed under Section 482 of the Code of Criminal Procedure, 1973, petitioner/ State seeks direction thereby quashing the order dated 06.03.2012 whereby both the respondents were granted bail by learned Additional Sessions Judge (West) Delhi in case FIR No.12/2011 registered at police station EOW Crime Branch, New Delhi for the offences punishable under Sections 409/420/120B of the IPC read with Sections 3,4,5, & 6 of the Prize Chit Money Circulation Scheme (Banning) Act, 1978 (hereinafter referred as the said Act.

2. The aforesaid case was registered on the complaint of one Sh.Rajnarendra B Badave on the allegations that respondents had launched lucrative schemes for the general public and invited investors on the assurance of high returns to them against their investments. The respondents also designed a website in the name and style of 'www.abcindya.com' and induced the victims by mentioning that the company is leading company in the network marketing industry. They conducted several seminars to give the publicity to the scheme. They induced many victims to invest the money with them and assured them to return 10-25 per cent per month of their investment amount as well as other incentives in the form of commission/subscription as under:-

"Recurring bonus: Recurring bonus is the most important and fabulous part of their plan, here subscriber gets bonus each month whether he is an active subscriber or inactive subscriber, either he is successful in building his down line or he failed to join any subscriber under him but still he will get announced recurring bonus each month. He will get up to 25% recurring bonus each month. They will try their level best to give minimum bonus, which is above than 10% to 25% every month.

Direct Income: Apart from the recurring bonus given to all distributors, direct promoter will get another 25% of the recurring bonus received by their 4 level down line subscriber. Binary Income: He will also receive commission on the subscribers, which is not directly referred by him that means if he has a good down line and you get good sale under him, then also he is get huge commissions through the binary income. It was also assured that the principal amount of the investor would also be returned after completion of 30 months of their investments."

3. Mr.Rahul Mehra, learned senior standing counsel appearing on behalf of petitioner submits that as per the contents of the above said website, there are about 40,715 investors, who have invested their money in the scheme of the alleged company and said company has collected about Rs.44.00 Crores from them. The respondents were in custody and they moved the bail application which was considered vide order dated 06.03.2012 on the statement of their learned counsel that said respondents cannot ensure the payments while in custody and could only pay, if they are granted bail. Learned counsel for said respondents assured that they will assist the investigation and ensure the payment of money to the creditors. The said order was passed in the year 2012. Since the respondents paid no money to the investors, the present petition has been filed.

4. Vide order dated 16.07.2012, this Court keeping in view the seriousness of the allegations and siphoning of the funds, the Serious Fraud Investigation Office (SFIO) was directed to investigate the affairs of M/s Abcindya Networks Pvt Ltd. The DCP, EOW was also directed to file the photocopies of all the documents collected by him during investigation with SFIO.

5. Consequently, said office investigated the matter and filed the report. In the order dated 03.10.2012, this Court recorded that as per the report investigation filed, neither the TDS of Rs.2,95,70,787/- nor the service tax of Rs.44,64,767/- has been deposited. In the report some allegations of siphoning of funds found to be correct. Consequently, respondents were directed to file the affidavits indicating as to how many investors have been paid since the date of their release on bail

and whether they are willing to deposit the admitted amount due and payable to the investors according to them, with the Investigating Officer.

6. Mr.Mehra further submits that respondents did not comply with the said order, however filed affidavit dated 05.03.2014 after a gap of almost 1½ years wherein inter-alia stated as under:-

"4. That the company doesn't own any dues to any person. It is pertinent to mention here that the same can be matched with both profit and loss accounts and the same has been submitted to SFIO during investigation.

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6. That it is submitted here that I have already paid all the subscribers the money due to them and the company currently have no dues pending towards any subscribers."

7. Learned counsel further submits that SFIO investigated the matter qua the violations of the provisions of the Companies Act 1956 and accordingly filed the complaint against the respondents before learned Trial Court. Thus, the respondents have not complied with the order dated 06.03.2012 whereby they were released on bail subject to the terms incorporated therein. Moreover, pursuant to the order dated 03.10.2012, respondents have not filed proper affidavits and avoided to mention therein whether they had paid any amount to the investors.

8. On the other hand, Mr.K.K.Manan, learned senior counsel appearing on behalf of respondents submits that pursuant to the order dated 03.10.2012 respondents filed their affidavits wherein it is stated that the company does not own any dues to any person. The respondents joined the investigation both done by EOW and SFIO. The

SFIO filed the complaint against respondents whereas EOW has not filed any charge-sheet till date. Moreover, SFIO concluded in the investigation report as under:-

"(i) The company had accepted deposits in the guise of online gaming in contravention to the provisions of Section 58A of the Company Act, 1956. The investment/subscription made by the public is in the nature of public deposit as the rate of interest is given as 10% per month, the time period of the deposit is given as 30 months and the deposits are refundable at the option of the investor after a period of 90 days. Therefore, the company and its managing director have contravened the provisions of Section 58A and are punishable under Section 58A(6) of the Companies Act, 1956.

(ii) There is a material misstatement in the Balance Sheet and Profit and Loss Account of the company. Shri Inderpreet Singh, managing director and Shri C.K. Garg, auditor has violated the provisions of Sections 211 and 217 of the Companies Act, 1956. They have filed the balance sheet with ROC knowing them to be false and are guilty u/s 628 of the Companies Act, 1956.

(iii) The Company was involved in the activity of money circulation as defined in Sec 2© of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 and it is a banned activity under the said Act. Hence, the managing director of the company Shri Inderpreet Singh and individuals who have enrolled others for participation in the scheme have thereby earned huge benefits and are liable for penalty under Sec 3 & 4 of the said Act.

(iv) The managing director and such individuals, who acted as agents / representatives and have dishonestly and knowingly inducted the people to invest in the company with the dishonest intention

of making illegal and unlawful gains, are guilty u/s 406/420 read with section 120B of IPC.

(v) The following amounts have been siphoned away from the company:

(a) Rs.80.00 lakhs shown as advance recoverable in cash or kind by Shri Inderpreet Singh, managing director.

(b) Rs.10.00 lakhs by Shri Tilak Raj Sharma.

(c) Rs.3.41 Crores of TDS and Service Tax payable . to the Govt b y Shri Inderpreet Singh."

9. Thus, the allegations of the petitioner don't have any substance for the reason that there is nothing to be paid by the respondents.

Moreover, the matter has been investigated by SFIO and filed the complaint before learned Trial Court. This Court vide order dated 16.07.2012 directed the matter to be investigated by SFIO for the reason that EOW was not properly investigating the matter. Thus, after the investigation has been done by the latter authority, nothing is to be paid by the respondents as stated in the affidavit. The respondents have not violated any terms and conditions of the order dated 06.03.2012 passed by learned Additional Sessions Judge whereby they were granted bail and the order dated 03.10.2012 passed by this Court.

10. Mr.Manan, further submits that as per the conclusion of the SFIO, total Rs.90.00 Lacs were siphoned off and an amount of Rs.10.00 Lacs were returned to one Tilak Raj, one of the investors, whereas the other investors including the complainant in this case have not come forward. Therefore, there was no occasion for the respondents to pay the amount. Moreover, SFIO issued the summons

to the complainant and other four investors, however they did not turn up. In addition, the respondents remained in jail for about 86 days and were in police custody for 14 days. Therefore, there is no purpose to set aside the order dated 06.03.2012 and directing the respondents to remain behind the bar.

11. It is not in dispute that SFIO investigated the matter regarding the violations of the Indian Company Act provisions and accordingly said office filed the complaint under Sections 58A, 221,227, 233 read with Section 628 of the Companies Act, 1956; whereas EOW is investigating the case FIR No.12/2011 registered under provisions of IPC and of the said Act. Therefore, the report filed by the SFIO and the investigation carried out by the State are totally different and for different violations of laws.

12. Be that as it may. The order dated 06.03.2012 was not passed on merits by learned Additional Sessions Judge. Respondents were released on bail on the assurance that they shall assist the investigation and ensure the payment of money to the creditors. Admittedly, barring an amount of Rs.10.00 lacs paid to one Tilak Raj (as per conclusion of SFIO), respondents have not paid any money. Moreover in the affidavit dated 05.03.2014 respondents stated that the company does not own any dues to anyone. Moreover, pursuant to the order dated 03.10.2012, the respondents have not filed details of any amount paid to any of the investors. The investors are in thousands and amount in Crores involved. The respondents were released on bail vide order dated 06.03.2012 on the assurance that they will return the amount after releasing from Jail, however, they failed to do so.

13. In view of the facts recorded above, I have no hesitation to say that respondents have violated the order dated 06.03.2012 passed by learned Additional Sessions Judge as well as order dated 03.10.2012 passed by this Court.

14. Consequently, the order dated 06.03.2012 releasing the respondents to bail is hereby set aside. Both respondents are hereby directed to surrender before the Investigating Officer within two days from today.

15. In above terms, instant petition is allowed.

16. Copy of this order be given dasti under the signature of Court Master to both the sides.

SURESH KAIT (JUDGE) MARCH 15, 2016 M