Punjab-Haryana High Court
Vinod Kumar vs State Of Haryana on 26 April, 2024
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
Reserved on : 09.02.2024
Pronounced on: 26.04.2024
1. CRM-M-13400-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana & Others ...Respondents
2. CRM-M-13443-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana & Another ...Respondents
3. CRM-M-13227-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana & Another ...Respondents
4. CRM-M-12874-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana ...Respondent
5. CRM-M-13293-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana & Another ...Respondents
6. CRM-M-13292-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana & Another ...Respondents
7. CRM-M-13399-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana & Another ...Respondents
SANJAY GUPTA
2024.05.02 15:21
I attest to the accuracy and
authenticity of this document
8. CRM-M-13184-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana ...Respondent
9. CRM-M-14417-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana ...Respondent
10. CRM-M-12433-2021
Vinod kumar ...Petitioner
VERSUS
State of Haryana ...Respondent
CORAM: HON'BLE MR. JUSTICE HARKESH MANUJA
Present : Mr. Chetan Mittal, Senior Advocate with
Ms. Sehaj Sandhawalia, Advocate,
for the petitioner (in all petitions).
Mr. Gurmeet Singh, AAG, Haryana.
****
HARKESH MANUJA, J.
CRM-M-13400-2021, CRM-M-13443-2021 & CRM-M-13227-2021
1. This common order of mine shall dispose of
aforementioned petitions under discussion as the common issues/
question of law and facts are involved. For convenience, facts are
being taken from CRM-M-13400-2021.
2. By way of present petition filed under Section 482
Cr.P.C., prayer has been made for quashing the FIR No. 273 dated
26.04.2018 U/S 406, 420, 120B IPC & U/S 3 of the Haryana
Protection of Interest of Depositors in Financial Establishments, Act,
2013 (hereinafter referred as "HPIDFE Act") registered at PS Sector
31, Faridabad and all other consequential proceedings arising
therefrom.
3. Briefly stated, facts of the case are that FIR NO. 273
dated 26.04.2018 U/S 406, 420, 120B IPC & U/S 3 of the HPIDFE
Act was registered against the petitioner including others, on the
basis of a complaint made by Abhinav Garg, wherein, it was alleged
that a sum of Rs.94.5 Lacs was deposited by respondent No 2 w.e.f
July 2015 to December 2015 in FD Scheme floated by M/s SRS Ltd.
in which petitioner happened to be Non-Executive Director. It was
further alleged that all officials named in the FIR lured the
complainant to deposit money and promised a handsome rate of
interest but except payment of interest till March 2017, nothing was
paid back. It was also stated that SRS Ltd. went to NCLT for
extension of time which was earlier granted vide order dated
20.10.2016, but subsequently vide order dated 20.12.2017 NCLT
Chandigarh bench refused to extend the time and also directed
Registrar of Companies to proceed under Section 74(3) of the
Companies Act, 2013 against the SRS Limited.
3.1 It was further alleged in the FIR that despite of deposing at
different forums that they will sell some of their subsidiaries to return
the amount due towards the depositors, no effective step was taken
in this direction, rather the amount received after the sale of
subsidiaries of the companies were siphoned off in a well planned
conspiracy for the private benefits, thereby committing a fraud upon
the depositors.
3.2 Side by side, consequent to order dated 20.12.2017
passed by NCLT, Chandigarh, Deputy Registrar of Companies
initiated proceedings against the Company & its officials u/s 74(3) of
the Companies Act and vide order dated 01.08.2018 by the Ministry
of Corporate Affairs (hereinafter referred as 'MOCA'), enquiry by the
Serious Fraud Investigation Office (SFIO) was ordered which after
investigation filed two reports before the Special Court-Additional
Sessions Court, Gurgaon. While COMA 17-2021 dealt with offences
punishable under Sections 360 r/w 447, 448 and 143 of the
Companies Act, 2013 and Sections 227 and 628 of the Companies
Act, 1956, in which the petitioner was arrayed as an accused though
he was implicated as an accused only in COMA-18-2021 in which
charges were u/s 92, 137, 134, 128 and 129 of the Companies Act,
2013 and 209, 211, and 217 of the Companies Act, 1956.
4. Learned Senior Counsel for the petitioners made
submissions on various grounds. Firstly, he submitted that the
primary grievance of respondent No.2 was the non repayment of
fixed deposit/interest by the company which was squarely covered
u/s 73, 74 and 76A r/w 447 of Companies Act, 2013 and when
investigation by SFIO was already completed and proceedings were
initiated by Special Court for non refund of FD, there was no scope of
investigation by the police on the basis of same set of allegations in
view of Sections 212 & 436 of the Companies Act,2013 (for short 'the
Act'). Relevant sections relied upon by the ld. Senior Counsel are
reproduced herein:-
"212. Investigation into affairs of Company by Serious
Fraud Investigation Office.--
***
(2) Where any case has been assigned by the Central
Government to the Serious Fraud Investigation Office for
investigation under this Act, no other investigating agency of
Central Government or any State Government shall proceed
with investigation in such case in respect of any offence under
this Act and in case any such investigation has already been
initiated, it shall not be proceeded further with and the
concerned agency shall transfer the relevant documents and
records in respect of such offences under this Act to Serious
Fraud Investigation Office.
(15) Notwithstanding anything contained in this Act or in any
other law for the time being in force, the investigation report
filed with the Special Court for framing of charges shall be
deemed to be a report filed by a police officer under section
173 of the Code of Criminal Procedure, 1973 (2 of 1974).
***
(17)(a)In case Serious Fraud Investigation Office has been
investigating any offence under this Act, any other
investigating agency, State Government, police authority,
income-tax authorities having any information or documents in
respect of such offence shall provide all such information or
documents available with it to the Serious Fraud Investigation
Office;
*****
436. Offences triable by Special Courts.--
(1) Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974),--
(a) all offences specified under sub-section (1) of section 435
shall be triable only by the Special Court established for the
area in which the registered office of the company in relation
to which the offence is committed or where there are more
Special Courts than one for such area, by such one of them
as may be specified in this behalf by the High Court
concerned;
***
(2) When trying an offence under this Act, a Special Court
may also try an offence other than an offence under this Act
with which the accused may, under the Code of Criminal
Procedure, 1973 (2 of 1974) be charged at the same trial."
4.2 While drawing attention of the Court towards these
provisions, ld. Senior Counsel submitted that in view of section
436(2) of the Companies Act, 2013, Special Court when trying an
offence under the Companies Act may also try an offence with which
the accused may be charged under Code of Criminal Procedure
(CrPC), 1973. Further, it was also submitted that as per Section
212(2), where a case was assigned by the Central Government to
SFIO for investigation, no other investigating agency of the Central
Government or any State Government could proceed with parallel
investigation. Drawing strength from these provisions, he submitted
that when investigation was already being concluded by SFIO,
Investigation by the Economic Offences Wing (EOW) in present case
should not proceed further and the concerned agency was to transfer
the relevant documents and records in respect of such offence under
the Companies Act to SFIO.
4.3 Secondly, he contended that a bare perusal of the FIR
reveals that there were no specific allegations against the petitioner
who was named in only one FIR i.e. FIR No. 273 and in all other
FIRs, he was not even named. He further submitted that merely
because allegations were raised against the company in which he
was a Director, vicarious criminal liability could not be imposed upon
him in the absence of any specific allegations being made against
him.
4.4 He further submitted that on the basis of the same set of
allegations, petitioner was arrayed as an accused in COMA-17-
2021. Petitioner was arrayed as accused only in COMA-18-2021, in
which charged offences itself reflects that petitioner was unaware
and was not a party to transactions of M/s SRS Limited or its group
companies
4.5 Thirdly, he submitted that the petitioner was not
authorised to carry out any transaction related to Fixed Deposits.
Placing reliance upon MoM dated 28.07.2014 (Annexure P-13) of M/s
SRS Ltd., he submitted that Sunil Jindal (Managing Director), Raju
Bansal (Whole Time Director), Bhagwan Dass (Chief Financial
Officer) were only authorised persons on behalf of the company to
issue non- transferable fixed deposit receipts, sign & issue interest
warrants, make entries in the fixed deposit register & refund the
deposits on maturity, prepayment or otherwise, file necessary returns
with the ROC or any other concerned authority. Accordingly, in the
event of default of any payment in relation to these FDRs, he could
not be made criminally liable as he was not having any authority in
this regard.
4.6 Lastly, he contended that when investigation under the
provisions of Companies Act was already completed, no investigation
could be conducted under the HPIDFE Act, as in that event
provisions of HPIDFE Act becomes repugnant and inconsistent with
the provisions of Companies Act, 2013. He also submitted that
Section 406 and Section 409 IPC were antithesis of each other and
could not be applied together.
4.7 In support of his contentions, he placed reliance upon the
following judgments:
i. "SHIV KUMAR JATIA VS STATE OF NCT OF DELHI"
reported as (2019) 17 SCC 193
ii. "RAVINDRANATH BAJPE VS MANGALORE SPECIAL
ECONOMIC ZONE LTD AND OTHERS" reported as 2021
SCC Online SC 806
iii. "GHCL EMPLOYEE STOCK OPTION TRUST Vs INDIA
INFOLINE LIMITED" reported as (2013) 4 SCC 505
iv. "SHARAD KUMAR SANGHI Vs SANGITA RANE" reported as
(2015) 12 SCC 781
v. "SUSHIL SETHI AND ANOTHER Vs STATE OF
ARUNANCHAL PRADESH" reported as (2020) 3 SCC 240
vi. "N. GOPINATH Vs STATE OF ANDHRA PRADESH" in case
bearing No Criminal Petition No. 315 of 2021
vii. "SHARAT BABU DIGUMATI Vs GOVERNMENT (NCT OF
DELHI)" reported as (2017) 2 SCC 18:
viii. "A.V PRATHAP REDDY VS M/S INTELLECTUAL EDUCARE
PVT LTD" in case Crl. P. No. 3999 of 2018
ix. "SHILPA AJWANI & ORS. VS U.T. CHANDIGARH" reported
as 2020(1) R.C.R.(Criminal) 934.
5. On the other hand, learned State counsel submitted that
SRS Ltd., in which petitioner was a director for approximately 15
years, was involved in cheating the small investors through a well-
planned conspiracy amounting to thousands of crores. Though, on
many occasions, it was deposed before the NCLT that they will sell
their subsidiaries to return the amount of investors, however, income
from these sales was siphoned off for the personal benefits. Learned
State counsel submitted that offences detailed in the complaint
registered by respondent No.2 were duly covered under Section 3 of
HPIDFE Act as well as the provisions of IPC. He further submitted
that the scope of investigation under both the acts was separate and
accordingly, investigation by the EOW was in no way hindered by the
investigation conducted by the SFIO. Ld. State Counsel further
submitted that there were numerous precedents wherein different
agencies were made entitled for conducting the parallel investigation.
5.1 It was also submitted that while the investigation by the
SFIO was limited to the offences under the Companies Act, 2013
only and even from the language of Section 212(17)(b), it was more
than apparent that parallel investigation by other agencies was not
ruled out. For ready reference, Section 212 (17) (b) of the Act is
reproduced hereunder:-
"212.***
(17)(b) The Serious Fraud Investigation Office shall share any
information or documents available with it, with any
investigating agency, State Government, police authority or
income-tax authorities, which may be relevant or useful for
such investigating agency, State Government, police authority
or income-tax authorities in respect of any offence or matter
being investigated or examined by it under any other law."
5.2 It was also contended by learned State counsel that while
it was not possible for the depositors to know the exact role played by
each director, however, in view of the fact that petitioner was a Whole
Time Director (in short "WTD") for approximately 15 years, including
the period of default as well, his role could not be ruled out and exact
role played by him in this entire scheme of events could be seen only
after the investigation. It was further contended that from the perusal
of FIR, it cannot be held that no offence was made out against the
petitioner or the present case was an abuse of the process of law
and therefore, this Court would not exercise the discretionary powers
in favour of the petitioner to quash the FIR and consequential
proceedings.
6. I have heard learned counsel for the parties and gone
through the paper book. I do not find much substance in the
submissions made on behalf of the petitioner.
7. Firstly, argument raised by ld. Senior Counsel that once
investigation has been completed by the SFIO, investigation by any
other agency is not permissible, is required to be considered. The
above said preposition was also followed by Delhi High Court in
"Ashish Bhalla v. State & Anr", reported as 2023 NCDHC 6808
and it was held by the Hon'ble Court that SFIO has the exclusive
jurisdiction in such cases. But this Court is in respectful disagreement
with the same as there are many other considerations which were not
discussed by the Court besides, the different factual position of the
present case.
7.1 Scope of investigation by the SFIO is limited to the
offences under the Act only, which is also apparent from the
language of section 212(2) itself, whereby, investigation by any other
agency would be barred "in respect of any offence under this Act".
But on that basis, it would be preposterous to hold that investigation
even under the offences of any other Act would also be barred. In the
present case, FIR has been registered u/s 3 of HPIDFE Act along
with the provisions of IPC and accordingly, there cannot be any
restriction on investigation as per the provisions of HPIDFE Act &
CrPC.
7.2 The factum of different scope of investigation under the
Act and HPIDFE Act, is further substantiated from the scope of
investigation spelled out in summoning order dated 16.08.2021 with
synopsis, which has been annexed by the petitioner as Annexure P-
16. Para 7 of the same reads as under:
"7. The facts, revealed during investigation, showing
commission of offences as complained of, are mentioned
under the following headings:
I. FALSE STATEMENT WITH RESPECT TO SRS GROUP
OF COMPANIES INCLUDING A1-A8
II. FRADULENT REPRESENTATION BEFORE BANKS FOR
OBTAINING CREDIT FACILITIES BY A1, A3-A6
ROLE OF INDIVISUALS IN THE AFORESAID FRADULENT
INDUCEMENTS OF THE BANKS/ FINANCIAL
INSTITUTIONS
III. SIPHONING AND DIVERSION OF FUNDS RECEIVED AS
LOAN FROM BANKS/FINANCIAL INSTITUTIONS, PUBLIC
DEPOSITS, AND BOOKING AMOUNT FROM CUTOMERS
AGAINST FLATS
INSTANCES OF SIPHONING
INSTANCES OF DIVERSION
ROLE OF INDIVISUALS IN THE AFORESAID
SIPHONING & DIVERSIOB OF FUNDS
IV. MATERIAL MIS-STATEMENT IN THE FINANCIAL
STATEMENTS OF THE SRS GROUP COMPANIES"
7.3 Perusal of the commission of offences in relation to which
investigation was conducted appropriately reveals the scope of
investigation by the SFIO, which is primarily related to
the irregularities/illegalities in operations of company in violation of
relevant statutes, rules and regulations governing the administration
of a company. On the other hand, scope of offences under the IPC
and HPIDFE Act is much wider and investigation in this regard has to
be conducted on the basis of allegations levelled in the FIR after
taking into consideration the version of the victim/ investors.
7.4 Undisputedly, in the present case, investigation by the
SFIO was the outcome of the direction issued by NCLT, Chandigarh
Bench. The Bench vide order dated 20.12.2017 asked the Registrar
of Companies to initiate prosecution under Section 74(3) of the
Companies Act, 2013 before the Special Court. As a result of the
same, MOCA vide order dated 01.08.2018 ordered investigation by
the SFIO. In the scheme of Companies Act, 2013, scope of
investigation by SFIO at the behest of victims of fraud committed by a
company, is very narrow and it can be ordered only by Central
Government in accordance with section 212 of the Act. For that
reason, involving the victims in the investigation is not mandatory as
is the scenario in the present case as well as it is the admitted
position of fact that in investigation by the SFIO, neither the
complainants have been given a hearing nor is the investigation in
the line of allegations made by them.
7.5 Parallel investigation under other laws by different
agencies is not ruled out from the scheme of Companies Act, 2013
itself as in Section 212(17)(b) it is envisaged that SFIO shall share
any information or documents available with it with any other
investigating agency "in respect of any offence or matter being
investigated or examined by it under any other law". Thus,
parallel investigations by different agencies, as permitted by law, are
not precluded. The allegations under the HPIDFE Act involve
separate aspects of the alleged financial irregularities/illegalities and
cannot be considered redundant merely due to SFIO investigation
under the Companies Act, 2013.
7.6 In the present case, the complainant has approached the
police even before the investigation by the SFIO was ordered by
MOCA on 01.08.2018 as FIR in the present case is dated
26.04.2018. At this stage it is also relevant to have a look at the
definition of Section 17 of HPIDFE Act, which is reproduced below:
" Act to override other laws.
17. Save as otherwise provided in this Act, the provisions of
this Act shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time
being in force or any custom or usage or any instrument
having effect by virtue of any such law."
7.7 In contradiction to Companies Act, 2013, HPIDFE Act
specifically stipulates that Provisions of this Act shall have effect,
notwithstanding anything inconsistent therewith contained in any
other law. In that eventuality, provisions of HPIDFE Act would have
effect and thus proceedings under this Act cannot be curtailed on
account of the fact that investigation by the SFIO is complete and
Special Court has taken cognizance under Companies Act, 2013.
Therefore, In view of all these considerations held in forgoing paras,
it cannot be held that SFIO has the exclusive jurisdiction for
investigation in the present case.
8. Now other arguments raised by learned Senior counsel
for the petitioner regarding absence of specific allegations as well as
another contention that he did not have any authority with respect to
FDRs, are required to be considered. In a case like the present one
where deposits are being taken by the company, an ordinary
individual depositor cannot be expected to know the complete
hierarchy and role of each individual in the fraud committed by the
company, which are committed by way of complicated nexus and
conspiracy involving shell companies and multilayered siphoning off
the money on large scale.
8.1 Though in a different context, but similar observations
were also made by the Hon'ble Apex Court in "S.P. Mani And
Mohan Dairy v. Dr. Snehalatha Elangovan", reported as 2023(10)
SCC 685, while discussing the role of a director under Negotiable
Instrument Act 1881, relevant para of which is reproduced
hereunder:-
"47. Our final conclusions may be summarised as under:-
xxxxx
b) The complainant is supposed to know only generally as to
who were in charge of the affairs of the company or firm, as
the case may be. The other administrative matters would be
within the special knowledge of the company or the firm and
those who are in charge of it. In such circumstances, the
complainant is expected to allege that the persons named in
the complaint are in charge of the affairs of the company/firm.
It is only the Directors of the company or the partners of the
firm, as the case may be, who have the special knowledge
about the role they had played in the company or the partners
in a firm to show before the court that at the relevant point of
time they were not in charge of the affairs of the company.
Advertence to Sections 138 and Section 141 respectively of
the NI Act shows that on the other elements of an offence
under Section 138 being satisfied, the burden is on the Board
of Directors or the officers in charge of the affairs of the
company/partners of a firm to show that they were not liable to
be convicted. The existence of any special circumstance that
makes them not liable is something that is peculiarly within
their knowledge and it is for them to establish at the trial to
show that at the relevant time they were not in charge of the
affairs of the company or the firm."
At this point, it is apposite to take note of the fact that
section 3(2) of HPIDFE Act also envisages the vicarious liability of
directors (including other persons) in case of default by the financial
establishments. Relevant part of this section is reproduced here
under:-
"3. Fraudulent default by financial establishment. - ****
(2) If any financial establishment defaults any repayment of
deposit on maturity along with any benefit in the form of
interest, bonus, profit or in any other form as promised or fails
to render service as assured against the deposit, every person
including the promoter, partner, director, manager or any other
person or an employee responsible for the management of or
conducting of the business or affairs of such financial
establishment shall be punished with imprisonment for a term
which may extend upto seven years and with fine upto two
lakh rupees. Such financial establishment shall also be liable
for a fine which shall not be less than five lakh rupees or
where such deposit is quantifiable in terms of money twice the
defrauded amount whichever is more:
Provided that in the absence of special and adequate reasons
recorded, the imprisonment shall not be less than three years
with fine which shall not be less than fifty thousand rupees as
against each individual and not less than two lakh rupees
against such financial establishment."
8.2 On the other hand the case of the respondent No 2, is that
petitioner remained Director for approximately 15 years including the
relevant time when the FDRs were taken from the victims. It is
admitted case of the petitioner that he became a Whole- time
Director on 01.10.2005, re-appointed on 01.06.2010, and retired on
31.05.2015. Thereafter he was appointed as Non-executive director
but he was not working for the company since 01.04.2016 due to
personal and health reasons and pursuant to the company letter
dated 03.02.2017 he resigned as non-executive Director on
06.02.2017. Further, he was disqualified as director u/s 164(2) of the
Act from 30.09.2017 to 30.09.2022. But document brought on record
by respondent No.2 as Annexure R-2/5 shows that petitioner was re-
appointed as a Whole-Time Director by the board of directors of M/s
SRS Ltd. at its board meeting held on 22.05.2015 w.e.f. 01.06.2015.
Relevant part of this document is reproduced hereunder:-
" SPECIAL BUSINESS
4. Re-appointment of Sh. Vinod Kumar (DIN:
00013729) as Whole-Time Director designated as
Executive Director
To consider and if thought fit, to pass with or without
modification(s), the following resolution as an ordinary
resolution:
"RESOLVED THAT in accordance with the provisions of
Section 196, 197 and 203 read with Schedule V and other
applicable provisions, if any, of the Companies Act, 2013
(hereinafter referred to as "Act") and the Companies
(Appointment & Remuneration of Managerial Personnel)
Rules, 2014 (including any modification(s) or re-enactment(s)
thereof for the time being in force) and as recommended by
the Nomination & Remuneration Committee and approved by
the Board of Directors, the consent of the Members be and is
hereby accorded for reappointment of Sh. Vinod Kumar (DIN:
00013729) as Whole-Time Director of the Company,
designated as Executive Director, for a further period of 5
(Five) years w. e. fi from 1st June, 2015 on the terms &
conditions as specified in the Statement pursuant to Section
107 of the Companies Act, 2013 annexed to this notice......"
8.3 It is relevant to note at this stage that allegations in the
present FIR pertain to Year 2015 onwards. Further, perusal of Form
No. MGT7 brought on record as Annexure - "R2/3" dated 12.07.2017
pertaining to financial year 01.04.2014--31.03.2015 reveals that
petitioner's name finds mention at Serial No 4 as a whole time
director in details of directors and Key managerial person. In view of
the above, it cannot be denied that during all these instances, the
petitioner was a part of the top hierarchy of SRS Ltd. and thus was at
the helm of affairs of the company. It is also relevant to notice here
that with respect to these paras i.e. para 10 & 11, there is no specific
denial by the petitioner in his counter to the written statement. In that
circumstance, it is hard to believe that he was not having knowledge
about all these illegalities/ irregularities or he was not a party to any
such transactions. Even if there are no specific allegations against
him or he was not named in the FIR or even if he was not having any
authority with respect to FDRs, when allegations are against the
company SRS limited, petitioner having a place in the top hierarchy
of the company, his involvement cannot be completely ruled out at
this stage.
8.4 The judgments relied upon by learned Senior counsel for
the petitioner, regarding requirement of specific allegations, cannot
be made applicable in the present case as Section 3 of HPIDFE Act
specifically makes Directors and other persons, who are responsible
for the functioning of financial establishment, vicariously liable in
such cases. Judgments to the effect that special statue shall prevail
over general law are also not applicable as HPIDFE Act is also a
State specific special law to protect the interest of depositors in
financial establishment and for matters connected therewith or
incidental thereto which also received the assent of the President of
India on the 27th October, 2014. Additionally, even if Section 406 and
420 of IPC are antithesis to each other, it cannot be a basis to quash
the FIRs, in the given facts and circumstances.
9. It is not the case of the petitioner that there was no such
fraud committed, rather from the reports of SFIO as well as different
audit/bank reports brought on record by respondent No.2, it is
apparent that a financial fraud/scams involving hundreds of crores
was committed with thousands of depositors. Crux of some of these
reports is as below:-
a) Transaction audit report by Grant Thornton, LLP Was taken
into consideration by the NCLT Chandigarh bench in CA No
1171/ 2019, wherein, it was observed that the business of SRS
Limited was carried on with the intent to defraud creditors
including the applicant.
b) In action taken report dated 10.08.2020, it has been
informed by the SBI to respondent No 1/EOW that account of
SRS Ltd has been classified as fraud. Some of the points from
this report are reproduced here under:
"v. SRS Limited Account has been classified as, "Fraud" and
complaint has been lodged with CBI on 13.05.2018.
vi. LOC has been approved against Promoters/ Guarantors by
Fraud Monitoring Department,
vii. Enforcement Directorate is also probing the Company for
violations under PMLA. We have submitted all the details
sought by them.
vii. SRS Ltd, matters are being examined by CBI, SFIO and
ED in the cases filed against Promoters/Guarantors/Directors
of SRS Limited."
c) Similar observations are also there in report dated
12.02.2020 provided by the Axis Bank to EOW/ respondent
No 1.
10. From all these reports it is manifest that complainants
were lured to invest/deposit their hard earned money in the schemes
projected by the company, wherein, lucrative returns were offered to
them, but subsequently, SRS Ltd. did not returned any amount and
thus causing immense financial loss to these persons. Merely,
because the provisions of HPIDFE Act are similar to the provisions of
Companies Act, 2013 on certain aspects, it cannot be held that a
person cannot be charged under these sections when from the
allegations these offences are duly made out. Under the HPIDFE Act,
the EOW would investigate offences related to the protection of
depositors' interests and EOW's jurisdiction extends to a broader
range of economic offences beyond corporate frauds, including
scams related to financial establishments, Ponzi schemes, and other
financial crimes.
11. Therefore, considering the parameters laid down by
Hon'ble Supreme Court in "State of Haryana and others vs.
Ch.Bhajan Lal and others", reported as 1991 (1) R.C.R. (Criminal)
383, case of the petitioner does not fall in any of the specified
parameters and there is no basis coming forth to invoke powers u/s
482 of CrPC to quash the impugned FIRs or consequential
proceedings, especially when the investigation is yet to be
completed.
12. In view of the discussion made above, all these petitions
are dismissed.
CRM-M-12874-2021, CRM-M-13293-2021, CRM-M-13292-2021,
CRM-M-13399-2021 & CRM-M-13184-2021
13. All these cases under present discussion belong to the
FIRs filed on account of dishonor of cheques. Facts as taken from
the case CRM-M-13399-2021, very briefly are that victims were
persuaded to invest their money in real estate schemes with
assurance that they will be given plot or flat at a lower price alongwith
interest @ 1.5% per month and one can either take that interest or
reinvest the same. But subsequently, neither interest was given nor
the money was returned and to assuage the victims, cheques of part
amount were given, which were also dishonored. It has also been
alleged that thousands of such cheques were issued.
14. In addition to the grounds taken in the petitions related to
FDRs, which have already been rejected by this Court, two additional
grounds were also taken in these petitions. Firstly, the petitioner was
not Director of SRS Buildmart, the firm which issued these cheques.
Secondly, these cheques were issued after the date of registration of
FIR and post retirement of the petitioner.
15. On the other hand, the learned State counsel submitted
that the parent company is SRS Limited only and there were
numerous shell companies created to commit fraud with all its
depositors.
16. I do not find much substance in these arguments raised
by learned Senior Counsel. Even in the report of SFIO, it has been
observed that there were around 88 subsidiary companies of the
SRS Limited, which is the parent company. All these subsidiary
companies were created to spread the business of SRS Limited and
worked on its behalf only. In that case, it is immaterial whether the
cheques were issued by SRS Buildmart, and when the petitioner is a
director in the parent company which was the ultimate beneficiary of
all these transactions, his role and liability cannot be ignored at this
stage of investigation.
16.1 Timings of these cheques also could not come to the
rescue of the petitioner as it has to be ascertained during
investigation that whether the petitioner had any role to play in entire
sequence of events including the allegations of fraud and conspiracy
as alleged by the complainants.
17. In view of the discussion made above, all these petitions
are also dismissed.
CRM-M-14417-2021 & CRM-M-12433-2021
18. These two cases under discussion belong to the FIRs, on
account of non-delivery of flats. Facts as taken from the case CRM-
M-12433-2021, very briefly are that FIR has been filed against SRS
Real Estate against offering of flats in SRS Royal Hills by alleging
that builder enticed them to book e-flats by showing a brochure of the
township being constructed. Booking of flats started in August 2012
and delivery of flats was to be given in 4 years but neither the flats
have been delivered nor there is any refund of money.
19. In addition to the grounds taken in the petitions dismissed
in the earlier part of the judgment, only additional grounds taken in
these petitions is that proceedings under RERA have already been
initiated and the criminal colour is being given to a civil dispute.
20. On the other hand, the learned State Counsel submitted that
deposits from complainants were taken without there being any
intention to deliver any flat and the only purpose was to cheat the
complainants and therefore, it cannot be said that criminal
proceedings cannot be initiated against the petitioner.
21. When the entire operations of the company in which
petitioner was a director, are vitiated with frauds and numerous
cases have piled up against them for money not being returned,
then it cannot be simpliciter said that the present cases only relate to
RERA. If entire scheme to deliver flats to homebuyers was cooked up
to defraud them, it is not possible to hold that even such actions
would be outside the purview of criminal proceedings.
22. In view of the discussion made above, both these
petitions are also dismissed.
23. Pending miscellaneous application(s) in any of these
petitions, if any, shall also stand disposed of.
26.04.2024 ( HARKESH MANUJA)
sanjay JUDGE
Whether speaking/reasoned ? Yes/No
Whether Reportable? Yes/No
