Telangana High Court
Vvr Industries, vs Union Of India, on 15 April, 2024
Author: Surepalli Nanda
Bench: Surepalli Nanda
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IN THE HIGH COURT OF TELANGANA AT HYDERABAD
W.P. No. 14898 of 2023
Between:
V.V.R. Industries and another
... Petitioners
And
Union of India and others
... Respondents
JUDGMENT PRONOUNCED ON: 15.04.2024
THE HON'BLE MRS JUSTICE SUREPALLI NANDA
1. Whether Reporters of Local newspapers : Yes
may be allowed to see the Judgment?
2. Whether the copies of judgment may be
marked to Law Reporters/Journals? : Yes
3. Whether Their Lordships wish to
see the fair copy of the Judgment? : Yes
_________________
SUREPALLI NANDA, J
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THE HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P. No. 14898 of 2023
% 15.04.2024
Between:
V.V.R. Industries and another
... Petitioners
And
Union of India and others
... Respondents
< Gist:
Head Note:
!Counsel for the Petitioners: Mr.C.Shanmukha Rao
^counsel for Respondent No.1 : L. Pranthi Reddy
Standing Counsel for respondents 2 and 3: Mr M.P.Kashyap
Counsel for respondent No.4: Mr THOMAS JOSEPHLLOYD
Counsel for respondents 5 and 6:G.P. for Home
? Cases Referred:
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HON'BLE MRS JUSTICE SUREPALLI NANDA
W.P. No. 14898 of 2023
ORDER:
Heard Mr C.Shanmukh Rao, learned counsel
appearing on behalf of the petitioners, Ms L.Pranathi
Reddy, learned counsel appearing on behalf of the 1st
respondent, Mr M.P.kashyap, learned standing counsel
appearing on behalf of respondents 2 and 3, Mr Thomas
Joseph Lloyd, learned counsel appearing on behalf f the
4th respondent and learned Government Pleader for
Home appearing on behalf of respondents 5 and 6.
2. The petitioner filed the present writ petition
seeking prayer as under:
"to issue an order or direction in the nature of writ,
more particular in the nature of Writ of Mandamus
declaring the inaction of respondents in continuing to
freeze Petitioner No.1's account and directing the
Respondent No. 3 Bank to de-freeze account No.
50200016545880 of 1st petitioner, pending further
investigation by the Respondent No. 5 & 6."
3. The case of the petitioners, in brief, as per the
averments made by the petitioner in the affidavit filed
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by the petitioner in support of the present writ petition
is as under:
a) The 1st Petitioner Firm is doing business of supply of
steel strap, strapping seals CR Sheets, C-30 guards with the
4th respondent company and other companies which are
subsidiary of the 4th respondent company and other
companies. The business transaction between 4th respondent
and the 1st petitioner is also that of supply of goods i.e.
exchange of their goods as per their requirement and
necessity on payment of goods consideration. On this process
the 1st petitioner firm had debt with the 4th respondent
company and the 4th respondent also had debts with other
companies among them one is Sunray Metallurgical Ltd..
b) Thereafter, a letter was addressed by the representative
of the 4th respondent firm to the 1st petitioner to clear the
debts with Sunray Metallurgical Ltd Company and
subsequently one representative of the 4th respondent had
approached to petitioner No.1 firm with a letter addressed
that petitioner No.1 firm had to clear their debts with Sunray
Mettalurgical Ltd. Company on their instruction the 2nd
petitioner had cleared the 4th respondent company debts
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through petitioner No.1 firm account for an amount of
Rs.80,22,711/- .
c) Subsequently, the 6th respondent without proper
enquiry has registered a crime No. 539 of 2022 dated
25.08.2022 including the petitioner firm, as accused No.6 for
the mischief/cheating and other acts done by the employee of
the 4th respondent which is nowhere concerned and not
connected with petitioner No.1 firm. Thereafter, the 5th
respondent has issued notice dated 25.11.2022 to freeze the
account of the 1st petitioner with the 3rd respondent bank vide
A/c No.5020016545880 through letters. The 5th respondent
has also issued further notices to the 1st petitioner dated
21.11.2022, 22.12.2022 & 17.03.2023 and the petitioner has
replied to all the notices along with the documentary
evidences. However, the 5th respondent has again issued
notices dated 24.04.2023 and 29.04.2023.
d) Thereafter, as the result of notice issued by the 5th
respondent, the 3rd respondent bank has frozen the account
of the 1st petitioner firm and the same was intimated to the
petitioner through letter dated 25.11.2022. However, even
upon proper investigation by the respondent No. 3 & 5, the
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5th respondent is not sending letter to the 3rd respondent to
defreeze the 1st petitioner firm's account as it is no more
required.
e) Moreover, all the business transactions between the 4th
respondent and the 1st petitioner firm are also cleared and
this clearly establishes the false allegations levelled against
the petitioner firm. The 1st petitioner firm has only one bank
account through which it conducts its business and in the
view of the above facts and circumstances continuing to
freeze the petitioner's account by the 3rd respondent will
further hamper petitioners' business. Hence this Writ Petition.
4. PERUSED THE RECORD
A) Letter dated 25.11.2022 of the HDFC Bank, reads
as under:
"I have received the Notice on 11.11.2022 from Asst.
Commissioner Police to Debit Freeze Your Account
(50200016545880). Based on the Notice, we have
marked no Debit to your Account.
This letter has been issued upon specific request
received from the customer without any risk or
responsibility on part of the Bank or any of its signing
authorities."
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B) Letter dated 07.08.2023 vide Rc.No.DC.II/2023,
dated 07.08.2023 of the Deputy Commissioner (ST-II)
Enforcement, O/o Commissioner of Commercial Taxes
C.T. Complex, Nampally, Hyderabad - 500 001
addressed to the Assistant Commissioner of Police,
EOW, Cyberabad Police Commissionerate, Hyderabad at
Gachibowli - 500 032 and in particular, the relevant
portion, read as under:
"In connection to the letter issued from your
office, we hereby submit that we have found various
fraudulent transactions while going through the e-
waybills and their purchase and sale transactions. We
observed the following which clearly exhibits the.
fraud done by the supplier duly raising invoices
without supplying material.
V.V.R. INDUSTIES:
While going through the transactions of VVR
Industries, it was observed that the said company is not
in the procurement of CR/HR Coils and involved only in
the business of trading of CR Strips and other finished
products only. It was also observed that there is
variation in the quantity mentioned in Invoices and E-
waybill also which were raised to KLSR Infratech Limited
and on the same vehicles, other e-waybills also raised
by other taxpayers. It was also observed that there is
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no procurement of CR/HR Coils from any company
involved in the said business.
Further, it was also observed that there are huge
variations in the value of HSN wise purchases and sales
and not even matching with the purchased HSN code
material and sold HSN Code material. We also observed
that there is no vehicle movement for many invoices.
It was also observed that the vehicles pertaining
to procurement of material and sale of material were
non-transport vehicles and moreover Bike
(AP15BB1147), Tractor (AP15TA7129), Car
(TS08UB7124), TS12UB2286 (Passenger Auto),
TS34T2977 (Passenger Auto) AP28BP1145 (NANO Car)
etc., which clearly exhibits that the said firm
involved in huge fraudulent transactions not only
with KLSR Infratech Limited but also with many
companies. It was also observed that some of the
vehicles were frequently used even on the same day
also and the existence of vehicles and the carrying
capacities of all vehicles need to examine further in
detail."
C) Paras 6 and 9 of the counter affidavit filed by
respondent No.4, read as under:
"6. The Respondent No. 4 submits that the respondent
No. 4 having paid the amounts to the petitioner under
the belief that the petitioner had issued genuine
invoices/ bills and without doubting his intentions
cleared the bills, but during the audit when the
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respondent No. 4 verified the accounts, the
respondent No. 4 realized that the amounts
claimed by the petitioner in their invoices for the
supplies alleged to have been made, were never
made to the Respondent No. 4 company and that
the petitioner had raised false bills and invoices
and had usurped away several crores of Rupees
from the respondent No. 4. Further the respondent
No. 4, verified with the Commercial Tax Department
with regard to the alleged supplies claimed to have been
made by the petitioner and the respondent No. 4 vide
Letter dt. 07-08-2023, received from the Deputy
Commissioner enforcement commissioner of commercial
tax in which it is clearly mentioned that "while going
through the transactions of VVR industries, it was
observed that the said company is not in the
procurement of CR/HR coils and involved only in the
business of trading of CR Strips and other finished
products only it was also observed that there is
variation in the quantity mentioned in invoices and E-
Way bill also which were raised to KLSR Infratech Ltd
and on the same way vehicles, other e-way bills also
raised by other taxpayers. It was also observed that
there is no procurement of CR/HR coils from any
company involved in the said business.
9. Respondent No. 1, submits that the petitioner
fraudulently had received Crores of rupees from
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had realized the same and lodged a complaint
with the police Jeedimetla and the police
Jeedimetla had registered FIR No. 539 of 2022, dated
30 June 2022 Under Sections 420 and 406 of IPC, and
during the course of investigation, the police having
found the complaint of the Respondent No. 4 true and
genuine and also that the petitioner has played fraud
and raised false invoices against the Respondent No. 4
company had got the bank account of the petitioner
freezed and the same is in freeze till date."
D) Paras 9, 10 and 11 of the counter affidavit filed by
respondent No.5 read as under:
" In this regard, it is submitted that the petitioner
No.1 falsely claimed an amount of Rs. 3,38,59,030
(Rupees three crores thirty-eight lakhs fifty-nine
thousand and thirty only) from the 4th respondent
company and credited in their bank account No.
No.50200016545880 HDFC Bank, Kompally,
Hyderabad. The respondent No.5 also intimated to
THE HONOURABLE VIII METROPOLITAN
MAGISTRATE, MEDCHAL:: CYBERABAD regarding
the said freezing of account vide letter dt. 18.11.2022.
Since the amount available in the account
No.50200016545880 HDFC Bank pertains to the
amount claimed by the petitioner No.2 from the 4th
respondent. In view of the same, the respondent
No.5 requested the respondent No.3 to make debit
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freeze of the account in order to protect the case
property/money till the orders of the Hon'ble
Court.
10. It is respectfully submitted that the petitioner
No.2/accused No.6 in para No.9 & 10 requested to de-
freeze their bank account No.50200016545880 HDFC
Bank to facilitating them to pay salaries to their
employees, workers, customers, bills etc.
In this regard, it is to submit that the
investigation of this has been completed and filed
the charge sheet before the Hon'ble VIII
METROPOLITAN MAGISTRATE, MEDCHAL::
CYBERABAD on 19-09-2023 and it is PT vide CC
No. 1837 of 2023.
It is respectfully submitted that, since the amount
available in the account No.50200016545880 HDFC
Bank pertains to the amount claimed by the petitioner
No.2/A-6 from the 4th respondent, the prayer of the
petitioner No.2/A-6 is not considerable.
11. It is submitted that the petitioner has efficacious
alternate remedy to approach the Hon'ble Trial Court for
the relief claimed in this Writ Petition, as such present
Writ Petition is not maintainable.
For the reasons stated above, it is therefore
prayed that, this Hon'ble Court may be pleased to
dismiss the Writ Petition, in the interest of justice and
pass such other order or orders as this Hon'ble Court
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may deem fit and proper in the circumstances of the
case."
5. A bare perusal of the averments made in the
counter affidavit filed by the 4th respondent indicates
that on the ground that the petitioner had raised
invoices without making any supplies to the respondent
No.4 company and on realization of the same, the
respondent No.4 lodged a complaint with the police,
Jeedimetla and had registered FIR No.539 of 2022,
dated 30.06.2022 under Sections 420 and 406 IPC
against the petitioner herein.
DISCUSSION AND CONCLUSION
6. A bare perusal of the material document enclosed
along with the counter filed by the 4th respondent vide
Rc.No.DC.II/2023, dated 07.08.2023 of the Deputy
Commissioner (ST-II) Enforcement, O/o Commissioner
of Commercial Taxes C.T. Complex, Nampally,
Hyderabad - 500 001 addressed to the Assistant
Commissioner of Police, EOW, Cyberabad Police
Commissionerate, Hyderabad at Gachibowli - 500 032,
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clearly indicates a clear finding against the petitioner that
petitioner induldged in fraud by raising invoices without
supplying material and that there is no vehicle movement for
many invoices and that there are huge variations in the value
of HSN wire purchases and sales are not even matching with
the purchased HSN Code material and sold HSN Code
material.
7. A bare perusal of the averments made in the counter
affidavit filed by the respondent No.5 in particular paras 9, 10
and 11 (referred to and extracted above) clearly indicates the
specific stand of the respondents, that petitioner No.2 had
falsely claimed an amount of Rs.3,38,59,030/- from the 4th
respondent company without the 4th respondent being
supplied the raw material as mentioned in their 22 invoices,
and got credited the said amount in petitioners' bank account
No.50200016545880, HDFC, Kompally, Hyderabad and in view
of the same the 5th respondent requested the respondent No.
3 to make debit freeze of the subject account in order to
protect the case property/money till appropriate orders are
passed by the trial Court.
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8. This Court taking into consideration the specific
averments made at paras 6 and 9 of the counter
affidavit filed by respondent No.4 and also the specific
averments made in the counter affidavit filed by the 5th
respondent at para 9, 10 and 11 and the contents of the
letter Rc.No.DC.II/2023, dated 07.08.2023 (referred to
and extracted above) and duly taking into
consideration the fact as borne on record, that the
investigation of the subject case had been completed
and charge sheet had been filed before the VIII
Metropolitan Magistrate, Medchal, Cyberabad on
19.09.2023 vide C.C.No.1837 of 2023, this Court opines
that the effective remedy available to the petitioner as
per law for the relief claimed for in the present writ
petition is to approach the competent Trial Court, and
accordingly, the writ petition is disposed off giving
liberty to the petitioner to approach the competent trial
Court for the relief prayed for in the present writ
petition since the specific plea taken by the petitioner
in the reply affidavit filed by the petitioner No.2 that
the 5th respondent completed the investigation, but
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however, intentionally to support the 4th respondent is
delaying filing of charge sheet, is factually incorrect
since the charge sheet had been filed before the
competent Court on 19.09.2023 itself as per the
counter affidavit filed by the 5th respondent and hence,
the said plea of the petitioner No.2 in the reply affidavit
filed by the petitioner is untenable. However, there
shall be no order as to costs.
Miscellaneous petitions, if any, pending shall stand
closed.
__________________
SUREPALLI NANDA, J
Dated: 15.04.2024
Note: L.R. copy to be marked
b/o
kvrm
