Court Stays Investigation, Directs CBI for Status Report; Petitioners Granted Exemption with Conditions.

The court granted exemption to petitioners, contingent on filing sworn affidavits and court fees within 72 hours post-resumption. M/s. ESL, undergoing insolvency since May 2017, faced multiple complaints, but EoW and CBI investigations revealed no fraud. The court stayed further investigation, directing CBI to submit a detailed status report, emphasizing adherence to procedural norms in bank fraud cases.

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Issues:
1. Exemption allowed subject to filing sworn affidavit and court fee.
2. Incorporation and loan details of M/s. ESL and M/s. ESPL.
3. Loan restructuring process and approvals.
4. Initiation of insolvency proceedings by M/s. ESL.
5. Complaints filed against M/s. ESL and subsequent investigations.
6. Circulars issued by CVC regarding banking fraud complaints.
7. Filing of multiple complaints with CBI and registration of FIR.
8. Previous investigations by EoW and CBI finding no fraud.
9. Court order directing CBI to provide detailed report on previous complaints.
10. Stay on investigation and directive for detailed reply/status report.

Analysis:
1. The petitioners were granted exemption subject to the condition of filing sworn affidavits and requisite court fees within 72 hours upon the resumption of the court's regular functioning.

2. M/s. ESL and M/s. ESPL availed loan facilities from a consortium of banks, with M/s. ESL initiating insolvency proceedings under the Insolvency and Bankruptcy Code in May 2017. The resolution professional appointed affirmed no fraudulent transactions.

3. Despite complaints filed against M/s. ESL, investigations by EoW and CBI did not find any fraud. Circulars from CVC directed PSBs to refer complaints to the Advisory Board of Banking Fraud before filing with investigating agencies.

4. Multiple complaints were filed with CBI against M/s. ESL, with a subsequent FIR registered in February 2020. The court directed CBI to provide a detailed report on previous complaints and investigations.

5. Previous investigations by EoW and CBI did not find any fraud or misappropriation, and the Resolution Professional confirmed the absence of fraudulent transactions. The court ordered a stay on the investigation and directed CBI to file a detailed reply/status report.

6. The court emphasized the need for following established procedures in bank fraud cases and sought clarification on the complicity of any public servant in the investigations. The case was listed for further proceedings on a specified date.

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