Company director's discharge plea rejected in bank fraud case involving falsified balance sheets worth Rs. 250 lakhs

Mrs. Sandhya Varma Versus Union of India Rep by Inspector of Police, CBI, SCB, Chennai-90

Mrs. Sandhya Varma Versus Union of India Rep by Inspector of Police, CBI, SCB, Chennai-90 - TMI Issues Involved:

1. Whether the petitioner should be discharged from the criminal proceedings under Section 239 Cr.PC.
2. Whether there is sufficient prima facie evidence against the petitioner for framing charges related to the alleged conspiracy and fraud.
3. Whether the petitioner's role as a director implicates her in the alleged criminal activities of the company.

Issue-wise Detailed Analysis:

1. Discharge from Criminal Proceedings:

The petitioner sought discharge from the criminal proceedings under Section 239 of the Criminal Procedure Code, arguing that she was only a director in name and not involved in the company's operational affairs. The petitioner contended that there was no misrepresentation on her part, and she had not signed the alleged fraudulent documents. The trial court dismissed the discharge application, finding sufficient prima facie evidence to proceed with the case. The High Court upheld this decision, noting that the petitioner was a director and involved in the company's affairs, thus warranting the continuation of the proceedings.

2. Prima Facie Evidence for Framing Charges:

The prosecution alleged that the petitioner, along with other directors, was involved in a conspiracy to defraud the bank by submitting inflated and forged balance sheets to obtain overdraft facilities. The trial court found that there were specific allegations and sufficient prima facie materials against the petitioner, including her signatures on several documents as a director. The High Court agreed, stating that the evidence presented, including witness statements and company documents, indicated the petitioner's active participation in the alleged fraudulent activities. The court emphasized that at the stage of framing charges, the presence of strong suspicion is sufficient to proceed with the trial.

3. Petitioner's Role as a Director:

The petitioner argued that she was not responsible for the company's day-to-day operations and that her involvement was limited to another company, M/s. Fountainhead Communication Pvt. Ltd. However, the prosecution provided evidence showing that the petitioner, along with her husband, was a director of the company involved in the fraud, and actively participated in its affairs. The High Court noted that the petitioner had knowledge of the fraudulent activities and was involved in the submission of inflated documents to the bank. The court rejected the petitioner's argument of vicarious liability, stating that the evidence demonstrated her direct involvement in the conspiracy to defraud the bank.

Conclusion:

The High Court concluded that there was no illegality or infirmity in the trial court's decision to dismiss the discharge petition. The court found that there were sufficient prima facie materials and allegations against the petitioner to proceed with the criminal trial. Consequently, the criminal revision was dismissed, confirming the trial court's order and closing the connected miscellaneous petition.