TaxTMI 
TaxTMI 
2021 (3) TMI 1142
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....resent prosecution has been started and the bail application for the said offences is to be considered. 3. Heard Shri Mukul Rohatgi, learned Senior Counsel through video conferencing and Shri Anurag Khanna, learned Senior Counsel assisted by Ms. Gunjan Jadwani and Shri Kartikeya Saran, learned counsel for the applicant and Shri Gyan Prakash, learned Senior Counsel assisted by Shri Sanjay Kumar Yadav, learned counsel appearing for Serious Fraud Investigation Office (in short 'SFIO') and perused the record. 4. It was submitted by Shri Mukul Rohatgi, learned Senior Counsel appearing for the applicant that applicant is aged about 64 years and is in jail since 19.3.2020. He has cooperated with the investigating agency. There is no need for his further interrogation, as investigation has already been completed and charge sheet has been filed. Since number of witnesses disclosed in the charge sheet are living out of the Country, it will not be possible to conclude the trial expeditiously. Much time will be consumed in serving summons upon them and also in recording their evidence. It was further submitted that besides the said witnesses, there are also a number of witnesses ....
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.... done by the applicant in the books of account. No active role has been assigned to him. Receivable amount shown in the books of account was verified by the Bank employees thereafter letter of credit was issued and in lieu thereof advance was taken by the applicant for the business. Applicant was also regularly depositing the advance taken by him and receivable amount was also being returned by the person against whom same was shown as due. There was no question of actual physical possession of goods / articles on part of applicant as it is a merchantine trade done on the basis of bill of lading. Goods directly goes to the possession of end user from the person having possession thereon. Intermediate business on the basis of bill of lading is permissible in merchantine trade. Therefore allegations levelled against the applicant are false and baseless. Applicant was also following the guidelines of R.B.I. and was a genuine trader of goods. Referring to law laid down by the Apex Court in Y.S. Jaganmohan Reddy vs. CBI, (2013) 7 SCC 439 and P. Chidambaram Vs. CBI, (2019) SCC Online SC 1380, Shri Khanna further submitted that for consideration of bail application, Court has to look i....
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....ed letter of credit for use in foreign countries. In fact Company concerned engaged in Merchanting Trade business was in loss and due to that reason advance taken through letter of credit could not be repaid and it become NPA. Referring to total amount of NPA it was further submitted that applicant and its company furnished false books of account and caused huge loss not only to the Bank concerned but interest of public at large also affected. At this juncture, learned Senior Counsel also referred to contents of complaint and conclusion drawn by SFIO and further submitted that applicant cannot be enlarged on bail merely on this ground that co-accused, who had approached Apex Court challenging the vires of the provisions of Section 212(6) of the Companies Act were granted interim protection. It was also submitted that if the bar created under Section 212(6) of the Companies Act is declared unconstitutional then also merits of the case will remain unchanged. This is an economic offence and interest of public at large is also involved. Lastly, learned Senior Counsel prayed for rejection of bail application filed on behalf of the applicant. In support of his submissions, learned Sen....
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....e not mandatory. Similar conditions imposed in PMLA Act has been struck-down by the Apex Court. It was next contended that merchanting trade business was genuine one and it was being carried out since long time without any default. Financial statement furnished by the Companies were accurate and reflect a true state of affairs. Merchanting trade business was also being done alongwith genuine foreign parties (sellers & buyers) and they were running companies independently managed by competent persons having ample experience in the international trade and banking sector. Receivable amount was also genuine and S.F.I.O. has wrongly concluded that false statement was being submitted showing the profitable business, though, company was running in loss. It was next contended that conclusion drawn by S.F.I.O. is not based on concrete evidence and same is only on imagination / hypothesis. Guidelines laid down by the R.B.I. have been complied with in letter and spirit by the Companies. There is inconsistency and contradiction in the complaint itself regarding the charges levelled against the applicant. None of the ingredients of alleged offences are attracted against the applicant. 8. I h....
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.... MT being undertaken by RGC thereby gambling with Banks money which resulted in huge loss. Applicant was instrumental in holding the currency losses in the books of accounts under the garb of debit notes. These debit notes were raised against foreign parties and made part of trade receivable. Later on these debit notes were adjusted against the payment received from the LC rotated funds. Falsified financial statements of FIL signed by the applicant was filed with ROC and was submitted to public sector Banks depicted false MT trade receivables. Applicant provided false and bogus documents to the Banks. 10. Allegation against the applicant is also that he abused his position as promoter-directors of FIL to cause wrongful loss of Rs. 4041 Crores to public sector Banks. He utilized the corporate identity of FIL to perpetrate fraud of rotating the funds obtained through Letter of Credit discounting for mopping the interest arbitrage available between LC issuance and discounting charges and that between the interest on fixed deposits. This whole conspiracy was played under the garb of doing MT. 11. MSL (Mohan Steel Limited) started doing MT business as done by RGC and FIL i.e. mopp....
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....urt, applicant did not approach the Court below firstly but keeping in view the prayer made by the applicant before the Apex Court in Special Leave to Appeal (Criminal) No. 2393 of 2020 and the order dated 28.5.2020 passed by the Apex Court, said objection raised on behalf of prosecution is meaningless. 16. So far as the order granting interim protection passed in favour of Sunil Verma, Anoop Kumar Wadhera as well as Vikram Kothari is concerned, if the prohibition contained under Section 212(6) of the Companies Act is declared unconstitutional and struck-down from the Statute, then in that situation also merits of the present matter will not change. Thus, on the the basis of interim protection granted to co-accused by the Apex Court, the applicant cannot be enlarged on bail. 17. If the role of the applicant as alleged by the prosecution, nature and gravity of the offence and also the evidence available on record in support thereof, are compared in consonance with the Guidelines laid down by the Hon'ble Supreme Court in Y.S. Jagmohan Reddy case (supra) and P. Chidambaram case (supra), then also in the present matter huge amount received by the applicant through Letter of C....