TaxTMI 
TaxTMI 
2022 (1) TMI 973
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....tion of Corruption Act, 1988. 3. Heard Sri V.Venkata Ramana, learned Senior Counsel appearing on behalf of Sri V.Venkata Nagaraju, learned counsel for the petitioner/A10. 4. Brief facts of the case are that pursuant to the complaint dated 07.9.2021 addressed by the Chairman, Andhra Pradesh State Skill Development Corporation, Andhra Pradesh (for short APSSDC) to the Additional Director General of Police, Crime Investigation Department, Andhra Pradesh at Mangalagiri, the present crime was registered by the respondent police on 09.12.2021. In the said written complaint, it was alleged that the Government of Andhra Pradesh has issued orders vide G.O.Ms.No.47 (HE) (EC.A2) Department dated 13.12.2014 incorporating the APSSDC. The object of the project is to impart hi-end technology to the trainers. SIEMENS offers training program in collaboration with various State Governments. In the negotiations, the State Government has agreed to establish SIEMENS centers of excellence, technical skill development institutions and skill development centers. Six such clusters have been formed at the inception at cost of Rs. 546,84,18,908/- with SIEMENS and Design Tech providing a grant-in-aid of....
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....SSDC. The object of the project/scheme is to impart hi-end technology to the trainers. APSSDC has deputed a team to visit SIEMENS centers of excellence already established in Gujarat and to submit a report. SIEMENS offers training program in collaboration with various State Governments. The State Government has agreed to establish SIEMENS centers of excellence, technical skill development institutions and skill development centers in different clusters. Each cluster compromises of one center of excellence. Five technical skill development institutions of one center of excellence, five technical skill development institutions and skill development centers. Six such clusters have been formed at the inception at cost of Rs. 546,84,18,908/- 90% and a government share thereof is 10% Rs. 55crores. A MOA has been entered into between APSSDC on one hand and SIEMENS on the other. SIEMENS is a combination of M/s. SIEMENS Industry Software (India) private limited and M/s. Design Tech Systems Private Limited. The MOA is in furtherance of G.O.Ms.No.4, dated 30.6.2017 of skill development enterprises and innovation (Skills) Department. A tax investigation by the Additional Dire....
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....patent that all these companies have formed into a cartel to siphoning the public funds turning to crores of rupees. The Addl. Director General, DGGSTI, Zonal Unit, Pune observed that no services were delivered by Skillar to DesignTech in their invoices depicting training software development including various sub-modules and royalty and subscription thereof. The Managing Director of DesignTech admitted before Asst. Director General that he does not have any evidence to show that services have been received from these companies. After financial irregularities have come to surface, directions have been given to APSSDC to conduct a forensic audit and to furnish a copy of the report for taking further action. Accordingly, a work order has been assigned to M/s. Sharath and Associates, Chartered Accountants Forensic Audit firm. The audit firm conducted an enquiry and submitted a report. The forensic audit is concerned with pointing out the flaws in policies, flaws in systems. Flaws in utilization of funds and analysis of various spending practices and to find out irregularities, misstatements, governance procedure, internal policies evaluation for the financial years 2014-15 to....
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....ical supervision. He has multiple co-morbidities and is an old patient of hypertension and requires strict and medical supervision. Even according to the medical report dated 04.12.2021 and 03.12.2021 shows that the petitioner is suffering with the following ailments. i. Primary hypertension. ii. Breathlessness iii. Diabetes Type II iv. Weight gain v. Urine frequency and urinary voiding vi. Liver enlargement vii. Gall-bladder adequately distended viii. B12 deficiency ix. Swelling of body x. Uric acid. 10. Learned Senior counsel further submitted that even as per the complaint dated 07.9.2021 have only allegations based on the report submitted by the Additional DGGI, Pune and even according to the said report of DGGI, Pune has only with the service provider and service receiver has taken contradictory stands. They have established a shell company and they were issuing invoices without providing any services. Though the allegations in the DGGI report is related to the financial irregularities but there is no mention about the siphoning of the funds. Even ac....
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.... Suman Bose, Mukul Agarwal, Mr. Vikas Vinayak Khanvelkar and officials of APSSDC has committed fraud and forgery, besides fabrication of books and accounts with malafide intention to misuse the APSSDC funds. Learned senior counsel has submitted that the above said allegations in the F.I.R. or in the remand report are inserted the strand and no case is established against the petitioner. He further submitted that the petitioner was arrested on 10.12.2021 and remanded and subsequently, the respondents have filed an application for police custody of the petitioner through Crl.M.P.No.282/2021 on the file of the Special Judge for SPE & ACB Cases-cum-Additional Metropolitan Sessions Judge, Vijayawada. But the said application was considered on merits and dismissed on 22.12.2021 with the following reasons: Admittedly, the petitioner/CID conducted searches and seized CPU, laptop, cell phones and some documents. Admittedly, the respondent/A10 is neither a director no promoter of the company and he is only an employee. Admittedly the GST official summoned respondent/A10 several times for enquiry before him he has produced all the available documents with him. The main accus....
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....inal jurisprudence that there is no vicarious liability unless the statute specifically provides so. Thus, an individual who has perpetrated the commission of an offence on behalf of a company can be made accused, along with the company, if there is sufficient evidence of his active role coupled with criminal intent. Second situation in which he can be implicated is in those cases where the statutory regime itself attracts the doctrine of vicarious liability, by specifically incorporating such a provision. In another judgment of the Hon'ble Supreme Court in between Arnab Manoranjan Goswami vs. State of Maharashtra and others (2021) 2 Supreme Court Cases 427 wherein it is recited that: While considering an application for the grant of bail under Article 226 in a suitable case, the High Court must consider the settled factors which emerge from the precedents of this Court. These factors can be summarized as follows: (i) The nature of the alleged offence, the nature of the accusation and the severity of the punishment in the case of a conviction; (ii) Whether there exists a reasonable apprehension of the accused tampering with the witnesses or be....
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....on. The remedy of bail is the "solemn expression of the humaneness of the justice system". 41. Tasked as we are with the primary responsibility of preserving the liberty of all citizens, we cannot countenance an approach that has the consequence of applying this basic rule in an inverted form. We have given expression to our anguish in a case where a citizen has approached this court. We have done so in order to reiterate principles which must govern countless other faces whose voices should not go unheard. In view of the observations in the above said judgments, it is clear that the petitioner's involvement in the above said complaint, F.I.R/remand report are not specific. Hence learned senior counsel requested to consider the bail application on the above stated grounds and also on the medical reasons and he also submitted that he would obey the conditions imposed by this Court and also cooperate with the investigation. Crl.P.No.7339 of 2021 13. This petition is filed under Section 437 and 439 of Code of Criminal Procedure, 1973 (for short "Cr.P.C") seeking regular bail to the petitioner/A6 in connection with Crime No.29/2021 on the file of Crime Investigation D....
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....making correspondence with top leaders of the then Govt. and top bureaucrats for getting release of funds of Rs. 371 crores in advance in favour of DesignTech. 4. In the year 2017 officials of Directorate General of GST Intelligence Unit, Pune registered a case against DesignTech. After investigation they came to a conclusion that the APSSDC funds of Rs. 371crores paid to DesignTech for establishing Skill Development Centers along with SISW were diverted by raising fake invoices through the various shell companies. Their investigation further concluded that the diverted amount again was routed back to DesignTech through bank accounts of different companies. The Directors of shell companies paid back the consideration amount to DesignTech after deducting their commission for issue of fake invoices. Further, it is established that much before entering into the agreement, MD, SISW in connivance with MD, DesignTech and others hatched a conspiracy to incorporate and to create a company exclusively to manage and to supply the material to Siemens Project of APSSDC. Pursuant of their conspiracy they incorporated and created a company by name PVSP IT Skills and DesignTech and sub-c....
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.... Vikas Khanvelkar MD of DesignTech had several meetings with provestment group of companies (PVSP Group). The agenda of these meetings were to brief the PVSP group on the APSSDC project and proposed execution of the plan of utilizing of APSSDC grant of Rs. 330 crores. 14. Further, the investigation established that Mr. Bose, Khanvelkar and Mr. Agarwal played an active role in setting up "Skillar" as a project management entity for APSSDC project and the above three persons controlled the activities of Skillars. The remaining team members of Siemens Project had knowledge about creation of Skillars exclusively for Siemens project. Further, Mr. Bose did not share the above actions with other employees of SISW except his close associates/team members. 15. Further, all the negotiations, scope, management and discussions related to TalentEdge (supplier of manpower) and KnowledgePodium (supplier of course material) were performed by Suman Bose and his SISW team, i.e. GVS.Bhaskar Prasad, Bhavna Gupta, Naga Venkata Pratap Bontha, Ashish Sharma and later handed over to Skillar for raising the purchase orders. 16. Further, Mr. Soumyadri Shekhar Bose @ Suman Bose pla....
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....ters International (Asia) Ltd., as a mechanism to obtain improper benefits by using fake invoices raised by the shell companies. The funds released by APSSDC were pilfered off through this modus operandi. 28. It clearly emerges that Mr. Suman Bose in connivance with Mukul Agarwal, and Mr. Vikas Vinayak Khanvelkar, Ghanta Subbarao, Dr.K.Lakshminarayana and NVK Prasad has committed fraud and forgery, besides fabrication of books and accounts with malafide intention to misuse the APSSDC funds. 15. Learned senior counsel has further submitted that the show cause notice issued on 30.12.2020 by the Director General of Goods and Services Tax Intelligence is that M/s. Designtech systems are mainly engaged in three lines of business 1. Distribution of PLM software of Siemens, 2. Product design and engineering services for automotive OEMS and auto component suppliers and 3. CAD CAM CAE and IT training. M/s Design Tech Systems limited is largely paying service tax under the category of information technology service. A show cause notice has been issued under the provisions of Section 73(1) of the Act to designtech and PVSP/Skillar within five years of the date of filing of their S....
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.... the CITD accepted the request through its letter dated 05.12.2015. Reply to the said letter the CITD has submitted its request on 04.01.2016 wherein it clearly indicated that the then Principal Director CITD Sri Shujayat Khan submitted preliminary report on valuation of the project to Sri L.Premachandra Reddy, IAS, Secretary to Government. Accordingly, the work was entrusted to CITD by the skill development, Entrepreneurship & Innovation Department. Later CITD has submitted its valuation report on 22.3.2016 to Sri L.Prema Chandra Reddy, IAS, the then Principal Secretary, Department of Skill Development. 18. Finally the learned senior counsel has relied on the allegations made in the remand report. As per the allegations made in the remand report that the petitioner being a managing director of SISW he entered into an agreement with APSSDC for establishing six clusters comprising one COE and 5 TSDI are falsely projected as worth Rs. 3356 crores (Siemens and Designtech should contribute 90%-AO State Government should contribute 10% of the project). Second ground is that he corresponded with the Government of Andhra Pradesh and got released Rs. 371 crores towards Government share ....
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.... petitioner/A8 in connection with Crime No.29/2021 on the file of Crime Investigation Department (CID), Economic Offence Wing-II, CID, Andhra Pradesh, at Mangalagiri, Guntur District, wherein the petitioner is alleged to have committed the offences punishable under Sections 120-B, 166, 167, 418, 420, 465, 468, 471, 409, 201, 109 r/w 34 & 37 IPC and sections 13(2) r/w 13(1)(c) of Prevention of Corruption Act, 1988. 22. Sri P.Veera Reddy, learned senior counsel appearing on behalf of the learned counsel for the petitioner/A8 has mainly contended that the allegations made by the Chairman, APSSDC in his complaint dated 07.9.2021 itself clearly discloses that the petitioner has to pay 55 crores only as their share of 10%. In the complaint he has specifically stated that as per MoA, DesignTech has to provide training software development including various sub-modules designed for high end software for advance manufacturing CAD/CAM. The MoA does not contemplate sub-contract. But contra, Siemens and Designtech has subcontracted a large part of its work to M/s. Skillar enterprises private limited, New Delhi. As a matter of fact, skillar was established after designtech had entered into a....
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....the respondents. It shows that since three months, the petitioner is cooperating with the investigation and whatever the request made by them, the petitioner has submitted and the same was established in the order passed by the Special Judge for SPE & ACB Cases, Vijayawada vide its order dated 22.12.2021. Further the Court has considered that the CID had conducted searches in the residence and office of the petitioner and seized laptop, cell phone and some documents and the court has also observed that the respondent/A8 was served with questionnaire by the petitioner/CID to which he answered and it is not disputed by the petitioner/CID. Observing the same, the said application was dismissed. 25. Finally learned senior counsel has relied on the medical reports annexed along with the bail application. Further submitted that the petitioner is 65 years old and he has medical ailments even according to the report annexed along with the petitioner, the petitioner is suffering from change of voice, breathlessness, bilateral abductor palsy and swelling due to infection or inflammation. In view of the same, the petitioner would cooperate with the investigating agency and prayed to consid....
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....titutions as t-SDIs for setting up skill development centers. 27. Subsequent to the agreement with APSSDC and SISW, the DesignTech, in turn, entered into a sub-contract with (A-5) i.e. PVSP IT Skills Pvt., Ltd., later name changed to M/s Skillar enterprise India Pvt. Ltd which was incorporated on 30.7.2015 just one month after the execution of the APSSDCSIEMENS project agreement and issued purchase order to the tune of Rs. 241crores for the supply of material for the project. The A5 skillar does not have any previous experience for the supply or huge value of material as it was incorporated just one month after the execution of the agreement. A5 PVSP/Skillar in turn issued purchase orders to A27 allied computers international (Asia) Ltd. which was declared as a shell company by Central Government Agencies. A27 was a defunct company and was being used only to issue bogus invoices without the supply of any material or providing any services only to accommodate entries. Similarly, the A5 also issued purchase orders to other shell companies namely M/s. Patrick Info Services Pvt. Ltd., IT Smith Solutions Pvt., Ltd., Inweb Services Pvt. Ltd. The said shell companies issued fake invoic....
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....ompanies) is not true because of A8, MD of A4 and A6, MD of SISW and the petitioner had earlier worked together in different companies and they are close associates since long back. The petitioner in connivance with A6 and A8, with fraudulent and dishonest intention in pursuance of a conspiracy, hatched a plan among themselves to create a company to divert the APSSDC funds. In pursuance of their conspiracy, the petitioner, A6, A8 incorporated a company namely A5 PVSP IT later changed to Skillar enterprises Pvt. Ltd. On 30.8.2015 after entering into the agreement. The petitioner has complete knowledge about the creation of the new company. As such the contention of the petitioner that A5 was only a project management company and it was operated as per the directions of A4 and SISW. 31. As contended by the petitioner that he was only appointed as financial adviser and later as chief operating officer of the A-5/Skillar Enterprises is false. The petitioner in connivance with other accused incorporated the company exclusively to divert the APSSDC funds by raising fake/bogus invoices through various associated shell companies. 32. Considering the above said aspects FIR was registe....