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TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 1028
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....for the time being in force, any person who is found to be guilty of fraud, [involving an amount of at least ten lakh rupees or one per cent of the turnover of the company, whichever is lower], shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to ten years and shall also be liable to fine which shall not be less than the amount involved in the fraud, but which may extend to three times the amount involved in the fraud: Provided that where the fraud in question involves public interest, the term of imprisonment shall not be less than three years. [Provided further that where the fraud involves an amount less than ten lakh rupees or one per cent of the turnover of the company, whichever is lower, and does not involve public interest, any person guilty of such fraud shall be punishable with imprisonment for a term which may extend to five years or with fine which may extend to [fifty lakh rupees] or with both.] Explanation.-For the purposes of this section- (i) "fraud", in relation to affairs of a company or any body corporate, includes any act, omission, concealment of any fact or abuse of....
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....rred as "EISML") and Edusmart Services Private Limited (hereinafter referred as "ESSPL"), both subsidiaries of ESL. 9. The status report has been filed by SFIO and it is alleged in nutshell as under: "3. The investigation established that Shantanu Prakash was required to infuse capital in the company to avail of credit facilities from lender banks and financial institutions. Further, to hold indirectly control of the prime assets of CUIs after Corporate Debt Restructuring ("CDR") proposal, to siphoned off the funds from CUIs, he was assisted by his employees and close associates, through a series of concerted actions, such as bogus capital advances, bogus LCs, property at inflated prices and to infuse the capital, and maintain the required level of debt-equity, using a complex web of companies and financial transactions, siphoned off funds from CUIs starting from the F.Y. 2008-09 onwards. 4. Investigation established that Shantanu, Managing Director ESL and Director in EISML and others, in connivance with the KMPs/employees of the company and his close associates siphoned off huge amount of funds to the tune of Rs. 240.76 crores through various paper companies/....
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....ansferred Rs. 16.35 crores to the Applicant's account who further transferred the same to MEMPL. 10. In relation to the role of the present applicant, it is alleged that the applicant is closely associated with Shantanu Prakash and Educomp group. She was former Research head of ESL during the period 2004 to 2014. She was also a Director of MEMPL during the period 14.10.2014 to 31.07.2020 and of MEF during the period 01.10.2014 to 01.11.2017. 11. It is alleged that the applicant, despite being aware of the fact that the financials are not reflecting a true and fair view of the affairs of the company, had signed the financial statements of MEMPL for the financial year 2014-15 to 2018-19 and the financial statements of MEF for the financial year 2014-15 to 2015-16. 12. It is further alleged that she was the authorised signatory in the Bank Account operated by MEMPL in which funds were received from the various companies being operated by Shantanu Prakash. 13. She received funds to the tune of Rs. 17.78 crores in her personal account and the companies, MEMPL and MEF also received funds to the tune of Rs. 9.25 crores and Rs. 2 crores respectively from the companies co....
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....eceived from Group I & II companies and further transferred to ECCPL/MEMPL. She had received funds of Rs. 17.78 crores from Group I & II companies in her personal account and she failed to prove the genuineness of the funds received. Bindu Rana was well aware of the facts that funds were used by MEMPL to acquire the majority shareholding of ECCPL/LMEPL and to construct the school under the Brand 'The Millennium School' were arranged by Shantanu Prakash. iii) In all, 15 persons have been stated to be involved in commission of the above mentioned Charge No. 1. b. The other charge in which the role of the applicant has been alleged was Charge No. 2A and Charge No. 2B, which reads as under: Charge No. 2A: Commission of fraud by divesting the asset of ESL (share in Educomp Child Care Private Ltd. now known as Little Millennium Education Private Limited) in favour of Millennium Education and Management Pvt. Ltd. punishable under Section 447 of the Companies Act, 2013 Charge No. 2B: Commission of fraud by using the funds of ESL, EISML and ESSPL to acquire "the Millenium School" through Millenium Education Foundation; punishable under Se....
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.... aware about the fact that funds were routed through her personal account and MEMPL to indirectly hold the control of MIS by Shantanu Prakash. 18. There are various other charges which have been levelled against various accused persons but not the applicant herein. 19. Learned Senior Counsel for the applicant submits that the applicant has been falsely implicated in the present case. He submits that the applicant has received several national and international awards and is a renowned academic educationalist and author. 20. The applicant has always cooperated with the investigation for the past four years. She joined as and when she was called. He submits that there was no occasion for the respondent authorities to arrest the applicant. 21. He further submits that the applicant has been targeted by the prosecution. The main accused, even as per the prosecution case has not been arrested till date. The respondents have not arrested other accused persons who are stated to be the co-accused in the transactions which are alleged against the applicant. 22. No offence under Section 447 of the Companies Act is made out against the applicant even if taken at the face value. ....
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....her submits that the applicant had failed to cooperate with the investigation and remained evasive on several occasions. The offence alleged is a grave economic offence which inflicts severe injuries on both health and wealth of the nation and have the tendency to jeopardise the economy of the country. 30. He further submits that the limitation in grant of bail in terms of Section 212(6) of the Companies Act is in addition to the limitations under the Cr.P.C. 31. He relies upon the judgment passed by this Court in the case of Shivani Rajiv Saxena v. Directorate of Enforcement: MANU/DE/2776/2017 to contend that merely because the applicant is a woman does not entitle her for bail and the nature, gravity and seriousness of the offence have also to be considered. 32. He further relies upon the judgment passed by the Hon'ble Apex Court in the case State of Gujarat v. Mohanlal Jitamalji Porwal (1987) 2 SCC 364, Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439 and Rohit Tandon v. Directorate of Enforcement (2018) 11 SCC 46 in order to buttress the argument that economic offences constitute a class apart and need to be visited with a different approach in a matter of bail. 3....
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....ibed in Section 212(6). 40. It, however, does not mean that the woman who is found to have committed the offence should necessarily be released on bail and the basic jurisprudence to bail still have to be applied. 41. The economic offences are considered under the category of grave offences and is a factor which has to be kept in mind in addition to the triple test which is normally applied while considering the application for grant of bail. 42. It is, however, equally true that only because the allegations are one of the grave economic offences, it is not a rule that the bail has to be denied in every case. Every application has to be considered on its own merits and considering the factors which are relevant for the said case. The basic test, as reiterated by the Hon'ble Apex Court from time to time, remains the same being: (i) the chances of tampering with the documents and evidence, (ii) the chances of influencing the witness, and (iii) the flight risk. 43. It is not in dispute that the investigation in the present case is already complete, which has culminated into a criminal complaint filed before the concerned Special Court. 44.....
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....te complaint was filed for the purpose of denying Applicant the benefit of default Bail under Section 167(2) of CrPC. 50. The learned senior counsel has made detailed arguments in order to show that the transactions alleged against the applicant were commercial in nature. 51. It was submitted that the Applicant was coerced, threatened and browbeaten into making incriminating statements during her SFIO custody, contrary to the facts and her previous statements. SFIO coerced the Applicant to do so by threatening to drag her young daughter, who was an early MEMPL director, into the investigation. It is stated that the such statements were withdrawn subsequently by filing appropriate application before the Special Judge. 52. It is submitted that the Applicant has during the course of investigation explained all transactions undertaken by her and the aforesaid companies. Applicant was never involved in the financial affairs of ESL and was never an authorised signatory of the company and has not signed any balance sheet of ESL during her tenure. All transactions were undertaken through proper banking channels and as per lawful commercial practices. 53. It was further submitte....
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....nocent members of the family, especially when it relates to a woman being in custody. 62. The very fact that the SFIO did not feel the need to keep 53 out of 55 accused persons in custody and did not feel that their custody would be relevant in order to complete investigation, shows that it does not apprehend any tampering with the evidence or influencing of the witnesses. From the perusal of the complaint the role of Applicant does not appear to be graver than other co-accused persons. In fact the same has not even been contended by SFIO during the course of arguments. 63. As reiterated by the Hon'ble Apex Court from time to time, the object of bail is neither punitive nor preventive and deprivation of liberty must be considered as a punishment. 64. Considering the aforesaid facts and circumstances in mind, I am persuaded to admit the applicant on regular bail pending the trial in the Criminal Complaint titled SFIO Vs Educomp Solutions Limited & others. The applicant is, therefore, directed to be released on bail on furnishing a personal bond for a sum of Rs. 5 lakh with one surety of the like amount to the satisfaction of the Special Judge/Duty Magistrate on the fol....