TaxTMI 
TaxTMI 
2023 (4) TMI 152
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.... He is the Promoter and President of M/s. Securekloud Technologies Limited (formerly known as M/s. 8K Miles Software Limited), Indian Company. He is also the Promoter of M/s. Healthcare Triangle Incorporation, a Nasdaq listed corporation in the USA. Petitioner gave two criminal complaints with CCB, Chennai, against M/s. Quantum Global Securities, M/s. Desert River Capital Private Limited and KSBL Securities Limited in relation to an act of illegal sale of equity shares of M/s. Securekloud Technologies Limited by Narendra Malik, Bhavesh Ram Prakash Singh, Rohit Arora, Ashish Singh, Kalpana Singh and the Directors of M/s. Quantum Global Securities, M/s. Desert River Capital Private Limited and KSBL Securities Limited. The two FIRs were registered on 02/02/2019 and 26/09/2019, in Crime Nos. 39/2019 and 282/2019 respectively. 3.Based on the abovesaid FIRs, the Enforcement Directorate opened an ECIR bearing reference No. ECIR/CEZO-1/17/2020. Petitioner was the defacto complainant in the aforesaid Crime Numbers and he was issued summons, dated 02/09/2022, 28/10/2022 and 07/12/2022 by the Directorate of Enforcement Department. The officers of the Enforcement Directorate instead of invest....
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....uance of Look Out Circular is contrary to law and violates his freedom of movement. 5.In support of his submissions, the learned counsel for the petitioner pressed into service the following Orders. (A) W.P.No.2477 of 2020 dated 07.03.2022 in Rahul Surana Vs. The Serious Fraud Investigation Office and seven others. The relevant portion of the order is extracted hereunder: 28. The investigation, even after the elapse of three years, is stated to reveal only prima facie materials and no concrete evidences are stated to have been found been found to implicate the petitioner or frame charges. Admittedly, however there are no proceedings against the petitioner so as to implicate him before the Criminal Court or in any other fora to justify the restrictions under which he has been placed. 29. Admittedly, there have been no instances when the petitioner has evaded summons/notices calling for his attendance/appearance. The Central Bureau of Investigation (CBI) has confirmed that there are no investigations that are ongoing in the case of the petitioner, though reserving their right to initiate appropriate action at an appropriate juncture in future. 30. No material is placed before....
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....cular provided: "Recourse to Look Out Circular is to be taken in cognizable offences under IPC or other penal laws. The details in column IV in the enclosed proforma or regarding reason for opening LOC's must invariably be provided without which the subject of an LOC will not be arrested/detained." 64. The mandate of the Office Memorandum dated 27.10.2010, that a request for Issuance of an LOC would necessarily have to contain reasons for such request makes it clear that the condition precedent for issuance of an LOC is the existence of reasons, which should be disclosed in the request for issuance of an LOC. (C) W.P.(CRL) 714/2022 Dated 04.04.2022 Rana Ayyub Vs. Union of India and Anr. is relied for the proposition that if applicant has appeared before the Investigating Agency when summoned, there is no cogent reason for presuming that the petitioner would not appear before the Investigation Agency and hence, no case is made out for issuing the impugned LOC. (D) W.P.(C) 5374/2021 & CRL.M.(BAIL) 605/2021 dated 12.01.2022 Vikas Chaudhary Vs. Union of India is relied for the proposition that LOC is an extremely severe step and meant to be used only in exceptional circumst....
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....20 with an objective of preventing the offence of money laundering and punishing the offenders of money laundering, identifying and confiscation of proceeds of crime involved in money laundering by commission of offences vide the abovesaid FIR. 7.Investigation conducted so far revealed the complicity of the petitioner. They are: (i) Petitioner obtained loan from M/s. QGSL as a resident Indian and Indian Citizen and suppressed his KYC documents showing him as a foreign citizen and an NRI. (ii) This was done only to avoid and bypass regulatory requirements of NRE/ NRO accounts. (iii) His regular DMAT account with HDFC was opened as an NRI. (iv) He obtained loan from M/s. QGSL knowing fully well that the share brokers are not allowed to give loan and the said loan can be obtained only from an NBFC. (v) Petitioner and the then CFO of M/s.8k Miles found to be involved in manipulation of books of account and inflating the revenue of the company, thereby showing the rosy picture of the company, which led to exorbitant hike in the share price of the Company. Petitioner and the CFO of the company Shri.RS.Ramani involved in manipulation of share price of M/s.8k Miles in order to g....
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.....He further submitted that investigation indicated that petitioner has enriched himself to the tune of Rs.145 crores by selling shares of M/s.8k Miles belonging to himself and his CFO Shri.RS.Ramani. Petitioner's premises were searched along with the premises of the lenders of his loan and important evidences of his outright involvement in manipulation of share prices of M/s.8k Miles were found in the form of digital evidences and the same are being analysed. To confront the findings of digital evidences, he was summoned for his appearance on 15.03.2023. However, he preferred not to appear. 10.It is his further submission that when they searched in the business and residential premises, he was asked about his laptop and he replied that his laptop is in USA. Through the "Find my" app in his mobile phone, it could be gathered that his laptop and mobile phone were concealed at some premises in Chennai itself and they were seized. The data recovered from the said devices are huge and are being analysed. Due to the share price manipulation activities and fudging of books of account, the innocent investors, who believed in the genuineness of the books of account of his company, lost....
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....ART A of the Prevention of Money-Laundering Act, 2002. The petitioner was penalised by SEBI in its final order in WTM/AB/CFID/CFID_3/22165/2022-23 for the offences under Sections 15A (a), 15HA, 15HB of the SEBI Act, 1992 and is not penalised under Sections 12A r/w Section 24, though there is a finding that the company and petitioner have violated Section 12A (c) of the SEBI Act, 1992 and Regulation 3(d) & 4(1) of the PFUTP regulations, 2003. When there is no punishment imposed under Section 12A r/w Section 24, Enforcement Directorate has no jurisdiction to investigate the case against the petitioner for the alleged violations of the securities under the SEBI Act, 1992 and for the penalties imposed aforesaid. 13.Considered the rival submissions and perused the records. 14.It is true that the petitioner is the defacto complainant in the FIR in Crime No.39/2019 for the offences under Sections 420, 465, 468, 471 and 120B IPC and Crime No.282/2019 for the offences under Sections 409, 420, 465, 468, 471 and 120B IPC registered against the accused. The FIR allegations in Crime No.39/2019 shows that petitioner owns 92,00,000 shares in M/s. 8K Miles Software Services Ltd. He is the promot....
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....IRs that petitioner obtained loan against his shares and later his shares were sold by the accused by fabrication and forging of documents. However, we have seen from the counter affidavit filed by the first respondent, narrated in detail above, that petitioner himself is a party to the conspiracy in share manipulation, i.e., Exorbitant hike in the price by showing a rosy picture, possible inflation of revenue, questionable related party transactions, siphoning of funds by the promoters and fraudulent write-off of INR 520.65 Crores, sale of shares in the open market for Rs.110 crores in conspiracy with R.S.Ramani, parking of illgotten money in the entities belonging to the petitioner in USA and UAE, causing loss to the investors for more than Rs.1000crores, intentional, willful mis-declaration, impersonation claiming as Indian resident and Indian citizen when actually he is a foreign citizen and NRI and manipulation of the accounts in favour of the revenue of the company etc., Though petitioner appeared for enquiry, it is seen from the statement of the learned Additional Solicitor General of India that petitioner had not effectively co-operated with the enquiry/investigation. When ....
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.... made out against the petitioner. Therefore, petitioner cannot contend that Enforcement Directorate has no jurisdiction to investigate the case against him for violating/committing the offences under the SEBI Act, 1992. 18.FIR in Crime No.39/2019 was registered for the offences under Sections 420, 465, 468, 471 and 120B IPC and FIR in Crime No.282/2019 was registered for the offences under Sections 409, 420, 465, 468, 471 and 120B IPC. Offences under Section 120-B r/w Sections 420 and 471 IPC are Scheduled offences under the Prevention of Money-Laundering Act, 2002. We have come across cases were the defacto complainant had himself/herself during the course of investigation found to be an accused. In the nature and circumstances of the case, the allegations made against the petitioner, the volume of the amount involved in this case, volume of loss suffered by the investors, volume of money ill gotten by petitioner and said to have parked in USA and UAE and the fact that investigation in this case is not completed for the reason that analysis of electronic data consumes lot of time, this Court is of the view that the presence of petitioner in India is absolutely necessary for compl....