TaxTMI 
TaxTMI 
2021 (2) TMI 1356
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.... its Managing Director in 1982. One Dilliraj was the Vice President of FLCI during 2006 - 2007. One Sivaramakrishnan was the Chief Financial Officer of FLCI from 2008 to 2014. 2.3 Things were going fine for FLCI until the State Bank of India (SBI) sanctioned a working capital credit limit of Rs.20 crores on 08.02.2005, followed by the IDBI Bank, which also gave a working capital facility for Rs.18 crores by a sanction letter dated 17.08.2005. These banks extended financial assistance to FLCI from time to time. 2.4 While so, the SBI formed a consortium of banks that had lent monies to FLCI. Sometime in the year 2007, the Reserve Bank of India (RBI) conducted inspection of FLCI and observed serious irregularities and diversion of funds to 15 satellite companies. When this news became public, things started hotting up for FLCI and they were not able to repay their lenders, resulting in their account becoming 'Non Performing Asset' (NPA) in the year 2013. 2.5 Farouk Irani is said to have resigned from the post of Managing Director on 23.10.2013 and A.C.Muthiah is said to have resigned from the post of Chairman on 01.11.2013. 2.6 As the investigation into the financial health of FLC....
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....No.24888 of 2016. 2.12 Though the aforesaid facts are common to all the cases, in this order, this Court is confining itself to Crl.O.P.Nos.24856 of 2016 that was filed by Sivaramakrishnan (A1) and Ratha (A2) under Section 482 Cr.P.C. for quashing the prosecution in C.C.No.71 of 2016. 3 Heard Mr.B.Kumar, learned Senior Counsel representing Mr.S.Ramachandran, learned counsel on record for Sivaramakrishnan and Ratha and Mr.R.Sankaranarayanan, learned Additional Solicitor General assisted by Ms.G.Hema, learned Special Public Prosecutor appearing for the Enforcement Directorate. 4 Admittedly, Sivaramakrishnan (A1) joined as Accountant in the Accounts Department of FLCI in the year 1997 and at the time of leaving the company in the year 2014, he was the Chief Financial Officer. 5 The CBI investigation in Crime No.RC-02(E)/2016 registered on the complaint of the State Bank of India (SBI) has resulted in the filing of a charge sheet in C.C.No.8 of 2017 in the Court of the Additional Chief Metropolitan Magistrate for the offences under Sections 120-B read with 201, 409, 420, 468, 471 and 477-A IPC against 26 accused, of which, Sivaramakrishnan has been shown as A9. 6 However, in the c....
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....an. Though the complaint in C.C.No.71 of 2016 runs to 53 pages, this Court was able to read it and distil the essence of the allegations against Sivaramakrishnan and his wife Ratha. In fact, in paragraph 4.31 of the impugned complaint, the Enforcement Directorate has stated as under : "From the forgoing discussions, it is evident that the Salaries, Performance Bonus and other perquisites (estimated to the tune of Rs.70,11,620) as received by Shri L. Sivaramakrishnan, as a top official in FLCI, in various capacities during his tenure from 1993 to 2014 were out of bank borrowings fraudulently obtained by FLCI, which are nothing but proceeds of crime. Therefore, it stands to reason that the nature of transaction related to the acquisition of movable properties in the form of Fixed Deposits available in the names of Shri L. Sivaramakrishnan and his family members, is of money laundering, which is very well within the ambit of Section 23 of the Act." (emphasis supplied) Thus, the proceeds of crime has been quantified as Rs.70,11,620/- and that it has come to Sivaramakrishnan by way of salaries, performance bonus and other perquisites. However, the cause of action for the offence ....
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.... and every year, it has slowly increased vide paragraph 4.25 of the complaint. To say that with this income, he could not have purchased a house site for Rs.90,000/- defies logic. 11 Mr.Sankaranarayanan contended that, in his confession statement, Sivaramakrishnan has stated that he has purchased the said property for Rs.5,75,000/-, but, had registered it for Rs.90,000/- in the year 2009. If this averment in the confession statement is accepted, it can only show that he had undervalued the document and it cannot lead to the inference that he had purchased the property with the proceeds of crime. When the complaint itself, in paragraph 4.6.9 says that, FLCI had diverted the monies obtained from the banks to 15 satellite companies, it is preposterous to say that the salaries and bonus paid to Sivaramakrishnan were proceeds of crime. There is no shred of material to show that Sivaramakrishnan was a recipient of any amount, except the salary, bonus and other emoluments, which were paid to him, in the course of his employment as Accountant in FLCI. 12 That apart, the prosecution of his wife Radha, in whose name, there are some fixed deposit amounts on the premise that she is holding t....
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....mount of wrongful dividend earned by Shri.A.C. Muthiah (A-1), Shri Farouk Irani (A.-2), Ashwin C. Muthiah (A-13) and various companies promoted by Shri. Ashwin C. Muthiah (A-13) and Shri.A.C. Muthiah (A-1), namely M/s. Darnolly Investments Ltd. (A-14), M/s. Ranford Investments Ltd. (A-15), M/s. Sicagen India Ltd. (A-16), M/s ACM Educational Foundation (A-17), M/s. ACM Medical Foundation (A-18), M/s. South India House Estates Properties Ltd. (A-19) and M/s. South India Travels Pvt. Ltd. (A-20) against the false profits of M/s. FLCIL (A-5) during the FYs 2003-2004 to 2011-12 is tabulated below: Sl. No. Name of the promoter shareholder of M/s. FLCIL Total Dividends earned during FY 2003-04 to 2011-12 1 Shri A.C. Muthiah (A-1) 28,95,179.60 2 Shri. Ashwin C. Muthiah (A-13) 19,98,663.20 3 M/s. Darnolly Investments Ltd. (A-14) 12,30,669.20 4 M/s. Ranford Investments Ltd. (A-15) 64,66,275.20 5 M/s. Sicagen India Ltd. (A-16) 3,65,91,000.60 6 M/s. ACM Educational Foundation (A-17) 3,08,67,766.41 7 M/s. ACM Medical Foundation (A-18) 41,83,203.20 8 M/s.South India House Estates Properties Ltd. (A-19) 3,86,88,300.00 9 M/s. South India Travels Pvt. Ltd. (A.20) 63,....