TaxTMI 
TaxTMI 
2023 (10) TMI 1369
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....e applicant was, however, arrested on 8/3/2022. There are in all four accused of which one is granted bail by the trial Court and one by this Court. 3. The applicant is a director of the company named Jagat Agro Commodities Pvt. Ltd. (hereafter 'JACPL' for short) which was initially incorporated in the year 1984 by the Pawa Group and in 1993, Aggarwal Group joined as the other shareholder. JACPL was primarily engaged in rice production. It is the contention of learned senior advocate for the applicant that the bank auditors carried out repeated physical verification and vide reports dated 12/2/2014, 5/12/2024, 15/6/2015 and 8/10/2025 categorically verified the physical existence of the godowns and the value of the stocks. It is submitted that last of the Forensic Audit Report dated 8/10/2015 found the losses incurred by JACPL in the year 2014-2015 to be genuine and also found no diversion of funds. While adjudicating a lis arising out of a dispute between two shareholder groups, that is Pawa Group and Aggarwal Group in JACPL, the Company Law Board ('CLB' for short) directed SFIO to file a report with respect to the position of stock. An assertion was made by Pawa Group that stoc....
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....2019. It is, thus, the submission that once the entire proceedings were initiated on the strength of the Companies Act, 1956, there was no occasion, justification or jurisdiction with the SFIO to commence and conclude its investigations and prosecute the applicant under Section 447 of the said Act. It is then submitted that even on the same set of accusations, CBI has registered First Information Report (FIR) under Sections 420, 467, 468, 471, 120-B of the Indian Penal Code (IPC) at the instance of the bank defrauded. It is, therefore, submitted that the question is whether prosecution under Section 447 of the said Act would stand validated or not would also require adjudication at an appropriate stage. In the facts and circumstances of the present case, having regard to the view that I am inclined to take, I do not propose to delve into the aforesaid aspects of this paragraphs which could be a subject matter of consideration in appropriate proceedings. 7. Mr. Hiten Venegavkar, learned counsel for the respondent No. 1 - SFIO, vehemently opposed this application. It is submitted that the applicant is facing serious accusations of financial fraud in the company and there are mater....
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.... not a case where the applicant is entitled to be enlarged on bail on medical grounds. It is then submitted that though the properties are attached and an affidavit has been filed to indicate that part of the amount involved in the fraud can be covered up, however, this cannot be a factor for enlarging the applicant on bail having regard to the serious nature of the accusations. 9. Having heard learned counsel, while deciding the present application I must bear in mind the provisions of sub-section (6) of Section 212 of the said Act which reads thus:- "212(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), [offences covered under section 447] of this Act shall be cognizable and no person accused of any offence under those sections shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: ....
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....6) of Section 212 of the said Act. 13. So far as the medical condition of the applicant is concerned, learned senior advocate submitted that the applicant is suffering from several ailments such as hypertension, diabetes mellitus, ischemic heart disease and seizure disorder. This Court had called for a medical report. The applicant was admitted in Sir J. J. Hospital at times for undergoing treatment. This Court in the order dated 3/5/2023 recorded that the report does not indicate that the sickness cannot be treated by the doctors in Sir J. J. Hospital. The order dated 21/7/2023 passed by this Court records that the applicant was admitted in Sir J. J. Hospital since 9/6/2023 and is being treated. The applicant's medical report dated 4/8/2023 reveals that the applicant is treated as per advise of Sir J. J. Hospital. The medical advice is for regular monitoring and better control of seizures. The report reveals that the applicant was referred to Sir J. J. Hospital on multiple occasions for various treatments. The present health status of the applicant as per the medical report is thus :- "Patient continues to suffer from seizure episodes. He had 2 seizure episodes in last....
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....company or any body corporate, includes any act, omission, concealment of any fact or abuse of position committed by any person or any other person with the connivance in any manner, with intent to deceive, to gain undue advantage from, or to injure the interests of, the company or its shareholders or its creditors or any other person, whether or not there is any wrongful gain or wrongful loss; (ii) "wrongful gain" means the gain by unlawful means of property to which the person gaining is not legally entitled; (iii) "wrongful loss" means the loss by unlawful means of property to which the person losing is legally entitled." 16. Learned senior advocate submitted that the applicant is now in custody for more than 18 months. Placing reliance on Section 447 of the said Act it is submitted that the maximum punishment for the offence is imprisonment for a term which shall not be less than six months but which may extend to ten years. Prima facie, I am of the opinion that having regard to the nature of the accusations made in the case at hand, as per the first proviso to Section 447 of the said Act, the alleged fraud in question involves public interest, for which th....
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....Crores. The details of these properties are as under:- Sr. Description of Property Initial Approx Valuation at the time of Sanction 1 Industrial Sheds/building on a plot measuring 42 Kanals and 4 Marlas situated at 38/39 Km Stone in the area of Village Rai, Dist. Sonipat in the name of M/s Shree Balaji Agro Industries. Rs. 26.92 Crores 2. Land & building at plot measuring 2 Bigha and 8 Biswas (2420 sq. yds) (Part of Khasra No. 11/11) situated at Village Singhu near Delhi Haryana Boarder belonging to Shri Sant Lal Aggarwal & Smt. Sudha Pawa. Rs. 2.92 Crores 3. Land and building on plot measuring 1 Bigha and 3 Biswas) 1210 sq. yds (Khasra No. 11/13/2) situated at Village Singhu (near Delhi Haryana Boarder) in the name of Shri Sant Lal Aggarwal & Smt. Sudha Pawa. Rs. 1.32 Crores 4. Land and Building measuring 2 Bigha 3 Biswas (2167 sq. yds) (out of Khasra No. 11/19), situated at Village Singhu (near Delhi Haryana Boarder) in the name of Shri Sant Lal Aggarwal and Smt. Sudha Pawa. Rs. 2.75 Crores 5. Land & Buildingat Plot measuring 2 Bigha 3 Biswas (2167 sq. yds) (out of Khasra No. 11/20) situated at Village Singhu (near De....
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.... Bigha part of Khasra No. 11/1 (120), Village Singu, Delhi - 4 in the name of Sant Lal Agarwal. Rs. 1.02 Crores 19 Agricultural Land measuring 2 Bigha 2 Biswa part of Khasra No. 11/18 (2-2), Village Singu, Delhi - 4 in the name of M/s Satish Pawa. Rs. 2.15 Crores 20 Agricultural Land measuring 1 Bigha 11 Biswa part of Khasra No. 11/19 (1-11), Village Singu, Delhi - 4 - in the name of JACPL. Rs. 1.85 Crores 21 Agricultural Land measuring 1 Bigha 3 Biswa part of Khasra No. 11/2 (1-3), Village Singu, Delhi - 4 - in the name of Satish Pawa. Rs. 1.18 Crores 22 408, HSIIDC, Industrial Estate, Rai, Sonipat Haryana Rs. 12 Crores. 5. That the record also reveals that on the basis of the FIR registered by the CBI for offences u/s. 120-B, 420, 467, 468 & 471 IPC vide RC2202020E0013 dated 27.5.2020 and on account of the invocation of Section 447 of Companies Act, 2013 by the SFIO in the instant case, the Enforcement Directorate ("ED") has also commenced its investigations under PMLA vide ECIR /14/MBZO-1/2021 dated 31.3.2021. During the process of such investigations, the ED has since provisionally attached the following assets vide PAO No. ....
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....Agricultural land measuring 50 kanal 17 marla (33184 sq. yds Kila No. 76/21/BG), 76/21/1(3- 10), 76/23/2 (5-10), 78/24/1/1(3-6), 88/2(8-0), 88/7 (8-0), 88/9 (8-0), 88/8 (7-13, 85/10/2 (2-18) situated in village Kundli District, Sonepat (Haryana). JACPL 2. Agricultural land at village Kohand, Tehsil Gharaunda, District Karnal, Haryana, Khewat No. 132, Khatoji No. 235, Murabba No. 14, Kila No. 11/2 area measuring 1 kanal 10 marla. JACPL 3. Agricultural land at village Khoand, Tehsil Gharaunda, Dist. Karnal, Haryana. Khewat No. 152 measuring 5 Kanal 7 Marla. JACPL 4. Agricultural land situated at Karnal, Haryana, Khewat No. 132, khatoni 238 admeasuring 75 kanal, 12 marla JACPL 5 Agricultural land situated at Singhu Border, Delhi Khasra no:8/2, 11/1. JACPL 9. That total OTS Proposal after mutual discussion with the Bank is for an amount of Rs. 37.25 Crores which includes the value of the above unsold/unattached properties. This proposal is under active consideration by the Bank which is evident from its email correspondence dated 09.08.2023 which reads as under: "With reference captioned subject, you are request....
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....ng the lenders. So much so, they do not even have their own house to live in and have been living in rented accommodation for the last more than 5 years. The only remaining assets with the family are the personal jewelry of the three ladies i.e., the wife of the Applicant and his two daughters-in-law which would come out to be approximately Rs. 1.10 Crores. The family is ever ready to place this entire jewelry as security with the Learned Trial Court during the pendency of the Trial and/or subject to any direction that may be issued by this Hon'ble Court. 16. That the Applicant further humbly beseeches this Hon'ble Court to grant him indulgence and release him on bail so that he may make all out efforts to fructify the OTS and generate all other resources to settle the entire matter. 17. That the Applicant further undertakes to furnish adequate surety for the purpose of bail and may be able to persuade his relatives etc. to furnish a surety having valuation of upto Rs. 5 Crores for the purpose of releasing him on bail within such time frame/period that this Hon'ble Court may deem fit." 18. In paragraph 17 of the affidavit, though it is stated that t....