TaxTMI 
TaxTMI 
2022 (10) TMI 1276
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.... deal with the factual aspects in brief as under:- (i) The Ministry of Corporate Affairs (hereinafter referred to as "MCA"), Government of India (GOD), vide order No.F.No.3/61/2018/CL-II dated 28.03.2019, ordered an investigation into the affairs of Surana Industries Limited and 14 other companies (hereinafter referred to as Surana Group of Companies or Surana GOC) by Serious Fraud Investigation Office under Section 212(1)(c) of the Companies Act of 2013. The details of Companies under Surana Group of Companies are as under: S.No. COMPANY 1. Surana Industries Limited (SIL) 2. Surana Power Limited (SPL) 3. Surana Corporation Limited (SCL) 4. Surana Green Power Limited (SGPL) 5. Vinayaga Infra Limited (VIL) 6. Surana Green Energy Limited (SGEL) 7. SSS Tech Engineers Private Limited (SSSTECH) 8. BLS Power Solution Limited (BL SPL) 9. R.R.Tools Private limited (RR TPL) 10. V.N.R. Infrastructures Limited (VNRIL) 11. Patheypori Gardens Private Limited (FGPL) 12. Grant Logistics Limited (GLL) 13. Natural Coal Private Limited (NCPL) 14. Sayso Exim Private Limited (SAYSO) 15. Thribhuvan ....
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..... The books of accounts were maintained in a fragmented manner, both SAP and tally. False statements of trading revenue were generated to mislead the creditors and shareholders and thereby they have cheated the banks to the tune of Rs.10,238 crores. (vi) The petitioner was appointed as Group CEO of Surana Group (SIL & SPL) on 27.05.2015 as approved in the BOD of SIL dated 22.05.2015. Email pertaining to this taking charge as Group CEO from DES confirms the same. The specific role role of the petitioner in fraudulent conduct of affairs of SIL is as listed below: ● The petitioner (A6), in connivance with his father Dinesh Chand Surana (A4), had utilized Puppet-II managed by his maternal uncle Deepak Kothari (A22) as a tool to inflate revenue figures of SIL during F.Y. 2015-16 and 2016-17 by showing paper trade. Statutory Auditors of SIL have given adverse opinion for both financial years as they were unable to conclude that the financial statements reflect true and fair view of the affairs of SIL. RDS had controlled the affairs of puppet entities SAYSO, TEPL. ● The petitioner, in connivance with his father Dinesh Chand Surana and Yashpal, had si....
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....and Surana, orchestrated creation of separate Tally for Madhavaram and to artificially and falsely show trading material loss of Rs.77.44 Crores, resulting in siphoning of stocks of SIL in FY 2015-16. ● The petitioner had connived with Dinesh Chand Surana & Deepak Kothari to appoint employees as directors of SAYSO & TEPL, these BOD were accustomed to act on the direction of Dinesh Chand Surana, the petitioner & PK either directly or indirectly. 7. The petitioner, a key management personnel and son of Dinesh Chand Surana M.D of SIL & SPL, was appointed as Vice President (Projects) in SPL in the Board of Directors Meet dated 28.12.2008. The petitioner looked after the implementation of the 420MW power plant of SPI. He has been disclosed as Key Management Personnel in the related party disclosures for F.Y. 2010-11, 2011-12, 2012-13 & 2013- 14. It is to be noted that both the hiving off 35MW and the plan to establish 420MW power plant happened after appointment of RDS as VP (Projects). The audit documentation 11101.06 Org chart SPL CHO.pdf for FY 2014-15 of SPL shows the overall control of the petitioner over Technical Department, Finance Department, Accounts Departme....
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....d roped in wife of Anand Parekh (Bindhu Anand) on 14.09.2016. Dinesh Chand Surana and the petitioner had operated BELL and had acquired the windmills of SIL & SCL by proxy utilizing the bank borrowings siphoned off from SIL & SCL. This is a classic case of how a promoter, who had defaulted in bank borrowing, acquires the same asset by proxy using the siphoned off funds of banks. e. The petitioner, in connivance with his father Dinesh Chand Surana, had also siphoned out funds (a) Rs.8.25 Crores to the bank accounts of Dinesh Chand Surana; (b) Rs.2 Crores to Sakthi GOC through BELL, which was partly repaid after the commencement of investigation. Dinesh Chand Surana and the petitioner had also conceived an implemented manner utilizing employees to transfer siphoned out bank borrowings from BELL to Radha GOC and RAI Ispat. Dinesh Chand Surana and the petitioner had carried out these acts, in connivance with Yashpal of Radha Group, Ritesh Rai & Kanniah Anandh. 9. Hence, the respondent has filed the complaint against the petitioner and others, citing 125 witnesses, annexing 532 documents and 115 statements of witnesses. 10. Learned Senior Counsel Mr.N.R.Elango appearing f....
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....esolution Professional had filed an application before an NCLT Division Bench No.2, Chennai under Section 66 of the Insolvency and Bankruptcy Code, 2016 seeking an order to direct the Surana GOC to pay a sum of Rs.17,231 crores to the Corporate debtors, whereas, the NCLT had dismissed the application vide its order dated 27.06.2022 in MA/244/2019 in CP 646/IB/2017, finding that there was no fraud in the management of the Company. (iv) The loans have been issued pursuant to the due diligence exercised by the lending Banks. Mott MacDonald, a Global Engineering and Management Consultant was appointed by IDBI, the lead bank of SPL consortium lender as Lender's Independent Engineer (LIE) for due diligence, construction monitoring, performance testing and annual operation monitoring (5 phases) and only based on the Report issued by the Engineers, the loans were disbursed. (v) From 07.03.2022 to 13.07.2022 the petitioner was summoned for investigation by the respondent and the petitioner had appeared before the respondent for more than 7 times and the petitioner has not evaded summons or absconded. He had duly cooperated with the respondent in his investigation, howe....
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.... Surana Power Limited, the petitioner has played pivotal role in running the Company. (ii) In the Profile of the petitioner, annexed to the Company documents, the petitioner is shown to be the person in charge of Finance and Accounts and he is the person in charge of 1) Submission of feasibility/viability, study reports for syndication of Term Loan from the Lenders. 2) Monitoring and releasing the payments to the agencies involved in the project and operations as per the internal schedules. 3) Overseeing all other matters pertaining to finance which are required to be performed in the Company for the successful project implementation. 4) Monitoring the finance and accounts team for maintaining the proper books of accounts and making inspections of records as and when required. 5) Formulating and implementing the investment strategies for meeting the needs and contingencies of the company. 6) Planning and Monitoring the Cash Flows in the Company and forecasting the future Cash flow requirement as against the actuals. 7) Formulated various strategies to ensure effective control and monitoring system for finance and accoun....
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....ot having details that in-depth and in detail investigation in respect of the fraud committed by the petitioner. (ix) The Insolvency Resolution Professional has no wherewithal to investigate and go into details. The respondent had conducted in-depth investigation and statements have been recorded from the witnesses under Section 217 and 449 of the Companies Act. (x) The witnesses have given evidence that the petitioner alongwith other accused, by using shell and puppet companies has involved in round tripping of monies and thereby embezzled the amounts. The accused, by various fraudulent activities had caused monetary loss to the tune of Rs.10,000 crores to the consortium of banks. (xi) Though the petitioner claims to be not in charge of Finance, there are materials by way of oral and documentary evidence to show that the petitioner had indulged in fraud as explained under Section 447 of theCompanies Act. (xii) Various statements recorded from the witnesses with regard to the involvement of the petitioner and the fraud committed by him would reveal that the respondent has made out grounds for believing that the petitioner is guilty of the offence....
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....o-accused has been granted bail by order dated 11.10.2022 in Crl.O.P.No.22595 of 2022 and thus, the petitioner is entitled for grant of bail. 15. Heard the learned Special Public Prosecutor on the above aspects and perused the materials available on record. 16. The petitioner is charged with the offence punishable under Section 447 of the Companies Act, 2013. The case of the petitioner is that he had complied with the twin conditions of Section 212(6) of the Companies Act, 2013, which reads as under:- " 212. Investigation into affairs of company by Serious Fraud Investigation Office. ........ ......... (6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), 1[offence 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 gui....
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....ir employees, poor relatives and round tripping and layering of money. 19. A perusal of the materials reveals that the petitioner is the person who has signed in various documents as person in charge of commercial/financial transactions of Surana Power Limited. Apart from the above, the statement recorded from Banvarlal Sharma discloses about the role played by the petitioner and other accused for defrauding the banks and embezzlement of funds. 20. The witnesses viz., Ramachandran and Banvarlal Sharma say that without there being any actual business activities in those Companies, the petitioner and other accused, were round tripping the money and the money borrowed were projected as capital to inflate and show profit in the Companies and contracts were entered between the benami Companies at high rates and the monies were returned back to Surana for business activities. 21. Sofar as the stand taken by the petitioner that he has got a clean chit in the writ petition filed by him challenging the Look Out Circular issued against him, it is seen that he was not an accused in the case connected with such proceedings and therefore, he cannot claim such an order as an immunity fo....
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....exigencies of the case. It is possible that in a given situation, the collective interest of the community may outweigh the right of personal liberty of the individual concerned." 26. Further, in Serious Fraud Investigation Office vs. Nittin Johari (2019) 9 SCC 165, a Three Judges Bench of the Apex Court has held as under:- "24. At this juncture, it must be noted that even as per Section 212(7) of the Companies Act, the limitation under Section 212(6) with respect to grant of bail is in addition to those already provided in CrPC. Thus, it is necessary to advert to the principles governing the grant of bail under Section 439 of CrPC. Specifically, heed must be paid to the stringent view taken by this Court towards grant of bail with respect of economic offences. In this regard, it is pertinent to refer to the following observations of this Court in Y.S. Jagan Mohan Reddy [Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439 : (2013) 3 SCC (Cri) 552] : (SCC p. 449, paras 34-35) "34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge ....