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P.K. Ruia v/s State of Delhi

Company & Directors' Information:- RUIA AND RUIA PRIVATE LIMITED [Active] CIN = U51900MH1969PTC014329

Company & Directors' Information:- RUIA AND COMPANY PRIVATE LIMITED [Active] CIN = U74999MH1960PTC011837

    Criminal Miscellaneous (Main) Appeal No. 3109 of 1994

    Decided On, 30 November 1994

    At, High Court of Delhi


    For the Appearing Parties: Akshay Kumar, Arun Birbal, D.C. Mathur, R.K. Anand, S.Lal, Advocates.

Judgment Text


(1) P. K. Ruia has been arrested by the C. B. I, in four cases pertaining to First Information Reports No. RC/12/eow/86, RC/13/eow/86, RC/14/e/86 and RC/15/eow/86. He is to be produced before a Calcutta Court. He prays that he should be enlarged on bail or at least on interim bail so as to enable him to appear before the court concerned in Calcutta. All those cases are under sections 120b/420/468/471 of the Indian Penal Code and under section 5 (1) (d) read with section 5 (2) of the Prevention of Corruption Act, 1947.

(2) IT appears from the First Information Report dated December 16, 1986 that during the period January, 1985 to September, 1985 the petitioner entered into a conspiracy with one Mr. Charls Solomon, the then manager of the Tamilnad Merchantile Bank Ltd. to commit fraud and cheat the Bank and in pursuance of that 94 public limited companies were floated and the capital was subscribed in questionable manner. All those companies had the petitioner as its Chartered Accountant. The prosecution alleges that the petitioner was very thick and thin with the said Mr. Solomon and it was on account of that closeness and the conspiracy entered into between them that the said joint stock companies utilised many saving bank and current accounts opened by them in the said bank and the cheques were issued from those accounts to the credit of application and allotment accounts of various public issues but only transfer entries were made and as in all those cases the basis of allotment was from the date of closing of the subscription list and as allotments were made immediately the said companies withdrew the subscription on the very same day and though Mr. Solomon acted as bankers to the issue he did not even bother to claim for the bank commission and expenses or charges and that on account of said misdemeanor a total loss of Rs-24,18,470. 79 was caused to the bank in the year 1985. It is also the allegation of the prosecution that in furtherance of the said conspiracy many book transfers involving the said Joint stock companies of the petitioner running into crores of rupees in a single day have come to the light although in all those accounts the amount standing in the credit was normally in hundreds and in a few cases less than one hundred and that debit to the various accounts had been allowed without any credit balances and that further by creating a chain of unauthorised over drafts which were settled by virtue of cross-transfers on the same day the accused persons defrauded the Government and the Government agencies and the 'bank in particular. It is claimed that the entries in this regard were all fictitious. The First Information Report in question further discloses that in all the above transactions shares were allotted in fictitious names and the promoters withdrew from the bank the account credited to the share application account even before the application was honoured and although in few cases the promoters even kept a portion of the subscription amount in fix deposit but were immediately allowed a loan to the maximum extent possible.

(3) I have given above only a brief resume' of what has been alleged in the First Information -Report. The allegations are extremely serious. Though the case was registered as far back -as in the year 1986 the investigation was stayed by the Calcutta High Court and it was only very recently that the said stay was vacated leading to the arrest of the petitioner. I am informed by the learned counsel for the C. B. I. that the cases having been registered at Calcutta much of the spade work is to be done there and that the petitioner would be needed for lot of interrogation and it would not be in the interest of investigation to enlar

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ge him either on regular bail or on interim bail. As regards the plea of interim bail he has further submitted that the petitioner has already left for Calcutta in police custody, though this has been challenged. In any case I do agree with the learned counsel for the C. B. I. that the charges are too serious and that it is not a fit case where relief sought for should be granted. The petition is consequently dismissed.