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Vijayakumar & Others v/s The State rep. by Inspector of Police, CCB-1 Police Station, Chennai

    Crl.O.P. Nos. 23381 & 23367 of 2022 & Crl.M.P. Nos. 15263 & 15264 of 2022
    Decided On, 01 December 2022
    At, High Court of Judicature at Madras
    By, THE HONOURABLE MR. JUSTICE A.D. JAGADISH CHANDIRA
    For the Petitioners: P.S. Raman, Senior Counsel, M/s. Abishek Jenasenan, Advocate. For the Respondent: Hasan Mohammed Jinnah, State Public Prosecutor, assisted by S. Rajakumar, Additional Public Prosecutor. For the intervenor: V. Raghavachari, Advocate.


Judgment Text
(Prayer: Criminal Original Petitions filed under Section 438 of Cr.P.C. to enlarge the Petitioners on bail in the event of arrest made by the respondent police in Crime No.187 of 2022 on the file of the respondent police Criminal Original Petitions filed under Section 482 of Cr.P.C. seeking to permit the Intervenor to intervene in the Anticipatory Bail Petitions pending before this court in Crl.O.P.Nos.23381 and 23367 of 2022)

1. Criminal Original Petition No.23381 of 2022 has been filed by petitioners/A3 and A4 and Criminal Original Petition No.23367 of 2022 has been filed by A7 seeking anticipatory bail in in Crime No.187 of 2022 on the file of the respondent police whereas the Miscellaneous Petitions have been filed by the de facto complainant seeking permission of the court to intervene in the matter.

2. After initially hearing the parties for some time, this court felt that the intervening party, being the de facto complainant, has its say in the matter and thereby, the petitions seeking permission of the court to the intervenor to intervene in the matter stand allowed.

3. The factual background behind filing of the above petitions are as under:-

i) The de facto complainant is one Gaurav Chachra, Director of M/s.Pettigo Commercio International, LDA, the intervenor. He sent a complaint dated 22.8.2022 to the Commissioner of Police which came to be taken on file by the respondent police in Crime No.187 of 2022.

ii) The allegation of the de facto complainant is that they are involved in the business of investment of funds in variable projects across the globe and the accused, laminating to be the Founders of Kallal Group of companies, met the representative of the de facto complainant and canvassed as if they got considerable experience in mining excavation and they run a company in the name of Kallal Logistics (P) Ltd which had secured work order dated 24.2.2021 from M/s.Jindal Steel and Power Limited for deploying heavy earth work equipment and excavation work at Chattisgarh and the work order would be in force for 7 years and for carrying out the said work, heavy vehicles, machines and equipments are required and hence they were looking for investors.

iii) The arrangement was that the accused group company would invest 49 crores of rupees and their additional requirement of 114.34 crores of rupees would be invested by the de facto complainant.

iv) The accused represented that they had paid a sum of Rs.31 crores to Volvo CE India (P) Ltd. Bangalore by way of RTGS from Punjab National Bank for booking 108 Nos of Volvo FMX 460 8x4 43 WB 20 3 Rock Body Tippers on 26.2.2021 and another sum of Rs.18 crores on 20.2.2021 as advance for purchase of 27 Nos. of Volvo EC 480 DL Excavators.

v) Believing the said transactions to be true and genuine, the de facto complainant had entered into a Share Purchase Agreement dated 7.5.2021 and invested a sum of Rs.114.34 crores in M/s.Kallal Logistics (P) Ltd. upon letters of allotment of shares issued on 31.5.2021 and 16.6.2021.

vi) A share holders agreement was also executed on 7.5.2021 by which the complainant was to get 70% share holding and Kallal Holdings would get 30% share holding in the said Kallal Logistics (P) Ltd and the accused assured for appointment of 3 Directors of the de facto complainant in Kallal Logistics (P) Ltd. pursuant to the above arrangement.

vii) However, there was delay in such induction of Directors and thereupon, the de facto complainant had initiated arbitration proceedings before the Singapore International Arbitration Centre.

viii) Subsequently, the complaint came to be lodged by the de facto complainant alleging that after receipt of the instalment, the accused had failed to induct the Directors as assured and had not disclosed any accounts and on verification, they came to know that the Volvo Receipts shown by the accused were forged and fabricated and the amount invested by the de facto complainant had been diverted into multiple accounts and thereby they had cheated the de facto complainant to the tune of Rs.114,34,70,000/-.

ix) On the basis of the complaint, a case in Crime No.187 of 2022 was registered against the accused persons for the offences punishable under Sections 406, 420, 465, 468, 471 read with Section 120(B) IPC.

x) Apprehending arrest, the present Criminal Original Petitions have been filed by A3, A4 and A7.

xi) Reiterating the allegations against the accused, the intervening petitions have been filed by the de facto complainant, vehemently opposing for grant of anticipatory bail by alleging that the complaint would clearly show that cognizable offences are made out against all the accused and in the event of the accused being granted anticipatory bail, they would try to tamper with the evidence and would abscond and would not cooperate with the investigation.

4. Mr.P.S.Raman, learned Senior Counsel for the petitioner/accused would submit his arguments as under:-

i) The complaint lodged by the de facto complainant is a misleading and incomplete one without relevant facts.

ii) The discussion between the parties was in March 2021 and only after due diligence, they had entered into a Share Purchase Agreement and a Shareholders Agreement on 7th May 2021 and the de facto complainant had invested Rs.114,00,00,000/- for a 70% equity stake.

iii) There was exchange of notices and reply notices with regard to induction of Directors and ultimately, on 29.4.2022, the de facto complainant initiated Arbitration Proceedings and had moved an Application for emergency interim relief and a reply to the same was also filed by the petitioners and thereon, the Arbitral Tribunal dismissed the Application filed by the de facto complainant seeking emergency interim relief.

iv) Having failed to get interim relief, the de facto complainant sent a letter dated 27.5.2022 to Kallal Logistics Pvt. Ltd calling for a General Body Meeting. A reply dated 25.7.2022 was issued by Kallal Logistics Pvt. Ltd clarifying that the meeting could not be convened on account of pendency of the arbitration proceedings.

v) The dispute between the parties being civil in nature, as a new strategy, the de facto complainant had chosen to lodge a frivolous complaint against the petitioners only to harass them, which is nothing but an abuse of process.

vi) The de facto complainant, having pleaded before the Arbitral Tribunal as if there was no allegation of criminal activity against the petitioners, cannot now raise an allegation of fraud against them.

vii) The offences with which the petitioners are accused of are punishable with imprisonment of less than 7 years and thus, in the light of the decision in Arnesh Kumar vs. State of Bihar (2014) 8 SCC 273, they need not ordinarily be arrested and the necessity for their arrest would arise only if they refuse to cooperate with the police. The petitioner, being lawabiding citizens and having deep roots in Chennai without any criminal antecedents, would certainly not fly away from the clutches of law and they would cooperate with the police during the investigation and thereby they need not be arrested and no custodial interrogation could be required and they may be granted anticipatory bail.

5. The respondent police has filed detailed counter affidavits and pointing out the contents of the same, Mr.Hasan Mohammed Jinnah, learned State Public Prosecutor assisted by Mr.S.Rajakumar, learned Additional Public Prosecutor would submit his arguments as under:-

i) On the basis of the complaint lodged by the de facto complainant against Kallal Group and 6 others, the respondent took up investigation and look out circular was issued against A2 Saravanan and A3 Vijayakumaran on 5.9.2022 and based on the same, A2 Saravanan was detained at Bangalore Airport by the Immigration Officer, while he was about to travel to London and subsequently, he was examined under Section 41(A) of Cr.P.C. on 10.9.2022, 12.9.2022 and 16.9.2022, however, he failed to drag on the issue and thereby, A2 Saravanan and A5 Vijay Ananth were arrested and remanded to judicial custody on 16.9.2022.

ii) A2 and A5 were taken police custody from 28.9.2022 to 30.9.2022 and based on their confession, the laptop which was used for preparing the forged receipt was seized.

iii) Two receipts VCE/EC480DL/D1 dated 20.2.2021 and 26.2.2021 relied on by the petitioners/accused to contend that they had paid Rs.18 Crores and Rs.31 Crores as advance for purchase of Volvo Heavy Vehicles and for booking of 108 Nos of Volvo FMX 8*4 WB 20.3 cum Rock Body Tipper were sought to be verified with regard to their genuineness and thereby necessary requisition had been issued to the Volvo CE India Pvt. Ltd. Bangalore and received replies saying "We have not had any sale transactions with M/s.Kallal Holdings Private Limited" and for the query whether they had issued such receipts, received reply saying that "We had issued Advance receipt No.VCE/EC480Dl/D1 dated 10.11.2020 to M/s.Kallal Logistics Private Ltd., against the receipt of a sum of Rs.60,16,000/- against the purchase of 1 No. of Volvo EC 480 DL excavator by M/s.Kallal Logistics" and "We have not issued any receipt dated 26.2.2021. It was ascertained from the above replies that the two receipts are fake and forged ones and fraudulently created by the accused Company/Kallal Groups as purported to be issued by Volvo CE India Pvt. Ltd. in favour of Kallal Holding Pvt. Ltd.

iv) Thereupon, financial investigation was conducted and found that the accused had induced the de facto complainant company to invest the amount with the accused company and eventually the amount had been transferred to the accounts of the accused.

v) The investigation revealed that by producing fake and forged documents, the petitioners/accused had induced the de facto complainant to invest huge amount of Rs.114 crores with them and thereafter, transferred the same to various Bank accounts and misused for their own use and cheated the de facto complainant.

vi) Merely to side track the issue, the petitioner relies on the arbitration proceedings and takes a stand that this is a civil dispute, whereas, the investigation reveals that by producing the forged receipts, the petitioners/accused had induced the de facto complainant to invest huge amount of Rs.114 crores with them and thereafter, cheated the de fact complainant by misusing the money for their personal gain and failed to start the Project.

vii) The statement of witnesses and the investigation reveal that the petitioners had committed criminal breach of trust, cheating, forgery and criminal conspiracy.

viii) The investigation is pending with the following ongoing process:-

a) Collection of documents from various departments, various banks, IG, Registration, Income tax, GST and ROC, etc.

b) Digital Analysis Report with regard to the Laptop seized is yet to be received.

c) Remaining accused need to be arrested.

d) More number of witnesses have to be examined.

e) Involvement of the other accused in the offence and their location have to be found out.

f) Detailed Financial Investigation has to be done.

g) Reply from Jindal Power Steel Pvt. Ltd. dated 29.9.2022 with regard to the genuineness of the work order dated 24.2.2021 sought for by the respondent by letter dated 6.9.2022 has been received, wherein it is stated that M/s.Jindal Power Limited is in no way directly or indirectly involved in this matter.

ix) Though notices under Section 41-A Cr.P.C were issued fora appearance of A3 and A4 on 22.9.2022, 28.9.22 and 6.10.2022, they failed to appear for enquiry and are trying to prolong the investigation by seeking time.

x) Huge amount of Rs.114 Crores has been swindled and diverted to various other bank accounts including the accounts of the petitioners herein making it very difficult to trace the money that has been siphoned.

xi) When the investigation is at an extremely crucial stage, the petitioners, to thwart the same, have come up with the present petition seeking anticipatory bail with frivolous and baseless contentions and thereby, they are not entitled to grant of anticipatory bail.

6. Adopting the submission of the learned Additional Public Prosecutor, Mr.V.Raghavachari, learned counsel appearing for the de facto complainant/intervenor would submit his arguments as under:-

i) It is a clear case of criminal breach of trust, cheating, forgery and criminal conspiracy as the petitioners had induced the de fact complainant to invest huge amount to tune of Rs.114 crores with them by producing the fake and forged receipts to make an impression that they are reputed entrepreneurs having tie-up with M/s.Jindal Steel and Power Limited and in that regard, they had paid huge amount to Volvo CE India Pvt. Ltd. Bangalore as advance for purchase of vehicles to be used in their business activity with M/s.Jindal Steel and Power Limited.

ii) Subsequent to the investment of huge amount to the tune of Rs.114 Crores by the de facto complainant, their nominees were not inducted as Directors as agreed by the petitioners in the Share Purchase Agreement and Shareholders Agreement despite the fact that the de facto complainant had a 70% stake, no General Body Meetings were convened and true accounts of the Company were not disclosed to the de facto complainant and hence, they were constrained to move for arbitration before the Singapore International Arbitration Centre (SIAC).

iii) Only thereafter, the de facto complainant understood that they had been defrauded and cheated by the petitioners/accused by playing a confidence trick on them.

iv) Having received alarm on the indifferent behaviour of the petitioners/accused and their evasive replies in the matter of inducting the personnel from the de facto complainant as Directors, disclosure of true accounts and non-convening of General Body Meeting, the de facto complainant had verified the genuineness of the documents relied on by the petitioners/accused and came to know that they are fake and forged ones and subsequently, lodged the criminal complaint against the petitioners/accused.

v) The investigation done by the respondent police upon receipt of complainant revealed that both the receipts produced by the petitioner/accused to induce the petitioner to invest huge money with them are fake and forged ones and thereby the petitioners/accused, with intention to cause wrongful gain, had fraudulently fabricated the said receipts and induced the petitioner to part with money.

vi) The truth that has come out of the investigation by the respondent police would clearly show that cognizable offence is made out against all the accused persons wherein the de facto complainant had been cheated to the tune of Rs.114 crores and thereby, they are not entitled to grant of anticipatory bail as there is every possibility of misuse of their liberty and tampering with the evidence and investigation.

7. Heard the learned counsel appearing for the petitioners, learned Additional Public Prosecutor and the learned counsel appearing for the intervenor/de facto complainant and perused the materials available on record.

8. The issue to be decided is whether the petitioners, who are alleged to have committed offences of breach of trust, cheating, forgery and criminal conspiracy are entitled to anticipatory bail.

9. The allegation against the petitioners is that they defrauded the de facto complainant by producing two fake receipts to show as if they have booked vehicles for excavation work by paying Rs.18 crores and Rs.31 crores in connection with a project and business tie-up they

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have with a large scale industry and thereby induced them to invest huge amount to the tune of Rs.114 Crores in lieu of a major stake of 70% and induction of their nominees as Directors of their Companies, however, their relationship got strained due to the abnormal and indifferent attitudes of the petitioners/accused in keeping up the assurances they made for receiving the investment from the de facto complainant. 10. Of course, the de facto complainant had initially approached the arbitral forum to redress their grievance as an emergent measure and failed in their attempt. But, that itself cannot label the dispute between the parties as a civil one. The petitioners cannot take shelter under the arbitral proceedings initiated by the de facto complainant and try to dilute the criminal proceedings against them claiming to be genuine businessmen, especially, when the prima facie investigation itself reveals fabrication of documents and forgery on their part based on which the de facto complainant Company had been induced to invest a huge amount of about Rs.114 Crores, which would certainly require a deep investigation into the matter. 11. In the instant case, the petitioners are facing such a serious offence of defrauding the de facto complainant involving huge amount to the tune of Rs.114 Crores and diversion of the same to multiple accounts and it had vanished into thin air. Therefore, this court is of the view that deeper investigation is required in this matter and thus, the petitioners cannot seek anticipatory bail as a matter of right at this crucial stage of investigation. 12. Considering the totality of the circumstances of the case, the Criminal Original Petitions are liable to be dismissed and accordingly, they are dismissed.
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