Madras High Court
Cascade Energy Pvt Ltd vs The State Of Tamil Nadu on 22 February, 2021
Author: N.Anand Venkatesh
Bench: N.Anand Venkatesh
1 Crl.OP No.591 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 22.02.2021
CORAM
THE HONOURABLE MR. JUSTICE N.ANAND VENKATESH
CRL.O.P.No.591 of 2021
and
Crl.MP.No.347 of 2021
Cascade Energy Pvt Ltd.,
Represented by its Authorised Signatory,
Mr.Rajiv Pradhan,
A company registered under the
Law of Singapore,
No.319-320, Third Floor, Vipul Agora Mall,
Meha Gurgaon Road,
Sector 28, Gurugram,
Hariyana 122001. ...Petitioner
.Vs.
1.The State of Tamil Nadu,
Rep.by Home Secretary,
Fort St.George,
Tamil Nadu 600 009.
2.The Director General Of Police,
Dr.Radhakrishnan Salai,
Mylapore,
Chennai 600 004.
3.The Commissioner of Police,
No.132, Commissioner Office Building,
EVK Sampath Road, Vepery,
Periyamet, Chennai,
Tamilnadu 600 007.
https://www.mhc.tn.gov.in/judis/
2 Crl.OP No.591 of 2021
4.Deputy Commissioner of Police,CCB,
Commissioner of Police,
Pantheon Road, Egmore,
Chennai 600 008.
5.Inspector of Police, CCB,
EDF-1, Team-1, CCB,
Office of Commissioner of Police,
No.132, EVK Sampath Road,
Vepery,
Chennai 600 007.
6.The Joint Director,
Central Bureau of Investigation,
College Road near by Indian Overseas Bank,
Subba Road Avenue, Thousand lights,
Chennai,
Tamil Nadu 600 006. ..Respondents
PRAYER: Criminal Original Petition filed under Section 482 of the
Code of Criminal Procedure, to call for the records pertaining to
the C.C.No.1831 of 2020 dt.16.03.2020, transfer the same to the
Joint Director, CBI for re-investigation.
For Petitioner : Mr.S.Prabhakaran
Senior Counsel
Mr.Karthikeyan Sekar
For Respondents : Mr.M.Mohamed Riyaz
Additional Public Prosecutor
R 3 to R 5
https://www.mhc.tn.gov.in/judis/
3 Crl.OP No.591 of 2021
ORDER
This criminal original petition has been filed seeking for transfer of investigation to some other agency in order to re investigate the case.
2.Based on the complaint given by the petitioner, an FIR came to be registered in Crime No.424 of 2017, by the 5 th respondent on 30.11.2017, for an offence under Section 409 and 420 IPC. During the course of investigation, a quash petition came to be filed before this Court in Crl.OP.No.11819 of 2018.
This petition was taken up for final hearing and it was dismissed by an order dated 03.09.2018. It will be beneficial to substantially extract from this order since the order deals with the facts of the case and the seriousness of the allegations involved in the present case.
4. Before adverting to the rival submissions, it may be necessary to give a summary of the allegations in the FIR.
Cascade is a Singapore-based investment company. It is the case of Cascade that Rohit Rabindranath [A1], along with his son Maanik Nath https://www.mhc.tn.gov.in/judis/ 4 Crl.OP No.591 of 2021 [A2], approached them for investment in Zynergy Solar Projects and Service Private Ltd. (hereinafter would be referred to as "Zynergy"), a Company with its Headquarters in Chennai. According to Cascade, Rohit Rabindranath [A1] represented that Zynergy is a leading player in tapping solar energy in India and they have contracts worth Rs.400/- crores in India and Africa; Zynergy attached valuation reports said to have been given by Grant Thornton India LLP and Birla Capital and Financial Services Ltd. depicting the huge profits the Company had earned; believing the representation, Cascade entered into a Strategic Investment Agreement and Shareholders Agreement, dated 27.07.2015, under which, Cascade invested Rs.33/- crores with Zynergy by way of fund transfers from bank accounts; by the said investment, Cascade purchased 51% of the equity shares of Zynergy, however, the management of the affairs of Zynergy was retained by Rohit Rabindranath [A1]; for two years, Cascade did not receive any returns for the investment and when they started conducting enquiries, they learnt that Zynergy had not invested their money in any project, but, had siphoned off the money to 40 sham and Shell companies floated by them in the name of their own employees and thereby, cheated Cascade; enquiries revealed that the valuation report of Grant Thornton India LLP was a fabricated one. Hence, the complaint and the consequent FIR.
6. Learned Additional Public Prosecutor submitted that after registration of the FIR, https://www.mhc.tn.gov.in/judis/ investigation began and during the course of 5 Crl.OP No.591 of 2021 investigation, the Investigating Officer was able to unearth how the money that was invested by Cascade with Zynergy was clandestinely routed through various shell companies of Archer Power Systems Private Ltd and which clearly went into the kitty of Rohit Rabindranath [A1].
7. On a perusal of the case diary, it is seen that Rs.29.22 crores invested by Cascade in Zynergy has first gone into Alectrona Energy, from where, it had gone into Raha Infrastructure, a shell company purportedly floated to launder money. Raha Infrastructure had transferred the money to Esita Real Estate, another shell company linked to Rohit Rabindranath [A1]. The investigation conducted by the police so far shows that Rohit Rabindranath [A1] and his group have floated the following shell companies:
(i) Alectrona Energy
(ii) Sun Energy
(iii) Esita Real Estate
(iv) Raha Infrastructure
(v) LVC Alternative
(vi) AH Enterprises
(vii) Gold Green Technologies
(viii) TSR Sun Energy
(ix) RR Sun Power
(x) Solar Energy Equipments
(xi) SEH Solar
(xii) Green Energy
(xiii) Poora Jaya Consulting
https://www.mhc.tn.gov.in/judis/
6 Crl.OP No.591 of 2021
8. In most of these Companies, T.Sheshadri and S.Ganesh, employees of Rohit Rabindranath [A1] have been shown as Directors. Huge amounts have also gone into the personal accounts of the said T.Sheshadri, S.Ganesh and Rohit Rabindranath [A1]. There is no material to show that the amounts were invested in any worthwhile solar project, but, the money trail shows that the amounts had gone into all these shell companies, from where, it had gone into the kitty of Rohit Rabindranath [A1].
15. There appears to be much force in the submission of Mr.S.Prabakaran, in this regard. If Rohit Rabindranath [A1] was so concerned about the antecedents of Kohli, he ought not to have entered into the Strategic Investment Agreement at all. At the most, the equity shares amounting to Rs.5 crores will be tainted and not the investment of Rs.29 crores by Cascade. Had Rohit Rabindranath [A1] been an honourable man, he should have immediately deposited the amount invested by Cascade with NCLT and should have contested the case, instead, he has launched the NCLT proceedings on the species ground that the Know Your Customer (KYC) details of Kohli appear tainted.
16. To cap it all, Rohit Rabindranath [A1] has managed to register an FIR in Cr.No.999 of 2017 dated 23.06.2017 with the Mylapore Police Station for the offences under Sections 441, 294(b) and 506(i) IPC https://www.mhc.tn.gov.in/judis/ against the Directors of Cascade alleging that they had 7 Crl.OP No.591 of 2021 trespassed into his building and had threatened him. Fortunately, after the registration of the FIR, the police had not further proceeded with the investigation, perhaps, on coming to know of Rohit Rabindranath's evil design. It is true that Cascade had filed a police complaint in Gurgaon, but, on a reading of the closure report, it is seen that the complaint has been closed on two grounds, viz., that most of the transactions had taken place in Delhi and Chennai and that apart, it is also stated that the dispute appears to be civil in nature. For any common man, the present dispute would appear to be civil in nature, however, if one were to dwell deep into the investigation that has been conducted so far by the Central Crime Branch, it will be clear that an insidious attempt is being made by Rohit Rabindranath's [A1] group to cheat the de facto complainant and other foreign investors by raising species grounds for not repaying.
17. Incidentally, the Serious Fraud Investigation Office has also commenced investigation against Rohit Rabindranath's [A1] group of companies, which is, of course the subject matter of the dispute in this petition (Crl.O.P.No.11819 of 2018). While painting a rosy picture about Zynergy, Rohit Rabindranath [A1] appears to have submitted an one page valuation report of Grant Thornton India LLP about Zynergy to Cascade. Investigation conducted by the CCB with Grant Thornton India LLP shows that they had not given an one page report, but, had given a 43 page Valuation https://www.mhc.tn.gov.in/judis/ Report about Zynergy. This prima facie shows that 8 Crl.OP No.591 of 2021 there was deception at inception, inasmuch as a truncated Valuation Report favourable to Rohit Rabindranath [A1] has been shown to Cascade in order to convince them to invest. After obtaining the investment of Rs.33 crores, Rohit Rabindranath [A1] has been playing every trick under the sun denying Cascade the fruits of their investment. The material collected by the police so far thus shows the commission of a cognizable offence and on account of the stay granted by this Court, further progress in investigation had come to a grinding halt. Applying the test laid down in State of Haryana v. Bhajan Lal [AIR 1992 SC 604] and State of Bihar Vs. P.P.Sharma [AIR 1991 SC 1260], the impugned FIR cannot be quashed at the threshold.
3.It is clear from the above order that this Court took into consideration the seriousness of the allegations and also the attitude of the accused persons cheating foreign investors by raising species grounds for not repaying them. This Court found that the records clearly revealed deception even at the inception and right through the transaction after receiving nearly an investment of Rs.33 crores.
https://www.mhc.tn.gov.in/judis/ 9 Crl.OP No.591 of 2021
4.Pursuant to the above orders passed by this Court, it was taken on appeal before the Hon'ble Supreme Court and the SLP came to be dismissed by an order dt.27.09.2018.
5.As a subsequent development, an alteration report came to be filed by the 5th respondent before the Court below on 16.05.2019, by altering the offences to Section 409, 420, 465, 467, 468 and 471 IPC r/w Section 120 (b) of IPC. Statements were also recorded from the witnesses and prima facie it was found that there was a large scale conspiracy among the accused persons.
6.On completion of the investigation, the 5th respondent has filed a final report before the Court below only as against A-1 for an offence under Section 409 and 420 IPC. The names of all the other accused persons was dropped and all the other offences added in the alteration report was also dropped.
Aggrieved by the same, the present criminal original petition has been filed before this Court seeking for reinvestigation by a different agency.
https://www.mhc.tn.gov.in/judis/ 10 Crl.OP No.591 of 2021
7.When the mater came up for hearing on 20.01.2021, this Court passed the following order:
"Respondents 8 to 13 are unnecessary parties in this petition and their names are deleted. The respondents 1 and 2 are also not necessary parties in this petition and their names are also deleted. Mr.M.Mohamed Riyaz, learned Additional Public Prosecutor takes notice for respondents 3, 4 and 5.
2.The fifth respondent is directed to file a Status Report before this Court and handover the entire case diary to enable the Additional Public Prosecutor to explain this Court, as to how, six named accused persons have been dropped from the Final Report. Mr.S.Prabakaran, learned Senior Counsel appearing on behalf of the petitioner, who is the De facto complainant, specifically pleaded that no notice was issued to the petitioner at the time of filing the Final Report, even though the names of six accused persons have been dropped in the Final Report. The fifth respondent shall explain as to why such a notice was not issued to the petitioner. This petition has been filed seeking for transferring the investigation and the matter requires serious consideration. Post this case under the caption 'for orders' on 22.02.2021.
https://www.mhc.tn.gov.in/judis/ 11 Crl.OP No.591 of 2021
3.In the meantime, all further proceedings in C.C.No.1831 of 2020 on the file of Special Metropolitan Magistrate (Exclusively trial of Cases of CCB and CBCID) Cases Court, Egmore, Chennai, shall remain stayed".
8.When the matter was taken up for hearing today, a Status Report was filed by the 5th respondent. The relevant portions in the Status Report, are extracted hereunder:
"3.It is submitted that during the course of investigation, the Inspector of Police, examined 4 witnesses viz. The de facto complainant Tr.Rajiv Pradan, 2) Mr.Kam Dillan, Authorized signatory of Kohli Ventures and also Cascade Energy Pte Ltd., Singapore, 3) The Branch Service & Operation Manager of DCB Bank, Purasawalkam Branch. The Inspector has collected (1) Strategic Investment Agreement dated 27.07.2015 between A) Kohli Venures, b) Rahit Rabindranath (Promoter), C) Archer Power Systems Private Limited, D) Zynergy Capital Pte Limited, E) Zynergy Solar Projects & Services Private Limited, F)Alectrona Energy Pvt. Limited and Greatshine Holdings Pvt.Ltd. He had also collected Shareholders Agreement dated 27.07.2015 By and between, Archer Power Systems Private Limited and "Cascade" Energy Pte.Limited and Zynergy Solar Projects & Services Private Limited it was referred as "Zynergy India" or "the company" in the said shareholder agreement.
https://www.mhc.tn.gov.in/judis/ 12 Crl.OP No.591 of 2021
4.It is submitted that in he Strategic Investment Agreement, the Kohli Ventures has agreed to invest a total sum of Rs.30 (Trichy) crore as strategic investment in the companies promoted by promoter i.e. Rohit Rabindranath, in terms of this agreement with an objective of along erms business focus, growth and value addition in solar business beign conducted by the promoter through Zynergy India, Alectrona and Greatshine holding. The promoter agreed to take the responsibility to purchase the shareholdings and all other interest of shareholders and investors in terms of this agreement. It has been clearly agreed between Kohli Ventures and the promoter that Kohli ventures and the promoters will held the shareholdings and ownership interest in Zynergy India and all its subsidiaries in he ration of 51:49. The subsidiaries will be held 100% by Zynergy India and 51:49 holding in Zynergy India by a nominee of Kohli Ventures and Archer (being the nominee of promoter) respectively will achieve this project That Zynergy Singapore has given a share application money of Rs.78,02,997/- to Zynergy India, That the afore share application money of Rs.78,02,997/- will be converted in to equity share capital of Zynergy India and 6,24,240 shares will be issued by Zynergy India in favour of Zyergy Singapore and the promoter will ensure that necessary compliance in terms of Exchange Control Regulation of India are duly made and filed with Reserve Bank of India for conversion of the share application money in to equity shares. 51% of share holding of Zynergy India will be fully transferred in favour of the company nominated by Kohli Ventures in this regard against payment of a sum of Rs.4,58,52,750/-. This payment will be released https://www.mhc.tn.gov.in/judis/ by the Kohil Ventures immediately on closing as per 13 Crl.OP No.591 of 2021 conditions contained in Annexure 18 appended with A Table containing these details enclosed as Annexure-I.
5.It is submitted that in addition to the investment to be made by Kohli Ventures for the purchase of 51% share holdings of Zynergy India and towards FCCB in terms of the preceding clause, totalling to Rs.10 Cores (Rs.4,56,52,750 towards purchase of shares and 5,43,47,250 towards FCCB) Kohli Ventures has further agreed subject to clause 29(d) to invest additional amount of Rs.20 crores as 0% optionally fully convertible debenture of Zynergy India (OFCD), in terms of schedule of investment being enclosed as Annexure-2. This investment of Rs.20 crore will also be converted in terms o fOFCD subscription agreement. The promoter has further introduced a sum of Rs.87,09,667/- as interest free loan in favour of Zynergy India, from his personal resources. This amount will also be dealt with in terms of Annexure-3.
6.It is submitted that in the said Strategic Investment Agreement, it has been clearly agreed that the only outflow out of the investment made by Kohil Ventures will be towards payment consideration to Zynergy Capital towards 51% shareholding by Zynergy India amounting to Rs.4,56,52,750/- and the balance amount out of Rs.30 crore i.e.25,43,47,250/- will remain in the business of Zynergy India in form of FCCB to augment growth and working finance in terms of this agreement (FCCB Series-1 Rs.5,43,47,250/- and OFCD Rs.20,00,00,000/-. It has been further agreed that the amount payable to the minority shareholder of Alectrona and Great shine Holdings will be https://www.mhc.tn.gov.in/judis/ paid by Zynergy India, to the respective individual investor of 14 Crl.OP No.591 of 2021 Alectrona and Greatshine holdings, in accordance with clause 23 as per details in table as per annexure-8, reinvested in Zynergy India will be first utilized for payment of various amounts totalling Rs.4,29,36,494/- as per annexure-10 and balance amount shall be reinvested in Zynergy India as per Annnexure-3.
7.It is submitted that as per Strategic Investment Agreement in clause 26) That zynergy India will be held to the extent of 51% by a nominee of Kohli Ventures and 59% of Zynergy India will be held by Archer or other nomninees of the promoter. The companies Alectrona and Greatshine holdings will be 100% subsidiaries of Zynergy India. As per clause 27 of the agreement, That FCCB Series-1 to be invested by he nominee of Kohli Ventures and the promoter and his nominees in terms of this agreement, will be converted in to Equity capital of Zynergy India, in terms of FCCB Atgreement in such manner that the holding between the nominee of Kohli Ventures and the promoter and his nominee continue to be 51.49, except in a case where milestone, in terms of target clause is not achieved by Zynergy India and the two substantiates i.e. Alectrona and Greatshine holdings.
8.It is submitted that as per Share holders Agreement, the board shall be comprised of an odd number of directors until otherwise agreed by the parties, there shall be two Cascade directors and one Archer Director. The appointments to the Board at completion shall be as follow:
https://www.mhc.tn.gov.in/judis/ 15 Crl.OP No.591 of 2021 “Cascade” “Archer”
1) Rajiv Pradhan 1.Rohit Rabindranath.
2) Ranjeev Rai As per clause 45 of Shareholders agreement, The JVC shall open and maintain one or more bank accounts with such bank inside or (Subject to RBI approval) outside the Territory as shall be acceptable to the Board, All withdrawals or payments from the JVC's bank accounts or instructions relating to the operation thereof shall be as determined by the Board, and subject to applicable law. One of the mandatory joint signatory to all the bank accounts shall be a nominee of Cascade above such limits as the Board may decide from time to time. To achieve this, the bankers of the company will be approached to ensure electronic authorization of such payments by RTGS/ECS/bank draft/banker's Cheque, as may be needed by the company from time to time.
9.It is submitted that after the Strategic Investment Agreement and Shareholders agreement no new account was opened in any of the banks. All bank transactions were made out of the bank account opened on 24.04.2015 with DCDB Bank, Nungambakkam Branch a/c No.0602190004329 earlier before entering into Strategic Investment Agreement and Share Holders Agreement dated 27.07.2015. Therefore there was no chance to make joint signatory in the existing bank account.
10.It is submitted that as per Strategic Investment https://www.mhc.tn.gov.in/judis/ Agreement, “In case the parties do not come to a settlement 16 Crl.OP No.591 of 2021 or understanding based on the conciliation proceedings, the matter will be referred Arbitration under the aegis of International Chamber of Commerce, to be held at London.”
11.It is submitted that Cascade Energy Pte Ltd had filed a petition u/s.241,242,243,244, 230 and 408 of the Companies Act, 2013 before the National Company Law Tribunal Division Bench at Chennai in CP No.19/2017. In the said petition, the Tribunal has ordered on 14.06.2017 as follow:
“....(4)In view of the above, we proceed to consider the prayer of the petitioner for gran tof interim relief contained under sub para II of the petition. Counsels for respondents have vehemently opposed the grant of interim relief. However, considering the facts and circumstances involved in the case, as detailed in the petition, we are inclined to grant interim relief as prayed and appoint Mr.S.Santhanakrishnan as Chartered Accountant and Mr.R.Sridharan as Company Secretary, whose name have been recommended by the petitioner and direct them to undertake forensic audit of the state of affairs of the company including accounts cum banking and statutory compliance including Sales Tax, Excise, Customs, FEMA, Companies Act, GATT and other Always application and statutory records of R 1 company including the Income and Expenditure of Respondent No.1”.
(National Company Law Tribunal has accepted the prayer of the petitioner Cascade Energy Pte Ltd.) https://www.mhc.tn.gov.in/judis/ 17 Crl.OP No.591 of 2021 Against this order, Archer Power Systems Private Limited has filed an appeal before the National Company Law Appellate Tribunal, New Delhi in Company Appeal (AT) NO.213/2017. National Company Law Appellate Tribunal in its order dated 14.07.2017 has set aside the impugned order passed by the Tribunal in Company petition No.19 of 2017 and direct the parties to file their respective reply affidavit in concerned petitions within one week, rejoinder, if any, be filed within a week thereafter. In case one or other party fails to reply affidavits in their respective petitions and or rejoinder, the Tribunal will proceed with the matter without granting further time to the parties while deciding the question of maintainability at the time of final hearing of the case. The parties should cooperate with the Tribunal and it is expected that the Tribunal will decide the case at an early date preferably within 30 days. (Set aside the orders of National Company Law Tribunal which allowed the prayer of the Cascade Energy Pte Ltd.) Against this order, Cascade Energy Pte Ltd filed an appeal before the Hon'ble Supreme court of India in Civil Appeal No.9388/2017. The Hon'ble Supreme Court of India in their order dated 10.08.2017, “allowed the appeal and set aside the order passed by the NCLAT and direct the NCLAT to decide the appeal within four weeks from today. The parties are at liberty to raise their respective contentions on the basis of the materials produced before the NCLT. It was also further ordered, when we are remanding the matter to the NCLAT, the main proceedings before the NCLT shall remain stayed till the NCLT decides with regard to the justifiability of https://www.mhc.tn.gov.in/judis/ the interim order. The NCLAT may be well advised to deal 18 Crl.OP No.591 of 2021 with the issue of the maintainability of the original proceedings or that comes within the seep of prima facie case for entertaining the prayer for interim relief”.
(Order of National Company Law Appellate Tribunal was set aside and remand back to NCLAT for fresh enquiry and disposal). This matter is pending before the NCLAT.
12.It is submitted that the investigation in this case disclosed that in violation of the conditions of Strategic Investments Agreement the accused Rohit Rabindrfanath had diverted the money from Zynergy Solar Projects and Services Pvt. Limited the accused to his personal account a sum of Rs.2,96,659/- in excess of his rightful claims of his share value Rs.2,62,27,235/-. He had also diverted a sum of Rs.4,20,000/- on 10.09.2015 and Rs.30,00,000/- on 14.09.2015 to his personal account. In all he has diverted the fund of Rs.37,16,659 to his personal account to which he is not entitled to get the same from Zynergy Solar Projects and Services Pvt. Limited to which the complainant's company had transferred its money as per the Strategy Investment Agreement.
The accused had settled the loan of
Rs.3,23,20,862/- on 29.09.2015 being the closure of loan
account No.6257673414 of Alectrona Energy Private Limited obtained on 04.09.2014 which was not mentioned in Strategic Investment Agreement. Further, the said amount was transferred on 29.09.2015 to Indian Bank account in the name of Alectrona Energy Pvt.Ltd., account No.6245514561 https://www.mhc.tn.gov.in/judis/ after transferring amount from M/s Zynergy Solar Projects 19 Crl.OP No.591 of 2021 and Services Pvt. Limited in to the count of M/s Alectrona Energy Pvt. Ltd. In all the accused had diverted Rs.3,60,37,521/- from M/s Zynergy Solar Projects and Services Pvt. Limited's bank account to which the defacto complainant's company had transferred its funds as per the Strategy Investment Agreement and Shareholder Agreement dated 25.07.2015. Therefore charge sheet was laid against the accused Rohit Rabindranath under section 409 and 420 IPC which is pending trial before the Special Court for trial of CCB-CID Egmore in CC.No.1831/2020.
13.It is submitted with regard to the case against the other accused A.2 to A.7 the entire transaction were made by A1 Rohit Rabindranath who is the promoter as well as General Manager & CEO of Zynergy Solar Projects and Services Pvt.Limited. As per share holders Agreement, in clause No-3, and also stated in Strategic investment Agreement in clause 41.
As per the Share Holders Agreement, in clause No.3 and also stated in Strategic Investment Agreement in Clause 41, Mr.Rohit has agreed to be the Managing Director and CEO of the company as well as Zynergy group subject to over all superintendence and control of he board for a minimum period of 3 years and will have the responsibility of the day to day functioning of the company and for the growth & development of the company. So, for each and every transactions made in Zynergy Solar Projects & Services Pvt. Ltd. is being done by the Managing Director & CEO and no other will held responsible for such transactions. https://www.mhc.tn.gov.in/judis/ 20 Crl.OP No.591 of 2021 The defacto complainant claims that the promoter has not allowed two nominated directors if Cascade Energy Pte Ltd. in any of the Board Directors meeting, but alleged that the Managing Director and CEO of Zynergy was acting with the associations of the accused A2 to A7 and diverted the money of the defacto complainant company's fund to several sham companies. Further, the defacto complainant has not provided any documentary evidence that the accused A2 to A7 wee directly or indirectly involved in spending money of M/s Zynergy Solar Projects and Services Pvt. Ltd. but based on the transaction made by the Accused No.1 have raised allegations against them. For violation of conditions of Strategy Investment Agreement, A1 has been charges separately for having his transfer of funds from Zynergy Solar Projects and Services Pvt.Ltd. in to his own account.
For the reasons stated above, it has confirmed that there is no evidence to prove the allegation against A2 to A7. However it is informed to the Hon'ble Court that the further action against A2 to A7 have been dropped.
As there is no evidence to prove the allegation against A-2 to A-7 further action against them was dropped on 16.12.2019 and a separate report dated 04.02.2020, 22.02.2020 and 05.03.2020 sent by RPAD to the complainant and the same was submitted to the trial court on 17.03.2020 along with the charge sheet against the accused Rohit Rabindranath”.
https://www.mhc.tn.gov.in/judis/
9.Heard Mr.S.Prabakaran, learned Senior Counsel for the 21 Crl.OP No.591 of 2021 petitioner and Mr.M.Mohamed Riyaz, learned Additional Public Prosecutor appearing on behalf of respondents 3 to 5.
10.It is not necessary to reiterate the seriousness of the allegations involved in the present case and the previous order passed by this Court and extracted supra, clearly explains the same. There were totally 7 accused persons in this case. The final report was filed only as against A-1 and the case has been dropped insofar as the other accused persons are concerned. The final report was filed before the court below on 16.03.2019. It is only after filing the final report, an attempt was made by the 5 th respondent to serve notice on the petitioner regarding the dropping of the names of A-2 to A-7 in the final report on 04.02.2020, 22.02.2020 and 05.03.2020. In the meantime, the Court below has taken cognizance of the final report even without issuing notice to the petitioner and to enable the petitioner to file a protest petition against dropping of the names of six accused persons [A-2 to A-7]. In the considered view of this Court, the Court below should have taken into consideration the earlier order passed by this Court expressing its concern on the seriousness of https://www.mhc.tn.gov.in/judis/ 22 Crl.OP No.591 of 2021 the allegations and should have been more careful in ensuring that notice is served on the petitioner and opportunity given to the petitioner to file a protest petition. Obviously, this mandate has not been fulfilled by the Court below and the Court below has taken cognizance of the final report in a mechanical fashion.
11.The law on this issue is well settled and it will be relevant to extract the portions of the order passed by this Court while dealing with a similar issue in Crl. OP. No.1856 of 2015, in D.Subramanian v. The Inspector of Police (Crime), Ambur Taluk Police Station, Vellore District, dt. 22.07.2019 “18.It is relevant to rely upon the Judgement of this Court in [C.Ve.Shanmugam S/o.Venugopal Vs. The Deputy Superintendent of Police, Tindivanam Sub-division, Rosanai Police Station, Tindivanam, Villupuram District and others] in 2010 2 MLJ Crl 833, in this regard. The relevant portions are extracted hereunder :-
15. At the outset, I have to state that in the Code of Criminal Procedure, there is no provision impelling the learned Magistrate to issue notice to the de facto complainant before accepting the final report of the police where either some of the accused against whom allegations were made in the FIR have been omitted or the entire report is a negative https://www.mhc.tn.gov.in/judis/ 23 Crl.OP No.591 of 2021 report. The Hon'ble Supreme Court,however, considering the said lacuna in the Code, in Bhagawant Singh's case cited supra (AIR 1985 SC 1285) has held that such a notice is absolutely necessary. In para 4 of the judgement, the Hon'ble Supreme Court has laid down as follows:-
"4. ....... There can, therefore, be no doubt that when, on a consideration of the report made by the officer in charge of a police station under sub-section 2(i) of S.173, the Magistrate is not inclined to take cognizance of the offence and issue process, the informant must be given an opportunity of being heard so that he can make his submissions to persuade the Magistrate to take cognizance of C.Ve.Shanmugam vs The Deputy Superintendent Of ... on 21 January, 2010 Indian Kanoon -
http://indiankanoon.org/doc/699824/ 5 the offence and issue process. We are accordingly of the view that in a case where the Magistrate to whom a report is forwarded under sub- section 2(i) of S.173 decides not to take cognizance of the offence and to drop the proceedings or takes the view that there is no sufficient ground for proceeding against some of the persons mentioned in the First Information Report, the Magistrate must give notice to the informant and provide him an opportunity to be heard at the time of consideration of the report. It was urged before us on behalf of the respondents that if in such a case notice is required to be given to the informant, it might result result in unnecessary delay on account of the difficulty of effecting service of the notice on the informant. But, we do not think this can beregarded as a valid https://www.mhc.tn.gov.in/judis/ 24 Crl.OP No.591 of 2021 objection against the view we are taking, because in any case the action taken by the police on the First Information Report has to be communicated to the informant and a copy of the report has to be supplied to him under sub-section 2(i) of S.173 and if that be so, we do not see any reason why it should be difficult to serve notice of the consideration of the report on the informant. Moreover, in any event, the difficulty of service of notice on the informant cannot possibly provide any justification for depriving the informant of the opportunity of being heard at the time when the report is considered by the Magistrate."
16. When the said law came to be again considered by the Hon'ble Supreme Court in Union Public Service Commission v. S.Papaiah 1998(3) Crimes 40 (SC), the same was reaffirmed. There are several such judgements rendered subsequently wherein the Hon'ble Supreme Court has followed the said law laid down in Bhagawant Singh's case [AIR 1985 SC 1285]. Thus, undoubtedly, it is a settled law as of now that before accepting a final report, where some of the accused, whose names find a place in the FIR, have been omitted, the learned Magistrate must issue notice to the de facto complainant. On receipt of such notice, the de facto complainant has got right to file a petition known as 'protest petition'. Only after hearing him, the learned Magistrate has to pass an order either accepting the final report in its entirety or rejecting the same and to proceed to take cognizance of the offence on the basis of the materials on record and the Court can direct further investigation or to treat the protest petition https://www.mhc.tn.gov.in/judis/ 25 Crl.OP No.591 of 2021 as a complaint in terms of Chapter XV of the Code of Criminal Procedure.
17. In para 16 of the judgement in S.Papaiah's case cited supra, the Hon'ble Supreme Court has held as follows:-
"Thus, for what we have said above we are of the opinion that the learned Magistrate was not justified in accepting the final report of the C.B.I. and closing the case without any notice to the appellant and behind its back. The order of the learned Magistrate dated March 6, 1995 closing the case and of November 4, 1995 dismissing the petition filed by the appellant as well as the order of the learned Sessions Judge dated March 8, 1996 dismissing the revision petition are set aside. The matter is remitted to the earned Metropolitan Magistrate for its disposal in accordance with law.
......."
18. Applying the above law laid down in Bhagwant Singh's case cited supra and followed in the other cases cited supra to the present case, it is crystal that the order of the learned Magistrate accepting the final report without notice to the petitioner is absolutely illegal and the same is, therefore, liable to be set aside. Consequentially, the order of committal of the case to the Court of Sessions for trial C.Ve.Shanmugam vs The Deputy Superintendent Of ... on 21 January, 2010 Indian Kanoon -
http://indiankanoon.org/doc/699824/ 6 and all the consequential proceedings before the Court of Sessions are https://www.mhc.tn.gov.in/judis/ 26 Crl.OP No.591 of 2021 liable to be set aside.
19. Now, yet another question arises as to whether, in the absence of any specific challenge to the order of the learned Magistrate taking cognizance and the order of committal by filing appropriate petition, in this revision, which questions only the legality and correctness of the order passed by the learned Additional Sessions Judge, this Court can set aside the above orders of the learned Magistrate and the consequential proceedings. In this regard, it needs to be pointed out that though separate petition has not been filed to challenge the above proceedings, nevertheless, a specific ground has been taken before the learned Additional Sessions Judge as well as in this revision that the orders of the learned Magistrate are vitiated for want of notice as laid down in Bhagwant Singh's case.”
12.It is clear from the above order that in a case where the Magistrate to whom a report is forwarded under Section 173(2) of Cr.P.C., decides not to take cognizance of the offence and to drop the proceedings or takes the view that there is no sufficient ground for proceeding against some of the accused persons whose names are mentioned in the FIR, the Magistrate must give notice to the informant and provide him an opportunity to be heard at the time of consideration of the report. This is a https://www.mhc.tn.gov.in/judis/ 27 Crl.OP No.591 of 2021 mandatory requirement to be fulfilled by the Magistrate, failing which, the entire process of taking cognizance will be vitiated.
13.In the present case, the Court below failed to follow this mandatory procedure and as a result of the same, the cognizance of the final report taken by the Court below is hereby quashed. The Court below is directed to issue notice to the de facto complainant and give them an opportunity to file a protest petition. The Court below shall take into consideration, the allegations raised in the protest petition along with the materials collected by the 5th respondent in the course of investigation and take a decision strictly in accordance with law within a period of six weeks from the date of filing of the protest petition. This Court did not intentionally render any findings on the merits of the case since it will influence the mind of the Magistrate and the learned Magistrate shall take into consideration all the materials, on its own merits and in accordance with law and take a decision on the final report filed by the 5th respondent.
https://www.mhc.tn.gov.in/judis/ 28 Crl.OP No.591 of 2021
14.This criminal original petition is accordingly allowed with the above directions. Consequently, connected miscellaneous petition is closed.
22.02.2021 Index : Yes Internet: Yes KP To
1.Home Secretary, The State of Tamil Nadu, Fort St.George, Tamil Nadu 600 009.
2.The Director General Of Police, Dr.Radhakrishnan Salai, Mylapore, Chennai 600 004.
3.The Commissioner of Police, No.132, Commissioner Office Building, EVK Sampath Road, Vepery, Periyamet, Chennai, Tamilnadu 600 007.
https://www.mhc.tn.gov.in/judis/ 29 Crl.OP No.591 of 2021
4.Deputy Commissioner of Police,CCB, Commissioner of Police, Pantheon Road, Egmore, Chennai 600 008.
5.Inspector of Police, CCB, EDF-1, Team-1, CCB, Office of Commissioner of Police, No.132, EVK Sampath Road, Vepery, Chennai 600 007.
6.The Joint Director, Central Bureau of Investigation, College Road near by Indian Overseas Bank, Subba Road Avenue, Thousand lights, Chennai, Tamil Nadu 600 006.
7.The Public Prosecutor, High Court, Madras.
https://www.mhc.tn.gov.in/judis/ 30 Crl.OP No.591 of 2021 N.ANAND VENKATESH.J., KP CRL.O.P.No.591 of 2021 22.02.2021 https://www.mhc.tn.gov.in/judis/