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The Complainant has filed complaint U/Sec.200 of Code of Criminal Procedure R/w. Sec.621 of Companies Act, 1956 against the Accused for the offence punishable under Section 240(3) of Companies Act, 1956.

2. The case of the prosecution in brief is as follows; The accused No.1 was the Managing Director of Accused No.1 company-M/s. Megacity (Bengaluru) Developers & Builders Ltd., (herein after referred to as 'MDBL'), Which was incorporated as a private limited company on 11/08/1994 and converted into a public limited company on 12/08/1998, with the object of carrying on the business to develop, construct, furnish, let-out, sell, deal in and to carry on all or any of the functions of Proprietors of lands, flats, dwelling houses, shops, offices, commercial complexes, factory sheds, buildings and accommodation of all kinds. The accused under the said company have floated a real estate project named 'Vajragiri' project and collected about Rs.60 Crores towards booking amounts in respect of the same. However, the said project was not materialized and large number of investors' money was not refunded. Accordingly, there were several complaints from the investors pointing towards the financial affairs of said company being conducted prejudicial to the interest of said investors. In view of such complaints regarding financial fraud against the company received by the Ministry of corporate Affairs, an inspection of the company U/Sec. 209A of the companies Act was ordered and accordingly, the inspection report was submitted to the Ministry of Corporate Affairs on 31/09/2007, which brought out violation of various provisions of the companies Act by the said company. Further, the Registrar of companies, Karnataka has also conducted a scrutiny of the balance sheet of said company as on 31/03/2006 U/Sec. 234(1) of the Companies Act, 1956 and submitted a report to the Ministry of Corporate Affairs, Government of India U/Sec. 234(6) of the Act, indicating the possible diversion and mis-utilization of funds by the promoters of said company. In the light of said reports, the Ministry of Corporate Affairs, Government of India has directed an investigation into the affairs of said MDBL company U/Sec. 235 of the Companies Act, by its order dated: 17/04/2009. Accordingly, a team of investigators was appointed to investigate into the financial and other irregularities, contraventions/violations of the provisions of the companies Act, 1956 or fraudulent Act committed by the said company and its Directors or its Officers or any other persons in the conduct of affairs of the company. After the investigation, the said team of investigators submitted the investigation report to the Government of India. On the basis of the findings given in the investigation report as to several irregularities, fraudulent acts and contravention / violation of the provisions of the companies Act, the Ministry of Corporate Affairs had directed the complainant office i.e., The Serious Fraud Investigation Office (herein after referred as 'SFIO'), Ministry of Corporate Affairs, Government of India, New Delhi to file complaints against the said company, its Directors and Officers by its letter dated: 14/09/2011. Accordingly, on the basis of one of the findings of said investigation report as to disobedience and willful ignorance of the summons issued by the investigating team of the complainant and failure to appear before the investigating team and failure to produce required information or documents to the investigating team of the complainant, which amounts to violation of provisions of Sec.240 of the Companies Act and liable to be punishable U/Sec. 240(3) of the Companies Act. It is the specific allegation that, though the accused No.1 was issued summons dated: 10/06/2011 asking to appear on 17/06/2011 at the Camp office of SFIO, Bengaluru for recording the statement, he did not turn up. He was again issued summons on 20/06/2011 asking to appear on 27/06/2011 at the office of SFIO at New Delhi and on that day also he did not appear. Further, a final summons was issued to him on 01/07/2011 asking him to appear on 07/07/2011 at New Delhi along with a show cause notice for non-cooperation in the investigation. But, he again chooses not to appear on the said date also. Thus he has fail to appear before the investigation team for the purpose of investigation and also fail to produce the documents / information required by the investigation team, which is an violation U/Sec. 240 of the Companies Act, punishable U/Sec. 240(3) of the Companies Act. Accordingly, the accused No.1 & 2 have committed the offence punishable U/Sec. 240(3) of the Companies Act.

6. The points that arise for consideration are:

1. Whether the complainant proves that the accused being the managing director of M/s. Megacity (Bangalore) Developers & Builders Limited, Bangalore, dealing with land developments, having responsibility of day to day affairs of the company, failed to produce required information or documents to the investigators of the complainant office and thereby committed the offence punishable U/sec.240(3) of Companies Act, 1956?

2. What Order ?

7. My answer to the above points are as follows :

Point No.1 : In the Negative Point No.2: As per final order for the following;

REASONS

8. Point No.1 :- It is the specific case of the complainant that, the accused being the managing director of M/s. Megacity (Bangalore) Developers & Builders Limited, Bangalore, dealing with land developments, having responsibility of day to day affairs of the company, failed to produce the information or data about (1) proof of lands purchased by him as MD of said MDBL out of the fund of Rs.5 Crores given to him by said MDBL as land advance. (2) Construction of building with the help of MDBL funds in his native village Chakkere. (3) Proof of his income as shown in the affidavit furnished to the Returning officer during the year 2008, (4) Proof of source of income of share application money i.e., Rs.199 Lakhs brought in by him and his family members & (5) complete details of utilization of Rs.20 Crores, Rs. 26 Crores & Rs.49 Crores received from Prestige Bidadi Holdings Pvt Ltd.,. to the investigation team constituted under the SFIO - complainant office by the Ministry of Corporate Affairs Government of India and as such he has violated the provisions of Sec.240(1) & (2) of the Companies Act and accordingly committed the offence P/U/Sec. 240(3) of Companies Act, 1956.