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3. The summoning order was issued pursuant to Criminal Complaint No. 770/2019 (hereinafter referred as 'complaint') filed by the Serious Fraud Investigation Office (hereinafter referred as 'SFIO'). The said complaint was filed pursuant to the investigation carried out by SFIO into the affairs of BSL and other companies. The Government of India had by an order dated 03.05.2016 issued directions to SFIO under Section 212(1) of the Companies Act to investigate into the affairs of certain companies (fifteen in number) including BSL. Subsequently, approval was also granted to SFIO to investigate the affairs of other companies based on the material that was collected during the investigation.

4. SFIO submitted its investigation report into the affairs of BSL and one hundred and fifty six other companies (hereinafter referred as 'Investigation Report') to the Government of India on 27.06.2019. Thereafter, on 29.06.2019, Ministry of Corporate Affairs, Government of India issued directions to the SFIO to initiate prosecution against the accused persons for the offences mentioned in the complaint. In all, two hundred and eighty seven persons/entities have been arrayed as accused in the said complaint. The petitioner is arrayed as accused no. 175 (A-175). SFIO alleges that during the course of investigation, it found that ex-promoters of BSL [Brij Bhushan Singal (A-158) and Neeraj Singal (A-159)] were directly or indirectly controlling one hundred and fifty seven companies including BSL. SFIO categorised these accused companies into four categories, namely, A, B, C and D. Category A comprises of two companies - BSL and Bhushan Energy Limited (hereinafter referred as 'BEL'). It is alleged that the said category of companies had generated funds, which were diverted to various other companies controlled by Brij Bhushan Singal and Neeraj Singal - (hereinafter collectively referred as 'Promoters'). Category B companies comprises of sixty-two companies and it is alleged that these companies were incorporated by the Promoters and they were either initial subscribers to the Memorandum of Association or directors in the said companies. SFIO alleges that the funds received in these companies were diverted to purchase properties in the name of the companies or invested as promoter's equity in the form of preference shares in BSL. The third category of companies, namely C category, comprises of eighty-five companies. These companies were in turn divided into sixteen groups where employees of BSL were appointed as directors from time to time. It is alleged that some of these companies were used for providing manpower while the remaining companies were used for diversion of funds from BSL. Category D comprises of eight companies, which were allegedly managed by entry operators primarily engaged in providing accommodation entries. These were used as a conduit for diversion of funds from BSL and other associated companies of the Promoters. It is alleged that these companies were managed by dummy directors for the benefit of the Promoters.

6. SFIO alleges that the funds were siphoned off using various methods. One such method was to transfer the funds from BSL and BEL to associate companies (Category B and C companies) by reflecting the same as 'capital advances'. It is alleged that the recipient companies then transferred the funds through one or more layers of associated companies of the Promoters, to BSL, as promoter's equity. It is alleged that these transactions took place in the year 2009-10 and 2010-11. SFIO further alleges that during the financial year 2013-14 and 2014-15, the amounts receivable from eighteen companies in category B and fourteen companies in category C were adjusted from the head 'Capital Advances' to 'Capital Work In Progress'. SFIO alleges that in the year 2011-12, three category B companies and the Promoters routed ₹575 crores, which was borrowed from banks and reflected the same as investments in preference shares of BSL. The interest payments for these loans were made through funds that were siphoned off from BSL through various companies. The said companies and Promoters repaid the loans from the proceeds received from redemption of preference shares of BSL in the year 2015-16 and 2016-17.

57. The learned Trial Court has proceeded on the assumption that there is an allegation that the petitioner has connived with the Promoters and other employees in perpetuating the fraud. Clearly, the Investigation Report submitted by the SFIO also does not make any such allegation against the petitioner.

58. In view of the above, neither the complaint made by the SFIO nor the Investigation Report submitted by the SFIO contains any specific allegations against the petitioner of being complicit or having acted in bad faith. The reasoning of the learned Court that the petitioner had connived with the Promoters and is liable to be proceeded against, is clearly unsustainable and not supported by the allegations made in the complaint or the Investigation Report furnished by the SFIO.