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The further investigation in respect of charge No.3 is being undertaken and the SFIO is in the process of submitting a supplementary investigation report.

iv) Concealment of material facts and inducing the then existing shareholders of DAL to agree for demerger of Airline Division of DAL with that of erstwhile KFAL and acquiring the control of KFAL, liable to be prosecuted U/S. 68 of the Companies Act, 1956.

v) Fraudulent inducement of banks to convert part of the debt into preference shares by deceptive projections and non-existing collateral securities by concealment of material facts, liable to be prosecuted U/S. 68 of the Companies Act, 1956.

6. Therefore, the accused are said to have committed the following offences under:

6. 1 Section 68 of the Companies Act, 1956:
Vijay Mallya and others concealed material facts and induced the shareholders of DAL to agree for demerger of airlines division with KFAL, thereby the shareholders of DAL lost the value of shares and the shareholders of erstwhile KFAL gained higher value on demerger.
The accused persons fraudulently induced the bankers to convert part of the loan into preference shares at the time of DRP by presenting false projections of future profitability in the Information Memorandum and valuing the brand using inflated projections.
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NC: 2024:KHC:14889 WP No. 4380 of 2018 C/W WP No. 3624 of 2018 WP No. 3625 of 2018 WP No. 3632 of 2018 WP No. 3642 of 2018 WP No. 3829 of 2018 WP No. 3943 of 2018 WP No. 4381 of 2018 WP No. 4671 of 2018 WP No. 6074 of inducement to enter into an agreement in respect of share of debenture is an essential element of Section 68. The decision to undertake the merger was already taken by the parties to the merger, and the petitioner was engaged merely to recommend the swap ratio; therefore, the question of inducement does not arise (CBI -vs- K Narayanrao (2012) 9 SCC 512 (paras-20, 31), and Sunil Kumar Agarwal and others -vs- Mukhopadhyay (2009) SCC OnLine CAL 239).

17. Section 2(11) of the Act, 1956, defines the term "Court" and means, with respect to any offence under this Act, the Court of a Magistrate of First Class having jurisdiction to try such an offence.

18. Section 68 of the Act, 2013, deals with the penalty for fraudulently inducing persons to invest money, and states that any person who, either by knowingly or recklessly making any statement, promise, or forecast which is false, deceptive, or misleading, or by any dishonest concealment of material facts, induces or attempts to induce