V. Ramasubramanian ORDER
V. Ramasubramanian, J.
1. This is a petition for anticipatory bail filed under Section 438 of the Code of Criminal Procedure.
2. Heard Mr. Prakash Goklaney, learned counsel appearing for the petitioner, Mr. S. Shanmuga Velayutham, learned Public Prosecutor for the State and M/s. Karthik Seshadri and Abudu Kumar Rajarathnam, learned counsel appearing for the intervenors.
3. The petitioner, who is the Managing Director of a company formerly known as M/s. Viswapriya Financial Services and Securities Limited and which is at present known as Viswapriya (India) Limited, is arrayed as the fourth accused in Crime No. 05 of 2013 on the file of Economic Offences Wing II of the Chennai City Police for the alleged offences under Sections 406, 420 and 120B of the Indian Penal Code read with Section 5 of the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997. The aforesaid complaint was registered at the instance of one Mr. G. Ramadoss, who claimed that upon being incited by the fifth accused namely P. Ram Mohan, who was employed as the Chief Manager of M/s. Viswapriya Financial Services and Securities Limited and at the behest of one Mr. Ganesan, working as Senior Executive in the company, he and his family members had invested a total amount of Rs. 6,60,000/- in a scheme known as 'Prime Investment Scheme'. The de facto complainant was issued with secured non convertible debentures, which actually matured for payment. According to the de facto complainant, he and his family members were issued with four cheques along with covering letters indicating as though the de facto complainant requested the transfer of investments to a company by name M/s. Quadrangle Trading Services Limited in a scheme known as 'Liquid Plus Scheme'. According to the de facto complainant, he never made any request for the transfer of investments and when he presented the cheques for payment, they returned dishonoured.
4. Though the complaint was lodged way back on 21.10.2013, the hands of the police got tied up due to certain collateral proceedings, without reference to which, the plea for anticipatory bail cannot be understood. Hence, I am constrained to make a reference to some collateral proceedings.
5. The petitioner herein admittedly promoted about 49 companies, whose particulars are as follows :
6. Though the petitioner was/is a director only in a few of them, the employees of some of these companies happen to be the directors of the other companies. In other words, the petitioner has direct or indirect control over the above 49 companies.
7. When M/s. Viswapriya (India) Limited, which is the first accused in Cr. No. 5 of 2013 (in relation to which, the fourth accused has come up with this anticipatory bail petition), plunged into a financial crisis, one of the companies promoted by the petitioner herein by name M/s. Analog Financial Services Private Limited came up with an application in Comp.A. No. 1007 of 2013 on the file of the Company Court seeking a direction to convene, hold and conduct a meeting of the secured debenture holders of M/s. Viswapriya (India) Limited for the purpose of considering a scheme of arrangement under Sections 391 to 394 of the Companies Act, 1956. The said application along with the proposed scheme of arrangement was filed before the Company Court in September 2013, at least a month before the criminal complaint was lodged on 21.10.2013. In the said application, this Court directed publication of notices and ordered convening of the meetings of the secured debenture holders on 24.11.2013. A senior member of the Bar was also appointed as the Chairman of the meeting, since this Court could not repose confidence in the petitioner or his nominees who were the directors.
8. Pursuant to the said order, advertisements were published on 1.11.2013 and 2.11.2013. The meeting of the debenture holders was held on 24.11.2013 and the Chairman of the meeting filed a Report. It will be useful to extract the relevant portion of the report of the learned counsel appointed to chair the meeting. It reads as follows :
"a. The said meeting was attended either personally or by proxy by 2,164 (two thousand one hundred and sixty four only) number of debenture holders of Viswapriya (India) Limited entitled together to 8,39,291 (eight laks thirty nine thousand two hundred and ninety one only) representing total value of debentures of Rs. 83,92,91,000/- (Rupees eighty three crores ninety two lakhs and ninety one thousand only).
b. The arrangement was taken as read and explained by the nominee of the applicant to the meeting and the question submitted to the said meeting was whether the debenture holders of Viswapriya (India) Limited approved the scheme of arrangement submitted to the meeting and agreed thereto.
c. The said meeting was of the opinion that the arrangement should be approved and agreed to/for the result of the voting upon the said question was as follows :
9. It should be recorded at this stage that since the application for convening a meeting of the debenture holders for considering a scheme of arrangement was filed on 19.9.2013 and also since the police registered the first information report on 21.10.2013, the Company Court, even while ordering the convening of the meeting, granted protective orders preventing the police from arresting the petitioner herein, with the object of seeing as to whether the debenture holders were with the petitioner herein or not. Eventually, the report of the Chairman of the meeting of the debenture holders indicated that more than 93% of the debenture holders supported the scheme of arrangement. Hence, the person who came up with the scheme of arrangement, filed a company petition in C.P. No. 15 of 2014 for sanctioning the scheme of arrangement. In the said petition, notice was ordered to the Regional Director of the Ministry of Corporate Affairs. In response to the notice, the Regional Director filed a report. A group of debenture holders also filed objections. After considering those objections, the Company Court passed an order dated 30.4.2014 in C.P. No. 15 of 2014 sanctioning the scheme of arrangement.
10. In the meantime, the second and third accused companies, which had actually issued cheques in favour of the de facto complainant in Cr. No. 5 of 2013, filed a petition in Crl.O.P. No. 12098 of 2014 under Section 482 of the Code for quashing the criminal complaint. Though a stay was granted initially in the said petition, it was eventually dismissed by a final order dated 29.4.2015.
11. Thereafter, the first accused herein filed a writ petition in W.P. No. 14229 of 2015 under Article 226 of The Constitution for a declaration that the first information report in Cr. No. 5 of 2013 was without jurisdiction, non est and void. The affidavit in support of the said writ petition was sworn to by the petitioner herein (fourth accused in the first information report) on behalf of the first accused. In the said writ petition, notice was ordered and a stay of all further proceedings in Cr. No. 5 of 2013 was granted. However, the said writ petition was eventually dismissed by a final order dated 6.8.2015. It is relevant to note that by the said order dated 6.8.2015, a learned Judge of this Court not only dismissed the writ petition filed by the first accused, but also dismissed yet another writ petition in W.P. No. 14664 of 2015 filed by a completely different company. That company came up with an appeal in W.A. No. 1227 of 2015 against the order of the learned Judge dated 6.8.2015 in W.P. No. 14664 of 2015 alone. A Division Bench (presided over by me) dismissed the said writ appeal by judgment dated 28.8.2015.
12. The above sequence of events indicates that from 21.10.2013 - the date on which a first information report was registered against the petitioner and others, the petitioner was in enjoyment of one protective order or the other, either in the form of stay of all further proceedings in the criminal complaint or in the form of protection from arrest. Both types of protective orders eventually disappeared on 6.8.2015, paving the way for the police to step up investigation.
13. At this stage, it is relevant to note that one more criminal complaint was filed at Trichy in Cr. No. 1 of 2015. The petitioner and another person were taken into custody by the Trichy Police and when they were produced before the concerned Court, they were directed to be enlarged on bail, in view of the protective orders granted by the Company Court. After getting enlarged, the petitioner approached the Madurai Bench of this Court with a quash petition and got further proceedings stayed. Though I am not now concerned with the said petition, I am making a reference to it for the completion of narration of facts.
14. After the writ petition in W.P. No. 14229 of 2015 filed by the first accused company for declaring the first information report in Cr. No. 05/2013 was dismissed by a learned Judge on 6.8.2015, the police took into custody four persons including the fifth accused and three other persons, who were not implicated as the accused in the first information report. They were taken into custody on 7.8.2015. Their applications for bail were dismissed by the Trial Court on 17.8.2015. However, by an order dated 8.9.2015, they were directed to be enlarged on bail, after they had undergone 30 days of incarceration.
15. Similarly, three more persons including the eighth accused in the first information report were taken into custody on 3.9.2015. Out of them, two were directed to be released by this Court on 8.9.2015. The third accused was released by the Trial Court later. The seventh accused, who is 87 years of age and who is suffering from cancer of the colon, was granted anticipatory bail by me by an order dated 14.9.2015.
16. It should be pointed out here that all other accused (except the petitioner herein) were granted bail (or anticipatory bail in the case of one) on account of the fundamental fact that the petitioner herein is the kingpin. Both in the scheme of arrangement in C.P. No. 15 of 2014 as well as before the Criminal Court, the petitioner herein has made an unequivocal statement that he alone is responsible for repayment of the dues to the debenture holders. Therefore, the case of the petitioner herein cannot be treated on the same footing as the case of the other accused, who were let off on bail (anticipatory bail).
17. Since the petitioner is the kingpin and since he has taken the full responsibility and also since he is at large, I passed an order on 8.9.2015 calling for the following details :
"The petitioner shall furnish the following details to this Court :
(i) The total number of companies promoted by him or in which he has an interest either as a shareholder or as a director
(ii) The details of all the schemes floated by the petitioner in all the companies (the schemes under which monies are even now due and payable to third parties)
(iii) The details of the assets of all the companies
(iv) The details as to how the petitioner proposes to satisfy the scheme of arrangement sanctioned by this Court by order dated 30.4.2014 in C.P. No. 15 of 2014
(v) The details of persons, who are covered by C.P. No. 15 of 2014
(vi) The details of persons/depositors, whom, according to the petitioner, are not covered by the scheme in C.P. No. 15 of 2014
(vii) The list of receivables by all the companies and the steps taken for recovery of those receivables
(viii) The details as to the filing of returns to the Income Tax Department
(ix) The details of filing returns with Registrar of Companies in respect of the companies
(x) The list of bank accounts held by all the companies and directors.
Post on 11.9.2015."
18. The object of passing the above order was to see if the depositors could get some money and to see if the petitioner really has the ability and resources to make repayment to the debenture holders. Though the police have been able to secure and arrest all and sundry, connected with the affairs of the first accused company, the police have not been able to find out the whereabouts of the petitioner herein for the past nearly six weeks, after the dismissal of the writ petition. Therefore, I thought that the mere dismissal of the anticipatory bail application will not advance the cause of the debenture holders and hence, I toyed with the idea of exploring the possibilities of bringing out the resources, if there are any, with which, the petitioner would be able to repay the debenture holders, even while keeping the anticipatory bail application pending. This is why I passed the order dated 8.9.2015, which is extracted in the preceding paragraph, calling upon the petitioner to furnish various details.
19. In pursuance of the said order, the petitioner has filed an affidavit giving some details. But, the details are not complete in all respects. The petitioner has stated that he needs access to the office records without fear of being harassed or arrested by the police, to enable him to come out with all the details. Therefore, I explored the possibility of giving the petitioner, access to the office records, in the presence of someone appointed by this Court and also in the presence of the Investigating Officer, so that the records are not tampered and at the same time, information is culled out.
20. But, there is very stiff opposition from the intervenors, who represent the large body of secured debenture holders. According to them, the long indulgence shown by this Court from October 2013 has proved to be in vain. But unfortunately, it is the very same debenture holders, who voted overwhelmingly in favour of the scheme of arrangement. Therefore, the Court alone is not to be blamed (if at all the Court has to take the blame.)
21. In pursuance of another order passed by me, the prosecution has filed a list of documents seized by them from the office premises of the various companies promoted by the petitioner herein. Though the list runs to about 16 pages, it is not known as to whether the files and registers seized by the prosecution are of any use to find out whether the petitioner has sufficient resources to repay the debenture holders or not. The prosecution claims that unless they are able to secure the petitioner, they will not be able to get the details.
22. Moreover, there are two types of persons. One set of persons are debenture holders, whom, according to the petitioner, are covered by the scheme of arrangement sanctioned in C.P. No. 15 of 2014. There are another set of depositors, who have invested money in two schemes known as 'Liquid Plus Scheme' and 'Safety Plus Scheme'. Even while sanctioning the scheme of arrangement in C.P. No. 15 of 2014, this Court has recorded a submission made by the petitioner that the second category of persons, who have invested money in Liquid Plus and Safety Plus Schemes, are not covered by the scheme of arrangement sanctioned by this Court.
23. In such circumstances, a clear picture
"(i) as to whether the petitioner has necessary resources
(ii) as to whether the petitioner is genuine in his commitments or not
and
(iii) as to whether the debenture holders, covered by the scheme and those not covered by the scheme would get back their money or not, has not emerged. The prosecution as well as depositors association are of the strong view that unless the petitioner is secured and his custody taken by the police, a clear picture would not emerge."
24. The stand taken by the depositors association cannot also be termed as wholly unjustified, in view of the fact that the petitioner herein and the first accused company have not so far honoured the commitments made by them to the Company Court in C.P. No. 15 of 2014, except to the extent of about Rs. 50.00 Lakhs. In other words, the Scheme sanctioned by this Court in C.P. No. 15 of 2014 is also not working out as per the time schedule.
25. Therefore, accepting the contentions of the prosecution and the intervenors, this petition is dismissed.
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