Nafr High Court
Case Details
1 2025:CGHC:35477 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR CRR No. 1143 of 2018 1 - Saptarishi Commercial Company Ltd. A Company Incorporated Under The Provisions Of The Erstwhile Companies Act, 1956, Having Its Registered OfÏce At B/306-309, Dynasty Business Park, Andheri Kurla Road, J.B. Nagar Andheri (East) Mumbai - 400 059, Through Its Authorised Representative Shri Govinda Soni S/o Mangaru Soni ., District : Mumbai, Maharashtra RAJSHEKHAR SONI Digitally signed by RAJSHEKHAR SONI 2 - Sangam Business Credit Ltd. A Company Incorporated Under the Provisions Of The Erstwhile Companies Act, 1956, Having Its Registered OfÏce At B/306-309, Dynasty Business Park, Andheri Kurla Road, J.B. Nagar Andheri (East) Mumbai -400059, Through Its Authorised Representative Shri Govinda Soni S/o Mangaru Soni, District : Mumbai, Maharashtra. 3 - Sangam Infotech Ltd. A Company Incorporated Under The Provisions Of The Erstwhile Companies Act , 1956, Having Its Registered OfÏce At B-10 Second Floor ,s.K. Plaza, Pur Road Bhilwara, Rajasrhan -311 001, Through Its Authorised Representative Shri Govinda Soni S/o Mangaru Soni., District : Bhilwara, Rajasthan --- Applicants versus 1 - Rajeev Kapoor S/o Balram Kapoor R/o Kapoor House 24 College Road, Choubey Colony, Raipur 492001 Chhattisgarh. 2 - Shilpa Kapoor W/o Rajeev Kapoor R/o Kapoor House 24 College Road, Choubey Colony, Raipur 492001 Chhattisgarh. 3 - Vasmi Krishna S/o Srirangam Raja R/at 11/567, Sector - 3 Shivanand Nagar, Khamtaral, Raipur - 492008 Chhattisgarh. 2 4 - Vidarbha Infra Realty Pvt. Ltd. A Company Incorporated Under The Provision Of Erstwhile Companies Act, 1956 Having Its Registered OfÏce At Kapoors House, 24, College Road Beside Esic OfÏce Choubey Colony Raipur - 49200 Chhattisgarh. 5 - Shilpa Energy Pvt. Ltd. A Company Incorporated Under The Provision Of Erstwhile Companies Act, 1956 Having Its Registered OfÏce At Kapoors House, 24, College Road Beside Esic OfÏce Choubey Colony Raipur - 49200 Chhattisgarh. --- Respondent For Petitioners/Complainants : Mr. Ankit Singhal, Advocate, as well as Mr. Ayush Mahishwar, Advocate. For Respondents/Accused : Mr. Rajeev Shrivastava, Senior Advocate, assisted by Ms. Sakshi Shakeel, Chhabra, Advocate, and Mr. Saket Pandey, Advocate, holding brief of Mr. Anup Majumdar, Advocate. Kashif Mr. CRMP No. 1247 of 2018 Rajeev Kapoor S/o Lt. Shri Balram Kapoor, Aged About 43 Years R/o Kapoor House, 24, College Road, Choubey Colony, P.S. Saraswati Nagar, Raipur 492001 (Chhattisgarh). ---Applicant Versus 1 - State Of Chhattisgarh Through District Magistrate, District Bilaspur Chhattisgarh. 2 - Saptarishi Commercial Company Ltd., A Company Incorporated Under The Provisions Of The Erstwhile Companies Act, 1956 Having Its Registered Address At B/306-309, Dynasty Business Park, Andheri Kurla Road, J.B. Nagar, Andheri (East), P.S. Andheri, Mumbai 400059 (Maharashtra) Through Its Authorized Representative Shri Govinda Soni S/o Shri Mangaru Soni, District : Mumbai, Maharashtra 3 - Sangam Business Credit Ltd., A Company Incorporated Under The Provisions Of The Erstwhile Companies Act, 1956 Having Its Registered 3 Address At B/306-309, Dynasty Business Park, Andheri Kurla Road, J.B. Nagar, Andheri (East), P.S. Andheri, Mumbai 400059 (Maharashtra) Through Its Authorized Representative Shri Govinda Soni S/o Shri Mangaru Soni, District : Mumbai, Maharashtra 4 - Sangam Infratech Ltd., A Company Incorporated Under The Provisions Of The Erstwhile Companies Act, 1956 Having Its Registered At B-10, Second Floor, S.K. Plaza, Pur Road, P.S. Bhilwara, Bhilwara- 311001 (Rajasthan) Through Its Authorized Representative, Shri Govinda Soni S/o Shri Mangaru Soni, District : Bhilwara, Rajasthan --- Respondent For Petitioner/Accused : Mr. Rajeev Shrivastava, Senior Advocate, assisted by Ms. Sakshi Chhabra, Shakeel, Advocate, and Mr. Saket Pandey, Advocate, holding brief of Mr. Anup Majumdar, Advocate. Kashif Mr. For Respondent No.1/State : Ms. Smriti Shrivastava, Panel Lawyer. For Respondents No. 2 to 4 /Complainants : Mr. Ankit Singhal, Advocate, as well as Mr. Ayush Mahishwar, Advocate. CRMP No. 2235 of 2018 1 - Vidarbha Infra Reality Private Limited (A Company Incorporated Under The Provision Of The Erstwhile Companies Act, 1956 Having Its Registered Address At Kapoor House 24, College Road, Choubey Colony, Police Station Saraswati Nagar, Raipur- 492001 Chhattisgarh Through Its Director Shrirangam Vasmi Krishna S/o Shri S. Raja, District : Raipur, Chhattisgarh 2 - Shrirangam Vasmi Krishna S/o Shri S.Raja Aged About 33 Years Director Vidarbha Infra Reality Private Ltd OfÏce Address Kapoor House, 24 College Road Chaoubey Colony, Police Station Saraswati Nagar Raipur Chhattisgarh. 3 - Smt. Shilpa Kapoor W/o Shri Rajeev Kapoor Aged About 40 Years Director Vidarbha Infra Reality Private Ltd OfÏce Address Kapoor House, 24 College Road Chaoubey Colony, Police Station Saraswati Nagar Raipur Chhattisgarh. 4 Versus ---Applicants 1 - State Of Chhattisgarh Through District Magistrate District Bilaspur Chhattisgarh.
Legal Reasoning
2 - Saptrishi Commercial Company Ltd A Company Incorporated Under The Provision Of The Erstwhile Companies Act, 1956 Having Its Registered Address At B/306 -309 Dynasty Business Park, Anbdheri Kurla Road, J.B. Nagar, Andheri (East) Police Station Andheri Mumbai - 400059 (Maharashtra) Through Its Authorized Representative Shri Govinda Soni S/o Shri Mangaru Soni, District : Mumbai, Maharashtra 3 - Sangam Business Credit Ltd A Company Incorporated Under The Provisions Of The Erstwhile Companies Act ,1956 Having Its Registered Address At B/306 -309 Dynasty Business Park, Andheri Kurla Road ,j.B. Nagar, Andheri (East) Police Station Andheri Mumbai -400059 (Maharashtra ) Through Its Authorized Representative Shri Govinda Soni S/o Shri Mangaru Soni, District : Mumbai, Maharashtra 4 - Sangam Infratech Ltd A Company Incorporated Under The Provision Of The Erstwhile Companies Acr ,1956 Having Its Registered Address At B/306-309 Dynasty Business Park, Anbdheri Kurla Road, J.B. Nagar, Andheri (East) Police Station Andheri Mumbai -400059 (Maharashtra) Through Its Authorized Representative Shri Govinda Soni S/o Shri Mangaru Soni, District : Mumbai, Maharashtra --- Respondent For Petitioners/Accused : Mr. Rajeev Shrivastava, Senior Advocate, assisted by Ms. Sakshi Shakeel, Chhabra, Advocate, and Mr. Saket Pandey, Advocate, holding brief of Mr. Anup Majumdar, Advocate. Kashif Mr. For Respondent No.1/State : Ms. Smriti Shrivastava, Panel Lawyer. For Respondents No. 2 to 4 /Complainants : Mr. Ankit Singhal, Advocate, as well as Mr. Ayush Mahishwar, Advocate. 5 CRMP No. 2292 of 2018 1 - Shilpa Energy Private Limited A Company Incoporated Under The Provision Of The Erstwhile Companies Act .1956 Having Its Registrered Address At Kapoor House, 24 Collage Road Chaoubey Colony, Police Station Saraswati Nagar Raipur 492001 Chhattisgarh. Through Its Director Shrirangam Vasmi Krishna S/o S. Raja, District : Raipur, Chhattisgarh 2 - Shriragam Vasmi Krishna S/o Shri S. Raja Aged About 33 Years Director Bidarbha Infra Reality Private Ltd OfÏice Address At Kapoor House ,24 Collage Road Chaoubey Colony, Police Station Saraswati Nagar Raipur 492001 Chhattisgarh. 3 - Smt. Shilpa Kapoor W/o Shri Rajeev Kapoor Aged About 40 Years Director Vidarbha Infra Reality Private Ltd OfÏce Address At Kapoor House, 24 Collage Road Chaoubey Colony, Police Station Saraswati Nagar Raipur 492001 Chhattisgarh., District : Raipur, Chhattisgarh ---Applicants Versus 1 - State Of Chhattisgarh Through District Magistrate District Bilaspur Chhattisgarh. 2 - Saptarishi Commercial Company Ltd A Company Incorporated Under The Provisions Of The Erstwhile Companies Act , 1956 Having Registered Address At B/306-309 Dynasty Business Park, Andheri Kurla Road, J.B. Nagar Andher (East) Police Station Andheri Mumbai 400059 (Maharashtra) Through Its Authorised Representative Shri Govinda Soni S/o Shri Mangaru Soni, District : Mumbai, Maharashtra 3 - Sangam Business Credit Ltd , A Company Incorporated Under The Provisions Of The Erstwhile Companies Act , 1956 Having Registered Address At B/306-309 Dynasty Business Park, Andheri Kurla Road, J.B. Nagar Andher (East) Police Station Andheri Mumbai 400059 (Maharashtra) Through Its Authorized Representative Shri Govinda Soni S/o Shri Mangaru Soni, District : Mumbai, Maharashtra 4 - Sangam Infratech Ltd A Company Incorporated Under The Provisions Of The Erstwhile Companies Act , 1956 Having Registered At B-10 Second Floor S.K. Plaza Pur Road Police Station Bhilwara Bhilwara 6 311001 (Rajasthan) Through Its Authorised Representative Shri Govinda Soni S/o Shri Mangaru Soni, District : Bhilwara, Rajasthan ---- Respondents For Petitioners/Accused : Mr. Rajeev Shrivastava, Senior Advocate, assisted by Ms. Sakshi Chhabra, Shakeel, Advocate, and Mr. Saket Pandey, Advocate, holding brief of Mr. Anup Majumdar, Advocate. Kashif Mr. For Respondent No.1/State : Ms. Smriti Shrivastava, Panel Lawyer. For Respondents No. 2 to 4 /Complainants : Mr. Ankit Singhal, Advocate, as well as Mr. Ayush Mahishwar, Advocate. Hon'ble Mr. Ramesh Sinha, Chief Justice Order on Board 23.07.2025 1. The CRR No. 1143/2018 has been filed by its applicants/complainants with following prayer: “ It is prayed, therefore, that the Hon'ble Court may kindly be pleased to allow this revision and partly quash the impugned order dated 26/5718 passed by the Court of Special Judge. (Companies Act, 2013) Bilaspur. Chhattisgarh in Special Case (Companies Act) No. 18 of 2018 (Annexure A/1) and cognizance for the offences punishable under Sections under Section 166(5). 188 of Companies Act, 2013 and Sections 120- B. 406 and 408 of IPC against for the Respondents may kindly be taken in the interest of justice. 2. The CRMP No. 1247 of 2018 has been filed by its petitioners/accused with following prayer: “ 1. It is respectfully prayed that the entire records of the Special Case (Companies Act) No: 18/2018 may kindly be called from the Special Court of Mr. N. D. Tigala, Special Judge (Companies Act) and Sessions Judge, 7 Bilaspur, District Bilaspur (C.G.). 2. It is respectfully prayed that the order dated 26.05.2018 in registering the complaint against Petitioner by the Special Court of Mr. N. D. Tigala, Special Judge (Companies Act) and Sessions Judge, Bilaspur, District Bilaspur (C.G.) may kindly be quashed. 3. Any other relief/ relief's which this Hon'ble Court may think fit and proper in the facts and circumstances of the case with cost of the petition may please be also granted to the Petitioner. ” 3. The CRMP No. 2235 of 2018 has been filed by its petitioners/accused with following prayer: “ 1. It is respectfully prayed that the entire records of the Special Case (Companies Act) No: 18/2018 may kindly be called from the Special Court (Companies Act), Bilaspur, District Bilaspur (C.G.). 2. It is respectfully prayed that the order dated 26.05.2018 in registering the complaint against Petitioner by the Special Court (Companies Act), Bilaspur, District Bilaspur (C.G.) may kindly be quashed. 3. Any other relief/ relief's which this Hon'ble Court may think fit and proper in the facts and circumstances of the case with cost of the petition may please be also granted to the Petitioner. ” 4. The CRMP No. 2292 of 2018 has been filed by its petitioners/accused with following prayer: “ 1. It is respectfully prayed that the entire records of the Special Case (Companies Act) No: 18/2018 may kindly be called from the Special Court (Companies Act), Bilaspur, District Bilaspur (C.G.). 2. It is respectfully prayed that the order dated 26.05.2018 in registering the complaint against Petitioner by the Special Court (Companies Act), 8 Bilaspur, District Bilaspur (C.G.) may kindly be quashed. 3. Any other relief/ relief's which this Hon'ble Court may think fit and proper in the facts and circumstances of the case with cost of the petition may please be also granted to the Petitioner. ” 5. The prosecution case in brief is that the complainants are the Companies duly registered under the provisions of erstwhile Companies Act. 1956. The Registered OfÏces of the Complainants are situated as stated hereinabove in the Cause Title of CRR No. 1143/2018. The complainants belong and controlled/held by Sangam Group of Companies. Sangam Group of Companies have diversified business interests with major operations in Rajasthan, Maharashtra and also elsewhere. Shri Govinda Soni, is duly authorized by the complainant companies to file the revision CRR No. 1143/2018. Mahalaxmi TMT Pvt. Ltd. ("MTPL") is also a Sangam Group Company. MTPL has been in the business of production of TMT Bars from its plant situated at Plot No. C/2. Deoli Growth Centre, Deoli, District Wardha, Maharashtra. The capacity of the said plant of MTPL is 5 Lacs Metric Tonne Per Annum ("MTPA"). The sponge iron and billets was a major raw material used by MTPL to manufacture its final product of TMT Bars. Vide and under an Incorporation Certificate dated 07/11/2003, a Company in the name of Baldev Alloys Pvt. Ltd. ("BAPL") was formed, incorporated and registered by the Registrar of Companies ("ROC") for the State of Chhattisgarh under the provisions of erstwhile Companies Act, 1956, having its registered ofÏce, at the 9 relevant time of the commission of the subject offence, at Siltara Industrial Growth Centre, Phase II, 18th Mile Stone, Bilaspur Road, Raipur, Chattisgarh. As per the Memorandum and Articles of Association, duly registered with the ROC, Chhattisgarh, the said BAPL was promoted and incorporated by Kapoor Group and Somani Groups having equal stake/share in the subscribed and paid-up capital and also the representation on the Board of Directors. Accordingly, the Mr. Sanjeev Kapoor and his brother were appointed as the Promoter Directors representing Kapoor Group and Mr. Shyamlal Somani and Mr. Jitendra Somani as Promoter Directors representing Somani Group. The said Four Directors of Kapoor and Somani Groups are subscribers to the Memorandum and Articles of Association of BAPL and continued to be the Directors at the relevant time of commission of the subject offences. Rajeev Kapoor throughout acted as the Chief Executive OfÏcer (CEO) of BAPL even till the commission of the subject offence. The various statutory returns of the BAPL filed with and duly recorded Electronically on the ofÏcial website of Ministry of Corporate Affairs (MCA), it further establishes that from the Financial Year 2005-06 to the Financial Year 2013-14, the Balance Sheet as well as the Annual Return of the BAPL have throughout been signed and submitted by the Rajeev Kapoor. The Shilpa Kapoor is the wife of Rajeev Kapoor and was also working with the BAPL having drawn a salary of Rs. 3 Lac in the Financial Year 2012-13 from BAPL. 6. The Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. are 10 the Companies promoted, formed and incorporated by Shilpa Kapoor and Vamsi Krishna in collusion and conspiracy of the Rajeev Kapoor to commit the subject offences as stated in detail hereinafter. The Vamsi Krishna is an employee of the Rajeev Kapoor and Shilpa Kapoor and also a minor shareholder holding 0.69% and 2.82% shareholding in Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd., respectively. Save and except the said shareholdings of Vamsi Krishna in the Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd., rest of the shareholdings of the said companies are owned by the Rajeev Kapoort and Shilpa Kapoor directly or through their other corporate entity. 7. The BAPL has been engaged in the manufacturing of Sponge Iron (directly reduced iron), Billets and also in the business activities into crushing and screening of Iron Ore, trading and exports of Iron Ore fines, power generation and other allied ancillary/auxiliary businesses incidental thereto. BAPL has its manufacturing plants in Village Siltara, Tehsil and District Raipur, Chattisgarh, and also in Village - Raikot. Jagdalpur, District - Bastar, Chattisgarh. The BAPL had, in the Financial Year 2009-10, purchased following properties in District Nagpur, Maharashtra, for expansion of its business activities, like the the Agricultural land admeasuring 2.08 Hectare situated on Khasra No.14, Patwari Halka No. 38, Mouza - Ghogli, Tehsil & District Nagpur (Property No.1) and Land admeasuring 501.14 Sq. Meters situated on Khasra No. 40/1, Patwari Halka No.38, Mouza Beltrodi, Gram Panchayat Besa, Tehsil and District Nagpur (Property No.2). 8. The said Property Nos. 1 and 2 shall hereinafter collectively 11 referred to as "the Nagpur Properties". That BAPL was passing through severe financial crisis, therefore, at the representations and requests of Mr. Sanjeev Kapoor of Kapoor Group and Mr. Shyam Somani of Somani Group, the Complainants agreed for making investments in BAPL. The sponge iron and billets manufactured by BAPL was / is a raw material used by MTPL of Sangam Group for manufacturing its final product of TMT Bars, therefore, the smooth functioning of BAPL's plant would result into firm and uninterrupted supply of the said billets and sponge iron as raw material to MTPL. Therefore, in view thereof and also in view of other commercial factors, the Applicants/Complainants decided to make strategic invest in BAPL as largest shareholder. Accordingly, the Complainants have invested in an aggregate sum of Rs.9.86.00.000/- for the purchase of equity shares of Rs.10/- each in the paid-up share capital of BAPL jointly acquiring majority stake. 9. When the complainants purchased and acquired the above shares, the Complainants' holding cumulatively in BAPL was constituting about 70% of the total paid-up share capital. The said Kapoor and Somani Groups. However, subsequently, without notice or invitation to the complainants, increased the Paid-up share capital of the BAPL as a result whereof, the respective holding of the complainants reduced to 11.91%, 13.50% and 13.74%, respectively, and the cumulative holding of the complainants decreased to 39.16% which is also a majority shareholding of the 12 complainants in BAPL which position still exists. After said investment by the complainants, in the joint meeting held somewhere in the first/second week of March, 2013, at the registered ofÏce of BAPL, it was represented by the Kapoor, including Rajeev Kapoor, and Somani Group Directors that Rajeev Kapoor had rich experience in Sponge Iron and Billets manufacturing process, administration and operation of the plants, the related financial matters, having cordial relations with high ranking ofÏcers of financial institutions, relevant departments of Central and State Governments, therefore, in a position to promptly get various required permissions, sanctions including the allotment of related matters of coal and iron ore mines. Therefore, the complainants decided not to insist for participation in the management and control of BPAL and allowed Rajeev Kapoor to continue to function as the CEO of BAPL and to be paid monthly remuneration by BAPL. It was further agreed that the other Directors may also be paid reasonable remuneration to the extent of services rendered to BAPL. In fact, for the Financial Years 2011- 12, 2012-13 and 2013-14, Rajeev Kapoor has been paid the Director Remunerations of the sum of Rs. 9,00,000/-, Rs. 13,50,000/- and Rs. 24.00.000/- respectively. The complainants have also, through their business associates, arranged the additional financial assistances to BAPL. 10. That MTPL have been regularly purchasing the Billets from BAPL and making advance payments thereof. BAPL has however though received the advance payments but the Billets to the extent of a 13 sum of Rs. 3,66,23,777/- have not been supplied till this date. Therefore, a sum of Rs. 3,66,23,777/- along with interest thereon remains outstanding due and payable by BAPL to MTPL as unsecured creditor. Thus, the complainants, through their aforesaid Associated Sangam Group Companies and its Business Associates, are also unsecured creditors of BAPL. Rajeev Kapoor, Shilpa Kapoor and Vamsi Krishna have hatched a conspiracy to illegally, dishonestly, fraudulently and unlawfully siphon off the Nagpur Properties from BAPL and causing it wrongful loss. By said illegal and unlawful transactions of Nagpur properties, the Rajeev Kapoor and Shilpa Kapoor have derived wrongful gain to themselves. In furtherance of the said conspiracy, Rajeev Kapoor, Shilpa Kapoor and Vamsi Krishna have formed, promoted and incorporated the Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. vide the two respective Incorporation Certificates both dated 08/09/2014 Issued by the ROC, Chhattisgarh. In both the said companies, the Shilpa Kapoor and Vamsi Krishna are shown as the Directors and Shareholders. 11. In furtherance of the said conspiracy, the Accused Nos. 2 and 3 in CRR No.1143/2018, with active aid and abetment of Rajeev Kapoor, opened, same day of Incorporation i.e. 08/09/2014 without complying with the mandatory requirement of PAN Card, two Bank Accounts in the names of Devendra Nagar, Raipur Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. in HDFC Bank, Branch. It may be noted that even PAN Cards were not issued to Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. at the time of 14 opening of the said Bank Accounts. In furtherance the said conspiracy, without knowledge, consent, information or mandate of the complainants, as the major shareholders and the Board of Directors of BAPL, Rajeev Kapoor, illegally. fraudulently, dishonestly and unlawfully on behalf of BAPL sold the two Nagpur properties at grossly undervalued considerations to the companies Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. as (i) Property No.1 which was sold under a Sale Deed dated 12/09/2014 to Vidarbha Infra Realty Pvt. Ltd. for the grossly undervalued consideration of Rs.1.15 crores. The said Sale Deed is duly registered vide Registration No. NGN-GRAM-10-9664/2014. The market value of this property is Rs.6 crores and the Circle Rate / Ready Reckoner Rate Value duly determined. approved and declared by the Revenue Authority of Government of Maharashtra is Rs. 4.98 crores. The Stamp Duty of Rs. 27,50.000/- is paid on the Government approved Market Value of Rs. 4.98 crores on this Sale Deed, and (ii) Property No.2 which was sold under a Sale Deed dated 12/09/2014 to Shilpa Energy Pvt. Ltd. for the grossly undervalued consideration of Rs.30 Lacs. The said Sale Deed is duly registered vide Registration No. NGN-GRAM-10-9665/2014. The market value of this property is Rs.75 Lacs and the Circle Rate / Ready Reckoner Rate Value duly determined, approved and declared by the Revenue Authority of Government of Maharashtra is Rs.50.12,000/-. The Stamp Duty of Rs.2.75,700/- is paid on the Government approved Market Value of Rs.50, 12.000/- on this Sale Deed. 12. In the aforesaid two transactions, Vamsi Krishna acted and signed 15 the Sale Deeds as duly authorized Representative of aforesaid companies. In the said transactions, Rajeev Kapoor has neither referred to nor annexed any Board or General Body Resolution of BAPL authorising Rajeev Kapoor to sell the Nagpur properties or execute the said Sale Deeds. That BAPL had suffered an aggregate loss of the sum of Rs.5634.29 Lacs for the Financial Year 2013-14 which loss stood increased to Rs.5771.07 Lacs for the Financial Year 2014-15. Inspite of the BAPL suffering from huge losses, thus. consequently finding very difÏcult to run its business affairs. Rajeev Kapoor, as the CEO of BAPL, instead of taking steps to help and bail out the BAPL, siphoned off the said two valuable Nagpur properties for his personal gain. These losses for the Financial years 2013-14 and 2014-15 are recorded in the Annual Report for the Financial Year 2014-15 of BAPL. 13. In furtherance of the said conspiracy, the Rajeev Kapoor, Shilpa Kapoor and Vamsi Krishna have even illegally, fraudulently and dishonestly siphoned off to themselves the said grossly undervalued consideration purported to have been paid under the aforesaid two Sale Deeds to BAPL. The said sale considerations were deposited by Rajeev Kaoor in a Bank Account of BAPL bearing No. 01522560006806 maintained with HDFC Bank Ltd. at Raipur. This Account was not a regular business account of BAPL and has been clandestinely and fraudulently operated by Rajeev Kaoor without the knowledge of the Complainants and in violation of Article 80 of the AOA of BAPL. 14. Thus, from the aforesaid facts, it is evident that the aforesaid 16 consideration of Rs.1.15 crores and Rs.30 Lacs have never been brought to the regular Account of BAPL and have never been used for the purposes of BAPL, In fact, the said sale considerations have also been fraudulently and dishonestly misappropriated by accused namely Rajeev Kapoor himself alongwith said two Nagpur Properties. 15. The said two Nagpur properties have been illegally, fraudulently, dishonestly and unlawfully sold by Rajeev Kapoor in the Financial Year 2014-15 without the approval of the BAPL and/or shareholders including complainants, being the largest shareholder of BAPL. The complainants have never been served with any notice of AGM/EGM of BAPL to discuss agenda of sale of the said Nagpur properties. It is further found out that in the Annual Report of the BAPL for the Financial Year 2014-15, which is duly signed by Rajeev Kapoor, he has deliberately with dishonest and malafide intentions, not disclosed the sale consideration of the said Nagpur properties. It has further come to the knowledge of the complainants that the Income Tax Authorities have scrutinized the said sale transactions of Nagpur Properties and passed the Assessment Order dated 18.12.2017 holding categorically the sales of the said two Nagpur properties to be grossly undervalued, therefore, further holding BAPL liable to pay Long Term Capital Gain (LTCG) of an aggregate sum of Rs. 3,37,32,248/-. Thus, the net result of said fraudulent, dishonest, illegal and unlawful sale of said two Nagpur Properties by Rajeev Kapoor on BAPL is 17 summarised, as below: (i) BAPL lost the ownership of said two properties having aggregate of the market value of Rs.6.5 crores; (ii) Even the purported sale considerations shown to be paid by Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. are also siphoned off by Rajeev Kapoor; (iii) BAPL is further fastened with the liability of long term capital gain of Rs.3.37.32.248/- by Income Tax Authority; (iv) BAPL is put to huge wrongful loss of more than Rs.9.5 crores or thereabout, therefore, as a major shareholder the complainants are also put to huge loss: (v) Rajeev Kapoor and Shilpa Kapoor have wrongfully gained Nagpur Properties worth Rs.6.5 crores or thereabout free of cost. 16. Thus, Rajeev Kapoor has committed an offence under Section 447 of Companies Act, 2013, of fraud in relation to affairs of BAPL by abusing his position as a Director and Chief Executive OfÏcer in collusion, connivance and conspiracy with accused Nos. 2 to 5 (in CRR No. 1143/2018) with intent to deceive and/or to put on wrongful loss, inter-alia, the complainants as the major shareholders and to obtain wrongful gain to himself from the illegal and fraudulent sale of Nagpur properties. Rajeev Kapoor has also committed an offence punishable under Sub-Section (5) of Section 166 in respect of the said illegal and fraudulent sale of the Nagpur properties. Rajeev Kapoor has deliberately concealed and omitted to disclose the material fact of sale of Nagpur properties in the 18 Annual Report of the BAPL for the Financial Year 2014-15 which is duly signed by Rajeev Kapoor. Rajeev Kapoor has the knowledge that the transaction of the sale of Nagpur properties is mandatorily required to be disclosed in the Annual Report/Balance Sheet for the Financial Year 2014-15. Therefore, Rajeev Kapoor has committed an offence punishable under Sections 448 read with Section 447 of the Companies Act, 2013. Rajeev Kapoor has illegally and fraudulently sold and delivered the Nagpur properties to the Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. on one hand to make unlawfully gain to himself and Shilpa Kapoor and on the other hand intending thereby to prevent the said Nagpur properties to be used and utilised among the creditors of BAPL, therefore, has also committed an offence under Section 421 of IPC. Rajeev Kapoor, as the Promoter Director and CEO of BAPL has always had the full and complete domain over the Nagpur property which has been Illegally and fraudulently sold and delivered by them to the Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. which are duly controlled by Rajeev Kapoor and Shilpa Kapoor. Therefore, Rajeev Kapoor has committed an offence punishable under Section 406 read with Section 408 of IPC. The Respondent Nos. 1 to 5 (in CRR No. 1143/2018) have also committed an offence under Sections 406, 408 and 421 of the IPC. As stated above, the Rajeev Kapoor, Shilpa Kapoor and Vamsi Krishna have committed the aforementioned offences in furtherance of the conspiracy hatched by them, therefore, they are also liable to be prosecuted under Section 120(B) of IPC. In such 19 circumstances, being left with no other option, the complainants herein were constrained to file a criminal complaint under Section 436 read with Section 439(2) of the Companies Act, 2013. As shareholder of Baldev Alloys Pvt. Ltd., against the Respondents (In CRR No. 1143/2018) for offences committed by them under Sections 166(5), 447 and 448 of the Companies Act, 2013, and under Sections 120(B), 406, 408 and 421 of IPC, and read with Section 219 of CrPC. 17. In the said complaint, statement of Mr. Govinda Soni Authorised ofÏcer of the complainants was recorded. Vide the impugned order dated 26.05.2018, the learned trial Court took cognizance of the offences punishable under Section 447 and 448 of the Companies Act, 2013 only, against the accused persons whereas the complainants have also made out a prima facie case for taking cognizance of offences punishable under Sections 166(5) and 188 of Companies Act, 2013 and Sections 120-B, 406 and 408 of IPC also. Being aggrieved by the order dated 26.05.2018, accused Rajeev Kapoor had preferred a petition (CRMP No.1247/2018), in which vide order dated 10.07.2018, this Court had stayed the further proceeding before the learned trial Court concerned. Hence, these petitions. 18. Mr. Rajeev Shrivastava, learned Senior Advocate, appearing on behalf of the accused party, submits that Rajeev Kapoor has challenged the impugned order dated 26.05.2018 before this Court in Cr.M.P. No. 1247/2018 praying quashment of same, on the main legal ground for challenging the order is that the Special Judge 20 (Companies Act) cannot directly take cognizance in a private complaint of Shareholders alleging under Section 447 and 448 of the Companies Act, and the coordinate Bench of this Court was pleased to stay the proceedings of present case i.e. Special Case (Companies Act) No.18/2018 till the disposal of I.A. No.1 on merits. The allegation of the complainants herein against the accused party is that Rajeev Kapoor who was the Managing Director of the Baldev Alloys Private Limited (BAPL) in which the complainants are shareholders has sold 2 lands situated in Nagpur (MH) belonging to the BAPL to the companies Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. at much lower price without any authorization and received the sale consideration in a bank account which is not the regular business account of BAPL. It is also alleged that by the said act Rajeev Kapoor, Shilpa Kapoor and Vamsi Krishna have conspired to fraudulently siphon of Nagpur Properties causing wrongful loss to BAPL. Hence, the they ought to have been charged under Sections 166(5) and 188 of Companies Act 2013 and Sections 120B, 406 and 408 of the IPC also. The allegations made in the entire matter against the accused is categorically denied. It is submitted that Rajeev Kapoor was fully authorized by the company to transact the Nagpur properties and Nagpur properties were purchased and sold on the basis of the principal decisions between Kapoor and Somani Group and other stakeholders taken at the time of the purchases of the properties when the complainant was not the part of the company. It is further submitted that the said bank account was the company's bank 21 account duly authorized by the board of directors operated with consent of the board of directors, regular account with several other transactions of the company's business. It is also submitted that the said amount was duly brought to company and utilized for the company's operations and other expenses as per the principal decisions taken at the time of purchase. It is also respectfully submitted that the properties were sold under proper authority and the balance sheet was signed with a caveat/remark of pending HDFC Bank. It is further submitted that the Special Judge (Companies Act) cannot take cognizance over a private complaint under Section 447 and 448 of the Companies Act in view of the 2 nd Proviso of Section 212(6) read with Section 439(1) of the Companies Act. It is also submitted that the Special Judge (Companies Act) in view of Section 436(2) of the Companies Act cannot take cognizance independently under Indian Penal Code unless and until the accused is prosecuted under the provisions of the Companies Act. 19. Mr. Shrivastava, learned Senior Advocate also emphasizes that there is already a Civil Suit pending with regard to sale of the subject matter properties before the Civil Court at Nagpur (Maharashtra) instituted by the other group Directors Sham Somani which is still pending. Hence, in absence of any finding by the Civil Court against the accused party with regard to sale, the complainants cannot institute criminal action with regard to same transaction. Furthermore, with respect to transaction of same subject matter at Nagpur properties (Maharashtra) the accused 22 party is being harassed by the other Director/Shareholders (Somani Group) by filing complaints before various authorities such as Police Complaint at Nagpur (Maharashtra), Police Complaint at Jagdalpur (C.G.) and Police Complaint at Dharsiwa (C.G.) which has been closed by all the Police after inquiry. 20. Mr. Ankit Singhal, learned counsel appearing for the complainants opposes the submissions advanced by learned Senior Advocate appearing for the accused party, and submits that the learned trial Court failed to appreciate that the complainants have made out a prima facie case for taking cognizance of offences punishable under Sections 166(5) and 188 of Companies Act, 2013 and Sections 120-B, 406 and 408 of IPC also. Section 166(5) of the Companies Act, 2013, is reproduced here as under: “(5) A director of a company shall not achieve or attempt to achieve any undue gain or advantage either to himself or to his relatives, partners, or associates and if such director is found guilty of making any undue gain, he shall be liable to pay an amount equal to that gain to the company.” Section 188 of Companies Act, 2013, is also reproduced here as under: “Section 188. Related party transactions.---(1) Except with the consent of the Board of Directors given by a resolution at a meeting of the Board and subject to such conditions as may be prescribed, no company shall enter into any contract or arrangement with a related party with respect to-- (a) sale, purchase or supply of any goods or materials; (b) selling or otherwise disposing of, or buying, property of any kind; 23 (c) leasing of property of any kind; (d) availing or rendering of any services; (e) appointment of any agent for purchase or sale of goods, materials, services or property; (f) such related party's appointment to any ofÏce or place of profit in the company, its subsidiary company or associate company; and (g) underwriting the subscription of any securities or derivatives thereof, of the company: Provided that no contract or arrangement, in the case of a company having a paid-up share capital of not less than such amount, [or transactions] exceeding such sums, as may be prescribed, shall be entered into except with the prior approval of the company by a 2[resolution]: Provided further that no member of the company shall vote on such 2[resolution], to approve any contract or arrangement which may be entered into by the company, if such member is a related party: 3[Provided also that nothing contained in the second proviso shall apply to a company in which ninety per cent. or more members, in number, are relatives of promoters or are related parties:] Provided also that nothing in this sub-section shall apply to any transactions entered into by the company in its ordinary course of business other than transactions which are not on an arms length basis: 4[Provided also that the requirement of passing the resolution under first proviso shall not be applicable for transactions entered into between a holding company and its wholly owned subsidiary whose accounts are consolidated with such holding company and placed before the shareholders at the general meeting for approval.] Explanation.-- In this sub-section,-- 24 (a) the expression "ofÏce or place of profit" means any ofÏce or place-- (i) where such ofÏce or place is held by a director, if the director holding it receives from the company anything by way of remuneration over and above the remuneration to which he is entitled as director, by way of salary, fee, any rent-free commission, accommodation, or otherwise; perquisites, (ii) where such ofÏce or place is held by an individual other than a director or by any firm, private company or other body corporate, if the individual, firm, private company or body corporate holding it receives from the company anything by way of remuneration, salary, fee, commission, perquisites, any rent- free accommodation, or otherwise; (b) the expression "arm's length transaction" means a transaction between two related parties that is conducted as if they were unrelated, so that there is no conflict of interest. (2) Every contract or arrangement entered into under sub- section (1) shall be referred to in the Boards report to the shareholders along with the justification for entering into such contract or arrangement. (3) Where any contract or arrangement is entered into by a director or any other employee, without obtaining the consent of the Board or approval by a 1[resolution] in the general meeting under sub-section (1) and if it is not ratified by the Board or, as the case may be, by the shareholders at a meeting within three months from the date on which such contract or arrangement was entered into, such contract or arrangement 2[shall be voidable at the option of the Board or, as the case may be, of the shareholders] and if the contract or arrangement is with a related party to any director, or is authorised by any other director, the directors concerned shall indemnify the company against any loss incurred by it. (4) Without prejudice to anything contained in sub-section (3), it shall be open to the company to proceed against a director 25 or any other employee who had entered into such contract or arrangement in contravention of the provisions of this section for recovery of any loss sustained by it as a result of such contract or arrangement. (5) Any director or any other employee of a company, who had entered into or authorized the contract or arrangement in violation of the provisions of this section shall,-- (i) in case of listed company, be 3[liable to a penalty of twenty-five lakh rupees]; and (ii) in case of any other company, be 4[liable to a penalty of five lakh rupees].” 21.
Decision
It is further submitted that in view of the above provisions of the Companies Act, it is clear that Rajeev Kapoor has also committed an offence punishable under Sub-Section (5) of Section 166 and 188 of Companies Act in respect of the said illegal and fraudulent sale of the Nagpur properties. The learned trial Court failed to appreciate that Rajeev Kapoor has deliberately with dishonest and malafide intentions deliberately concealed and omitted to disclose the material fact of sale of Nagpur properties in the Annual Report of the BAPL for the Financial Year 2014-15 which is duly signed by Rajeev Kapoor, as he has the knowledge that the transaction of the sale of Nagpur properties is mandatorily required to be disclosed in the Annual Report/Balance Sheet for the Financial Year 2014-15. Therefore, the Rajeev Kapoor has committed an offence punishable under Section 448 read with Section 447 of the Companies Act, 2013. It is further submitted that the learned trial Court failed to appreciate that Rajeev Kapoor has illegally and fraudulently sold and delivered the Nagpur properties to the 26 Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. on one hand to make unlawfully gain to himself and his wife Shilpa Kapoor, and on the other hand intending thereby to prevent the said Nagpur properties to be used and utilized among the creditors of BAPL, therefore, he has also committed an offence under Section 421 of the IPC. The learned trial Court failed to appreciate that Rajeev Kapoor, as the Promoter Director and CEO of BAPL has always had the full and complete domain over the Nagpur property which has been illegally and fraudulently sold and delivered by them to the companies Vidarbha Infra Realty Pvt. Ltd. and Shilpa Energy Pvt. Ltd. which are duly controlled by Rajeev Kapoor and Shilpa Kapoor. Therefore, the Rajeev Kapoor has committed an offence punishable under Section 406 read with Section 408 of IPC. It is also submitted that the learned trial Court failed to appreciate that as per the mandate of the Companies Act, 2013, the prosecution qua the violation of the said Act shall be filed and tried by the Special Court established under Section 435 of the Companies Act, 2013. Furthermore, by virtue of Section 436(2) of the Companies Act, 2013, Special Court is also competent to try the offences punishable under the IPC and other Acts. Hence, the learned Special Court was competent to take cognizance of above stated offences on the basis of Complaint filed by the complainants and to take cognizance for the offences punishable under Section 120-B. 406 and 408 of IPC also. 22. I have heard learned counsel for the parties and considered the rival submissions made herein and gone through the record with 27 utmost circumspection. 23. At the very outset, it is clear from the submissions advanced by Mr. Shrivastava, learned Senior Advocate appearing for the accused party as well as from the bare perusal of the Companies Act, 2013, that the Special Judge (Companies Act) cannot take cognizance over a private complaint under Section 447 and 448 of the Companies Act in view of the 2nd Proviso of Section 212(6) read with Section 439(1) of the Companies Act. The relevant provision is reproduced here as under: “(6) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), offence covered under section 447 of this Act shall be cognizable and no person accused of any offence under those sections shall be released on bail or on his own bond unless— (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs: Provided further that the Special Court shall not take cognizance of any offence referred to this subsection except upon a complaint in writing made by— (I) the Director, Serious Fraud Investigation OfÏce; or (ii) any ofÏcer of the Central Government authorised, 28 by a general or special order in writing in this behalf by that Government.” 24. Furthermore, the Special Judge (Companies Act) in view of Section 436(2) of the Companies Act cannot take cognizance independently under Indian Penal Code unless and until the accused is prosecuted under the provisions of the Companies Act. The relevant provision is reproduced as under: “(2) When trying an offence under this Act, a Special Court may also try an offence other than an offence under this Act with which the accused may, under the Code of Criminal Procedure, 1973 (2 of 1974) be charged at the same trial.” 25. Taking into consideration the facts and circumstances of the case, and the provisions of Companies Act, 2013, it transpires that the Special Judge (Companies Act) cannot take cognizance over a private complaint under Section 447 and 448 of the Companies Act in view of the 2nd Proviso of Section 212(6) read with Section 439(1) of the Companies Act, hence, the cognizance taken by the learned trial Court on the complaint filed by the complainants vide impugned order dated 26.05.2018 is without jurisdiction, and the same could not be sustained in the eyes to law, therefore, the same is liable to be quashed. So far as the argument raised by the learned counsel for the applicants/complainant party in CRR No. 1143/2018 is concerned, that the learned trial Court has only taken cognizance under Section 447 and 448 of the Companies Act, 29 2013, against the accused persons and has not summoned them for the offence under Sections 120B, 406, 408 and 421 of the IPC, though the prima facie offence is disclosed from the said offence, the said offences is not sustainable in view of the reasonings given by the learned Magistrate. Therefore, the CRR No. 1143/2018 is being devoid of merits, is liable to be and is hereby dismissed. 26. In view of 2nd Proviso of Section 212(6) of the Companies Act, that the Special Judge (Companies Act) cannot take cognizance over a private complaint under Section 447 and 448 of the Companies Act, which in the instant case filed by the complainant party/respondents No.2 to 4 in CRMP Nos. 1247/2018, 2235/2018 and 2292/2018, hence, the order dated 26.05.2018 passed by learned Court of Special Judge (Companies Act), Bilaspur, District – Bilaspur (C.G.) in Special Case (Companies Act) No. 18/2018, registering the complaint against the petitioners in CRMP Nos. 1247/2018, 2235/2018 and 2292/2018, under Sections 447 and 448 of the Companies Act, 2013, is hereby quashed, with liberty to the competent authority to proceed in view of the proviso of Section 212(6) of the Companies Act, 2013, if so requires. 27. Resultantly, the CRMP No.1247/2018, CRMP No.2235/2018 and CRMP No.2292/2018 is allowed. 28. OfÏce is directed to send a copy of this order to the trial Court concerned for necessary information and compliance forthwith. Rajshekhar Sd/- (Ramesh Sinha) Chief Justice