RAJEEV SAWHNEY V/S STATE BANK OF MAURITIUS LTD AND ORS 2011(6) Mh Lj 401
| Citation | 2011(6) Mh Lj 401 |
| Date of Judgment | 6 May 2011 |
| Court | High Court of Judicature at Bombay |
| Case Type | Criminal Revision Application 441 of 2008 |
| Applicant | Rajeev Sawhney |
| Respondent | State Bank of Mauritius Ltd |
| Bench | Justice J.H. Bhatia |
| Referred | Sections 420, 465, 467, 471, 403 read with Sec. 120B of IPC |
FACTS
The complainant is the Chairman of Mauritius-incorporated Vmoksha Technologies Ltd., also referred to as “the Company” in the following. The company had subsidiaries with the names “Vmoksha Technologies Pvt. Ltd.,” “Vmoksha Technologies Inc. USA,” and “Vmoksha Technologies Pvt. Ltd.,” registered in Bangalore, Singapore, and Bangalore.Accused No. 5 is Helios and Matheson Information Technology Ltd., a company with its headquarters in Chennai and an Indian registration. The Chairman and Managing Director of the aforementioned accused No. 5 Company are Accused Nos. 6 and 7, respectively.
In addition to the complainant owning 50% of Vmoksha Technologies, accused No. 4 in case 4CRA-441-08.sxw Pawan Kumar and his family also owned 50% of the company. Pawan Kumar, the fourth accuser, also served as the business’s CEO. His 50% holdings were transferred to the complaint on 28.1.2006. State Bank of Mauritius Ltd. is the first accused party, and Mumbai is the second. The accused No. 1 Bank’s Chennai Branch was under the control of the accused No. 3. The Company’s owners decided to sell its subsidiaries in India, the United States, and Singapore. M/s. PriceWaterhouseCoopers, a firm of Chartered Accountants, was tasked with finding a potential buyer. According to said M/s. PriceWaterhouseCoopers, accused No. 5 was identified as a potential buyer. A share purchase agreement was finally signed on May 11, 2005, between the Company and many other confirming parties on the one hand, and accused Nos. 6 and 7, who were then serving as the chairman and managing director of accused No. 5, respectively. According to the aforementioned agreement, accused No. 5 purchased the Company’s subsidiaries in India, the United States, and Singapore for a total of US$ 19 million, which included an earn out of US$ 4 million to be paid to accused No. 4 Pawan Kumar, the then-CEO, who was to continue in that role even after the sale.
The remaining sum of US$ 15 million was supposed to be given to the company’s shareholders as payment for the aforementioned transaction. The complainant and other shareholders were to receive US$ 13,395,519.13 from this consideration sum, and since the accused No. 4 Pawan Kumar’s 50% share was eventually acquired by the complainant and his family, the complainant was to receive the full sum. Some of this consideration sum was to be paid to Tapan Garg and Madhuri Garg, the accused No. 4 Pawan Kumar’s son and wife, respectively, for their holdings. Accused No. 5 had agreed to pay the full consideration amount after 18 months since it was unable to pay it all at once in cash. However, it was also agreed that initially, Accused No. 5 would pay the Sellers US$ 15,000,000, and the Sellers would reimburse Accused No. 5 by subscribing to redeemable preference shares for the same amount, which Accused No. 5 would then redeem after 18 months by paying. Therefore, only the redeemable preference shares of Accused No. 5 Company were initially to be transferred to the Company’s sellers, and upon redemption of those shares after 18 months, the Complainant and other sellers were to receive the consideration amount in cash. The sellers were required to keep PriceWaterhouseCoopers, who had been chosen as the escrow agent, in possession of all original share certificates that represented the company’s entire equity capital in its subsidiaries in the United States, Singapore, and India. According to the terms of the escrow agreement, accused No. 5 was required to give the escrow agent a deposit of Rs. 1.2 crore for them to hold. According to the provisions of the aforementioned sale agreement, the initial payment of $6 CRA-441-08.sxw was to be sent by cheque, which was to be changed to a pay order within 7 working days of the date the agreement was executed. The sellers were expected to receive an amount of Rs. 58,3775 crore from accused No. 5 as consideration for the transfer of their shares in the aforementioned three subsidiary firms once the consideration was converted into Indian currency, except the shares of Tapan Garg and Madhuri Garg. On May 19, 2005, the Board of Directors of the Company decided to give accused No. 4 permission to deposit share certificates of the Company’s subsidiaries with signed transfer deeds in favour of accused No. 5 with the escrow agent.
ISSUES
- Would a second complaint based on the same facts be maintainable, especially after the first complaint was rejected on the merits and that rejection had become final?
ARGUMENTS
The complainant asserts that accused No. 5 never delivered the redeemable preference shares of accused No. 5 in the complainant’s favour or the original pay order of Rs. 1.2 crore to the escrow agency.
The complainant claims that on June 28, 2005, accused No. 4 wrote an email to PriceWaterhouseCoopers, an escrow agent, asking them to persuade the complainant to consent to obtaining a loan from respondent No. 1 Bank and opening an account there in Mauritius. The aforementioned email included a copy of the resolution for the complainant’s signature.
The complaint claims that the accused No. 5 neither transferred the redeemable preference shares to the sellers in accordance with the contract’s terms nor made any payment. Further investigation found that on June 28, 2005, accused No. 4 had offered to create an account with accused No. 1 Bank and advance a loan to the Company. Under the condition that the Board Resolution of the Company to that effect and the authority in support of Accused No. 4 be produced, the Bank authorized the proposal and agreed to issue the loan.
As previously mentioned, the complainant claims that neither he nor the accused No. 4 had signed the resolution that had been submitted to him through the Escrow Agent for their signing. In addition, he had emailed the escrow agent to hold the transaction’s proceedings to express his disapproval. Despite this, the accused 8 CRA-441-08.sxw Nos. 2 and 3 approved the loan on June 28, 2005, the same day it was requested, and the accused No. 1 Bank’s officers immediately credited the loan amount to the Company’s newly opened account at the Post Louis Branch of Mauritius.
Even while the accused No. 5 was required under the agreement to deliver the redeemable preference shares of the accused No. 5 Company to the sellers, the learned Counsel for the complainant argued that this was not the case. The complaint and other owners of the aforementioned Company never received such shares or had them transferred to them.
The learned Counsel argued that neither the Company’s borrowing the money from Accused No. 1 in the name of the aforementioned company nor the Company’s transfer of that money to Accused No. 5’s account in Chennai had any legal justification because neither the complainant nor its company was required to pay Accused No. 5 in the aforementioned transaction.
Despite his best efforts, the learned counsel for the accused individuals was unable to provide a convincing response as to why and under what circumstances the complainant company was required to obtain the loan in order to pay the accused No. 5 when, in reality, the accused No. 5 Company was supposed to make payment to the complainant company 10 CRA-441-08.sxw and not another party.
Accused Nos. 2 and 3 were stationed in India throughout the relevant period, the learned counsel for accused Nos. 1 and 2 strenuously argued. At the Port Loius Branch of the State Bank of Mauritius, an account for Vmoksha Technologies was opened, and a loan was authorised and credited to that account.
JUDGMENT
These findings support the initial inference that the accused nos. 4, 5, 6, and 7 actively participated in a large-scale conspiracy and fraud that produced this transaction as a whole.
Given the aforementioned facts and circumstances, it must be decided that there was enough evidence to issue a trial against the accused, which the trial Court did. By the contested order, the learned Additional Sessions Judge primarily disregarded three aspects of the trial court’s order.
First, the information that the complainant had previously filed a complaint with the Bangalore Magistrate based on the same facts was suppressed.
Second, some of the accused individuals did not reside within the learned Metropolitan Magistrate’s territorial jurisdiction as required by Section 202 of the Criminal Procedure Code, and third, the alleged act of June 28, 2005 was approved by the complainant at the meeting held on July 19, 2005.
We believe that the second complaint in this case was based on nearly identical facts to those raised in the first complaint, which was dismissed on the basis of merits, in accordance with the aforementioned principles, which are more or less established, have dominated the field since 1962, and have consistently been followed by this Court. ig Therefore, the second objection cannot be upheld. This Court concludes that both complaints share the same main claims. Nothing that is significantly new and not stated in the first complaint has been disclosed in the second complaint. There is no proof that the first complainant was unaware of the facts stated in the second complaint, even after exercising reasonable diligence. Since the circumstances of both complaints are essentially identical, such a case could not be formed. According to that stance, the second complainant under the circumstances of this case cannot be taken into consideration.
It is made plain that the Court below will not be influenced by any observations made in this order when making decisions about the case during the charge-forming stage or at the time of the final judgement following the trial, as those remarks are made only for this Revision Application.
REFERENCES
This Article is written by Ayushi Notani of Vivekananda Institute of Professional Studies.
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