The recent Bombay High Court judgement pronounced by the Division Bench of Justice Prasanna B Varale and Justice Shriram M Modak, wherein, the FIR was quashed, allowing plea on merits filed by Indiabulls Housing Finance Limited (IHFL), the petitioners.
The FIR filed in Wada under the Palghar district was quashed by the Division Bench, thereby, staying all investigation in the matter. In the FIR were falsely claimed losses alleged to be suffered by shareholder Ashutosh Vijay Kamble, due to the devaluation of shares stating the alleged siphoning of funds, cheating, criminal breach of trust by IHFL. The Hon’ble BHC passed an ad-interim order, allowing the petition on merits in an appeal by IHFL, challenging & annulling the Judicial Magistrate’s order passed under Section 156(3) of the Code of Criminal Procedure, 1908.
Senior Counsels Mukul Rohatgi and Amit Desai, representing the petitioners, argued, “absolutely malafide, part of earlier similar attempts made against the petitioners based on false and frivolous allegations, so as to extract money from the petitioners.” The Division Bench of the Bombay High Court believed the complaint filed by the complainant appears to be “malafide and deficient”. Accordingly, the ECIR (Enforcement Case Information Report) registered by the ED arising from the said FIR, was also quashed.
“absolutely malafide, part of earlier similar attempts made against the petitioners based on false and frivolous allegations, so as to extract money from the petitioners.”Senior Counsels Mukul Rohatgi & Amit Desai for the Petitioners
The Division Bench’s 41-page judgement found merit in the submissions of the Counsels for the petitioners. The Counsels argued that the complainant’s shift to Wada was a “pre-planned designated move” to “invoke Wada’s jurisdiction”, it failed to fulfill even the necessity of “an affidavit in support of the complaint” resulting into serious doubts on the bonafides of the complainant. Therefore, these factors contributed towards befitting the invocation of the inherent powers of the hon’ble court to quash the said FIR & to stay all the investigations in the matter.
However, this recent Judgement involving Indiabulls Housing Finance Limited raises serious questions regarding the rights & duties of the shareholders towards the companies & their derivative actions causing drastic effects, criminal proceedings, thereby raising governance & other issues. Especially, with the ever-increasing frauds and scams in the corporate India, amidst the dwindling confidence of the public towards the corporates, the need is to escalate the confidence of the stakeholders.