Individuals associated with a company can be prosecuted for fraud if evidence shows their active role and intent, regardless of the company's status as an accused.

JUDGMENT :

PC :

1. The Appellant has challenged the order dated 09.01.2025 passed below Exhibit-30 in MPID Special Case No.1300 of 2021 by the learned Designated Judge under The Maharashtra Protection of Interest of Depositors Act, 1999, for Greater Bombay. Vide the impugned order, the Appellant’s discharge application was rejected. Brief background of the case as is reflected from the F.I.R. and the consequent charge-sheet is as follows:

The F.I.R. was lodged vide C.R.No.263 of 2015 on 05.09.2015 at Amboli police station, under sections 420 and 120B of the I.P.C. and U/s.3 and 4 of the The Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 (for short ‘MPID Act’). The investigation was subsequently taken over by the Economic Offences Wing (EOW) vide registering their own F.I.R. vide C.R.No.52 of 2015. The F.I.R. was lodged by one Rajiv Mehta on 05.09.2015. He has stated in his F.I.R. that, he was working as a Chartered Accountant. In February 2012, he received a phone call from a finance company. The informant was asked whether he was interested in making investment. The caller suggested that, he could invest in a couple of companies. One of them was M/s. Elder Pharmaceuticals Ltd. The informant showed his interest in investing in M/s. Elder Pharmaceuticals Ltd. (hereinafter referred to as ‘the company’). The informant received forms of investment in the company. He noticed that there were two schemes of Fixed Deposit investments. It was mentioned that the company was a leading name in the pharmaceutical field and it was ranked 27 in India. The names of the persons controlling the company were mentioned; they were Jagdish Saxena, as Managing Director and Alok Jagdish Saxena as Assistant Managing Director and there were other Executive Directors. Significantly, the appellant’s name was not mentioned at that point of time. Incidentally, it can be noted that the Appellant is the son of Jagdish Saxena and the brother of Alok Saxena. The investment forms mentioned a cumulative scheme and a non cumulative scheme promising 9.50% to 14% interest with annually effective yield. The minimum investment amount was fixed at Rs.25000/-. Considering those schemes, the informant invested in the cumulative scheme. He invested Rs.5 lakhs on 16.03.2012. He was to get the promised amount of Rs.7,23,340/- on 18.03.2015. The interest per annum was Rs.12.50% p.a. and locking period was 36 months i.e. 3 years. He was given the fixed deposit receipt. Before the investment period was to get over, he received an information that the company was not returning investments to other investors and some litigation was pending before the Company Law Board. The informant made an application for including his name in that litigation, but there was no response. He did not receive back his investment. He contacted the company in March 2015, but he was told that, it was not possible to give back his investment and the promised returns. The F.I.R. thereafter mentions the name of the present Appellant describing him as the Chief Operating Officer of the company. It is the informant’s case that, there was no progress and he did not receive his amount. There were many such investors. The F.I.R. mentions that there were more than 400 investors who were induced into investing in the company for the promised returns at the interest of 12.50% to 14.00%. The F.I.R. mentions that the misappropriated amount of the company was more than Rs.5 crores. On these allegations the F.I.R. was lodged. The investigation was carried out and the charge-sheet as filed.

2. The charge-sheet contains further details and according to the investigating agency, till the time of filing of the charge- sheet, there were about 23941 investors and the amount of investment was Rs.155,28,67,770/-. About 760 complaints were received by the EOW and the amount involved in those complaints which was misappropriated was to the tune of Rs.9,13,90,000/-. The role attributed to