The court ruled that allegations of fraud under the Companies Act do not require direct financial gain, and participation in fraudulent transactions suffices for liability, reinforcing stringent scrutiny in economic offence cases.

JUDGMENT

Rajbir Sehrawat, J. - This petition under Section 438 of the Code of Criminal Procedure has been filed by the petitioner for grant of Anticipatory Bail in Criminal Complaint No.3 of 18.05.2019 CIS No.COMA/05/2019 CNR NO. HRGR01-007022-2019 titled as SFIO V/S. ADARSH BUILD ESTATE ETC. under Sections 120 -B, 417, 418, 420, of Indian Penal Code ( for short 'the IPC ') and Section 447 of Companies Act, 2013, pending before the Special Court, Gurugram.

2. It deserves to be pointed out at the outset that this case is one of the cases in a bunch; which were heard together. However, for making the things more distinct these cases are being decided vide separate judgments. However, since several aspects of the matter are common to all the cases and have even been argued on similar lines and even jointly, therefore, some aspects of the matter would form part of all the judgments.

3. The brief facts constituting allegations in this case are that one Multilevel Co-operative Society was got registered by one Mukesh Modi and family in the name of Adarsh Credit Co-operative Society Ltd. (hereinafter referred to as the Co-operative Society or (ACCSL). That Cooperative Society collected deposits from about 22 lakh investors. In the process about Rs.5000Crores were collected from investors from general public; which remained unreturned to the investors and, accordingly an amount of approximately Rs.9253Crores, including interest, is reflected in the accounts of the Society ACCSL, as payable to the investors. After collecting this money from the public, Mukesh Modi and family created a large number of Companies under the aegis of Adarsh Group of Companies Ltd. (AGCL), with their associates and relatives as the Directors. Subsequently these companies were shown having been advanced the loans of about Rs.1700 Crores by the Co-operative Society ACCSL. Loans were required to be returned to the Co-operative Society by these Companies with interest, as per the alleged agreements of advancement of money. However, the same were not returned by the Companies. Therefore, the money of the Co-operative Society was allegedly, being siphoned off through the Companies created by Adarsh Group of Companies Limited. When the matter came to knowledge of the Central Government, the Central Government, through Ministry of Corporate Affairs, vide the order dated 28/06/2018, passed in exercise of powers conferred under section 212 (1)(c) of Companies Act 2013 and section 43(2) & (3)(c)(i) of LLP ACT 2008, ordered an investigation into the affairs of the said companies, through the Serious Fraud Investigation Office (hereinafter referred to as SFIO), which is an instrumentality created under the new Companies Act for investigation into the affairs of the companies. During investigation it came out that 70 Companies of the Adarsh Group of Companies Ltd. had shown Rs.4140Crores approximately as payable to the said Co-operative Society; as the loan yet to be repaid. Still further, during investigation some companies out-side the Adarsh Group of Companies were also found to be the alleged collaborators of the Adarsh Group and those companies were also taken under investigation. Accordingly, a total of about 125 Companies (hereinafter referred to as CUIs), and some individuals, including the petitioner and his Companies a