IMPORTANT POINT
The court emphasized the need for transparency and fairness in the actions of the Enforcement Directorate, the gravity of economic offences, and the discretion of the court in granting bail based on the facts and circumstances of each case.

JUDGMENT :

Criminal Petition No.11332 of 2023 is filed by Accused No.1 and Criminal Petition No.11515 of 2023 is filed by Accused No.3, seeking regular bail in connection with the Enforcement Case Information Report (ECIR) No. ECIR/HYZO/08/2023 dated 15.02.2023.

2. Since the petitioners in both the criminal petitions are accused No 1 and 3 in the said ECIR, both the petitions are disposed by this common order.

3. Briefly, the case of Enforcement Directorate (ED) is that M/s.Taksheel Solutions Limited (for short “TSL”) Company made various mis-statements and failed to disclose information in the offer document. The Securities and Exchange Board of India (for short “SEBI”) inquired and conducted preliminary investigation. Thereafter, an ad-interim exparte order dated 28.12.2011 was filed against TSL and its Management. Consequently, SEBI passed a levying order dated 30.06.2014 levying penalty of Rs.76,00,00,000/- against 16 different entities which were involved, for various violations under the SEBI Act. The said adjudication order was challenged by most of the entities. The SEBI Appellate Tribunal (for short “SAT”) remanded the case back to the adjudicating authority since opportunity was not given and the orders were passed exparte.

4. In the preliminary investigation conducted by SEBI it was found that one Pavan Kumar Kuchana (A2)-MD & CEO of TSL company and others, created different entities showing them as vendors of TSL in the USA and siphoned off Initial Public Offering (for short “IPO”) proceeds to create an impression of business transactions for software development. However, no such software development had taken place but, the funds were rotated.

5. The said company was run by Pavan Kumar Kuchana (A2) as Managing Director. The funds which were garnered through IPO was transferred to its vendors in the USA and they again were routed back to TSL in the names of different entities.

6. After investigation conducted by SEBI, a complaint was filed on 28.01.2016 under Section 12-A(a) to (c) r/w.24 of Securities & Exchange Board of India Act, 1992 (Act 15 of 1992) (herein after referred to as “SEBI Act”) against TSL company.

7. On the basis of the said complaint, Enforcement Directorate registered the ECIR for committing irregularities in respect of IPO. Since the TSL raised 82.50 crores through IPO by adopting fraudulent methods, the said amount was considered as proceeds of crime.

8. Pursuant to the ECIR registered by the Enforcement Directorate, the premises of A2 was searched on 22.09.2023 and various incriminating documents were found. In the statement of A2, the role of these petitioners was informed. The petitioners had inflated the market value and raised IPO by misleading the facts. Initially funds of Rs.34.50 crores were arranged as Inter Corporate Deposits (for short “ICD”) and the Initial Public Offer (IPO) proceeds to the extent of 53.50 crores received, was also siphoned off.

9. The officials of the Enforcement Directorate conducted search in the premises of these petitioners. Statements were recorded under Section 50 clause 2 & 3 of the PMLA Act, 2002, on 10.10.2023 and 11.10.2023. According to the Enforcement Directorate, A3 was acting as an intermediary in between A1 and A2. The understanding was that A1 would arrange for ICD in the year 2011 to an extent of 34.50 crores. The said amounts were arranged from different entities by A1. The said funds were used by TSL for increase in turnover in its books. No interest was paid by TSL for the amount of 34.50 crores received. Having examined the petitioners, the Enforcement Directorate came to know that A1 to A3 have conspired and planned to inflate the revenue of TSL for bringing ICDs and later siphoning off the IPO proceeds. As already said A1 arranged for ICD of Rs.34.50 crores for the purpose of inflating the revenue of TSL before the IPO. After IPO proceeds were received, the initial ICD payment of Rs.34.50 crores was returned to A1 and commission was also paid to bo