A corporate debtor cannot be prosecuted for offences committed prior to the commencement of the corporate insolvency resolution process if a resolution plan resulting in a change of management has been approved.

JUDGMENT

CHANDRA DHARI SINGH, J.

FACTUAL MATRIX

1. The instant petition under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter “CrPC”) [now Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (hereinafter “BNSS”)] has been filed onbehalf of the petitioner seeking quashing of the FIR No. RC074023E0001, dated 7th February, 2023, registered at Police Station - BS&FB, Delhi for the offences punishable under Section 120B read with Section 420 of the Indian Penal Code, 1860 (hereinafter “IPC”) and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988 (hereinafter “PC Act”) and also the proceedings initiated consequent thereto for the commission of the aforesaid offences qua the petitioner (i.e., accused no.1).

2. M/s Gangakhed Sugar and Energy Ltd., the petitioner herein, is a company involved in the business of Integrated Cane Processing Plant with the manufacturing facilities of sugar, distillery and power in Maharashtra.

3. The respondent no. 1 is the Superintendent of the Banking and Securities Fraud Cell of the Central Bureau of Investigation that has registered the aforesaid FIR.

4. The respondent no. 2 is the Joint Director (Policy) of the Banking and Securities Fraud Section of the Central Bureau of Investigation to whom the complaint was addressed.

5. The respondent no. 3 is an Indian Public Sector bank and the complainant in the present case.

6. The petitioner, when managed and controlled by its erstwhile directors/management, availed credit facilities by the consortium of lenders which was led by UCO Bank (respondent no. 3). The banks sanctioned a term loan with a limit of Rs. 100 Crore and working capital limit of Rs. 15 Crores on 16th September, 2008 against the principal security and collateral security. The said loan facilities were renewed several times and the last deed sanctioning the renewed limit was extended on 28th September, 2015.

7. On 31st January, 2017, the account of the petitioner was classified as Non-Performing Asset (hereinafter “NPA”) by the respondent no. 3 pursuant to which an application, bearing CP 500(IB)/MB/2019 was filed by the respondent no. 3 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter “IBC”) before the learned National Company Law Tribunal, Mumbai Bench (hereinafter “NCLT”) for initiating corporate insolvency resolution process (hereinafter “CIRP”) against the petitioner. The said application was admitted by the learned NCLT vide order dated 10th October, 2019.

8. Thereafter, on 27th November, 2020, the respondent no. 2 filed a complaint bearing complaint no. Nzo/Vig/14/2020-21 with the respondent no. 1 against the petitioner, its erstwhile directors and guarantors. The complaint, inter alia, stated that the petitioner and its directors/guarantors defrauded the consortium of six banks by availing the term loan, working capital facility and other non-fund-based facilities to build an Integrated Cane Processing Plant having manufacturing facility for sugar, ethanol and green power. As per the complaint, the last sanction/documents executed by consortium of lenders which was led by UCO Bank was as far back as in the year 2015 and the alleged fraud was reported by the respondent no. 2 to RBI on 11th May, 2020. Further, the complaint was based on the forensic audit conducted by one GD Apte &Co. for a period of 1st April, 2011 to 31st March, 2017.

9. Pursuant to the above, on 7th February, 2023, an FIR was registered at Police Station-BS&FB, Delhi against the petitioner and its directors/management/guarantors for the offences punishable under Section 120B read with Section 420 of the IPC and Section 13(2) read with Section 13(1)(d) of the PC Act.

10. Subsequently, on 17th February, 2023, the learned NCLT approved the resolution plan of one M/s Six Sigma Investment Fund.

11. Hence, the present petition has been field seeking quashing of the aforesaid FIR to the extent of the petitioner.

PLEADINGS BEFORE THIS COURT

12. The petitioner