IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THE HON'BLE SMT. JUSTICE TIRUMALA DEVI EADA CRIMINAL PETITION Nos.4068 AND 4526 OF 2020 DATE: 10-02-2026 Between:

M/s. Mussadilal Jewellers Exporters Private Limited and two others … Petitioners And The Assistant Director, Directorate of Enforcement, Zonal Office Hyderabad, Ministry of Finance, Government of India, 5-10-174, 3^rd Floor, Shankar Bhavan, Basheerbagh, Hyderabad-500004 and another ... Respondents

COMMON ORDER:

Crl.P.No.4068 of 2020 is filed by the petitioners-accused Nos.1 to 3 seeking to quash the proceedings against them in File No.ECIR/HYZO/18/2019, pending before the Directorate of Enforcement, Zonal Office, Hyderabad.

2. Crl.P.No.4526 of 2020 is filed by the petitioners-accused Nos.1 to 3 seeking to quash the proceedings against them in C.C.No.1284 of 2024 on the file of learned XXI Additional Chief Judicial Magistrate-cum-Special Sessions Judge, Hyderabad.

The offence alleged against petitioner No.1-accused No.1 is under Section 420 I.P.C. and the offence alleged against petitioner Nos.2 and 3-accused Nos.2 and 3 is under Section 120B read with 420 I.P.C. and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988.

3. Heard Sri Duvva Pavan Kumar, learned counsel for the petitioners, Sri V.T.Kalyan, learned Special Public Prosecutor for Directorate of Enforcement appearing for the respondents in Crl.P.No.4068 of 2020, Sri Srinivas Kapatia, learned Special Public Prosecutor for CBI appearing for respondent Nos.1 and 2 in Crl.P.No.4526 of 2020 and Sri B.Harinath Rao, learned counsel for respondent No.3 in Crl.P.No.4526 of 2020.

4. The case of the prosecution is that petitioner No.1 is a Company and petitioner Nos.2 and 3 are the Directors of petitioner No.1-Company. The petitioners have availed loan from Indian Overseas Bank (for short, ‘the Bank’) and have committed default in repaying the same, as such, the accounts of petitioner No.1-Company were declared as Non-Performing Assets by the said Bank. Later, the petitioners have entered into One Time Settlement (OTS) with the said Bank, through which fraud is alleged to have been committed by the petitioners causing loss to the public exchequer. Therefore, based on a complaint filed by the Chief Regional Manager, Indian Overseas Bank, vide No.RO/VIG/208/2019-2020, a case in Crime No.7 of 2019, dated 18.07.2019, was registered by the Central Bureau of Investigation, Bank Securities and Frauds Cell, Bangalore, for the offence under Section 120B read with 406, 420, 468 and 471 I.P.C. and Section 13 (2) read with 13(1)(d) of the Prevention of Corruption Act, 1988. Based on the said crime, ECIR/HYZO/18/2019 has been registered before the Directorate of Enforcement, Hyderabad. On completion of investigation in Crime No.7 of 2019, charge sheet was filed and the same was taken cognizance and numbered as C.C.No.1284 of 2024 on the file of learned XXI Additional Chief Judicial Magistrate-cum-

Special Sessions Judge, Hyderabad.

5. Learned counsel for the petitioners submitted that the contents of the complaint are that the petitioners have committed the offences of criminal conspiracy, criminal breach of trust, cheating, forgery, used forged documents as genuine and criminal misconduct. In the complaint, it is alleged that during inspection on 24.07.2017, it was found that there were no stocks, inventory became nil and sale proceeds to stock and receivables were not credited to the Bank with an intention to defraud the Bank causing loss to a tune of Rs.75.01 crores. It is further alleged that Credit Audit Report, dated 25.03.2014, point out that petitioner No.1-Company is not routing the turnover through the C.C. account and the major outstanding debtors were found to be M/s. Anushri Commodity Trade Private Limited, M/s. Gold Craft India Limited and M/s. Lotus CZ Jewellery. It is noticed that the names of these debtors were not reflected in the Stock Audit Report, dated 18.01.2016.

6. Learned counsel for