Madras High Court annuls FIR against three Ex-Directors of IL & FS but refrains from providing ‘Clean Chit’

  • Home
  • Madras High Court annuls FIR against three Ex-Directors of IL & FS but refrains from providing ‘Clean Chit’

CA Bimal Jain | Sep 7, 2021 | Views 415521

Madras High Court annuls FIR against three Ex-Directors of IL & FS but refrains from providing ‘Clean Chit’

Madras High Court annuls FIR against three Ex-Directors of IL & FS but refrains from providing ‘Clean Chit’

In Ravi Parthasarthy and Ors. v. State of Tamil Nadu [CRL. O.P. NOS. 3730, 4227, 4095 &  11206 OF 2021 CRL. M.P. NOS. 6647, 6649, 2218, 2601, 2679, 3388, 6708 &  6709 OF 2021 W.P. NO. 1397 OF 2021 AND W.M.P. NO. 5917 OF 2021 dated August 31, 2021]], Ravi Parthasarthy (“Petitioner No. 1”), Hari Sankaran (“Petitioner No. 2”) and Ramchandra Karunakaran (“Petitioner No.3”) have filed a petition to quash the FIR in EOW, Chennai Crime No.13 of 2020 filed against them by Moon Technologies Limited (“Respondent No. 2”) under the Tamil Nadu Protection of Interest of Depositors Act of 1997 (TNPID Act).

Infrastructure Leasing & Financial Services Limited (IL & FS) is parent to 348 group companies. Due to financial crises, the Central Government employed a petition before the National Company Law Tribunal (NCLT) and as a result Directors were appointed, vide order dated October 1, 2018 and October 9, 2018, for the management of the company which included IL & FS Transportation Networks India Limited (INTL). Furthermore, the investigation into this ill-fated company was given to Company Act by Serious Fraud Investigation Office (SFIO) under Section 212 of the Companies Act. Meanwhile, INTL had also purchased non-convertible debentures from various companies including the Respondent No. 2. Therefore, Respondent No. 2, in order to recover the loan amount, had subsequently filed an FIR under the TNPID Act and therefore, this case.

The Petitioner, in this case, contended that the complaint lodged by the Respondent No. 2 was not at the helm of the affairs of the company as Petitioner No. 1, 2 and 3 had resigned from the posts of Non-Executive Director on July 27, 2018, October 1, 2018 and October 28, 2018 respectively. Further it was contended that Petitioner No. 1, 2 and 3’s positions will not be considered as “Key Managerial Personnels” under Section 2 (51) of the Companies Act and thus claiming the report to be unsustainable.

At the perusal of all the facts and evidences, the Honorable Madras High Court adjudged that the SFIO is probing the case, no other investigative agency is empowered to investigate into the affairs of IL & FS and its subsidiary companies for any offences under the Companies Act.

Furthermore, the Court quashed a case registered under the TNPID Act, although the Court clarified that it is not commenting on the SFIO probe underway or giving the alleged perpetrators a clean chit.

DISCLAIMER: The views expressed are strictly of the author and A2Z Taxcorp LLP. The contents of this article are solely for informational purpose and for the reader’s personal non-commercial use. It does not constitute professional advice or recommendation of firm. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. Further, no portion of our article or newsletter should be used for any purpose(s) unless authorized in writing and we reserve a legal right for any infringement on usage of our article or newsletter without prior permission.

Join Studycafe's What's App Group or Telegram Channel for Latest Updates on Income Tax, GST, Companies Act, Judgements and CA, CS, ICWA, and MUCH MORE!"




Author Bio

My Recent Articles

ITAT: Ownership of several flats under JDA is eligible for Capital Gain Exemption Guidelines on grant of bail to accused not arrested during investigation post filing of Chargesheet Irrecoverable loss incurred due to bad weather and technical snags would be considered as Revenue Loss SEZ falls within the meaning of ‘any person’ as given under Section 54 of the CGST Act and shall be entitled to refund Best Judgment Assessment Order withdrawn as Petitioner filed relevant returns in accordance with order of High Court View All Posts

Leave a Reply

Your email address will not be published. Required fields are marked *