S.VIMALA,J. - (1.) Money is neither clear nor dirty, per se, but becomes tainted as it moves from the legal economy across legal-illegal boundary into the underground economy. Alleging that the accused persons also contributed for the underground economy, a complaint has been laid by IDBI Bank Limited.
(2.) Criminal Original Petition No.20423 of 2016 has been filed by the petitioner / first accused, Farouk Irani, (Ex-Managing Director of First Leasing Company), (aged 75 years), the accused in C.C.No.63 of 2016 before the Special Court, Chennai, in respect of the offence under Sections 3 and 4 of the Prevention of Money-Laundering Act, 2002 (hereinafter referred to as "the PMLA"), seeking the relief of bail. 2.1. Criminal Original Petition No.20454 of 2016 has been filed by the petitioner, L. Sivaramakrishnan, (aged 50 years) (Ex-Chief Finance Officer), the fourth accused in Crime No.ECIR/CEZO/10/2015 on the file of the respondent, in respect of the offence under Section 3 of the PMLA, seeking the relief of bail. 2.2. Criminal Original Petition No.20581 of 2016 has been filed by the petitioner, S. Dilliraj, (aged 48 years), (Ex-Senior Vice President), the third accused in Crime No.ECIR/CEZO/10/2015 on the file of the respondent, in respect of the offence under Section 3 of the PMLA, seeking the relief of bail. Brief facts :-
(3.) The transaction involves two companies, i.e., a Non-Banking Financial Company and a Banking Financial Company and the allegation is that the Non-Banking Financial Company has availed loans from a consortium of banks, over a period of time, skillfully masking the real financial health of the company, through fudged accounts and manipulated balance sheets. 3.1. A complaint has been preferred by IDBI Limited, a company registered under Companies Act, 1956, which is a banking company, within the meaning of Section 5 (c) of the Banking Regulation Act, 1949. 3.2. First leasing company is a non-banking financial company (NBFC) incorporated under the Companies Act, which sought financial assistance, for the purpose of working capital in the year 2005, from the IDBI Limited. Based on the audited financial report as well as credit rating assigned by CARE, for the previous three years, initially loan was granted for Rs. 18 crores. 3.3. Based on the continuous demands towards enhancement of working capital, the loan was increased to Rs. 30 crores, then to Rs. 55 crores. 3.4. As a security for repayment of the loan, assets of the company were hypothecated and later, a charge was also created on the hypothecated assets. Gradually, the loan was being increased to Rs. 76 crores, then to Rs. 109 crores, then to Rs. 150 crores, then to Rs. 185 crores, then to Rs. 250 crores and then finally to Rs. 300 crores. Consistently, the company had been executing supplementary agreements in favour of the Bank as well as hypothecation agreements. 3.5. It is the case of the Bank that there had been representations on behalf of the company by the first accused, Farouk Irani and the Managing Director, Dilli Raj, and other employees of the company regarding the financial position of the company; in support of the same, letters were also given by the accused, Dilli Raj; audited financial report was submitted by Dilli Raj; CARE Rating Letters, dated 11.10.2012, 04.07.2013 and 09.11.2011, all assigning AA rating were produced. 3.6. The company was making repayment of the debts till 13.09.2013. 3.7. The Reserve Bank of India, a supervisory body of NBFC, in exercise of the powers conferred under Section 45N of the Reserve Bank of India Act, 1934, inspected the records of the company during 2013; it was found that there was serious irregularities in the business operations of the company; the income was highly inflated; current asset of the company was over stated; large scale diversion of funds by the Chairman and the Managing Director to 15 satellite companies incorporated by them; the Directors of those companies were the employees of First Leasing Company; the Reserve Bank of India ordered forensic investigation into the affairs of the company and appointed Ex-CBI Officers, Shri. R.K. Raghavan, to do forensic audit and appointed Shri. N.C. Rajagopal, Chartered Accountant, to do special audit; immediately after this directive, the Credit Rating went down and later on, trading was suspended from 21.09.2013. 3.8. During September 2013, Farouk M.Irani, divulged the manner in which the affairs of the company were mismanaged and the accounts of the company were prepared by inflating / falsifying entries on profit, cash flow income and its state of affairs. 3.9. Because of the failure of the company to pay the out-sandings, the Bank has declared the liabilities of the company as NPA, on 31.12.2013 and has ordered the following measures for recovery of dues:- (a) The Bank by the letter dated 21.05.2014 has recalled various facilities sanctioned to the company. (b) IDBI Limited has initiated recovery proceedings before the Debts Recovery Tribunal, in Chennai, against the company. (c) It has also joined in the winding up petition filed by ICICI Bank against the borrower company. 3.10. Alleging that the total amount involved in the fraudulent act of the company was to the tune of Rs. 2,73,99,90,071/-, including interest, as on 02.09.2014, a prosecution has been launched by the Bank as against First Leasing Company and seven others, which includes Ex-Chairman, Ex-Managing Director, Senior Vice President, CFO of the company, Chartered Accountants, Internal Auditors of the Company, etc., ;