B.S.V. Prakash Kumar, Member - (1.) Union of India through its Regional Director (Western Region), Ministry of Corporate Affairs, mentioned this Company Petition filed u/s. 221, 222, 241, 242, 246 & 339 on the ground that the affairs of R1 company, its group companies and LLPs have been/being conducted prejudicial to the public interest of India, hence forth Union of India, being custodian of the subjects of the country, sought the interim reliefs as follows: (a) That the Petitioner be permitted to serve the Respondents through post, publication in newspapers, email, whatsapp messaging, wherever required, in order to ensure due service of notice to all Respondents, present in India or overseas, (b) That the Respondents be directed to disclose their moveable and immovable properties/assets, including bank accounts, owned by them in India or anywhere in the world. (c) That the Respondents be restrained From mortgaging or creating charge or lien or third-party Interest or in any way alienating, the movable or immovable properties owned by them and further, direct attachment of the all said properties and hand them over to the Petitioner. Petitioner be allowed to execute such orders through the Indian Missions, stationed overseas, for the immoveable and moveable properties in existence abroad. (d) That the Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and Securities and Exchange Board of India (SEBI) be directed to restrain the trading of securities of Respondent No. 1. (e) That the Respondent Nos. 2, 3, 7, 8, 9, 22 and 23 be restrained from mortgaging or creating charge or lien or third-party interest or in any way alienating the securities issued by the said Respondents. (f) That Central Depository Services Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) be directed that securities owned/held by the respondents in any company be freezed and details thereof be shared with the Petitioner. (g) That the Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC) may be directed to disclose information about all assets of the Respondents, in their knowledge or possession, for the purpose of attachment and restraint on alienation of such assets. (h) That the Reserve Bank of India (RBI) and the Indian Banks Association (IBA) be directed to facilitate disclosure of the details of bank accounts, lockers owned by the Respondents and attach the same on behalf of the Petitioner. (i) That the State Governments and Administrators of Union Territories be directed to identify and disclose all details of immoveable properties owned/held by the Respondents. (j) That the Petitioner be permitted to take possession, after due inventory, of all moveable and immoveable properties of the Respondents that have been attached as per the orders of this Hon'ble Tribunal, through Official Liquidators. (k) The Petitioner seeks the leave of the Hon'ble Tribunal to enlarge the scope of the reliefs sought and prayers made in this petition by filing any other documents or applications In view of the extraordinary nature of the circumstances pertaining to the present petition. (l) That the Petitioner may be permitted to file copies of the interim and/or final investigation reports of the Serious Fraud Investigation Office (SFIO), as and when the same are submitted by the concerned inspectors to the Central Government, in order to supplement/enlarge/amend/modify the present petition, based on the findings of the interim/final report, including addition to the array of Respondents, as per the NCLT Rules.
(2.) The cause of action for filing this case by the Petitioner herein is that the Union of India has identified a group of companies, LLPs, Trusts and individuals prima facie appeared to be involved in financial fraud of approximately Rs. 11,400 crores that has been perpetuated on Punjab National Bank (PNB) by one Mr. Nirav Modi (R11), Mr. Nishal Modi (R12), Mrs. Ami Nirav Modi (R13) and Mr. Mehul Chinubhai Choksi (R14) through various companies and LLPs directly or indirectly maintained by them. It is shown as most of the companies are primarily engaged in the business of diamond trading, but whereas by seeing this Petition it appears that these Respondents and their group companies in the name of diamond business, according to the Petitioner, committed mega fraud by conniving with some of the Officers of PNB routing money of a public sector Bank through issual of letter of undertakings to their benefit without making any entries in the trade finance module of the Banks, i.e. Core Banking Service (CBS) system to avoid detection. The Petitioner submits that the funds received under Buyer's credit from overseas banks were credited to Nostro Account of the Bank and subsequently utilized as per direction given by the conniving officer to repay Imports/earlier Buyer's credit used by the firms. For issuance of fraudulent LCs, the conniving officer, issued LCs by entering a small amount in trade module of Core Banking Service (CBS) system and generating the reference number and SWIFT messages were sent for the amounts. Subsequently, without making any change in Trade Finance Module of CBS system, the conniving officer sent modified SWIFT message for the same reference to the beneficiary bank for enhanced amount unauthorizedly. By sending modified SWIFT message with the reference given for smaller amount, this enhancement would not come to the notice of CBS system. By doing so, according to the Petitioner, the Respondents herein committed fraud of Rs. 11,400 crores against PNB.
(3.) The Petitioner's case is that since the Respondents' companies and their directors having caused wrongful loss of rupees above Rs. 11,000 crores by fraudulent means, for there being FIRs against many of the Respondents detailing how fraud has been committed, at least to realize the monies to the extent possible, it is essential to obtain restraint orders against the assets lying with various companies, LLPs, Trusts and individuals, in the backdrop of the factual scenario, it has became imperative upon this Bench to pass restraint orders before going into the technicalities and the procedural aspects in respect to the Company Petition, because the facts of the matter is, fraud has been taken place, money of the bank has gone out. If this Bench remains waiting for details of each and every transaction, the liquid assets and other assets lying with these entities will be frittered away, once that happened, the whole exercise of passing orders will become redundant.;