2018 (10) TMI 707 - SC - Indian Laws

Handing over all the original documents of accounts of Amrapali Group of Companies from the year 2008-2015 and 2015-2018 of 46 companies - petitioners stated that the orders of this court have not been complied with and as per the e-mails, the documents have not been handed over and only skeletal documents of two companies have been handed over, namely of Amrapali Zodiac and of Amrapali Princely Estates. Held that - It is not only deliberate non compliance of the order but effort is being made to fritter away the documents in utter violation of the order passed by this Court. No justification could be pointed out by the learned counsel appearing on behalf of the Amrapali Group of Companies for not complying with the orders passed by this Court. Since it is necessary to hand over the documents to the forensic auditors, considering the non-compliance evident on record, we find that there is no other way except to direct the Police to seize all the documents and to handover the documents to the forensic auditors after seizing them from the possession of 46 Companies and their Directors. Application disposed off.

Summary

Issues:
Non-compliance with court orders for handing over original documents of accounts of companies, violation of court orders by Amrapali Group of Companies, failure to submit documents to forensic auditors, non-compliance with DRT order, initiation of contempt proceedings against directors and companies, seizure of documents by Police, directions for handing over documents to forensic auditors, provision of funds to forensic auditors, surrender of passports by directors, and disposal of an application by the Deputy Commissioner of Police.

Analysis:
The Supreme Court issued an order directing the Amrapali Group of Companies to hand over original documents of accounts to forensic auditors, which was not complied with despite repeated orders. The forensic auditors reported that only skeletal documents of two companies were provided, leading the Court to observe deliberate non-compliance and efforts to evade the order. Due to the non-compliance, the Court directed the Police to seize all relevant documents from 46 companies and their directors and hand them over to the forensic auditors. Additionally, the Court noted non-compliance with a DRT order and initiated contempt proceedings against the directors and companies involved.

Furthermore, the Court directed the Police to seize all specified documents, including those not submitted to the DRT, and hand them over to the forensic auditors. Directors were instructed not to retain any documents, and failure to comply would result in their custody by the Police until the handover. The Court also directed the Police to accompany the directors to various locations to secure the documents effectively.

Moreover, the Court ordered the provision of funds to the forensic auditors and instructed the directors not to leave the country, surrendering their passports to the Police. The directive excluded nominee directors from passport surrender. An additional application by the Deputy Commissioner of Police was disposed of, clarifying that the Court's previous order did not hinder criminal investigations by the Police, allowing them to proceed as necessary and report back within three months.

In conclusion, the judgment addressed the serious non-compliance with court orders by the Amrapali Group of Companies, leading to the initiation of contempt proceedings and the involvement of the Police to seize and hand over crucial documents to forensic auditors. The Court's detailed directives aimed to ensure compliance and facilitate the forensic audit process while maintaining oversight over the directors' actions and preventing any attempts to evade the legal obligations.