9911796707
TMI Blog2022 (7) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... phoning off by its promoters. 3.2 In brief, the allegation against the applicant is that he being a Chartered Accountant and one of the partners at ASRN & Associates [the firm appointed as stock auditors by the consortium of banks led by Punjab National Bank (hereinafter "PNB") for Financial Year 2015-16] failed to perform his duty independently and diligently by not verifying the stock in transit, and he is accused to be in collusion with the office bearers of M/s Bhushan Steel Limited. 3.3 It is stated that he is involved in providing and using wrong information to calculate the Drawing Power figures wrongly based on the figures given by M/s Bhushan Steel Limited. 3.4 A complaint dated 01.07.2019 was filed under Section 439(2) read with Section 436(1)(a),(d) and (2) read with Section 212(15) of the Companies Act, 2013 read with Section 621(1) of the Companies Act, 2013, read with Section 193 of the Code of Criminal Procedure, 1973 by the respondent, Serious Fraud Investigation Office (SFIO). The respondent also relies upon Investigation Report dated 27.06.2019 filed with the Ministry of Corporate Affairs. 3.5 As per the complaint, the allegations against the petitioner are as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atia, CA appointed by the Banks also colluded with the above-mentioned accused and did not discharge their duties diligently. 73. A-158 Brij Bhushan Singal, A-159 Neeraj Singal, A-160 Nitin Johri, A-161 Pankaj Kumar Aggarwal, A-179 Pankaj Tewari, A-183 Sunil Agarwal, A-184 Rajat Jain, A-185 Rajesh Sharma, A-181 Vivek Mittal, A-180 Saurabh Mittal of BSL, alongwith A-186 R.K. Mehra, CA of Mehra Goel & Co., connived in making false, misleading statements relating to Stock-in-Transit for the credit facilities availed from bankers during the period covering F.Y. 2013-14 to 2015-16. 74. Thus A-1 BSL, A-158 Brij Bhushan Singal, A-159 Neeraj Singal, A-160 Nittin Johari, A-181 Vivek Mittal, A-180 Saruabh Mittal, A-179 Pankaj Tewari, A-183 Sunil Aggarwal, A-184 Rajat Jain, A-185 Rajesh Sharma, A-190 Pankaj Mahajan, A-200 Sunil Bhatia, A-186 R.K. Mehra, A-161 Pankaj Kumar Aggarwal are liable for fraudulent inducement of creditors as laid down in Section 36 (c) of Companies Act 2013 and are liable to be punished u/s 447 of the Companies Act, 2013." 3.6 The Investigation Report records as under:- "OBSERVATION ON THE STOCK AUDIT REPORT OF M/S ASRN & ASSOCIATES, CHARTERED ACCOUNTANTS 4.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .58 crore (refer para 4.4 (Table No. 4.7) of factual matrix) specifically keeping in view the nature of account of "BSL" which was classified as "Non-Performing Asset since 1.10.2014/Doubtful". 5.1.15. Thus, both the Stock Auditors, failed to perform their duties independently and diligently by not verifying the stock in transit, and thereby colluded with the officers of "BSL" in providing and using the wrong information to calculate the DP figures wrongly based on the figures given by "BSL" management. The Stock Auditors also got influenced and did not perform their assigned duty diligently and professionally." 3.7 Based on the conclusions in the Investigation Report and allegations contained in the complaint, the learned Special Court was pleased to summon the applicant under Section 36(c) read with Section 447 of the Companies Act, 2013vide summoning orders dated 16.08.2019. 3.8 The applicant filed his bail application and sought to be supplied with the complete Charge Sheet in accordance with his rights under Section 207/208 Cr.PC. 3.9 It is submitted that the Charge Sheet is approximately of 60,000 pages, and in February 2022, the learned Special Court directed the applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho conduct audit of BSL in the F.Y. 2014-15 & 2015-16.". 7.2 He submits that a bare perusal of the appointment letter dated 29.10.2016 shows that the applicant was appointed as aStock Auditor for conducting stock audit for the year 2016-17. The terms of appointment were as under:- "(Appointment Letter dt. 29.10.2016) PUNJAB NATIONAL BANK Large Corporate Branch, Tolstoy House, New Delhi-110001 Email:[email protected] Ph:91-11-23752604, 23311654 Fax:91-11-23323480/41522135 LCB/Stock Audit M/s ASRN & Associates Chartered Accountants 608, Padma Towers - I Rajindra Place New Delhi Dear Sir, Reg. Stock Audit as at 31.10.2016 We have pleasure to appoint you as Stock Auditor of M/s Bhushan Steels Ltd. (Shri Pankaj Tiwan) Phone No. 8588870836) for conducting stock audit for the year 2016-17. The Proforma of Stock Audit Report along with Checklist/ Scope of Stock Audit and Terms of Reference is enclosed. The audit may be completed within 2 weeks and report be submitted immediately after completion of audit but in no case later than two weeks of completion of audit Irregularities observed during the stock audit may be discussed with the Relationship Manager at our br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n having regard to the fact that the volume and spread of transactions in modern businesses are incredibly enormous. In such cases, it is recommended by the Institute that only "test check" be carried out. 7.6 Additionally, the Stock Audit Report by the applicant's firm, discloses the Asset Classification of BSL as "Non Performing Asset since 01.10.2014/Doubtful". 8. In opposition to the grant of bail, Mr. Ripu Daman Bhardwaj, the Ld. CGSC has submitted the following arguments. 8.1 The period of stock audit of BSL was as on 30.09.2016. The visits of the stock auditor to company plants commenced from Dec. 2016 onwards and the last visit was on 15.02.2017 and report was submitted on 15.02.2017. Hence, there is a gap of more than 3 months from the date of his commencement, and he has not taken stock statement of December 2016 and reconciled the stocks backward. The movement of stocks for intervening period was not taken into account. 8.2 The applicant did not do any physical stock verification and relied upon the stock position given by BSL. 8.3 The stock auditor did not check the records to substantiate claim of consumption of such huge quantity of coal, and they also failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 and that the applicant could thus not be liable for the statutory record which was filed in the year 2008-09 to 2014-15 available on the MCA website cannot be overlooked in as much as the role attributed against the applicant by the SFIO commenced only from February-March, 2016...." 11.2 This was the first appointment of the applicant and he was not an auditor of BSL prior to the said date. Mr. Rajan Malhotra, who was the relationship manager at PNB, states: "Q. no. 11 In reference to your answer to question no. 10, please state since you was relationship manager, why you had accepted the stock audit report. Whether you consider the verification of stock auditor from other entity. Ans: It is correct that company was under financial stress and no further exposure was extended, so not much emphasis was given to this audit report. Further, I would like to submit stock audit report was shared with all the lenders and the same has not been closed." A bare perusal of the above answer shows that the Punjab National Bank (PNB) did not lay much emphasis to the audit report given by the applicant. Even if I see the audit report, the audit report shows that the applicant had raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FIO dated 29.06.2022. e. A coordinate bench of this court also enlarged Rupesh Purwar, coaccused no. 203 on bail. He was signatory to the Financial Statements of the company for the FY 2013-14 and 2014-15 in his capacity as the Company Secretary, which he had signed for the purpose of regulatory filing of the Company. [Rupesh Purwar v. SFIO, CRL. M.C. No. 2878 of 2022 dated 29.06.2022] 11.4 I am of the view that since the ex-promoters/directors and similarly situated chartered accountants have been granted bail, there is no reason why the Applicant should be treated any differently. 12. The judgment relied upon by Mr. Kapur, learned senior counsel for the applicant on Jainam Rathod vs. State of Haryana and Ors. [SLP (Crl No. 1554/2022, Order dated 18.04.2022)] also helps the petitioner as it has been held:- '8 In this backdrop, in the absence of a fair likelihood of the trial being completed within a reasonable period, this Court must be mindful of the need to protect the personal liberty of the accused in the face of a delay in the conclusion of the trial. We are inclined to grant bail on the above ground having regard to the fact that the appellant has been in custody since ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
