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TMI Blog2018 (8) TMI 2115X X X X Extracts X X X X X X X X Extracts X X X X ..... to sell some of the shares and to deposit sale proceeds in the bank account. Along with existing balance added by the sale proceeds, the total came to approximately Rs.38 crores. The Supreme Court further permitted the petitioner to sell shares proceeds of which came to Rs.42.51 crores - All along, the Supreme Court had made a clear distinction between the two amounts. Insofar as, sum of Rs.42.51 crores is concerned, the Supreme Court had concluded that the same was not covered under CBI's restraint order. The petitioner was allowed to withdraw the same unconditionally. However, with respect to rest of the amount, the Supreme Court granted no relief except allowing the petitioner to challenge such restraint order passed by CBI. Thus, the first contention of the counsel for the petitioner that there was no distinction between the two amounts is not well founded. Had the case been so simple, surely the Supreme Court itself would have released both the amounts. Quite apart from the various aspects emerging from the affidavit, it is neither possible nor correct on my part to interfere at this interim stage in the present proceedings and hold that all the above assertions made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner-Company had preferred appeal before the Securities Appellate Tribunal, Mumbai ('Tribunal', for short). Pending such appeal, petitioner also prayed for interim relief allowing the company to sell the shares and securities presently held through recognized stock exchanges. On such interim application, an order was passed on 8.5.2006 by the Tribunal. The Tribunal was of the opinion that final disposal of the appeal may take some time. In the meantime, share market condition may vary. Whether the appellant succeeds or fails in the appeal, adverse market fluctuations may harm either side. The Tribunal, therefore, passed the following order: In this view of the matter the appellant is justified in getting itself insulated against the market risks. We therefore permit the appellant to sell the shares/ securities presently held by it through recognized stock exchanges in accordance with law and through registered stock brokers and credit the same proceeds in the bank account maintained by the appellant with ICICI Bank. We make it clear that the shares/ securities shall be traded only through the stock exchange mechanism and that the appellant shall immediately report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MCB fraudulently received by some of the accused were routed into India in the said bank account through foreign destinations such as Mauritius and British Virgin Islands. 6. Before the Supreme Court, the petitioner sought permission to sell further shares. The Supreme Court disposed of the appeal of the petitioner by an order dated 5th December, 2008. The order reads as under: While Civil Appeal D. No. 5526/08, has been filed against the order dated 2nd March, 2007, dismissing the Review Application which had been filed before Securities, Appellate Tribunal, Mumbai, the other Appeal being C.A. No.1268/08, has been filed against the order passed by the Securities Appellate Tribunal, Mumbai the other Appeal being C.A. No. 1268/08, has been filed against the order passed by the Securities Appellate Tribunal on 6th September, 2006, in Appeal No.21/06, by which the order passed by the S.E.B.I. was upheld and the appeal was dismissed. During the hearing of the two appeals, the order passed by the Appellate Tribunal in Miscellaneous Application in Appeal No.21/06 dated 8th May, 2006 was brought to our notice wherein the appellant before us, who was also the appellant before the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SEBI dropped the show cause notice proceedings against the petitioner in view of resignation of one Mr. Dharmesh Doshi, who was an employee of the petitioner's Bank and whose conduct was under cloud. However, restrictions imposed under the interim order dated 13/01/2006 restraining the petitioner from accessing the Indian Security Market was continued till November, 2010. 9. The petitioner once again had to approach the Supreme Court in contempt petition since the petitioner was not allowed to withdraw the sale proceeds out of the sale of shares. In such proceedings, the Supreme Court passed the following order on 17th August, 2010, which reads as under: This I.A. No. 3, has been filed in Contempt Petition No.17 of 2009, which arose out of Civil Appeal Nos.1268/2008 and 7428 of 2008, which were disposed of by an order dated 5th December, 2008. While disposing of the said appeals it was brought to our notice that the Securities Appellate Tribunal, Mumbai, had directed sale of some of the shares which were being held by Securities Exchange Board of India (SEBI). Accordingly, we disposed of both the appeals by granting leave to the appellant to sell off the remaining sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t prevent the CBI from taking any steps as it may consider necessary under the law. (Emphasis supplied). 10. Thus, the Supreme Court made a clear distinction between the proceeds out of sale of shares permitted by the Tribunal and the proceeds out of sale of shares permitted by the Supreme Court. With respect to latter, the Supreme Court noted that there was no restriction imposed by CBI under Section 102 of Cr.P.C. and the Bank was therefore given the liberty to take steps with regard to such sale proceeds in accordance with law. 11. Pursuant to this order of the Supreme Court, petitioner could withdraw the accumulated sale proceeds out of the sale of shares permitted by the Supreme Court relatable to sum of Rs.42.51 crores. However, petitioner's attempt to withdraw rest of the amount failed. The petitioner, therefore, yet again approached the Supreme Court in a contempt petition which came to be disposed of by an order dated 12.10.2011 which reads as under: The relief sought for in the contempt petition, in our view, cannot be granted since the original order passed in terms of Section 102 Cr.P.C., in respect of the account of the petitioner in the ICICI Bank, is st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eafter, no question of not permitting further sum of Rs.38 crores lying in the account not being allowed to be withdrawn. It was contended that the action of the CBI freezing the bank account of the petitioner was based on no material. 14. CBI appeared before the Magistrate and opposed the request of the petitioner. During the course of arguments before the learned Magistrate, it was pointed out on behalf of the petitioner-Company that Dharmesh Doshi, who was an employee of the petitioner s Bank and was shown as accused No.8 by the CBI in its criminal investigation, has been discharged by the Magistrate. It was on account of alleged involvement of Dharmesh Doshi in the MMCB scandal, CBI had passed the order under Section 102 of Cr.P.C. Now that Mr. Dharmesh Doshi is discharged of all accusations, the restraint order must be withdrawn. 15. The learned Magistrate by the impugned order dated 2nd November, 2012, while granting the request for withdrawal of the amount, imposed the condition that the petitioner must give a matching bank guarantee. As noted, it is this condition, the petitioner has challenged. 16. Appearing for the petitioner-Company, learned counsel, Mr. Saurin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no distinction between the two amounts is not well founded. Had the case been so simple, surely the Supreme Court itself would have released both the amounts. Conscious that the earlier amount is covered under the CBI s restraint order in terms of relief that was granted, the petitioner was granted liberty to challenge the restraint order. 20. In the context of petitioner's contention that the CBI has no basis to pass the restraint order, I may reproduce certain portions of the CBI's affidavit filed before the High Court. Relevant portion reads as under: 3.1 It is respectfully submitted that the CBI, BS FC, Mumbai registered a case in RC.4 (E)/2001 under the orders of the Hon'ble Court against Shri Rameshchandra Parikh and 2 others for commission of offences punishable under Sections 120-B r/w.405, 406, 408, 409 and 420 IPC for causing loss to the tune of Rs.1030 Crore to the Madhavpura Mercantile Co-Operative Bank Ltd. (MMCB). After investigation a Charge sheet was filed against 11 accused for commission of offences punishable under Sections 120-B, r/w.409 and 420 IPC, before the Court of the Chief Metropolitan Magistrate, Ahmedabad, in 2003. The trial of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, UK, an associate of the Jermyn Capital Partners, Dubai. 3.4 The reason for freezing the accounts of appellant by CBI, at ICICI Bank, Mumbai was that during investigation it was revealed that Sh. Dharmesh Doshi, after fleeing to London started a Stock Broking Company in the name of M/s. Triumph Securities UK PIC. This name was changed to M/s. Jermyn Capital Partners PIC, UK. Subsequently he continued as Director in the new Company also. Sh. Dharmesh Doshi while in India, was Director of a Stock Broking firm named Triumph International Finance (India) Limited (TIFIL) at Mumbai M/s. TIFIL had obtained advances from MMCB and had misused the same. M/s. TIFIL in India held 100% stake in Triumph Securities UK through it's Mauritius based subsidiary viz. M/s. International Holdings (Triumph) Ltd. Sh. Dharmesh Doshi along with Sh. Ketan Parkeh, Sh. Ketan Parekh and Sh. Jatin Sarvaiya, all cited as accused, in his capacity as a Director of TIFIL in India had brokered several fraudulent brokerage deals and in the process, proceeds of crime amounting to Rs.241 Crore of MMCB were siphoned off to Mauritius. This amount was transferred through various accounts of Overseas Corporate Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oshi was the beneficiary of a large portion of the proceeds of defrauded funds of MMCB. 21. Quite apart from the various aspects emerging from such affidavit, it is neither possible nor correct on my part to interfere at this interim stage in the present proceedings and hold that all the above assertions made by CBI are incorrect and there is no trail of tainted money having been routed through foreign destinations back into the said account in ICICI Bank. 22. Last question is of discharge of Dharmesh Doshi, accused No.8. Learned Magistrate noted that he has already been discharged. It is primarily on this basis that he permitted the petitioner to withdrawal of the amount. He, however, imposed condition for providing bank guarantee of a matching sum. If the discharge of accused No.8 had attained finality perhaps the petitioner was justified in contending that petitioner should have been allowed withdrawal of the amount unconditionally. However, discharge of Dharmesh Doshi accused No.8 is not yet final. Revision Petition filed by CBI against the order of the Magistrate is pending before the Sessions Court. To safeguard the interest of the respondents, it would be absolutely ne ..... X X X X Extracts X X X X X X X X Extracts X X X X
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