Mumbai, Oct 9 (UNI) The Bombay High Court today dismissed a plea filed by industrialist Arun Firodia, his daughter Sulajja and their finance company, challenging issuance of process by a local court against them in a criminal complaint at Pune.
The accountability of decision making by the corporates, while managing borrowed public funds, cannot be compensated by recovery decrees alone and complaints regarding criminal acts must be allowed to be taken to their logical end, the High Court observed, while dismissing the plea.
Athens Financial Services, formerly known as Kinetic Finance, a company established to provide finance to Kinetic Motors' customers, had made an arrangement for working capital from a consortium of 23 banks led by the State Bank of India.
The consortium had moved the Debt Recovery Tribunal (DRT) after its dues went up to nearly Rs 144 crore.
Even when the proceedings were pending with the DRT, one of the banks from the consortium, Bank of Rajasthan, filed a private complaint against the finance company and its chairman Arun Firodia and MD Sulajja, on which process came to be issued against them by the metropolitan court.
The company had moved the High Court after a Pune court dismissed their plea against the issuance of process, saying that criminal proceedings were liable to be set aside since civil proceedings were pending with the DRT.
But, a single judge bench of Justice B H Marlapalle, too, rejected the company's plea, saying that alleged acts of fraud, dishonesty and cheating could not terminate or extinguish on the decree for recovery of money.
It was extremely essential for corporate decision makers to realise that the law makes a distinction between faulty decisions and fradulent decisions. In the first case, loss could be made good, but in the second case, if proved, sends the accused to jail, Justice Marlapalle observed in the order.
The court further observed that quashing such proceedings merely because the civil remedy was pending would not be in public interest.