The Delhi High Court has quashed the First Information Report (FIR) against a Chartered Accountant (CA), Vipul Agarwal who was working as a Financial Consultant of the company involved in cash transaction through illegal channels.
The bench of Justice Chandra Dhari Singh has observed that the prosecution has not presented any concrete evidence to establish that Mr. Vipul Agarwal, Consultant, Prakash Industries Ltd. (PIL), was involved in any unlawful activity. The allegations that Mr. Vipul Agarwal was pursuing the External Commercial Borrowing (ECB) term loan proposal through Pawan Bansal and was regularly in touch with him over the phone to not, in themselves, establish any culpability or conspiracy.
“Mere telephonic conversations between parties involved in a business proposal cannot be construed as evidence of a criminal act, unless accompanied by substantial proof indicating any mens rea. The law is well settled that suspicion, no matter how strong, cannot take the place of proof,” the bench ruled.
Prakash Industries Ltd. (PIL) is a company incorporated and is engaged in the business of coal mines, iron and steel, power and wind energy. The Petitioner Ved Prakash Agarwal is the Chairman and Managing Director of PIL.
The another petitioner, namely Mr. Vipul Agarwal, is a Chartered Accountant and has been working as a Financial Consultant in PIL since 2013. He has been associated with the company for a considerable period of time and was a Director (Finance and Accounts) prior to the year 2013.
PIL, vide letter addressed to the State Bank of India, submitted Form 83 for the allotment of loan registration number of their Foreign Currency Convertible Bonds (FCCB) amounting to USD 50 Million in light of the External Commercial Borrowing (ECB)/FCCB guidelines of the Reserve Bank of India (RBI).
On 1st August 2014, criminal law was set into motion with the registration of the instant FIR, under Sections 9 and 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 (PC Act) and Section 120B of the Indian Penal Code, 1860 (IPC) against the company and other co-accused persons.
After the registration of the FIR by the CBI statements of Mr. Uday Shankar Majumdar was recorded under Section 161 of the CrPC. It is to be noted that Mr. Uday Shankar Majumdar worked as a General Manager, Treasury, and International Banking Department, Syndicate Bank. He stated that the department was responsible for assessing the proposals for loans which were received from foreign branches of Syndicate Bank.
The CBI contended that Vipul Agarwal, Chartered Account, PIL facilitated the bribe to a public servant by using the services of Sh. Pawan Bansal. There is evidence to establish the criminal involvement and complicity of the accused petitioner in commission of the alleged offence. In addition to the intercepted conversation, there is evidence on record in the form of an oral statement of witness to reveal the criminal involvement of accused petitioner for facilitating the transaction of bribe amount to the accused public servant.
The CBI contended that CA Vipul Agarwal also facilitated transaction of cash amounting to Rs. 3.25 crores approximately from PIL to Mr. Pawan Bansal through illegal channels, using the services of Mr. Ghanshyam Mudgal and Mr. Ashok Sharma, both employees of PIL., The amount was received in Delhi by Ajay Bansal, a relative of Pawan Bansal.
The court held that the prosecution has failed to discharge its burden of proof and establish the allegations prima facie, which is a sine qua non for conviction in criminal cases. Hence, no adverse inference can be drawn against the petitioners solely on the basis of assumptions, conjectures, or suspicion and it is held that the Special Judge erred in passing the order, by, summoning the petitioners and further erred in accepting the charges framed against the petitioners in the chargesheet.
Case Details
Case Title: M/S Prakash Industries Ltd & Anr Versus ED
Case No.: CRL.M.C.2526/2019, CRL.M.As.10049/2019 & 10051/2019
Date: 28th March, 2025
Counsel For Petitioner: Vikas Pahwa, Senior Advocate
Counsel For Respondent: Ripudaman Bhardwaj
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