Mumbai: In a relief for Adani Group chairman Gautam Adani and managing director Rajesh Adani, the Bombay High Court on Monday discharged them in a case of alleged violations of market regulations amounting to nearly Rs 388 crore observing that no case of cheating or criminal conspiracy was made out.
In 2012, the Serious Fraud Investigation Office (SFIO) initiated a case against Adani Enterprises Limited (AEL) and its promoters, Gautam Adani and Rajesh Adani. It filed a chargesheet accusing them of criminal conspiracy and cheating.
Later, in 2019, Gautam Adani and Rajesh Adani approached the High Court, seeking to quash a sessions court order from the same year that refused to discharge them from the case. In December 2019, the High Court granted an interim stay until January 13, 2020, which was subsequently extended from time to time.
Justice RN Laddha discharged the two industrialists saying that after evaluating the submissions and the records it is “evident that the complaint fails to satisfy the essential ingredients of the offence of cheating”. The judge said that when the offence of cheating itself is not made out then even the charge of criminal conspiracy becomes unsustainable.
In a detailed order, the HC said: “A fundamental requirement for an offence under section 420 of the IPC (cheating) is the presence of an element of deception, which leads to the victim suffering from loss while the accused gains wrongfully.” It added that in the present case, there is a “conspicuous absence” of any such allegations from an affected party, it added.
“Merely by asserting that the accused has made a wrong gain without demonstrating the corresponding wrongful loss or deception suffered by a specific victim does not suffice to attract the offence of cheating,” the court underlined.
The court turned down SFIO’s request to stay the order to allow them the approach the Supreme Court.
The SFIO had filed a chargesheet in 2012 against 12 accused, including the Adani's, for allegedly providing funds and shares to Ketan Parekh to facilitate illegal activities in the capital market. They were accused of cheating and criminal conspiracy. However, a local magistrate discharged them from the case in May 2014.
Following an appeal by the SFIO, the sessions court, on November 27, 2019, set aside the magistrate’s order. The sessions court observed that the SFIO had prima facie established a case of “unlawful gain” by the Adani Group promoters and Parekh, amounting to approximately Rs388 crore and Rs151 crore, respectively.
The Adani's approached the High Court against this order, claiming that the sessions court’s decision was “arbitrary and illegal.” Their plea contended that “except for bald and general allegations of criminal conspiracy, no offence of cheating is disclosed against the petitioners, and the allegations are groundless.”
The case involved allegations of market regulation violations amounting to nearly Rs 388 crore. It stemmed from concerns over regulatory compliance and financial transactions flagged during an investigation.
