Mumbai: The sessions court has refused to grant anticipatory bail to the directors of Ecstasy Realty Pvt Ltd (ERPL) in a Rs 600 crore alleged fraud case filed by Edelweiss Asset Reconstruction Company Ltd (EARCL).
About The Case
The court said the diversion of funds to the tune of Rs 144.50 crore needs to be probed by the Economic Offences Wing against the accused – Pulin Bole, 63, Shivani Varma, 59, and Shobhit Rajan, 62. It is alleged that real estate firm Ecstasy Realty approached M/s ECL Finance Ltd for Rs 600 crore in the form of 600 debentures. M/s Catalyst Trusteeship Ltd was appointed as the debenture trustee on March 20, 2018, and a debenture trust deed was executed between ERPL, ECL Finance, and Catalyst Trusteeship.
It is claimed that a loan of Rs 400 crore raised by way of debentures was agreed to be used to refinance the debt availed from Union Bank of India; out of the remaining loan, Rs 144.50 crore was to be used for general purpose or towards making investments or providing loans or repayment of unsecured loans availed by issuer. Meanwhile, the debentures were taken over by EARCL.
ERPL defaulted on the loan and was declared a non-performing asset, later taken over by Asset Reconstruction Company. The court noted that the directors allegedly diverted Rs 141.95 crore out of Rs 144.5 crore into the bank accounts of other companies where they were directors and into their personal bank accounts instead of using it for the construction project. The directors claimed that ERPL has lodged two complaints – one against the Edelweiss Group and the trustee company in August last year, and another in February against the subscribers of debentures and the Edelweiss Group.
The directors claimed that the company was at liberty to utilise Rs 144.5 crore for general corporate purposes or towards making investments or repayment of unsecured loans availed by the issuer. It is also alleged that EARCL forced ERPL to take a loan of Rs 152 crore and that the present FIR is a counterblast to two FIRs filed by ERPL. The court noted that though a part was diverted for repayment of unsecured loans, more than the outstanding amount was transferred.
“There was no justification for the transfer of such an excess amount in almost all repayment of unsecured loans,” the court said.
