MUMBAI: The Bombay High Court has dismissed a SIFO case against Adani Group chairman Gautam Adani and his younger brother and managing director of Adani Enterprises, Rajesh Adani, in an alleged violations of market regulations and share price manipulation, saying no case of cheating or criminal conspiracy has been made out.
The case related to alleged share price manipulation and thus unlawful gains to the tune of Rs 388 crore by the company and its promoters selling their holdings at higher price and then buying back them after pulling down the share price later.
The Serious Fraud Investigation Office (SFIO) had in 2012 initiated a case against Adani Enterprises and the promoters Gautam and Rajesh Adani, and chargesheeted with criminal conspiracy and cheating. In 2019, the company and the brothers had moved the high court seeking to quash a sessions court order which had earlier in the year ordered the SIFO to probe the case.
A single-bench of Justice RN Laddha on Monday quashed the sessions court order and discharged the duo and the company from the case.“A careful evaluation of the submissions and the records makes it evident that the complaint fails to satisfy the essential ingredients of the offence of cheating,” the court said discharging the brothers and the company of any wrong doings.
“When the offence of cheating itself is not made out, then even the charge of criminal conspiracy becomes unsustainable,” the order said, adding “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.
However, in the present case, there is a conspicuous absence of any such allegations from an affected party. ”The court further said, “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.
"Moreover, justice Laddha also did not accept the plea of the SFIO for a two-week’s stay on his order so that it can challenge it in the Supreme Court.In December 2019, the high court stayed the sessions court order and it was extended from time-to-time. In 2012, the SFIO filed a chargesheet against 12 persons, including the two Adanis, accusing them of criminal conspiracy and cheating.
But a city magistrate court had discharged them from the case in May 2014, which the SFIO had challenged in the sessions court which in November 2019 had set aside the magistrate's order. Senior counsel Amit Desai, appearing for the Adanis, argued that no member of the public had claimed any losses and hence the allegation of cheating levelled by the SFIO was baseless.
The SFIO counsel Anil Singh argued that there were sufficient grounds to prosecute the petitioners for criminal conspiracy and cheating as the Adanis conspired with the co-accused and manipulated the stock market by divesting their shareholdings at inflated prices and acquiring shares when the prices declined.
As a result, Singh said, the petitioners unlawfully gained a huge amount, causing financial loss to the general public and other stakeholders, the SFIO charged. The case involved allegations of market regulation violations amounting to nearly Rs 388 crore. The case stemmed from concerns over regulatory compliance and financial transactions flagged during an investigation by the SFIO.
(PTI)