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Former promoter of Ranbaxy and the Religare Group Malvinder Singh has moved the Delhi High Court seeking to quash an FIR against him in connection with the complaint by Religare Finvest Ltd alleging misappropriation of funds.
The petition came up for hearing today before a Single Judge Bench of Justice Brijesh Sethi, hours after Malvinder Singh, his brother Shivinder, and former Religare CMD Sunil Godhwani were arrested by the Delhi Police’s Economic Offences Wing (EOW).
As interim relief, Singh also sought a stay of proceedings under the FIR.
Appearing for Malvinder Singh, Senior Advocate Abhishek Manu Singhvi contended that the Delhi Police had no jurisdiction to investigate the matter, as the Serious Fraud Investigation Office (SFIO) was already seized of the allegations.
Singhvi relied on Sections 212(2), 212(17)(a), 436 and 447 of the Companies Act 2013 to contend that once the SFIO was seized of a matter, no other investigating agency could investigate it.
He thus claimed that since the SFIO was already investigating the commission of fraud, the Delhi Police could not initiate parallel proceedings with respect to the same companies and the same act. Singhvi argued,
“The idea is to prevent multiciplity of proceedings…There’s a larger constitutional principle of Article 20…why to allow start of investigation when the end result is the same? Parallel EOW investigation cannot go on.”
Singhvi added that Companies Act was a special Act and it would therefore have preference over the Indian Penal Code while investigating commission of fraud.
Appearing for Delhi Police, advocate Avninder Singh defended the EOW investigation on the ground that while the SFIO was investigating Religare Enterprises and Fortis Healthcare with respect to the offences under Companies Act, the EOW was investigating a complaint by Religare Finvest Ltd for commission of offences under Sections 409, 420 and 120B IPC.
He added that investigation was at a crucial stage and involved misappropriation of funds to the tune of Rs 1260 crore.
Avninder Singh also contended that an accused could not choose which agency would investigate him.
Additional Solicitor General Maninder Acharya, who appeared for SFIO, also agreed with the submissions by the Delhi Police. She stated that the SFIO was investigating Religare Enterprises and Fortis Healthcare with respect to offences under Companies Act, and not Religare Finvest.
“We dont investigate IPC (offences)…(After report is submitted), we leave it to the Special Court to take cognizance.”
Acharya also added that if needed, Religare Finvest may be investigated after a notice is issued on this aspect by the Central Government.
After hearing the parties at length, the Court reserved its order on the point of issuance of notice.
Earlier today, a Court in Saket granted the EOW four days’ custody of Malvinder Singh, his younger brother Shivinder and three others in the case.
The EOW had arrested the former promoters of pharma giant Ranbaxy on Thursday. Shivinder Singh was detained by the Delhi Police on Thursday, while the elder brother Malvinder Singh was nabbed late on Thursday night from Punjab. Sunil Godhwani, former CMD of Religare, and two others were also arrested by the Police.
The arrest comes in a complaint concerning Religare Enterprises which was under the absolute control of the Singh Brothers. Manpreet Suri of Religare Finvest accused the brothers of siphoning off funds and misappropriation of funds to the tune of Rs 740 crore. This complaint, filed in December 2018, led to the brothers being charged with cheating, fraud, and misappropriation of funds.
Shivinder Singh owned an 85% stake in Religare Enterprises which controlled Religare Finvest at the time the alleged offence was committed. Godhwani was the CMD while the other two accused – Kavi Arora and Anil Saxena – held crucial managerial positions in Religare Enterprises at the time.