The Calcutta High Court convened a late-night hearing on the subject of multiple jute businesses, including Delta Mills, failing to pay provident fund (PF) dues to a group of jute mill workers. The case was heard by a single bench, led by Justice Abhijit Gangopadhyay. As stated by the petitioners’ counsel, the outstanding amounts for each of the ten workers averaged Rs 2.5 lakhs, or around Rs 25 lakhs.
The directors of the firms were summoned by the single bench earlier in the day, and they were instructed to appear for questioning by the Serious Fraud Investigation Unit (SFIO). Following the SFIO’s legal representative’s presentation before the Bench, the directors were revealed to be fictitious individuals – workers within the organization who were offered a directorial position in exchange for a monetary sum. The court summoned DSG Dhiraj Trivedi of the Enforcement Directorate and inquired as to why the ED was unable to conduct a probe into the subject.
According to the submission, the ED could only look into scheduled crimes, and it could only do so if the requirements under Section 447 of the Companies Act, 2013 had been proven and FIR had been filed. The Court made the following observation after reviewing these submissions and dissecting the provisions of S.447 of the Companies Act:
“The ingredients of s447 of the Companies Act are writ large in this case. I am directing the SFIO to lodge an FIR at the local police station in order to enable the ED to begin their investigation.”
While the SFIO’s lawyer contended that it could not lodged a FIR on its own initiative, the Court stated that, under Section 212 of the Companies Act, the Court was instructing the SFIO to file the FIR in the broader public interest. The court observed that the appointment of fictitious directors and the connivance in the abuse of their positions had amply demonstrated the elements of fraud in this instance.
As a result, it instructed that the SFIO file the FIR by 3 p.m. tomorrow, and that the facts be communicated to the ED so that the investigation may begin immediately. The Court also directed the release of the five directors who were being questioned, as well as the return of their mobile phones.
Matter will be taken up tomorrow at 3 pm.