K.V. Brahmaji Rao Vs Union of India (NCLAT Delhi)
INTRODUCTION
In this case the NCLT’s order was set aside by the NCLAT to implead a former Executive Director of the Punjab National Bank in a matter related to Rs 14000 crore scam involving diamond merchant Nirav Modi Group and Gitanjali Group of Companies. The National Company Law Tribunal (NCLT) ordered the impleading of 19 people in the case in January 2019, including the former executive director of the bank, K V Brahmaji Rao. A directive to freeze their assets was also given. The tribunal’s decision was based on a petition the corporate affairs ministry had submitted. An earlier judgement on the case of Usha Ananthasubramanian was used in this case to reach out to the conclusion that any person who is a head of some other organisation cannot be roped and his or her assets cannot be freezed or attached in excersing the power under sections 337 and 339 of the Companies Act, 2013.
FACTS OF THE CASE
- In the appeal by the respondent (UOI) had initiated a petition against the petitioner and the others as accused in the FIR on 31.01.2018 and further on 15.02.2018 filed by Punjab National Bank. The FIR was registered against some known and unknown accused who were alleged to be involved in the perpetration of the huge Financial Scam against the Punjab National Bank.
- The Respondent ordered an investigation into 107 companies and 7 LLPs under the provisions of the Companies Act, 2013 and LLP Act, 2008 and also sought to supplement the investigation by seeking indulgence of the Tribunal as per the provisions of Sections 221, 222, 241, 242 and 246 r/w Section 339 of the Act.
- The CBI had filed a chargesheet in the case of Nirav Modie’s case and Gitanjali Group cases. The investigation by the CBI has revealed that 19 persons which included Brahmaji Rao and Usha Ananthasubramanian have acted dishonestly and fraudulently with other people.
- Thus, the respondent had filed an application to freeze the assets of these people and implead them.
- The NCLT in the appeal by the respondent passed the order and allowed the application for frizzing assets of the appellant ( including Usha Ananthasubramanian and others) who was the Executive Director of ONB at that time and also injuncted from disposing movable and immoveable Properties/Assets which belong to them.
- Now, being aggrieved from this order appealed to the NCLAT.
PROVISIONS INVOLVED IN THE CASE
