New Delhi: The Supreme Court bench comprising of Justices Rohinton Fali Nariman, S Ravindra Bhat and V Ramasubramanian reversed the National Company Law Appellate Tribunal's (NCLAT) order of freezing Usha Ananthasubramanian's, former PNB MD and CEO, assets.
Senior Advocate CS Vaidyanathan appearing for Usha Ananthasubramanian argued that chargesheet filed by the CBI only charges her with not taking precautions or preventive measures to prevent the fraud by Nirav Modi.
Justice Nariman, while setting aside the NCLAT and NCLT orders, said that powers under Sections 337 and 339 of the Act could not be utilized to rope in the head of other organisations and attach his/her assets.
He added that the CBI charge sheet had clarified that the criminal case against her was only that she omitted to take precautions or steps to prevent the fraud perpetrated by Modi and thereby committed misconduct and conspiracy with the other accused.
The court said that both Sections 337 and 339 refer to penalty for frauds by an officer of the company in which mismanagement has taken place and the business of the company which has been carried on with intent to defraud creditors of that company, respectively. It also said that the provisions don’t include the business of another company or other persons.
The scam had come to light in late January 2018 when PNB informed the stock exchanges and the CBI about the scam involving directors of Modi’s companies and Choksi’s Gitanjali Gems Ltd issuing fake letters of undertakings against non-existing invoices since 2007.
