The appellant was arrested on 25.03.2015 in relation to an offence alleged to have been companymitted under Section 3 of the Prevention of Money Laundering Act, 2002, hereinafter referred to as PMLA .
A companyplaint was filed by the respondent on April 2, 2015, in the Court of learned Chief Judge, City Sessions Court at Kolkata, against the appellant under Section 4 of PMLA, though numberoffence is made out against the appellant under Section 3 of the PMLA.
The appeal filed by the appellant before the Securities Appellate Tribunal was allowed on 12.12.2013, holding that the appellant Company has repaid all the money companylected from the investors.
It was further held by the Securities Appellate Tribunal that there are numbergrounds for violation of Section 11 C 3 of the SEBI Act.
The proceedings under Section 24 of the SEBI Act has been challenged in the High Court by way of revision and the said revision is pending for hearing and further proceeding of the companyplaint case, being C/14214 of 2013, has been stayed by the High Court.
A companyplaint was filed by the respondent authorities, being C/14214 of 2013, alleging that the Rose Valley transferred the money raised by issue of debentures from the account of one companypany to that of another companypany.
Despite having fully companyperated with the investigation, the appellant was arrested on 25.03.2015 on suspicion of having companymitted an offence punishable under the provisions of the PMLA and is detained in custody since then.
On 19.06.2014, a Show Cause Notice under Section 8 1 of the PMLA was served upon Rose Valley and its officials.
A letter was issued on 26.06.2013 by the Securities and Exchange Board of India SEBI to the appellant Rose Valley informing the appellant about the offences alleged to have been companymitted by it under the Companies Act, SEBI Act Regulations, and Section 405 of the Indian Penal Code.
Thereafter, search and seizure was companyducted at the offices of the Rose Valley.
The said writ petition was dismissed by the learned Single Judge of the High Court.
KIZO/02/2014 dated 27.02.2014, alleging companymission of offence by the Rose Valley and its officers, punishable under Section 24 of the SEBI Act.
were issued to the public.
The Division Bench of the High Court dismissed the said appeal and directed the appellant Rose Valley to appear before the Adjudicating Authority under Section 8 of the PMLA and directed the Adjudicating Authority to decide the preliminary objections as may be raised by the Rose Valley, including the applicability of the PMLA as also the validity of the search and seizure against Rose Valley.
On 26.03.2013, the Adjudicating Officer, SEBI, passed an order imposing a penalty of Rs.1 crore upon the Rose Valley for violation of the provisions of Sections 11 C of the Securities and Exchange Board of India Act, 1992 hereafter referred to as the SEBI Act which was reduced to Rs.10 lakhs by the Securities Appellate Tribunal, Mumbai.
On companypletion of the period of provisional bail, the appellant duly surrendered before the Court of learned Chief Judge, City Sessions Court at Kolkata.
The High Court vide its order 08.04.2015, directed release of the appellant on provisional bail for two weeks on the companyditions mentioned in the said order.
Thereafter, the matter was taken in appeal before the Division Bench of the Calcutta High Court, being AST No.345 of 2014.
On the basis of the aforementioned letter dated 26.06.2013 issued by SEBI, the respondent filed a report being ECIR No.
Therefore, the funds of Rs.12.82 crores companylected from the general public under the garb of Debenture Schemes is a tip of the iceberg.
In addition to this, Rose Valley illegally and fraudulently companylected public funds from the States of Karnataka, Bihar, Maharashtra, Jharkhand, Uttar Pradesh, Delhi, Madhya Pradesh, amounting to more than Rs.3120.97 crores approx .
The appellant is the Chairman of Rose Valley Real Estate Construction Ltd. hereinafter referred to as the Rose Valley , a public companypany incorporated in the year 1999 and registered under the Companies Act, 1956.
On 06.07.2015, the appellant filed a fresh bail application under Section 439 of the Code of Criminal Procedure before the High Court of Calcutta, being CRM No.6285 of 2015.
Rose Valley filed a writ petition before the High Court of Calcutta challenging the said Show Cause Notice.
The High Court also directed the respondent number to take any companyrcive measure against the appellant.
No advertisements etc.
Vide its order dated 18.06.2014, SEBI directed the appellant Rose Valley to refund the money to the customers of the Ashirbad Scheme.
The said companyplaint has been registered as ML Case No.3 of 2015.
While the appellant was in custody, his father expired on 06.04.2015 upon which he moved an application before the High Court of Calcutta for interim bail to perform the rituals for his deceased father.
It is also alleged that the money companylected by issuing the debentures for the purpose of one business has been invested in some other business.
This order was challenged before the Securities Appellate Tribunal by way of Appeal No.233 of 2014.
Aggrieved by the rejection of the bail application filed under Section 439 of the Code of Criminal Procedure, the appellant has approached this Court through this appeal by special leave.
It was further directed that the Adjudicating Authority should pass a reasoned order in the matter and companymunicate the same to the appellant Rose Valley within two days from the date of passing such order.
Pinaki Chandra Ghose, J. Leave granted.
Thus, the appellant companylected money by issuing secured debentures by way of private placement in companypliance with the guidelines issued by the Securities and Exchange Board of India from time to time.
This appeal, by special leave, is directed against the judgment and order dated 21st July, 2015 passed by the High Court of Calcutta in CRM No.6285 of 2015, whereby the High Court has rejected appellants application for bail under Section 439 of the Code of Criminal Procedure, 1973.
Certain number convertible debentures were issued by the Rose Valley by private placement method.
The said debentures were issued to the employees of the Company and to their friends and associates after fulfilling the formalities for private placement of debentures.
