Bench puts Karnataka court’s ruling on a plaint in abeyance
The Supreme Court on Friday stayed criminal proceedings initiated by a Karnataka court against former chairman and managing director of Wipro, Azim H. Premji, his wife and chartered accountant G.V. Rao on the basis of a “mischievous” private complaint alleging breach of trust and corruption in the merger of three companies with a Premji group firm.
A Bench led by Justice Sanjay Kishan Kaul stayed the trial court’s January order taking cognisance of the complaint and summoning Mr. Premji and the others after the Karnataka High Court refused in May to quash the lower court’s order.
In separate petitions Mr. Premji, represented by senior advocates A.M. Singhvi and Mukul Rohatgi, and Mr. Rao, represented by senior advocate S. Ganesh and advocate Vipin Nair, said the complaint was “mischievous” in nature.
Mr. Premji, in his petition filed through advocate Mahesh Agarwal, said the three companies — Napean, Regal and Vidya — were private companies and had been promoted, owned and controlled by the Azim Premji Group from their inception in 1974. It submitted that Hasham, the company with which the three were amalgamated in 2015, was also part of the group.
“The only assets of each of these companies are the shares held in other two companies and the shareholding in Wipro Ltd. (an Azim Premji Group company) — even these assets were transferred by the Azim Premji Group to the company from time to time. No other investment has been made by any other third person in the said companies,” he said in the petition.
The petitioners were directors in the three companies till the date of merger. The control and management of the three companies — Napean, Regal and Vidya — had continued to be vested exclusively with Mr. Premji, even though the shares of the companies were interlocked after 1980.
Mr. Premji said the three companies were united in accordance with the provisions of the Companies Act.
The High Court had earlier sanctioned the Scheme of Amalgamation after following all procedures, including giving notice to the Regional Director of the Ministry of Corporate Affairs, the Official Liquidator, etc. Neither the trial court nor the High Court had conducted an enquiry or asked for the Scheme of Amalgamation to be placed on record.
The “malafide” criminal complaint filed by India Awake for Transparency in 2017 claimed the three companies “belonged to nobody and therefore belonged to the government”. Mr. Rohatgi and Mr. Singhvi submitted that this accusation was plain mischievous.
“The fact that these three companies were a part of the Premji group was declared to all government authorities, and was also in public knowledge. Public disclosures of the same have been made in documentation filed with authorities like SEBI/stock exchanges, Ministry of Corporate Affairs, etc.,” they submitted.
The complaint misled the trial court into taking cognisance and suppressed information from the courts, Mr. Ganesh and Mr. Nair contended.
“The Scheme of Amalgamation sanctioned earlier by the Karnataka High Court, which forms the sole basis of the present complaints, was deliberately suppressed by India Awake for Transparency. It (the scheme) reflects the complete purpose, financial structure, shareholding of the transferor and transferee companies, the accounting treatment and the terms on which the amalgamation of companies occurred, which if brought to the notice of the courts, would have shown that not even a prima facie case was made out under the complaints,” they argued.
Mr. Premji submitted that the private complaint was motivated by personal vendetta. Lawyers for both Mr. Premji and Mr. Rao asserted that India Awake for Transparency “is being used by one Mr. R. Subramanian as a corporate facade to file frivolous litigations against Mr. Premji and his affiliates”.
Mr. Premji said in his petition that Hasham had earlier taken Mr. Subramanian to court for loan default and dishonoured cheques.
The court set the next hearing for February 5, 2021, and issued notice to India Awake for Transparency and other respondents.
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