Bombay High Court discharges Gautam & Rajesh Adani in Rs 388 Cr case

Guwahati, March 17: The Bombay High Court on Monday discharged the Chairman of the Adani Enterprises Ltd group Gautam Adani, along with its Managing Director Rajesh Adani from a case involving Rs 388 crores, related to alleged violations of market regulations.

The High Court, in its ruling, said that no case of cheating or criminal conspiracy was made out.

The case against the Adani Enterprises Limited (AEL) and its promoters Gautam Adani and Rajesh Adani was initiated in 2012 by the Serious Fraud Investigation Office (SFIO).

A chargesheet was filed, accusing them of cheating and criminal conspiracy.

A petition was filed in 2019 by the company and the two industrialists, seeking for a sessions court order of the same year to be quashed by the High Court. The sessions court order of 2019 refused them discharge from the case.

On Monday, the Bombay High Court’s single-judge bench of Justice RN Laddha quashed the sessions court order and discharged the two industrialists and the company from the case.

The court in its order said a careful evaluation of the submissions and records makes it "evident that the complaint fails to satisfy the essential ingredients of the offence of cheating".

When the offence of cheating itself is not made out, then even the charge of criminal conspiracy becomes unsustainable, it added.

"A fundamental requirement for an offence under section 420 of the IPC (cheating) is the presence of an element of deception, which leads to the victim suffering from loss while the accused gains wrongfully," the High Court said.

The Court, however, noted that in the present case, such allegations from any affected party are conspicuously absent.

The Court also observed that mere assertion that the accused has made a wrong gain without demonstrating the corresponding wrongful loss or deception suffered by a specific victim is not sufficient to constitute the offence of cheating.

The SFIO sought the bench to stay its order for a period of two weeks so that it could file an appeal in the Supreme Court.

Justice Laddha, however, refused to do so.

In December 2019, the High Court stayed the sessions court order and it was extended from time-to-time.

In 2012, the SFIO filed a chargesheet against 12 persons, including the Adanis, accusing them of criminal conspiracy and cheating.

A magistrate's court in Mumbai discharged them from the case in May 2014. The SFIO challenged the discharge order. The sessions court in November 2019 set aside the magistrate's order.

The industrialists, in their petition in the High Court, termed the sessions court order as "arbitrary and illegal".

The counsel for the company and its promoters, Amit Desai, had urged that no member of the public filed any complaint against them claiming that they were cheated upon or they suffered financial losses; and said that the allegations of cheating levelled by the SFIO was baseless.

The counsel for the SFIO, Anil Singh, however, argued that there were sufficient grounds to prosecute the petitioners for the offences of criminal conspiracy and cheating.

The SFIO alleged that the Adanis conspired with the co-accused in the case and manipulated the stock market by divesting their shareholdings at inflated prices and acquiring shares when the prices declined.

As a result, the petitioners unlawfully gained a huge amount, causing financial loss to the general public and other stakeholders, the SFIO charged.

The case involved allegations of market regulation violations amounting to nearly Rs 388 crore. The case stemmed from concerns over regulatory compliance and financial transactions flagged during an investigation by the SFIO.