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Madras high court quashes cases against three ex-directors of IL&FS

Times of India

2 Sept 2021

The Madras high court has quashed an FIR registered against three former directors of IL&FS ransportation Network Ltd (ITNL) in connection with the Rs 1 lakh crore IL&FS scam.

Chennai: The Madras high court has quashed an FIR registered against three former directors of IL&FS Transportation Network Ltd (ITNL ) in connection with the Rs 1 lakh crore IL&FS scam.

Justice M Dhandapani passed the order while allowing the pleas moved by Ravi Parthasarathy, Hari Sankaran and Ramchand Karunakaran. However, the court made it clear that by quashing the case relating to the TNPID Act, it was, by no stretch of imagination, giving a clean chit to the petitioners as persons beyond a pale of doubt.

“This court has only quashed the case against the petitioners on the ground that the investigation under the TNPID Act by EOW is not sustainable…” the judge said. This apart, the court has also quashed the FIR registered against ITNL. The FIR was registered based on the complaints filed by investors under the (in Financial Establishments) Act (TNPID). The court passed the order concurring with the submissions of counsel for the petitioners A Ashwini Kumar that ITNL was not a financial establishment as Woman engulfed by scooter fire dies while onlookers make videos 

This apart, the court has also quashed the FIR registered against ITNL. The FIR was registered based on the complaints filed by investors under the Tamil Nadu Protection of Investment of Depositors (https://timesofindia.indiatimes.com/topic/tamil-naduprotection-of-investment-of-depositors)

(in Financial Establishments) Act (TNPID). The court passed the order concurring with the submissions of counsel for the petitioners A Ashwini Kumar that ITNL was not a financial establishment as codified under the TNPID Act and the debentures issued by the company do not fall under the definition of ‘Deposit’ prescribed under Act.

“Once this court has come to the conclusion that neither ITNL could be termed to be financial establishment and the amount collected by it through private placement by issuance of debentures could be termed to be deposit with the meaning of TNPID Act, necessarily it has to follow that the provisions of the Act cannot be made applicable to the case of ITNL…,” the court said. 

Therefore, this court is of the firm and clear opinion that TNPID Act is not applicable to the present case and the act of ITNL relating to issuance of debentures under the private placement scheme cannot be termed to be receipt of deposit from public and, therefore, the consequential registration of the case for investigation the economic offences wing of the state and the petitioners herein is beyond its legal dominion and, necessarily the crime registered against the petitioners and ITNL deserves to be quashed, Justice Dhandapani added.

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