The High Court of Karnataka has rejected petitions filed by former Minister C.P. Yogeshwar questioning the trial court’s order of 2022 arraigning Megacity (Bangalore) Developers and Builders Ltd. in eight criminal cases registered against him for alleged corporate fraud, criminal conspiracy, forgery, and cheating related to the dealings of the company of which he was the managing director.
The allegation of misappropriation is also against the promoters and the directors of the company, who may be erstwhile. But without the company, the proceedings could not have gone on further, the High Court said, while holding that the trial court had rightly arraigned the company.
Justice M. Nagaprasanna passed the order while dismissing eight petitions filed by Mr. Yogeshwar.
The Serious Fraud Investigation Office (SFIO) of the Ministry of Corporate Office, which had investigated the complaints from the customers of the company, had launched prosecution against Mr. Yogeshwar, other directors, and other persons way back in 2012.
However, the SFIO in 2019 filed an application before the trial court to arraign the company as one of the accused in all these criminal cases while pointing out that it had due to oversight made only the directors of the company accused but inadvertently left the name of the company from the list of accused persons as the company is not a juristic person.
In the teeth of the law laid down by the apex court, company ought to have been made an accused as other accused, erstwhile managing director/promoter/directors of the company cannot be prosecuted, the High Court said, while observing that arraigning of company was essential for completion of trial in a manner known to law.
The main charges against the petitioner and other accused is that of siphoning off several crores of rupees from the company by cheating thousands of people who had paid money for sites in the company’s Vajragiri Township project; forging of sale agreements to show that about ₹37 crore was paid to landowners to buy their land, and using this money for personal matters.
