Stage Two – Criminal Proceedings
Summary of Facts – The department initiated criminal proceedings against the company and its CEO and the matter is pending with Special Court (Economic Offences) Bangalore. Against the interim order of the special court, the company appealed at High Court. High Court dismissed the appeal and then company went to Supreme Court seeking Special leave Petition. Supreme Court dismissed the petition of the company.
Flow of events – For those of you who are interested in knowing the brief flow of events which unfolded in this case, the facts are given below –
- When the case stood as above, as a separate move, the Income tax department filed 3 complaints against the company and its CEO at Special Court (Economic Offences) Bangalore. The Court registered the cases and issued summons to the company and its CEO.
- The company aggrieved by the entire proceedings, appealed to High Court seeking quashing of the orders of Special court. The company also said that the Chairman (Mr. Mallya) is not involved in the day-to-day operations of the company and hence he has to be spared from this legal process.
What High court said?
- The criminal proceedings are independent of recovery proceedings. Both can be done simultaneously. Nonpayment of TDS attracts criminal prosecution and Nonpayment of TDS can be recovered through attachments!
- The annual report of company specifies Mr. Mallya as the Chairman and Chief Executive Offer (CEO) of the company. So, the CEO is held responsible as he was a ‘Principal Officer’ of the company.
- The High court dismissed the petition filed by the Company on 18th January, 2014
- The company filed a Special Leave Petition against the high court directive to pay 50% of TDS dues (What is special leave petition – read an article written by Co-panelist Mr. Ranganath, advocate) before the Supreme Court; and the same was dismissed by the Apex Court.
So what is next?
- The CEO has sought exemption from personal appearance before the Special Court and his lawyers assured that he will be present in court when the case is heard. (sometime now)
- The case at Special Court regarding Criminal Proceedings and the case at High Court regarding the recovery proceedings will be heard in due course and upon the judgment we will know the next course of action.
Thought for the day
Be more concerned with your character than your reputation. Character is what you really are. Reputation is just what people say are.