Brief Note in the Matter of SFIO V Jagat Agro Commodities Pvt. Ltd. & Ors.

Criminal
Complaint No. 418 of 2022

This matter stems from the order of Hon’ble National Company Law Tribunal in Company
Petition No. 10(MB)/2016, in which directions were issued to SFIO to investigate in the
affairs of Jagat Agro Commodities Pvt. Ltd. (“Company”) pursuant to which different
investigation team was setup. Based on the investigation report submitted by SFIO, the
Hon’ble NCLT by order dated 26.09.2016 observed large-scale fraud by fudging of accounts
for taking loan and increasing the limits.

Based on the above order of Hon’ble NCLT, Ministry of Affairs (“MCA”) directed the SFIO
to book the responsible persons. Investigation report into the financial affairs of company was
submitted by SFIO on 07.04.2022 and the MCA by order dated 18.04.2022 issued direction to
initiate prosecution against the responsible person under the offence of Section 447 of
Companies Act, 2013.

The content of the investigation alleges that, the directors of company has deliberately shown
excess number of godowns and has availed credit facilities from various banks. 36 godowns
worth Rs. 201.14 Cr were projected by the directors in Company Petition No. 10(MB)/2016
whereas only 20 godowns worth Rs 37.80 Cr could found by the SFIO during physical
verification of the stocks and the godowns.

The content of the Investigation also points out irregularities in the functioning of the banks
and officers of the bank while carrying out inspection of the stocks and godowns for further
granting of loans.

The complaint by the SFIO alleges that though the Accused No. 4 named Satish Kumar Pawa
was not directly associated with Jagat Agro Commodites but he used to attend joint meetings
with the bank as the promoter of the company and was controlling the affairs of the company
through his wife Accused No. 3 Sudha Satish Pawa. It is also alleged that he has presented
himself as the CEO of the company which was also displayed on the website.

The complaint also alleges that Accused No. 4 Satish Kumar Pawa and Accused No. 2 Sant
Lal Agrawal were controlling the affairs of the company and documents were signed by both
of them to avail loan facilities from the bank after fudging the financial accounts of the
company.
Investigation of the SFIO alleges that funds of the company were siphoned off to related
parties of company by showing them as “Rent” and “Salary” to the godowons which were
owned by the directors themselves or persons closely associated with them. It is also alleged
that directors had siphoned off funds amouting to Rs. 349.19 Cr into their personal accounts
during year 2013-2014 and hence has committed fraud as per section 447 of the Companies
Act, 2013