LexCBI, HYDERABAD versus SUBRAMANI GOPALAKRISHNAN & ANR.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A
·B
[2011) 5 S.C.R. 824
CBI, HYDERABAD
v.
SUBRAMANI GOPALAKRISHNAN & ANR.
(Criminal Appeal Nos. 985-86 of 2011)
APRIL 21, 2011
[P. SATHASIVAM AND DR. B.S. CHAUHAN, JJ.]
Bail- Grant of - Challenge to - Corporate scam -
Fudging of the Company accounts and manipulation of
C records by Chairman, M.D. and other Directors of a Company
which were certified by the auditors - Huge financial loss to
shareholders - Complaint against Chairman, Directors and
Auditors of the Company- Entrustment of investigation to CBI
- Grant of bail to two co-accused-A4 and A 10, external and
D internal auditors of the Company by the High Court -
Justification of - Held: Not justified - A4 and A 10 being
external and internal auditors of the company respectively,
played a paramount role in inflating processing assets and
bank balances of the Company - High Court erred in granting
E bail to A4 and A 10, by placing reliance on the bail order
granted in favour of A5 since the roles ascribed to A4 and A5
were not identical - Also, the bail granted in favour of all the
main accused had been cancelled by Supreme Court and
directions were issued, on basis of which the trial has to be
F concluded within the schedule time -
In the facts and
circumstances of the case and in view of the magnitude of the
scam, the High Court erred in granting bail to A4 and A 10 -
Order of the High Court granting bail in favour of A4 and A 10
set aside.
G
Several frauds and cooking books of accounts took
place in Mis SCSL Company. Many investors suffered
loss. One of the investor filed a complaint against the then
Chairman, Directors and Auditors of Mis SCSL and others
under Section 120-B read with Sections 409, 420, 467, 468,
H
824
'
l.·. ·;CBI; 'HYDERABAD v. SUBRAMANI
825
GOPALAKRISHNAN & ANR.
471"and: 477A IPC. The investigation was entrusted to
A
CBI. The High Court enlarged the respondents be A4 and
A10 external and internal auditors of the Company on bail
by imposing certain conditions.· Therefore, ·the appellant-
CBI filed the instant appeals.
Allowing the appeals, the Court
B
'
.
HELD: .1, 1 As per the complaint and investigation, A4
and A 1 O .along with .the other ac~used were involved in
one of the greatest corporate scams of the commercial
world. It has caused a financial storm not only C
throughout the country but also worldwide and by their
action and conduct, lakhs of shareholders and others
have been duped and the corporate credibility of the
nation has received a serious setback. Nobody can
underestimate the sufferings of the shareholders and
D
others due to the scam. (Para 11t {834-G-H; 83S~A]
~
1.2 The High Court, while ordering bail for A4 and
A10, heavily relied on the order of this Court dated
04.02.2010 made in the appeal which relates to AS, who
E
is a Chartered Accountant and working as a partner with
Mis Price Waterhouse which is the statutory authorized
auditors of Mis SCSL. The allegation against AS is that
while submitting the audit report for the year 2007-08,
some inflated figures were incorporated in the said report
and thereby he committed serious breach of faith as a
Member of the professional body of auditors/
accountants. Considering certain factual details for
releasing AS on bail that it could be easily assumed that
F
the trial of this case would take a long time even to start
without expressing any opinion on the merits of the case
G
regarding the nature of offence or gravity thereof
allegedly committed by AS and having regard to the fact
that he had been in custody for more than a year released
him on bail on 04.02.2010 by imposing certain conditions.
[Para 13) [835-D-F; 836-B]
H
826
SUPREME COURT REPORTS
[2011] 5 S.C.R.
A
1.3 In view of the appeal filed by A5 against the
dismissal of his bail application by the High Court, this
Court considering certain facts released AS' on bail
subject to certain conditions. There is no similarity in
respect of the role assigned to A4 and A5. After going
B through the materials, prima facie, the assumption that
the role assigned to A-4 and A-5 is identical is incorrect.
Though both A4 and A5 were Auditors of M/s SCSL at the
relevant time, admittedly, A5 had worked only for a period
of one year whereas A4 was in-charge of auditing the
c accounts of M/s SCSL for a period of seven years, i.e.,
from 2000 to 2007. Three charge-sheets and the
imputations made against both these accused persons
have been Excerpt shown. Read the full judgment & AI analysis in Lexace.