Ludhiana police have registered a criminal case against the directors of a Delhi-based power trading company for allegedly defrauding a Ludhiana-based steel manufacturer of approximately Rs 4 crore. The accused are alleged to have induced the steel firm to withdraw insolvency proceedings before the National Company Law Tribunal (NCLT) under the guise of a settlement. Following the withdrawal of the legal proceedings, the directors reportedly reneged on their commitment to clear the dues, thereby perpetrating the fraud.
Information was available with The Chenab Times that the case was initiated based on a complaint filed by Sanchit Arora, the authorized signatory of Aarti Steels, the aggrieved steel manufacturing company. The complaint named Instinct Infra and Power Limited, its directors Ravi Gupta and Salil Gupta, and a former director, Swati Mittal, as accused.
A preliminary investigation into the matter was conducted by the Additional Deputy Commissioner of Police-2, Ludhiana. The official’s probe report, which examined documentary evidence, NCLT records, settlement agreements, bank statements, and Ministry of Corporate Affairs (MCA) master data, indicated that the actions of the accused were part of a meticulously planned criminal conspiracy. The findings from this preliminary inquiry suggest that there are prima facie charges of fraud and breach of trust against the directors of Instinct Infra and Power Limited.
The allegations centre on a scheme where the accused allegedly promised a settlement to Aarti Steels, a company facing insolvency proceedings at the NCLT. This assurance was purportedly given to persuade Aarti Steels to halt the legal process. However, once the insolvency proceedings were withdrawn by Aarti Steels in reliance on the promised settlement, the directors of Instinct Infra and Power Limited allegedly failed to honour their commitment, leading to the alleged Rs 4 crore fraud.
The case is expected to involve a detailed examination of financial transactions between the two companies. The Ludhiana police are likely to investigate the modus operandi employed by the accused to deceive the steel manufacturer. The NCLT proceedings themselves are a complex legal mechanism designed to facilitate the resolution of financial distress for companies, and the allegations suggest a misuse of this process for fraudulent purposes.
The involvement of a Delhi-based company in a fraud involving a Ludhiana-based firm underscores the cross-jurisdictional nature of many commercial disputes and financial crimes. The investigation will likely seek to trace the flow of funds and establish the extent of the alleged conspiracy. The prosecution will need to prove beyond reasonable doubt that the accused intentionally misled Aarti Steels and acted in bad faith, thereby causing financial loss.
This incident highlights the importance of due diligence in business dealings, especially when complex legal and financial settlements are involved. Companies engaged in negotiations for settlements, particularly those involving the withdrawal of ongoing legal proceedings like insolvency, are advised to secure robust legal assurances and verify the credibility and intentions of the parties involved.
The investigation by the Ludhiana police is ongoing, and further details are expected to emerge as the case progresses through the legal system. The authorities are committed to ensuring that perpetrators of financial fraud are brought to justice.
The Chenab Times News Desk
