DIRECTORATE OF ENFORCEMENT Vs. PRAKASH INDUSTRIES LTD

JUDGEMENT

(1.) Through the present Appeals, the Appellant assails the correctness of the Judgment and Order dtd. 24/1/2023 [hereinafter referred to as 'IJ'] passed by the learned Single Judge [hereinafter referred to as 'LSJ'] in Writ Petitions which raised substantially similar challenges. Since, both the Appeals before this Court emanate from a similar dispute involving substantially similar questions of fact and law, they are, with the consent of learned counsel for the parties, being disposed of by this consolidated judgment. Nevertheless, for the ease of reference and with the consent of the parties, LPA 102/2023 is being treated as the lead case.

(2.) The dispute between the parties arises from the allocation of Fatehpur Coal Block in favour of M/s Prakash Industries Limited [hereinafter referred to as 'PIL']. The primary allegations against PIL are two-fold. Firstly, it is alleged that PIL obtained the allocation of coal block, through fraudulent means; and secondly, prior to actual and formal allocation made in favour of PIL, it allegedly misrepresented before Bombay Stock Exchange [hereinafter referred to as 'BSE'] that it had already received the allocation. This misrepresentation made by PIL before BSE purportedly caused an artificial rise in the share price of PIL, following which shares were sold on a preferential basis, thereby generating alleged proceeds of crime.

(3.) The present round of litigation traces its genesis to an application dtd. 12/1/2007, submitted by PIL to the Ministry of Coal for allocation of Fatehpur Coal Block for setting up a power plant, pursuant to a newspaper advertisement. While submitting the said application, PIL misrepresented its net worth as Rs.532.00 crores as on 31/3/2006, whereas, as per the Directorate and CBI, its actual net worth was (-) Rs.144.16 crores at the relevant time.