Delhi High Court Refuses To Stay Investigation In FIR Against Ashneer Grover, His Wife For Alleged Misappropriation Of Funds In BharatPe

The Delhi High Court on Thursday refused to stay investigation in the FIR registered against former BharatPe Managing Director Ashneer Grover and his wife Madhuri Jain Grover for alleged misappropriation of funds and causing loss of about Rs. 80 crores to the fintech company.

Justice Anup Jairam Bhambhani issued notice on the plea moved by Ashneer Grover and Madhuri Jain Grover seeking quashing of the FIR registered by Delhi Police’s Economic Offences Wing on the complaint by BharatPe, as well as their application seeking stay of the investigation.

“However, no case is made out atleast at this stage for staying the investigation,” the court said.

The duo, in the alternative, also sought direction on the concerned IO to give them advance written notice in case their custody is needed. The court granted them liberty to adopt other remedies available to them under CrPC and other laws.

The counsel representing the duo submitted that a perusal of the FIR would show that the allegations relate essentially to certain transactions relating to the GST and other matters pertaining to management and affairs of BharatPe which the couple were entitled to conduct as directors and for which they also had authority from the board of directors.

It was further contended that both Ashneer and Jain, being promoters or directors of BharatPe, were involved in nurturing of the company from a small venture to a valuation of Rs. 20,000 crores in 2023.

The counsel also said that the allegations in the FIR do not disclose any criminality on the part of the duo and that the annual report of 2021-22 of the company in question stated that no instances of fraud qua them were reported by the statutory auditors to the board of directors.

On the other hand, the issuance of notice was vehemently opposed by Senior Advocates Vikas Pahwa and Dayan Krishnan appearing for the fintech company on the ground that the matter involves complex financial transactions which were undertaken by the duo which amount to defalcations of the funds of BharatPe.

It was submitted that the duo availed input tax credits under GST law in relation to bogus transactions where the vendors did not exist, committed acts of siphoning of company’s funds and also forged documents regarding recruitments made in BharatPe to their benefits.

During the hearing, Justice Bhambhani said that while he was inclined to issue notice in the plea, there cannot be any stay on the probe.

“These are very complex economic transactions and allegations and counter allegations involving transactions issue etc. How can this form subject matter of quashing? You have to make out an open and shut case where a bare reading of the FIR shows that no offence is made out. Does it sound that kind of an FIR?”, the judge asked duo’s counsel.

Justice Bhambhani also added: “Assuming that you say once the board of directors said that no fraud was reported by the auditors qua the petitioners but does that prevent the FIR being investigated? Even the board of directors may be involved in certain ways. I don’t know.”

“All of that is a matter of detailed consideration and the board of directors cannot give you a clean chit and you cannot give a clean chit to yourself. Who else is involved we don’t know. It doesn’t sound like a case where even malice would mean that the matter should be scotched here and now.”

Title: MADHURI JAIN GROVER & ANR. v. STATE OF NCT OF DELHI & ANR.

Citation: 2023 LiveLaw (Del) 475