Delhi HC holds EOW closure report, directs special commissioner to examine investigation

New Delhi [India], January 22 : The Delhi High Court directed the Special Commissioner of the Economic Offences Wing (EOW) to examine the investigation and file a report within four months, in a writ petition filed by CD Pharma Pvt. Ltd. alleging that the Italian lawyer of the Swiss accused unlawfully provided access to the entire investigation file by the EOW.
The petitioner CD Pharma is the Indian subsidiary of an Italian multinational company that manufactures drugs and pharmaceuticals. The genesis of the petition is an FIR that was registered against the accused persons and the consequent investigations conducted by the economic offences wing of the Delhi Police.
According to the petition, the allegations against the accused relate to the alleged offences of cheating, forgery and criminal breach of trust under the provisions of Sections 420, 406 and 468 of the Indian Penal Code.
Based on arguments addressed by Rohit Kochhar and Krishna Vijay Singh, advocates for the petitioner, the bench of Justice Yogesh Khanna stated that "needless to say, the closure report, pending before the Magistrate be kept in abeyance without drawing any inference till this fresh report is filed. It is only thereafter the concern Metropolitan Magistrate shall consider both the reports to proceed further as per law."
Court also directed the Special Commissioner EOW to examine the veracity of the internal notings filed by the EOW before the High Court during the course of the proceedings.
The petition claimed that accused Prof Claudio De Simone, in course of pending money laundering proceedings against him in Switzerland, filed a letter dated March 10, 2020, written by his lawyer Stefano Bagianti. The letter contended that EOW had decided to file a closure report in the FIR registered against De Simone, stating that the Italian lawyer flew to India between July 24 to 26, 2019 to hold meetings with the EOW officers. During the said meetings, he was allegedly unlawfully allowed to inspect the entire case file in violation of Section 172 of the Code of Criminal Procedure (CrPC), which specifically bars an accused or his agent from gaining access to the investigation records.
According to the submissions made by Rohit Kochhar and KV Singh, no worthwhile investigation was conducted by the investigation officer in a complex case of alleged fraud committed by the two directors, and the closure report merely parrots the version of the accused. They further argued that the EOW has filed a closure report in complete disregard of principles of corporate governance.
The writ petition alleged that the two accused directors had fraudulently and systematically siphoned large sums of money from the complainant company from 2009 to 2014 using their own companies in India, Italy and Switzerland, created forged agreements in May 2014 backdated to 2010/ 2011, and transferred the trademarks, drug import licence and the entire business of the petitioner company in July 2014 to an Indian company that the accused had established as a clone of the petitioner.