The recent order by the apex court paves way to restart proceedings against the accused, including H&M's chairman V Ramachandran, in the vMoksha case

The Supreme Court has dismissed the special leave petitions (SPL) filed by Helios & Matheson Information Technology Ltd (H&M) and Pawan Kumar, the then chief executive officer of vMoksha Technologies. Both have challenged the Bombay High Court (HC) order, which allowed the revision application of vMoksha’s co-founder Rajiv Sawhney against H&M.

Dismissing the SPLs, the apex court said, “In the result, we see no reason to interfere with the order passed by the High Court in exercise of our jurisdiction under Article 136 of the Constitution of India.”

In an order passed on 6 May 2011, the HC had restored an order passed by the Additional Chief Metropolitan Magistrate (ACMM) of the 47th Court at Mumbai, to restart proceedings against the accused, including H&M's chairman V Ramachandran.

While dismissing the SLPs, the SC said, “It is interesting to note that even in the present SLPs the petitioner has filed an unsigned copy of the alleged minutes of the meeting   dated 19th July, 2005. We do not think that we can possibly look into that document without proper proof and without verification of its genuineness. There was and is no clear and unequivocal admission on the record, at least none was brought to our notice, regarding the genuineness of the document or its probative value.”

 Earlier, Justice JH Bhatia of the Bombay HC in an order had said, “The Additional Sessions Judge, on the basis of facts disclosed in the complaint, had also come to the conclusion that a prima facie case was made out. Having come to such a conclusion, the judge embarked upon the consideration of other grounds and quashed the order, which was well-reasoned and based on facts disclosed in the complaint. Therefore, in my opinion, it is a fit case where this Court should, under its inherent power under Section 482, interfere and quash the order passed by the Additional Sessions Judge.”

Moneylife had previously reported about the bruising battle between H&M and Rajeev Sawhney.

The case dates back to 2005, when shareholders of vMoksha, an IT company, decided to sell its three units. The company appointed PriceWaterhouseCooper, who found out H&M as potential buyer for vMoksha's three units. On 11 May 2005, both the companies signed a share purchase agreement under which V Ramachandran, chairman of H&M, was to pay $19 million for the three units, out of which $4 million was to be paid to Pawan Kumar, the then chief executive of vMoksha and also former CEO of the controversial DSQ Software, as earn out. Although, Pawan Kumar and his family members were also stakeholders in vMoksha, Mr Sawhney later bought out their stake as well.
 
Mr Ramachandran was supposed to pay $13.4 million to Mr Sawhney, after paying some amount to Tapan Garg and Madhuri Garg, son and wife of Pawan Kumar for their holding. Mr Sawhney soon realised that he had been kept in the dark about many aspects of the deal. For instance, he found that instead of receiving $19 million, a bank account had been 'fraudulently' opened in the State Bank of Mauritius in vMoksha's name and used to borrow $13.5 million, using a fake board sanction and false entries. That money was remitted to H&M ostensibly for subscription of redeemable preference shares on 28 June 2005.
(Read more - http://www.moneylife.in/article/771.html)

Moneylife had also reported on how the market regulator, the Securities and Exchange Board of India (SEBI), had fined H&M Rs50 lakh for making false announcements to influence the stock price and hiding information about acquisition of vMoksha.