SC convicts finance company promoter for contempt

The Supreme Court has convicted K S Raju, Promoter Director of Hyderabad-based Nagarjuna Finance Limited (NFL), for contempt of court for not refunding the money to its investors as directed by the Company Law board.
A bench of justices Vikramajit Sen and Prafulla C Pant allowed 60 days time to the company and Raju to return the money, failing which he has to undergo imprisonment for six months.
It upheld the single bench order of the Andhra Pradesh High Court which had convicted the company and Raju for contempt of court and awarded six months jail term and fine of Rs 2,000. The bench set aside the order passed by division bench of the high court which had set aside their conviction and sentence.

"If the amount is paid to the present appellant as directed by this court within 60 days, the sentence shall be reduced to the extent of fine only," it said.
"In our opinion, K S Raju wilfully disobeyed the order of CLB and breached the undertaking given to CLB, and thereby committed Contempt of Court subordinate to HC as such the division bench of the High Court has erred in law in allowing the contempt appeal by Raju and setting aside his conviction and sentence, recorded against him by the learned single judge," it said.
The bench passed the order on plea filed by one of the investors E Bapanaiah, who had deposited Rs 4 lakh with NFL in 1997 after the company promised that the amount would multiply to double within 45 months.

Bapanaiah had filed contempt petition in HC after the company failed to return the money alleging there is a wilful disobedience of order passed by Company Law Board, Southern Region Bench, and for breach of undertakings including one filed by Raju before CLB on refunding the money.