Calcutta HC Rejects Eraaya Lifespaces’ Plea to Quash Criminal Conspiracy FIR in Alleged $120M Bond Evasion Plot
Kolkata, 2nd July 2026: In a significant development involving corporate governance and financial integrity, the Calcutta High Court has dismissed a quashing petition filed by publicly listed company Eraaya Lifespaces Limited and its top brass. The ruling paves the way for a full criminal investigation into a suspected conspiracy where a “friendly” lawsuit was allegedly orchestrated before the National Company Law Tribunal (NCLT) using forged signatures, allowing the company to evade multi-million-dollar bond obligations.
In a judgment delivered on July 1, 2026, Dr. Justice Ajoy Kumar Mukherjee dismissed Revisional Application CRR 2895 of 2025. The petition, filed jointly by Eraaya Lifespaces, promoter-director Bikash Garg, Company Secretary Basudha Agarwal, and the company’s Chief Financial Officer (CFO), sought to throw out a criminal case pending before the Chief Judicial Magistrate in Murshidabad.
The accused face serious charges under the Bharatiya Nyaya Sanhita (BNS), 2023, including criminal conspiracy, cheating, and the forgery of valuable securities (Sections 61(2), 318(4), 336, 338, and 340(2)).
The Alleged Corporate Plot: A “Friendly” Lawsuit
The criminal case originated from an FIR lodged at the Baharampore Police Station by a shareholder of the company. According to the complaint, another shareholder, Sunil Agarwal (Accused No. 1, who is not a petitioner), filed a company petition before the NCLT New Delhi (Company Case No. 11 of 2025) challenging an Offering Circular issued by Eraaya on August 23, 2024.
To satisfy the stringent legal threshold under Section 244(1) of the Companies Act—which requires a minimum number of shareholders to file such a petition—Sunil Agarwal presented a Special Power of Attorney (SPA) claiming to represent 103 shareholders. On February 13, 2025, he successfully secured a status quo order from the Delhi NCLT.
However, the complainant subsequently discovered that the SPA was a complete fabrication. The signatures of several shareholders had been forged, and the notary advocate listed on the document, Mr. Rakesh Kumar Jain, formally denied ever executing or notarizing it during the police investigation.
How the Company “Benefited” From Being Sued
While lawsuits are typically adversarial, the complainant alleged that this NCLT petition was a collusive sham designed to benefit Eraaya. By obtaining the status quo order, Eraaya Lifespaces was legally relieved from:
- Paying interest on $120 million raised through Foreign Currency Convertible Bonds (FCCBs).
- Converting those convertible bonds into equity.
- Pledging its shares to creditors.
The complainant asserted that Sunil Agarwal had no personal financial benefit in blocking the FCCB process. Instead, the “ultimate beneficiary” was Eraaya itself. To pull off the scheme, Eraaya’s management allegedly acted “hand in glove” with the nominal challenger. The prosecution claims that internal shareholder registries (which are highly confidential) and internal email communications were leaked directly to Sunil Agarwal from the Outlook ID of Company Secretary Basudha Agarwal and the CFO to facilitate the forgery.
Furthermore, the plot thickened as the court noted a parallel SEBI investigation. On the exact same day the NCLT status quo order was passed (February 13, 2025), SEBI had issued a show-cause notice to director Bikash Garg and shareholder Sarad Kumar Bagga (whose signatures were among those allegedly forged on the NCLT SPA) for orchestrating a manipulative share-pricing scheme.
The Legal Battle: Jurisdiction and Malafides
Defending the corporate executives, Senior Advocates Sandipan Ganguly and Ayan Bhattacharjee raised a three-fold argument:
- Absurdity: It is legally untenable to argue that a company conspired to have itself sued by its own shareholders.
- Jurisdiction: All the accused are Delhi residents, the NCLT case was filed in Delhi, and the SPA was allegedly signed across Delhi, Gujarat, and Haryana. Therefore, the Baharampore Police in West Bengal had no territorial jurisdiction.
- Malafides: The complaint was filed in a remote location in Murshidabad—far from the nearest airport in Kolkata—solely to harass Delhi-based executives and engage in “forum hunting”.
Opposing the quashing plea, Senior Advocate Aman Lekhi, representing the complainant, argued that the conspiracy was self-evident. He pointed out that rather than taking disciplinary action against Company Secretary Basudha Agarwal for the massive leak of internal company emails, Eraaya’s management chose to join hands and file the quashing petition alongside her.
The High Court’s Verdict: Police Probe Cannot Be Throttled
Justice Mukherjee rejected the petitioners’ arguments, holding that an investigation is at too nascent a stage for judicial interference under Section 528 of the BNSS.
Addressing the jurisdictional challenge, the Court ruled that under Section 173(1) of the BNSS, 2023, the police have an explicit statutory mandate to register an FIR “irrespective of the area where the offence is committed” (often referred to as a “Zero FIR” framework).
Justice Mukherjee relied heavily on the landmark Supreme Court judgments in Satvinder Kaur v. State (GNCT of Delhi) (1999) and Rasiklal Dalpatram Thakkar v. State of Gujarat (2010), which established that lack of territorial jurisdiction is not a valid ground for a High Court to quash an FIR at the threshold of a police investigation.
Furthermore, the Court dismissed the “malafide” argument by citing Lakhwant Singh v. Jasbir Singh (2008), reiterating that once a cognizable offence is disclosed, the alleged bad faith of an informant becomes secondary to the material collected during the investigation.
Concluding the judgment, Justice Mukherjee invoked the Supreme Court’s warning in Vinod Raghubanshi v. Ajay Arora (2013) that courts must not “kill a stillborn child” by stifling proper prosecutions at their inception.
“I do not find much force in the argument that other petitioners cannot have any role in the alleged conspiracy at this stage,” Justice Mukherjee observed, adding that the judiciary must not usurp the domain of the police. The High Court subsequently dismissed CRR 2895 of 2025 and directed the investigating agency to make “every endeavour” to conclude the criminal investigation at the earliest.
