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SUPREME COURT OF INDIA
B.R. GAVAI, K. V. VISWANATHAN, JJ.
CBI BS And FC Mumbai – Appellant
Versus
Manojdev Gokulchand Seksaria And Anr. – Respondents
Criminal Appeal Nos. 3481-3482 of 2024 (@Special Leave Petition (Crl.) Nos. 12344-12345/2022)
Decided On : 22-08-2024
Indian Penal Code, 1860 – Sections 420, 467, 468 and 471 read with Section 34 [Bharatiya Nyaya Sanhita, 2023 – Sections 318(4), 338, 336(3) and 340(2) read with Section 3(5)] – Criminal Procedure Code, 1973 – Section 482 [Bharatiya Nagarik Suraksha Sanhita, 2023 – Section 528] – Constitution of India – Article 226 – Cheating and forgery – Common intention – Cognizance of offences – Quashing petition – Even though first Writ Petition was filed in 2018 after cognizance orders of 10.03.2008 and 19.03.2008, respondent did not make specific prayer challenging cognizance orders – Respondent merely challenged FIR and charge-sheet – It is quite inexplicable why no challenge was made to cognizance orders – Considering earlier order of Division Bench and order of this Court granting liberty to file a fresh petition, present case in second-round ought to have been heard by Division Bench – As to whether respondent had made out a case for quashing proceedings will be independently decided by Division Bench which will now hear the matter on remand. (Paras 13, 20 and 23)
Facts of the case:
Present appeals arise out of judgement and order dated 05.01.2022 passed by Single Judge of High Court of Judicature at Bombay in Writ Petition No. 245 of 2020 and Writ Petition No. 730 of 2020.
Findings of Court:
Parties are at liberty to approach Division Bench hearing the matter for appropriate extension/modification of this interim order and Division Bench shall after hearing the parties make such order as it deems fit.
Result : Appeals allowed.
JUDGMENT :
K.V. Viswanathan, J.
1. Leave granted.
2. The present appeals arise out of the judgement and order dated 05.01.2022 passed by the Learned Single Judge of the High Court of Judicature at Bombay in Writ Petition No. 245 of 2020 and Writ Petition No. 730 of 2020. In view of the fact that we propose to set aside the judgement and remand the Writ Petitions to be heard a Division Bench of the High Court, only a brief reference to the facts of the case is being made hereinbelow.
3. The appellant-Central Bureau of Investigation (hereinafter referred to as the ‘CBI’), on 20.02.2006, registered a Criminal Case No. RC3(E)/2006/BS&FC/Mumbai against 19 accused persons on the basis of a written complaint made by R. Ravichandran, Chief General Manager, Securities and Exchange Board of India (hereinafter referred to as the ‘SEBI”). The allegation was with regard to certain fraudulent activities committed in the Initial Public Offering (IPO) of the shares of Yes Bank Ltd., which opened for subscription from 15.06.2005 to 21.06.2005.
4. On 21.02.2006, the CBI registered another criminal case being Criminal Case No. RC4(E)/2006/CBI/BS&FC/Mumbai against 26 accused persons on the basis of a similar complaint. This time, it pertained to the fraudulent activities committed in the Initial Public Offering (IPO) of the shares of Infrastructure Development Finance Company Ltd. (IDFC), which opened for subscription from 15.07.2005 to 22.07.2005. In this First Information Report (hereinafter referred to as the ‘FIR’), the respondent was specifically named.
5. On 29.09.2007, a chargesheet was filed in Criminal Case No. RC4(E)/2006/CBI/BS&FC/Mumbai after completion of investigation vide Special Case No. 47 of 2007 against 22 accused persons including the first respondent herein for offences punishable under Section 120-B read with 420, 467, 468 and 471 of IPC and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 and Section 68-A of The Companies Act, 1956. A supplementary chargesheet was also filed in Criminal Case No. RC4/E/2006/BS&FC Mumbai which was numbered as Special Case No. 74 of 2014 and further 21 accused persons were added with the Original 22, totaling 43 accused.
6. Similarly, on 19.10.2007, with regard to Criminal Case No. RC3(E)/2006/BS&FC/Mumbai, a chargesheet was filed vide Special Case No. 48 of 2007 against 16 accused persons including the first respondent under Section 120-B read with 420, 467, 468 and 471 of IPC and Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 and Section 68-A of The Companies Act, 1956. Similarly, a supplementary chargesheet was also filed in Criminal Case RC3/E/2006/BS&FC/Mumbai which was numbered as Special Case No. 22 of 2014 and further 9 accused were added, totaling the number of accused to 25.
7. On 10th March, 2008, on the basis of the charge-sheet and material produced before the Special Court CBI, the said Court took cognizance against the accused persons including the respondent for the offences mentioned above in Special Case No. 47 of 2007. Similarly, on 19.03.2008, on the basis of the charge-sheet and material produced by the CBI, the Special Court CBI took Cognizance against the accused persons including the respondent for the offences mentioned above in Special Case No. 48 of 2007.
8. In the meantime, the respondent approached SEBI for a consent order in terms of SEBI Circular No. EFD/ED/Cir-1/2007 and on 04.09.2009, the High-Powered Advisory Committee of SEBI in terms of the Circular directed the respondent to pay Rs. 2,05,18,968/- being the unjust profit made by the respondent and Rs. 20,51,897/- being a percentage of the disgorged amount towards settlement charges. The respondent paid the said amount. On 07.12.2009, SEBI passed the consent order disposing of the proceedings under Section 11(4) and 11B of the SEBI Act, 1992.
9. It is at this stage that the respondent approached the High Court by filing Writ Petition No. 406 of 2018 under Article 22
Merits of quashing proceedings will have to be independently decided by Division Bench which is going to hear the matter on remand.
Point of law: Criminal cases involving offences which arise from commercial, financial, mercantile, partnership or similar transactions with an essentially civil flavour may in appropriate situations....
Point of Law : Hon’ble Supreme Court has observed that at stage of framing of charge, trial court is not to examine and assess in detail material produced by prosecution nor to consider sufficiency o....
Composite petitions challenging FIR, charge-sheet, and cognizance should be heard by a Division Bench under the Bombay High Court Appellate Side Rules, ensuring uniformity and avoiding jurisdictional....
Settlement of monetary disputes does not automatically justify the quashing of criminal proceedings in cases involving serious allegations of criminality.
Redundant criminal proceedings should not be allowed to continue.
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