The main legal point established in the judgment is the significance of SEBI's findings in establishing the misuse of Power of Attorney, misappropriation of funds, and securities belonging to investors, which influenced the court's decision to uphold the registration of the crime and allow the investigation to proceed.

JUDGMENT

Maheshan Nagaprasanna, J. - The petitioner in the subject petition calls in question registration of crime in Crime No. 84 of 2021 registered for offences punishable under Sections 107, 424, 427, 34, 418, 421, 403, 406, 409, 411, 413, 414, 420, 468, 120, 120A, 378, 405, 410, 415, 425, 463, 464 and 117 of the IPC and pending before the IV Additional Chief Metropolitan Magistrate, Bangalore City.

2. Brief facts leading to the filing of the present petition, as borne out from the pleadings, are as follows:-

M/s. Karvy Stock Broking Limited (hereinafter referred to as 'the Company' for short) is a Company involved in the business of share broking, financial advisory and other allied services. The petitioner is presently the Director of the Company. A complaint comes to be registered against the Company on 8-09-2021 by one M/s. B.K.G. Mining Private Limited and its officers alleging that the Company through its officers has misutilized the Power of Attorney granted to it on the investments made which has resulted in huge losses to the investor/complainant for the wrong doing of the Company. The complaint becomes a crime in Crime No. 84 of 2021 for several offences noted supra. Registration of FIR leads the petitioner/Company to this Court in the subject petition.

3. Heard Sri C.V. Nagesh, learned senior counsel appearing for the petitioner, Smt. K.P. Yashodha, learned High Court Government Pleader for respondent No. 1 and Sri Kiran S. Javali, learned senior counsel appearing for respondent No. 2.

4. The learned senior counsel representing the petitioner taking this Court through the documents appended to the petition, would contend that it is purely a matter of contract between the parties and there is no element of criminal breach of trust or cheating or any of the offices so alleged. The crime is registered in a reckless manner. Definitions of offences are made as offences and since there is no application of mind in registering the crime, this Court should interfere and terminate such proceedings which are recklessly instituted against the petitioner.

5. On the other hand, the learned senior counsel representing the 2nd respondent/complainant would vehemently refute the submissions to contend that investors like the complainant invested their investments with the petitioner, who is the Director of the Company to deal with the funds in a proper manner in accordance with law and not to invest in places where it is convenient for the petitioner and then show up losses to them. The Securities and Exchange Board of India ('SEBI' for short) has clearly indicated as to what are the activities done by the petitioner and has further indicated how the petitioner has misutilized the Power of Attorney executed by the investors like the complainant.

6. In reply to the said submission, the learned senior counsel for the petitioner would contend that SEBI, being a statutory body having enquired into the allegations made against the petitioner has in fact taken penal action of cancellation of licence under the provisions of the Securities and Exchange Board of India Act, 1992 ('SEBI Act' for short). Therefore both the proceedings under the SEBI Act and for offences under the IPC are not maintainable. Apart from this, he would submit that there is gross delay of 6 years in registering the crime as investments have been made in the year 2015.

7. I have given my anxious consideration to the submissions made by the respective learned senior counsel and perused the material on record.

8. Since the matter is at the stage of FIR, there are no facts that have emerged after the investigation that are before the Court for consideration. The afore-quoted facts, though limited, are not in dispute. What needs to be considered on the complaint and the proceedings before the SEBI is:

'Whether registration of crime was in accordance with law and further proceedings are to be permitted or not?'

9. The complaint so registered narrates that the accused approached t