The main legal point established in the judgment is the requirement for specific averments against accused directors and their active involvement in the alleged offenses, emphasizing the principle of vicarious criminality and the liability of individuals in charge of and responsible for the conduct of the business of the company.

JUDGMENT

1. The instant appeal has been filed under Section 401 of the Code of Criminal Procedure, 1973(`CrPC') by Securities and Exchange Board of India, 1992 (`SEBI') assailing the order dated 24.03.2009 passed by the Learned Additional Sessions Judge in Revision Petition bearing No. 61/2008 titled `Arihant Jain v. State & Anr.' (`Impugned Order'). Vide the Impugned Order, the Learned Additional Sessions Judge set aside the summoning order dated 20.03.2000 passed by the Ld. Trial Court qua Mr. Arihant Jain, i.e., Respondent No.1 herein.

2. It emerges that SEBI had filed a Complaint under Sections 24 and 27 of the Securities and Exchange Board of India Act, 1992 (`SEBI Act') and Regulations 4(a), 4(e) and 4(e) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 read with Regulation 6(1), 6(3), 8(1), 10(1) and 10(2) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1994 and Section 200 of the CrPC against inter alia Mr. Arihant Jain, the Accused No. 13 therein (`Complaint'). It was alleged that one M/s Ideal Hotels and Industries Ltd. (`IHIL') had bought back its shares through its own group companies, their directors, and friends and family, thereby inter alia artificially raising the price of IHILs securities. At the relevant time, Mr. Arihant Jain, was acting as the Director of IHIL.

3. Vide Order dated 29.03.2000, the Ld. ACMM, Tis Hazari, Delhi was pleased to issue summons to all the accused persons, including Mr. Arihant Jain. Thereafter, a Revision Petition under Section 397, CrPC for setting aside the Summoning Order dated 29.03.2000 was filed by Mr. Arihant Jain.

4. Vide Impugned Order dated 24.03.2009, the Learned Additional Session Judge set aside the summoning order qua the Respondent No.1 herein while observing that the Complaint filed by the Appellant herein did not contain any material to suggest that the Respondent No. 1 herein was responsible for the carrying out the business of IHIL. Aggrieved by this order, the instant Revision Petition was filed by the SEBI.

5. In sum and substance, the Ld. Counsel for the Petitioner has argued that the Impugned Order ought to be set aside since the averments in the complaint, when read in their entirety, establish a prima facie case against the Respondent No. 1.

6. Per contra, the counsel for Respondent No. 1 has defended the propriety of the Impugned Order by stating not only that the Summoning Order was quashed qua similarly placed accused persons but also that without specific averments in the complaint detailing the role of each Accused Person, the Summoning Order was unsustainable.

7. Heard learned Counsel for the Appellant and the learned Counsel for the Respondent and perused the material on record.

8. At the outset, this Court finds it prudent to go through the averments in the complaint. The SEBI had filed the complaint against 23 accused persons under Sections 24 and 27 of the Securities and Exchange Board of India, 1992 and Regulations 4(a), 4(e) and 4(e) of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995 read with Regulation 6(1), 6(3), 8(1), 10(1) and 10(2) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1994 and Section 200 of the CrPC. It was stated that SEBI had received a complaint dated 27.06.1996 alleging that the Accused No. 1 i.e., IHIL was involved in price rigging and insider trading.

9. Upon the reception of this complaint, SEBI conducted a preliminary investigation into the purchase of IHIL shares which revealed unusually high fluctuation in the price of shares between 30.01.1996 and 29.02.1996. It was also noted that the volume of trade was also substantially high during this period. Thereafter, SEBI obtained details of entities and individuals who had bought or sold the shares of IHIL. This revealed that certain companies i.e., M/s Dali Fashions Pvt. Ltd.(Accused