1. This petition is filed u/S.482 of Cr.P.C. to quash Annexure-I complaint pending before Chief Judicial Magistrate Court, Ernakulam as C.C.No.137/2009. The above complaint was filed by the 2nd respondent alleging the offence punishable u/S.406, 409 r/w.34 IPC.

2. The petitioners are 3rd, 4th and 5th accused in the above case. The petitioners contended that the 1st accused is a share trading company registered with SEBI. Annexure-II Client Registration Kit shows the high risk involved in the transactions, being speculative business, which was disclosed to the 2nd respondent before registration of the accepted terms. The petitioners were the employees of the 1st accused company. They were not directly involved in any of the alleged transaction. Now they were resigned from the company and doing independent work in other companies. There is no allegation in the complaint that the invested funds were misappropriated by the petitioners for their own use. Moreover, a perusal of the complaint shows that no materials are produced before Court to make a prima facie case against them. Hence, the inherent jurisdiction may be invoked to quash Annexure-I complaint in this case.

3. The 2nd respondent’s allegation in Annexure-I complaint is that he is a business man mainly engaged in share investing business and the 1st accused is a share- broking company registered under the provisions of the Companies Act, having its branch office at Ernakulam. The other accused persons are office bearers and person in charge of the branch of the company at Ernakulam. In January, 2000, a person working in the 1st accused company telephoned the 2nd respondent introducing as the branch manager and informed that the firm wish to deal with the share trading and investment business with the 2nd respondent. He further informed that if the 2nd respondent opens and operates a share dealing account through his company’s branch at Ernakulam, the 2nd respondent could make enormous profit through the advices and services they offer. As per the assurance, he signed a member-client agreement. In the year 2006, the 3rd accused advised to do the speculative section of share operation. The accused persons stated to the 2nd respondent that he would get greater and quicker profit from this type of share business than normal investments. In November 2006, the 2nd respondent received a contract note of the Futures transaction of a company called ‘Escorts’ sent by the accused persons. But, without the consent of the 2nd respondent, the accused persons purchased the Escorts futures in the account of the 2nd respondent in large quantity. In that transaction, the 2nd respondent sustained huge loss. In November also, he received another contract notes of Escorts futures, in which also it was found that the 1st accused had violated the lawful directions of the 2nd respondent. Due to that illegal act, 2nd respondent sustained a huge loss of Rs.1,79,755.37/- and due to criminal misappropriation, he also sustained a loss of Rs.73,650/-. In the circumstances, the 2nd respondent filed Annexure-I complaint before CJM, Ernakulam. Hence, the petitioners, who are the employees of the 1st accused approached this Court with this petition.

4. The learned counsel for the petitioners contended that the petitioners have no direct contact with the transaction, which caused huge loss to the 2nd respondent. There is no entrustment of money with them, no misappropriation of such amount and no offence u/s.406, 409 r/w.34 IPC were attracted against them. The 1st accused company is a firm incorporated under the Companies Act and is working as per the Statute. The entire business transaction of the Company is being carried out strictly in accordance with the guidelines laid down by the Securities Exchange Board of India. The entire trading is based upon speculative business and no guarantee or assurance for profit can be given by the share trading company. Therefore, a high level risk is involved