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2024 Supreme(Online)(GUJ) 25406
HIGH COURT OF GUJARAT
MR. JUSTICE NIRAL R. MEHTA, J
AJITJI PARTHIJI PRATAPJI THAKOR – Appellant
Versus
STATE OF GUJARAT – Respondent
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE FIR/ORDER) NO. 16165 of 2021
MR PIYUSH TRIVEDI FOR MR PRATIK B BAROT(3711), MR HK PATEL, APP
Only specified authorities can file complaints under the Securities Contract Regulation Act, and allegations under IPC sections 406 and 420 were insufficient to sustain the FIR.
Headnote:(A) Code of Criminal Procedure, 1973 - Section 482 - Indian Penal Code - Sections 406, 420, 120B - Securities Contract Regulation Act, 1956 - Sections 13, 14 - Information Technology Act - Sections 66
(C), 66
(D) - Petitioners sought to quash FIR for alleged financial fraud and conspiracy involving unauthorized trading activities. (Paras 1, 2, 4, 6)
(B) Maintainability of FIR - Court held that police cannot file FIR under Securities Contract Regulation Act, 1956 as per Section 26, which mandates complaints only from specified authorities. (Paras 4, 7, 9)
(C) Ingredients of IPC offences - Court found that allegations under Sections 406 and 420 were not substantiated, thus quashing the FIR. (Paras 8, 9)
Facts of the case:
Petitioners challenged FIR for financial fraud involving unauthorized trading through a mobile application, claiming lack of maintainability and insufficient evidence for IPC offences.
Findings of Court:
The FIR and all consequential proceedings were quashed due to lack of jurisdiction for police to file under the Securities Contract Regulation Act.
Issues: Whether the FIR was maintainable under the Securities Contract Regulation Act and if the ingredients of IPC offences were established.
Ratio Decidendi: The court ruled that only specified authorities can file complaints under the Securities Contract Regulation Act, and the allegations under IPC were insufficient to sustain the FIR.
Result: Petition allowed, FIR quashed.
ORAL ORDER
1. By way of this petition under Section 482 of the Code of Criminal Procedure , 1973, the petitioners have prayed for the following reliefs.
“(B) Your Lordships may be pleased to quash and set aside the impugned FIR being C.R. No.11206062210543 of 2021 registered with Satlasana Police Station, District Mehsana, for the offences punishable under Sections 406, 420 , 120B of the Indian Penal Code , Sections 13 and 14 of the Securities Contract Regulation Act , 1956 and Sections 66(C) and 66(D) of the Information Technology Act and consequential proceedings arising out of it;
(C) Pending admission, hearing and final disposal of the present petition, Your Lordships may be pleased to stay the proceedings of the impugned FIR being C.R. No.11206062210543 of 2021 registered with Satlasana Police Station, District Mehsana, for the offences punishable under Sections 406, 420 , 120B of the Indian Penal Code, Sections 13 and 14 of the Securities Contract Regulation Act , 1956 and Sections 66(C) and 66(D) of the Information Technology Act and consequential proceedings arising out of it;”
2. The case of the prosecution in nutshell, as can be reproduced from the impugned F.I.R. is as under.
The fact in this matter is such that, accused No.6 had hired accused Nos.1 to 5 and by installing a mobile phone application namely Market Pulse in the Mobile Phone and Tablet, hatched conspiracy of causing financial loss to the Government of India by doing business of buying and selling of Shares without any type of license of Stock Exchange and maintained accounts of increase and decrease in the share prices through Havala. Thus they hatched conspiracy with intention of causing financial loss to the Government of India by committing financial fraud, violating the rules of SEBI and as the accused No.1 to 3 arrested at the place with muddamal of Mobile phones Nos.-05 Tablet No-01 and note books in total muddamal of worth Rs.12000/- and as the accused No.4,6 fled from the place and as the accused No.5 was not found at the place, they have abetted each other in committing the offence and this is the complaint regarding the same.
My name is Mukeshkumar Kamjibhai, Unarmed Police Constable, B.No.687, Service at Satlasana Police Station . Ta. Satlasana, Dist. Mehsana, Mo.No.9662263533.
The fact of my complaint is such that, today, I along with you and Head Constable, Dineshbhai Jethabhai B.No.366, Laxmanji Amrutji B.No.285, A.P.C. Ravikumar Devendrakumar, B.No.1074 were present at the Police Station. Meanwhile, you received information that, some persons are operating Dabba trading by using mobile phone in a farm situated near the house of Thakorji Kiaranji Parthiji, in the area of Khadiya in the outskirt of Vaghar Village and that they are present there. On the basis of such information, you along with the staff members left the Police Station and arrived at Vaghar Village and upon personally verifying the received information at the place mentioned in the information, it was found to be true. Therefore, you came to Vaghar Village and summoned two panchas and made them aware about the aforesaid facts and upon going and seeing the place mentioned in the information along with these Panchas, about five persons were holding mobile phone, tablet and notebooks in their hands and were doing something in the phones. Therefore, in order to catch them, as we cordoned them and raided there, they threw the mobile phones and Notebooks from their hands and started fleeing. Three persons out of them, were arrested and two persons fled from there. Upon asking the name and address of these three persons in presence of the panchas, out of the three, first persons stated his name as Thakor Ajitji Parthiji Pratapji age 21 years residing at Vaghar , Taluka Satlsana. Upon asking the second person about his name, he stated his name as Thakorji Prakashji alias Popatji Vinuji alias Amratji Karanaji, age 20 years, residing at Vaghar (Kesharpura seem), Ta.Satlsana. Upon askin
