The court ruled that a lower court cannot take cognizance of offenses under the Securities Contract (Regulation) Act without a written complaint from authorized entities, quashing the FIR due to lack of evidence for criminal breach of trust.

ORAL ORDER

1. RULE. Learned APP waives service of notice of rule for the respondent-State. Though served, none appears for respondent no.2.

2. Considering the facts and circumstances of the case and with consent of learned advocate for the respective parties, matter is taken up for final disposal forthwith.

3. By way of this application under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as “Cr.P.C.”), the applicant has prayed to quash and set aside the complaint being FIR C.R. No.11192011210067 of 2021 with Bopal Police Station, Ahmedabad, for the offences punishable under Sections 406 & 420 of IPC as well as Sections 23(e), 23(f), 23(h), 23(l) of The Securities Contract (Regulation) Act, 1956, Sections 45(H)(A) of the Security Exchange Board of India, 1995 and Sections 4 and 5 of the Gujarat Prevention of Gambling Act and all the consequential proceedings arising therefrom.

4. At the instance of first informant, FIR came to be filed on 21.01.2021 inter alia alleging that, he received a secret information that a person namely Ashishbhai Sureshbhai Davra, residing at Flat No.I-803 of Orchid Elegance was doing illegal trading in the stock market by doing Dabba trading. Therefore, on the basis of said information, ofÏcers of Bopal Police station, called two panchas and informed them about the said information and prepared for raid. During the raid, one person named Ashishbhai Davra was present in the house, who was doing some work in his laptop and upon further interrogation of said person, he informed that, he was doing illegal trading in stock market. In this regard, FIR came to be filed.

5. Learned advocate for the applicant submits that the applicant has nothing to do with the offence and he is falsely implicated in it. It is submitted that there is a specific bar contained in Section 26 of the Act, and the Court could not have taken cognizance based on a police report in view of this bar. In the present case, in the absence of a complaint in writing filed before the appropriate court, the lower court took cognizance of the alleged offenses based on a police report, which is clearly in contravention of the provisions of Section 26. Therefore, the entire proceedings are illegal and liable to be quashed. It is further submitted that the allegations leveled against the present petitioner are far from the truth and do not constitute criminal breach of trust. In light of Section 26 of the Act, the lower court ought not to have taken cognizance of the offenses based on a police report. Therefore, the application may be allowed.

6. Learned APP has strongly opposed the present application and submits that the accused persons were engaging in trading in securities without a license or permission and without entering into a contract with SEBI, in violation of the provisions of the Act. During the raid, the police found accused person at the scene of the offense, along with materials such as laptop, mobile, pen drive etc., as stated in the FIR. As a result, the petitioner has committed criminal breach of trust and other offences under the Securities Contract (Regulation)

Act . He therefore, requested to dismiss the present application.

7. Having heard learned advocates on both the sides and considering the fact, it appears from the complainant that on 21.01.2021, respondent No.2, Police Constable based on information raided the house of the accused. The accused was trading in securities without a license or permission and without entering into a contract with SEBI, in violation of the provisions of the Act.