IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 13057 of 2022 ==========================================================

ANKITBHAI NILESHBHAI PAREKH & ORS.

Versus STATE OF GUJARAT & ANR.

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Appearance:

NIMIT Y SHUKLA(8338) for the Applicant(s) No. 1,2,3,4,5,6 RULE SERVED for the Respondent(s) No. 2 MR TRUPESH KATHARIYA, APP for the respondent State ==========================================================

CORAM:HONOURABLE MR. JUSTICE HASMUKH D. SUTHAR Date : 02/09/2024

ORAL ORDER

1. 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 compliant/FIR being II-C.R. No.3155 of 2012 registered with Morbi City Police Station, Morbi (Rajkot) for the offence punishable under Sections 13, 15, 17, 19 and 23-A of the Securities Contracts (Regulation) Act, 1956 as well as charge sheet bearing No.412 of 2012 culminated into Sessions Case No.13 of 2104 pending before the learned 2^nd Additional District and Sessions Judge, Morbi.

2. The facts of the case are that on 12.03.2012, the concerned police officers raided the premises of the petitioners, and it is alleged that the petitioners were engaged in Dabba Trading using a laptop, computer, and Internet connectivity. The petitioners are said to have conducted trading for their customers in Gold, Silver, and the Stock Market, which led to the present complaint. Subsequently, in connection with the impugned FIR, the concerned police station filed the charge sheet bearing No. 412 of 2012 before the learned Chief Judicial Magistrate, Morbi, on 27.07.2012. The case was then committed to the learned 2nd Additional District and Sessions Judge on 13.08.2012, which culminated in Sessions Case No. 13 of 2014 on 20.02.2014. Thereafter, the learned 2nd Additional District and Sessions Judge, Morbi, issued summons to the petitioners/accused persons on 05.07.2014.

3. 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.

4. 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.

5. Having heard learned advocates on both the sides and considering the fact, on 12.03.2012, police raided the petitioners' premises, alleging they were engaged in Dabba Trading using a laptop, computer, and internet. The petitioners allegedly conducted trading in Gold, Silver, and the Stock Market for customers, leading to the present complaint. The charge sheet (No. 412 of 2012) was filed on 27.07.2012,