Discharge at framing of charge requires a prima facie case review; disputed resignation defence must await trial.

At the stage of discharge under Section 239 CrPC, the court must confine itself to the prosecution material and determine only whether a prima facie case exists; disputed factual questions must be left to trial. Defence documents can defeat the charge only if they are of sterling and unimpeachable quality. Applying that test, the petitioner's resignation documents did not justify discharge because the complaint disclosed a triable case under the SEBI regime, including allegations of continuing non-compliance in relation to the collective investment scheme. The rejection of discharge was therefore upheld.

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Issues: Whether the petitioner was entitled to discharge at the stage of framing of charge on the basis that she had resigned as director before the alleged violations, and whether the materials produced by her could be considered to defeat a prima facie case.

Analysis: The complaint alleged violation of the SEBI Act and the CIS Regulations by an existing collective investment scheme which had neither sought registration nor wound up the scheme or repaid investors. The petitioner relied on Form 32 and the date of resignation to contend that she was not a director when the later regulatory defaults occurred. The Court held that the offence under the SEBI regime was continuing until compliance and repayment, and that the question whether the petitioner remained concerned with the affairs of the company was a disputed factual matter requiring trial. At the stage of discharge under Section 239 of the Code of Criminal Procedure, 1973, the Court is only to see whether a prima facie case exists on the prosecution material. Defence material cannot ordinarily be relied upon unless it is of such sterling and unimpeachable quality that it cannot be doubted. The resignation documents, filed much later, did not justify discharge at the threshold.

Conclusion: The petitioner was not entitled to discharge and the order rejecting discharge was upheld.

Final Conclusion: The revision petition failed because the complaint disclosed a triable case and the disputed defence based on resignation could only be examined in trial.

Ratio Decidendi: At the stage of discharge, the Court must confine itself to the prosecution material to see whether a prima facie case exists, and defence documents cannot be used to defeat charges unless they are of unimpeachable and sterling quality; disputed questions of fact must go to trial.

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