https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=401358 https://www.taxtmi.com/caselaws?id=401358 Violation of provision of SEBI Act v/s IPC - Bail application - offence punishable under other Act such as IPC - Whether amount taken from the clients was deposit or fees - invoking the principles of M.P. Nikshepakon Ke Hiton Ka Sanrakshan Adhiniyam, 2000 - HELD THAT:- Section 26 of SEBI Act only prohibits cognizance of offence which is punishable under SEBI Act, but does not prevent cognizance in respect of offence punishable under other Act such as IPC. It is true that the police has come to know about the complainants after communicating with SEBI and after obtaining particulars from the same agency and in the FIR the names of the complainants have been given, but under Section 154 of Cr.P.C, it is not imperative that the aggrieved person is only authorized to lodge FIR. FIR has been lodged by SHO on the directions of ASP who after obtaining relevant information from SEBI regarding duped customers has directed the SHO to lodge FIR. The FIR contains the names of customers. After lodging of FIR, statements of such complainants have been recorded which reflect offences as laid down in the FIR and which are cognizable in nature. Thus, it is not that there is violation of provision of SEBI Act only, but provisions of IPC are also prima facie attracted for investigation of which police is the only appropriate authority. Investigation by police is not excluded in view of Section 32 of SEBI Act. For invoking the principles of M.P. Nikshepakon Ke Hiton Ka Sanrakshan Adhiniyam, 2000, it should be shown that the amount which has been taken by the company from its client was in the form of deposit. There is substance in the prosecution case that the aforesaid company, was though on papers was an advisory company rendering advice to consumers on payment of fees, was in fact involved in receiving money from investors and such money could not be termed as fees but was more in the nature of deposit - such advisory companies registered with SEBI have mushroomed in various parts of the country. However, instead of doing their business by charging fees, are involved in taking lump sum amounts from their clients, assuring them with the promise of huge returns, but are indulging in malpractices resulting in huge loss to investors. On papers such company appears to be properly constituted, showing to be acting as per their given ambit and scope of business, but in reality the consumers are given a raw deal. It is also found that the whole operation is run by persons who are not qualified as per set out norms. The applicant in the present case, although an employee of Flanking Research Investment Company is an E-Commerce Company, was looking after the complete operations at Indore and was also involved in recruiting ill equipped employees who were as many as 114 in numbers. Such firms/companies, are not only causing immense hardship to the citizens, but also causing loss to the Government and Financial and Banking Institutions in a big way. The activities of such advisory firms have to be dealt with an iron hand. Further, Tarun Chandani, the main owner of this company is still absconding - no case is made out for grant of bail to the applicant. The same stands rejected. Case-Laws SEBI Wed, 04 Nov 2020 00:00:00 +0530