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2020 (9) TMI 1209
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....red in SEBI and has complied with all the SEBI regulations and is also registered with Local Municipal Corporation and Labour Department. The petitioner submits that the FIR mentions the name of one Anoopam Gupta (respondent No.2) who had filed a complaint against the Company. Anoopam Gupta, is a broker and not a client nor investor or employee and no way connected to the company and his complaint is without any basis and based on hearsay. The Investigating Officer has taken cognizance of such complaint without verifying the same. There is a specific procedure laid down under Section 11 of SEBI Act, 1992, for carrying out investigation in respect of companies, which are registered in SEBI because these companies managed investment of large number of clients at any given point of time and any disturbance in regulations of such companies can result in huge loss of the clients. Hence, specific procedure for carrying out investigation has been laid down. The companies following all the SEBI guidelines makes sufficient disclaimers and disclosures well in advance. The company merely provides advice to its client and execution of such advice is completely at the discretion of the client. ....
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....idelines, 2013", the qualifications of a investment adviser has been specified and none of the employees having qualification to indulge in investment advise to the customers. During the investigation, it was found that some of the employees who are offering investment advise to customers did not hold NISM certificate nor did they possess any such degree or qualification mandated by SEBI. The investment advise involves, thorough market analysis, which an undergraduate employee would not be able to do, if he does not hold the requisite qualifications. Many of the customers of this company had lodged details of the company on the SEBI portal stating that the company made them to invest huge amount of money and their ill advise caused heavy losses. The clients were assured huge profits. The company was handling and operating jobs of execution and investment adviser together, which is prohibited as per SEBI guidelines. The company has charged exorbitant fees from customers for rendering advise by any qualified persons. It has been further mentioned that more than 20 clients have complained to the SEBI that they were cheated by the company. An officer incharge of the police is empowered....
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.... the consequence of violation of the Regulations of SEBI. Section 26 of the SEBI Act provides that no Court shall take cognizance of any complaint against the company unless the complaint is filed by SEBI Board. Hence, learned counsel submits that crime branch could not have registered an FIR without the complaint by SEBI Board. Learned counsel for the petitioner further submits that barely suffering losses on shares which have been purchased does not imply that there was intention to deceive the customers. The share markets are prone to highs and lows and therefore, if a customer suffers losses in share, it cannot be stated that there was intention to cheat him. Further, for attracting provision of Section 420 of IPC, intention to deceive should exist from very beginning. It is further been submitted that the raid could have been conducted only after lodging of FIR, but in this case a reverse pattern has been followed, i.e., the raid was conducted and then FIR was registered. 10. As far as the present matter is concerned, the complainant has not suffered at the hands of the petitioner and her firm namely "Money Secure Investor Investment Adviser". He has lodged a complaint on t....
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....f the offence because the complaint has not been filed by SEBI Board and such offences which are described under SEBI Act, 1992 can only be tried by Special Court. Section 26(B), 26(d) and 26(D)(1) of the Act is relevant which reads as under :- Offences triable by Special Courts. "26B. Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences under this Act committed prior to the date of commencement of the Securities Laws (Amendment) Act, 2014 or on or after the date of such commencement, shall be taken cognizance of and tried by the Special Court established for the area in which the offence is committed or where there are more Special Courts than one for such area, by such one of them as may be specified in this behalf by the High Court concerned." Appeal and revision "26C. The High Court may exercise, so far as may be applicable, all the powers conferred by Chapters XXIX and XXX of the Code of Criminal Procedure, 1973 on a High Court, as if a Special Court within the local limits of the jurisdiction of the High Court were a Court of Session trying cases within the local limits of the jurisdiction of the High Cou....
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....n No.1841/2018, following observations were made :- "The law in this regard is well settled. Although the police has power to investigate the offence alleged against the applicant and charge sheet has been filed, the Court will not be able to take cognizance in view of the specific bar. The investigation carried out by the police can be used for the purpose of filing a complaint in writing. To be precise whatever material has been collected by the Investigating Officer could be used by the authority for the purpose of filing a complaint before the competent Court." 16. The Court in para 9 of the aforesaid case observed as under :- "In the result the writ application succeeds and is hereby allowed and the proceedings of the Sessions Case pending before the City Sessions Court, Ahmedabad are hereby ordered to be quashed. All consequential proceedings pursuant thereto stand terminated." 17. It is clarified that it shall be open for the authority concerned to initiate appropriate fresh proceedings in accordance with law, before the appropriate forum. 18. In the case of Kanwardeep Singh vs. State of West Bengal order dated 8.10.2002 Civil W.P.No.2488/2002, (Ca....
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....IPC. Accused A/2 and A/3 filed a petition under Section 482 of Cr.P.C, for quashing the case in its entirety. This petition was allowed. The Supreme Court held such quashment to be completely incorrect and uncalled for and held that while investigation was still incomplete, High Court ought not to have interfered in present case. 22. However, the aforesaid citation would not come to the rescue of State because of the fact that the matter did not pertain to violation of the provisions of SEBI Act, 1992. 23. On the contrary, learned counsel for the applicant has placed reliance on the judgment of the Apex Court in the case of State of Madhya Pradesh vs. Laxmi Narayan & Ors. passed in Cri. Appeal No.349/2019 order dated 5.3.2019 wherein the Apex Court had discussed the ambit and scope of Section 482 of Cr.P.C. In another citation Nirmal Seed's Pvt. Ltd. vs. State of M.P. & Ors. passed in M.Cr.C.No.18348/2017 order dated 25.10.2018, the FIR was quashed in view of the following observations :- "11.After considering the facts and material placed before this Court in the present petition is neither sufficient to disclose cognizable offences against the applicant, nor th....