TaxTMI 
TaxTMI 
2026 (8) TMI 599
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 66D of the Information Technology Act, along with all consequential proceedings arising therefrom. 3. The brief facts as narrated in the FIR are to the effect that: (3.1) Respondent No. 2 - original first informant as in capacity of Assistant Sub-inspector serving with Visnagar Town Police Station, upon a secret information received by them that applicant No. 1 - Thakor Jigarji Ishvarji by calling the persons in the house of her sister, namely, Thakor Komalben Ishvarji, and by giving them the mobiles as well as dummy sim cards and keeping a search on the market plus application downloaded in his mobile, applicant No. 1 was giving tips for earning more money without procuring any valid licence from the Stock Market, all the applicants are illegally indulged into a "dabba trading" in such premises as also are maintaining records to that effect, soon thereafter, after a search warrant was procured, raid was carried out at the said premises wherein the present applicants were found and arrested from the scene of offence with mobile phones, sim cards, account books, which resulted into lodgment of the impugned FIR as against twelve arrested accused as along with one Kri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces under the IPC are still made out. It was, therefore, argued that the proceedings, insofar as they relate to the offences under the IPC, ought not to be quashed. 7. Heard learned advocates for the respective parties. 7.1 Section 26 of the Securities Contracts (Regulation) Act, 1956, reads thus: "26. Cognizance of offences.- (1) No Court shall take cognizance of any offence punishable under this Act or any rules, regulations or bye-laws made thereunder, save on a complaint made by the Central Government or the State Government or the Securities and Exchange Board of India or a recognized Stock Exchange or by any person. (2) No Court inferior to that of a Court of Session shall try any offence punishable under this Act." 7.2 A plain reading of Section 26 of the Securities Contracts (Regulation) Act, 1956 would indicate that no Court can take cognizance of any offence punishable under the said Act or the rules, regulations or bye-laws framed thereunder, except upon a complaint made by the Central Government, the State Government, the Securities and Exchange Board of India, a recognized Stock Exchange, or any other person authorized under the prov....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nment, the State Government, the Securities and Exchange Board of India, a recognized stock exchange, or any authorized person. Therefore, no case is made out under the provisions of the Securities Contract (Regulation) Act. 8. Coming to the second contention, the Court is of the view that even if the entire case put up by the prosecution is accepted as true, none of the ingredients to constitute the offence of criminal breach of trust or cheating are spelt out inasmuch as there is no direct evidence or material to suggest that there was any entrustment of property. The allegations in the complaint is of engaging in fraud and misconduct, but nowhere is it alleged that present applicants pocketed money by causing a loss to anyone or obtaining wrongful gain. Even if this fact is accepted, it constitutes merely a breach of the Securities Contract (Regulation) Act, which has been wrongly characterized as criminal breach of trust. Criminal breach of trust, as defined in Section 405 of the IPC, is as follows: "Whoever, being entrusted with property, or having dominion over property, dishonestly misappropriates or converts that property to their own use, or dishonestly uses or....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or dishonest intention is shown right at the beginning of the transaction. Merely on the allegation of failure to keep up promise will not be enough to initiate criminal proceedings. From the facts available on record, it is evident that the respondent No. 2 had improved his case ever since the first complaint was filed in which there were no allegations against the appellant rather it was only against the property dealers which was in subsequent complaints that the name of the appellant was mentioned. On the first complaint, the only request was for return of the amount paid by the respondent No. 2. When the offence was made out on the basis of the first complaint, the second complaint was filed with improved version making allegations against the appellant as well which was not there in the earlier complaint. The entire idea seems to be to convert a civil dispute into criminal and put pressure on the appellant for return of the amount allegedly paid. The criminal Courts are not meant to be used for settling scores or pressurize parties to settle civil disputes. Wherever ingredients of criminal offences are made out, criminal courts have to take cognizance. The complaint in quest....