Hetal Yogeshkumar Patel vs Bombay Stock Exchange
2021 Latest Caselaw 6087 Guj

     R/SCR.A/5429/2015                              ORDER DATED: 16/06/2021




       IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

       R/SPECIAL CRIMINAL APPLICATION NO. 5429 of 2015

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             HETAL YOGESHKUMAR PATEL & 7 other(s)
                                 Versus
              BOMBAY STOCK EXCHANGE & 4 other(s)
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Appearance:
MR SHALIN MEHTA FOR MR HEMANG M SHAH(5399) for the
Applicant(s) No. 1,2,3,4,5,6,7,8
MR AMAR N BHATT(160) for the Respondent(s) No. 1
MS DHARMISHTA RAVAL(707) for the Respondent(s) No. 3
MR ASHISH KARNAVATI FOR MR DINESH TIWARI FOR
MR NIMIT Y SHUKLA(8338) for the Respondent(s) No. 5
MS MD MEHTA ADDL. PUBLIC PROSECUTOR(2) for the
Respondent(s) No. 2,4
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 CORAM:HONOURABLE MR. JUSTICE NIKHIL S. KARIEL

                            Date : 16/06/2021

                             ORAL ORDER

1. Heard learned Senior Counsel Shri Shalin Mehta for learned Advocate Shri Hemang Shah for the petitioners, learned Advocate Shri Amar Bhatt for respondent No.1, learned Advocate Ms. Dharmishtha Raval for respondent No.3, learned Advocate Shri Ashish Karnavat for learned Advocate Shri Dinesh Tiwari for learned Advocate Shri Nimesh Y. Shukla for respondent No.5 and learned APP Ms. M.D. Mehta for respondent Nos.2 and 4.

2. Rule. Learned Advocates for the respective respondents waive service of Rule.

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3. By way of present petition, the petitioners seek relief of release of the amount of Rs.1,47,86,769.20 (wrongly mentioned as Rs.1,47,85,673.32), which is withheld by the respondent No.1 - Bombay Stock Exchange, whereas the said amount being the amount of consideration for sale of shares of a Company named M/s. Dinesh Allogra Ltd., which had been sold by the petitioners.

4. Facts in nutshell are that the petitioners have been transacting in the respondent No.1 - Stock Exchange for many years through their broker, respondent No.3 and that on 28.06.2012, the petitioners had issued orders for sale of shares of M/s. Dinesh Allogra Ltd. and whereas the same had been purchased by various investors and in total, the petitioners were entitled to receive a sum of Rs.1,47,86,769.20. The said amount had to be credited to the petitioners through their share broker within 2 days after the transaction, which was the norm as followed by the Stock Exchange and whereas since the petitioners did not receive the said amount within the stipulated period, they had taken up the matter with their share broker - respondent No.3 and whereas on 30.08.2012, respondent No.3 had addressed a letter to each of the petitioner informing them the settlement had been kept in abeyance by respondent No.1 based upon instructions received from the Economic Offence Wing of Maharashtra Police. It is further submitted that upon some of the petitioners approaching the Economic Offence Wing through their learned Advocate, they were informed that since the alleged fraudulent transaction had happened in Gujarat State, therefore, papers have been sent to their counter part in Gujarat State and therefore, the petitioners were directed to make correspondence with appropriate authority of Gujarat Police in this regard. The petitioners had therefore, preferred petition before this Court being Special Criminal Application No. 3147 of 2012 inter alia seeking quashment

R/SCR.A/5429/2015 ORDER DATED: 16/06/2021

of communication dated 29.06.2012 and for release of the amount. That the respondent No.1 had preferred Transfer Petition (Criminal) No.401 of 2013 before the Supreme Court of India for transferring the preoceedings of Special Criminal Application No.3147 of 2012 for having the same heard along with other matters pending before the Supreme Court and whereas vide order dated 04.10.2013, the Supreme Court while dismissing the petition had reserved liberty in favour of the respondent No.1 to approach High Court for early hearing of Special Criminal Application No.3147 of 2012. That in the interregnum, criminal complaint being FIR I - 201 of 2012 came to be registered with "A" Division Police Station, Bhavnagar, by one Shri Pragnesh Arvindbhai Soneji, Customer Head of Saurashtra Kutch in H.D.F.C. Security Ltd. inter alia alleging commission of offences punishable under Sections 407, 419 and 420 of the Indian Penal Code against the accused mentioned therein, who are not the petitioners herein. The complainant H.D.F.C. Security Ltd. has thereafter, preferred a petition before this Court being Special Criminal Application No.1529 of 2013 raising grievance against the manner and method in which investigation was being conducted and sought to transfer the investigation to any Central Investigating Agency or any other agency as deemed fit by this Court. Such petition came to be dismissed by this Court (Coram: Anant S. Dave, J.) vide order dated 26.03.2014 and even a Note for Speaking to Minutes preferred by the said petitioner had also been dismissed by this Court vide order dated 07.05.2014. That the said order had been challenged before the Supreme Court of India vide SLP (Criminal) No.21334 - 21335 of 2014 and whereas said application had been withdrawn by the petitioner therein on 01.12.2014 the Supreme Court had reserved liberty in favour of the petitioner to seek redress including redress by way of prayer for further investigation before the competent Court, if otherwise permissible in law. H.D.F.C. Security Ltd., respondent No.5 herein had thereupon filed an application before the

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learned Judicial Magistrate First Class at Bhavnagar, inter alia praying for further investigation.

5. In the meanwhile, Special Criminal Application No.3147 of 201 came to be decided by this Court (Coram: V.M. Pancholi, J.) vide CAV judgment dated 20.03.2015, whereby the the petitioners prayer inter alia for release of the amount had been dismissed on the ground that upon permission granted by the Supreme Court, the application for further investigation had been filed before learned Judicial Magistrate First Class, Bhavnagar, which is pending and whereas further investigation was in progress in accordance with direction given by the said Court and whereas the supplementary charge-sheet was not yet filed. Further, this Court was also concerned with the fact that there were two petitions filed praying for similar reliefs before this Court and in one of the matter, against the order of this Court, an SLP had been preferred where Supreme Court had stayed order of this Court and in another matter preferred by one Shri Dave Umang Girishbhai Dave, the same had been dismissed by this Court.

6. Thereafter, the Investigating Officer had filed supplementary charge- sheet before the concerned Court on 02.06.2015. At this stage, it would be pertinent to mention that while none of the petitioners have been named as accused in the supplementary charge-sheet, the petitioner Nos.1, 2, 5 to 8 have been named as witnesses whereas the petitioner Nos.3 and 4 have not been named even as witnesses also.

7. That Shri Dave Umang Girishbhai, who had preferred a petition like the petition in the year 2012 as those petition was dismissed by this Court, which fact had been referred by this Court in the judgment dated 20.03.2015

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in Special Criminal Application No.3147 of 2012, had after the supplementary charge-sheet being filed preferred writ petition being Special Criminal Application No.1062 of 2013 inter alia praying for release of amount from sale of shares of M/s. Dinesh Allogra Ltd. which have been withheld by the respondent No.1. This Court (Coram: A.Y. Kogje, J.) vide order dated 16.01.2020 had been pleased to allow the said petition and directed the Stock Exchange to deposit the aforesaid amount with interest before this Court and thereafter, the petitioners were permitted to make an appropriate application for release of the amount. It would be pertinent to mention here that the amount was directed to be deposited in this Court since the broker, who had been joined as a party, had though served chosen not to remain present.

8. Learned Senior Counsel Shri Mehta had submitted that since the supplementary charge-sheet has been filed and since the petitioners have not been named as accused and the amount receivable by the petitioners not being treated as muddamal, therefore, there was no impediment in releasing the amount to the petitioners. He further relies upon the order of this Court dated 16.01.2020 and submits that the petitioners therein were similarly placed as the petitioners herein and whereas the said petitioners therein having preferred a petition before the supplementary charge-sheet, which had been rejected and thereafter, having preferred fresh petition and the same had been considered by this Court. Learned Senior Counsel further submits that Special Criminal Application No.3147 of 2012 having been dismissed inter alia on the ground of investigation pending and the supplementary charge-sheet not having been filed and the Court having dismissed the petition at that stage, therefore, the petitioners after filing of the supplementary charge-sheet on the strength of change of circumstances, have preferred present petition. Therefore, learned Senior Counsel requests

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this Court for release of the amount withheld by the respondent No.1 in favour of the petitioners herein.

9. Learned Advocate Shri Amar Bhatt for respondent No.1 has submitted that as such after communication dated 29.06.2012 of Economic Offence Wing, Maharashtra Police, after investigation had been transferred to Gujarat Police, upon Bombay Stock Exchange communicating with the concerned Authority, the said Authority vide a communication dated 12.01.2013, informed about the investigation having been transferred to Bhavnagar District Police since the offences appear to have been committed under the said jurisdiction. Thereupon the respondent No.1 had written to the Bhavnagar Police and vide communication dated 23.01.2013, the Police Inspector, LCB Bhavnagar, had directed the respondent No.1 to withhold the funds of delivery based transactions and not to release the same without informing the said office. It is submitted that it was on the basis of said communication, since the transaction of the petitioners was delivery based transaction, therefore, the respondent No.1 had withheld the amount in question.

10. Learned APP Ms. Mehta has submitted that since the amount in question was connected with the investigation and further investigation with regard to the criminal complaint being FIR I - 204 of 2012, therefore, this Court may not direct to release the amount. As such learned APP could not point out any reason for withholding the amount even after the supplementary charge-sheet being filed where the petitioners have not been named as accused.

11. This petition has been strongly opposed by the learned Advocate Shri

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Ashish Karnavat for respondent No.5 - H.D.F.C. Security Ltd. Learned Advocate has submitted that the investigation itself was not done scientifically and therefore, the petitioners who were involved in the alleged crime, had not been named as accused and whereas he submits that even after the supplementary charge-sheet had been filed, they had preferred an application before the concerned Court for further investigation and whereas learned Judicial Magistrate First Class had been pleased to reject such application vide order dated 20.07.2019. Learned Advocate has submitted that the said order has been challenged before this Court by preferring Special Criminal Application No.9773 of 2019 before this Court and whereas the said petition is pending. Learned Advocate has therefore, submits that till this Court passes appropriate orders in the said writ petition, this Court may not pass order releasing the amount.

12. In rejoinder, learned Senior Counsel Shri Shalin Mehta submits that even after the charge-sheet and supplementary charge-sheet, where the petitioners herein have not been named as accused and whereas some of the petitioners have been named as accused and where some of the petitioners have been named as witnesses, the amount receivable upon sale of shares by the petitioners ought not be withheld merely because the petition has been preferred by the respondent No.5 praying for further investigation. Learned Senior Counsel has submitted that said petition had been preferred in October, 2019 and whereas till date, even notice has not been issued in the said petition much less substantive orders have been passed by this Court in favour of the respondent No.5. Learned Senior Counsel further submits that even otherwise in the case of similarly situated persons, this Court had passed an order for release of the amount withheld vide order dated 16.01.2020 in Special Criminal Application No.1062 of 2013 and whereas said order has not been challenged by respondent No.5 and this the same

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has attained finality and therefore, respondent No.5 may not be heard to state before this Court that the amount due and payable to the petitioners may not be released in their favour by the respondent No.1.

13. Having heard learned Advocates for the parties, this Court is of the opinion that as such there is no impediment as of now in directing to release the amount in favour of the petitioners herein. This Court has reached the above opinion in view of the fact that in earlier round of litigation, this Court while rejecting similar prayer vide judgment dated 20.03.2015 in Special Criminal Application No. 3147 of 2012 has observed about further investigation being in progress and also about the petition filed by the similarly situated person named Shri Dave Umang Girishbhai, which came to be dismissed by this Court. That as of now, pursuant to the application for further investigation, the same having been granted by the Court concerned, some of the petitioners have been named as witnesses as is the case with Shri Dave Umang Girishbhai and his co-petitioner and furthermore, some of the petitioners having not been named as witnesses also. That most importantly none of the petitioners have been named as accused even pursuant to further investigation. That after supplementary charge-sheet having been filed, said Shri Dave Umang Girishbhai having preferred Special Criminal Application No.1062 of 2013 and whereas this Court had been pleased to direct releasing the amount in favour of the petitioners therein and such order had not been challenged by the respondent No.5, has become final between the parties. Considering the same, even after the investigation and further investigation and after filing of the supplementary charge-sheet, merely because an application for further investigation has been filed by the respondent No.5, would not be a good ground not to direct releasing the amount. That respondent No.5 having preferred application before the Magistrate at Bhavnagar for further

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investigation, which came to be rejected, has challenged the said order before this Court and the petition which is stated to be pending since around 18 months without any order passed thereupon, would not in the considered opinion be an impediment against the direction to release the amount since in two rounds of investigation, the Investigating Authority have not found any material which would link either the petitioners or the amount in question with the alleged crime in question. The petitioners, who were entitled to receive the amount in 2012 itself have been left bereft of such amount till the year 2021 and since as discussed hereinabove, this Court does not find any legal and justifiable reason not to release the amount, therefore, this Court deems it appropriate to issue following directions:

1. The respondent No.1 is directed to deposit the amount of Rs.1,47,86,769.20 which has been withheld by it along with interest accrued thereupon (since it has been stated by the learned Advocate for the respondent No.1 that the amount had been deposited in Fixed Deposit) with the respondent No.3, within a period of four weeks from the date of receipt of the order.

2. The respondent No.3 is directed to release the amount due and payable in favour of each of the petitioner along with interest accrued thereupon, within a period of of one week from the date of deposit of the amount with them by respondent No.1.

With the above directions and observations, present petition stands allowed to the above extent. Rule is made absolute.

(NIKHIL S. KARIEL,J) Y.N. VYAS