[Cites 16, Cited by 0]
Gujarat High Court
Rajankumar Kishorchandra Kakkad vs State Of Gujarat on 30 March, 2026
Author: Gita Gopi
Bench: Gita Gopi
NEUTRAL CITATION
R/CR.RA/26/2024 ORDER DATED: 30/03/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL REVISION APPLICATION (AGAINST ORDER PASSED BY
SUBORDINATE COURT) NO. 26 of 2024
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RAJANKUMAR KISHORCHANDRA KAKKAD & ORS.
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR DIVYANG A JOSHI for MR CHINTAN S POPAT(5004) for the
Applicant(s) No. 1,2,3,4,5,6,7
NOTICE SERVED for the Respondent(s) No. 2
MR BHARGAV PANDYA, ADDITIONAL PUBLIC PROSECUTOR for the
Respondent(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE GITA GOPI
Date : 30/03/2026
ORDER
1. By way of this application, the applicants herein have
prayed for quashing and setting aside the order dated
05.10.2023 passed by the learned Additional District and
Sessions Judge, Keshod below Exhibit 11 in Sessions Case
No.16 of 2019, and thereby discharge the applicants from
the charges levelled against them.
2. Heard learned advocate for the applicant Mr. Divyang A.
Joshi, who submitted that the very complaint filed under
Sections 19 and 23-I of the Securities Contracts
(Regulation) Act, 1956 (for short 'SC (R) Act, 1956') and
Sections 4 and 5 of the The Public Gambling Act, 1867
(hereinafter referred to in short as 'the Gambling Act') is
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R/CR.RA/26/2024 ORDER DATED: 30/03/2026
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bad in law. Referring to provision of Section 26 of SC (R)
Act, 1956 i.e. Cognizance of offences by courts, it is
submitted that no Court can take cognizance of any
offences punishable under the act or Rules regulations or
bye laws made under the SC (R) Act, 1956 unless the
complaint has been filed by the Central Government,
State Government or the Securities and Exchange Board
of India (SEBI) or a recognized Stock Exchange or by any
person. It is further submitted that the expression 'any
person' has been explained in judgment of this Court
dated 15.03.2018 in Special Criminal Application No.1781
of 2018 (Vipulkumar Avantilal Shah v. State of Gujarat),
where any person would not include the police and
accordingly, the expression 'person' in Section 26 of the
SC (R) Act, 1956 would not include the complaint by the
police.
3. Learned Additional Public Prosecutor Mr. Bhargav Pandya
has referred to the Report of the Assistant Sub Police
Inspector, Keshod Police Station, District Junagadh where
it has been referred that the necessary permission to file
the case under the SC (R) Act, 1956 had not been sought
for and the officer concerned has now retired.
4. Before the learned Additional District and Sessions Judge,
Keshod, an application was moved by the present seven
revisionists making a prayer to discharge them by
moving an application Exhibit 11, which came to be
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rejected. The learned trial Court Judge was of the opinion
that after a long time, the discharge application had been
moved and the charge has been framed on the basis of
the police complaint and when the accused were given
opportunity for defence at different stage and that plea
has been recorded therefore, the learned trial Court
Judge in that circumstances did not think it fit to entertain
the application.
5. A complaint was filed before the Keshod Police station by
K.V. Chandpa, Police Inspector serving at Keshod Police
Station on 29.01.2015 invoking the provision of SC (R)
Act, 1956 and Sections 4 and 5 of the Gambling Act. The
primary charge against the accused was that when a raid
was conducted on 29.01.2015 at the Office of Keshod
Ambawadi, Om Complex, Jay Bholenath, they found that
the accused No.1 and 2, without any license had opened
an office for illegal stock exchange and total 16 accused
were found in the process of sale and purchase of share
through mobile and were found involved in the activity of
trade gambling ('dabba' trading). The total transaction of
shares was valued at Rs.3,79,64,227/-. During the course
of raid, the officer had seize books, chits, lap top, CPU's,
5 pieces of mobile phone with the total value of the
muddamal seized as Rs.43,000/-.
6. The challenge is given to the maintainability of police
complaint. Section 26 of the SC (R) Act, 1956 makes
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provision for the cognizance of offences by Court on a
private complaint which reads as under :-
"26. Cognizance of offences by courts.- (1) No court shall
take cognizance of any offence punishable under this Act or
any rules or regulations or bye-laws made thereunder, save
on a complaint made by the Central Government or State
Government or the Securities and Exchange Board of India or
a recognized stock exchange or by any person."
7. Simple reading of the Section itself prima-facie clears
that no Court shall take cognizance of any offence
punishable under the Act or Rules or Regulations or bye-
laws made under the Act, except on a complaint made by
the Central Government or State Government or SEBI or
a recognized Stock Exchange or by any person.
Reference of expression 'any person' would find its
meaning under Section 2(d) of Code of Criminal
Procedure, 1973 (hereinafter referred to in short as 'the
Code') where the definition of the complaint has been
elaborated. Section 2(d) of the Code is reproduced
hereunder for ready reference :-
"Complaint" means any allegation made orally or in writing to
a Magistrate that some person, known or unknown, has
committed an offence, but does not include a police report.
8. The meaning of the complaint thereby would be the
allegation made either orally or in writing to the
Magistrate for the offence committed, such complaint
would not include Police Report. Here, admittedly, the
complaint has been filed by the Police, in the Police
Station. Thus, if Section 26 of the SC (R) Act, 1956 and
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2(d) of the Cr.P.C. if read together then the police would
have no authority to even file private complaint.
9. Here the police had registered the First Information
Report and then after the investigation has filed the
charge-sheet, which is in complete violation of the SC (R)
Act, 1956 and the Rules made thereunder.
9.1. The Securities Contract (Regulation) Act, 1956 had
been put in force to prevent undesirable transactions in
securities by regulating the business of dealing and by
providing for certain other matters connected therewith.
The penalties for the offences delineated as clause (a) to
(i) under sub-section (1) of Section 23, make them
cognizable under Section 25 of the Securities Contract
(Regulation) Act, 1956. Section 25 is as under :-
"25. Certain offences to be cognizable. - Notwithstanding
anything contained in the Code of Criminal Procedure, 1898
(5 of 1898), any offence punishable under Section 23, shall
be deemed to be a cognizable offence within the meaning of
that Code."
9.2. Thus, a conjoint reading of the Sections 25 and 26
of SC (R) Act, 1956, it would be manifest that the
cognizance by the Court of the offences under Section 23
would be only on a complaint filed by the authorities as
specified under Section 26 before the Special Court
established as per Section 26-A of the Act. The police
has no role to play in the contractual transaction
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regulated as per the SC (R) Act, 1956.
10. Further, the police would also have no authority to move
the Criminal Court under the Gambling Act where the
transaction relates to sale and purchase of shares and
the allegations are of bogus trading, bucket trading which
as per the police the same is an illegal method of trading
outside the official stock exchanges. Whether the said
transaction would become illegal is for SEBI to decide.
The police would have no authority to even file an FIR.
11. In light of the reasons given above and the provision of
law, this application is allowed. The FIR being C.R. No.II-
28 of 2015 dated 29.01.2015 registered with Keshod
Police Station, Junagadh and the charge-sheet filed in
Sessions Case No.16 of 2019, pending before the learned
District and Sessions Judge, Keshod is against the
provisions of the SC (R) Act, 1956. Thus, the application
for discharge preferred by the applicants herein is
allowed setting aside the order dated 05.10.2023 below
Exhibit 11 of Sessions Case No.16 of 2019. The
applicants are discharged in the matter.
12. Rule made absolute. Direct Service is permitted.
Sd/-
(GITA GOPI, J)
CAROLINE / DB # 119
