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2013 (4) TMI 135 - HC - Indian LawsArticle 226/227 of the Constitution of India - Criminal Revision Application - Respondent No.2 has transferred shares into his wife s Demat Account with Peoples Cooperative Bank instead of transferring the shares to respective client s Demat Account - He has further transferred the shares from his wife Demat Account with Peoples Cooperative Bank to the Demat Account with ICICI Bank - Also sold some of the shares from ICICI Damat Account - Held that - the learned Magistrate issued notice upon the Income Tax Department with respect to the shares in question. - It appears that thereafter the Income Tax Department has inquired into the case and conducted inquiry and after conclusion of the inquiry it has been found that the misappropriated shares were duly reflected in the Books of Accounts of the petitioner and that some of the shares which were related with some of the clients, have given their confirmation that they have purchased the shares through the petitioner. The stand taken by the Income Tax Department is allowed and the impugned orders passed by the learned Additional Sessions Judge and Presiding Officer, Fast Track Court No.5, Surat passed in Criminal Revision Application No.144 as well as order passed by the learned Additional Senior Civil Judge and Judicial Magistrate are hereby quashed and set aside - It is directed to handover the Instruction Slip Books with respect to the shares which are alleged to have been misappropriated by the original accused Nos.1 and 2, and thereafter the petitioner is permitted to transfer the alleged misappropriated shares in question lying in the Demat Account of the respondent Nos.2 and 3 original accused Nos.1 and 2 to the Demat Accounts of the petitioner in the respective Banks. It is further observed that after transfer of the shares in his Demat Account, if the petitioner wants to transfer any of the shares in question for which the complaint is filed, the petitioner shall submit an appropriate application before the concerned Magistrate - And on undertaking that in case ultimately at the conclusion of the trial any adverse order is passed against the petitioner he will deposit the said amount and such a transfer shall be subject to ultimate outcome of the trial - Rule is made absolute to the aforesaid extent
Issues:
1. Quashing of impugned orders passed by Additional Sessions Judge and Presiding Officer, Fast Track Court. 2. Transfer of shares from Demat Account of accused to petitioner's Demat Account. 3. Dispute over ownership of shares and misappropriation allegations. 4. Role of Income Tax Department in the investigation and inquiry. 5. Relief sought by the petitioner under Article 226/227 of the Constitution of India. Issue 1: Quashing of Impugned Orders: The petitioner filed a petition under Article 226/227 to quash orders passed by the Additional Sessions Judge and Presiding Officer, Fast Track Court, Surat. The orders directed the transfer of shares from the accused's Demat Account to the petitioner's account. The petitioner sought relief to set aside these orders. Issue 2: Transfer of Shares: The petitioner, a Share Investment and Sub-Broker, alleged that the accused misused trust by transferring shares to his wife's Demat Account instead of clients' accounts. The investigating officer seized shares and documents as Muddamal. The petitioner requested the transfer of these shares to his account. The Income Tax Department conducted an inquiry and found no further action warranted against the petitioner under the Income Tax Act. Issue 3: Ownership Dispute and Misappropriation Allegations: The petitioner alleged misappropriation by the accused and filed a complaint under various sections of the Indian Penal Code. The accused transferred shares to his wife's account and sold some from another account. The Income Tax Department confirmed that the misappropriated shares were reflected in the petitioner's accounts and some clients confirmed purchasing shares through the petitioner. Issue 4: Role of Income Tax Department: The Income Tax Department conducted an inquiry and found no further action necessary against the petitioner under the Income Tax Act. The Department confirmed that misappropriated shares were reflected in the petitioner's accounts and some clients verified purchasing shares through the petitioner. Issue 5: Relief Sought under Article 226/227: The petitioner sought relief to quash the impugned orders and transfer the misappropriated shares to his Demat Account. The Court allowed the petition, quashed the orders, and directed the transfer of shares to the petitioner's account. The petitioner was required to seek permission before transferring any shares during the trial's conclusion. This detailed analysis covers the issues involved in the legal judgment, addressing the quashing of orders, ownership dispute, role of the Income Tax Department, and the relief sought by the petitioner under Article 226/227 of the Constitution of India.
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