TMI Blog2008 (1) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... and set aside. The Court of Sessions to return the concerned complaints to the respective Courts which had passed the committal order.Trial of the complaints is expedited. - CRIMINAL APPLICATION NOS. 2238 TO 2239 OF 2007 WRIT PETITION NOS. 338 OF 2007 AND CRIMINAL WRIT PETITION NOS. 1154, 1557,1598, 1611 AND 1773 OF 2007 - - - Dated:- 16-1-2008 - B.H. MARLAPALLE, J. Adik Shirodkar, Ms. Neeta Rajda, Surendra Raja, Nitin Pradhan, Ms. S.D. Khot, Maheen Pradhan, Ms. Ameeta Kuttikrishnan, S.V. Marwadi, J.P. Shah, Gaurav Agarwal, Sachin Kudalkar, Amit Desai, Pranav Badheka, Sandeep Parekh, Gopal Shenoy, Nitin Deshpande and S.P. Narkar for the Petitioner. H.H. Ponda, V.N. Shingnapurkar, Amit Borkar, R.F. Lambay and P.A. Pol for the Respondent. JUDGMENT 1. Heard the learned counsel for the respective parties. Rule. With the consent of the parties, the petitions/applications have been finally heard at length. 2. This group of petitions/applications filed under Article 227 of the Constitution and/or under section 482 of Cr. P.C. raise a common grievance viz. , that the complaints filed against the petitioners/applicants for the offences punishable under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplaint, though the list of witnesses has been filed, no statements of any witnesses as recorded by the Investigating Officer/Authorised Officer, on oath or otherwise, have been placed on record by the complainant and obviously the investigation as per section 11C of the SEBI Act was not conducted before the complaints were filed after 29-10-2002. ( e )Though the complaints were pending anywhere from three to six years, at no point of time even after 29-10-2002 the SEBI filed an application for committal of the complaints under section 209 of Cr.P.C. and the committal orders have been passed only on the basis of the order dated 30-6-2006 issued by the Registrar General of this Court regarding establishment of a Special Court for trial of the cases filed under the SEBI Act. ( f )After the complaints were committed to the Sessions Court under section 209 of Cr.P.C., separate applications were filed before the Sessions Court but the relief prayed for was not on the same lines. In one set of cases the accused prayed for quashing of the committal order on the ground that it did not comply with the requirements of sections 200, 202 and 208 of Cr.P.C. and consequently it was prayed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with section 27 of the SEBI Act was the Court of Metropolitan Magistrate or Judicial Magistrate of the First Class. However, as per the amended section 26(2) no Court inferior to that of a Court of Session shall try any offence punishable under the said Act and no Court shall take cognizance of any offence punishable or any Rules or Regulations framed thereunder, save on a complaint made by the Board, thereby deleting the words with the previous sanction of the Central Government from sub-section (1) of section 26. 6. Briefly stated the grounds in support of the prayer that the above stated complaints ought to be tried by the Court before whom they were presented at the first instance and that the Court of Session does not have power to try these cases are as under : ( a )Article 20(1) of the Constitution of India lays down the doctrine of prospective effect and no person alleged to have committed an offence can be prosecuted and convicted of any offence except for violation of a law in force at the time of commission of the act charged as an offence and at the same time he/she cannot be subjected to a penalty greater than that which might have been inflicted under th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essions in view of the amended Act and that the learned Metropolitan Magistrate did not have the jurisdiction to try the complaint. ( e )Article 20(1) of the Constitution read with section 6 of the General Clauses Act, 1897 must lead to the conclusion that all the proceedings and the rights, privileges, obligations accrued/arising within sections 24 and 26 of the SEBI Act, 1992 have remained in-tact and cannot be disturbed by the SEBI Amendment Act, 2002 which is prospective in operation and it cannot be made retrospective. If section 24 is given prospective effect and section 26 is provided with retrospective effect, there will be a good amount of anomalies created which was beyond the contemplation of the Legislature such as ( a ) the Sessions Court will not be in a position to try any offender entitled to be punished for a maximum punishment of one year under the old Act summarily in view of the command of section 260 of Cr.P.C. and ( b ) the accused would not be entitled to exercise his vested right as contemplated under section 256 of Cr.P.C. ( f )In SEBI Appeal No. 1 of 2002, SEBI Appeal No. 8 of 2002 and SEBI Appeal No. 9 of 2002 which were decided by this Court (Divisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t relating to offences exclusively triable by Court of Sessions and as regards the proceedings initiated on the police report, the relevant provisions would be sections 154, 173, 207 and 209 of the said Code. The provisions of section 200 and section 202 cannot be read in isolation but the entire scheme will have to be taken into account to ascertain the legislative intent and to fathom the true meaning thereof. There cannot be a situation where an accused based on a police report is at advantageous position qua the procedural fairness or the receipt of the entire material collected during investigation and produced at the stage under section 173 of Cr.P.C. in order to give him a reasonable idea about the accusations likely to be faced during trial before the Sessions Court. In support of these contentions the learned counsel for the accused referred to the added provision of section 11C to the SEBI Act with effect from 29-10-2002 regarding investigation and it was contended that the scheme of section 11C is on the lines of the provisions of sections 164, 165, 175 of Cr.P.C. and such powers of investigation were not provided under the SEBI Act of 1992. ( k )The accused had, on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entence up to one year or up to three years or fine or both, there is no reason which stops the Sessions Court to proceed with the trial of the committed complaints as per the procedure applicable to the summons cases under Chapter XX or the warrant cases under Chapter XIX, notwithstanding the fact that the trial before the Sessions Court is dealt with under Chapter XVIII of the Cr.P.C. Mr. Ponda referred to Schedule I to Cr.P.C. and pointed out that some warrant cases for the offences under IPC are triable by the Sessions Court and there is no jurisdictional bar for trial of the complaints by the Sessions Court as summons cases or warrant cases. As per Mr. Ponda the accused have a vested right for trial but they do not have any such right for selecting a forum. The right of fair and speedy trial is envisaged under Article 21 of the Constitution but at the same time the accused cannot choose a forum or insist that he/she must be tried by a specific Court. Referring to the amendment to section 26 of the SEBI Act, it was contended by Mr. Ponda that the same is procedural in nature and, therefore, it must have a retrospective effect inasmuch as all the pending cases as on 29-10-2002 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttal passed by the learned Metropolitan Magistrate, Mr. Ponda has relied upon the following decisions in addition to the ones already referred to here-inabove: (1) Rao Shiv Bahadur Singh v. State of Vindhya Pradesh AIR 1953 SC 394; (2) Union of India v. Sukumar Pyne AIR 1966 SC 1206; (3) Nani Gopal Mitra v. State of Bihar AIR 1970 SC 1636; (4) Anand Gopal Sheorey v. State of Bombay AIR 1958 SC 915; (5) Rajendra Kumar v. Kalyan AIR 2000 SC 3335; (6) Hitendra Vishnu Thakur v. State of Maharashtra AIR 1994 SC 2623; (7) Shiv Shakti Co-operative Housing Society v. Swaraj Developers AIR 2003 SC 2434. 8. In the case of Rao Shiv Bahadur Singh ( supra ) the Constitution Bench held that what is prohibited under Article 20 is only conviction or sentence under an ex post facto law and not the trial thereof. Such trial under a procedure different from what obtained at the time of commission of offence or by a Court different from that which had competence at the time cannot ipso facto be held to be unconstitutional. A person accused of the commission of offence has no fundamental right to trial by a particular Court or by particular proced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "....the principle is well-established that a retrospective operation is not to be given to a statute so as to impair an existing right. This is the general rule. But the Legislature is competent to pass a statute so as to have retrospective operation, either by clearly expressing such intention or by necessary and distinct intendment." In the case of P. Mahendran v. State of Karnataka AIR 1990 SC 405, a three-Judge Bench observed as under, "It is well-settled rule of construction that every statute or statutory Rule is prospective unless it is expressly or by necessary implication made to have retrospective effect. Unless there are words in the statute or in the Rules showing the intention to affect existing rights the rule must be held to be prospective. If a Rule is expressed in language which is fairly capable of either interpretation it ought to be construed as prospective only. In the absence of any express provision or necessary intendment the rule cannot be given retrospective effect except in matter of procedure...." (p. 408) In Hitendera Thakur s case ( supra ) the Supreme Court stated as under : "( i )A statute which affects substantive rights is pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial acquisition of securities or control, section 15HA - penalty for fraudulent and unfair trade practices, section 15HB penalty for contravention where no separate penalty has been provided, section 15JA - crediting sum realised by way of penalties to Consolidated Fund of India and it has amended sections 4( d ), 11, 11A, 15A, 15B, 15C, 15D, 15E, 15F, 15G, 15H, 15L, 15M, 15N, 15-O, 15Z, 24 and 26. Section 24 pertains to the offences and it is divided in two parts. Sub-section (1) provides for sentence if any person contravenes or attempts to contravene or abets the contravention of the provisions of the Act or any Rules or Regulations made thereunder. Whereas sub-section (2) provides for punishment if any person fails to pay the penalty imposed by the adjudicating officer or fails to comply with any of his directions or orders. Prior to the Amendment Act, 2002 under sub-section (1) the accused would be punishable with imprisonment for a term extending to one year or fine or with both. Whereas under sub-section (2) the accused was punishable with imprisonment for a term which shall not be less than one month but which may extend to three years or with fine which shall not be less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial amendment, it has to be read with the main section providing for sentence and it cannot be read in isolation. Consequently the amendment to section 24 read with section 26 must be held to be prospective in operation. Both these sections are complimentary to each other and inseparable in operation. The amended provision has virtually repealed old provision, namely sections 24 and 26 bringing into effect the enhanced punishment and corresponding change in forum making it compatible with the Schedule to Cr.P.C. The effect of such a repeal is covered by section 6 of the General Clauses Act, 1897, which mandates that the repeal shall not, ( a )revive anything not in force or existing at the time at which the repeal takes effect; or ( b )affect the previous operation of any enactment so repealed or anything duly done or suffered thereunder; or ( c )affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or ( d )affect any penalty, forfeiture or punishment incurred in respect of any offence committed against any enactment so repealed; or ( e )affect any investigation, legal proceeding or remedy in respect of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey are, ( a )Courts of Session; ( b )Judicial Magistrates of the First Class and in any metropolitan area, Metropolitan Magistrate; ( c )Judicial Magistrates of the Second Class; and ( d )Executive Magistrates. Section 190 of Cr.P.C. confers powers on the Magistrate to take cognizance of an offence who are of the manners therein proscribed and the term Magistrate in the said section is a compendious term which includes Judicial Magistrate First Class, Metropolitan Magistrate, Judicial Magistrate of Second Class and Executive Magistrate. At the same time there is another Court of original jurisdiction viz. the Court of Sessions also being set up under section 6 of Cr.P.C. Under section 193 of Cr.P.C. except as otherwise expressly provided therein or by any other law for the time being in force, no Court of Sessions shall take cognizance of any offence as a Court of original jurisdiction unless the case has been committed to it by a Magistrate. In other words, a Court of Sessions can take cognizance of an offence only upon an order of committal made by the Magistrate under section 209 of Cr.P.C. and in no other manner. If the Magistrate takes cognizance of an offence u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. classifying the offences under the laws other than IPC clearly states that the offences punishable with imprisonment for less than three years or with fine only are to be tried by Magistrate which means Magistrate of First Class or the Metropolitan Magistrate. There is one more danger in accepting the submissions of Mr. Ponda in this regard viz. it would imply that the amendments to section 24 of the SEBI Act are prospective in nature but the amendments in section 26 of the SEBI Act are retrospective. In fact the scheme of sections 24 and 26 of the SEBI Act is complimentary to each other and inseparable in operation inasmuch as section 24 deals with the imposition of penalty whereas section 26(2) deals with the trial of such offences upon filing of complaint under section 26(1). All these steps/aspects of trial of offences under the SEBI Act are procedurally dependent upon Cr.P.C. 14. In the case of A.R. Antulay v. R.S. Nayak [1992] 1 SCC 225 the Constitution Bench while recognising the right to speedy trial flowing from Article 21 of the Constitution set out certain propositions and proposition Nos. 1, 2 and 3 read as under, "(1) Fair, just and reasonable procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT v. Dhadi Sahu 1993 AIR SCW 3578 the Income-tax Officer had initiated proceedings for the imposition of penalty under section 271(1)( c ) of the Income-tax Act, 1961 and the matter was referred to the Inspecting Assistant Commissioner under section 274(2) of the said Act which on the date of reference read as under : "Notwithstanding anything contained in Clause ( iii ) of sub-section (1) of section 271, if in a case falling under clause ( c ) of that sub-section, the minimum penalty imposable exceeds a sum of rupees one thousand, the Income-tax Officer shall refer the case to the Inspecting Assistant Commissioner, who shall for the purpose, have all the powers conferred under this Chapter for the imposition of penalty." Pending reference, section 274(2) came to be amended with effect from 1-4-1971 by the Taxation Laws (Amendment) Act, 1970 and it read as under: "Notwithstanding anything contained in clause ( iii ) of sub-section (1) of section 271, if in a case falling under clause ( c ) of that sub-section, the amount of income (as determined by the Income-tax Officer on assessment) in respect of which the particulars have been concealed or inaccurate particulars hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. ( v )This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise." (P. 553) It was contended on behalf of the accused by referring to the above principles that the same apply for all the remedies available to an accused under the Criminal Procedure Code including a remedy of revision under section 397 read with section 401 of the said Code. Mr. Ponda, the learned counsel for the Board, however, did not agree with these submissions and as per him, the remedy of revision cannot be compared with the remedy of an appeal. While Mr. Ponda admitted that the remedy of appeal is a substantive right or a vested right, but such is not the case with the remedy of revision before the High Court. In this regard he referred to the scheme of section 115 of Cr.P.C. and the decision in the case of Shiv Shakti Co-operative Housing Society ( supra ) and more particularly the following observations: "13. . . . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er who has been convicted is entitled to avail the right of appeal which is also a fundamental right affecting the liberty of a person keeping in view the expansive definition of Article 21 of the Constitution. 18. When a revision application under section 397 of Cr.P.C. is presented to the High Court, the High Court s powers to decide such revision are set out in section 401 therein. Section 401, Cr.P.C. reads as under: "401. High Court s power of revision. (1) In the case of any proceeding the record of which has been called for by itself or which otherwise comes to its knowledge, the High Court may, in its discretion, exercise any of the powers conferred on a Court of Appeal by sections 386, 389, 390 and 391 or on a Court of Sessions by section 307 and, when the Judges composing the Court of revision are equally divided in opinion, the case shall be disposed of in the manner provided by section 392. (2) No order under this section shall be made to the prejudice of the accused or other person unless he has had an opportunity of being heard either personally or by pleader in his own defence. (3) Nothing in this section shall be deemed to authorise a High Court to conve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )to have acted in the exercise of its jurisdiction illegally or with material irregularity, the High Court may make such order in the case as it thinks fit: Provided that the High Court shall not, under this section, vary or reverse any order made, or any order deciding an issue, in the course of a suit or other proceedings, except where the order, if it had been made in favour of the party applying for revision, would have finally disposed of the suit or other proceedings. (2) The High Court shall not, under this section, vary or reverse any decree or order against which an appeal lies either to the High Court or to any Court subordinate thereto. (3) A revision shall not operate as a stay of suit or other proceeding before the Court except where such suit or other proceeding is stayed by the High Court. Explanation - In this section, the expression, any case which has been decided includes any order made, or any order deciding an issue, in the course of a suit or other proceeding." 20. In the case of Ch. Prabhakar v. State of A.P. 2001 (4) Andh.L.T. 694, a Division Bench of the Andhra Pradesh High Court was dealing with the remedy of criminal revision applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise any of the powers conferred on a Court of appeal by sections 386, 389, 390 and 391 of the said Code. When the Judges composing the Court of Revision are equally divided in opinion, the case shall be disposed of in the manner provided by section 392 which also falls in the chapter of Appeals. In the case of A.R. Antulay v. R.S. Nayak ( supra ) a seven-Judge Bench observed, inter alia , as under: "... Four valuable rights, it appears to us, of the appellant have been taken away by the impugned directions, ( i )The right to be tried by a Special Judge in accordance with the procedure established by law and enacted by Parliament. ( ii )The right of revision to the High Court under section 9 of the Criminal Law Amendment Act. ( iii )The right of first appeal to the High Court under the same section. ( iv )The right to move the Supreme Court under Article 136 thereafter by way of a second appeal, if necessary." (p. 1553) The Supreme Court thus recognised the right of revision as one of the valuable rights available to an accused. It was submitted by Mr. Ponda that the above stated observations made by Their Lordships are only an obiter and the same cannot be taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Companies Act, 1956, it shall be the duty of every manager, managing director, officer and other employee of the company and every intermediary referred to in section 12 of the Act or every person associated with the securities market to preserve and to produce to the Investigating Authority or any person authorized by him in this behalf, all the books, registers, other documents and record of, or relating to, the company or, as the case may be, of or relating to, the intermediary or such person, which are in their custody or power. Sub-section (3) provides that the Investigating Authority may require any intermediary or any person associated with securities market in any manner to furnish such information to, or produce such books, or registers, or other documents, or record before him or any person authorised by him in this behalf as he may consider necessary if the furnishing of such information or the production of such books, or registers, or other documents, or record is relevant or necessary for the purposes of its investigation. Sub-section (4) provides that the Investigating Authority may keep in its custody any books, registers, other documents and record produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e used in evidence against him. Sub-section (8) provides that where in the course of investigation, the Investigating Authority has reasonable ground to believe that the books, registers, other documents and record of, or relating to, any intermediary or any person associated with securities market in any manner, may be destroyed, mutilated, altered, falsified or secreted, the Investigating Authority may make an application to the Judicial Magistrate of the First Class having jurisdiction for an order for the seizure of such books, registers, other documents and record. Sub-section (9) provides that after considering the application and hearing the Investigating Authority, if necessary, the Magistrate may, by order, authorise the Investigating Authority - ( a ) to enter, with such assistance, as may be required, the place or places where such books, registers, other documents and records are kept; ( b ) to search that place or those places in the manner specified in the order; and ( c ) to seize books, registers, other documents and record, it considers necessary for the purposes of the investigation. However, the Magistrate shall not authorise seizure of books, registers, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial for the learned Prosecutor to proceed with the trial of the complaint before the Sessions Court and the complaints will have to be dismissed and consequently the accused will have to be discharged under section 227 of Cr.P.C. In this regard the learned counsel for the accused have relied upon the view taken by Hon ble Shri Justice K.T. Thomas (as then he was) in the case of Rosy ( supra ). His Lordship examined the question whether the Magistrate should have examined all the witnesses of the prosecution before the case was committed to the Court of Sessions or before the process was issued to the accused. Chapter XIV of Cr.P.C. sets out conditions requisite for initiation of proceedings and section 190 thereunder specifies the power of a Magistrate to take cognizance of the offence by three different courses i.e. ( a ) upon receiving a complaint of facts which constitutes such offence, ( b ) upon a police report of such facts, and ( c ) upon information received from any person other than a police officer or upon his own knowledge that such offence has been committed. Taking cognizance of the offence involves the exercise of deciding whether process should be issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the magistrate to issue process if the magistrate forms the opinion that there is sufficient ground for proceeding . When the offence is triable by a Court of Sessions the task of the magistrate cannot be restricted to considering whether process should be issued. There must be sufficient ground for proceeding. Proceeding to what ? In this context section 208 of the Code is important and hence it is extracted below : 208. Supply of copies of statements and documents to accused in other cases triable by Court of Sessions . Where, in a case instituted otherwise than on a police report, it appears to the Magistrate issuing process under section 204 that the offence is triable exclusively by the Court of Sessions, the Magistrate shall without delay furnish to the accused, free of cost, a copy of each of the following: ( i )the statements recorded under section 200 or section 202, of all persons examined by the Magistrate; ( ii )the statements and confessions, if any, recorded under section 161 or section 164; ( iii )any documents produced before the Magistrate on which the prosecution proposes to rely : Provided that if the Magistrate is satisfied that any such docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 208 of the Code. So the intention is not to indicate that the inquiry is only optional in the cases mentioned in section 208. 18. It is pertinent to consider yet another aspect. It is of importance from practical point of view also. Section 209 of the Code enjoins on the magistrate to commit the case to the Court of Sessions after complying with the provisions in section 208 of the Code. Once the case is committed it proceeds to the next stage for which the venue is the Court of Sessions. The trial in the Court of Sessions is envisaged in Chapter XVIII. It must be borne in mind that in the Sessions Court a Public Prosecutor alone can conduct prosecution, whether the case was instituted on police report or on complaint. Section 226, falling within the aforesaid Chapter, requires the public prosecutor to make the open address to the Sessions Court. That section reads thus : 226. Opening case for prosecution. When the accused appears or is brought before the Court in pursuance of a commitment of the case under section 209 the prosecutor shall open his case by describing the charge brought against the accused and stating by what evidence he proposes to prove the guilt of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that it was obligatory on the part of the Magistrate to call upon the complainant to produce all his witnesses and examine them on oath if the offence is triable exclusively by the Court of Sessions and in case the same is not done, obviously the order passed issuing process would be patently in violation of the mandatory requirement of the proviso to section 202(2) of Cr.P.C. 25. The committal order in all the committed complaints has been passed only on the basis of the notification dated 9-6-2003 issued by the Law and Judiciary Department and published in the State Government Gazette. As per the said notification a Special Court for offences arising from the SEBI Act has been constituted so as to conduct the trials for the offences punishable under section 24 read with section 27 of the SEBI Act. The order further states that as the complaint was filed before the constitution of such a Special Court and cognizance was taken thereof by the Court to which the complaint was presented, the case was required to be committed for trial to the Special Court under section 209 of Cr.P.C. The committal order does not speak about the compliance of section 208 of Cr.P.C. which undoubte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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