TMI Blog2021 (4) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... eing no procedure prescribed for filing of complaint in this Act, shows that the provisions under the Code of Criminal Procedure are applicable, hence, lodging of FIR under Section 10 of the Act, 2005 is well within the law. Further there is evidence present that depositors were defrauded by the HBN Company in which the applicants are directors, which is prima-facie case for framing charge under Section 10 of the Act, 2005. Hence, after considering on all the submission and the material present in the charge-sheet against these applicants, this Court is of the opinion that prima-facie case for framing of charge against these applicants, framed by the trial Court, is present. Hence, all the revision petitions are liable to be dismissed, which are dismissed accordingly. - CR.R. No. 577 of 2018 - - - Dated:- 7-4-2021 - Hon'ble Shri Justice Rajendra Chandra Singh Samant For Applicants : Mr. Bhashkar Payashi, Advocate with Mr. Vibhash Tiwari Rohitashwa Singh Advocates For State/Respondent : Mr. Adil Minhaj, Govt. Advocate C A V ORDER 1. In all the above revision petitions, the applicants are common, the facts circumstances and evidence are also of simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal order dated 12.02.2015 provided opportunity to the applicant to make repayment to the investors on or before 09.03.2015. The company has acted in accordance with the direction of SEBI and repaid the amount to various investors in Chhattisgarh. The property acquired from investments have been surrendered by the company, which is value of ₹ 1400 Crores. Therefore, the applicants' company did not have any dishonest intention. As soon as the direction and orders were issued by the SEBI, the company of the applicants started making repayments to the investors from the year 2013, but then the offence against the company were registered in the year 2015. There does not exist sufficient material in the chargesheet against the applicants for framing of charge. Because of the registration of FIR, the applicants' company is now unable to dispose of its property, which has become hindrance in making repayment to the investors. The applicants' company has challenged the order dated 12.02.2015 of SEBI, before the Securities Appellate Tribunal, Mumbai, in which the tribunal has ordered and directed SEBI to sale out the property surrendered by the company and make payment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ositors and proceed to secure the interest of the depositors, which has not been done. Therefore, there is no ground present to frame charge under Section 10 of the Act, 2005 against the applicants (in Cr.R. No.1339 of 2019) as there is no finding of the Competent Authority that the applicant company has committed fraudulent default as defined under Section 2 (i) of the Act, 2005. It is also submitted that the rules framed under Protection of Depositors Interest Rules, 2015 has also not been followed. 7. Reliance has been placed on the judgment of Binod Kumar Ors. Vs. State of Bihar Ors., reported in (2014) 10 SCC 663 , in which the Supreme Court has held, that civil liability can not be converted to criminal liability and if it is done that is the abuse of process of law. In case of Madhavrao Jiwajirao Scindia Ors. Vs. Sambhajirao Chandrojirao Angre Ors, reported in (1998) 1 SCC 692, in which it was held that when prosecution at the initial stage is asked to be quashed, the test to be applied by the Court is as to whether the uncontroverted allegations as made primafacie establish the offence or not and that a breach of trust may be both civil wrong or criminal o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicants was not registered with SEBI, which is the requirement under the proviso to Section 11AA Sub-section (1) of SEBI Act, 1972. The applicants company has issued bond certificate for which the applicants had no authority to issue such bond and certificate. The Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999 clearly provides under Section 3, that no persons other than collective investment management company which has obtained certificate under these regulations shall carry or on or sponsor or launch a collective investment scheme. Regulation 2(h) defines 'Collective Investment Management Company' means a company incorporated under the Companies Act, 1956 (1 of 1956) and registered with the Board under these regulations, whose object is to organise, operate and manage and collective investment scheme. The applicants' company was neither constituted as collective investment management company nor was registered under the scheme, 1999, which further shows that the intention of the applicant had been to defraud the investor/depositors from the very beginning. 9. It is further submitted that Section 3 of the Act, 1978 is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Cr.P.C. grants the accused any right to file any documents at the stage of framing charge. Further in case of Superintendence and Remembrancer of Legal Affairs West Bengal Vs. Anil Kumar Bhunja, reported in AIR 1980 SC 52, it was held that even a very strong suspicion founded upon materials before the Magistrate, which leads him to form a presumptive opinion as to the existence of the factual ingredients constituting the offence alleged; may justify the framing of charge against the accused and similar was the view of Supreme Court in case of Amit Kapoor Vs. Ramesh Chander, reported in (2012) 9 SCC 460 . It is submitted that the Hon'ble Supreme Court has cautioned the High Court to refrain from interfering at the stage of framing charges against the accused persons in the case of Om Wati (Smt.) Another Vs. State, Through Delhi Admn. Ors., reported in (2001) 4 SCC 333 . The material available in all three cases clearly are against these applicants, which is quite sufficient for framing of charges. Hence, looking to the prima-facie case present against these applicants for framing of charges against them, the revision petitions are without any substance, which m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company Ltd. SEBI examined the business of HBN Dairy Allied Co. Ltd. and passed order on 12.07.2013, in which, it is mentioned in the first paragraphs, that HBN Dairies and Allied Limited company is illegally collecting money from public. Notice was issued to the company to explain about violation of the provisions of SEBI Act, in which company submitted that the scheme and plans of the company are not in the nature of collecting money, but the money is provided by the customers of HBN Dairies to facilitate its business. After examination of the reply to the notice, the applicants' company was directed to wind-up their business of making collections of money from public. This order is part of the charge-sheet. Reference of the applicants' side on the final order of SEBI dated 12.02.2015, the order of NCLT 14.08.2018 and the order of Supreme Court dated 17.06.2019 is not present with any material present in the charge-sheet, therefore, these orders can not be taken into consideration. 18. There is no dispute that the applicants' company was entrusted with the property of the investors/depositors and that the applicants had taken delivery of the property I.e. the mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is manifestly necessary and indeed, to say so is to state the obvious, that the activity charged as falling within the mischief of the Act must be shown to be a part of a scheme for making quick or easy money, dependent upon the happening or non- happening of any event or contingency relative or applicable to the enrollment of members into that scheme. A 'scheme,' according to the dictionary meaning of that word, is 'a carefully arranged and systematic program of action', a 'systematic plan for attaining some object', 'a project'. 'a system of correlated things'. (see Webster's New World Dictionary, and Shorter oxford English Dictionary, Vol. II), The Systematic programme of action has to be a consensual arrangement between two or more persons under which, the subscriber agrees to advance or lend money on promise of being paid more money on the happening of any event or contingency relative or applicable to the enrollment of members into the programme. Reciprocally, the person who promotes or con- ducts the programme promises, on receipt of an advance or loan, to pay more money on the happening of such event or contingency. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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