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TMI Blog2023 (6) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... ulations, 1995 read with Regulation 6(1), 6(3), 8(1), 10(1) and 10(2) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1994 and Section 200 of the CrPC against inter alia Mr. Arihant Jain, the Accused No. 13 therein ('Complaint'). It was alleged that one M/s Ideal Hotels and Industries Ltd. ('IHIL') had bought back its shares through its own group companies, their directors, and friends and family, thereby inter alia artificially raising the price of IHILs securities. At the relevant time, Mr. Arihant Jain, was acting as the Director of IHIL. 3. Vide Order dated 29.03.2000, the Ld. ACMM, Tis Hazari, Delhi was pleased to issue summons to all the accused persons, including Mr. Arihant Jain. Thereafter, a Revision Petition under Section 397, CrPC for setting aside the Summoning Order dated 29.03.2000 was filed by Mr. Arihant Jain. 4. Vide Impugned Order dated 24.03.2009, the Learned Additional Session Judge set aside the summoning order qua the Respondent No. 1 herein while observing that the Complaint filed by the Appellant herein did not contain any material to suggest that the Respondent No. 1 herein was responsible for the carrying out the business of IH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or indirectly controlled by the Managing Director of IHIL i.e., Shri L.R. Maurya, Accused No. 10 and one Director of IHIL Shri. Shririam Maurya, Accused No. 11, and their friends and family. Details of the companies, their directors, and their registered addresses are reproduced below in a tabulated form:- Name of Entity Regd. Office Directors Dali Fashions P Ltd. B-34, Sagar Apts, Tilak Marg, New Delhi-1 is the regd. Office of IDEAL and also the office of Shri Prakash Gupta Shri Prakash Gupta and his wife Smt. Nirmal Gupta PKP consultants P Ltd. B-34, Sagar Apts, Tilak Marg, New Delhi-1 is the regd. Office of IDEAL and also the office of Shri Prakash Gupta Directors include Shri Prakash Gupta and his wife Smt. Nirmal G Fidelity FinvestPvt. B-34, Sagar Apts, Tilak Marg, New Delhi-1 is the regd. Office of IDEAL and also the office of Shri Prakash Gupta Directors included Salil Dubey employee of IDEAL and Shri Sudhir Gupta, a friend of Shri Prakash Gupta. Fourays Construction P Ltd. No linkage. Directors include Smt. Nirmal Gupta, Shri Salil Dubey, an employee of IDEAL, Shri Sudhir Gupta, a friend of Shri Parkash Gupta and Shri Sushil Kumar, a relative of Shri Prakas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the Respondent No. 1 is concerned. 14. A perusal of the Complaint also indicates that the Appellant had issued summons under Section 11(13) of the SEBI Act, 1992 to Accused Nos. 5-7 and 9 Companies, Accused No. 16 i.e., Mr. Prakash Gupta, and Shri L.R. Maurya, Accused No. 10. The Complaint refers to the statements given by both, Accused Nos. 10 and 16. Mr. Prakash Gupta, in his statement, mentioned that the Accused No. 4-9 Companies were directly or indirectly the group companies of Accused No. 10 and 11, and their friends and family. He further stated that the affairs of these companies were handled by him from his office and residence. This was reiterated by Accused No. 10 i.e., Shri L.R. Maurya in this statement recorded on 05.07.1999. He admitted that Accused No. 4-9 Companies were controlled directly or indirectly by him, and his friends and family. He reiterated that the day to day affairs of such companies were also being handled by Shri Prakash Gupta, after due consultation with him. Neither Accused No. 10 nor 16 has detailed the role of the Respondent No. 1. On the contrary, it appears that Shri L.R. Maurya acting in connivance with one Shri Prakash Gupta was running t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the [contravention] and shall be liable to be proceeded against and punished accordingly. Explanation.-For-the purposes of this section,- (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm." 17. It emerges that every person responsible for the commission of the offence or with the knowledge of whom the offence was committed, is liable for the offence. There is now burgeoning jurisprudence both under the SEBI Act, and under the Negotiable Instruments Act, 1881 which suggests that the liability is fastened upon an individual by virtue of being in charge, and being responsible when the offence was committed, and not merely on the basis of holding a designation or office in the company. Even an individual not holding a particular designation in the Company, but who was at the helm of affairs at the relevant time can be held liable. Hence, such vicarious criminality is not attributed to individuals simply by virtue of the position held by them in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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