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TMI Blog2013 (8) TMI 1189X X X X Extracts X X X X X X X X Extracts X X X X ..... Sessions Court vide order of 24th July, 2002. The three grounds upon which quashing of the complaint in question and summoning order is sought by petitioners are as under: - (i) Whether or not the complaint is liable to be quashed qua the Petitioner on the ground of delay in filing the complaint? (ii) Whether or not the Chairman, SEBI could have authorized the concerned SEBI official to file the complaint on behalf of SEBI without there being Delegation of Powers in favour of the Chairman by the SEBI Board to this effect? (iii) Whether or not a "personal hearing" is mandatorily required to be given by a statutory authority for the purpose of dispensing with the requirement of following the principles of natural justice? 3. The factual background is as under: - SEBI received a complaint dated 27.6.96 from one Mr. Vijay Miglani alleging that on the instructions of M/s. Ideal Hotels and Industries Ltd. some broker purchased its shares and huge deliveries were kept outstanding in the grey market. An anonymous complaint was also received in October, 1996 alleging price rigging and insider trading in the script. After the investigation it was revealed that the price ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ket) Regulations, 1995, the accused No.1 to 23 acting through accused No.10,11 and 16 have been instrumental in artificially raising with price of IIHL immediately after it was listed in DSE. AS per the inquiry of SEBI no intimation of acquiring more than 5% have been received by DSE under the regulation 6(1), 8(1) and 10(1) of SEBI (Substantial Acquisition of shares and Takeovers) regulations 1994. 6. The relevant provisions of SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 1995, which are required to be noticed are Section 4(a) and 4(e), which read as under: - "Prohibition against Market Manipulation 4. No person shall - (a) effect, take part in, or enter into, either directly or indirectly, transactions in securities, with the intention of artificially raising or depressing the prices of securities and thereby inducing the sale or purchase of securities by any person; XXXXXXXXXXX (e) pay, offer or agree to pay or offer, directly or indirectly, to any person any money or money's worth for inducing another person to purchase or sell any security with the sole object of inflating, depressing, or causing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omic offences, which relates to complicated transaction involving multiple conniving offenders, usually takes time. In economic offences like the instant one, recourse to Section 473 of Cr.P.C. is generally taken. The pertinent observations of Apex Court in Sukhdev Raj v. State of Punjab, (1994) Supp 2 SCC 398 on limitation aspect are as under: - "In the appeal before the High Court the only question raised was that though occurrence took place on 31-5-1974 challan was filed on 29-8-1977, therefore, no cognizance could have been taken in view of Section 468 CrPC. The High Court has considered this aspect and after referring to Section 473 CrPC held that in the facts and circumstances of the case the court can take cognizance if the delay has been properly explained or that it is necessary to do so in the interest of justice. In any event in this case an application was filed for condoning the delay and also explaining the delay at a later stage. According to the learned counsel for the appellant such an application was filed only after almost at the time of conclusion of trial and before judgment was delivered. It may be noted Section 473 CrPC does not in any clear terms lay down ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined by regulations, the Chairman shall also have powers of general superintendence and direction of the affairs of the Board and may also exercise all powers and do all acts and things which may be exercised or done by that Board." 13. A plain reading of the aforesaid provisions makes it evident that the Chairman, SEBI, exercises the powers of general superintendence, directions and management, which impliedly includes the power to initiate prosecution against offenders for which no specific delegation in favour of Chairman, SEBI is required. Such a view can be prima facie taken in the absence of any particular provision in the aforesaid Act specifically mandating the Board to authorize the Chairman or any other member to file the complaint to initiate prosecution of the offenders. Thus, it can be reasonably said that Chairman, SEBI by virtue of Section 4(3) of the Act is empowered to initiate criminal prosecution of the offender and for doing so, Chairman, SEBI does not require any authorization from the Board under Section 19 of the Act. To take a contrary view would apparently render Section 4(3) of the Act redundant. 14. At the initial stage of these proceedings, Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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