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2013 (9) TMI 25 - HC - Companies LawJurisdiction of the Court - The main issue raised vide the instant petition is that Delhi Courts have no territorial jurisdiction to try and adjudicate upon the complaint case filed by the respondent because of the fact that petitioner is working at Lucknow has its registered office at Lucknow and the alleged offence was committed at Lucknow. Petition for Quashing the Complaint and Subsequent Proceedings in the case of SEBI v/s Maha Bhairav Plantation and Finance Ltd. - The petitioner and the co-accused sponsored and caused to be sponsored Collective Investment Schemes called as CIS without getting the mandatory registration from Complainant/Respondent SEBI, and thereby violated the provisions of section 12 (1B) of the SEBI Act, 1992 - Held that - The petition for quashing the Complaint was rejected - The important factor of the case was that it was at the fag end of the trial now fixed for the defence evidence and as such there was no difficulty or prejudice caused to the petitioner to proceed further. - Proceedings before the trial court, Delhi to continue. - Decided against the petitioner.
Issues Involved:
1. Territorial Jurisdiction of Delhi Courts 2. Compliance with SEBI Regulations 3. Timeliness of the Petition 4. Procedural Adherence and Statutory Obligations Issue-wise Detailed Analysis: 1. Territorial Jurisdiction of Delhi Courts: The petitioner argued that the Delhi Courts lack territorial jurisdiction since the company operates out of Lucknow and the alleged offense occurred there. The respondent countered that the Northern Regional Office of SEBI, which oversees regions including Uttar Pradesh, is situated in Delhi, and all dealings and communications related to the case were conducted with this office. Additionally, the application for registration and the required statutory report were to be filed in Delhi. The court noted that the petitioner had an office in Delhi, and communications on the company's letterhead disclosed this Delhi office. Consequently, the court determined that the cause of action accrued in Delhi, giving the Delhi Courts jurisdiction over the matter. 2. Compliance with SEBI Regulations: The petitioner had failed to comply with SEBI's requirements under Regulation 73 of the SEBI (Collective Investment Schemes) Regulations, 1999. The petitioner did not obtain the necessary registration from SEBI and failed to file the mandatory winding-up and repayment report. The respondent emphasized that the petitioner and the co-accused were required to wind up the existing Collective Investment Schemes and repay the investors but did not fulfill these obligations. The court highlighted that the petitioner did not file the statutory reports or repay the investors as required, thereby violating Section 12(1B) of the SEBI Act, 1992. 3. Timeliness of the Petition: The respondent pointed out that the complaint was initially filed on 24.12.2001, and the present petition was filed in 2011, making it time-barred. The court acknowledged that the case was at the fag end of the trial, with the matter fixed for defense evidence. Given the advanced stage of the trial, the court found no merit in the petitioner's argument about the timeliness of the petition. 4. Procedural Adherence and Statutory Obligations: The petitioner argued that the trial court dispensed with the statement of the accused under Section 313 of the Cr.PC and that the complaint case should have been filed in Lucknow. However, the respondent maintained that the petitioner failed to comply with statutory provisions, including filing the requisite reports with SEBI. The court referred to precedents, including the Supreme Court's judgment in K. Bhaskaran v. Sankaran Vaidhyan Balan, which clarified that the trial could be held in a court having jurisdiction over any of the localities where the offense was committed. The court concluded that the petitioner did not adhere to the procedural requirements and statutory obligations, reinforcing the validity of the complaint filed in Delhi. Conclusion: The court dismissed the petition, affirming that Delhi Courts have territorial jurisdiction, and the petitioner failed to comply with SEBI regulations. The petition was deemed time-barred, and the case was at an advanced stage of the trial, with no prejudice caused to the petitioner. The court was not inclined to quash the complaint and subsequent proceedings, and no order as to costs was made.
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