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TMI Blog2008 (1) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Court they were presented at the first instance. The committal orders passed by the Court of Metropolitan Magistrate/Addl. Chief Metropolitan Magistrate/Chief Metropolitan Magistrate in the complaints referred are hereby quashed 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. X X X X Extracts X X X X X X X X Extracts X X X X ..... cted 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 that the complaints be returned to the Court of Metropolitan Magistrate so as to pass a fresh order of committal after complying with the said provisions of Cr.P.C. Whereas in the other set of complaints the accused filed an application contending that the alleged offences pertained to the period prio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence 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 the law in force at the time of commission of the alleged offence. Under section 24(1) of the old Act, an accused could be punished with imprisonment for a term up to one year or with fine or with both. Whereas under section 24(2) of the old Act, if any person failed to pay the penalty imposed by the adjudicating of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ising 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 (Division Bench) it was the contention of the Board that the complaints filed for the offences that had taken place prior to 29-10-2002 shall be governed by the unamended SEBI Act of 1992 and not by the amended SEBI Act, 2002. (g)If the complaints are tried by the learned Metropolitan Magistrate or the learned Judicial Magistrate, First Clas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain 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 the day the complaint was filed by the authorised officer, a vested right of forum and that cannot be taken away by the amended provision of section 26(2) of the SEBI Act, by holding that the said amendment is retrospective in nature. The Amendments of 2002 are substantive in nature and consequently procedural and, therefore, they are prospective in n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or filed thereafter in respect of the offences that have taken place prior to the said date are required to be committed to the Sessions Court which must try the said complaints and the Court of Metropolitan Magistrate or the Court of Judicial Magistrate, First Class will have no power to try such complaints after 29-10-2002. He relied upon a recent decision of the Delhi High Court (S.B. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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 procedure except insofar as any constitutional objection by way of discrimination or the violation of any other fundamental rights may be involved. The same view was reiterated in Anand Gopal Sheorey's case (supra) and Sukumar Pyne's case (supra). In the case of State of Bombay v. Vishnu Ramchandra AIR 1961 SC 307 on the issue of an enactment to operate prospectively or retrospectively their Lordships observed as under : "1.6 ... The question whether an en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 presumed to be prospective in operation, unless made retrospective, either expressly or by necessary intendment. Whereas a Statute which merely affects procedure, unless such a construction is textually impossible is presumed to be retrospective in its application, should not be given an extended meaning, and should be strictly confined to its clearly defined limits. (ii )Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal, even thou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes 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 than two thousand rupees which may extend to ten thousand rupees or with both. On amendment the punishment has been substantially enhanced. Under sub-section (1) the accused shall be punishable with imprisonment for a term which may extend to ten years or with fine which may extend to twenty five crore rupees or with both. 12. As per section 2(w ) of Cr.P.C. 'summons case' means a case relating to an offence, and not being a warrant case. Whereas under section 2(x) 'warrant case' means a case relating to an offence punishabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid. In view of Article 20(1) of the Constitution of India and section 6 of the General Clauses Act, 1897, it is apparent that all the proceedings and the rights, privileges, obligations accrued or arising out of sections 24 and 26 of the unamended SEBI Act have remained in tact and cannot be disturbed on the enforcement of the amended Act. The SEBI (Amendment) Act, 2002 is, therefore, prospective in operation and cannot be made retrospective only on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ime 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 upon a complaint which appears to be exclusively triable by the Court of Sessions, he has to proceed according to sections 202(2), 208 and 209. Chapter XVIII incorporates provisions prescribing the procedure for the trial before a Court of Sessions. Chapter XIX deals with the procedure for trial of warrant cases, Chapter XX deals with the procedure for trial of summons cases and Chapter XXI prescribes the procedure for summary trial. As per section 260(1) of Cr.P.C. notwithstanding anything contained in the Code, any Chief Judicial Magistrate, any Metropolitan Magis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentary 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 implicit in article 21 of the Constitution creates a right in the accused to be tried speedily. Right to speedy trial is the right of the accused. The fact that a speedy trial is also in public interest or that it serves the social interest also, does not make it any the less the right of the accused. It is in the interest of all concerned that the guilt or innocence of the accused is determined as quickly as possible in the circumstances. (2) Right to speedy trial flowing from article 21 encompasses all the stages, namely the stage of investigation, inquiry, trial, appeal, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssistant 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 have been furnished exceeds, a sum of twenty five thousand rupees, 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." On the issue of transfer of the proceedings from the old forum to the new forum Their Lordships in Dhadi Sahu's case (supra) observed as under: "It may be stated at the outset the general principle is that a law which brings about a change in the forum does not affect pending actions unless an intention to the contrary is clearly shown. One of the mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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. . . . It is fairly well-settled position in law that the right of appeal is a substantive right but there is no such substantive right in making an application under section 115. 14. Section 115 is essentially a source of power for the High Court to supervise the subordinate courts. It does not in any way confer a right on a litigant aggrieved by any order of the subordinate court to approach the High Court for relief. The scope for making a revision under section 115 is not linked with a substantive right. 15. and 16. ****** 17. Right of appeal is statutory and when conferred by statute it becomes a vested right. . . . distinction between the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 convert a finding of acquittal into one of conviction. (4) Where under this Code an appeal lies and no appeal is brought, no proceeding by way of revision shall be entertained at the instance of the party who could have appealed. (5) Where under this Code an appeal lies but an application for revision has been made to the High Court by any person and the High Court is satisfied that such application was made under the erroneous belief that no appeal lies thereto and that it is necessary in the interests of justice so to do, the High Court may treat the application for revision as a petition of appeal and deal with the same accordingly." As per sub-section (1) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 application and its negation in view of the amendments effected by the State of Andhra Pradesh by Indian Electricity (Andhra Pradesh Amendment) Act, 2000 and it is apt to reproduce the following observations of the Division Bench: "In a country where democratic form of Government is adopted, liberty of citizen is of paramount importance and our Constitution provides for several procedural safeguards in that regard. While dealing with the liberty of a subject meant for safeguarding the interest of the accused, the procedure play an important role. The history of liberty is said to be the history of procedure. An accused person who is alleged to have committed an offence must ordinarily be tried in accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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 as legal precedents of binding nature under Article 142 of the Constitution. I am not impressed by these submissions more so when the powers of revision by the High Court are exercised under section 401 of Cr.P.C. and they are akin to the powers available to a Court of appeal against an order of conviction. I am, therefore, inclined to hold that the revision application under section 397 read with section 401 of Cr.P.C. is a statutory remedy and if the complaints are allowed to be tried by the Sessions Court, in the absence of any specific provision in the amended SEBI Act for transfer of the cases from the Court of Metropolitan Magistrate to the Sessions Court, the accused will be deprived of such a statutory remedy of rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch 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 produced under sub-section (2) or sub-section (3) for six months and thereafter shall return the same to any intermediary or any person associated with securities market by whom or on whose behalf the books, registers, other documents and record are produced. However, the Investigating Authority may call for any book, register, other document and record if they are needed again. However, if the person on whose behalf the books, registers, other documents and records are produced requires certified copies of the books, registers, other documents and record produced before the Investigating Authority, it shall give certified copies of such books, registers, other documents and record to such person or on whose behalf the books, registers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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, other documents on record, of any listed public company or a public company (not being the intermediaries specified under section 12) which intends to get its securities listed on any recognised stock exchange unless such company indulges in insider trading or market manipulation. Sub-section (10) provides that the Investigating Authority shall keep in its custody the books, registers, other documents and record seized under this section for such period not later than the conclusion of the investigation as it considers necessary and thereafter shall return the same to the company or the other body corporate, or, as the case may be, to the managing director or the manager or any other person, from whose custody or power they were seized and inform the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake 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 accused as envisaged under section 204 of Cr.P.C. However, there is an interregnum stage between the filing of the complaint and issuance of process and that is section 202 of Cr.P.C. which deals with postponement of the process and it is under Chapter XV "Complaints to Magistrates". Sub-section (1) states that any Magistrate on receipt of complaint of offence may, if he thinks fit, postpone the issue of process against the accused for resorting to any of the two courses i.e. either enquire into the case himself or direct an investigation to be made. But if the offence is triable by Court of Sessions, the Magistrate cannot make a direction for investigation. Hence the Magistrate taking cognizance of an offence upon a complaint, when such offence is not triable by Ses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 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 document is voluminous, he shall, instead of furnishing the accused with a copy thereof, direct that he will only be allowed to inspect it either personally or through pleader in Court'. 16. Three categories of documents are mentioned in the aforesaid section the copies of which the magistrate, who proceeds from the stage in section 204, has to supply to the accused free of cost (in a complaint case involving an offence triable exclusively by a Court of Sessions). As the words used are 'shall furnish' it is almost a compelling duty on the magistrate to supply the said documents to the accused. How can the magistrate supply such documents [In the present context the documents referred to in the third category mentioned in Clause (iii) are not important.] The first category delineated in Clause (i) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 the accused.' 19. If a case instituted on complaint is committed to the Court of Sessions without complying with the requirements in Clause (i) of section 208 of the Code how is it possible for the public prosecutor to know in advance what evidence he can adduce to prove the guilt of the accused. If no inquiry under section 202 is to be conducted a magistrate who decides to proceed only on the averments contained in the complaint filed by a public servant (who is not a witness to the core allegation) and such a case is committed to the Court of Sessions, its inevitable consequence would be that the Sessions Judge has to axe down the case at the stage of section 226 itself as the public prosecutor would then be helpless to state 'by what evidence he proposes to prove the guilt of the accused.' If the offence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tes 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 undoubtedly is the condition precedent for passing the committal order. No application was moved by the SEBI for committal of these complaints from the Court of Metropolitan Magistrate to the Sessions Court and in fact it is not proper to say that a Special Court was constituted for trial of these complaints. The complaints are required to be tried as per section 26 by the Court of Sessions and not by a Special Court. As a specific Sessions Court has been designated to try these complaints, perhaps, the learned Magistrate referred to the same as a Special Court. The nomenclature as "Special Court" does not have support even in the amended SEBI Act. The fact remains that the order of committal has been obviously passed without application of mind and this is one more reason to quash and set aside the order of acquittal. At the same tim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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