Patna High Court · 2012
Case Details
IN THE HIGH COURT OF JUDICATURE AT PATNA Criminal Miscellaneous No.8916 of 2011 ====================================================== Devarajan Kannan son of Shri Subramaniam Devarajan, Managing Director, Kotak Securities Ltd. 1 st Floor, Bakhtawar, 229, Nariman Point, Mumbai 400 021. .... .... Petitioner/s Versus 1. The State of Bihar. 2. Bibha Sinha wife of Ram Subhag Singh, resident of House no. 21, Kasturba Path, North Srikrishnapuri, Boring Road, P.S. Srikrishnapuri, District-Patna. .... .... Opposite Party/s ====================================================== Appearance : For the Petitioner/s :Mr. Uma Kant Shukla and Rajesh Ranjan no.1, Advs. For the Opposite Party/s :Mr. Shantanu Kumar, APP ====================================================== CORAM: HONOURABLE MR. JUSTICE SHIVAJI PANDEY ORAL ORDER 9 07-03-2013 Heard learned counsel for the petitioner and the State. 2. This Court vide order dated 22nd of June, 2012 had issued the notice to the O.P. No. 2. 3. The O.P. No. 2 had appeared through Sri Kritu
Legal Reasoning
of taking cognizance, this Court has to test only prima facie case, as materials are sufficient for taking cognizance and the court Patna High Court Cr.M isc. No.8916 of 2011 (9) dt.07-03-2013 5/6 below has not committed any act of illegality, as statements made in complaint petition are sufficient in forming opinion of prima facie case. 13. Having considered the rival contention of the parties, from the Memorandum of Association Company it appears that the company is doing the business as a broker and the certificate has been obtained from the ‘SEBI’ It appears from Annexures 5 and 8 series that the complainant purchased the share from market of different companies from time to time, complainant had not made investment in the mutual fund of the company or any other scheme. The return of profit in share market depends on the market position and sensex. Some times the market returns good profit of invested money but on certain occasion when the financial condition of the market goes down it occasions loss to the investors. Share markets fluctuate very sharply. The person making investment should keep caution as investor may incur loss due to weak financial market. If the complainant did not receive the amount according to her expectation no person can be held liable, except the investor himself or herself and to his/her fortune. 14. From the complaint petition it appears petitioner is an officer of company, the company was required to be made an accused in absence, as has been decided by the Hon’ble Supreme Patna High Court Cr.M isc. No.8916 of 2011 (9) dt.07-03-2013 6/6 Court in case of R. Kalyani v. Janak C. Mehta (supra), whole criminal proceeding liable to be quashed. The complaint petition does not disclose allegation against the petitioner, allegation in substance has been made against the accused no. 4 only who was posted as a Branch Manager at Patna office and as such in view of judgments reported in case of State of Haryana vs. Brij Lal Mittal
Arguments
Verma and Sri Sanjay Kumar Sharma, Advocates. When the counsel for the O.P. No. 2 did not appear on several dates on call, this Court vide order dated 7th September 2012 again issued the notice to the O.P. No. 2 giving another chance of hearing of the O.P. No. 2. 4. The O.P. No. 2 again appeared through the same counsel, Sri Kritu Verma. Even after appearance second time, he did not choose to appear before this Court on 10th January 2013, 11th January 2013 and 22nd February 2013. Even to-day the counsel for the O.P. No. 2 is absent. Patna High Court Cr.M isc. No.8916 of 2011 (9) dt.07-03-2013 2/6 5. This Court feels there is no way out but to dispose of this case on merit with the assistance of the counsel for the petitioner and the State. 6. In this case, the petitioner is challenging the order dated 14th May 2010 passed by the Judicial Magistrate 1st class, Patna in Complaint Case No. 241(C)/2010 for offence under sections 406 and 420 of the Indian Penal Code. 7. In the complaint case filed by the O.P. No. 2 allegation has been made that the accused no. 4 i.e. the Branch Manager who approached the complainant and asked her to become a client of the depositary participants. The accused no. 4 on different dates approached the complainant and on his assurance the complainant had given the power of attorney and also entered into an agreement with Kotak Mahindra Investment Ltd. During the course of business the complainant transferred Rs. 2,50,000/- (two lakhs and fifty thousand) in depositary participants account. In this connection the complainant had given five cheques, all bearing of HDFC, Boring Road Branch, Patna in the name of Kotak Securities Ltd. and Kotak Mahindra Investment Ltd., as the complainant were in need of money sent a legal notice on 8th July 2009 to the concerned Head, including the present petitioner and asked to return Rs. 3,40,000/- (three lakhs and forty thousand) which the company had taken by way of security/ Patna High Court Cr.M isc. No.8916 of 2011 (9) dt.07-03-2013 3/6 transactions but the said money was not returned and allegation has been made that the five cheques which were deposited in the company were not returned, thereby misappropriate the fund by the company and its officers. 8. Counsel for the petitioner submits that the allegation is completely absurd, as the company works as a broker for the purposes of investment in the share of different companies and for that Company has obtained license from the Security and Exchange Board of India (herein after mentioned as ‘SEBI’). It has further been submitted, the said money was not deposited in the company’s mutual fund or in any of the scheme but fact remains, complainant had made investment of money in purchase of shares of different companies. 9. The value of share depends on health of the share market as sensex varies time to time very sharply for different reasons. Investment in share is uncertain, it is not sure, the money invested in the share market would fetch profit as some times, value of share goes down resulting in loss to the investor. 10. In support of contention, the company works as broker in the share market relied on Articles of Association and Memorandum of Association which is an impeachable document (Annexure-4) shows the main object of the company in clause (i) of the memorandum of association, the company has been doing a Patna High Court Cr.M isc. No.8916 of 2011 (9) dt.07-03-2013 4/6 business as a broker for the purpose of investment of money in the share market for its Customers. To substantiate this argument, counsel relied on Annexure-7 series shows that the Kotak Securities Ltd. has obtained certificate of registration from the Securities and Exchange Board of India from time to time and Annexure-5 and Annexure-8 series show the complainant had invested the money in purchase of share on different dates and in different companies showing quantity of purchase of share and the amount of investment. He has further submitted that in the complaint petition there is no allegation whatsoever against the petitioner so much so that the company against whom the allegation has been made has not been made party to this complaint case and, as such, the order of cognizance is vitiated. 11. Counsel for the petitioner has relied on judgment reported in (2009) 1 SCC 516, paras 26 to 28 and 41 (R. Kalyani v. Janak C. Mehta) contending that in the complaint petition there should have been a specific allegation made against the persons who have been arrayed as accused so much so that it was mandatory required to implead the company in the event of failure, the whole prosecution will fall flat. 12. Counsel for the State has submitted, at the stage