Videocon International & ors. v. Securities & Exchange Board of India & ors.

Judgment

1. Heard the learned counsel for the respective parties. Rule. With consent parties, petitions / applications have been finally heard at length.

2. This group of petitions / applications filed Article 227 Constitution and/or Section 482 Cr.P.C. a common grievance viz. complaints against petitioners / applicants offences punishable Section 24 Section 27 Securities Exchange Board India Act, 1992 ("the SEBI Act" short) Court Chief Metropolitan / Additional Chief Metropolitan / Metropolitan Magistrate Mumbai rather committed Court Sessions Greater Mumbai, despite 4 SEBI (Amendment) Act, 2002 having brought effect 29th October 2002 whereunder Court Session offences together decided a common judgment. The details complaints giving petitions / applications are set out in the following tabular form: -------------------------------------------------- Sr.¦ Petition/ ¦ Complaint ¦ Offences ¦ Date of ¦ No.¦ Application¦ Number ¦ Number ¦ ----------------¦---------------------------------- ¦ ¦

1. ¦App/2238/07 ¦ 142/S/2003¦ 12, 24(1)¦14/6/2007 ¦ ¦ ¦ ¦ ¦

2. ¦App/2239/07 ¦ 142/S/2003¦ 12,24(1) ¦14/6/2007 ¦ ¦ ¦ ¦ ¦

3. ¦WP/338/07 ¦793/W/2003 ¦ 24(1)& 27¦ 5/10/06¦ ¦ ¦ ¦

4. ¦WP/1154/07 ¦3877/2003 ¦ 24(1) ¦ ¦ ¦ ¦

5. ¦WP/1557/07 ¦3952/W/2003¦ 12, 24(1)¦ 15/6/07 ¦ ¦ ¦ ¦ ¦

6. ¦WP/1598/07 ¦3952/W/2003¦ 12, 24(1)¦ 15/6/07 ¦ ¦ ¦ ¦ ¦

7. ¦WP/1773/07 ¦304/W/2003 ¦ 24(1)& 27¦ Not ¦ ¦ & 27 ¦ ¦ & 27 ¦ ¦ ¦ ¦ ¦ ¦ & 27 ¦ ¦ ¦ & 27 ¦ ¦ ¦ ¦ ¦ 8. ¦WP/1611/07 ¦460/S/2003 ¦24(1) & 27¦ 11/10/06 ¦ --------------------------------------------------- ¦ ¦

3. On perusal of the R. & P. called from the ¦ under ¦ SEBI Act ¦ order ¦ committal¦ ¦ ¦ ¦ ¦ ¦ ¦ Not ¦ committed¦ ¦ ¦ ¦ ¦ ¦ committed¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ ¦ 5 Court of the Metropolitan Magistrate / Sessions Court the following admitted position emerges: (a) The complaints have been filed on behalf of SEBI (Securities Exchange Board India) authorised officer a specific passed by the Chairman of SEBI and the said officer is the Legal Manager / Asst. Legal Manager. (b) In all the complaints the cause of action is 29/10/2002, 29/10/2002 remaining thereafter complaints 29/10/2002 conviction sentence the accused by the learned Metropolitan / Additional Chief Metropolitan / Chief Metropolitan Magistrate. (c) In some complaints SEBI has even engaged a private advocate rather engaging the services of the Public / Asst. Public Prosecutor. (d) Along with the complaint, though the list of witnesses filed, witnesses recorded statements Investigating Officer / Authorised Officer, otherwise, 6 placed record complainant obviously investigation Section 11C SEBI Act not conducted before the complaints were filed after 29/10/2002. (e) Though the complaints were pending anywhere years, 29th October 2002 SEBI application committal complaints Section 209 Cr.P.C. committal orders passed 30th June 2006 issued Registrar General 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 Section 209 Cr.P.C., separate applications before Sessions Court relief prayed lines. accused prayed quashing committal ground comply requirements Sections 200, 202 208 Cr.P.C. consequently prayed complaints returned Court In Metropolitan Magistrate a 7 committal complying provisions Cr.P.C. Whereas complaints accused application contending alleged offences pertained period 29/10/2002 and, therefore, guarantee Article 20 Constitution complaints required Metropolitan / Additional Chief Metropolitan / Chief Metropolitan Magistrate Sessions Court jurisdiction complaints consequently prayed remitting complaints Court passed committal. All applications dismissed Sessions Court Court quantum sentence awarded accused, guilty, pre-amended provisions i.e. a maximum Sessions Court competent Summons / Warrant cases, upholding the contentions of SEBI while opposing all such applications.

4. However, in these petitions / applications, as earlier, a common contention raised mentioned complaints required 8 committed / transferred Court Sessions Courts before were presented by the authorised officer at the first instance.

5. The SEBI Act was enacted to provide for the establishment a Board protect interest investors securities promote development regulate securities market The matters connected therewith incidental thereto brought 30th January

1992. SEBI notified Regulations prevention fraudulent unfair practices transactions relating securities titled Securities Exchange Board India (Prohibition Fraudulent Unfair Trade Practices Relating Securities Market) Regulations,

1995. It framed Securities Exchange Board India (Prohibition Insider Trading) Regulation,

1992. The Parliament amended SEBI Act SEBI (Amendment) Act, 2002 amendments brought effect 29/10/2002 unamended Section 26, Court competent complaints 27 offences Section 24 Section SEBI Act was the Court Metropolitan 9 Magistrate Judicial Magistrate First Class. However, amended Section 26(2) Court inferior a Court Session offence punishable Act Court cognizance offence punishable Rules Regulations framed thereunder, complaint Board, thereby deleting 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 stated complaints Court before presented

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 doctrine prospective effect person alleged committed offence prosecuted convicted offence except a violation a commission charged offence he/she cannot subjected a penalty greater inflicted commission alleged 10 offence. Under Section 24(1) Act, accused punished imprisonment a or with both. Whereas Section 24(2) Act, person failed penalty imposed adjudicating officer, punishment prescribed imprisonment a which may extend Rs.2000/- extend Rs.10,000/- both. offences Section 24(1) summons whereas Section 24(2) warrant Thus Court Metropolitan Magistrate Judicial Magistrate, First Class Section 26(2) Act. Under amended Act sentence enhanced Act amount quantified extended rupees twenty-five crores. The accused required offences Section 24 Section 27 Old Act amended Act action admittedly 29/10/2002 complaints, in view of the guarantee enshrined under Article 20(1) of the Constitution. 11 (b) The amendments to Section 24 are substantial nature amendment Section 26 SEBI Act consequential, though termed procedural and, therefore, amended provisions applicable prospectively retrospectively. Consequently complaints Act i.e. SEBI Act applicable 29/10/2002 cause of action arose prior to the said date of amendment. (c) If the period of sentence was upto one year, obviously period limitation complaint provisions Cr.P.C. complaints, referred hereinabove, a separate application accused praying dismiss complaints as they were filed beyond the limitation of three years. (d) Though the amendments in the SEBI Act were brought effect 29/10/2002, 14th June 2007 complainant application before learned Metropolitan 12 Magistrate praying complaint committed Court Sessions amended Act that the learned Metropolitan Magistrate did not have the jurisdiction to try the complaint. (e) Article 20(1) of the Constitution read with Section 6 General Clauses Act, 1897 conclusion proceedings rights, privileges, obligations accrued / arising within Sections 24 26 SEBI Act, 1992 remained in-tact cannot Amendment Act, 2002 disturbed SEBI prospective operation cannot retrospective. If Section prospective effect Section 26 provided retrospective effect, amount anomalies created beyond contemplation Legislature (a) Sessions Court a position 24 a offender entitled punished a maximum punishment Act summarily command Section 260 Cr.P.C. (b) accused entitled exercise vested right as contemplated under Section 256 of Cr.P.C. 13 (f) In SEBI Appeal No.1 of 2002, SEBI Appeal No.8 2002 SEBI Appeal No.9 2002 decided contention Court (Division Bench) Board complaints offences 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 learned Judicial Magistrate, First Class remedy appeal before Court Sessions thereafter accused, unsuccessful, a remedy revision Section 397 Cr.P.C. before Court. Whereas stated complaints Sessions Court, appeal instance accused Court additional statutory remedy revision Section 397 read with Section 401 of Cr.P.C. would be taken away. (h) When the complaints were filed by the authorised officer, witnesses statements witnesses investigation carried Section 164 14 Cr.P.C. Section 11C SEBI Act, process was issued learned Metropolitan Magistrate Section 204 Cr.P.C. without recording statement complainant a / witnesses complaint public officer. Consequently requirements Section 208 Cr.P.C. committal of the complaint to the Court of Sessions under Section 209 thereunder. (i) The right of speedy trial is a guarantee to accused enshrined Article 21 Constitution committed India complaints Sessions Court, covered Chapter XVIII Chapter XX Chapter XXI Cr.P.C. Consequently accused deprived guarantee speedy otherwise before learned Metropolitan Magistrate, summary warrant trial, be. It submitted benefit Sections 256, 257 258 Cr.P.C. available favour of the accused would be taken away if the complaints are tried before the Court of Sessions. (j) The trial by Sessions Court would result in 15 procedural discrimination impermissible intolerable fundamental rights envisaged Articles 14 21 Constitution. Sections 200, 202 proviso, 204, 208 209 Cr.P.C. provided Code private complaint relating offences exclusively triable Court Sessions regards report, proceedings initiated police relevant provisions Sections 154, 173, 207 209 Code. The provisions Section 200 Section 202 cannot isolation entire scheme account ascertain legislative intent fathom meaning thereof. There cannot a situation where accused police report advantageous position a procedural fairness receipt entire material collected during investigation produced Section 173 Cr.P.C. a reasonable accusations likely during before Sessions Court. In support contentions learned counsel accused referred provision Section 11C SEBI Act effect 29/10/2002 regarding investigation 16 contended scheme Section 11C provisions Sections 164, 165, 175 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 authorised officer, a vested cannot amended provision Section 26(2) SEBI Act, holding amendment retrospective nature. The Amendments 2002 substantive nature and consequently procedural and, therefore, they are prospective in nature. . In support of all these contentions the learned counsel for the accused relied upon the following decisions (1) Transmission Corporation A.P. Vs. Chi. Prabhakar & ors. [2004 [2004 [2004 (5) (5) (5) SCC SCC SCC 551] 551] 551] (2) Rosy & anr. Vs. State of Kerala & anr. [2000 [2000 [2000 (2) (2) (2) SCC SCC SCC 230] 230] 230] (3) Paranjothi Udiyar & ors. Vs. State & 17 ors. [1976 [1976 [1976 Cri.L.J. Cri.L.J. Cri.L.J. 598] 598] 598] [1977 (4) Kamal Krishna De Vs. State & anr. [1977 [1977 1492] Cri.L.J. 1492] Cri.L.J. 1492] Cri.L.J. (5) Devarapalli Lakshminarayana Reddy ors. Vs. V. Narayana Reddy & ors. [1976 [1976 [1976 (3) (3) (3) SCC SCC SCC 252] 252]252] SCSCSC (6) R.S. Nayak Vs. A.R. Antulay [AIR [AIR [AIR 1984 1984 1984 684] 684] 684]

7. Mr.Ponda, the learned counsel for the SEBI, on hand, before Court supporting committal submitted pending complaints 29/10/2002 thereafter pertaining offence 29/10/2002 required committed Sessions Court mandate Section 26(2) amended SEBI Act. When the mandate Section 26(2) SEBI Act states inferior a Court Sessions offence punishable Act, choice 18 learned Metropolitan Magistrate commit pending complaint Sessions Court Section 209 Cr.P.C. The Act unambiguous trials offences irrespective whether before amendment whether punishable imprisonment years. He further submitted Legislature wanted before amendment respect offences committed amendment should Metropolitan Magistrate, mentioned section itself and, therefore, permissible Courts language statute statute receive interpretations Legislature. While admitting sentence awarded abovementioned complaints unamended Section 24 i.e. a sentence both, reason Sessions Court proceed committed complaints procedure applicable summons Chapter XX warrant Chapter XIX, notwithstanding before Sessions Court 19 Chapter XVIII Cr.P.C. Mr.Ponda referred Schedule I Cr.P.C. pointed warrant offences IPC triable Sessions Court jurisdictional complaints Sessions Court summons warrant cases. As Mr.Ponda accused a vested selecting a forum. The speedy envisaged Article 21 Constitution / accused cannot choose a insist a specific Court. Referring amendment Section 26 SEBI Act, contended Mr.Ponda procedural nature and, therefore, a retrospective effect asmuchas pending 29/10/2002 thereafter respect offences required committed Sessions Court complaints Court Metropolitan Magistrate Court Judicial Magistrate, First Class complaints 29/10/2002. He relied a recent decision Delhi High Court (S.B.) Panther Fincap Management Services Ltd. 20 Vs. Securities Exchange Board India [Manu/DE/9209/2006] [Manu/DE/9209/2006] [Manu/DE/9209/2006] pointed interpretation amended Section 26(2) therein keeping principles applicable criminal jurisprudence should followed Court well. By change forum, violation fundamental rights guarantied Articles 14 21 Constitution observations A.R. Antulay Vs. R.S. Nayak [1988 [1988 [1988 (2) (2) (2) SCC SCC SCC 602] 602] 602] general principles Act Parliament existing changed, observations Apex Court cannot treated pending complaints pertaining offence 29/10/2002 the Courts before presented rather committing Sessions Court. In short, Mr.Ponda, observations A.R.Antulay’s obiter specific principles regarding retention forum. The learned counsel further a appeal a vested remedy revision criminal jurisprudence and, therefore, accused 21 deprived remedy revision Section 397 Cr.P.C. before Court committal complaints Sessions Court cannot accepted ground reason complaints required Court before presented. As Mr.Ponda, Rosy Vs. State Kerala (Supra) Transmission Corporation A.P. ors. vs. Chi. Prabhkar ors. (Supra) support accused complaints required learned Metropolitan Magistrate cannot committed Sessions Section 209 Cr.P.C. In support defence impugned orders passed Sessions Court orders committal passed learned Metropolitan Magistrate, Mr.Ponda relied following decisions in addition to the ones already referred to hereinabove: (1) Rao Shiv Bahadur Singh Vs. State Vindhya Pradesh [AIR [AIR [AIR 1953 1953 1953 SC SC SC 394] 394] 394] (2) Union India vs. Sukumar Pyne [AIR [AIR [AIR 1966 1966 1966 SCSCSC 1206] 1206] 1206] 22 (3) Nani Gopal Mitra Vs. State of Bihar [AIR[AIR[AIR 1970 19701970 SC SC SC 1636] 1636] 1636] (4) Anand Gopal Sheorey Vs. The State Bombay [AIR[AIR[AIR 1958 1958 1958 SC SC SC 915] 915] 915] (5) Rajendra Kumar Vs. Kalyan (dead) by LRs. [AIR[AIR[AIR 2000 2000 2000 SC SC SC 3335] 3335] 3335] (6) Hitendra Vishnu Thakur Vs. State Maharashtra [AIR[AIR[AIR 1994 1994 1994 SC SC SC 2623] 2623] 2623] (7) Shiv Shakti Co-opp. Housing Society, Nagpur Vs. Swaraj Developers & ors. 2003 20032003 SC SC SC [AIR[AIR[AIR 2434] 2434] 2434]

8. In the case of Rao Shiv Bahadur Singh (Supra) Constitution Bench prohibited Article 20 conviction sentence "ex facto" thereof. Such a procedure different obtained commission offence a Court different competence cannot "ipso facto" 23 unconstitutional. A person accused commission offence fundamental particular Court particular procedure except constitutional objection discrimination violation fundamental rights involved. The reiterated Anand Gopal Sheorey (Supra) Union India Vs. Sukumar Pyne (Supra). In a State Bombay Vs. Vishnu Ramchandra [AIR[AIR[AIR 1961 19611961 SC SC SC 307] 307] 307] enactment operate prospectively or retrospectively their Lordships observed as under: "...The question whether enactment operate prospectively retrospectively decided accordance settled principles. The cardinal principle statutes always interpreted prospectively, unless language statute retrospective, expressly necessary implication. either Penal statutes create offences always prospective, statutes create disabilities, prospectively, though ordinarily interpreted sometimes interpreted 24 retrospectively a intendment applied events...." . The Constitution Bench in the case of Shah Bhojraj Kuverji Oil Mills Ginning Factory Vs. committal Magistrate Section 209 Cr.P.C. manner. If Magistrate cognizance offence a complaint which appears exclusively triable Court Session, 37 proceed according Sections 202(2), 208

209. Chapter XVIII incorporates provisions prescribing procedure before a Court Session. Chapter XIX procedure warrant cases, Chapter XX procedure summons Chapter XXI prescribes procedure summary trial. As Section 260(1) Cr.P.C., notwithstanding anything contained Code, Chief Judicial Magistrate, Metropolitan Magistrate, Magistrate First Class specially empowered behalf High Court, may, thinks fit, a summary offences punishable death, imprisonment imprisonment a exceeding years. It offences Section 24 unamended SEBI Act Metropolitan Magistrate a summary respect offences alleged 29/10/2002. The scheme Cr.P.C. provides speedy trials certain and with in mind different provisions classes cases, i.e. summary trials, summons cases, warrant triable Court Session. Broadly 38 speaking classification offences purpose applying different provisions according gravity offences, though classifying offences summary trial, experience trying Magistrate consideration result provisions offences summarily triable speedily summons cases, summons speedily warrant warrant speedily sessions [The [The [The State State State of West of West of West Bengal Bengal Bengal Vs. Vs. Vs. Anwar Anwar Anwar AliAliAli Sarkar & Sarkar & Sarkar & anr. anr. anr. (1952 (1952 (1952 Cri.L.J. Cri.L.J. Cri.L.J. 510)]. 510)] 510)] It context petitioners insist respective complaints, continued before learned Metropolitan Magistrate, Chapter XIX, XX XXI case may be. The submissions of Mr.Ponda summary conducted Sessions Court support law. As earlier, Part II First Schedule Cr.P.C. classifying offences IPC clearly states offences punishable imprisonment Magistrate 39 Magistrate First Class Metropolitan Magistrate. There danger accepting submissions of Mr.Ponda regard viz. amendments Section 24 SEBI Act prospective nature amendments Section 26 SEBI Act retrospective. In scheme Sections 24 26 SEBI Act complimentary inseparable operation asmuchas Section 24 imposition penalty whereas Section 26(2) offences filing complaint Section 26(1). All / aspects of trial of offences under the SEBI Act are procedurally dependent upon Cr.P.C.

13. In the case of A.R. Antulay v. R.S. Nayak [(1992) [(1992) [(1992) 1 1 1 SCC SCC SCC 225] 225] 225] Constitution Bench recognising speedy flowing Article 21 Constitution certain propositions and proposition nos.1, 2 and 3 read as under, "(1) Fair, reasonable procedure implicit Article 21 Constitution creates a accused 40 speedily. Right speedy accused. The a speedy public interest serves social interest also, accused. It interest concerned innocence accused determined quickly possible circumstances. (2) Right speedy flowing Article 21 encompasses stages, namely appeal, investigation, inquiry, trial, revision re-trial.... (3) The concerns underlying speedy accused (a) ... ... ... are: (b) worry, anxiety, expense disturbance vocation peace, resulting unduly prolonged investigation, inquiry should minimal. 41 (c) ... ... ... Since accused who charged offence person / liberty peril, speedily. Being accused concern affects reputation standing person society. It a expense. provisions Criminal Procedure Code, a The hereinabove provide different trials before different forums Chapters XVIII XXI. Comparatively Sessions Court prolong a period a summary / summons a warrant trial. accused, therefore, justified claiming The deprived a speedy pending complaints are transferred / committed to the Court of Session for trial as per the amended SEBI Act.

14. There is one more aspect which also requires consideration absence a specific provision transfer pending complaints Court Metropolitan Magistrate / Judicial 42 Magistrate First Class Court Session amended SEBI Act. Reference Section 7 Special Courts (Trial Offences Relating Transactions Securities) Act, 1992 wherein pending required transferred provision SEBI (Amendment) Act. This support prospectivity operation SEBI (Amendment) Act. In Commissioner Income Tax v. Dhadi Sahu [1993 AIR [1993 AIR [1993 AIR SCW SCW SCW 3578] 3578] 3578] Income Tax Officer initiated proceedings imposition penalty Section 27(1)(c) Income Tax Act, 1961 matter referred Inspecting Assistant Commissioner Section 274(2) of the said Act which on the date of reference 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 minimum penalty imposable exceeds a sum of rupees one thousand, the Income-tax Officer shall refer the case to the Inspecting Assistant Commissioner, who shall for the purpose, have all the powers conferred 43 under this Chapter for imposition of penalty." Pending reference, Section 274(2) 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 transfer proceedings old forum to the new forum Their Lordships in Dhadi Sahu’s case observed as under: "It stated outset general 44 principle a brings a change affect pending actions unless intention contrary clearly shown. One intention making a provision change proceedings Court Tribunal pending Court tribunal which, law, jurisdiction them." "It litigant vested matter procedural but, question change forum, ceases a question procedure only. The appeal proceedings a vested opposed procedure followed before a particular forum. The becomes vested proceedings initiated Tribunal Court has, instance and, unless Legislature express necessary implication, clearly indicated, vested continue change jurisdiction different Tribunals forums." 45

15. In Garikapati Veeraya v. N. Subbiah Choudhry (Supra), following principles by the Constitution Bench regarding the vested rights of legal remedies: (i) That pursuit a remedy, suit, appeal second appeal really a series proceedings connected intrinsic regarded proceeding. (ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution carries implication rights appeal preserved parties thereto career suit. (iv) The appeal a vested a superior Court accrues litigant exists commences although 46 actually exercised adverse judgment pronounced governed prevailing institution proceeding prevails decision filing appeal. (v) This vested right of appeal can be taken away only be a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise. . It was contended on behalf of the accused by referring principles remedies available accused Criminal Procedure Code including a remedy revision Section 397 Section 401 Code. Mr.Ponda, learned counsel Board, however, submissions him, remedy revision cannot compared remedy appeal. While Mr.Ponda admitted remedy appeal a substantive a vested right, remedy revision before High 47 Court. In regard referred scheme Section 115 CPC decision Shiv Shakti Co-op. Housing Society (Supra) and more particularly the following observations: "(a) 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. (b) Section 115 essentially a source High Court supervise subordinate courts. confer a It a litigant aggrieved subordinate approach High Court relief. The making a revision Section 115 linked a substantive right. (c) Right appeal statutory conferred statute becomes a vested right. The distinction between appeal revision differences implicit expressions. An appeal continuation proceedings; 48 effect entire proceedings before appellate authority review evidence subject statutory limitations prescribed. But revision, whatever powers revisional authority have, review evidence, unless statute expressly confers power."

16. The learned counsel for the accused, on the hand, submitted remedy revision Section 397 Section 401 Cr.P.C. cannot compared remedy revision Section 115 CPC and, therefore, submissions Mr. Ponda their way remedy revision Criminal Procedure Code a remedy appeal a much remedy compared revision Section 115 of CPC. As accused remedy revision a statutory remedy available concerned complaint presented before learned Metropolitan Magistrate, Court Appellate Court against complaints committed 49 Sessions Court Board through Mr. Ponda, remedy revision away. Reliance placed Paul George Vs. S. State [AIR [AIR [AIR 2002 2002 2002 SC SC SC 657]. 657] 657] In Dilip Dahanukar v. Kotak Mahindra Co. Ltd. [(2007) [(2007) [(2007) 6 6 6 SCCSCCSCC 528], 528] 528] Lordships referred earlier decision Garikapati Veeraya (Supra) appeal indisputably a statutory offender who convicted entitled appeal a fundamental affecting liberty a person keeping in view the expansive definition of Article 21 of the Constitution.

17. When a revision application under Section 397 Cr.P.C. presented High Court, High Court’s powers decide revision Section 401 therein. Section 401, Cr.P.C. reads as under: "401.401. 401. High Court’s power of revision. - High Court’s power of revision. - (1) High Court’s power of revision. - In the case of any proceeding the record of which has been called for by itself or which otherwise comes to its knowledge, the High Court may, in its discretion, exercise any of 50 the powers conferred on a Court of Appeal by sections 386, 389, 390 and 391 or on a Court of Session 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 section be made prejudice accused person unless opportunity either personally pleader defence. (3) Nothing section deemed authorise a High Court convert a finding acquittal conviction. (4) Where this Code appeal appeal brought, proceeding revision entertained instance appealed. (5) Where this Code appeal application revision High Court person High 51 Court satisfied application erroneous belief appeal thereto necessary interests justice do, High Court application revision a petition appeal deal with accordingly." As sub-section (1) Section 401 High Court may, discretion exercise powers conferred a Court appeal Sections 386, 389, 390 391, deciding a revision application Section

397. As sub-section (2), a revision application prejudice accused person unless opportunity either personally a pleader defence sub-section (3) empower High Court convert a finding acquittal conviction a revision application cannot treated appeal against acquittal Section 378 Code. As sub-section (4) appeal appeal brought, proceeding revision entertained instance appealed. 52 At sub-section (5) Section 401, appeal Cr.P.C. application revision High Court person High Court satisfied application erroneous belief appeal thereto, necessary interest justice do, High Court consider application revision as a petition of appeal and deal with the same accordingly.

18. Whereas Section 115 of C.P.C. reads as under: "115.115. 115. Revision Revision Revision - - - (1) The High Court may record case which decided Court subordinate High Court appeal thereto, subordinate Court appears - (a) exercised a jurisdiction vested law, (b) failed exercise a jurisdiction vested, 53 (c) to have exercise jurisdiction illegally material irregularity, the High Court may make thinks fit: Provided the High Court not, section, reverse made, deciding issue, course a proceedings, except order, been made favour applying revision, finally disposed proceedings. (2) The High Court not, section, reverse decree against appeal either High Court Court subordinate thereto. (3) A revision operate a proceeding before Court except proceeding 54 stayed High Court. Explanation - In section, expression, "any decided" includes made, deciding issue, course a proceeding."

19. In the case of Ch. Prabhakar and 2 ors vs. The State A.P. [2001 [2001 [2001 (4) (4) (4) Andh.L.T. Andh.L.T. Andh.L.T. 694], 694] 694] a Division Bench Andhra Pradesh High Court dealing remedy criminal revision application amendments effected negation State Andhra Pradesh Indian Electricity (Andhra Pradesh Amendment) Act, 2000 and it is apt to reproduce the following observations of the Division Bench: "In a country democratic Government adopted, liberty citizen paramount importance Constitution provides several procedural safeguards regard. While dealing liberty a subject safeguarding interest accused, procedure important role. The history liberty 55 history procedure. An accused person alleged committed offence ordinarily accordance existed relevant offence alleged committed. Clause (1) Article Constitution forbids enhancement punishment. No person liable punishment except violation a 20 commission charged offence inflicted greater punishment which might inflicted commission offence. By reason Amending Act, 2000, accused deprived a procedure beneficial deprived a criminal revision a Sections 397 401 Code Criminal Procedure...." It pertinent Their Lordships "to accordance existed relevant time" "be 56 punished accordance existed relevant time". The learned counsel accused, therefore, submitted though Sessions Court before accused committed cases, guilty, sentenced according Section 24, demands conducted amended Act complaint Metropolitan Magistrate and it cannot be committed to the Sessions Court.

20. It is thus clear that the remedy of revision Section 397 Section 401 Cr.P.C. comparable remedy revision application Section 115 C.P.C. remedy Cr.P.C. empowers High Court, discretion exercise powers conferred a Court appeal Sections 386, 389, 390 391 Code. When Judges composing Court Revision equally divided opinion, disposed manner provided Section 392 chapter Appeals. In of A.R. Antulay v. R.S. conviction. therefore, inclined revision application Section 397 Section Cr.P.C. a statutory remedy 401 complaints allowed Sessions Court, absence specific provision amended SEBI Act transfer Court Metropolitan Magistrate Sessions Court, accused deprived a statutory remedy revision complaints required Courts before presented authorised officer. From complaints stated 2 above, 29/10/2002 though the cause of action arose prior to the said date.

21. Section 11C was introduced in the SEBI Act by Amendment 2002 provides 59 investigation undertaken Board through Investigating Authority. The complaints 29/10/2002 clearly showed investigation carried Section 11C SEBI Act consequently though complaints committed, without investigation papers including statement witnesses recorded during the course of investigation. Section 11C consists of eleven sub-sections as under: . Sub-section (1) provides that where the Securities Exchange Board India reasonable ground believe transactions securities a manner detrimental investors securities market, intermediary person associated securities market violated provisions Act regulations made directions issued Board thereunder, may, in writing, direct person (hereafter section referred Investigating Authority) specified investigate affairs intermediary persons associated with the securities market and to report thereon to the Board. 60 . Sub-section (2) provides that, without prejudice provisions sections 235 241 Companies Act, 1956, manager, managing director, officer employee referred company intermediary section 12 Act person associated securities market preserve produce Investigating Authority person authorized behalf, books, registers, documents record of, relating to, company or, be, or relating to, the intermediary or such person, which are in their custody or power. . Sub-section (3) provides Investigating Authority require intermediary person associated securities market manner furnish information to, produce books, registers, documents, record before person authorised behalf he may consider necessary furnishing information production books, registers, documents, record is relevant or necessary for the purposes of 61 its investigation. . Sub-section (4) provides Investigating Authority custody books, registers, documents record produced sub-section (2) sub-section (3) months thereafter return intermediary person associated securities market behalf books, registers, documents record produced. However, Investigating Authority book, register, document record needed again. However, person behalf books, registers, documents records produced requires certified copies books, registers, documents record produced before Investigating Authority, certified copies books, registers, documents record person behalf books, registers, other documents and records were produced. . Sub-section (5) provides that any person, directed investigation sub-section (1), examine oath, manager, managing director, officer employee 62 intermediary person associated securities market manner, relation affairs business administer accordingly and for that purpose may require any of those persons to appear before him personally. . Sub-section (6) provides that if any person without reasonable refuses (a) produce Investigating Authority person authorised behalf book, register, document record sub-section (2) sub-section (3) produce; (b) furnish information sub-section (3) furnish; (c) appear before Investigating Authority personally required sub-section (5) answer question Investigating Authority pursuance sub-section; examination referred (d) sub-section (7), punishable imprisonment a extend year, extend rupees, both, also with a further extend to five lakh rupees for every day after the first during which the failure or refusal continues. 63 . Sub-section (7) provides that notes of any examination sub-section (5) writing to, by, signed by, the person examined, and may thereafter be used in evidence against him. . Sub-section (8) provides that where in the course investigation, Investigating Authority reasonable ground believe books, registers, documents record of, relating to, intermediary person associated securities market manner, destroyed, mutilated, altered, falsified secreted, Investigating Authority application Judicial Magistrate having jurisdiction for an order for the seizure of such books, registers, other documents and record. . Sub-section (9) provides that after considering application hearing Investigating Authority, necessary, Magistrate may, order, authorise Investigating Authority- (a) enter, assistance, required, places books, 64 registers, documents records kept; (b) search places manner specified order; (c) books, registers, other documents and record, it considers necessary for the purposes of the investigation. . seizure record, However, the Magistrate shall not authorise books, registers, documents listed public company a public company (not intermediaries specified section 12) intends securities listed recognised exchange unless company indulges in insider trading or market manipulation. . Sub-section (10) provides Investigating Authority custody books, registers, documents record seized section period conclusion investigation considers necessary thereafter return company corporate, or, be, the managing director the manager person, custody seized inform Magistrate return. 65 However, Investigating Authority may, before returning books, registers, documents record as aforesaid, place identification marks on them or any part thereof. . Sub-section (11) provides that every search or seizure section, otherwise provided proposed section, carried accordance provisions Code Criminal Procedure, 1973 relating to searches or seizures made under that Code.

22. The learned counsel for the accused rightly submitted intention Parliament introducing Section 11C provide investigation carried Investigating Authority instance Board empower Investigating Officer consequential authority, scheme Sections Cr.P.C. report 164, complaint presented Court 165 Metropolitan Magistrate / Judicial Magistrate, Class instance comply requirements Section 208 committal Section 209 First 66 Cr.P.C. In absence powers investigation Board 29/10/2002 absence investigation having carried Section 11C complaints 29/10/2002, compliance requirements Section 208 before passing committal Section 209 Cr.P.C. In absence compliance Section 208 Cr.P.C., submitted learned counsel accused material learned Prosecutor proceed complaint before Sessions Court complaints dismissed consequently 227 accused discharged Section Cr.P.C. In regard learned counsel accused relied Hon’ble Shri Justice K.T. Thomas (as was) Rosy (Supra). His Lordship examined question whether Magistrate should examined witnesses prosecution before committed Court Session before process issued accused. Chapter XIV Cr.P.C. conditions requisite initiation proceedings Section 190 thereunder specifies a Magistrate cognizance 67 offence different courses i.e. (a) receiving a complaint constitutes offence, (b) a police report (c) information received person a police officer knowledge offence committed. Taking cognizance offence involves exercise deciding whether process should issued accused envisaged Section 204 Cr.P.C. However, interregnum between filing complaint issuance process Section 202 Cr.P.C. postponement process Chapter XV - "Complaints Magistrates". Sub-section (1) states Magistrate receipt complaint offence may, thinks fit, postpone process against accused resorting courses i.e. either enquire himself direct investigation made. offence triable Court Session, But Magistrate cannot a direction investigation. Hence Magistrate taking cognizance offence a complaint, offence triable Sessions Court, either courses viz. (i) straightway process, (ii) 68 postpone process holding enquiry, (iii) direct investigation offence triable a Court Session, impermissible Magistrate direct investigation, proviso sub-section (2) Section

202. On interpretations of Section 202(2) of Cr.P.C., Thomas, J. in Rosy’s case observed in para 14 as under: "14. The crucial issue therefore is, when the offence, sought to be taken congnizance of by the magistrate, is exclusively triable by the Court of Session, it is incumbent on the magistrate to conduct an inquiry as enjoined in the proviso to Section 202 (2) of the Code or can he dispense with such inquiry. The answer would not have been difficult if we go by the placement of the said proviso alone, as it can then be said that inquiry is not a must. If the said proviso was placed in Section 200 of the Code even a doubt that the legislative idea is to have all witnesses examined by the magistrate when the offence complained of is triable exclusively by the Court of Sessions would have been displaced. 69 Nonetheless the placement of the proviso is not the only criteria in discerning the legislative intent. Indications can be gathered from other connected provisions for taking a contrary view." His Lordship proceeded to observe in paras 15 to 19 as under: "15. Chapter XVI Code contains provisions commencement proceedings before magistrate. Section 204, already referred to, enjoins magistrate process magistrate opinion "sufficient ground proceeding". When offence triable a Court Sessions magistrate cannot restricted considering whether process should issued. There sufficient ground proceeding. Proceeding what? In context Section 208 Code important extracted below: "208. Supply copies statements 70 documents accused triable Court Session. - Where, a instituted otherwise a police report, appears Magistrate issuing process Section 204 offence triable exclusively Court Session, Magistrate without furnish accused, cost, a following:- (i) statements recorded Section 200 Section 202, persons examined Magistrate; (ii) statements confessions, any, recorded Section 161 Section 164; (iii) any documents produced before the Magistrate on which the prosecution proposes to rely; Provided Magistrate 71 satisfied document voluminous, shall, instead furnishing accused a thereof, direct allowed personally Court." inspect either through pleader

16. Three categories documents mentioned aforesaid section copies magistrate, proceeds Section 204, supply accused (in a complaint involving offence triable exclusively a Court Sessions). As the words "shall furnish" magistrate almost a compelling supply documents accused. How magistrate supply documents (In present context documents referred category mentioned Clause (iii) important.) The category delineated Clause (i) Section 208 consists "statement recorded Section 200 Section 202 persons examined magistrate." It 72 important "if any" second category documents delineated Clause (ii) Section 208 absent delineating category. In thoughtfully avoided Parliament Clause

17. If a magistrate comply aforesaid requirements Section 208 (i). Code (which cannot obviate language sub-section indication) the manner in which a failed examine witnesses The before issuing process accused. the word "or" employed Clause (I) Section 208 understood magistrate indication freedom dispense inquiry already examined complainant Section

200. A visualized complainant witness in which witnesses present complaint examined 73 required Section

200. In a complainant, produce witnesses Section 202 Code, liberty report magistrate witness already examined Section 200 Code. When possible utility "or" employed So clause Section 208 Code. intention indicate inquiry optional mentioned Section

18. It pertinent consider another aspect. It importance practical also. Section 209 Code enjoins magistrate commit Court Session complying provisions Section 208 Code. Once committed proceeds Court Session. The Court Session envisaged Chapter XVIII. It Sessions Court a public 74 Prosecutor conduct prosecution, whether instituted police report complaint. Section 226, falling within aforesaid Chapter, requires public prosecutor address Session Court. That section thus: "226.Opening prosecution:- When accused appears brought before Court pursuance a commitment Section 209 prosecutor describing charge brought against accused stating evidence proposes accused."

19. If a instituted complaint committed Court Session without complying requirements Clause (I) Section 208 Code possible public prosecutor advance evidence adduce accused. If inquiry Section 202 conducted a magistrate 75 decides proceed averments contained complaint a public servant (who a witness allegation) a committed Court Sessions, inevitable consequence Sessions Judge Section 226 itself public prosecutor helpless "by evidence proposes accused." nature If offence a serious public importance consequence miscarriage justice."

23. Undoubtedly the view taken by the other member Bench (M.B.Shah, J.) regarding interpretations Sections 202 204 Cr.P.C. However, instant complaints, though of witnesses placed record, statements witnesses recorded either course investigation Section 11C SEBI Act learned Metropolitan Magistrate before issuance process 76 himself postponing issuance process Section 202 complaint a public servant purporting discharge official duties. Consequently, committal passed Section 209 complaints (except two), requirements Section 208 Cr.P.C. complied asmuchas statements recorded Section 200 Section 202 persons examined Magistrate statement recorded during course investigation undertaken Section 11C SEBI Act before filing complaint accused contentions committal passed vitiated unsustainable. A Division Bench Court Shyamkant Wamanrao Pawar ors. Vs. State Maharashtra ors. [1980 [1980 [1980 Cri.L.J. Cri.L.J. Cri.L.J. 1388] 1388] 1388] approving earlier Court Laxmanlal vs. Judicial Magistrate, Class, Khamgaon, Satara reiterated First obligatory Magistrate complainant produce witnesses examine offence triable exclusively Court Session done, obviously passed issuing 77 process patently violation mandatory requirement of the proviso to Section 202 (2) of Cr.P.C.

24. The committal order in all the committed complaints passed notification 9th June 2003 issued Judiciary Department published Law State Government Gazette. As notification a Special Court offences arising SEBI Act constituted conduct trials offences punishable Section 24 Section 27 SEBI Act. The further states complaint before constitution a Special Court cognizance thereof Court complaint presented, required committed Special Court Section 209 Cr.P.C. The committal compliance Section 208 Cr.P.C. undoubtedly condition precedent passing committal order. No application SEBI committal complaints Court Metropolitan Magistrate Sessions Court proper a Special Court 78 constituted complaints. The complaints required Section 26 As Court Session a Special Court. a specific Sessions Court designated complaints, perhaps, learned Magistrate referred a Special Court. The nomenclature "Special Court" support amended SEBI Act. The remains committal obviously passed without application reason acquittal. At whether Session Court had the powers to adjudicate upon the committal order was not raised.

25. In the premises these petitions / applications succeed and the same are hereby allowed as under: (a) It is held that the amendment in Section 24 of the SEBI Act brought into force with effect from 29/10/2002 is a substantial amendment and the amendment in Section 26 of the said Act is only consequential, though 79 procedural. (b) The said amendments shall have prospective effect and not retrospective and, therefore, are not applicable to the above stated complaints. (c) The complaints filed before or after 29/10/2002 but in respect of the alleged offences that have taken place prior to the said date are required to be tried by the Court to which they were presented and they are not required to be committed to the Court of Sessions. Hence the above referred complaints shall be tried by the Court they were presented at the first instance. (d) 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 Session to return the concerned complaints to the respective Courts which had 80 passed the committal order. (e) Trial of the complaints is expedited.

26. Rule is made absolute in terms of the above directions. (B.H.MARLAPALLE,J.)