Writ Petition No. 3123 of 2014 and Criminal Application No. 178 of 2016. Case: Nirmal Bang Securities Private Limited and Ors. Vs State of Maharashtra and Ors.. High Court of Bombay (India)

Case NumberWrit Petition No. 3123 of 2014 and Criminal Application No. 178 of 2016
CounselFor Appellant: Satish Mane Shinde, Ravichandra Hegde, Aashni Dalal, i/by J. Sagar Associates and For Respondents: K.V. Saste, A.P.P.
JudgesAbhay Shreeniwas Oka and Anuja Prabhudessai, JJ.
IssueCode of Criminal Procedure, 1973 (CrPC) - Sections 154, 154(3),156, 156(1), 156(3), 173, 190(1)(a), 200, 202, 202(1),482; Constitution Of India - Articles 226, 227; Indian Penal Code 1860, (IPC) - Section 34, 409
Judgement DateMay 05, 2017
CourtHigh Court of Bombay (India)


Abhay Shreeniwas Oka, J.

  1. By this Petition under Article 226 of the Constitution of India read with Section 482 of the Code of Criminal Procedure, 1973 (for short "Cr.P.C."), a prayer is made for quashing the order dated 23rd December, 2013 passed by the learned Additional Metropolitan Magistrate, 47th Court, Esplanade, Mumbai on a complaint filed by the second respondent. By the said order, action under Section 156(3) of the Cr.P.C. was ordered to be taken. There is also a prayer for quashing the First Information Report (FIR) registered with MRA Marg Police Station for the offence punishable under Section 409 read with Section 34 of the Indian Penal Code registered on the basis of the impugned order. On 5th February, 2015, Rule was issued and after hearing the learned counsel appearing for the second respondent and the learned APP. An interim order was passed directing that charge sheet shall not be filed without leave of this Court and that no coercive action shall be taken against the petitioners. However, investigation was ordered to be continued. We may note here that on 4th November, 2015 an order was passed by the Additional Chief Metropolitan Magistrate, 38th Court, Ballard Pier, Mumbai which reads thus:-

    ORDER BELOW EXH. 1 IN NOTICE No. 40/2015

    As I am passing this order just below this notice itself, I need not reproduce its contents.

    2] Perused the petition and the documents along with. Issue notice to the Investigating Officer that, if the offences of forgery as contended in this notice application are made out, he may take appropriate action in accordance with the provisions of law, in the course of his investigation, and do the needful.

  2. By order dated 16th December, 2015 this Court permitted amendment to be carried out for incorporating a reference to the aforesaid order and accordingly, amendment has been carried out.

  3. The second respondent in his complaint stated that he was a Director of a Company SIYA Financial Services Pvt. Ltd. The said company was engaged in the business of trading and investment of shares. In the complaint it was alleged that the first petitioner-Company was formerly known as M/s. Nirmal Bang and the second and third petitioners are the Directors of the first petitioner - Company. It is alleged that the first petitioner - Company is engaged in the business of share trading and is a registered broker of NSE and BSE. The allegation is that in the year 1995, the second and third petitioners along with their deceased brother Nirmal Bang had approached the second respondent and requested him to invest in shares and do trading through them. They represented to the second respondent that they were registered brokers of NSE and BSE and it was represented that it would be profitable for the second respondent to get associated with them. On the basis of the representations made by the second and third petitioners and their deceased brother (Nirmal Bang), the second respondent agreed to invest. According to the case made out in the complaint, the second respondent started investing from the year 1995 and numerous transactions in huge amounts running into Crores of rupees were made. It is alleged that the second and third petitioners along with their brother Nirmal Bang were also the Directors of Bama Securities Limited. The said Company was also trading in shares. Reliance is placed on contract notes which are annexed to the complaint by way of illustration. It is alleged that on 26th February, 1998 the petitioners had bought on behalf of the second respondent, 1,09,700 shares of BFL Software at the rate of Rs. 86/-. A copy of the statement of the said transaction has been annexed as Exhibit - B to the complaint. The second respondent relied upon an entry dated 30th June, 1998 which shows the purchase of 1,09,700 shares of BFL Software on 26th February, 1998. It is alleged that in addition to the aforesaid shares, the petitioners were holding other shares on behalf of the second respondent. Details of the said shares are annexed as Exhibit - C to the Petition.

  4. The second respondent stated in the complaint that BFL Software was taken over by a foreign company and therefore, price of the shares of BFL Software Company went up. When the second respondent contacted the petitioners to know the status of his shares which were lying with the petitioners and to discuss about the future course of action in trading, the petitioners showed an indifferent and evasive attitude. It is alleged in the complaint that on 11th October, 1998 the second respondent filed a complaint with the Commissioner of Police at Mumbai a copy of which is annexed as Exhibit-E to the complaint. The material averments in the complaint are in paragraphs 7 to 11 of the pages 32 and 33 which read thus:-

    7. The complainant thus decided to put his foot down and demanded the accused to hand over all his shares which the Accused had purchased on his behalf in the course of the trade and which the accused were holding on his behalf. The Accused instead of returning the shares back to the complainant threatened the complainant with dire consequences if he ever demanded my shares from them. The complainant was thus constrained to file a complaint before the Commissioner of Police, Mumbai narrating the facts and requesting for appropriate action as per Law. Annexed hereto and marked as Exhibit E is the copy of the complaint dated 11.10.98 filed before the Commissioner of Police, Mumbai.

    8. The matter was sent before the General branch, Crime Branch, C.I.D., Mumbai for investigation. Surprisingly no investigation came to be carried out at the instance of General Branch, Crime Branch, C.I.D., Mumbai and without even registering any crime the Inspector of Police, General branch, Crime Branch, C.I.D., Mumbai wrote a letter to me dated 29.06.99 stating that no action was feasible in the matter and that I may redress my grievances in arbitration before Board of Bombay Stock Exchange or National Stock Exchange. Annexed hereto and marked as Exhibit F is the copy of the letter dated 29.06.99 of the Inspector of Police, General branch, Crime Branch, C.I.D., Mumbai. Aggrieved by the approach of the Inspector of Police, General branch, Crime Branch, C.I.D., Mumbai, the complainant pursued the matter with higher officers and made various complaints to them. Annexed hereto and marked as Exhibit G Colly are the copies of the complaints.

    9. The complaint was then being pursued by the Office of the Addl. Commissioner of Police, Economic offences Wing, Mumbai and on 13.04.2010 the complaint was marked to the Dy. Commissioner of Police, Zone-1, Mumbai for necessary action. Annexed hereto and marked as Exhibit H is the copy of the letter dated 13.04.2010.

    10. The matter if of a serious nature and of wide repercussions. The accused above named have together conspired and have committed serious criminal offences and a huge fraud running in crores of rupees. The accused have in connivance with each other and with dishonest intentions, since inception, induced the complainant to part with his hard earned monies by representing him that they would invest the said amount in shares. However, inspite of repeated requests and reminders, the accused have not given delivery of those shares as well and have sold off the said shares and appropriated profits generated to their own use. The were holding the shares in trust for the complainant and being the sub-brokers, they were agents of the complainant. The shares belonging to the Complainant are worth about sixty crores which had been entrusted to the accused above named and which the Accused are holding in their capacity as a broker. The Accused above named have committed the offence of criminal breach of trust under section 409 of the Indian Penal Code.

    11. Till date no Crime has been registered in the matter by the Economic Offences Wing despite the matter warranted for a prompt and effective investigation by the Economic Offences Wing as the fraud committed is in crores of rupees.

  5. A prayer was made in the complaint praying that an order under Sub-Section (3) of Section 156 of the Cr.P.C. be issued directing the concerned officer of Economic Offence Wing to register a crime. The impugned order passed on the complaint reads thus:-

    Complainant is present considering the allegation herein, police is directed to investigate into the matter U/s. 156(3) of Cr.P.C. and report within (illegible) days.

  6. The learned counsel appearing for the petitioners invited our attention to the complaint dated 11th October, 1998 addressed by the second respondent to the Commissioner of Police. He pointed out that the allegations of cheating and fraud have been made in the said letter only as against the said Nirmal. He pointed out that an enquiry was made into the said complaint addressed to the Commissioner of Police and by a letter dated 29th June, 1990, the Inspector of Police, General Branch, Crime Branch, C.I.D., Mumbai...

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