National Spot Exchange Limited Vs Central Bureau of Investigation Bank Securities And Fraud Cell & Anr (Supreme Court of India)
Factual Background and Proceedings Before the High Court
The dispute concerned an application by National Spot Exchange Limited (NSEL), accused No.1 in Special CBI Case No. 62 of 2016 and Special CBI Case No. 34 of 2017, seeking a joint and single trial of both cases. The cases were pending before the Special Judge (CBI), Sessions Court, Mumbai. The applicant contended that both cases arose from transactions conducted on the NSEL platform during 2007 to 2013 involving alleged fraudulent paired contracts (T+2 buy and T+25 sale) without actual delivery of commodities, resulting in siphoning of funds.
Read HC Judgment in this case: National Sport Exchange Limited Vs Central Bureau of Investigation Bank Securities and Fraud Cell (Bombay High Court)
In Special Case No. 62 of 2016, the allegations concerned cheating of M/s. PEC Ltd., a Public Sector Undertaking, causing wrongful loss of approximately Rs.120.75 crores. Special Case No. 34 of 2017 concerned alleged cheating of M/s. MMTC Ltd., another Public Sector Undertaking, causing wrongful loss of approximately Rs.222.49 Crores. The applicant submitted that the cases had a similar modus operandi and that 18 accused, 25 witnesses and 71 documents were common. Reliance was placed on Sections 219, 220 and 223 of the Code of Criminal Procedure (Cr.P.C.) to contend that a joint trial was permissible and that separate trials could prejudice the defence.
The CBI opposed the application, submitting that the cases involved different Public Sector Undertakings, distinct transactions, separate conspiracies and different sets of accused persons. It also submitted that the evidence was substantially different and that joint trial was an exception, whereas separate trial was the rule when offences were distinct.
The Trial Court rejected the application. The Bombay High Court considered the challenge to that order.
High Court Reasoning and Ruling
The High Court noted that although both cases involved NSEL and reflected a similar modus operandi, the transactions were separate, involved different victims and different accused persons. The dealings of the two PSUs with NSEL were held to be independent and unconnected.
The High Court observed that the victims, transactions and financial implications were different. Merely because some witnesses and accused were common was not considered sufficient to justify a joint trial. It further rejected the submission that separate trials would prejudice the applicant by exposing its defence in one case, noting that charge-sheets had already been filed in both cases and the prosecution had cited its witnesses.
The High Court considered Sections 219, 220(1) and 223(d) of the Cr.P.C. It stated that Section 219 permits a joint trial where offences of the same kind are committed within twelve months, while Section 220(1) permits a joint trial where offences form part of the same transaction, involving continuity of action and a clear nexus. Section 223(d) permits persons accused of different offences to be charged and tried together where those offences were committed in the course of the same transaction.
According to the High Court, the alleged offences spanned 2007 to 2013, falling outside the scope of Section 219. The material on record also showed that the alleged conspiracies concerning fraud and cheating were different, involved separate persons and transactions relating to different entities, and did not form part of the same transaction. The High Court therefore considered the cases to involve separate conspiracies rather than a single general conspiracy.
It concluded that the cases did not satisfy the legal requirements for a joint trial and that a joint trial could lead to confusion in evidence, unnecessary delay and possible prejudice. The application was accordingly rejected.
Challenge Before the Supreme Court and Final Ruling
The High Court’s order was challenged before the Supreme Court. The Supreme Court recorded that the delay was condoned and held that no case to interfere with the impugned order passed by the High Court was made out.
The Special Leave Petition was accordingly dismissed. The Supreme Court also directed that pending application(s), if any, would stand closed.
Effect of the Supreme Court’s Decision
The Supreme Court’s dismissal of the Special Leave Petition left the High Court’s decision undisturbed. Consequently, the application seeking a joint and single trial of Special CBI Case No. 62 of 2016 and Special CBI Case No. 34 of 2017 remained rejected, with the High Court’s conclusion that the cases did not satisfy the requirements for a joint trial left intact.
SEO Title
SC Dismisses SLP, Upholds Separate Trials in NSEL Cheating Cases
SEO Description
SC dismissed SLP against separate trials, finding no case to interfere with the High Court order rejecting joint trial of NSEL cases.
Cases Discussed: State of Jharkhand Through Sp. Central Bureau of Investigation versus Lalu Prasad Yadav alias Lalu Prasad (2017) 8 SCC 1
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1. Delay condoned.
2. No case to interfere with the impugned order passed by the High Court is made out. The Special Leave Petition is, accordingly, dismissed.
3. Pending application(s), if any, shall stand closed.
