Arvind Kumar Bahl Vs State of Maharashtra (Bombay High Court)
Bombay High Court held that Selective investigation of Economic Offence Wing (EOW) betrays the faith of victims. Accordingly, responsible persons for the wrongdoings should not be allowed to escape the process of law.
Facts- The applicant is an investor who had invested huge amount of Rs. 22,24,604/- through his broker namely India Infoline Commodities Limited (IICL) which was acting as Trading cum Clearing Member of NSEL.
It was alleged that the broker misrepresented that NSEL is extremely safe risk free and it could fetch good returns of about 15 % to 18 % per annum.
Pursuant to the default at NSEL platform in July 2013, one investor Shri Pankaj Saraf filed a complaint and based on it an FIR No.89/2013 was registered for the various offences of IPC and MPID Act.
An investigation assigned to EOW, after detailed investigation of 9 years, total 11 charge-sheets filed by it.
The actual grievance raised by the applicant that the chargesheet dated 27.12.2018 is based on picked and choose policy and in contravention of section 3 of MPID Act. Several directors, promoters, and brokers despite of having their active involvement in the matter and sufficient documentary evidence against them, they had deliberately not chargesheeted by the Investigating Officer
Conclusion- Selected investigation and final report raises serious question about the impartial investigation of EOW, betrays the faith of victims. In view of the facts and circumstances as discussed above, the responsible persons for the wrongdoings should not be allowed to escape the process of law. It is further required to mention here that when my Ld. Predecessor took cognizance of the offences of the said chargesheets, this all facts were not placed before it. Hence, it appears to be left out some person from taking cognizance. Upon placing the facts before the court as such and on examining the same, if the court find substance therein, the court cannot shut its eyes over it, as the amount involved in alleged scam is of several investors and the depositors. In order to protect the interest and welfare of the investors/depositors the appropriate action is warranted against the responsible persons in accordance with law. The over all material discussed as above, is more than sufficient at least to take cognizance of the alleged offences appear to committed by the persons as alleged by the applicants.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
By this common order the above numbered proceedings are disposed of together as it involves common and overlapping questions.
Factual matrix:
2. The applicant in M.A. No.339/2023 is an investor who had invested huge amount Rs.22,24,604 through his broker namely, India Infoline Commodities Limited (IICL) which was acting as Trading Cum Clearing Member of National Spot Exchange Limited (NSEL). He was having unique client code (UCC) (IIFL ID PAMAABHL). According to him, during the period of 2012-2013 he had invested the above amount with the above broker. Initially, smart assurance and promises had given by said broker to return the handsome amount on the investment above. However, his broker exactly acted contrary against his interest. It so happened that broker of the applicant caused him huge loss due to NSEL payment default crises. The broker as above, misrepresented the applicant that NSEL is extremely safe risk free and it could fetch good return about 15% to 18% per annum Guaranteed Return. Applicant clamimg himself as a Victim of his broker who cheated him for huge amount. Pursuant to the default at NSEL platform in July 2013, at the behest of like him, one investor Shri. Pankaj Saraf, filed a complaint and based on it an FIR No.89/2013 was registered for the various offences of IPC and MPID Act.
3. An investigation assigned to EOW, after detailed investigation of 9 years, total 11 chargesheets filed by it. In a supplementary chargesheet 27.12.2018, India Infoline Commodities Pvt. Ltd. (In short “IICL”) and its director Mr. Chintan Modi arrayed as an accused on the ground that the said company lured and taken deposits from unsuspecting clients like the applicant. Similarly, Anand Rathi Commodities Ltd. (In Short “ARCL”) and Geojit Commodities Ltd. (In short “GCL”) and its director arrayed as an accused on the ground that the said companies lured and taken deposits from unsuspecting clients like the applicant by promising guaranteed rate of the returns and therefore, they being financial establishment which defaulted in repayment of such deposits. The paras 54 and 59 of chargesheet dated 27-12-2018 categorically concludes that the above three broker companies are financial establishments under the provision of the MPID Act.
4. The actual grievance raised by the applicant that the chargesheet dated 27.12.2018 is based on picked and choose policy and in contravention of section 3 of MPID Act. Several directors, promoters, and brokers despite of having their active involvement in the matter and sufficient documentary evidence against them, they had deliberately not chargesheeted by the Investigating Officer (In short “IO”). There is sheer negligence on the part of investigating agency in non chargesheeting them. The present matter pertains to economic offence of huge magnitude of Rs 5,600 Crores and several gullible investors like applicant are still awaiting the justice. However, such selected bias investigation and final report raises serious question on integrity of EOW, betrays the faith of victims. The neat question raised by the applicant that real culprits should not be allowed to escape the process of law. The applicant mentioned 8 persons name along with their designation and company in para 8 of his application.
5. While concluding application, the applicant claimed that in the interest of justice and law of parity the promoters and directors of the financial establishments IICL, ARCL and GCL be summoned by taking cognizance under section 3 of MPID Act. It is further expressed anxiety that grave prejudice and failure of justice will be caused to the aggrieved depositors as well as to the applicant if present application is not allowed.
6. In another application 619 the applicant himself is one of the accused namely National Spot Exchange Limited (in short “NSEL”) which seeks relief to take cognizance against the various directors and promoters of financial establishment which allegedly not chargesheeted by the I.O., Economic Offence Wing (in short “EOW”). According to applicant, circumstances leading to filing of the present application are that he has been given to understand that the loss caused to the defacto complainant in the present case has been settled by the accused defaulters. Hence, the first informant does not seem to be interested in agitating the cause of the justice any longer. Therefore, the applicant is constrained to move the present application in the interest of Justice. This applicant also raised his grievance lesser or more on the same line as like the first applicant investor in MA.No.339/2023. Instead, the applicant is one of the accused, he raised objections about the bias and partiality investigation conducted by investigating agency. According to this applicant, the IO instead having more than sufficient incriminate evidence against the three companies’ directors, promoters and brokers selectively dropped them by non chargesheeting. It is clear discrimination against the applicant which is contrary to the constitutional guarantee of equality before law under Article 14 of constitution of India. Prayer of the application reflects the names of the person who were dropped by investigating agency despite having sufficient evidence. Therefore, it is prayed that this Court to take judicial notice and take cognizance of offence under Section 3 of the MPID Act against the promoters and directors of the said 3 broker companies who are accused as financial establishments, whose role is in consonance with their companies and colleague directors and issue process to them.
7. The prosecution has strongly opposed the application filed by the applicant/accused in Exh.619 vide reply Exh.2. According to prosecution, the investigating agency has carried out very detailed and depth investigation and not chargesheeted the person as stated by applicants. According to IO, during his investigation as there is no substantial ground found against the persons as mentioned by the applicants. Therefore, these persons are not chargesheeted. However, the prosecution admitted the fact that the proposed accused companies are financial establishment. Total supplementary eleven (11) chargesheets have been filed by the IO after due investigation. Hence, the present application is not at all maintainable. The applicant is prime accused in the alleged crime who is the financial establishment declared by the Hon’ble Apex Court. One accused cannot ask for as such relief against the other accused by way of this application.
8. The present application under Section 190 of Cr.P.C. is not at all maintainable at the instance of one accused. The applicant has no locusstandi to file this application. There are no grounds emerges from the chargesheets and the material collected on record. This Court has still not taken cognizance of a supplementary chargesheets nos.10 and 11. Therefore, the present application cannot be entertained at this stage. On the grounds as above and others the prosecution prayed for rejection of the application Exh. 619.
9. It is pertinent to note that the IO has filed reply vide Exh.2 to MA No.339 of 2023 which filed by the investor Mr. Arvind Bahl. However, surprisingly, the IO did not oppose his application even on facts and law. On perusal of the said reply it appears that infact the said reply and the contents therein are not regarding the application and sought relief by the investor Mr. Arvind Bahl. The applicant by his application sought cognizance against the aforesaid three (3) broker companies. However, the reply of the IO reflect regarding the attachment of properties and not for opposing to cognizance application. The said reply appears to be singed by the Ld. SPP after its verification. In the said reply, the IO has not disagreed with any contents made by the applicant Mr. Arvind Bahl regarding cognizance as sought for. For the sole and simple reason, the MA No.339 of 2023 which field by the applicant Mr. Arvind Bahl for taking cognizance remains unopposed at the instance of IO.
10. The Ld. Adv. Mr. Gheewala submitted that he is representing the Accused No. 65 i.e IICL, in main MPID Case no.01/2014 and by way of these applications the documents of his clients company have been challenged by the applicants, hence he may be allowed to make submission on law points in these applications. This court found therein substance and in the interest of the justice, allowed him for limited purpose to make submission on law points and regarding documents only.
11. According to the Ld. Advocate for Accused No. 65 i.e IICL, any material not forming part of the Chargesheet should not be relied upon while hearing Application u/s 190 of Cr.P.C. Documents produced by the Accused do not become documents produced by the Prosecutor. Documents should be examined with credibility when the documents were produced by the Accused. There is nothing to show that IIFL is the promoter of Accused No. 65. There is no reference of IIFL/promoter in the Chargesheet. There are no deeming provisions in the MPID Act unlike Negotiable Instrument Act.
12. Heard both sides at the length of considerable time. I have bestowed my best consideration to their respectful submissions. Besides, the oral arguments, the Ld. Advocate for the applicant (investor) filed his written notes of argument vide Exh.7 whereas the Ld. Advocate for the accused No.65 filed written notes of argument in Exh.619 vide Exh.7 and in MA No.339 of 2023 vide Exh.8 respectively. The Ld. Advocate for accused No.65 relied on decision in the matter of State of Orissa VS Debendra Nath Padhi MANU/SC/1010/2014. Whereas the Ld. Advocates for the applicants and prosecution relied on the various citations. I will place the relevant citations in respect of the subject matter at the appropriate place in order.
13. The points for consideration :-
