Ahilya Sharma & Ors. Vs State of West Bengal & Anr. (Calcutta High Court)
The Calcutta High Court considered a petition seeking quashing of a criminal complaint filed under Sections 24(1) and 27 of the SEBI Act, 1992, relating to alleged violations of provisions governing collective investment schemes (CIS). The complaint, pending before the Chief Judicial Magistrate, alleged that the accused company had mobilized approximately ₹40,000 from the public through a collective investment scheme and failed to comply with statutory requirements, including refunding investors’ money and obtaining registration under applicable SEBI regulations.
The petitioners contended that the amount involved was minimal and that the company had complied with SEBI’s directions, including furnishing information and ceasing operations. They further argued that the scheme had been withdrawn, the funds had been refunded, and the company had applied for winding up, which ultimately resulted in its dissolution in 2008. It was also argued that the prosecution was an abuse of process, particularly as no investor claims were pending and the petitioners had taken steps to close the scheme.
Additionally, the petitioners raised a limitation argument, submitting that the alleged offence occurred prior to the 2002 amendment to Section 24 of the SEBI Act, when punishment was less severe. They contended that the complaint filed in 2004 was barred by limitation under Section 468 of the Code of Criminal Procedure (Cr.P.C.), as the applicable limitation period was one year from the date of the offence.
