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SEBI Special Court convicted four directors of the Roofers Realty Limited for not complying with the summons issued by the investigating authority of the Securities and Exchange Board of India (SEBI). SEBI had launched investigation into alleged illegal mobilization of funds from the public by Roofers Realty Limited. The investigating Authority appointed by the Board had summoned four directors of the company, viz., Mr. Sauravmoy Ghosh, Jayanti Sounth, Hirak Nath Sounth and Khudiram Sounth to appear before the Authority in relation to the aforesaid investigation. Despite receiving the summons, the directors did not appear before the investigating authority.

Therefore, SEBI launched prosecution proceedings against the aforesaid persons under Section 11C (6) of the Securities and Exchange Board of India Act, 1992. The Special Court convicted the accused on the ground that the directors failed to appear before the investigating authority despite due receipt of the summons. The Court sentenced three directors, viz. Mr. Sauravmoy Ghosh, Jayanti Sounth and Hirak Nath Sounth to one year simple imprisonment and imposed a fine of Rupees Five Lakhs. The Court has also imposed a fine of Rs 2,50,000 on Mr Khudiram Sounth considering his old age.


PR No.: 18/2019

[Press Release dt. 26-07-2019]

Securities and Exchange Board of India

Case BriefsHigh Courts

Patna High Court: The Bench of Ahsanuddin Amanullah, J. quashed criminal proceeding filed in the year 2013 under Section 497 of the Penal Code, 1860 against a person accused of adultery, in view of Supreme Court’s decision in Joseph Shine v. Union of India, (2019) 3 SCC 39.

Petitioner herein had filed a complaint case against the opposite party 2 alleging adultery with his wife, wherein the Chief Judicial Magistrate issued summons under Section 497 of the Penal Code, 1860. The said order of cognizance was challenged by opposite party 2 before the Sessions Judge by way of a criminal revision petition, and the order of cognizance was set aside. Aggrieved thereby, the instant application was filed under Section 482 of the Code of Criminal Procedure, 1973 praying for setting aside of order dated 22-09-2014.

Counsel for the parties Mr Prabhu Narayan Sharma (for petitioner), Mr Md. Arif (for State) and Mr Saket Tiwary (for opposite party 2) submitted that the aforesaid issue was no more res integra for the reason that a Constitution Bench of the Hon’ble Supreme Court had held Section 497 IPC to be unconstitutional and has also declared Section 198 CrPC, which deals with the procedure for filing complaint in relation to an offence of adultery, as unconstitutional.

In view of the above, the Court held that cognizance against the opposite party 2 under Section 497 IPC could not be sustained. Thus, the entire criminal proceeding arising out of complaint case was quashed.[Devraj Dev v. State of Bihar, 2019 SCC OnLine Pat 431, Order dated 02-04-2019]

Case BriefsHigh Courts

Kerala High Court: The Bench of Devan Ramachandran, J. disposed of a petition cautioning Passport Authority of not taking any action against the petitioner without properly notifying him as any action taken against him without his knowledge, might be detrimental to his employment in the USA.

Petitioner herein had applied for renewal of his passport; but when the Consulate subsequently received information of a criminal case pending against him, he was issued a notice by the Vice-Consul (Passports) asking him to show cause why his passport should not be revoked under Section 10(1)(b) and 10(1)(e) of the Passport Act, 1967. Aggrieved thereby, the instant petition was filed.

Petitioner’s submission was that when he applied for renewal of his passport, he was not aware of any crime pending against him since he had not received any notice or summons from Court with respect to this case.

The Court noted that it was virtually admitted that there was a criminal case pending against the petitioner at the time of submitting an application for renewal. It may be true that the petitioner was not aware of pendency of the criminal case, because he had not received any notice/summons from Court. However, these are issues that the petitioner ought to have brought to notice of Consulate General of India.

It was opined that since the impugned notice was only a show cause notice, there was no need for petitioner to approach this Court by filing this writ petition since these issues could certainly have been considered by the appropriate authority in terms of Passport Act. In view thereof, petitioner was directed to answer the show cause, detailing all his defences and the Passport Authority was directed to consider the same, after affording the petitioner an opportunity of hearing.[Arun Harshan v. Union of India, 2019 SCC OnLine Ker 776, Order dated 01-03-2019]

Case BriefsSupreme Court

Supreme Court: In a matter where the Gujarat High Court had set aside the order passed by a Chief Judicial Magistrate who had taken cognizance of the offences punishable under Sections 420, 465, 467, 468, 471, 477A and 120-B IPC on the basis of the second supplementary charge sheet filed by the police and ordered issuance of process to the accused, the bench of R. Banumathi and Indira Banerjee, JJ held that the High Court ought not to have gone into the merits of the matter when the matter is in nascent stage.

Holding that the High Court overstepped in the said matter, the bench said:

“When the prosecution relies upon the materials, strict standard of proof is not to be applied at the stage of issuance of summons nor to examine the probable defence which the accused may take. All that the court is required to do is to satisfy itself as to whether there are sufficient grounds for proceeding.”

Stating that while hearing revision under Section 397 Cr.P.C., the High Court does not sit as an appellate court and will not reappreciate the evidence unless the judgment of the lower court suffers from perversity, the bench said:

“materials produced by the prosecution ought not to have been brushed aside by the learned Single Judge to quash the order of issuance of summons to the respondent-accused. As to whether these evidences are sufficient to sustain the conviction of the respondent-accused or whether he has a plausible defence or explanation is the matter to be considered at the stage of trial. The learned Single Judge ought not to have weighed the merits of the case at the initial stage of issuance of summons to the accused.”

The Court explained that while taking cognizance of an offence based upon a police report, it is the satisfaction of the Magistrate that there is sufficient ground to proceed against the accused and when the satisfaction of the Magistrate was based on the charge sheet and the materials placed before him, the satisfaction cannot be said to be erroneous or perverse and the satisfaction ought not to have been interfered with.

It was, hence, held that the High Court committed a serious error in going into the merits and  demerits of the case and hence, the impugned order was set aside. [State of Gujarat v. Afroz Mohammed Hasanfatta, 2019 SCC OnLine SC 132, decided on 05.02.2019]

Case BriefsHigh Courts

Bombay High Court: A Single Judge Bench comprising of A.M. Dhavale, J. allowed an appeal filed by the appellant-wife challenging an ex-parte order passed by a District Judge under Section 25 of the Guardians and Wards Act, 1890.

Vide the order impugned, custody of the minor girl aged 7 years was ordered to be handed over to the respondent-husband. The grievance of the appellant was that there was no proper service of summons on her and still the trial Judge proceeded ex-parte. As per the record of the trial court, summons were issued against the appellant in the present matter relating to the custody of the minor child. The bailiff visited her house. The appellant was out of station, the summons returned unserved. Trial Judge observed that summons were sent to the appellant but it returned with an endorsement as unserved. Therefore, he proceeded ex-parte against the appellant. Aggrieved by the said order, the appellant filed the instant appeal.

The High Court reiterated that the rule of fair trial is that nobody should be condemned unheard. It was observed that the present was not a case of proper service and the trial judge had no discretion to proceed ex-parte only on the basis of a  finding that notice was returned unserved.The envelope that was returned nowhere showed that the summons were refused by the appellant. The Court also referred to Order V CPC which deals with issue and service of summons. The Court was of the view that this was a child custody matter and the trial Judge was expected to be sensitive to the rights of the parties. The Court further observed, even it is assumed that the envelope returned with an endorsement as not claimed, still it does not mean that it is an endorsement of refusal to accept the service. Furthermore, even if there would have been a refusal to accept the service as per Order V Rule 17 CPC, service by affixing the copy of summons + plaint on the outer door or some other conspicuous part of the house. It was held that as there was no service of summons, the ex-parte order is not tenable and deserved to be set aside. [Jayshri Gajendra Mahajan v. Gajendra Pandit Mahajan,2018 SCC OnLine Bom 2233, dated 07-08-2018]

Case BriefsHigh Courts

High Court of Judicature at Madras: A Single Judge Bench comprising of C.T. Selvam J., recently addressed a Criminal Revision Petition filed under Sections 397 and 401 of the Criminal Procedure Code against the order of the Judicial Magistrate.

The facts of the case are that the petitioners had filed a petition seeking permission to leave India and travel to Oman and that they be allowed to appear before the Court of the Judicial Magistrate on receipt of summons. This Court allowed the petition with the condition that the petitioners would have to return to India by 1/12/2018. Aggrieved by the condition placed on them, the petitioners moved the present revision.

The counsel for the petitioners argued that since the petitioners were engaged in business which required of them to travel abroad frequently, the aforementioned condition of returning to India by a certain date would be of great inconvenience to them. The High Court thus held that giving consideration to the situation of the petitioners, it would allow modifications to the order in question in the sense that the petitioners would have to file affidavits conceding to take communications of summons to their e-mail addresses as sufficient service on them.

Accordingly, the High Court allowed the revision petition and modified the order of the Judicial Magistrate and directed for the service of summons on the petitioners to their e-mail addresses as well as the residential address. [Premkumar Thangadurai v. State by The Inspector of Police; Crl.R.C. No.31 of 2018, order dated 11/1/2018]