In a significant legal ruling, the Supreme Court of India has addressed the issue of quashing criminal proceedings in the case of FIR CR No.II-3121 of 2016. The respondents sought relief based on the statutory bar under Section 26 of the Securities Contract Act, 1956, which mandates a written complaint for the Court to take cognizance of the offense. The Court’s decision impacts the legal landscape concerning offenses under the Act and sets a precedent for future cases.
Arguments
- The applicants have filed a quashing petition regarding the FIR CR No.II-3121 of 2016 registered with ‘A’ Division Police Station, Morbi.
- The learned counsel for the applicants argues that the offense alleged is exclusively triable by the court of Sessions, and there is a bar under Section 26 of the Securities Contract (Regulation) Act, 1956 for the court to take cognizance without a written complaint.
- The counsel suggests quashing the FIR and allowing for a fresh proceeding to be filed.
- The petitioner argues that the petition is premature as the trial court should determine the issue raised.
- The bar under Section 26 is said to be attracted when the court takes cognizance of the offense.
Analysis
- The Court analyzed Section 26 of the Act, 1956 which specifies that cognizance of any offense under the Act can only be taken on a complaint made by specific authorities or a person.
- It was emphasized that no Court below the level of a Court of Session can try offenses under the Act.
- The concept of a ‘complaint’ under Section 26 was clarified to mean a written complaint as defined in the Code of Criminal Procedure.
- Due to the statutory bar in Section 26, the Court concluded that cognizance could not be taken based on a police report alone.
- Even though the offense under Section 23 is cognizable and police can investigate, the Court cannot take cognizance without a proper complaint being filed.
- The analysis was guided by precedents, like the Vipulkumar Shah case, to determine the legal course of action.
- Courts cannot take cognizance of any offence under this Act unless a complaint is made by the Board
- Courts inferior to a court of session cannot try any offence under this Act
- The present case falls under parameter (vi) as per the case of State of Haryana Vs. Bhajanlal (1992) suppl. 1 SCC 335.
- The grounds for quashing the criminal proceedings are clearly defined in the said case law.
- The specific circumstances of the present case align with the criteria laid out in State of Haryana Vs. Bhajanlal.
- Quashing the criminal proceedings in this case would be justified based on the established parameters.
Decision
- The authorized person or any person as contemplated under Section 26 of the Act has the liberty to file a fresh complaint including the offence of the Indian Penal Code against the applicants.
- Direct service is permitted for filing a fresh complaint.
- The FIR CR No.II-3121 of 2016 registered with ‘A’ Division Police Station, Morbi, and the consequential proceedings arising from it are quashed for the present applicants.
- The present application is allowed and the rule is made absolute.
Case Title: HITESH MANEKBHAI RACHH Vs. STATE OF GUJARAT
Case Number: R/CR.MA/8341/2021