DINESH DALMIA Vs. COMMISSIONER OF POICE

JUDGEMENT

(1.) Dinesh Dalmia, promoter of DSQ Software Limited in Writ Petition No. 44701 of 2002, challengesFIR No. 476 dated 24-9 2002 on the file of the Sub Inspector, Detective Department, Central Kolkata, third respondent herein insofar as it concerns him. In Writ Petition No. 44714 of 2002 the very same petitioner challenges FIR of 2002 the very same petitioner challenges FIR bearing No. 300 dated 23-9-2001 on theme of the same respondent.

(2.) The case of the petitioner in Writ Petitipn No. 44701 of 2002 is briefly stated hereunder : According to him, M/s. DSQ Software Limited was promoted by him at Chennai in the year 1993. The main object of the company was the preparation and export of softare products. It was ranked one of the leadg Software companies in the country. Its earnings were in foreign exchange. It has valuable customers, many of whom are Fortune 500 companies. In the year 2000, when the software market was at its peak, with a view to expand, its activities further, it embarked on the purchase of overseas software companies, one of which was FortunaTechnologies in which New Vision Investment Private Limited held a substantial number of shares. It allotted shares to New Vision India Private Limited for which it had the requisite permission from the concerned authorities. However, due to technological flaw, the company, M/s. DSQ Software Limited was directed by SEBI to cancel the allotment. Due to the default committed by some of the Brokers operating in the Calcutta Stock Exchange, the said Exchange appears to have suffered a loss. A complaint has been lodged by the Secretary of the Calcutta Exchange Association Ltd. alleging that the Stock Exchange had been cheated to the tune of Rs. 120 crores by the accused named in the complaint. While so, certain articles were published in Dailies including the Business Line issue of Oct. 3, 2002 alleging that the petitioner was absconding. The said issue states that according to the 2nd respondent herein, he had masterminded the fund diversion with one Mr. Dinesh Kumar Singhania, the former Head of the Calcutta Stock Exchange. The allegation is malicious and unwarranted. To establish that the petitioner had nothing to do with the scam which is under investigation, the report of the Calcutta Stock Exchange Limited sent to the Deputy Director, Lok Sabha Secretariate is adequate proof. In view of the assertion made by the Calcutta Stock Exchange (in short "CSE") to the Joint Parliamentary Committee, the inclusion of petitioners name and the allegations made by the 2nd respondent in his interviews to the various newspapers are unjustified and unwarranted. The only defect the shares lodged with the Stock Exchange suffers from is their subsequent cancellation by the Securities Exchange Board of India (in short "SEBI"). The order of cancellation was communicated to the company M/s. DSQ Software Limited at Chennai and hence the cause of action if any arises at Ghennai though the FIR which is devoid of any allegation against him or the company has been lodged at Kolkata. This Court has ample jurisdiction to go into the veracity of the impugned FIR. There is no nexus between the petitioner and the other accused. The action of the respondent violates his rights under Arts. 14, 19 (1) (g) and 21 of the Constitution of India. Similar averments have been made in the other writ petition where the petitioner challenges FIR bearing No. 300 dated 23-9-2001 on the file of the third respondent.

(3.) Pursuant to the notice and interim order, the third respondent-Sub Inspector of Police, Detective Department Central Calcutta, third respondent has filed a counter affidavit and also petition for vacation of the interim order. The case of the respondents as seen from the counter-affidavit of the third respondent is briefly stated hereunder, Both the writ petitions are not maintainable as this Court lacks territorial jurisdiction to grant the relief of quashing the FIR No. 476 dated 24-9-2002 filed before the Detective Department, Kolkata. The cause of action had wholly arisen within the City limits of Kolkata where the Calcutta Stock Exchange Association is situated. The case in FIR No. 476 has been registered on the complaint given by one Prasun Kumar Ray, Secretary of the Calcutta Stock Exchange Association Limited on 24-9-2002 for alleged offences under Sections 120(B) , 420, 409, 467, 468, 471, 477-AIPC. During the period between Feb. 2001 and March, 2001, the writ petitioner and other accused persons and others being bankers, share brokers and Directors of Calcutta Stock Exchange, had entered into a criminal conspiracy to cheat the Stock Exchange and its investors as well as the common members of public and in pursuance thereof, frauduently withdrew a huge sum of Rs. 120 crores and criminally misappropriated the same for their wrongful gain causing wrongful loss to Calcutta Stock Exchange and its investors by preparing and using forged and fabricated documents-as genuine. The petitioner in conspiracy with the other accused by indulging in circular trading articifically inflated the price of the shares of the DSQ Software Company Limited, DSQ Industries Limited and the shares of some other companies cheated small time investors of their hard earned money. They also cheated the Calcutta Stock Exchange Association to a tune of Rs. 120 crores by deliberately making default in payment for the shares purchased by them in circular trading. A Joint Parliamentary Committee was formed and a full enquiry was conducted by it. The report of the committee clearly found that the writ petitioner is criminally liable for his wrong doings culminating in a nation wide security scam having serious impact on the economy of the country. The Securities Exchange Board of India (SEBI) also conducted an enquiry and came to the conclusion that the writ petitioner is culpable.