MANOJ GOKULCHAND SEKSARIA Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) By way of these Petitions, filed under Article 227 of Constitution of India and Sec. 482 of the Criminal Procedure Code, 1973, the Petitioner seeks to quash and set aside criminal proceedings i.e impugned Order dtd. 19/3/2008 in respect of FIR No. RC 3(E)/2006/BS&FC/ Mumbai dtd. 20/2/2006 in Special Case No. 47 of 2007 alongwith chargesheet dtd. 2/3/2009 and impugned Order dtd. 10/3/2008 in respect of FIR No. RC 4(E)/2006/BS&FC/Mumbai dtd. 20/2/2006 in Sessions Court Special Case No.48 of 2007 alongwith chargesheet dtd. 2/3/2009, both registered under Sec. 120-B r/w. read with Sec. 420, 467, 468, 471 of Indian Penal Code and Sec. 13(2) read with Sec. 13(1)(d) of the Prevention of Corruption Act, 1988 and under Sec. 68-A of the Companies Act, 1956.

(2.) The Securities and Exchange Board of India (SEBI), addressed a complaint letter to the Central Bureau of Investigation (CBI/Respondent No.2), giving information in respect of certain illegal acts/offences which had been committed in respect of the Initial Public Offerings (IPO's) of Yes Bank Limited (YBL) and Infrastructure Development Finance Corporation (IDFC). Pursuant to the complaints, CBI registered two criminal complaints Criminal Case No. RC 3(E) / 2006 / BS&FC / Mumbai and Criminal Case No. RC 4(E) /2006 /BS and FC / Mumbai. The Petitioner is an accused in both complaints. The case of the prosecution is that, the accused including the Petitioner pursuant to a criminal conspiracy, opened Bank and Demat accounts in the name of fictitious persons and applied for shares, in the said fictitious names in the retail investor category (RII) i.e shares meant for retail investors, predatory cornered the shares meant for genuine retail investors. The said illegally cornered shares were then transferred to the accounts of some the accused including the Petitioner and then sold in the market at substantial higher prices. The said illegal acts ensured unjust profit and wrongful gain for the Petitioner and other accused. This was done and achieved at the cost of the retail investors and by abusing the IPO process/system. The entire game plan was masterminded, designed and executed by the accused including the Petitioner with the help of public servants/bank employees of PSU banks. The complaint proceeds on the basis that the acts of the accused including the Petitioner are not only detrimental to the orderly development of the securities market but also criminal in nature as forged documents were used and genuine retail investors at large were deprived of the legitimate allotment of shares through the IPO process.

(3.) The CBI/Respondent No.2 registered, Criminal Case No. RC 3(E)/2006/BS&FC/Mumbai and RC 4(E)/2006/BS&FC/Mumbai, in respect of the illegalities committed by the accused including the Petitioner in respect of the IPO's of YBL and IDFC respectively. Criminal prosecutions were under Sec. 120-B r/w. read with Sec. 420, 467, 468, 471 of Indian Penal Code and Sec. 13(2) read with Sec. 13(1) (d) of the Prevention of Corruption Act, 1988 and Sec. 68-A of the Companies Act, 1956.