Calcutta High Court (Appellete Side)
Bhaskar Saha And Anr vs Securities And Exchange Board Of India ... on 25 July, 2024
IN THE HIGH COURT AT CALCUTTA
(Criminal Revisional Jurisdiction)
APPELLATE SIDE
Present:
The Hon'ble Justice Shampa Dutt (Paul)
CRR 242 of 2021
(Assigned)
With
CRAN 1 of 2021
With
CRAN 2 of 2021
Bhaskar Saha and Anr.
Vs
Securities and Exchange Board of India (SEBI).
For the Petitioners : Mr. Samrat Sen, Sr. Advocate,
Mr. Ranajit Ray,
Ms. Parna Roy Chowdhury,
Mr. Abhishek Banerjee,
Mr. Sourath Dutt.
For the Opposite Party/ : Mr. Sandipan Ganguly, Sr. Adv,
SEBI Mr. Rajib Ray.
Hearing concluded on : 09.07.2024
Judgment on : 25.07.2024
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Shampa Dutt (Paul), J.:
1. The present revision has been preferred praying for quashing and setting aside of the order dated 17.01.2020, passed by the Learned 5th Special Court at Calcutta, thereby framing charges as against the Petitioners in respect of several alleged offences, which have not been alleged in and are beyond the scope of the complaint and the report filed by the investigating agency in connection with Complaint Case No. SEBI 10 of 2017.
2. It is the case of the petitioners that the respondent SEBI initiated the said criminal proceeding being Complaint Case No. SEBI 10 of 2017, as against the Petitioners by submitting a complaint by mechanically incorporating Sections 56, 60 and 70 read with Section 2(36), 73 of the Companies Act, 1956 read with Section 465 of the Companies Act, 2013 and the SEBI (Discloser and Investors Protection) Guidelines 2000 read with SEBI (Issue of Capital and Discloser Requirement) Regulations 2009. The aforesaid offences are punishable under Section 24 and 27 of the SEBI Act 1992 and also offences under Section 26A, 26B, 26C of the SEBI Act 1992 and also under Section 11, 11A and 11B of the SEBI Act 1992 read with Section 24 and 27 of the SEBI Act 1992 and also offences punishable under Section 24 and 27 of the SEBI Act 1992.
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3. It is also the case of the Petitioners that vide order passed on 17.01.2020, the Learned 5th Special Court at Calcutta framed charges against the Petitioners herein under Sections 56, 60 read with Section 2(36), 55A, 67, 68, 70, 73, 117(B), 117(C), of the Companies Act, 1956 read with Section 40 of the Companies Act, 2013 and Section 6 of the General Clauses Act 1857 in violation of Section 12(1) of the SEBI Act, 1992, and violation of Regulation 3 of the SEBI (PFUTP) Regulations, Regulations 4(2), 4(4), 5(2), 6-9, 12-17, 19, and 26 of the SEBI (IDLS) Regulations, 2008 which is punishable under Section 56(3), 60(5), 70(4), 73(1A), 117C(5) and 629A of the Companies Act 1956 and under Section 24(1), 24(2), 27 of the SEBI Act 1992 in a mechanical manner, without applying its judicial mind and without even considering whether the offences alleged by SEBI as against the Petitioners could even remotely be contributed in the instant case given that the factum of the alleged complaint does not, even tenuously, reveal commission of such offences by the Petitioners.
4. Hence, the revision.
5. The Opposite Party (SEBI) has used an affidavit-in opposition, Wherein, the prima facie allegations as stated in the petition of complaint is being reproduced as here for convenience:-
―8. That before dealing with the averments made in the said application in a more detailed manner, the prima facie allegation stated in the petition of complaint are stated herein below:-4
a. SEBI had conducted an examination with respect to illegal fund mobilization and observed that Aspen Projects India Limited (hereinafter referred to as 'APIL') from 2009-10 to 2011-12 raised Rs. 14.90 crores as secured redeemable debenture and from 2010-2011 and Rs.76.1 Lakhs during 2011-2012 through the issue of redeemable preference shares, without complying with the regulatory provisions applicable to a public issue. b. APIL had made public issue of shares without filing any offer document or statement in lieu of prospectus against such public issue. Whenever an offer is made by an entity to fifty or more persons, it is deemed to be a public issue and such entity are bound to comply with the disclosure requirements of SEBI. The Hon'ble Supreme Court of India in the matter of Sahara India Real Estate Corporation Limited & Others vs. SEBI and another [(Civil Appeal Nos. 9813 and 9833 of 2011 decided on August 31, 2012) ('the Sahara case")] had inter alia held that -
―Section 67(1) deals with the offer of shares and debentures to the public and Section 67(2) deals with invitation to the public to subscribe for shares and debentures and how those expressions are to be understood, when reference is made to the Act or in the articles of a company. The emphasis in Section 67(1) and (2) is on the "section of the public‖. Section 67(3) states that no offer or invitation shall be treated as made to the public, by virtue of subsections (1) and (2), that is to any section of the public, if the offer or invitation is not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation or otherwise as being a domestic concern of the persons making and receiving the offer or invitations.
Section 67(3) is, therefore, an exception to Sections 67(1) and (2). If the circumstances mentioned in clauses (1) and
(b) of Section 67(3) are satisfied, then the offer/invitation would not be treated as being made to the public. The first proviso to Section 67(3) was inserted by the Companies (Amendment) Act, 2000 w.e.f. 13.12.2000, which clearly indicates, nothing contained in Sub-section (3) of Section 67 shall apply in a case where the offer or invitation to subscribe for shares or debentures is made to fifty persons or more.... Resultantly, if an offer of securities is made to fifty or more persons, it would be deemed to be a public issue, even if it is of domestic 5 concern or proved that the shares or debentures are not available for subscription or purchase by persons other than those received the offer or invitation.... I may, therefore, indicate, subject to what has been stated above, in India that any share or debenture issue beyond forty nine persons, would be a public issue attracting all the relevant provisions of the SEBI Act, regulations, framed thereunder, the Companies Act. pertaining to the public issue...‖ (Emphasis supplied)‖ Therefore, once an offer is made to fifty or more persons, the intention to get listed or not is irrelevant. Since APIL had issued share to public without making any application for listing of the shares in the stock exchange, APIL has violated several provision of the Companies Act, 1956 as well as SEBI Act, 1992.
c. APIL is a company incorporated under the companies Act, 1956 and accused no. 2 to 10 (including petitioners) are the directors/promoters/managers/key management personnel/persons in charge of the business of the accused company's schemes and are responsible for the day to day affairs of the company.
d. APIL has failed to take necessary actions as required by law and therefore prosecution is being launched for violation of provisions of the Companies Act, 1956 as well as SEBI Act and Regulations.
e. APIL has raised a huge amount of money from general public in contravention of the extant legal provisions. f. Upon noticing that APIL was not complying with the extant legal provisions, SEBI issued an order being dated August 14, 2015 directing APIL to comply with SEBI directions and make repayments to the investors but the company did not comply with the Regulations, which shows its dishonest intentions of evading the repayments of the amount collected by it from the investors. g. APIL has not taken any steps for winding up the scheme and the repayment to the investors nor has it taken any other steps to comply with the SEBI directions and extant legal provisions.
h. APIL and its directors have failed to refund the amounts to the general public who invested their hard earned money in the schemes operated by the accused persons and cause huge pecuniary damage to general public.‖ 6
6. In reply, the petitioners have again denied the case of the opposite party and reiterated their case as made out in the revisional application.
7. Written notes of argument have been placed by the parties in this case along with judgments relied upon.
8. The Petitioners in their written notes have placed the relevant Sections of the Companies Act in respect of their case and relied upon the following rulings:-
a. Bhawna Bai v. Ghanshyam and Ors., (2020) 2 SCC 217.
b. Hardeep Singh v. State of Punjab & Ors., (2014) 3 SCC 92.
c. Dipakbhai Jagdishchandra Patel v. State of Gujarat & Anr., (2019) 16 SCC 547.
d. Ghulam Hassan Beigh v. Mohammad Maqbool Magrey & Ors., (2022) 12 SCC 657.
9. The Opposite party/SEBI in its written notes has stated that a brief perusal of the formal charges would reveal that all the charges have been laid down in detail and have been read over and explained to the Petitioners/accused persons. Pursuant to the charges being read over to the accused persons, they pleaded not guilty and claimed to be tried. Thus, all the necessary procedure as laid down under Section 211 of the Code of Criminal Procedure, 1973 has been compiled by the Learned Trial Court.
10. The opposite party has relied upon the following Judgments:- 7
a. Kanti Bhadra Shah Vs. State of West Bengal., (2000) 1 SCC 722.
b. Bhawna Bai v. Ghanshyam and Ors., (Supra).
c. Hardeep Singh v. State of Punjab & Ors., (Supra).
d. Dipakbhai Jagdishchandra Patel v. State of Gujarat & Anr., (Supra).
e. Ghulam Hassan Beigh v. Mohammad Maqbool Magrey & Ors., (Supra).
11. Chapter XVII of the Code of Criminal Procedure, 1973, deals with the procedure as to the consideration of 'charge'.
12. Section 211 Cr.P.C, lays down as to what shall be the contents of charge:-
211. Contents of charge.--(1) Every charge under this Code shall state the offence with which the accused is charged.
(2) If the law which creates the offence gives it any specific name, the offence may be described in the charge by that name only.
(3) If the law which creates the offence does not give it any specific name, so much of the definition of the offence must be stated as to give the accused notice of the matter with which he is charged. (4) The law and section of the law against which the offence is said to have been committed shall be mentioned in the charge.
(5) The fact that the charge is made is equivalent to a statement that every legal condition required by law to constitute the offence charged was fulfilled in the particular case.
(6) The charge shall be written in the language of the Court.
(7) If the accused, having been previously convicted of any offence, is liable, by reason of such previous 8 conviction, to enhanced punishment, or to punishment of a different kind, for a subsequent offence, and it is intended to prove such previous conviction for the purpose of affecting the punishment which the Court may think fit to award for the subsequent offence, the fact, date and place of the previous conviction shall be stated in the charge; and if such statement has been omitted, the Court may add it at any time before sentence is passed.
13. Learned Counsel for the Opposite Party has placed emphasis on Section 215 Cr.P.C. - Effect of Errors.
"215. Effect of errors. -- No error in stating either the offence or the particulars required to be stated in the charge, and no omission to state the offence or those particulars, shall be regarded at any stage of the case as material, unless the accused was in fact misled by such error or omission, and it has occasioned a failure of justice."
14. The Petitioners herein have invoked the inherent powers of this court, on the ground that there has been a failure of justice.
15. Section 228 Cr.P.C deals with the framing of charge.
"228. Framing of charge. -- (1) If, after such consideration and hearing as aforesaid, the Judge is of opinion that there is ground for presuming that the accused has committed an offence which--
(a) is not exclusively triable by the Court of Session, he may, frame a charge against the accused and, by order, transfer the case for trial to the Chief Judicial Magistrate, 139[or any other Judicial Magistrate of the first class and direct the accused to appear before the Chief Judicial Magistrate, or, as the case may be, the Judicial Magistrate of the first class, on such 9 date as he deems fit, and thereupon such Magistrate] shall try the offence in accordance with the procedure for the trial of warrant-cases instituted on a police report;
(b) is exclusively triable by the Court, he shall frame in writing a charge against the accused.
(2) where the Judge frames any charge under clause
(b) of sub-section (1), the charge shall be read and explained to the accused, and the accused shall be asked whether he pleads guilty of the offence charged or claims to be tried.‖
16. In the present case, the main contention of the petitioners is that:-
The trial court has framed charges against the petitioners in respect of offences, vide the order under revision, which are beyond the scope of the petition of complaint and the contents of the formal charges are not clear as to what offences the petitioners are charged with.
17. From the materials on record, the following documents and its contents are relevant:-
i) The Complainant/SEBI initially passed an interim order (extract herein) against the accused company on 22.06.2014 and a final order in August 2015 and passed certain directions with a condition that in case of non compliance within three months, shall take necessary action.
―WTM/ PS/39/ERO/IMD/AUG/2015 Dated: 14th August, 2015 .............. In case of failure of the company, Aspen Projects India Limited and its promoters and Directors including Mr. Abhijit Dasgupta, Mr. 10 Bhaskar Saha, Mr. Ashim Maitra, Mr. Ujjal Kumar Roy, Mr. Avijit Kumar Ganguly, Mr. Debopam Sur and Mr. Goutam Sarkar in complying with the aforesaid directions, SEBI, on expiry of three months from the date of this Order-
a) shall recover such amounts in accordance with section 28A of the SEBI Act including such other provisions contained in securities laws.
b) may initiate appropriate action against the Company, its promoters/directors and the persons/officers who are in default, including adjudication proceedings against them, in accordance with law.
c) would make a reference to the State Government/ Local Police to register a civil/criminal case against the Company, its promoters, directors and its managers/ persons in-charge of the business and its schemes, for offences of fraud, cheating, criminal breach of trust and misappropriation of public funds; and
d) would also make a reference to the Ministry of Corporate Affairs, to initiate the process of winding up of the Company....
Sd/-
Whole Time Member Securities and Exchange Board of India‖
ii) The Opposite party/SEBI then in the year 2016 initiated the case being, Complaint Case No. 11/2016, now registered as SEBI Case No. SEBI/10/2017, for violation of Sections 56, 60 and 70 read with sections 56, 60 read with section 2(36), 73 of the Companies Act, 1956 read with Section 465 of the Companies Act, 2013 and the SEBI (Disclosure and Investor Protection) Guidelines, 2000 ("the DIP Guidelines"- since rescinded) read with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("the ICDR Regulations") and 11 also stated therein that the aforesaid offences are punishable under Sections 24 and 27 of Securities and Exchange Board of India Act, 1992, read with SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 ("the ICDR Regulations") read with directions passed under Section 11, 11A and 11B of SEBI Act, 1992 read with Sections 24 and 27 of the SEBI Act, 1992. Offences Punishable under Sections 24 and 27 of Securities and Exchange Board of India Act, 1992.
iii) Specific case has been made out against the accuseds in Paragraphs 5,6,7,13,14,15 and 16 of the petition of complaint under Sections 56, 55A, 60, 67, 70, 73, 2(36), 465 and 621 of the Companies Act and Section 11, 11A, 11B of the SEBI Act, punishable under Sections 24 and 27 of the SEBI Act.
iv) It prima facie appears that the trial court in its order (under revision) dated 17.01.2020 and the formal charge framed has added sections beyond the content in the petition of complaint.
18. For convenience, a comparative chart is given below:-
SECTIONS IN THE SECTIONS IN THE SECTIONS IN THE PETITION OF ORDER DATED FORMAL CHARGE COMPLAINT 17.01.2020 Companies Act, 1956 Companies Act, 1956 Companies Act, 1956 Section 56 Section 56, 56(3) Section 56, 56(3) 12 Section 60 Section 60, 60(5) Section 60, 60(5) Section 70 Section 70, 70(4) Section 70, 70(4) Section 2(36) Section 2(36) Section 2(36) Section 73 Section 73, 73 (1A) Section 73, 73(1A) Section 465 NIL NIL Section 55A Section 55A Section 55A Section 67 Section 67 Section 67 Section 621 NIL NIL NIL Section 68 Section 68 NIL Section 117B Section 117B NIL Section 117C, 117C(5) Section 117C, 117C(5) NIL Section 40 Section 40 NIL Section 629A Section 629A General Clauses Act, General Clauses Act, General Clauses Act, 1857 1857 1857 NIL Section 6 Section 6 SEBI ACT, 1992 SEBI ACT, 1992 SEBI ACT, 1992 Section 11, 11A, 11B NIL NIL Section 24 Section 24(1), 24(2) Section 24(1), 24(2) Section 27 Section 27 Section 27 Section 26A, 26B, 26E NIL NIL NIL Section 12(1) Section 12(1) SEBI (PFUTP) SEBI (PFUTP) SEBI (PFUTP) REGULATIONS REGULATIONS REGULATIONS NIL Regulation 3 Regulation 3 SEBI (ILDS) SEBI (ILDS) SEBI (ILDS) REGULATIONS, 2008 REGULATIONS, 2008 REGULATIONS, 2008 NIL Regulation 4(2) Regulation 4(2) NIL Regulation 4(4) Regulation 4(4) NIL Regulation 5(2) Regulation 5(2)(b) NIL Regulation 6 Regulation 6 NIL Regulation 7 Regulation 7 NIL Regulation 8 Regulation 8 NIL Regulation 9 Regulation 9 13 NIL Regulation 12 Regulation 12 NIL Regulation 13 Regulation 13 NIL Regulation 14 Regulation 14 NIL Regulation 15 Regulation 15 NIL Regulation 16 Regulation 16 NIL Regulation 17 Regulation 17 NIL Regulation 19 Regulation 19 NIL Regulation 26 Regulation 26
19. The framing of charges under the Code of Criminal Procedure is a pivotal stage in criminal proceedings where a court formally accuses an individual (the accused) of committing a specific offence based on evidence and allegations presented by the prosecution. This process plays a crucial role in the criminal justice system, by informing the accused of the charges against them, establishing the legal foundation for a trial and promoting transparency and fairness in legal proceedings. In essence, a charge is a legal term used to describe an allegation.
20. Framing of charges in a criminal case is the formal accusation of an individual committing a specific offence or crime. This ensures that the accused is aware of the nature of the accusation and the accused can prepare their defence. The primary requirement under the Cr.P.C. for a fair and just trial is to ensure that the accused is precisely and accurately informed of the offence with which they are charged.
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21. Sections 211 and 212 of the CrPC:-
These sections prescribe the forms and contents of the charge in criminal cases. They establish the framework for drafting charges in a manner that clearly describes the offence to the accused.
Section 211(3) Cr.P.C, lays down:-
"211.Contents of charge.-
(1) ...............
(2) ...............
(3) If the law which creates the offence does not give it any specific name, so much of the definition of the offence must be stated as to give the accused notice of the matter with which he is charged."
Section 211(5) Cr.P.C, lays down:-
"211.Contents of charge.-
(1) ...............
(2) ...............
(3) ..............
(4) ..............
(5) The fact that the charge is made is equivalent to a statement that every legal condition required by law to constitute the offence charged was fulfilled in the particular case.‖
22. The Supreme Court of India, in Ghulam Hassan Beigh v. Mohammad Maqbool Magrey & Ors., (Supra), held:-
"18. The purpose of framing a charge is to intimate to the accused the clear, unambiguous and precise nature of accusation that the accused is called upon to meet in the course of a trial. [See : decision of a four-Judge Bench of this Court in V.C. 15 Shukla v. State [ V.C. Shukla v.State, 1980 Supp SCC 92 : 1980 SCC (Cri) 695] ].
19. The case may be a sessions case, a warrant case, or a summons case, the point is that a prima facie case must be made out before a charge can be framed. Basically, there are three pairs of sections in the CrPC. Those are Sections 227 and 228 relating to the sessions trial; Sections 239 and 240 relatable to trial of warrant cases, and Sections 245(1) and (2) with respect to trial of summons case.
21. This Court in Union of India v. Prafulla Kumar Samal [Union of India v. Prafulla Kumar Samal, (1979) 3 SCC 4 : 1979 SCC (Cri) 609] considered the scope of enquiry a Judge is required to make while considering the question of framing of charges.
After an exhaustive survey of the case law on the point, this Court, in para 10 of the judgment, laid down the following principles :
―10. ... (1) That the Judge while considering the question of framing the charges under Section 227 of the Code has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out.
(2) Where the materials placed before the Court disclose grave suspicion against the accused which has not been properly explained the Court will be fully justified in framing a charge and proceeding with the trial. (3) The test to determine a prima facie case would naturally depend upon the facts of each case and it is difficult to lay down a rule of universal application. By and large however if two views are equally possible and the Judge is satisfied that the evidence produced before him while giving rise to some suspicion but not grave suspicion against the accused, he will be fully within his right to discharge the accused. (4) That in exercising his jurisdiction under Section 227 of the Code the Judge which under the present Code is a senior and experienced Judge cannot act merely as a post office or a mouthpiece of the prosecution, but has to consider the broad 16 probabilities of the case, the total effect of the evidence and the documents produced before the Court, any basic infirmities appearing in the case and so on. This however does not mean that the Judge should make a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.‖
23. In Sajjan Kumar v. CBI [Sajjan Kumar v. CBI, (2010) 9 SCC 368 : (2010) 3 SCC (Cri) 1371] , this Court had an occasion to consider the scope of Sections 227 and 228CrPC. The principles which emerged therefrom have been taken note of in para 21 as under :
―21. On consideration of the authorities about the scope of Sections 227 and 228 of the Code, the following principles emerge:
(i) The Judge while considering the question of framing the charges under Section 227CrPC has the undoubted power to sift and weigh the evidence for the limited purpose of finding out whether or not a prima facie case against the accused has been made out. The test to determine prima facie case would depend upon the facts of each case.
(ii) Where the materials placed before the court disclose grave suspicion against the accused which has not been properly explained, the court will be fully justified in framing a charge and proceeding with the trial.
(iii) The court cannot act merely as a post office or a mouthpiece of the prosecution but has to consider the broad probabilities of the case, the total effect of the evidence and the documents produced before the court, any basic infirmities, etc. However, at this stage, there cannot be a roving enquiry into the pros and cons of the matter and weigh the evidence as if he was conducting a trial.
(iv) If on the basis of the material on record, the court could form an opinion that the accused might have committed offence, it can frame the charge, though for conviction the conclusion is required to be proved beyond reasonable doubt that the accused has committed the offence.17
(v) At the time of framing of the charges, the probative value of the material on record cannot be gone into but before framing a charge the court must apply its judicial mind on the material placed on record and must be satisfied that the commission of offence by the accused was possible.
(vi) At the stage of Sections 227 and 228, the court is required to evaluate the material and documents on record with a view to find out if the facts emerging therefrom taken at their face value disclose the existence of all the ingredients constituting the alleged offence. For this limited purpose, sift the evidence as it cannot be expected even at that initial stage to accept all that the prosecution states as gospel truth even if it is opposed to common sense or the broad probabilities of the case.
(vii) If two views are possible and one of them gives rise to suspicion only, as distinguished from grave suspicion, the trial Judge will be empowered to discharge the accused and at this stage, he is not to see whether the trial will end in conviction or acquittal.‖
27. Thus from the aforesaid, it is evident that the trial court is enjoined with the duty to apply its mind at the time of framing of charge and should not act as a mere post office. The endorsement on the charge-sheet presented by the police as it is without applying its mind and without recording brief reasons in support of its opinion is not countenanced by law.
However, the material which is required to be evaluated by the court at the time of framing charge should be the material which is produced and relied upon by the prosecution. The sifting of such material is not to be so meticulous as would render the exercise a mini trial to find out the guilt or otherwise of the accused. All that is required at this stage is that the court must be satisfied that the evidence collected by the prosecution is sufficient to presume that the accused has committed an offence. Even a strong suspicion would suffice. Undoubtedly, apart from the material that is placed before the court by the prosecution in the shape of final report in terms of 18 Section 173CrPC, the court may also rely upon any other evidence or material which is of sterling quality and has direct bearing on the charge laid before it by the prosecution. [See: Bhawna Bai v. Ghanshyam [ Bhawna Bai v. Ghanshyam, (2020) 2 SCC 217 :
(2020) 1 SCC (Cri) 581] ]."
23. The Supreme Court of India, in State of Gujarat v. Dilipsinh Kishorsinh Rao, 2023 SCC OnLine SC 1294, held:-
"7. It is trite law that application of judicial mind being necessary to determine whether a case has been made out by the prosecution for proceeding with trial and it would not be necessary to dwell into the pros and cons of the matter by examining the defence of the accused when an application for discharge is filed. At that stage, the trial judge has to merely examine the evidence placed by the prosecution in order to determine whether or not the grounds are sufficient to proceed against the accused on basis of charge sheet material. The nature of the evidence recorded or collected by the investigating agency or the documents produced in which prima facie it reveals that there are suspicious circumstances against the accused, so as to frame a charge would suffice and such material would be taken into account for the purposes of framing the charge. If there is no sufficient ground for proceeding against the accused necessarily, the accused would be discharged, but if the court is of the opinion, after such consideration of the material there are grounds for presuming that accused has committed the offence which is triable, then necessarily charge has to be framed.
8. At the time of framing of the charge and taking cognizance the accused has no right to produce any material and call upon the court to examine the same. No provision in the Code grants any right to the accused to file any material or document at the stage of framing of charge. The trial court has to apply its judicial mind to the facts of the case as may be necessary to determine whether a case has been made out by the prosecution for trial on the basis of charge-sheet material only.
12. The primary consideration at the stage of framing of charge is the test of existence of a prima-facie case, and at this stage, the probative value of materials on record 19 need not be gone into. This Court by referring to its earlier decisions in the State of Maharashtra v. Som Nath Thapa, (1996) 4 SCC 659 and the State of MP v. Mohan Lal Soni, (2000) 6 SCC 338 has held the nature of evaluation to be made by the court at the stage of framing of the charge is to test the existence of prima- facie case. It is also held at the stage of framing of charge, the court has to form a presumptive opinion to the existence of factual ingredients constituting the offence alleged and it is not expected to go deep into probative value of the material on record and to check whether the material on record would certainly lead to conviction at the conclusion of trial.
13. The power and jurisdiction of Higher Court under Section 397 Cr. P.C. which vests the court with the power to call for and examine records of an inferior court is for the purposes of satisfying itself as to the legality and regularities of any proceeding or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law or the perversity which has crept in such proceedings. It would be apposite to refer to the judgment of this court in Amit Kapoor v. Ramesh Chandra, (2012) 9 SCC 460 where scope of Section 397 has been considered and succinctly explained as under:
"12. Section 397 of the Code vests the court with the power to call for and examine the records of an inferior court for the purposes of satisfying itself as to the legality and regularity of any proceedings or order made in a case. The object of this provision is to set right a patent defect or an error of jurisdiction or law. There has to be a well-founded error and it may not be appropriate for the court to scrutinise the orders, which upon the face of it bears a token of careful consideration and appear to be in accordance with law. If one looks into the various judgments of this Court, it emerges that the revisional jurisdiction can be invoked where the decisions under challenge are grossly erroneous, there is no compliance with the provisions of law, the finding recorded is based on no evidence, material evidence is ignored or judicial discretion is exercised arbitrarily or perversely. These are not exhaustive classes, 20 but are merely indicative. Each case would have to be determined on its own merits.
13. Another well-accepted norm is that the revisional jurisdiction of the higher court is a very limited one and cannot be exercised in a routine manner. One of the inbuilt restrictions is that it should not be against an interim or interlocutory order. The Court has to keep in mind that the exercise of revisional jurisdiction itself should not lead to injustice ex facie. Where the Court is dealing with the question as to whether the charge has been framed properly and in accordance with law in a given case, it may be reluctant to interfere in exercise of its revisional jurisdiction unless the case substantially falls within the categories aforestated. Even framing of charge is a much advanced stage in the proceedings under the CrPC.‖"
14. This Court in the aforesaid judgment has also laid down principles to be considered for exercise of jurisdiction under Section 397 particularly in the context of prayer for quashing of charge framed under Section 228 Cr. P.C. is sought for as under:
"27. Having discussed the scope of jurisdiction under these two provisions i.e. Section 397 and Section 482 of the Code and the fine line of jurisdictional distinction, now it will be appropriate for us to enlist the principles with reference to which the courts should exercise such jurisdiction. However, it is not only difficult but is inherently impossible to state with precision such principles. At best and upon objective analysis of various judgments of this Court, we are able to cull out some of the principles to be considered for proper exercise of jurisdiction, particularly, with regard to quashing of charge either in exercise of jurisdiction under Section 397 or Section 482 of the Code or together, as the case may be:
27.1. Though there are no limits of the powers of the Court under Section 482 of the Code but the more the power, the more due care and caution is to be exercised in invoking these powers. The power of quashing criminal 21 proceedings, particularly, the charge framed in terms of Section 228 of the Code should be exercised very sparingly and with circumspection and that too in the rarest of rare cases.
27.2. The Court should apply the test as to whether the uncontroverted allegations as made from the record of the case and the documents submitted therewith prima facie establish the offence or not. If the allegations are so patently absurd and inherently improbable that no prudent person can ever reach such a conclusion and where the basic ingredients of a criminal offence are not satisfied then the Court may interfere.
27.3. The High Court should not unduly interfere. No meticulous examination of the evidence is needed for considering whether the case would end in conviction or not at the stage of framing of charge or quashing of charge. 27.9. Another very significant caution that the courts have to observe is that it cannot examine the facts, evidence and materials on record to determine whether there is sufficient material on the basis of which the case would end in a conviction; the court is concerned primarily with the allegations taken as a whole whether they will constitute an offence and, if so, is it an abuse of the process of court leading to injustice.
27.13. Quashing of a charge is an exception to the rule of continuous prosecution. Where the offence is even broadly satisfied, the Court should be more inclined to permit continuation of prosecution rather than its quashing at that initial stage. The Court is not expected to marshal the records with a view to decide admissibility and reliability of the documents or records but is an opinion formed prima facie.‖
24. In the present case, it prima facie appears that the order under revision framing charges and the formal charges framed are not in 22 accordance with law. The said order and the formal charge framed both suffer from patent defects and error of law. The trial Judge framed charges in respect of sections beyond the contents of the petition of complaint. And while doing so did not state the substance of accusations in its order or the formal charge, thereby prima facie the accuseds are not aware of the offences that they are charged with, which goes against the principles of natural justice and fair trial.
25. The accuseds/petitioners thus prima facie did not have sufficient notice of the contents of accusation with which they are charged.
Section 211 (3) Cr.P.C, lays down:-
"211.Contents of charge.
(1) ...............
(2) ...............
(3) If the law which creates the offence does not give it any specific name, so much of the definition of the offence must be stated as to give the accused notice of the matter with which he is charged."
The omission in this case is sufficient to mislead the accuseds, thus causing a failure of Justice. The contents of charge to be read over and explained to the accused is to be sufficient, so as to let the accuseds know the nature of accusation 23 and understands with what offence he is charged with (absent in this case).
26. The order under revision and the resulting formal charge, in the present case have not been passed and framed in compliance with the provisions of law. The accusations are not based on the materials on record, and also beyond the case of the complainant in the petition of complaint and thus judicial discretion has been exercised arbitrarily/ perversely. (Amit Kapoor Vs Ramesh Chander & Anr., (2012) 9 SCC 460, wherein scope of Section 397 Cr.P.C (revisional jurisdiction) has been considered and explained).
27. Thus, the order under revision and the formal charge framed, if allowed to remain shall cause severe prejudice to the petitioners herein, the same being an abuse of the process of the court/law and thus against the Interest of Justice. The same are thus liable to be set aside and quashed.
28. CRR 242 of 2021 is accordingly allowed.
29. The order dated 17.01.2020, passed by the Learned 5th Special Court at Calcutta, in SEBI Case No. SEBI/10/2017 and the formal charge framed on 17.01.2020 are hereby set aside.
30. The trial court being the 5th Special Court, City Sessions Court, Calcutta is directed to fix the case for consideration/framing of charge afresh within 15 days from 24 the date of communication of this order, keeping in mind the observations made in this Judgment and then, proceed in accordance with law, on hearing both sides.
31. All connected applications, if any, stand disposed of.
32. Interim order, if any, stands vacated.
33. Copy of this judgment to be sent to the learned Trial Court for necessary compliance.
34. Urgent certified website copy of this judgment, if applied for, be supplied expeditiously after complying with all, necessary legal formalities.
(Shampa Dutt (Paul), J.)