New Delhi: The Supreme Court has set aside an order quashing criminal proceedings in connection with the initial public offering (IPO) of shares of Yes Bank Ltd and Infrastructure Development Finance Company Ltd (IDFC) in 2005.
A bench comprising BR Gavai and KV Vishwanathan recorded a plea by advocate Alabhaya Dhamija, appearing for the CBI, that the accused Manojdev Gokulchand Seksaria and another accused had resorted to a clever expedient by deleting the pleas seeking quashing of the FIRs and the chargesheet and inserting fresh pleas challenging the remand orders, which were not specifically challenged in the first round.
“This was done to have the case tried by a single judge in terms of Rule 18(4) of Part 1 Chapter I of the High Court Rules,” he said.
As per the Bombay High Court rules, the lawyer said, applications for quashing an FIR and a chargesheet were outside the jurisdiction of a single judge and had to be heard by the Division Bench.
The CBI also submitted only one settlement before SEBI failed to acquit one party of the criminal proceedings.
The agency’s legal counsel also said that the allegations were of such a nature that the continuation of the criminal proceedings was justified.
Justice Vishwanathan, in his August 22 judgment written on behalf of the court, too, was of the view that the present case should have been heard by the division bench as the accused had earlier challenged the order of the division bench of the Bombay High Court not to quash the chargesheet and the FIR and the Supreme Court had allowed him to file a fresh suit before the High Court.
“We refrain from commenting on the question of whether there was any clever manipulation of the jurisdictional applications (before the single judge court) as anything that would be said would prejudice the parties’ case. We say nothing further on that at this stage,” the court said.
The Court also decided not to comment on the parties’ submissions on the facts of the case.
Senior counsel for the accused, Siddharth Dave, opposed the CBI’s plea and submitted that there was nothing sinister in striking out the application challenging the FIR and chargesheet and the validity of the probe orders.
The court has remanded the case to the Supreme Court for reconsideration before the Division Bench within a period not exceeding three months from the date of registration of the FIRs in 2006.
However, the court granted a temporary suspension of the criminal proceedings for four weeks.
The FIRs and chargesheets filed in 2006 and 2007 respectively related to fraudulent activities and seizure of shares meant for retail investors allegedly committed during IPOs. In the IDFC case, 43 persons were named as accused and in the Yes Bank case, 25 persons were named as accused.
In 2008, the Special Court took note of the crimes committed against the accused.
The defendants filed petitions in the Supreme Court in 2018 seeking to quash the FIR and the chargesheet, but the same was dismissed by the High Court. Following the rejection, the top court referred the matter back to the Supreme Court.
The respondents then filed fresh writ petitions before the High Court, but this time they only challenged the inquiry orders, which was allowed by the single judge bench in 2022, forcing the CBI to challenge the validity of the order before the Supreme Court.
Published August 26, 2024, 10:30 a.m. IS
