Summary
During an incomplete investigation into a share purchase procured by an impersonating caller, the High Court under Section 482 CrPC ordered release on superdari of Rs.15.90 lakh of sale proceeds withheld by the BSE to the seller company, whose role was still under investigation and which the chargesheet named as the main beneficiary. The Court held that the High Court exceeded its inherent jurisdiction by effectively giving the seller a clean chit while the main accused was absconding; the orders of the Magistrate and the revisional court declining release were restored and the money is to stay with the BSE during the trial.
Issues
- Whether the High Court, in exercise of inherent jurisdiction under Section 482 CrPC, could direct release of withheld sale proceeds to a party whose role in the alleged fraud was still under investigation.
- Whether observations exonerating such a party were permissible before the investigation was complete.
Provisions considered
- Section 482, Code of Criminal Procedure, 1973The inherent power of the High Court does not extend to conducting a mini trial; by finding that the seller had no role in the fraud while the investigation was pending and directing release of the proceeds, the High Court travelled beyond its inherent jurisdiction. (¶¶ 10, 11, 12)
Held
- While exercising inherent jurisdiction under Section 482 CrPC the High Court is not to conduct a mini trial (CBI v. Aryan Singh; Dharambeer Kumar Singh v. State of Jharkhand). (¶ 10)
- Where the chargesheet states that the main accused is absconding and that the role of the party seeking release can be ascertained only after his arrest, the High Court ought not to have observed that the party had no role in the transaction. Releasing the sale value of the shares while the investigation is incomplete may cause irreparable loss to the complainant and frustrate the investigation; it was premature to give the main beneficiary of the alleged fraudulent transaction a clean chit, especially when the market value of the shares was negligible, and the concurrent orders of the Magistrate and the revisional court declining release should not have been disturbed. (¶¶ 11, 12)
Result
Appeal allowed; High Court order dated 25.02.2025 set aside; the sale value of the shares (Rs.15.90 lakh) to remain with the BSE during the pendency of the trial; no observations on merits; trial court directed to proceed expeditiously; pending applications disposed of.