Case Note & Summary
The Supreme Court of India heard an appeal by the Central Bureau of Investigation (CBI) against an order of the Bombay High Court's Single Judge quashing criminal proceedings in two cases related to fraudulent activities in Initial Public Offerings (IPOs) of Yes Bank Ltd. and Infrastructure Development Finance Company Ltd. (IDFC). The CBI had registered FIRs in 2006 based on complaints from SEBI, and chargesheets were filed in 2007. The respondent, Manojdev Gokulchand Seksaria, was an accused in both cases. In 2009, SEBI passed a consent order requiring the respondent to pay disgorged profits and settlement charges, which he paid. In 2018, the respondent filed a writ petition (No. 406 of 2018) challenging the FIRs and chargesheets, which was dismissed by a Division Bench of the High Court. The Supreme Court permitted withdrawal of the SLP against that dismissal with liberty to raise the effect of the SEBI consent order. Thereafter, the respondent filed fresh writ petitions (No. 245 and 730 of 2020) challenging the cognizance orders of 2008, but not the FIRs or chargesheets. These petitions were heard and allowed by a Single Judge, who quashed the criminal proceedings. The CBI appealed, contending that the Single Judge lacked jurisdiction under the Bombay High Court Rules, as the petitions effectively sought quashing of criminal proceedings and should have been heard by a Division Bench. The Supreme Court agreed, noting that the respondent had deleted prayers challenging the FIR and chargesheet to avoid the Division Bench, but the substance of the petitions still involved quashing of proceedings. The Court set aside the Single Judge's order and remanded the matter to the Division Bench for fresh consideration on maintainability and merits, without expressing any opinion on the merits of the case.
Headnote
A) Criminal Procedure - Quashing of Criminal Proceedings - Jurisdiction of Single Judge vs Division Bench - Bombay High Court Rules, Rule 2(II)(h) - The High Court Rules provide that applications for quashing an FIR, charge sheet, or order directing investigation under Section 156(3) Cr.P.C. are to be heard by a Division Bench, not a Single Judge. The respondent, after withdrawal of an earlier SLP with liberty to raise the effect of a SEBI consent order, filed fresh petitions challenging only the cognizance orders, which were heard and allowed by a Single Judge. The Supreme Court held that the Single Judge ought to have considered whether the petitions were maintainable before him in light of the Rules and the earlier Division Bench order, and remanded the matter to the Division Bench for fresh consideration. (Paras 13-18) B) Criminal Procedure - Abuse of Process - Consent Order by SEBI - Effect on Criminal Proceedings - The respondent argued that the SEBI consent order dated 07.12.2009, accepting payment of disgorged profits and settlement charges, should result in quashing of criminal proceedings. The Supreme Court did not decide this issue on merits but noted that the Single Judge's order quashing proceedings was set aside on jurisdictional grounds, and the Division Bench will consider all aspects afresh. (Paras 8-11, 16-18)
Issue of Consideration
Whether the learned Single Judge of the Bombay High Court had jurisdiction to entertain and allow the writ petitions challenging the cognizance orders, given the earlier dismissal of a similar petition by a Division Bench and the High Court Rules regarding the jurisdiction of Single Judges and Benches.
Final Decision
The Supreme Court allowed the appeals, set aside the impugned judgment and order dated 05.01.2022 passed by the Learned Single Judge, and remanded Writ Petition No. 245 of 2020 and Writ Petition No. 730 of 2020 to be heard afresh by a Division Bench of the Bombay High Court. The Court clarified that it has not expressed any opinion on the merits of the case and the Division Bench shall decide the matter in accordance with law.
Law Points
- Jurisdiction of Single Judge vs Division Bench under Bombay High Court Rules
- Effect of consent order by SEBI on criminal proceedings
- Maintainability of writ petition challenging cognizance order after earlier dismissal of challenge to FIR and chargesheet
