Case Note & Summary
The appellant, a former non-executive director of National Spot Exchange Limited (NSEL) and resident of the United States, challenged the issuance of a non-bailable warrant (NBW) by the Special Judge, MPID Court, Mumbai on 6th December 2018 in Miscellaneous Application No.1462 of 2018 arising out of MPID Special Case No.1 of 2014. The prosecution alleged that the appellant was a key management person responsible for illegal activities at NSEL, including fictitious trades and misappropriation of funds, and that he was absconding despite efforts to contact him. The appellant contended that he had already cooperated in parallel attachment proceedings under Section 4 of the MPID Act, 1999, and that the NBW was issued mechanically without consideration of his prior appearance through counsel or the circumstances of his non-response, which included an erroneous phone number and an email landing in his spam folder. After the High Court granted interim relief, the appellant appeared before the investigating officer on multiple dates. Nonetheless, the Special Judge rejected his application for cancellation of NBW on 27th June 2019, citing the seriousness of the allegations and his status as a green card holder in the United States. The High Court heard both appeals together and reserved judgment on 24th July 2019. The judgment was pronounced on 2nd August 2019, but the provided text does not contain the court's final reasoning or operative order.
Issue of Consideration
Whether the learned Special Judge, MPID Court was justified in issuing NBW against the Appellant vide order dated 6th December, 2018; Whether the rejection of cancellation of NBW on 27th June 2019 was justified.
Case Details
2019 LawText (BOM) (08) 87
Criminal Appeal No.156 of 2019 with Criminal Appeal No.919 of 2019 with Criminal Application No.892 of 2019
Indrajit Mahanty, A.M. Badar
Mr. Sanjeev Kadam, Ms. Sabeena Mahadik, Mr. Pankaj Uttaradhi, Mr. Sagar Hate, Mr. Mangesh Avhale, Ms. Rebecca Gonsalvez, Mrs. M.M. Deshmukh
Shri Vaidyalingam Hariharan
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Nature of Litigation
Criminal appeals against issuance and refusal to cancel a non-bailable warrant in proceedings under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999.
Remedy Sought
Appellant sought quashing of the non-bailable warrant issued on 6th December 2018 and setting aside of the order dated 27th June 2019 rejecting cancellation of the warrant.
Filing Reason
Appellant asserted that the NBW was issued mechanically without judicial application of mind, he had cooperated through counsel in parallel proceedings, and non-response was due to a wrong international dialling code and email landing in spam folder, and not any intention to evade investigation.
Previous Decisions
The Special Judge, MPID Court, Mumbai issued NBW on 6th December 2018. On 27th June 2019, the same court rejected appellant's application for cancellation. The High Court on 8th April 2019 recorded appellant's undertaking to appear before investigating officer; appellant appeared on multiple dates.
Issues
Whether the learned Special Judge, MPID Court was justified in issuing NBW against the Appellant on 6th December 2018.
Whether the learned Special Judge was justified in rejecting the prayer for cancellation of NBW on 27th June 2019.
Submissions/Arguments
Appellant argued that NBW was issued mechanically, without considering that he had already appeared through advocate in the attachment proceeding and had replied to the show cause notice.
Appellant contended that the investigating agency used an erroneous phone number with Argentina country code instead of US code, and the email sent on 3rd November 2018 was inadvertently placed in his spam folder, so there was no deliberate non-cooperation.
Appellant submitted that after interim directions, he voluntarily came to India on 11th May 2019, appeared before the court and investigating officer on multiple dates, cooperated fully, thus defeating the basis for NBW.
Appellant asserted that being a green card holder in US is not a ground to keep NBW alive when he had demonstrated willingness to participate in investigation.
Prosecution argued that appellant was a key management person responsible for serious economic offences, had absconded, and NBW was necessary to secure his presence, and that his subsequent cooperation did not undo the need for warrant.
Judgment Excerpts
The essential question that arises for consideration in the present case is, as to whether the learned Special Judge, MPID Court was justified in issuing NBW against the Appellant vide order dated 6th December, 2018.
It was alleged that the appellant was one of the absconding accused and though the Investigating Officer had tried to contact the appellant through various modes of communication but same proved to be futile.
Whenever the appellant was contacted on telephone number his phone was switched off.
The appellant has complied with the requirements of law by participating in the investigation and consequently the NBW issued against him ought to be quashed.
Procedural History
FIR CR No.89 of 2013 was registered on 30th September 2013 at MRA Marg Police Station, leading to proceedings under MPID Act. In 2015, provisional attachment proceedings were initiated against the appellant; he entered appearance through advocate on 30th November 2015 and filed reply on 16th December 2015. On 28th November 2018, the prosecution filed Miscellaneous Application No.1462 of 2018 seeking NBW against the appellant. On 6th December 2018, the Special Judge, MPID Court, Mumbai issued NBW. Appellant challenged the NBW before the High Court via Criminal Appeal No.156 of 2019. The High Court directed the appellant to seek cancellation from the MPID court. The appellant filed an application for cancellation, which was rejected on 27th June 2019. He then filed Criminal Appeal No.919 of 2019 against that rejection. Meanwhile, on 8th April 2019, the High Court recorded appellant's undertaking to appear before the investigating officer; appellant appeared in May-July 2019. Both appeals were heard together and judgment reserved on 24th July 2019, pronounced on 2nd August 2019.
Acts & Sections
- Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999: 4
