Dismissed

Motilal Oswal v. the State of Maharashtra and Ors.

Bombay HC19 Sept 2011WP/134/2011

Case brief

AI extract

What is this about?

The High Court allowed the criminal writ petition filed by a broker the process issued against him for cheating. The Judge quashed the proceedings, finding no prima facie case of criminal intent or breach of trust, noting regulatory bodies had already closed their inquiries into the share transactions.

What did the court decide?

The process issued against Original Accused No. 3 was set aside to the extent of his involvement.

Motilal Oswal Vs the State of Maharashtra… — Contract and Commercial Disputes | Bombay HC (2011)

WP 134.11.sxw

JPP

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE SIDE JURISDICTION

¶5

CRIMINAL WRIT PETITION NO. 134 OF 2011

Mr. Motilal Oswal.

... Petitioner.

V/s.

The State of Maharashtra & Ors.

¶10

... Respondents.

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Mr. Abhijeet A. Desai a/w. Ms. Vrushali Maindad for the Petitioner.

¶12

Mr. S.A. Shaikh, APP for the State. Mr. A.G. Toraskar for Respondent 2.

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CORAM : K.U. CHANDIWAL, J.

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DATED : 19^th SEPTEMBER 2011.

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P.C. :-

¶16

Heard learned Counsel for the Petitioner (Original Accused No.3) and the Respondents (Original Complainant) extensively.

¶17

A complaint No.54 of 2008 and R/2008/37/SW/10 was filed, process was issued on 10^th February 2010 for an offence under Section 406,420,468 r/w. 34 of I.P.C. by the learned Additional Chief Metropolitan Magistrate pursuant to the verification dated 9.5.2008. The Petitioner is alleged to be a principal broker in the share transaction entered into by the

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WP 134.11.sxw

¶20

Original Complainant with Accused Nos.1 and 2. The recitals in the complaint perused as a whole make sweeping general reference of the Petitioner upto paragraphs 1 to 8. However, in paragraph 9 it mostly refers to Accused Nos.1 and 2. The complainant in paragraph 10 states that the Accused Nos.1 to 3 with common intention of cheating, have created false and bogus accounts and have looted to the complainant when he came to know of the cheating, he approached the Accused and demanded certain documents.

¶21

My attention was also invited to a police statement of the Petitioner recorded during inquiry as was directed by the learned Judge dated 19.3.2008. The statement of the Petitioner, recorded by the Police, has to be read as whole, and not in piecemeal as the Complainant desires. Reading the papers and particularly, the statement of accounts of the complainant with Pratik Investment, it is obvious, several entries were relating to purchase of the shares, the Complainant has with said Pratik Investment and other accused. Even if, it is held that the Petitioner is a principal broker, however, papers indicate he had no liability or responsibility to meet the contract of the Complainant. The element of cheating or of forgery or of misappropriation are seldom reflected as against the Petitioner. There may be prima-facie material against other accused, however, that will not by itself drag the Petitioner into on going proceeding as desired by the Complainant.

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WP 134.11.sxw

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The record also illustrate, the Securities and Exchange Board of India (SEBI) and National Stock Exchange (NSE), caused investigation and they have informed from their end the matter has closed. They have also informed to the Investigator. The responsibility of transaction tried to be travelled to the Petitioner, does not emerge in prima-facie infraction of Section 406, 420, 468 r/w. 34 of I.P.C. No element of Criminal breach of trust as no property was entrusted to Petitioner. The transactions were of sale purchase of shares as reflected in Account Statement with M/s. Pratik Investment. The agreement to which reference is given interalia provide arbitration to resolve the dispute pertaining to settlement. Again, mere breach of contract cannot give rise to criminal prosecution for cheating, unless fraudulent and dishonest intention is shown right at the beginning of the transaction.

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The Petition succeeds. The process to the extent of original Accused No.3 is set aside. Observations are restricted to the present case only.

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(K.U. CHANDIWAL,J.)

Motilal Oswal v. the State of Maharashtra and Ors.

Case brief

What is this about?

What did the court decide?

Motilal Oswal v. the State of Maharashtra and Ors.

Case brief

What is this about?

What did the court decide?

What the court decided

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