IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH THURSDAY, THE 2ND JUNE 2011 / 12TH JYAISHTA 1933 Crl.MC.No. 3850 of 2009() ------------------------- (CRIME NO.105/2009 OF THE KANNUR TOWN POLICE STATION) ----------------- PETITIONER/DEFACTO COMPLAINANT: ------------------------------------------------------------ P.PRADEEP KUMAR, S/O.NARAYANAN, AGED 46 YEARS, YESHODA NIVAS, CHIRAKKAL R.S.POST, CHIRAKKAL, KANNUR. BY ADVS. SRI.M.RAMESH CHANDER SRI.ANEESH JOSEPH RESPONDENT/STATE/ACCUSED: --------------------------------------------- 1. STATE OF KERALA, REPRESENTED BY PUBLIC PROSESCUTOR, HIGH COURT OF KERALA, KOCHI-31. 2. K.G.VINOD, S/O.GANGADHARAN, AGED 30 YEARS, MANAGER, KOTAK SECURITIES LTD., KANNUR BRANCH, FORT ROAD, KANNUR. 3. AMIT VIJAYA MASEKHAR, AGED 29 YEARS, S/O.MASEKHAR, EMPLOYEE M/S.KOTAK SECURITIES LTD., FIRST FLOOR, 229 NARIMAN POINT, MUMBAI-400 021. R1 BY PUBLIC PROSECUTOR SRI.MANU R2 BY ADV. SRI.M.AJAY R3 BY ADV. SRI.M.AJAY THIS CRIMINAL MISC. CASE HAVING COME UP FOR ADMISSION ON 02/06/2011, ALONG WITH WPC NO. 24414 OF 2009 , THE COURT ON THE SAME DAY PASSED THE FOLLOWING: VK THOMAS P JOSEPH, J. ---------------------------------------- Crl.M.C.No.3850 of 2009 and W.P(C).No.24414 of 2009 --------------------------------------- Dated this 02nd day of June, 2011 ORDER These proceedings concern a case registered by the Kannur Town Police as Crime No.105 of 2009 for offences punishable under Secs.406, 420 and 468 read with Sec.34 of the Indian Penal Code. Parties are referred hereunder as de facto complainant and accused for convenience. 2. Petitioner in Crl.M.C.No.3850 of 2009 is the de facto complainant. He preferred Annexure-A1, complaint (in Crl.M.C.No.3850 of 2009) before learned Judicial First Class Magistrate-I, Kannur alleging commission of offences as above stated against accused 1 and 2 (second accused is the third respondent in Crl.M.C.No.3850 of 2009 and petitioner in W.P(C). No.24414 of 2009). Case of the de facto complainant is that M/s. Kotak Securities (for short, "the Company”) misrepresented to him that they had share broking business, undertook business on behalf of the de facto complainant but, in the transaction company cheated the de facto complainant. Learned Magistrate forwarded Annexure-A1, complaint to the Kannur Town police for investigation under Sec.156(3) of the Code of Criminal Procedure Crl.M.C.No.3850 of 2009 and W.P(C).No.24414 of 2009 -: 2 :- (for short, "the Code”). Grievance of the de facto complainant (in Crl.M.C.No.3850 of 2009) is that the police has not conducted any investigation on the ground that any enquiry into the matter is to be conducted by the SEBI. Thereon, de facto complainant preferred Annexure-A2, petition before the Director General of Police for formation of a Special Investigation Team ((for short, "the SIT”). The de facto complainant also preferred Annexure- A3, petition before learned Magistrate to direct proper investigation but, no order was passed on the same (it is contended). It is prayed in Crl.M.C.No.3850 of 2009 that direction may be given to the State Government to constitute SIT for investigation of the case. 3. In W.P(C).No.24414 of 2009 filed by the second accused the prayer is to quash Ext.P13, complaint and Ext.P14, FIR in Crime No.105 of 2009 referred above. It is contended that the de facto complainant (respondent No.3 in W.P(C).No.24414 of 2009) actively traded in securities both in cash segment and futures and options segment and the company issued contract notes to the de facto complainant as required by the SEBI. It is contended that for every business company had transacted on behalf of the de facto complainant, there was voice recording of the authorisation. In mid January, 2008 there was an Crl.M.C.No.3850 of 2009 and W.P(C).No.24414 of 2009 -: 3 :- unprecedented fall in exchange business all over the world which resulted in loss to many of the investors including the de facto complainant. The company asked the de facto complainant to make up his margin money and accordingly the de facto complainant issued cheque for `.2,00,000/- to the company which was dishonoured on presentation. As per the rules and regulations of contract between parties any dispute is to be referred to the arbitrator and accordingly the company commenced arbitration proceeding against the de facto complainant to recover the amount due. It also filed a complaint under Sec.138 of the Negotiable Instruments Act (for short, "the Act”). The de facto complainant participated in the arbitration proceedings and even issued notice to the company requesting it to refrain from initiating proceeding under the Act. The Arbitrator passed award against the de facto complainant upholding contentions of the company. The de facto complainant challenged that award in the District Court, Kannur under Sec.34 of the Arbitration and Conciliation Act, 1996 and that matter is pending. It is in the meantime that the de facto complainant has ventured to file Ext.P13 (in W.P(C).No.24414 of 2009), complaint against second accused and another alleging offences as above stated. In W.P(C).No.24414 of 2009 it is prayed that allegations Crl.M.C.No.3850 of 2009 and W.P(C).No.24414 of 2009 -: 4 :- against the second accused are false and that he is only one among the 54 in-house lawyers engaged by the company to represent it in various legal matters. In Ext.P13, there is no specific allegation against the second accused and as such the complaint and FIR against the second accused are not sustainable. It is contended that it is without application of mind in that regard that learned Magistrate has directed investigation under Sec.156(3) of the Code. It is therefore prayed in the writ petition that Exts.P13 and P14, complaint and FIR may be quashed as against the second accused since it is an abuse of the process of Court and otherwise it is necessary to secure the interest of justice. 4. I have heard learned counsel for de facto complainant, second accused and the learned Public Prosecutor. Learned counsel on both sides argued their part of the case. According to the learned counsel for de facto complainant, there is specific allegation in the complaint regarding breach of trust, cheating and forgery. It is the further contention of learned counsel that the officer entrusted with investigation of the case is not doing any fruitful job and in the circumstance, since the matter runs into minute details regarding share broking business and examination of various documents and voice recording etc, a Crl.M.C.No.3850 of 2009 and W.P(C).No.24414 of 2009 -: 5 :- special team may be constituted to investigate the case as requested by the de facto complainant in Annexure-A2, petition (in Crl.M.C.No.3850 of 2009). Per contra, it is argued by learned counsel for second accused that there is absolutely no merit in the complaint, it is vexatious not to say about the malafide intention behind it. According to the learned counsel, all the allegation of breach of trust cannot stand since for every business transacted by the company on behalf of de facto complainant, there is voice recording of his consent. It is submitted by learned counsel that the dispute was referred to the Arbitrator in whose proceeding the de facto complainant also took part but, has suffered an adverse award which as per procedure established by law is sought to be annulled in O.P.No.119 of 2009 which is still pending. It is contended by learned counsel that so far as the second accused is concerned, he has nothing to do with the alleged forgery or breach of trust as he is only an in-house lawyer engaged by the company along with 53 others to represent the company in various legal matters. In the absence of any specific allegation worth mentioning about the alleged involvement of the second accused, prosecution against him cannot stand. Learned counsel submitted that it is true that second accused presented a complaint for offence punishable under Sec.138 of the Act on Crl.M.C.No.3850 of 2009 and W.P(C).No.24414 of 2009 -: 6 :- behalf of the company and against the de facto complainant. Learned counsel submits that the High Court of Bombay has quashed the proceeding on that complaint on the ground of non compliance with some formality in filing the complaint and that order is under challenge in the Supreme Court. Learned counsel has also invited my attention to pages 115 and 148 of the paper book of the writ petition to contend that even after the alleged breach of trust/forgery as the de facto complainant alleges, he ventured to transact with the company by applying to be a sub broker of the company which itself indicates falsity of the allegations. 5. Though learned counsel for second accused has argued about the vexatious and malafide nature of the complaint as a whole, I need not go into that question in this proceeding since in the writ petition, challenge is only to the complaint and FIR to the extent it concerned the second accused. It is seen from Ext.P11 in the writ petition (See page 77) is a list of in- house lawyers the company has prepared to represent it severally in Courts of law, judicial and quasi judicial authorities and various other forums or authorities. 54 lawyers were thus appointed or engaged, the second accused being Sl.No.48 in that list. Crl.M.C.No.3850 of 2009 and W.P(C).No.24414 of 2009 -: 7 :- 6. So far as allegation of breach of trust is concerned, it is mainly centered round the alleged forgery of the cheque which according to the de facto complainant, he had given in signed blank form to the company. The second accused is not the payee under the cheque. Nor is there any allegation that the said cheque was (allegedly) forged by the second accused. If that be so, the second accused being only an in-house lawyer who was authorised by the company to represent it in various forums, merely for the reason that based on the impugned cheque he happened to prefer a complaint against the de facto complainant and on behalf of the company, it cannot be said that he forged the cheque or committed breach of trust. 7. Yet another allegation of forgery referred to in the complaint regarding (alleged) execution of power of a attorney as if it is executed by the de facto complainant. The photocopy of that power of attorney is produced and marked Ext.P5 in the writ petition (See page 48 onwards). That power of attorney is seen (allegedly) attested by an advocate and Notary Public on 28.08.2007. According to the de facto complainant the first accused has committed forgery and made the power of attorney either by forging his signature and the Notary Public or by using blank signed papers obtained from de facto complainant. Either Crl.M.C.No.3850 of 2009 and W.P(C).No.24414 of 2009 -: 8 :- way, allegation of (alleged) forgery of the power of attorney does not concern the second accused. The second accused is also not a party to that power of attorney in any capacity whatsoever. If that be so, prosecution against the second accused is unwarranted and is liable to be quashed. 8. So far as request of de facto complainant for a better agency to investigate the case is concerned, having regard to the issues involved and the nature of investigation required to be conducted including examination (if any required) of voice recording etc which may require expertise in information technology, consider it appropriate that further investigation be conducted by an officer not below the rank of a Dy.S.P and be supervised by the Superintendent of Police of the District concerned. I make it clear that I have not expressed any opinion either way on the merit or otherwise of the case pleaded by de facto complainant against the first accused. The criminal miscellaneous case and writ petition are disposed of in the following lines: (i) Crl.M.C.No.3850 of 2009 is allowed. It is directed that an officer of the Kerala police not below the rank of a Dy.S.P shall further investigate the case which shall be supervised by the Superintendent of Police of the Crl.M.C.No.3850 of 2009 and W.P(C).No.24414 of 2009 -: 9 :- district concerned. It is open to the officer investigating the case to co-opt other officers in his team if he thinks it necessary. (ii) The Superintendent of Police, Kannur shall issue necessary orders transferring investigation to such officer within two weeks from the date of receipt of a copy of this judgment (which shall be made available to the Superintendent of Police by the de facto complainant/petitioner in Crl.M.C.No.3850 of 2009). (iii) Officer investigating the case shall look into the matter in detail having regard to the contentions raised in W.P(C).No.24414 of 2009 as well regarding the alleged transactions. (iv) W.P(C).No.24414 of 2009 is allowed. Ext.P13, complaint and P14, FIR in Crime No.105 of 2009 of Kannur Town Police Station to the extent it concerned the petitioner/second accused are quashed. (THOMAS P JOSEPH, JUDGE) Sbna/-