Reportable IN THE HIGH COURT OF DELHI AT NEW DELHI WP (C) No. 141 of 2007, WP (C) No. 17777 of 2006 and WP (C) No. 18093 of 2006 Reserved on : November 29, 2007 Pronounced on : January 11, 2008 1. WP (C) No. 141/2007 # Mahender Singh .....Petitioner ! through : Mr. Abhay K. Das, Advocate VERSUS $ High Court of Delhi & Anr. .....Respondents ! through : Mr. Rajiv Bansal, Advocate for the respondent No.1/DHC. Mr. Sanjay Mann, Advocate for the respondent No.2/SEBI. 2. WP (C) No. 17777/2006 # Sanjay Kumar .....Petitioner ! through : Mr. D.P. Singh with Ms. Priyanka Singh, Advocates VERSUS $ Registrar, High Court of Delhi & Anr. .....Respondents ! through : Mr. Rajiv Bansal, Advocate for the respondent No.1/DHC. Mr. Neeraj Malhotra, Advocate for the respondent No.2/SEBI. 3. WP (C) No. 18093/2006 # M/s. Churuwala Exports Pvt. Ltd. .....Petitioner ! through : Mr. D.P. Singh with Ms. Priyanka Singh, Advocates VERSUS $ High Court of Delhi & Anr. .....Respondents ! through : Mr. Rajiv Bansal, Advocate for the respondent No.1/DHC. Mr. Ashish Aggarwal with WP (C) No. 141/2007 nsk Page 1 of 17 Mr. R.K. Singh, Advocates for the respondent No.2/SEBI. CORAM :- * THE HON'BLE MR.JUSTICE A.K.SIKRI THE HON'BLE MR. JUSTICE VIPIN SANGHI 1. Whether Reporters of Local papers may be allowed to see the Judgment? 2. To be referred to the Reporter or not? 3. Whether the judgment should be reported in the Digest? A.K. SIKRI, J. 1. Against the petitioners in all these petitions the Securities & Exchange Board of India (‘SEBI’, for short), which is a statutory body constituted under the SEBI Act, 1992 (hereinafter referred to as ‘the Act’), has filed complaints under Section 24(1) and Section 27 of the Act. These complaints relate to the alleged offence committed by the petitioners, under the aforesaid provisions of the Act, prior to 29.10.2002. As per the said provisions prevalent at that time, the offences for which the petitioners are being prosecuted contained a maximum term of one year’s imprisonment. The complaints filed are in the nature of summons cases and having regard to the aforesaid maximum imprisonment which could be given to the accused held guilty of the offence, these are triable by the Court of Magistrate. Thus, the complaints were filed before the Magistrate who had taken cognizance thereof. 2. The provisions of the Act were amended with effect from 29.10.2002. These very offences, because of the amendment, are now punishable with 10 years imprisonment and, thus, triable by a Sessions Court. There is no dispute that insofar as substantive provision relating to the sentence is concerned, it has prospective operation and it applies to those offences committed after 29.10.2002. However, we are concerned with the procedural aspect and the question which arises for determination is as to whether the pending complaints would now be triable by the Court of Sessions. This issue has arisen in the following backdrop : 3. After the amendment in the SEBI Act by the SEBI (Amendment) Act, 2002 (hereinafter referred to as the ‘Amendment Act’), as mentioned above, the Registrar (Admn./Judl.) of the WP (C) No. 141/2007 nsk Page 2 of 17 High Court of Delhi addressed letter dated 1.12.2004 to the District & Sessions Judge, Delhi informing that the Chief Justice and Judges of this Court had been pleased to order that the SEBI cases be allocated to the Court of Ms. Asha Menon, Addl. Sessions Judge, Tis Hazari, Delhi in addition to her work. On receiving the communication, the then District & Sessions Judge, Delhi passed orders dated 4.12.2004 directing that all SEBI cases pending in the Court of Ms. Madhu Jain, Addl. Chief Metropolitan Magistrate, Delhi stood withdrawn and transferred those cases to the Court of the Addl. Sessions Judge. Thereafter, a clarificatory order dated 12.1.2005 was sent by the Registrar General of the Delhi High Court to the District & Sessions Judge, Delhi informing that the cases filed prior to the date of the above amendment were not required to be withdrawn from the Court of the Magistrate and were not to be transferred to the Court of Addl. Sessions Judge, but only those cases which are filed after coming into force the Amendment Act, i.e. the cases which were filed after 29.10.2002, had to be allocated to the Court of Ms. Asha Menon, Addl. Sessions Judge. 4. On the basis of this communication, the Sessions Judge passed consequential orders dated 13.1.2005. The effect of the aforesaid orders is that the complaints which were filed before 29.10.2002 (and obviously related to the alleged offences committed before the said date) were to remain before the Addl. Chief Metropolitan Magistrate and the complaints which were filed are are to be filed after 29.10.2002 are to be tried by the Sessions Court. There is no quarrel upto this. However, it has left behind gray area which has not been clarified, namely, if the offence allegedly committed relate to the period prior to 29.10.2002, but the complaint is filed after 29.10.2002, who would be the competent Judge to try the same. The purport of the aforesaid order dated 12.1.2005 read with order dated 13.1.2005 is that all the complaints filed after 29.10.2002, whether related to the offences committed before or after that date, are triable by the Court of Addl. Sessions Judge. 5. These writ petitioners fall in the aforesaid category. They contend that since the offence with which WP (C) No. 141/2007 nsk Page 3 of 17 they are charged is of the period prior to 29.10.2002, for which maximum punishment admittedly is one year, they have to be tried by the Magistrate irrespective as to when the complaint is filed. In fact, the writ petitioner in CWP No. 17777/2006 had even filed an application before Ms. Asha Menon, Addl. Sessions Judge, where his case was transferred, requesting for sending the case back to the Court of Addl. Chief Metropolitan Magistrate. This application is rejected vide orders dated 5.10.2005, which has led the petitioner to file the present writ petition challenging orders dated 1.12.2004 and 12.1.2005 passed by the Delhi High Court and consequential orders dated 4.12.2004 and 13.1.2005 passed by the District & Sessions Judge. Prayer is that they be declared null and void and non-est so far as they operate for the offences committed before the Amendment Act and a mandamus be issued for transferring their case back to the Court of ACMM. 6. Before taking note of the rival contentions, we may mention that this very aspect came up for consideration before a learned single Judge of this Court in the case of Crl.R.P. No. 24-31/2006 entitled Panther Fincap & Management Services Ltd. & Ors. v. Securities & Exchange Board of India. In that case the fact situation was identical, namely, complaint was filed in respect of offences allegedly committed between 24.3.1999 to 21.2.2000, i.e. before the Amendment Act, and complaint was filed on 28.5.2004, i.e. after the coming into force the Amendment Act in the year 2002. Complaint was filed before the Addl. Sessions Judge, Delhi. The question which arose was about the condonation of delay in filing the complaint because of the reason that as per the unamended provision, offence was punishable by maximum imprisonment for one year, limitation for filing the complaint was one year, whereas it was filed beyond the said limitation period prescribed under Section 468 of the Code of Criminal Procedure, 1973. The learned Sessions Judge vide orders dated 5.10.2005 condoned the delay. Against this order, the aforesaid Criminal Revision Petition was filed by the accused persons. Apart from challenging the said order on other grounds, one of the grounds was lack of jurisdiction on the part of the Addl. WP (C) No. 141/2007 nsk Page 4 of 17 Sessions Judge raising identical plea which is raised in this petition, namely, the offence under Section 24(1) as per the unamended Act, to which period the alleged act related, it was triable by a Magistrate and Court of Sessions had no power to pass an order condoning the delay. The submission was that jurisdiction conferred on a Magistrate could not be taken away by an administrative order, as held by a Division Bench of this Court in the case of A.S. Impex Ltd. v. Delhi High Court, 2003 VIII AD (Del) 189. It was also submitted that such transfer of complaints from the Magistrate’s Court to the Court of Sessions also amounted to taking away available remedies of appeal and revision. This contention is specifically noted by the learned Judge in the judgment dated 5.9.2006, as is clear from para 9 thereof, which is to the following effect :- “9. The first contention of the petitioners on the question of jurisdiction has been raised on the premise that prior to the amendment which took effect on 29.10.2002, the offence under section 24(1) was triable by a magistrate. It is only after the amendment that the said offence is triable by a Court of session. It is submitted that had the complaint been filed within the limitation prescribed, the complaint would have fructified into a trial by a metropolitan magistrate. It was also submitted that the jurisdiction conferred on a magistrate could not be taken away as was held in the case of A.S. Impex v. Delhi High Court; 2003 VIII Ad (Delhi) 189 by a division bench of this court. It was also submitted that such transfer of the complaint from the magistrate's court to the Court of session also amounted to taking away available remedies of appeal and revision.” 7. In the judgment dated 5.9.2006 rendered by the learned single Judge (Badar Durrez Ahmed, J.), the aforesaid contention was repelled and held to be unsustainable. The detailed reasons in support of the conclusion that the Court of Sessions was the appropriate Court having requisite jurisdiction to entertain the complaint are contained in paras 15 & 16 of the judgment. Since we are in respectful agreement with the view taken by the learned single Judge in the said judgment, we deem it proper to reproduce the entire discussion on this aspect, verbatim :- “15. Since the petitioners have strongly relied upon the decision of a division bench of this court in the case of A.S. Impex Ltd. (supra), I shall take up discussion with regard to that case. The facts were that the High Court, in exercise of its powers on the administrative side, transferred all the cases under section 138 of the Negotiable Instruments Act, 1881 which were pending as on 31.12.2001 from the courts of Metropolitan Magistrates to the courts of Additional Sessions Judges. The said WP (C) No. 141/2007 nsk Page 5 of 17 administrative order was gazetted on 13.03.2002. Pursuant to the gazette notification, the District Judge by an order dated 21.03.2002 transferred the cases to be tried by Additional Sessions Judges. The said administrative order as well as the order dated 21.03.2002 were challenged before this court as being violative of the Constitution of India as well as of the legislative provisions. It was contended, inter alia, that only the Metropolitan Magistrates or the Judicial Magistrates, first-class had exclusive jurisdiction to try the complaints under section 138 of the Negotiable Instruments Act, 1881 and that no jurisdiction vested in the Courts of Additional Sessions Judges to try complaints under the said section 138. The expediency of issuing such an administrative order was that the High Court on the administrative side, was of the view that the mandate of trying cases under section 138 of the Negotiable Instruments Act, 1881, expeditiously should be implemented. The High Court found that the number of cases could not be disposed of expeditiously because of lack of judicial officers at the magisterial level. It is in these circumstances that the High Court issued the aforesaid administrative order transferring all the cases under section 138 of the Negotiable Instruments Act, 1881 which were pending on 31.12.2001 from the courts of Metropolitan Magistrates to the courts of Additional Sessions Judges. The division bench, after considering the relevant provisions of the Negotiable Instruments Act, 1881 as well as the code, came to the conclusion that while section 142 (c) of the Negotiable Instruments Act, 1881 prescribes that the Metropolitan Magistrate or a judicial Magistrate first-class will try cases under the said section 138, by no stretch of imagination, could it mean that any superior court to the Court of Metropolitan Magistrate would also have jurisdiction to try those cases. The division bench observed that while the non obstante clause in section 142 excluded the jurisdiction of magistrates inferior to the Metropolitan Magistrate or the Judicial Magistrate, first-class, at the same time, it did not widen the scope of the provision so as to include in its ambit the jurisdiction of Additional Sessions Judges. The court observed that the jurisdiction to try offences under section 138 of the Negotiable Instruments Act, 1881 had been specifically conferred on the Metropolitan Magistrates or Judicial Magistrates, first-class and that such jurisdiction could not be taken away by invoking the provisions of article 227 of the Constitution. The division bench categorically held:-- "The High Court in its plenary jurisdiction cannot bypass the special legislation which empowers the Metropolitan Magistrate or judicial Magistrate, first-class to try the cases." 16. Although the learned counsel for the petitioners has relied heavily upon the Division Bench decision in A.S. Impex Ltd. (supra), the foregoing discussion indicates that the same is clearly distinguishable and would be inapplicable to the situation which presents itself in the present case. In A.S. Impex Ltd (supra), there was a pure administrative action on the part of the High Court in purported exercise of its powers under Article 227 of the Constitution of India. The administrative orders were not backed by any legislative provisions. Secondly, the administrative orders were the subject matter of challenge and they were quashed by the Division Bench holding that the High Court in its plenary jurisdiction cannot bypass the special legislation which empowers the Metropolitan Magistrate or Judicial Magistrate, Ist Class, to try the cases. In the present case the scenario is entirely different. The administrative orders passed by the High Court whereby the cases pending before the Metropolitan Magistrate were transferred to the Courts of Additional Sessions Judges was preceded by the amendment in Section 26 (2) of the SEBI Act. Prior to its amendment Section 26 (2) of the SEBI Act read as under:- WP (C) No. 141/2007 nsk Page 6 of 17 “(2) No Court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class shall try any offence punishable under this Act.” After the amendment which took effect from 29.10.2002 the said Sub-Section (2) of Section 26 of the SEBI Act reads as under:- “(2) No Court inferior to that of a court of Session shall try any offence punishable under this Act.” The effect of the amendment was that the offences under the SEBI Act now became triable by a Court of Session and not by any court inferior to that of a Court of Sessions. In this background, the High Court passed the administrative order on 4.12.2004 whereby complaints filed by the SEBI after the date of the amendment in the SEBI Act (i.e. 29.10.2002) were assigned to the Sessions Court for trial irrespective of the date of the commission of the offence. It is subsequent to this administrative order of the High Court that the complaint in this case was transferred to the court of the Additional Sessions Judge on 7.1.2005. The clear distinction between the present case and that of A.S. Impex Ltd. (supra) is that while in the present case the administrative order has the backing of a statutory provision, in the case of A.S. Impex Ltd (supra), the administrative order passed by the Court in purported exercise of its powers under Article 227 of the Constitution were held to be an attempt on bypassing the special legislation which empowered Metropolitan Magistrates or Judicial Magistrates of the First Class to try cases. The second distinguishing feature is that while in the case of A.S. Impex Ltd (supra), the administrative orders were the subject matter of the challenge, in the present case there is no challenge to such orders. Therefore, the decision in A.S. Impex Ltd (supra) is of no assistance to the petitioners.” 8. We may point out at this stage that learned counsel for the petitioners had made fervent plea that the aforesaid judgment would not be of any consequence as the learned Judge was influenced by the fact that administrative orders were not the subject matter of challenge in the said revision petition, whereas in the present case these orders are specifically challenged. This argument, however, would not help the petitioners. We say so for the following two reasons :- (i) the Court specifically held that the administrative orders were backed by legislative provisions, which was not the position in A.S. Impex Ltd. (supra). The other reason given by the learned single Judge that these administrative orders were not the subject matter of challenge in the said writ petition was the additional reason and even if that is ignored, it is sufficient to rest the conclusion on the basis of the first reason given by the Court in the said case. (ii) the Court in that case also interpreted the effect of the amendment carried out in Section WP (C) No. 141/2007 nsk Page 7 of 17 26 of the Act. Section 26(2) of the Act, prior to the amendment, provided that no Court inferior to that of a Metropolitan Magistrate or Judicial Magistrate (First Class) shall try any offence punishable under the said Act. Post amendment, this provision stipulates that no Court inferior to that of the Court of Sessions shall try any offence punishable under the Act. On this basis, the Court concluded that the complaint filed after the amendment, even though related to the offence of a period prior to the amendment, would be filed in the Court of Sessions. This opinion was predicated on treating amendment to sub-section (2) of Section 26 as procedural in nature relating to the forum. This is clear from the discussion contained in paras 17, 18 & 19 of the judgment and we do no more than reproducing the meticulous treatment given to this aspect in those paras by the learned single Judge :- “17. With regard to the submission that as the complaint had already been filed prior to the date of amendment, the same would have to be tried by the Metropolitan Magistrate or a Judicial Magistrate of the First class, it must be noted that the question of operation of amendments in a statute are considered differently with regard to the amendments which affect substantive rights and amendments which are only procedural in nature. The scope has been clearly laid down by the Supreme Court in the case of Hitendera Vishnu Thakur v. State of Maharashtra: 1994 (4) SCC 602 wherein, it observed:- “........From the law settled by this Court in various cases the illustrative though not exhaustive principles which emerge with regard to the ambit and scope of an Amending Act and its retrospective operation may be culled out as follows:- (i) A statute which affects substantive rights is presumed to be prospective in operation unless made retrospective, either expressly or by necessary intendment, whereas a statute which merely affects procedure, unless such a construction is textually impossible, is presumed to be retrospective in its application, should not be given an extended meaning and should be strictly confined to its clearly defined limits. (ii) Law relating to forum and limitation is procedural in nature, whereas law relating to right of action and right of appeal even though remedial is substantive in nature. (iii) Every litigant has a vested right in substantive law but no such right exists in procedural law. (vi) A procedural statute should not generally speaking be applied retrospectively where the result would be to create new disabilities or obligations or to impose new duties in respect of transactions already accompalished. (v) A statute which not only changes the procedure but also creates new rights and liabilities shall be construed to be prospective in operation, unless otherwise provided, either expressly or by necessary implication.” WP (C) No. 141/2007 nsk Page 8 of 17 18. The amendment that has been brought about in Section 26 of the SEBI Act is only an amendment relating to the fourm and, therefore, in view of Clause (ii) mentioned in the aforesaid extract from the Supreme Court decision in Hitendera Vishnu Thakur (supra), the amendment would be only of a procedural nature. Since the amendment merely affects procedure and there is nothing in the language used to enable us to take a contrary view, it must be presumed to have retrospective application. 19. A reference to another decision of the Supreme Court would also be apposite. In New India Assurance Company Ltd. v. Shanti Mathur: 1975 (2) SCC 840 held as under:- “ 5. On the plain language of Sections 110A and 110F there should be no difficulty in taking the view that the change in law was merely a change of forum i.e. a change of adjectival or procedural law and not of substantive law. It is a well-established proposition that such a change of law operates retrospectively and the person has to go to the new forum even if his cause of auction or right of action accrued prior to the change of forum. He will have a vested right of action but not a vested right of forum. If by express words the new forum is made available only to causes of action arising after the creation of the forum then the retrospective operation of the law is taken away. Otherwise the general rule is to make it retrospective.” Therefore, the transfer of the case to the Additional Sessions Judge and his passing of the impugned order would not be without jurisdiction. I am also in agreement with the submission made on behalf of the learned counsel for the respondents that since the amendment insofar as the substantive rights are concerned, would only be prospective, the unamended Section 24 (1) of the SEBI Act would apply. Indicating thereby that the term of imprisonment would be one year or with fine or with both. This, read with the definitions contained in Section 2 (w) and 2 (x) of the Code, which define “summons- case” and “warrant-case” (respectively), clearly goes to show that the present case would not be a warrant case inasmuch as a warrant case means a case relating to an offence punishable with death, imprisonment for life or imprisonment for a term exceeding two years. Clearly, the present case would fall in the category of “summons-case” and would have to be tried as such following the procedure under Chapter XX of the Code. It is an altogether different matter that the Sessions Court would be trying the offences in view of the special provisions of Section 26 (2) of the SEBI Act. It would all the same remain a summons trial.” 9. We record our concurrence with the aforesaid view rendered by the learned single Judge, which is based on the principles of law laid down by the Apex Court. In this behalf, it will also be prudent to refer to another judgment of the Supreme Court in the case of Rajendra Kumar v. Kalyan (Dead) by Lrs., (2000) 8 SCC 99. In paras 21 & 22 thereof, the legal position was explained in an erudite language as under :- “21. Still later this Court in Gurbachan Singh v. Satpal Singh, (1990) 1 SCC WP (C) No. 141/2007 nsk Page 9 of 17 445, expressed in the similar vein as regards the element of retrospectivity. The English courts also laid that the rule that an Act of Parliament is not to be given retrospective effect