The Supreme Court has set aside an order directing the release of over Rs 15 lakh in favour of a company alleged to be the main beneficiary of a fraudulent transaction involving the trade of shares/securities. The Apex Court noted that the release of the sale value of the shares may vitiate the entire investigation.

The appellant company assailed the order passed by the Delhi High Court allowing a petition under section 482 of the Criminal Procedure Code (CrPC) filed by the respondent company, thereby directing the release of Rs 15.90 lakhs being withheld by the Bombay Stock Exchange Ltd. (BSE) as payout for the sale of certain shares.

The Division Bench of Justice Sudhanshu Dhulia and Justice K. Vinod Chandran held, “The High Court ought not to have made any observations regarding the absence of any role played by respondent no. 2 in the whole transaction because investigation is yet to be completed. The charge sheet itself states that the main accused (Amit Jain) is absconding, and the role of respondent no. 2 can only be ascertained once the main accused is arrested. Considering the same, we are of the opinion that the release of the sale value of the concerned shares in favour of respondent no. 2, may cause an irreparable loss to the appellant and vitiate the entire investigation.”

Referring to the judgments in Central Bureau of Investigation v. Aryan Singh & Ors. (2023) & Dharambeer Kumar Singh v. The State of Jharkhand & Anr. (2025), the Bench held, “It is a settled position of law that while exercising the inherent jurisdiction under section 482 CrPC, the High Court is not supposed to conduct a mini trial.”

AOR Abhishek Gautam represented the Appellant, while Additional Solicitor General Raja Thakare represented the Respondents.

Factual Background

The Appellant and the respondent company, Spire Marketing (P) Ltd. are both companies engaged in the trade of shares/securities and are registered with the BSE. On a complaint made by the appellant, an FIR was registered under Section 420, 120B of the Indian Penal Code (IPC). It was alleged that the appellant received a phone call by a person impersonating himself as their client ‘Brij Mohan Gagrani’, to purchase 1 lakh shares of a company named ‘Ashutosh Paper Mills Ltd. After the purchase was executed, the said Brij Mohan Gagrani denied making any such call to the appellant for the abovesaid purchase.

Ashish Agarwal, an agent of the appellant company, was said to have connived with the seller of the shares in question to defraud the appellant. The BSE was thus requested to stop payment to the seller of the shares. Consequent to the FIR and the investigation, it was revealed that around 72000 shares (worth Rs. 15.90 lakh) were sold by the Respondent Company. The charge sheet was filed against one Amit Jain, who is said to have made the alleged phone call. Amit Jain was the main accused as per the charge sheet, who is absconding. The Respondent Company was revealed as the main beneficiary.

The respondent company’s application for the release of the money withheld by the BSE was dismissed in light of the fact that the role of the Respondent Company was under investigation. Being aggrieved by the order of the revisional court dismissing the Revision Petition against such order, the respondent company filed a Section 482 CrPC petition before the High Court. The Court allowed this petition and directed the release of the sale value of the shares in favour of the respondent company.

Reasoning

As per the Bench, the High Court had travelled beyond its inherent jurisdiction under Section 482 CrPC, by allowing the petition filed by the respondent. The Bench was of the view that the role of the second respondent was yet to be ascertained, and it was premature to give a clear chit to the respondent company. "Moreover, in the present case it is pertinent to note that respondent no. 2 was the main beneficiary of the alleged fraudulent transaction. As has been stated above, the chargesheet in the present case mentions that the role of respondent no. 2 cannot be ruled out", it said.

“When the investigation is still underway, releasing the sale value of the shares will frustrate the investigation. Both the Magistrate Court as well as the Revisional Court, have rightly held that the funds in question cannot be released at this stage. The High Court should not have disturbed these findings”, it added.

Thus, allowing the appeal, the Bench set aside the order of the High Court and ordered, “The sale value of the shares sold by respondent no. 2 (amounting to Rs. 15.90 lakhs) shall be kept with the BSE during the pendency of the trial, meanwhile.”

Cause Title: NDA Securities Ltd. v. State (Nct of Delhi) & Anr. (Neutral Citation: 2025 INSC 676)

Appearance

Appellant: AOR Abhishek Gautam, Advocates Keshari Kumar Tiwari, Shubham Soni, Varsha Bharti, Neeraj Goswami

Respondent: Additional Solicitor General Raja Thakare (NP), AOR Mukesh Kumar Maroria, Advocates Rohit Khare, Prakash Gautam, Astha Singh, Rishikesh Haridas, Deepender Hooda, C.P. Malik

Click here to read/download Judgment









Justice Sudhanshu DhuliaJustice K. Vinod Chandran

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.