Gujarat High Court
Bhavsar Himanshu @ Pintu Bharatbhai vs State Of Gujarat on 26 June, 2025
NEUTRAL CITATION
R/CR.MA/21689/2021 ORDER DATED: 26/06/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 21689 of 2021
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BHAVSAR HIMANSHU @ PINTU BHARATBHAI
Versus
STATE OF GUJARAT & ANR.
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Appearance:
MR PIYUSH TRIVEDI for MR PRATIK B BAROT(3711) for the Applicant(s)
No. 1
DS AFF.NOT FILED (N) for the Respondent(s) No. 2
MR TIRTHRAJ PANDYA, ADDL. PUBLIC PROSECUTOR for the
Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 26/06/2025
ORAL ORDER
Learned advocate for the petitioner does not press present
petition qua the offences of the IPC is concerned and his prayer
is limited to the offence of the Securities Contract Regulation
Act. Accordingly, present petition stands dismissed as not
pressed qua offences of the IPC is concerned.
1. Rule returnable forthwith. Learned APP for the
respondent – State wavies service of notice of Rule for and on
behalf of the respondent State.
2. By way of this application under Article 226 of the
Constitution of India read with Section 482 of the Code of
Criminal Procedure, 1973, petitioner prayed to quash and set
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NEUTRAL CITATION
R/CR.MA/21689/2021 ORDER DATED: 26/06/2025
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aside FIR being C.R.No.11206075210904 registered with
Visnagar Town Police Station, for the offences punishable under
Sections 13 and 14 of the Securities Contract Regulation Act
qua the petitioner herein.
3. Brief facts of the case are as under:-
3.1 Respondent No.2 original first informant as in capacity
of Unarmed Head Constable serving with Visnagar Taluka
Police Station upon, upon a secret information received by
them that in a rented flat of Thakor Hareshji Ramanji and with
the help of mobile gadgets, all of them are illegally indulged
into a ‘dabba trading’ in such premises as also are maintaining
records to that effect, soon thereafter, after a search warrant
was procured, raid was carried out at the said premises
wherein five persons i.e. original accused Nos.1 to 5 were
found and arrested from the scene of offence with mobile
phones, sim cards, account books, downloading of market plus
application into mobile phones was noticed and certain
vehicles were recovered, which resulted into lodgment of the
impugned FIR. Hence, present petition.
4. The principal contention advanced by learned advocate
appearing on behalf of petitioner is that cognizance of the
offences under the Act cannot be taken on the basis of a police
report, in view of the statutory bar contained in Section 26 of
the Act. Accordingly, he submits that the filing of the FIR
against the petitioner is a clear abuse of the process of law.
4.1 In support of his submission, reliance has been placed on
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NEUTRAL CITATION
R/CR.MA/21689/2021 ORDER DATED: 26/06/2025
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the judgment of a Co-ordinate Bench in the case of Milanbhai
Manubhai Shah v. State of Gujarat (Special Criminal
Application No. 1841 of 2018), as well as the decision in
Bhagirathsinh Rajendrasinh Solanki & 13 others v. State of
Gujarat (Special Criminal Application No. 10070 of 2016).
4.2 He, therefore, concluded his submissions by praying that
the present petition be allowed and that the FIR, along with
all consequential proceedings arising therefrom, be quashed.
5. On the other hand, learned APP prays to pass necessary
orders.
6. I have heard learned advocates for the petitioner and
learned APP for the respondent-State.
7. At the outset, I may refer Section 26 of the Act, which is
as under:-
“26. Cognizance of offences by courts.
(1) No court shall take cognizance of any offence
punishable under this Act or any rules or regulations
or bye-laws made thereunder, save on a complaint
made by the Central Government or State
Government or the Securities and Exchange Board of
India or a recognised stock exchange or by any
person.
(2) No court inferior to that of a Court of Session
shall try any offence punishable under this Act.”
8. A bare perusal of Section 26 of the Act makes it evident
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that the Court is barred from taking cognizance of any offence
punishable under the Act, except upon a complaint made by
the Central Government, State Government, the Securities
and Exchange Board of India (SEBI), a recognized stock
exchange, or by any person as specified therein.
8.1. It is thus well-settled that while the police may register
an FIR and investigate the offence, the Court cannot take
cognizance thereof unless a complaint, as defined under
Section 2(d) of the Code of Criminal Procedure, 1973, is filed
before the competent Court by a person authorized under
Section 26 of the Act.
8.2. The issue raised by the petitioner stands squarely
covered by the judgment rendered in Milanbhai Manubhai
Shah (supra), wherein the Co-ordinate Bench had referred to
its earlier decision dated 27.04.2015 passed in Special
Criminal Application No.4780 of 2014. Paragraph 7 of the said
judgment, being relevant, is reproduced hereinbelow:
“7. The issue raised in this writapplication is
squarely covered by an order passed by this Court
dated 27/04/2015 in the Special Criminal Application
No.4780 of 2014. The order dated 27/04/2015 is
extracted hereunder:-
Rule returnable forthwith. Mr.Shah, the learned APP
waives service of notice of Rule for and on behalf of
the respondents.
By this writ application under Article 226 of the
Constitution of India, the applicantsoriginal accused
have prayed for the following reliefs:
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(A) Your Lordships may be pleased to quash and set
aside FIR being C.R. NO.II68 of 2011 for the offence
under Sections 23(1) of the Securities Contract
(Regulation) Act, 1956 and under Section
15H(A) of the Securities and Exchange Board of
India Act, 1992 and the chargesheet filed thereupon
(Annexure A) and the impugned order dated
19.09.2014 passed by the learned 3rd
Additional Sessions Judge at Mahesana in
application below Exhibit 4. (Annexure B).
(B) Pending admission, hearing and final disposal of
this petition Your Lordships may be pleased to stay
the further proceedings pursuant to the FIR being
C.R. NO.II68 of 2011, registered at Mahesana B
Division Police Station on 25.05.2011 for the offence
under Sections 23(1) of the Securities Contract
(Regulation) Act, 1956 and under Section 15H(A) of
the Securities and Exchange Board of India Act, 1992
and the chargesheet filed thereupon (Annexure A).
(C) To pass such other further order as deemed fit in
the facts and circumstances of the case.
On 18th November 2014 the following order was
passed:
“Issue notice for final disposal to the respondents,
returnable on 18th December 2014. Mr.Pujari waives
service of notice for and on behalf of the respondents.
It appears that the respondent no.2, a Police
Constable of Mehsana BDivision Police Station,
Mehsana, received an information, and based upon
such information, lodged an FIR against the
applicants herein for the offence punishable under
Section 23(1) of the Securities Contracts (Regulation)
Act, 1956 and Section 15H(A) of the
Securities and Exchange Board of India Act, 1992. It
also appears that on conclusion of the investigation,
chargesheet has been filed and the case as on today
is pending in the Court of the 3 rd Additional Sessions
Judge, Mehsana, being sessions triable case.
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It appears that the applicants herein filed an
application for discharge under Section 227 of the
Code of Criminal Procedure. However, the same
came to be rejected by the learned 3rd Additional
Sessions Judge, Mehsana, vide order dated 19th
September 2014. It is this order before me which is
the subject matter of challenge.
Prima facie, I am of the view that while
rejecting the discharge application, the learned
Judge appears to have missed the effect of
Section 26 of the Act, 1956 and Section 26 of the
SEBI Act, 1992.
My attention has been drawn to Section 26 of the
Securities Contracts (Regulation) Act, 1956, which is
with regard to cognizance of offences by courts.
Section 26 reads thus :
26. Cognizance of offences by courts.(1) No court
shall take cognizance of any offence punishable under
this Act or any rules or regulations or byelaws made
thereunder, save on a complaint made by the Central
Government or State Government or the Securities
and Exchange Board of India or a recognized stock
exchange or by any person.
(2) No court inferior to that of a Court of Session
shall try any
offence punishable under this Act.
The plain reading of Section 26 of the Act, 1956
would suggest that no court will be able to take
cognizance of any offence punishable under the Act
except on a complaint made by the Central
Government or State Government or Securities &
Exchange Board of India or a recognized Stock
Exchange or any person.
Let me assume for the moment that the respondent
no.2 herein would fall within the ambit of ‘any
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person’. The issue which falls for my
consideration is, whether the court before whom the
chargesheet is filed can take cognizance of the
offence. The word ‘complaint’ figuring under Section
26 of the Act means, a complaint in writing before the
court as defined under Section 2(d) of the Code of
Criminal Procedure. I am conscious of the fact that
Section 25 makes the offence under Section 23 of the
Act a cognizable offence. Since Section 23 is a
cognizable offence, the police would definitely have
the power to investigate. To this extent, there is no
problem. The police has investigated, chargesheet is
filed. Now the stage has come for the court to take
cognizance. In my view, the Sessions Court will not
be able to take cognizance on the police report in
view of the specific bar contained in Section 26 of the
Act. The same is the position with Section 26 of the
Securities and Exchange Board of India Act, 1992.
Section 26 reads thus :
26. Cognizance of offences by courts.(1) No court
shall take cognizance of any offence punishable under
this Act or any rules or regulations made thereunder,
save on a complaint made by the Board.
(2) No court inferior to that of a court of session shall
try any
offence punishable under this Act.
The law in this regard is wellsettled. Although the
police has the power to investigate the offence
alleged against the applicant and chargesheet has
been filed, the Court will not be able to take
cognizance in view of the specific bar. The
investigation carried out by the police can be used for
the purpose of filing a complaint in writing before the
appropriate court. To be precise, whatever
materials have been collected by the
Investigating Officer could be used by the authority
for the purpose of filing a complaint before the
competent court.
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Having heard Mr.Gadhavi, the learned advocate
appearing on behalf of the applicants and having
gone through the materials on record, I am of the
view that the applicants have been able to make out a
strong prima facie case to have an interim order of
stay of further proceedings of Sessions Case No.20 of
2014 pending in the Court of the 3rd Additional
Sessions Judge, Mehsana. I, accordingly, grant such
relief. Direct service is permitted.”
Mr. NJ Shah, the learned APP appearing for
the State very fairly submitted that the position of
law being well settled, the prosecution must fail.
In the aforesaid view of the matter, this application is
allowed. The proceedings of Sessions Case No.20 of
2014 pending in the Court of 3rd Additional
Sessions Judge, Mehsana are hereby quashed.
All consequential proceedings pursuant thereto stand
terminated. Rule is made absolute. Direct service is
permitted.”
9. I have no hesitation in accepting indeed, I unreservedly
accept the submission advanced by learned advocate for the
petitioner, having due regard to the settled position of law as
succinctly elucidated in the aforesaid judgments.
10. The net result of the foregoing discussion is that the writ
petition succeeds and is accordingly ALLOWED.
11. The FIR being C.R.No.11206075210904 registered with
Visnagar Town Police Station, for the offences punishable under
Sections 13 and 14 of the Securities Contract Regulation Act
qua the petitioner herein are hereby quashed and set aside.
Rule is made absolute. Direct service is permitted.
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12. However, it is clarified that this order shall not preclude
the competent authority from initiating prosecution by filing a
criminal complaint, based on the material collected during the
course of investigation in connection with the aforesaid FIR,
in accordance with law.
13. FIR in question and subsequent proceedings arising there-
from in respect of the offence punishable under the IPC stands
continued; without being influenced by any observations made
in this order.
(J. C. DOSHI,J)
SHEKHAR P. BARVE
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