High Court raps EoW sleuths for filing ‘Dabba’ trade FIR without authority

Source: The Hitavada      Date: 25 Oct 2016 10:49:05


Staff Reporter,

 • FIR was void ab initio, observes HC

• Confirms bail to Sachin Agrawal

IN a major embarrassment for the Crime Branch and Economic Offences Wing (EoW), Nagpur bench of Bombay High Court on Monday held that entire action of police authorities in registering FIR in ‘Dabba’ trading scam for alleged violations under the Securities Contract Act 1956 was vitiated since only Central or State Government, SEBI or recognised stock exchange are authorised to initiate action by filing complaint before the special court.
Confirming bail to Sachin Thakurdas Agrawal, the High Court unequivocally held that Crime Branch and EoW inherently lacked powers to file FIR. This has practically taken out steam from the much-hyped ‘Dabba’ trade case in which prosecution had claimed that transactions worth lakhs of crores were reportedly carried out by accused persons hoodwinking rules and causing huge
revenue loss to state. Most of the main players were granted bail by the High Court, but this order has come as a major setback for sleuths as legality of entire action has now come under the cloud.
Agreeing with contention of senior counsel S K Mishra who had questioned the legality of the First Information Report (FIR) lodged by police officers in ‘Dabba’ trade case and that it was in utter violation of section 26 (1) of the Securities Contracts (Regulation) Act and hence entire action of the investigating agency was bad in law and void ab initio, Justice Sunil Shukre confirmed the interim bail granted to Sachin Agrawal and Kanhaiyya Thawrani. However, the High Court permitted the prosecution to take steps as per law which means after due authorisation, the action can be initiated against persons, if there is sufficient evidence and legally tenable grounds to begin fresh action.
According to section 26(1) of Securities Contracts (Regulation) Act, the complaint can be made only by the Central Government, State Government, SEBI or a recognised stock exchange or by any person, which according to applicant means only person authorised by Government, regulator or stock exchange.
According to applicant FIR was lodged by police officer which was impermissible under this special law by which Courts have been barred from taking cognisance of any offence punishable under this Act, or any rules, regulations or bye-laws. The Government has to function as per Article 166 of the Constitution and as such there appears to be violation of constitutional scheme of things by the authorities. Senior Counsel S K Mishra had further claimed that in the instant case, the FIR dated May 12 was lodged by police officer without being empowered by the State Government and hence the entire action was vitiated and needs to be struck down.
Sachin Agrawal was booked by EoW in connection with ‘Dabba’ trade following suspicion and discreet information. Premises of Sachin Agrawal was raided on May 12 and he was named as an accused in infamous Dabba trade scam and booked under Sections 420, 468, 471, 477(A), 120­B and 201 of the Indian Penal Code and also under section 23(1) of the Security Contract Regulation Act, 1956.
According to applicant, the EoW sleuths found nothing incriminating against him and he had no role to play in the entire case and panchanama recorded that no suspicious articles are found. The Special court had rejected his pre arrest bail on July 2.
PP Bharati Dangre and APP Sanjay Doifode appearing for the prosecution claimed that Sachin Agrawal was involved in ‘Dabba’ trade and as per preliminary estimate transactions worth Rs 5,091 crore were recorded and loss of Rs 1.45 crore to state exchequer was calculated. The prosecution has seized a diary in which incriminating evidence was found and entries in code words are being deciphered.
It may be recalled that the premises of various persons including the L7 group were raided on May 12 and police agency conducted marathon search for over 12 hours at various places. In June 2016 itself, the ‘Dabba’ case lost much of the steam when Agrawal was released on regular bail. Earlier while granting regular bail to Neeraj Agrawal and anticipatory bail to Ravi Agrawal, the High Court had observed that the prosecution could not even establish a prima facie case against the said accused.