PRAKASH AGGARWALversusGANESH BENZOPLAST LIMITED AND ANOTHER

844                      [2023]REPORTS
               SUPREME COURT    3 S.C.R. 844                [2023] 3 S.C.R.


A                          PRAKASH AGGARWAL
                                        v.
            GANESH BENZOPLAST LIMITED AND ANOTHER
                       (Criminal Appeal No. 1308 of 2023)
B                               APRIL 28, 2023
                 [B. R. GAVAI AND VIKRAM NATH, JJ.]
            Administration of Justice – Abuse of process of law – Held:
      Respondent No.1-complainant has attempted to turn a purely
      contractual dispute between the parties into a criminal case – Not
C
      only that, there is an inordinate delay in lodging the complaint –
      Further, the complaint even taken at its face value, does not disclose
      that any of the ingredients of the offence complained of have been
      made out – Thus, the present complaint is nothing else but an abuse
      of process of law – Complaint filed before the trial court u/ss.403,
D     406, 420, 120B, IPC is dismissed – Impugned judgment and order
      passed by the High Court and trial court are quashed and set aside
      – Penal Code, 1860 – ss.120-B, 403, 406, 420 r/w s.34 – Security
      Exchange Board of India Act, 1992 – s.15-HA – Arbitration and
      Conciliation Act, 1996 – s.34.
E           Allowing the appeals, the Court
            HELD: A perusal of the entire complaint would reveal that
      the only allegation is that accused No.1 Company had sold the
      shares to itself when the market price of the shares had fallen.
      The averments are totally contrary to the terms agreed between
F     the parties in the Inter-Corporate Deposit Agreement (ICDA)
      as well as in the Letter of Pledge (LoP). The ICDA as well as the
      LoP specifically authorizes the accused persons/appellants to sell
      the shares either to themselves or their group of companies.
      Accused No.1 Company had already invoked the arbitration
      clause on 14th August 2001. In the arbitration proceedings, a
G     specific stand was taken by the complainant/respondent No.1 that
      accused No.1 Company should have invoked the pledge at the
      stage of the first default, i.e. in May 2000. However, the accused
      persons/appellants waited till August-September, 2001 to sell the
      pledged shares which had in the meanwhile depreciated in value.
H
                                       844
 PRAKASH AGGARWAL v. GANESH BENZOPLAST LIMITED                          845
                AND ANOTHER

Another allegation made before the arbitration proceedings was          A
that accused No.1 Company had manipulated the price of the
shares. Thus, though the complainant/respondent No.1 was aware
about the sale of shares as early in the year 2001, he did nothing
till the year 2006 when, according to it, it had applied to BSE and
NSE for details. Even after the year 2006, the complainant/
                                                                        B
respondent No.1 waited till the year 2011 to lodge the complaint.
Though, it is sought to be urged by the complainant/respondent
No.1 before this Court that it came to know about the fraudulent
act of the accused persons/appellants in the year 2009, which
gave a cause of action to it to file the complaint, there is no
averment to that effect in the complaint. Insofar as the other          C
contention that the shares were sold at a lesser price than the
market price is concerned, there is no averment in the complaint
in that regard. In any case, the transactions have been made
through the BSE and NSE. As such, the contention in that regard
is without substance. In any case, a specific finding has been given
                                                                        D
by the Arbitrator in that regard. The said arbitral award is under
challenge in the proceedings under Section 34 of the Arbitration
Act. The complainant/respondent No.1 has attempted to turn a
purely contractual dispute between the parties into a criminal
case. Not only that, there is an inordinate delay in lodging the
complaint. Though the complainant/respondent No.1 was aware             E
about the sale of the shares in the year 2001, it did not do anything
except filing an application before the Arbitrator. According to
the complainant/respondent No.1, it received the information from
the BSE and NSE in the year 2006, which fortified its suspicion
about the fraud being played. Even thereafter, for a period of 5
                                                                        F
years, it was silent and filed the complaint only in the year 2011.
The complaint, taken at its face value, does not disclose that any
of the ingredients of the offence complained of have been made
out. The present complaint is nothing else but an abuse of process
of law. The impugned judgment passed by the High Court and
the order passed by the trial court are quashed and set aside.          G
The complaint filed before the trial court under Section 403, 406,
420 and 120B of the IPC is dismissed. [Paras 16, 17, 20-24][853-
E, G-H; 854-A-B; 855-D-H; 856-A-B, C-E]


                                                                        H
846               SUPREME COURT REPORTS                        [2023] 3 S.C.R.


A           CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
      No. 1308 of 2023.
            From the Judgment and Order dated 26.04.2021 of the High Court
      of Judicature at Bombay in CRLWP No. 349 of 2020.
               With
B
               Criminal Appeal Nos. 1309 and 1310-1311 of 2023.
            Shyam Divan, Vijay Aggarwal, Sr. Advs., Ankur Chawla, Aamir
      Khan, Vaibhav Malhotra, Shivam Tandon, Ms. Aruna Gupta, Vijay Juneja,
      Ms. Sanam, Advs. for the Appellant.
C           Abhishek M Singhvi, Mrs. Anjana Prakash, Sr. Advs., Ms. Iti
      Sharma, Puneet Sharma, Anshay Dhatwalia, Aditya Joshi, Ashwani
      Kumar, Siddharth Dharmadhikari, Aaditya Aniruddha Pande, Bharat
      Bagla, Ms. Shreya Saxena, Ms. Yamini Singh, Sourav Singh, Advs. for
      the Respondents.
D              The Judgment of the Court was delivered by
               B. R. GAVAI, J.
               1. Leave granted.
             2. The present appeals challenge the judgment and order dated
E     26th April 2021, passed by the High Court of Judicature at Bombay,
      thereby dismissing Criminal Writ Petition Nos. 348, 349 and 357 of 2020
      filed by the appellants herein seeking quashing of the order dated 22 nd
      March 2017 passed by the Metropolitan Magistrate, Railway Mobile
      Court, Andheri, Mumbai (hereinafter referred to as the “trial court”),
      thereby issuing summons to them. The High Court allowed Criminal
F     Writ Petition Nos. 127, 128, 129 and 130 of 2020 filed by the complainant/
      respondent No.1 herein, thereby, upholding the order dated 22nd March
      2017.
               3. The facts, in brief, giving rise to the present appeals are as
      under:
G
             3.1. Ganesh Benzoplast Ltd., the original complainant and
      respondent No. 1 herein, availed two Inter Corporate Deposit (hereinafter
      referred to as “ICD”) facilities, dated 14th February 2000 and 7th March
      2000, from Morgan Securities and Credits Pvt. Ltd – accused No. 1.
      The said ICD were for Rs. 50,00,000/-, each to be repaid by 15 th May
H
 PRAKASH AGGARWAL v. GANESH BENZOPLAST LIMITED                                 847
           AND ANOTHER [B. R. GAVAI, J.]

2000 and 5th June 2000. As per the ICD, security cover of 200% of the          A
ICD amount was to be maintained. Accordingly, the complainant/
respondent No.1 executed a Letter of Pledge (for short, “LoP”) in favour
of accused No.1 Company, pledging 15,00,000 of its equity shares as
security, with each share valued at Rs. 16/-, thereby amounting to Rs.
2,40,00,000/-.
                                                                               B
      3.2. Prakash Aggarwal, Meera Goyal and Suresh Chand Goyal,
appellants herein, who were Directors of accused No. 1 Company, were
responsible for the management of its day to day affairs. They were
arraigned as accused Nos. 2 to 4 in the original complaint.
      3.3. On 3rd May 2000, accused No.1 Company issued a notice to            C
the complainant/respondent No.1 asking it to pledge additional shares as
the value of the pledged shares had decreased to Rs. 1,24,50,000/- on
account of depression in the financial market, thereby, resulting in a
shortfall of Rs. 75,50,000/- from the agreed security cover i.e. 200% of
the ICD amount.
                                                                               D
       3.4. Due to financial hardship, the complainant/respondent No.1
was not in a position to repay the ICD amount on 5th June 2000, i.e. the
due date, and therefore, it informed accused No.1 Company that it could
sell the pledged shares to realize the due amount, and remit the excess
amount to the complainant/respondent No.1. Thereafter, accused No.1
Company assured the complainant/respondent No.1 that, as and when              E
the shares were sold, the balance amount, if any, would be remitted to it.
       3.5. On 25th August 2000, the complainant/respondent No.1 repaid
the first ICD and the loan account was closed.
       3.6. It is pertinent to note that the interest that was being charged   F
on ICD was being regularly recovered by accused No. 1 Company uptill
6th August 2001. In the meanwhile, the complainant/respondent No.1
was in constant communication with the accused No.1 Company, seeking
the details of the sale of shares. However, these requests were rebuffed,
with accused No.1 Company asking the complainant/respondent No.1
not to confuse the issue of sale of shares with the issue of interest on       G
ICD.
       3.7. On 2nd August 2001, accused No.1 Company issued another
notice to the complainant/respondent No.1, demanding the repayment
of the ICD of Rs. 50,00,000/- as the value of the pledged shares had
fallen to Rs. 44,25,000/-, failing which the pledged shares would be sold.     H
848             SUPREME COURT REPORTS                           [2023] 3 S.C.R.


A            3.8. Subsequently, on 14th August 2001, complainant/respondent
      No.1 proposed to repay Rs. 25,00,000/- initially in five equal monthly
      installments, with the first installment to be paid on or before 25th August
      2001. However, on the same day, accused No.1 Company invoked the
      arbitration clause in the ICD agreement and appointed a Sole Arbitrator,
      claiming the outstanding amount due from the complainant/respondent
B
      No.1.
            3.9. During the pendency of the arbitration proceedings, accused
      No.1 Company sold the 15,00,000 pledged shares for an amount of
      Rs.24,67,631/- to one Doogar and Associates Ltd., which was later
      renamed as Morgan Ventures Ltd. in the year 2004. Importantly, accused
C     Nos. 2 to 4 were also Directors in this transferee Company.
             3.10. The complainant/respondent No.1, on 11th February 2011,
      filed a criminal complaint being CC No. 56/SW/2011 against accused
      Nos.1 to 4, alleging fraud, cheating and criminal breach of trust, before
      the trial court. Vide order dated 11th September 2012, the Magistrate
D     issued process against all the accused for offences punishable under
      Sections 403, 406, 420 and 120-B of Indian Penal Code, 1860 (for short,
      “IPC”).
            3.11. The aforesaid order was challenged by filing a Criminal
      Revision Application No. 1276 of 2012 before the Court of Session for
E     Greater Bombay at Bombay. Vide order dated 16th January 2016, the
      said criminal revision application was allowed, and the matter was
      remanded to the trial court, who was directed to re-record verification
      under Section 200 of the Code of Criminal Procedure,1973.
            3.12. In the meantime, on 9th December 2015, an arbitral award
F     was passed in favour of accused No.1 Company and the complainant/
      respondent No.1 was held liable to pay the claim amount of
      Rs.34,59,218/- with interest at the rate of 36% per annum.
             3.13. Pursuant to the remand order dated 16th January 2016, the
      trial court, vide order dated 22nd March 2017, issued process under
G     Sections 406, 420 read with Section 34 of the IPC read with Section 15-
      HA of the Security Exchange Board of India Act, 1992 (for short, “SEBI
      Act”) against accused Nos. 1 to 4.
            3.14. Aggrieved by the same, the accused filed Criminal Revision
      Application being No.128 of 2017 before the Court of Sessions, Dindoshi,
H     Mumbai. Vide order dated 2 nd December 2019, the said revision
 PRAKASH AGGARWAL v. GANESH BENZOPLAST LIMITED                                   849
           AND ANOTHER [B. R. GAVAI, J.]

application was partly allowed. Insofar as the process issued against            A
accused No.1 Company, it was completely quashed and set aside,
whereas, the issuance of process against accused Nos. 2 to 4 was set
aside only under Section 420 of the IPC and Section 15-HA of the SEBI
Act. However, issuance of process against accused Nos. 2 to 4 for the
offences punishable under Section 406 read with Section 34 of the IPC
                                                                                 B
stood confirmed.
       3.15. Challenging the aforesaid order, criminal writ petitions were
filed both by the complainant/respondent No.1 and accused Nos. 2 to 4/
appellants herein. The High Court, vide the impugned judgment dated
26th April 2021, allowed the criminal writ petitions filed by the complainant/
respondent No.1 and dismissed the criminal writ petitions filed by accused       C
Nos. 2 to 4, thereby affirming the order of the trial court and confirming
the issuance of process against them under Sections 406 and 420 read
with Section 34 of IPC. The charges under Section 15-HA of the SEBI
Act were dropped at the instance of the complainant/respondent No.1,
who averred before the High Court that he would not pursue the                   D
application under the same.
       3.16. Hence, the present appeals.
      4. We have heard Shri Shyam Divan, learned Senior Counsel and
Shri Vaibhav Malhotra, learned counsel appearing on behalf of the accused
Nos. 2 to 4-appellants, Dr. Abhishek Manu Singhvi, Mrs. Anjana Prakash,          E
learned Senior Counsel appearing on behalf of the complainant/
respondent No.1 and Shri Siddharth Dharmadhikari, learned counsel on
behalf of the respondent No.2-State.
       5. Shri Divan submitted that the complaint, even taken at its face
value, does not disclose that ingredients of any offence have been made          F
out. He submits that, along with the Inter-Corporate Deposit Agreement
(hereinafter referred to as the “ICDA”), the complainant/respondent
No.1 had pledged the shares in question. As per the LoP, the accused
No.1 Company was entitled to invoke the pledge at any time in the event
of default or otherwise. In the LoP, the authority was also given to sell        G
and dispose of the said securities. He further submits that, as per the
LoP itself, the accused No.1 Company could have sold the shares to
themselves.
      6. Shri Divan further submits that, with regard to the very same
dispute, the arbitration proceedings were conducted between the parties.
                                                                                 H
850            SUPREME COURT REPORTS                           [2023] 3 S.C.R.


A     The complainant/respondent No.1 has participated in the said arbitration
      proceedings and an arbitral award is also passed by the learned Arbitral
      Tribunal. He submits that the same is challenged by the complainant/
      respondent No.1 by a proceeding under Section 34 of the Arbitration
      and Conciliation Act, 1996 (hereinafter referred to as the “Arbitration
      Act”). He further submits that it could clearly be seen that the dispute
B
      between the parties, if any, is purely of civil nature and continuation of
      the criminal proceedings would amount to nothing else but an abuse of
      process of law.
             7. Dr. Singhvi, on the contrary, submits that the complainant/
      respondent No.1 had informed the accused persons/appellants herein as
C     early on 5th June 2000 to sell the shares. However, the accused persons/
      appellants chose not to sell the shares at that point of time as the market
      price was much higher. He submits that the very fact that the shares
      were sold by the accused persons/appellants to a Company wherein
      accused Nos. 2 and 3 are also Directors, at a meagre price, clearly
D     exhibits a dishonest intention on their behalf. He submits that the
      complainant/respondent No.1, for the first time, came to know about the
      illegal act committed by the accused persons/appellants in the year 2009
      and as such, there is no delay in lodging the complaint. He submits that,
      in any case, the trial court, the Revisional Court as well as the High
      Court have concurrently held that insofar as the offence punishable under
E     Section 406 of the IPC is concerned, a case is made out. He therefore
      submits that an interference with the concurrent findings of fact would
      not be permissible. He, therefore, prays for dismissal of the complaint.
            8. With the assistance of the learned counsel for the parties, we
      have perused the documents placed on record.
F
            9. It is not in dispute that an ICDA came to be entered into between
      M/s Ganesh Benzoplast Limited, i.e. the complainant/respondent No.1
      herein and M/s Morgan Securities & Credits Pvt. Ltd., i.e. accused No.
      1, on 7th March 2000. Under the said ICDA, accused No.1 Company
      had agreed to grant the complainant/respondent No.1 the said ICD of
G     Rs.50,00,000/- for a period of 90 days at an interest rate of 26% per
      annum. It will be relevant to refer to Clauses 2 and 3 of the terms of the
      ICDA, which read thus:
            “2. The Borrower is aware that the ICD is being granted by the
            lender on the basis of securities agreed to be provided as per the
H           terms of the sanction.
 PRAKASH AGGARWAL v. GANESH BENZOPLAST LIMITED                                 851
           AND ANOTHER [B. R. GAVAI, J.]

      3. The borrower hereby irrevocably agrees that it shall arrange to       A
      issue an irrevocable instruction to their dematerialised participant
      to mark a lien in favour of the lender till the ICD and any other
      dues remains unpaid. All expenses related to dematerialising of
      shares shall be bone by the borrower.”
       10. It could thus be seen that the ICD was granted by the lender        B
on the basis of the securities agreed to be provided as per the terms of
the sanction. The complainant/respondent No.1 has also irrevocably
agreed that it shall arrange to issue an irrevocable instruction to its
dematerialized participant to mark a lien in favour of the lender till the
ICD and any other dues remains unpaid. It will further be relevant to
refer to the following part of Clause 9 of the ICDA:                           C

      “9. ……….
      a) Any installment of interest if any required to be paid in
      installment as agreed hereinabove remains unpaid even after the
      expiry of 3 days from the respective due date for payment.               D
      b) Any shortfall in the security pledged vide Letter of Pledge
      executed subject to which facility granted is not replenished even
      after giving due Notice as provided therein.
      c) …….….
                                                                               E
      d) ……….
      e) ………..
      f) …………
      h) ………..
                                                                               F
      i) ………….”
       11. It is thus clear that in the event of any of the events occurring
in sub-clauses (a) to (i) of Clause 9 of the ICDA, the lender would be
entitled at its discretion to enforce its rights as mentioned in the ICDA,
Deed of Personal Guarantees, Corporate Guarantee and LoP. A perusal            G
of sub-clause (a) of Clause 9 of the ICDA would reveal that, if any
installment of interest required to be paid as per the ICDA remains unpaid
even after the expiry of 3 days from the respective due date for payment,
accused No.1 Company was entitled to enforce its rights as mentioned
in Clause 9 of the ICDA. Similarly, if any shortfall in the security pledged
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852             SUPREME COURT REPORTS                            [2023] 3 S.C.R.


A     vide LoP executed, subject to which facility was granted, was not
      replenished even after giving due Notice, accused No.1 Company was
      entitled to invoke Clause 9 of the ICDA.
            12. It will further be relevant to refer to Clauses 5 and 8(5) of the
      LoP, which read thus:
B            “5. The Pledgee may invoke the pledge at any time in the event of
             default or otherwise for as many number of shares as the Pledgee/
             lender deems fit in its sole discretion. However, such invocation
             of pledge will not amount to sale of share to the lender and the
             borrower will not be entitled to any credit/ adjustment on such
C            invocation transfer of shares to the lenders account on that date.
             The amount which may be realised against as and when actual
             sale in effected by the lender in the market and in that
             circumstances only the borrower will be entitled to adjustment of
             the sale proceeds so realised against the ICD dues. Pledger agrees
             that it has understood the concept and shall not create any dispute
D            on the same.
             8. ……
             i) ………
             ii) ………
E
             iii) ………..
             iv) ………..
             v) In order to enable you to sell and dispose off the said securities
             under the circumstances mentioned in clause 7 above, We hereby
F            give you the authority to undertake all deeds and acts to dispose
             off the said shares in adjust the outstanding amount. We hereby
             confirm that we will not dispute or claim any loss on account of
             price at which securities are sold by the lender to himself, its
             group companies or to any outsider.”
G              13. A perusal of Clause 5 of the LoP would reveal that the Pledgee
      was entitled to invoke the pledge at any time in the event of default or
      otherwise for as many number of shares as the Pledgee/lender deems
      fit in its sole discretion. It further provided that such invocation of pledge
      would not amount to sale of shares to the lender and the borrower would
      not be entitled to any credit/adjustment on such invocation/transfer of
H
 PRAKASH AGGARWAL v. GANESH BENZOPLAST LIMITED                                 853
           AND ANOTHER [B. R. GAVAI, J.]

shares to the lender’s account on that date. It further provided that the      A
amount which may be realized against as and when actual sale is effected
by the lender in the market and in that circumstances only the borrower
would be entitled to adjustment of the sale proceeds so realized against
the ICD dues. It would further reveal that the Pledger had agreed that it
has understood the concept and shall not create any dispute on the same.
                                                                               B
       14. A perusal of sub-clause (v) of Clause 8 of the LoP would
reveal that a specific authority has been given by the Pledgee to sell and
dispose of the said securities under the circumstances mentioned in the
LoP. The complainant/respondent No.1 has also agreed to undertake all
deeds and acts to dispose of the said shares to adjust the outstanding
amount. The complainant/respondent No.1 has further agreed that it             C
would not question whether accused No.1 Company had got the best
price for the securities.
       15. A perusal of the terms of the ICDA as well as the LoP would
clearly reveal that, in the event of any of the events occurring as provided
in Clause 9 of the ICDA, accused No. 1 Company was entitled to sell            D
the shares either to itself, its group companies or to any outsider. The
accused No.1 Company had also agreed not to dispute or claim any loss
on account of the price at which such securities were sold.
       16. A perusal of the entire complaint would reveal that the only
allegation is that accused No.1 Company had sold the shares to itself          E
when the market price of the shares had fallen. The allegation is that
“The accused in order to acquire more shares of complainant waited
for further fall in share price and sold them only in 2001 for Rs.
24,67,531/-. Thus the accused jointly and severally are liable for
unauthorized, illegal and fraudulent sale and also for breach of               F
trust. The accused not only misappropriated the shares, but also
cheated the complainant as the securities were handed over only as
a surety in trust and on assurance of the accused which later proved
to be false that the same will be dealt as per guidelines of SEBI.”
      17. The aforesaid averments are totally contrary to the terms            G
agreed between the parties in the ICDA as well as in the LoP. As already
discussed hereinabove, the ICDA as well as the LoP specifically
authorizes the accused persons/appellants to sell the shares either to
themselves or their group of companies. It is further to be noted that
accused No.1 Company had already invoked the arbitration clause on
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854             SUPREME COURT REPORTS                           [2023] 3 S.C.R.


A     14th August 2001. In the arbitration proceedings, a specific stand was
      taken by the complainant/respondent No.1 that accused No.1 Company
      should have invoked the pledge at the stage of the first default, i.e. in
      May 2000. However, the accused persons/appellants waited till August-
      September, 2001 to sell the pledged shares which had in the meanwhile
      depreciated in value. Another allegation made before the arbitration
B
      proceedings was that accused No.1 Company had manipulated the price
      of the shares. It will be relevant to refer to Issue No. 2 framed by the
      learned Arbitrator, which reads thus:
            “2) Whether the 15 lakh equity shares which were pledged have
            been sold? If so, when, at what rate, to whom and to what effect?
C           (OPP).
            (The above issue will include the contention that the Claimant has
            not sold the shares at the best available price. This will also cover
            the allegation that as to whether the Claimants were obliged to
            sell the shares as stated in the letter of 3rd May, 2000).”
D
            18. It will be relevant to refer to the following observations of the
      learned Arbitrator made in his award dated 9th December 2005:
            “32. Pertinently, the average price at which-the pledged shares
            were sold by the Claimant on 24.03.2001 works out to Rs.2.47
E           per equity share, as per Respondent No. l’s own assertion [as
            mentioned in undated written note referred in para b (supra)). It
            is also not in1 dispute, as noted above, that the average market
            price per share as on 02.08.2001 was Rs. 2.95 per share. Such
            marginal fluctuations in the price of shares; and that too when the
            Claimant was constrained to realize the entire security in the face
F           of habitual default by Respondent No.1; with not many takers for
            the shares; cannot be described as a consequence of price
            manipulation, resulting in any wrongful loss to the Respondents.
            33. Had the share been priced at something like Rs. 8 or 10 per
            share in August, 2001; then a sale by the Claimant in the region of
G           Rs.2/- etc. could possibly have attracted an allegation of price
            manipulation. However, in the given circumstances, and for the
            reasons stated hereinabove, the allegations levelled by Respondent
            No.1 are misconceived and are liable to be rejected.”
           19. It is thus clear that the complainant/respondent No.1 was having
H     knowledge of the sale of shares in the year 2001 itself when the arbitration
 PRAKASH AGGARWAL v. GANESH BENZOPLAST LIMITED                                 855
           AND ANOTHER [B. R. GAVAI, J.]

proceedings were initiated. In the complaint, it is alleged that, during the   A
pendency of the arbitration proceedings, the complainant/respondent No.1
became suspicious of the illegalities committed by the accused persons/
appellants and sought for certain information. However, since the accused
persons/appellants did not give the information, the complainant/
respondent No.1 applied to Bombay Stock Exchange (for short, “BSE”)
                                                                               B
and National Stock Exchange (for short, “NSE”) in the year 2006 for
details of sale of its shares by the accused persons/appellants on 24th
August 2001, 31st August 2001, 3rd September 2001 and 12th September
2001. It is stated in the complaint that only thereafter, in the year 2006,
the complainant/respondent No.1 came to know of the fact that most of
the shares were sold at the closing time of the share market and at the        C
lowest price of the day. It is averred that, only at that point in time, the
complainant/respondent No.1 came to know that the shares were sold
by the accused persons/appellants to their own companies.
       20. It could thus be seen that, though the complainant/respondent
No.1 was aware about the sale of shares as early in the year 2001, he          D
did nothing till the year 2006 when, according to it, it had applied to BSE
and NSE for details. Even after the year 2006, the complainant/respondent
No.1 waited till the year 2011 to lodge the complaint. Though, it is sought
to be urged by the complainant/respondent No.1 before us that it came
to know about the fraudulent act of the accused persons/appellants in
the year 2009, which gave a cause of action to it to file the complaint,       E
there is no averment to that effect in the complaint.
       21. Insofar as the other contention that the shares were sold at a
lesser price than the market price is concerned, there is no averment in
the complaint in that regard. In any case, the transactions have been
made through the BSE and NSE. As such, the contention in that regard           F
is without substance. In any case, a specific finding has been given by
the learned Arbitrator in that regard. As already informed to us, the said
arbitral award is under challenge in the proceedings under Section 34 of
the Arbitration Act. We do not wish to observe anything about the merits
or demerits of the said award as the competent court is seized of the          G
same.
      22. However, it would clearly reveal that the complainant/
respondent No.1 has attempted to turn a purely contractual dispute
between the parties into a criminal case. Not only that, there is an
inordinate delay in lodging the complaint. Though the complainant/             H
856                SUPREME COURT REPORTS                        [2023] 3 S.C.R.


A     respondent No.1 was aware about the sale of the shares in the year
      2001, it did not do anything except filing an application before the learned
      Arbitrator. According to the complainant/respondent No.1, it received
      the information from the BSE and NSE in the year 2006, which fortified
      its suspicion about the fraud being played. Even thereafter, for a period
      of 5 years, it was silent and filed the complaint only in the year 2011. As
B
      already stated hereinabove, though an attempt was made at the time of
      hearing to contend that it has only filed the complaint after it came to
      know about the fraud in the year 2009, there is no averment to that
      effect in the complaint.
            23. We find that the complaint, taken at its face value, does not
C     disclose that any of the ingredients of the offence complained of have
      been made out. In the totality of the circumstances, we find that the
      present complaint is nothing else but an abuse of process of law. We,
      therefore, find that the appeals deserve to be allowed.
             24. In the result, we pass the following order:
D
             (i)    The appeals are allowed;
             (ii) The impugned judgment dated 26th April 2021 passed by the
                  High Court and the order dated 22nd March 2017 passed by
                  the trial court are quashed and set aside;
E            (iii) The complaint bearing CC No. 56/SW/2011 filed before the
                   trial court under Section 403, 406, 420 and 120B of the IPC
                   is dismissed.
             25. However, we clarify that nothing observed herein or in the
      impugned orders would weigh with the forum seized of the arbitral award
F     in the proceedings under Section 34 of the Arbitration Act or in any
      other proceedings, if taken recourse to by the appellants, if they are
      entitled in law.
             26. Pending application(s), if any, shall stand disposed of.

G
      Divya Pandey                                                 Appeals allowed.
      (Assisted by : Roopanshi Virang, LCRA)




H