Mumbai: The Securities and Exchange Board of India (SEBI) has been running from pillar to post to prosecute electronics and durables giant BPL Ltd and its directors, who along with stockbroker Harshad Mehta were accused of rigging stock prices in 2001. The agency is still fighting over the jurisdiction to hear their plea.
Sessions Court Rejects SEBI's 2004 Plea
After 20 long years, the sessions court last month rejected SEBI’s 2004 plea against the order of discharge of Mehta, BPL Ltd, and its directors, claiming it does not have the jurisdiction to hear and decide it.
In 2001, SEBI had filed a prosecution complaint against BPL Ltd and its directors Rajeev Chandrashekhar, Ajit Nambiar, R Murali, TC Chauhan, and TPG Nambiar, along with Harshad Mehta, for allegedly rigging BPL’s share prices. It was alleged that BPL’s share capital as of March 1998 was Rs 269.30 million and subsequently rose to Rs 776.90 million.
On September 19, 2001, the magistrate court also issued the process against the accused. However, on April 12, 2004, the same court allowed the plea of all the accused and recalled the order of issuance of prosecution and discharged them all.
SEBI moved the sessions court in July 2004 against the said order, claiming that the magistrate court had no power to recall its own order. The case before the sessions was pending for over 20 years before it was finally decided last month.
About The Court Order
The sessions court rejected SEBI’s plea on June 29, saying it doesn’t have the jurisdiction to decide on the issue in view of the several amendments to the SEBI Act.
As per the court order, the SEBI Act (1992) was amended in 2002, whereby the cases registered under the Act are triable by the sessions court. This was because the punishment for offences under the SEBI Act was also enhanced from one year to 10 years in jail. The alleged offences in question were committed prior to the 2002 amendment, therefore the imprisonment remains only one year.
The SEBI Act was further amended in 2014 when the offences under the Act were made triable by a special court. The sessions court said that after this amendment, the sessions court becomes the trial court and the order of the trial court has to be challenged before the high court.
The senior counsel for SEBI, Raja Thakare, however, contended that the amendments and law set by the apex court were silent about the existing petition. In the present scenario, Thakare contended that SEBI’s plea was filed before 2014, hence the sessions court has the jurisdiction to hear the plea, to which the defence objected. The court, however, dismissed the revision plea and asked SEBI to file its revision before the appropriate revision authority as provided under the SEBI Act, 1992
