In a significant ruling, the Supreme Court on May 13, 2025, set aside a Delhi High Court order that had directed the release of ₹15.90 lakhs to a respondent company despite an ongoing investigation into an alleged fraudulent share transaction. The Court reiterated that while exercising inherent powers under Section 482 of the Code of Criminal Procedure (CrPC), High Courts must refrain from conducting a mini trial or making determinations on disputed facts.
The judgment was delivered by a Bench comprising Justice Sudhanshu Dhulia and Justice K. Vinod Chandran in NDA Securities Ltd. vs State (NCT of Delhi) & Anr., Criminal Appeal No. ___ of 2025 (@ SLP (Crl.) No. 4379 of 2025).
Background
The case arose from a criminal complaint filed on 07.08.2015 by NDA Securities Ltd., a registered trading member of the Bombay Stock Exchange (BSE), against respondent no. 2, also a BSE-registered company. The complaint, lodged under Section 156(3) CrPC, led to the registration of an FIR under Sections 420 and 120B of the Indian Penal Code (IPC), alleging that 1 lakh shares of Ashutosh Paper Mills Ltd. had been fraudulently purchased by impersonating a client, Brij Mohan Gagrani.
The appellant claimed that the impersonation was facilitated by an agent of NDA Securities and that respondent no. 2 ultimately benefitted from the fraudulent transaction. Consequently, ₹15.90 lakhs, representing the sale value of 72,000 shares sold by respondent no. 2, were withheld by the BSE.
Proceedings Before Lower Courts
Respondent no. 2 sought release of the withheld amount before the Magistrate Court, which rejected the plea on 16.09.2016 citing ongoing investigation and the pending role determination of the respondent. A subsequent revision petition was also dismissed by the Revisional Court on 08.12.2016, which observed that releasing the funds could affect the rights of the appellant and instructed expeditious investigation.
Dissatisfied, respondent no. 2 filed a petition under Section 482 CrPC before the Delhi High Court, which allowed the release of the funds through an order dated 25.02.2025, subject to a guarantee being furnished.
Supreme Court’s Observations
The Apex Court held that the High Court had exceeded its jurisdiction under Section 482 CrPC by commenting on the merits of the case. It observed:
“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.”
Citing precedents including CBI v. Aryan Singh & Ors. (2023) 18 SCC 399 and Dharambeer Kumar Singh v. State of Jharkhand & Anr. (2025) 1 SCC 392, the Court reiterated that:
“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.”
The Court emphasized that respondent no. 2 was named as the main beneficiary in the chargesheet and that the main accused, Amit Jain, remained absconding. The investigation, it noted, was incomplete, and the determination of respondent no. 2’s role was still pending.
Decision
Setting aside the Delhi High Court’s order dated 25.02.2025, the Supreme Court ruled:
“The sale value of the shares sold by respondent no. 2 (amounting to ₹15.90 lakhs) shall be kept with the BSE during the pendency of the trial.”
The Court clarified that it made no observation on the merits and directed the trial court to proceed expeditiously.
The appeal was allowed, and all pending applications stood disposed of.
