# SECURITIES AND EXCHANGE BOARD OF INDIA v. CLASSIC CREDIT LTD

- **Citation:** [2017] 13 S.C.R. 559
- **Court:** Supreme Court of India
- **Decided:** 2017-08-21
- **Case number:** CriminalAppealNo. 67 of2011
- **Bench:** Jagdish Singh Khehar, Arun Mishra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/securities-and-exchange-board-of-india-v-classic-credit-ltd-31928
- **Pages:** 104

## Headnote

Securities and Exchange Board of India Act, 1992:
s.26(2) - Amendment causing change of forum of trial - Effect
B
of. on pending proceedings - Complaints filed u/s. 26(2) against
C
private parties for offences punishable under SEBI Act - Offences
allegedly committed before SEBI Amendment Act, 2002 - Trial of
accused by Metropolitan Magistrate or, Judicial Magistrate of the
first class - Amendment to ss. 24 and 26 by the 2002 Amendment
Act whereby change in forum of trial - All pending matters D
transferred to the concerned court of session - Challenge· to - While
matters pending, 2014 Amendment Act' came in, whereby offences
arising under. 'SEBI Act' would be tried by a Special Court - Held:
Change of 'forum' would operate retrospectively, and as such,
pending proceedings would necessarily have to be transferred to
the changed 'forum '-Special Court - 'Forum' of trial earlier vested E
in the Court of Metropolitan Magistrate or, Judicial Magistrate of
the first class after 'the 2002 Amendment Act', was retrospectively
changed to the Court of Session - In view thereof. the trials even in
respect of offences allegedly committed before '2002 Amendment
Act' became operational, whether in respect whereof trial had or
had not been initiated, would stand jurisdictionally vested in a Court
F
of Session - Similarly, trials of offences under SEBI Act, consequent
upon '2014 Amendment Act would stand jurisdictionally transferred
for trial to a Special Court, irrespective of whether the offence under
the SEBI Act was committed before '2002 Amendment Act' became
operational and/or before '2014 Amendment Act' became
G
operational, and irrespective of the fact whether trial had or had
not been initiated - SEBI (Amendment) Act, 2002 - SEBI
(Amendment) Act, 2014.
Amendment causing change of forum of trial - Nature of -
Held: Change of 'forum' being procedural, the amendment of the H
559
560
SUPREME COURT REPORTS
[2017] 13 S.C.R.
A
'forum' would operate retrospectively, irrespective of whether the
offence allegedly committed by the accused, was committed prior to
the amendment.
B
Disposing of the matters, the Court
HELD: 1.1 The adjudicatory 'forum' was not altered at all
by 'the 2002 Amendment Act'. Section 26(2) of 'the Securities
and Exchange Board of India Act, 1992', as it existed prior to the
2002 amendment, mandated that no Court inferior to that of a
Metropolitan Magistrate (or, a Judicial Magistrate of the first
class) shall try an offence punishable under this Act. The
c contemplated 'forum' of adjudication could be the Court of a
Metropolitan Magistrate (or, a Judicial Magistrate of the first
class), or any other higher court. And not necessarily the Court
of a Metropolitan Magistrate (or, a Judicial Magistrate of the
first class). The higher court which could have tried matters even
before 'the 2002 Amendment Act', could well be the Court of
D Session. And as such, in case of a determination, the trial of
offences under 'the SEBI Act' could have been conducted by a
Court of Session even prior to 'the 2002 Amendment Act', there
would be nothing wrong about it. The provision, as it existed
prior to 'the 2002 Amendment Act', clearly contemplated that
E even a Court of Session could try offences postulated by the
provisions of 'the SEBI Act'. As such, when 'the 2002 Amendment
Act' provided that adjudication of offences under 'the SEBI Act'
would be by a court not inferior to that of a Court of Session, the
position postulated prior to the said amendment cannot be stated
F
to have been breached. It may well be said to be curtailed from
the original position. But, it could not be said to be in conflict
with the original position. In a similar manner of understanding,
even after 'the 2014 Amendment Act', which provided that
offences arising under 'the SEBI Act' would be tried by a Special
Court (Section 26B), the position cannot be taken to be at variance
G from the one, as it existed prior to the 2002 amendment, as also,
the position as it

## Text

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[2017] 13 S.C.R. 559
SECURITIES AND EXCHANGE BOARD OF INDIA
A
v.
CLASSIC CREDIT LTD.
(CriminalAppealNo. 67 of2011)
AUGUST 21, 2017
[JAGDISH SINGH KHEHAR, CJI AND ARUN MISHRA, J.]
Securities and Exchange Board of India Act, 1992:
s.26(2) - Amendment causing change of forum of trial - Effect
B
of. on pending proceedings - Complaints filed u/s. 26(2) against
C
private parties for offences punishable under SEBI Act - Offences
allegedly committed before SEBI Amendment Act, 2002 - Trial of
accused by Metropolitan Magistrate or, Judicial Magistrate of the
first class - Amendment to ss. 24 and 26 by the 2002 Amendment
Act whereby change in forum of trial - All pending matters D
transferred to the concerned court of session - Challenge· to - While
matters pending, 2014 Amendment Act' came in, whereby offences
arising under. 'SEBI Act' would be tried by a Special Court - Held:
Change of 'forum' would operate retrospectively, and as such,
pending proceedings would necessarily have to be transferred to
the changed 'forum '-Special Court - 'Forum' of trial earlier vested E
in the Court of Metropolitan Magistrate or, Judicial Magistrate of
the first class after 'the 2002 Amendment Act', was retrospectively
changed to the Court of Session - In view thereof. the trials even in
respect of offences allegedly committed before '2002 Amendment
Act' became operational, whether in respect whereof trial had or
had not been initiated, would stand jurisdictionally vested in a Court
F
of Session - Similarly, trials of offences under SEBI Act, consequent
upon '2014 Amendment Act would stand jurisdictionally transferred
for trial to a Special Court, irrespective of whether the offence under
the SEBI Act was committed before '2002 Amendment Act' became
operational and/or before '2014 Amendment Act' became
G
operational, and irrespective of the fact whether trial had or had
not been initiated - SEBI (Amendment) Act, 2002 - SEBI
(Amendment) Act, 2014.
Amendment causing change of forum of trial - Nature of -
Held: Change of 'forum' being procedural, the amendment of the H
559
560
SUPREME COURT REPORTS
[2017] 13 S.C.R.
A
'forum' would operate retrospectively, irrespective of whether the
offence allegedly committed by the accused, was committed prior to
the amendment.
B
Disposing of the matters, the Court
HELD: 1.1 The adjudicatory 'forum' was not altered at all
by 'the 2002 Amendment Act'. Section 26(2) of 'the Securities
and Exchange Board of India Act, 1992', as it existed prior to the
2002 amendment, mandated that no Court inferior to that of a
Metropolitan Magistrate (or, a Judicial Magistrate of the first
class) shall try an offence punishable under this Act. The
c contemplated 'forum' of adjudication could be the Court of a
Metropolitan Magistrate (or, a Judicial Magistrate of the first
class), or any other higher court. And not necessarily the Court
of a Metropolitan Magistrate (or, a Judicial Magistrate of the
first class). The higher court which could have tried matters even
before 'the 2002 Amendment Act', could well be the Court of
D Session. And as such, in case of a determination, the trial of
offences under 'the SEBI Act' could have been conducted by a
Court of Session even prior to 'the 2002 Amendment Act', there
would be nothing wrong about it. The provision, as it existed
prior to 'the 2002 Amendment Act', clearly contemplated that
E even a Court of Session could try offences postulated by the
provisions of 'the SEBI Act'. As such, when 'the 2002 Amendment
Act' provided that adjudication of offences under 'the SEBI Act'
would be by a court not inferior to that of a Court of Session, the
position postulated prior to the said amendment cannot be stated
F
to have been breached. It may well be said to be curtailed from
the original position. But, it could not be said to be in conflict
with the original position. In a similar manner of understanding,
even after 'the 2014 Amendment Act', which provided that
offences arising under 'the SEBI Act' would be tried by a Special
Court (Section 26B), the position cannot be taken to be at variance
G from the one, as it existed prior to the 2002 amendment, as also,
the position as it existed after 'the 2002 Amendment Act'. The
reason for the above inference is, that a Special Court (notified
by the Central Government) was to be a court which, immediately
before such notification, was the Court of Session or an Additional
Sessions Judge (Section 26A(3)). Therefore, a Special Court was
H a court superior to a Metropolitan Magistrate (or, a Judicial
SECURITIES AND EXCHANGE BOARD OF INDIA v. CLASSIC
561
CREDIT LTD.
Magistrate of the first class), as contemplated prior to 'the 2002
A
Amendment Act'. It was also the same as the court contemplated
under 'the 2002 Amendment Act', namely, the Court of Session.
Therefore, the projection of the jurisdictional claim, is a mere
furore, without any serious justification. [Para 33] [639-C-H; 640A-C]
1.2 Procedural amendments are presumed to be
retrospective in nature, unless the amending statute expressly
or impliedly provides otherwise. And also, that generally change
of 'forum' of trial is procedural, and normally following the above
proposition, it is presumed to be retrospective in nature, unless
the amending statute provides otherwise. [Para 34] [640-D-E]
New India Insurance Co. Ltd. v. Shanti Misra (1975) 2
SCC 840 : [1976] 2 SCR 266; Securities and Exchange
Board of India v. Ajay Agarwal (2010) 3 SCC 765 :
[201 OJ 3 SCR 70; Ramesh Kumar Soni v. State of
Madhya Pradesh (2013) 14 SCC 696 : [2013] 1 SCR
1129; Hitendra Vishnu Thakur v. State of Maharashtra
(1994) 4 SCC 602 : [1994) 1 Suppl. SCR 360; Ranbir
Yadav v. Stale of Bihar (1995) 4 SCC 392 : [1995) 2
SCR 826; Kamlesh Kumar v. State of Jharkhand (2013)
15 SCC 460 : [2013) 14 SCR 263 - relied on.
B
c
D
E
1.3 Alteration of 'forum' has been considered to be
procedural, and that, the change of 'forum' being procedural, the
amendment of the 'forum' would operate retrospectively,
irrespective of whether the offence allegedly committed by the
accused, was committed prior to the amendment. [Para 35]
F
[640-F-G]
1.4 The submission that change of 'forum' could be
substantive or procedural, is accepted. It may well be procedural
when the remedy was yet to be availed of, but where the remedy
had already been availed of (under an existing statutory provision),
G
the right may be treated as having crystalised into a vested
substantive right. Where the remedy had been availed of prior to
the ameμdment, unless the amending provision by express words,
or by necessary implication, manda.tes the transfer of proceedings
to the 'forum' introduced by the amendment, the 'forum'
postulated by the unamended provision, would continue to have
H
562
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2017] 13 S.C.R.
the jurisdiction to adjudicate upon pending matters (matters filed
before amendment). In view thereof, no vested right can be
claimed with reference to 'forum', where the concerned court,
had not taken cognizance and commenced trial proceedings, in
consonance with the unamended provision.[Paras 36-37] [642C-F]
1.5 Insofar as the matters where proceedings had already
commenced before the amendment, change of 'forum' for trial
came into effect, the general principle is that a law which brings
about a change in the 'forum', does not affect pending actions,
unless intention to the contrary is clearly shown. What needs· to
be determined with reference to 'the 2002 Amendment Act', as
well as, with reference to 'the 2014 Amendment Act' is, whether
an intention to the contrary was expressed therein, so as to alter
the 'forum', where proceedings were pending. And to bring such
proceedings to the 'forum' contemplated by the amendment. [Para
38] (642-G-H; 643-Aj
1.6 Section 26, as amended through 'the 2002 Amendment
Act', leaves no room for any doubt, that the erstwhile 'forum'
would cease to be the adjudicatory authority and the newly created
'forum'-the Court of Session, would deal with all pending matters
as well. The plJirase, "no court inferior to that of a court of session
shall try any offence punishable under this Act", leaves no room
for any doubt, that the erstwhile 'forum' -the Court of Metropolitan
Magistrate (or, Judicial '.\fagistrate of the first class), was denuded
of its jurisdiction. The court having jurisdiction earlier, being a
court inferior to a Court of Session ceased to have the jurisdiction
to adjudicate matters punishable under 'the SEBI Act', after the
amendment under 'the 2002 Amendment Act' came into force,
on 29.10.2002. There can be no doubt whatsoever, that 'the 2002
Amendment Act', expressly diverted jurisdiction from the
Metropolitan Magistrates (and, Judicial Magistrates of the first
class) to try offences under 'the SEBI Act', after 'the 2002
Amendment A~t' became operational. The position was similarly
explicit in Section 26B inserted by 'the 2014 Amendment Act',
by use of the words " all offences under this Act committed prior
to the date of commencement of the Securities Laws
(Amendment) Act, 2014 or on or after the date of such
commencement, shall be tried by the Special Court established
SECURITIES AND EXCHANGE BOARD OF INDIA v. CLASSIC
563
CREDIT LTD.
for the area in which the offence is committed". There can be no
doubt whatsoever, that 'the 2014 Amendment Act' grouped all
offences together as one, by providing that all offences committed
prior to or after 'the 2014 Amendment Act', would be tried by a
Special Court. The attempt to segregate the cases arising under
'the SEBI Act' into two categories, is clearly and expressly ruled
out, by the language adopted in the provision itself. Section 26B
was categorically explicit, because of the clear intent expressed
therein, that all offences committed under 'the SEBI Act', prior
to the introduction of 'the 2014 Amendment Act', would be tried
A
B
by the Special Court. Therefore, there is absolutely no ambiguity,
that after 'the 2014 Amendment Act', proceedings in respect of C
offences committed prior thereto, could only be tried by a Special
Court. [Paras 39-40] [643-A-H]
1. 7 This Court have intentionally overlooked and not
extracted the words " shall be taken cognizance of and tried by
the Special Court", to emphasise that the amendment of 'forum'
contemplated under Section 26B would be applicable only to
matters where cognizance had not been taken. It is not possible,
either from the language of the provision, or even from the
surrounding circumstances, to arrive at the advocated position.
The legislative intent was clearly contrary to the one suggested.
Ordinarily, cognizance is taken by a magisterial court, whereupon,
the matter is committed to the concerned higher court, for trial.
The Special Courts (a Court of Session or an Additional Sessions
Judge, in terms of Section 26D(l) of 'the 2014 Amendment Act')
provides for a position different from the provisions contained in
the Code of Criminal Procedure. Now, by 'the 2014 Amendment
Act', the function of taking cognizance has been vested with Special
Court, conferred with the responsibility to conduct trials.
Therefore, all pending matters where cognizance had been taken
and proceedings had commenced, before the Court of Session,
would not be affected. 'The 2014 Amendment Act' which
provided for a change of 'forum', also authorized a Special Court
to take cognizance. It is not reasonable to read anything further
into the words highlighted. 'The 2014 Amendment Act' expressly
provided, that for all offences committed even prior to 'the 2014
Amendment Act, proceedings would be conducted only before
D
E
F
G
the Special Court. The provision itself therefore expressly H
564
A
B
c
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SUPREME COURT REPORTS
[2017J 13S.C.R.
mandated, that the change of 'forum' would operate
retrospectively, and as such, pending proceedings would
necessarily have to be transferred to the changed 'forum' - the
Special Court. For the reasons recorded, it is held that even for
such matters where trial had commenced under the unamended
provision, after the amendments, which has been held to be
operatiom)I retrospectively, the trial would move to the changed
'forum' (to the Court of Session, after 'the 2002 Amendment Act'
and, to the Special Court, after 'the 2014 Amendment Act'). f Para
41] 1644-A-G]
1.8 The classification of offences other than the offences
under the Penal Code, and the courts by which such offences
would be triable, expressed in Part II of the F'irst Schedule, must
essentially be read with Section 26 CrPC. Part II of the First
Schedule, would therefore be applicable only in cases where, the
other laws (-other than the Penal Code) do not postulate the
adjudicatory court. In such cases, offences (-provided for under
other laws~ if punishable with death, imprisonment for life or
imprisonment for more than seven years, would be tried by a
Conrt of Session, and where, the offence in question was
punishable with imprisonment for three years and upwards, but
not more tlrnn seven years, the adjudicatory court would be the
Court of Magistrate of the first class. And if, the punishment of
the offence is imprisonment for less than three years or with fine
only, the matter would be triable by any Magistrate. The
contingencies contemplated in Part II of the First Schedule
(appended to the CrPC), are clearly inapplicable to 'the SEBl
Act' on account of the fact, that the adjudicatory court (prior to
'the 2002 Amendment Act'), was a court not inferior to that of
the Metropolitan Magistrate (or, a Judicial Magistrate of the first
class), after 'the 2002 Amendment Act', it was a court not inferior
to a Court of Session, and finally, after 'the 2014 Amendment
Act', adjudication was vested with Special Courts. Therefore, at
G no stage was there any ambiguity of 'forum' for trial which would
deal with offences postulated under 'the SEBI Act'. f Para 49)
f651-H] f652-A-E)
H
1.9 Th,e legislative intent in matters falling in Section 26(b)
CrPC, for holding summary proceedings has been express. In
SECURITIES AND EXCHANGE BOARD OF INDIA v. CLASSIC
565
CREDIT LTD.
the absence of any similar provision under 'the SEBI Act', it is
A
natural to assume, that summary proceedings were riot
contemplated by the legislation, and has to be considered as
pr\ecluded. In the absence of an express provision for holding
summary proceedings in the trial of offences under 'the SEBI
Act', it is not possible to accept the submission, by merely relying
B
on Section 260 CrPC. [Para 50] [653-E-F]
1.10 Section 26(2) of 'the SEBI Act' (prior to 'the 2002
Amendment Act') expressly provided, "no court inferior to that
of a Metropolitan Magistrate (or, a Judicial Magistrate of the
first class) shall try an offence punishable under this Act". It is c
thus, apparent, that it was not imperative, that the 'forum' for
trial of offences under the unamended Section 24 of 'the SEBI
Act' would be conducted only by a Metropolitan Magistrate (or,
a Judicial Magistrate of the first class). Trials for offences under
'the SEBI Act', even prior to 'the 2002 Amendment Act', could
well have been conducted by a Court of Session, or an Additional D
Sessions Judge. If trial had actually been vested in such a superior
court (as the same was possible), Section 260 CrPC, would not
have been applicable, as Section 260 comes into play only for ·
trials by courts of Chief Judicial Magistrates, Metropolitan
Magistrates and Judicial Magistrates of the first class. For th.e
instant reason also, the provision of Section 260 CrPC, cannot E
be so interpreted. Since the applicability of Section 260 CrPC to
proceedings under 'the SEBI Act' has not been accepted, the
prejudice claimed on behalf of the accused under Section 262
CrPC (which is dependent on Section 260) can also not be
accepted. [Para 51] (653-F-H; 654-A-C]
F
1.11 It was submitted that the right of revision available to
the accused, prior to the amendment to 'the SEBI Act', has been
taken away; that this aspect also had substantive (and, not merely
procedural) implications for the accused; that the right of revision
being a valuable right of the accused, the deprivation of the above
G
valuable right, emerging from the change of'forum' from the Court
of the Metropolitan Magistrate (or, Judicial Magistrate of the
first class) by 'the 2002 Amendment Act', and by 'the 2014
Amenc;Iment Act', should not be considered as a trivial procedural
issue; that the taking away of the right ofrevision from an accused,
H
566
A
B
c
D
E
F
SUPREME COURT REPORTS
[2017] 13 S.C.R.
has to be considered as a substantial procedural deprivation; that
cases where an amending enactment, takes away favourable
rights, by replacing the same with an alternative which is less
advantageous, would violate the fundamental rights of the
accused; thus, it was submitted that the right of revision which
was vested in the accused under Section 397 rw Section 401 CrPC,
was available to the accused under the unamended provisions of
'the SEBJ Act', when adjudication for offences under 'the SEBJ
Act' was ve~ted with a Metropolitan '.\1agistrate (or, a Judicial
Magistrate of the first class); that since the adjudicatory procedure
for holding trials for offences under 'the SEBJ Act' was vested
with a Court of Session (under 'the 2002 Amendment Act'), and
thereafter, with the Special Court (consequent upon 'the 2014
Amendment Act'), the accused who have not been tried (prior to
the above amendments), stood deprived of the right of revision,
under Section 397 rw Section 401 CrPC; thus, the amendment of
'forum' of trial, could not be treated as a mere procedural
amendment, but was liable to be considered as having substantive
adverse implication for the accused; and that the action of transfer
of pending matters from the Court of Metropolitan '.\1agistrate
(or, Judicial Magistrate of the first class), to the Court of Session
(consequent upon 'the 2002 Amendment Act') and thereafter, to
the Special (::ourt (consequent upon 'the 2014 Amendment Act'),
was liable to be treated as prospective, failing which the accused
will be deprived of the important right of revision vested in him.
In view thereof, namely, that power of revision to a superior court
does not confer or create a corresponding right in the litigant, it
is not possible to accept the submission. When the remedy of
revision is considered as not a right of an accused, at all, the
absence of the remedy of revision cannot be considered as
deprivation of a right. [Paras 52, 53-54[ [654-D-F; 657-B-D; 658C-E]
1.12 The 'forum' for trial earlier vested in the Court of
G Metropolitan Magistrate (-or, Judicial Magistrate of the first
class) was retrospectively amended, inasmuch as, the 'forum' of
trial after 'the 2002 Amendment Act' was retrospectively changed
to the Court of Session. Jn this view of the matter, the trials even
in respect of offences allegedly committed before 29.10.2002
H
SECURITIES AND EXCHANGE BOARD OF INDIA v. CLASSIC
567
CREDIT LTD.
(-the date with effect from which, 'the 2002 Amendment Act'
A
became operational), whether in respect whereof trial had or had
not been initiated, would stand jurisdictionally vested in a Court
of Session. And likewise, trials of offences under the SEBI Act,
consequent upon 'the 2014 Amendment Act (which became
operational, with effect from 18.07 .2013) would stand B
jurisdictionally transferred for trial to a Special Court, irrespective
of whether the offence under the SEBI Act was committed before
29.10.2002 and/or before 18.07.2013 (the date with effect from
which 'the 2014 Amendment Act' became operational), and
irrespective of the fact whether trial had or had not been initiated.
The conclusion affirms the determination recorded by the Delhi
C
High Court in Mahender Singh v. High Court of Delhi that after
the amendment of s. 26 by the 2002 Amendment Act, offences
under the SEBI Act' were to be tried by a Court of Session. The
impugned judgment rendered by the High Court of Bombay in
Mis. Classic Credit Ltd. v. State of Maharashtra) is set aside. [Para D
56] [661-D-H; 662-A]
Union of India v. Sukumar Pyne AIR 1966 SC 1206 ;
[1966] SCR 34; Ramesh Kumar Soni v. State of Madhya
Pradesh (2013) 14 SCC 696 : [2013] 1 SCR 1129;
Kam/esh Kumar v. State of Jharkhand (2013) 15 SCC
460 ; [2013] 14 SCR 263; Rajendra Kumar v. Ka/yan
(2000) 8 SCC 99 : [2000] 2 Suppl. SCR 114; Nani
Gopa/ Mitra v. State of Bihar AIR 1970 SC 1636 :
[19691 SCR 411; Securities and Exchange Board of
India v. Ajay Agarwal (2010) 3 SCC 765 : [2010] 3
SCR 70; A.R. Antulay v. R.S. Nayak (1988) 2 SCC 602
; [1988] 1 Suppl. SCR 1; Ramesh Kumar Soni v. State
of Madhya Pradesh (2013) 14 SCC 696 : 1201311 SCR
1129; Commissioner of Income Tax, Orissa v. Dhadi
Sahu (1994) Suppl. 1 SCC 257 : [1992] 3 Suppl. SCR
168; R. Kapilnath v. Krishna (2003) 1 SCC 444 : [2002]
5 Suppl. SCR 66; Videocon International Limited v.
Securities and Exchange Board of India (2015) 4 SCC
33 : [2015] 3 SCR 1; Amba/al Sarabhai Enterprises
Ltd. v. Amrit Lal & Co. (2001) 8 SCC 397 : [20011 2
Suppl. SCR 195; Commissioner of Income Tax,
E
F
G
H
568
A
B
c
D
E
F
G
H
SUPREME COURT REPOR'fS
[2017] 13 S.C.R.
Bangalore v. R. Shradamma (1996) 8 SCC 388: [1996)
3 SCR 1200; Shankar Ramchandra Abhyankar v.
Krishnaji Dattatreya Bapat (1969) 2 SCC 74 : [1970)
l SCR 322; Devender Kumar Sing/a v. Baldev Krishan
Sing/a (2005) 9 SCC 15 : [2004) 2 SCR 459; Pranab
Kumar Mitra v. State of West li<'ngal AIR 1959 SC 144
: [1959) Suppl. SCR 63; Union of India v. A.K. Pandey
(2009) 10 SCC 552 : [2009) 14 SCR 528; Manna/al
Khetan v. Kedar Nath Khetan (1977) 2 SCC 424 :
J 1977] 2 SCR 190; Manujendra Dutt v. Purnedu Prasad
Roy Chowdhury AIR 1967 SC 1419: [1967] SCR 475;
Mohd Idris v. Sat Narain AIR 1966 SC 1499 : [1966)
SCR 15; Stale of West Bengal v. Anwar All Sarkar Habib
Mohamed AIR 1952 SC 75: [1952) SCR 284; Krishnan
i~ Krishnaveni (1997) 4 SCC 241 : )1997] 1 SCR 511
- referred to.
Case Law Reference
[1966) SCR 34
referred to
Para 13(i),44
r20BJ 14 sen. 263
referred to
Para 13(iii),14(i),
27,29,44
[2000) 2 Suppl. SCR 114
referred to
Para 13(iv)
[1969) SCR 411
referred to
Para 14(ii),36,44
[1988] 1 Suppl. SCR I
referred to
Para 14(iv),52
[2013 J I SCR 1129
referred to
Para 20,36
[1992] 3 Suppl. SCR 168
referred to
Para 23, 26, 36
[2002] 5 Suppl. SCR 66
referred to
Para 23, 26,36
[2015] 3 SCR 1
referred to
Para 24,36
[2001] 2 Suppl. SCR 195
referred to
Para 25,36
(1996) 3 SCR 1200
referred to
Para 26
[1970) I SCR 322
referred to
Para 27
[2004] 2 SCR 459
referred to
Para 29
[1959] Suppl. SCR 63
referred to
Para 29
SECURITIES AND EXCHANGE BOARD OF INDIA v. CLASSIC
569
CREDIT LTD.
12009] 14 SCR 528
referred to
Para 31
A
[1977] 2 SCR 190
referred to
Para 31
11976] 2 SCR 266
relied on
Para 34
[2010] 3 SCR 70
relied on
Para 34
[2013] 1 SCR 1129
relied on
Para 34
B
[1994] 1 Suppl. SCR 360
relied on
Para 34
[1995] 2 SCR 826
relied on
Para 34
[2013] 14 SCR 263
relied on
Para 34
[1967] SCR 475
referred to
Para 36
c
[1966] SCR 15
referred to
Para36
[2001] 2 Suppl. SCR 195
referred to
Para36
(1952] SCR 284
referred to
Para 52
D
(1997] 1 SCR 511
referred to
Para 53
CRIMINAL/CIVILAPPELLATE/ORIGINAL JURISDICTION:
Criminal Appeal No. 67 of201 l.
From the final Judgment and Order dated 16-01-2008 passed by
the High Court of Judicature at Bombay in Criminal Appeal No.1557 of E
2007
WITH
Cr!. Appeal Nos. 66 to 73 of2011, C.A. Nos. 102-103 of2011,
Cr!. Appeal No. 1096 of 2013, W.P. (Cr!.) No. 67 of 2016, Cr!. Appeal
No. 1450 of2017, C.A. No.10729/2017.
Ms. Pinky Anand,ASG, Sanjay Mann, Rishabh Jain, Vinay Kumar,
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Ms. Saudamini, R.K. Pillai (for Ms. Rekha Pandey), D.P. Singh,
Ms.Nishtha Chaturvedi, Ms. Sonam Gupta, San jay Jain, J itendra Kumar,
Vikas Mahajan, Vishal Mahajan, Vinod Sharma, Amarnath Singh (for
BhaskarY. Kulkarni), SantoshPaul, JosephAristotle, Ms. Swati Singh,
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Ms. K. Priyadarshini, Ms. Priya Aristotle, Advs. for the Appellant.
C.A. Sundaram, Sr. Adv., Jatin Zaveri, Neel Kamal Mishra,
Ms. Rohini Musa, Abhishek Gupta, Santosh Paul, Ms. Swati Singh (for
M.J. Paul), Gaurav Agrawal, Ms. Kamini Jaiswal, Ms. ShumailaAltaf,
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Jatinderpal Singh Grewal, Sushi! Karanjkar (for K.N. Rai), A.Subba
Rao, Annam Venkatesh, Sudipto Sircar, Abhinav Goyal, Rahul Mishra,
Kushank Sindhu (for Annam D.N. Rao), Advs. for the Respondent.
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The Judgment of the Court was delivered by
JAGDISH SINGH KHEHAR, CJI I. Leave granted, in all the
special leave petitions.
2. Complaints were filed against the private parties herein, for
offences punishable under the Securities and Exchange Board of India
Act, 1992 (hereinafter referred to as 'the SEBI Act'). At the time when
the complaints were filed under Section 26(2) of 'the SEBI Act', the
concerned accused were to be tried by a Metropolitan Magistrate (or, a
Judicial Magistrate of the first class). In this bunch of cases, the
contention before this Court, at the behest of the private parties is, that
for offences allegedly committed before 29.10.2002 (whether or not,
taken up for trial before 29 .10.2002) the trial was to be conducted by the
concerned Metropolitan Magistrate (or, a Judicial Magistrate of the first
class), and none other. It is relevant to record, that in these cases
complaints filed against the private parties herein, pertain to allegations
of commission or omission, prior to 29.10.2002. In some of these matters,
proceedings were initiated prior to 29.10.2002, while in others, it was
initiated after 29.10.2002. The above contention pertaining to the 'forum',
for trial by a Metropolitan Magistrate (or, a Judicial Magistrate of the
first class), was premised on a purely legal assertion, founded on the
format of Sections 24 and 26 of'the SEBIAct', as they existed prior to
the Securities and Exchange Board of India (Amendment) Act, 2002
(hereinafter referred to as 'the 2002 Amendment Act'). It was the
submission of the private parties, that the amended provisions under 'the
2002 Amendment Act' had no express or implied retrospective effect,
and therefore, the amendment carried out through 'the 2002 Amendment
Act', would not have any impact, particularly on the 'forum' for trial (-
the Court of Metropolitan Magistrate, or Judicial Magistrate of the first
class). It was submitted, that trial in all these matters, with reference to
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offences committed prior to 29. l 0.2002, whether or not put to trial, could
only be conducted by the Metropolitan Magistrate (or, Judicial Magistrate
of the first class).
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3. In order to appreciate the gamut of the submissions advanced,
it is imperative to extract hereunder, Sections 24 and 26 of 'the SEBI
SECURITIES AND EXCHANGE BOARD OF INDIA v. CLASSIC
571
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Act', in the format in which the provisions existed, prior to 'the 2002
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Amendment Act'. The same are accordingly reproduced below:
"24. Offences. -(I) Without prejudice to any award of penalty by
the adjudicating officer under this Act, if any person contravenes
or attempts to contravene or abets the contravention of the
provisions of this Act orof any rules orregulations made thereunder,
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he shall be punishable with imprisonment for a term which may
extend to one year, or with fine, or with both.
(2) If any person fails to pay the penalty imposed by the adjudicating
officer or fails to comply with any of his directions or orders, he
shall be punishable with imprisonment for a term which shall not
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be less than one month but which may extend to three years or
with fine which shall not be less than two thousand rupees but
which may extend to ten thousand rupees or with both.
xxx
xxx
xxx
26. Cognizance of offences by courts.-(!) No court shall take
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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 Metropolitan Magistrate or a
Judicial Magistrate of the first class shall trv an offence punishable
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under this Act."
It is also necessary to notice the change brought in, on the subject
of 'forum' for trial, by 'the 2002 Amendment Act'. Even though, the
change of 'forum' was expressed in the amended Section 26(2), yet
some of the submissions advanced during the course of hearing, emerged
out of a collective reading of the amended Sections 24 and 26 (-by 'the
2002 Amendment Act'). Accordingly, the format which Sections 24 and
26 of 'the SEBI Act' assumed, after 'the 2002 Amendment Act' also
needs to be noticed. The above amended provisions, are accordingly
reproduced below:
"24.0ffences. -(1) Without prejudice to any award of penalty by
the adjudicating officer under this Act, if any person contravenes
or attempts to contravene or abets the contravention of the
provisions of this Act or of any rules or regulations made thereunder,
he shall be punishable with imprisonment for a term which may
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extend tu te_11 years, or with fine, which may extend tu twe11!X::
five crure rupees or with both.
(2) If any qerson fails to pay the.Penalty imposed by the adjudicati!!g
officer_9r fails to comply with any of]lis directions or orders, he
shall be punishable with imprisonment for a term whkh shall not
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be less than one month but which may extend t_u ten years ur with
fine, which may extend to twenty-five crure rupees or with both.
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26. Cognizance of offences by courts.-(!) 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 coμrt inferior to that ofa Court of Session shall_try any
offence punishable under this AcJ."
4. After 'the 2002 Amendment Act', all pending matters (-before
Metropolitan Magistrates, or Judicial Magistrates ufthe first class) were
committed to the concerned, Court of Session. This was done, under
the assumption, that 'the 2002 Amendment Act' had the effect of
retrospec.tively altering the 'forum· for trial. And as such, matters which
were being tried by Metropolitan Magistrates (or, Judicial Magistrates
of the first class), and were pending before such Courts, were transferred
to the concerned Court of Session. The above change of 'forum' for
trial, was assailed by some of the private parties, before the court to
which the matters were committed. Their challenge failed. The matters
were then carried, to the jurisdictional High Court, i.e., the High Court of
Judicature at Bombay (hereinafter referred to as, 'the Bombay High
Court'). Alternatively, some of the private parties, directly approached
the jurisdictional High Court, to assail the changed ·forum' of trial.
5. Before the Bombay High Court, the SEBI supported the
determination rendered by the Court uf Session, and also, placed reliance
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on a decision rendered by the High Court uf Delhi at New Delhi
(hereinafter referred to as 'the Delhi High Court') in Panther Fincap
and Management Services Ltd. v. Securities and Exchange Board of
India (decided on 5.9.2006), wherein it had been concluded, that the
amendment to Section 26 of 'the SEBI Act' through 'the 2002
Amendment Act', related to a change in 'forum' of trial, and therefore,
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SECURITIES AND EXCHANGE BOARD OF INDIA v. CLASSIC
573
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the amendment was only procedural. And consequently, an amendment
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of procedure being impliedly retrospective, the Delhi High Court held,
that the committal of pending cases to the Court of Session, was justified
in law.
6. A Division Bench of the Bombay High Court, through the
impugned judgment dated 16.01.2008, collectively disposed of all matters
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pending before it, by setting aside the judgment rendered by the Court of
Session, by taking a view different from the one recorded by the Delhi
High Court. The SEBI therefore approached this Court to assail the
judgment rendered by the Bombay High Court. Some of the cases in
this group of cases (being collectively disposed of through the instant
judgment), arise out of the judgment of the Bombay High Court dated
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16.01.2008. All the remaining cases, arise out of a similar sequence of
events, which culminated before the Delhi High Court, wherein the lead
judgment was rendered in Mahender Singh v. High Court of Delhi (Writ
Petition (C) No.141 of2007, decided on 11.01.2008). It is apparent, that
the above judgment of the Delhi High Court dated 11.01.2008, was
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rendered just a few days before the impugned judgment was rendered
by the Bombay High Court, on 16.01.2008.
7. Consequent upon an interpretation of the amendment to Section
26 by 'the 2002 Amendment Act', the Division Bench of the Delhi High
Court, through the above judgment dated 1I.01.2008 (as already noticed
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above), held that after the amendment of Section 26 by 'the 2002
Amendment Act', offences under 'the SEBJ Act', were to be tried by a
Court of Session. It is also necessary for us to mention, that the Bombay
High Court did not refer to the above judgment dated I 1.01.2008, since
it may not have come to its notice, as the Bombay High Court had
reserved orders in the matter on 22.02.2007 - well before the Division
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Bench of the Delhi High Court, had pronounced its judgment (- on
I I .0 I .2008). The judgment dated I 1.01.2008 rendered by the Delhi High
Court (recording a view, contrary to that expressed by the Bombay High
Court) has been assailed by private parties, affected by the change of
'forum' of trial, from the Court of Metropolitan Magistrate (or, a Judicial
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Magistrate of the first class), to the Court of Session.
8. Whilst these matters were pending before this Court, 'the SEBI
Act' was again amended, by the Securities and Exchange Board of
India (Amendment) Act, 2014 (hereinafter referred to, as 'the 2014
Amendment Act'). It is relevant for the present controversy to notice,
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that by 'the 201AAmendmentAct', Section 26(2) was omitted from 'the
SEBI Act', and Sections 26A to 26E were inserted therein, with effect
from 18.07.2013. During the course of hearing, one of the contentions
advanced by learned counsel representing SEBI was, that the effect
and impact of 'the 2002 Amendment Act' with reference to the change
of 'fomm' for ttial under Section 26(2), from the Metropolitan Magistrate
(or, the Judicial Magistrate of the first class), to the Court of Session,
had again been altered. It was submitted, that all pending matters were
now to be tried by a Special Court, in terms of 'the 2014 Amendment
Act', and therefore, all the cases in hand, had been rendered infiuctuous,
because now tine 'fomm' for trial had again been changed. The instant
position, canvassed on behalfof'the SEBI', was seriously contested by
learned counsel representing the private parties. Having examined the
contention, we are of the considered view, that it is imperative for us
(during the course of the present adjudication), to render a determination
on the effect and impact of 'the 2014 Amendment Act', as well. It is
therefore, that learned counsel for the rival parties were heard, and they
advanced detailed submissions on this aspect of the matter, as well.
9. Since we will also be dealing with the jurisdictional effect of
'the 2014 Amendment Act', to matters where the offence(s) was/were
committed before 29. l 0.2002 (whether or not, put up for trial before
29.10.2002). It is necessary for us, to extract herein Sections 26A to
26E inserted i11to 'the SEBI Act' through 'the 2014 Amendment Act'.
The above provisions are accordingly reproduced below:
"26A. Establishment of Special Courts.-(!) The Central
Government may, for the purpose of providing speedy trial of
offences under this Act. by notification, establish or designate as
many Special Courts as ma.x_knccessary.
(2) A Special Court shall consist of a single judge who shall be
appointed by the Central Government with the concurrence uf
the Chief Justice of the High Court within whose jurisdiction the
judge to be appointed is working.
(3) A person shall not be qualified for appointment as a judge of a
Special Court unless he is, immeiliately before such appointment,
holding the office of a Sessions Judge or an Additional Sessions
Judge, as the case may be.
SECURITIES AND EXCHANGE BOARD OF INDIA v. CLASSIC
575
CREDIT LTD. [JAGDISH SINGH KHEHAR, CJ!)
26B. Offences triable by Special Courts.- Notwithstanding
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anything contained in the Code of Criminal Procedure, 1973 (2 of
1974), all offences under this Act committed prior to the date of
commencement of the Securities Laws (Amendment) Act, 2014
or on or after the date of such commencement, shall be taken
cognizance of and tried by the Special Court established for the
area in which the offence is committed or where there are more
Special Courts than one for such area, by such one of them as
may be specified in this behalf by the High Court concerned.
26C. Appeal and revision.- The High Court may exercise, so far
·as may be applicable, all the powers conferred by Chapters XXIX
and XXX of the Code of Criminal Procedure, 1973 (2of1974) on
a High Court, as if a Special Court within the local limits of the
jurisdiction of the High Court were a Court of Session trying cases
within the local limits of the jurisdiction of the High Court.
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26D. Application of Code to proceedings before Special Court.:
( 1) Save as otherwise provided in this Act. the provisions of the
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Code of Criminal Procedure, 1973 (2of1974) shall apply to the
proceedings before a Special Court and for the purposes of the
said provisions. the Special Court shall be deemed to be a Court
of Session and the person conducting prosecution before a Special
Court shall be deemed to be a Public Prosecutor within the meaning
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of clause (u) of section 2 of the Code of Criminal Procedure,
1973 (2of1974).
(2) The person conducting prosecution referred to in sub-section
(1) should have been in practice as an advocate for not less than
seven years or should have held a post, for a period of not less
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than seven years, under the Union or a State, requiring special
knowledge oflaw.
26E. Transitional provisions.-Any offence committed under this
Act, which is triable by a Special Court shall, until a Special Court
is established, be taken cognizance of and tried by a Court of G
Session exercising jurisdiction over the area, notwithstanding
an:Ything contained in the Code of Criminal Procedure, 1973 (2 of
1~74):
Provided that nothing contained in this section shall affect the
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powers of the High Court under section 407 of the Code of Criminal
Procedure, 1973 (2 of 1974) to transfer any case or class of cases
taken cognizance by a Court of Session under this section.".
10. Ms. Pinky Anand, leamedAdditional Solicitor General of India,
whilst appearing on behalf of the SEBI, laid the foundation of her
submissions by asserting, that it was a settled proposition of law, that
alteration of substantive law is always presumed and treated as having
only prospective implications, unless the legislative enactment itself,
expressly or impliedly mandates it to be retrospective. And in
contradistinction to the above, it was submitted, that an amendment to a
procedural enactment is always presumed and treated to have
retrospective effect, except when intended otherwise, expressly or
impliedly, through the legislation itself. Accordingly, it was asserted, that
change of 'forum' for trial, having merely procedural connotations, the
same was bound to be treated as retrospective, especially because there
was no express or implied intent in the legislative enactments ('the 2002
Amendment Act'; and 'the 2014AmendmentAct') thatthe amendments
were intended to have prospective effect.
11.