are very much attracted the provisions of section 17 of the said Ordinance. As the accused by their act had affected a series of transactions in various securities creating the appearance of the active trading and as the buyer/ seller influenced the market price when they choose to do so for their free value and entirety do not constitute any offence. …(28)
Code of Criminal Procedure (V of 1898)
Sections 439 and 561A
The petitioners having not challenged the order of framing charges against them by filing revisional application under section 439 of the Code but filed applications under section 561A of the Code to quash the entire proceeding for which the power under section 561A of the Code cannot be invoked to interrupt or divert the ordinary course of Criminal Procedure. ….(35)
Securities Exchange Ordinance (XVII of 1969)
In view of provision of section 24(2) of Securities Exchange Ordinance, 1969 onus lies on the accused to prove that he is not guilty of the alleged offence which is different from ordinary criminal jurisprudence, that the prosecution has to prove its case. …(37)
Abdul Quader Chowdhury and others –Vs- The State,28 DLR(AD), Page-38; Shinepukur Holding Ltd and Others–Vs- Securities and Exchange Commission and another,50 DLR(AD)189; Bangladesh –Vs- Tan Kheng Hock 31 DLR(AD),69, Farruk Ahmed –Vs-Abdul Kader Chowdhury 38 DLR(AD)18, Syed Mohammad Hashem alias Hashim –Vs- The State,48 DLR(AD)87; Ali Akkas –Vs- Enayet Hossain and others 17 BLD(AD)44 and securities and Exchange Commission–Vs- Runa N Alam,57DLR (AD) 161, ref.
Ms. Safayat Sultana Rume, Advocate on behalf of Mr. Rokonuddin Mahmud, Advocate
-For the Petitioners
Mr. A.K.M Ali, Advocate with
Ms. Ayesha Akhter, Advocates,
—For the Opposite Party
M. Enayetur Rahim, J:
By filing 3(three) separate applications under Section 561A of the Code of Criminal Procedure, three accused persons of Sessions Case No.607 of 1997, subsequently re-numbered as sessions Case No. 558 of 1999, arising out of complaint petition Case No.1081 of 1997 obtained the present Rules calling upon the opposite party to show cause as to why the proceeding of the said sessions case should not be quashed.
- 2. Since the facts and questions of law are same in all the Rules, those are being disposed of by this common judgment.
- 3. The opposite party Securities and Exchange Commission filed petition of complaint in the Court of Chief Metropolitan Magistrate, Dhaka which was registered as complaint petition case No.1081 of 1997 against the present petitioners and another namely Securities Consultants Ltd. stating, inter alia, that the accused firm and other accused persons act as dealers/brokers in Dhaka Stock-Exchange and in such capacity of the dealer/broker were involved in fraudulent activities in the year 1996 during the month of July to December within the mischief of Section 17 of the Securities and Exchange Ordinance,1969. This offence was detected by an Enquiry Committee formed by the Securities and Exchange Commission to enquire into the matter under Section 21 of the Securities and Exchange Ordinance, 1969.
- 4. According to the enquiry report dated 27.03.1997 the accused persons being dealer/broker committed offence described in section 17 of the Securities and Exchange Ordinance, 1969 and as such is liable to be punished under Section 24 of the Securities and Exchange Ordinance, 1969.
- 5. The finding of the Enquiry Committee regarding the accused persons runs as follows:
“Securities Consultants Ltd.
In foreign DVP bank statement there has been huge sales in this A/C. Total transactions in volume and value are 7,09,530 nos. and Tk.27.14 cores respectively. Unsettled amount is Tk.2.50 cores. There is no such name in SEC & DSE list. No trading has also taken place in DSE in this name. Major trading are in the shares of Beximco Pharma (1,71,450) Shine Pukur (1,00,000) Dynamic Textile (1,20,000), Mita Textile (89,900), Orion In fusion (73,680), Beximco Fisheries (50,000), Apex Footwear (37,500), Padma Textile (25,000).
- 6. The Committee fond no trading of these transactions in DSE. However, the Committee could gather that it is a syndicate comprising three members. Two are brokers of DSE namely Mr. M.G. Azam Chowdhury and Mr. Shahidullah. The third member is Professor Mahbub Ahmed, Department of Accounting Dhaka University. There is however no official confirmation to this. The observation made in respect of HMMS Associates is also applicable to this firm.
- 7. We feel that there may be some other groups in DSE in disguise but working closely together (as without the separate identify) as buyer/seller influencing the market price as and when they choose to do so.
- 8. The dealings of the firm indicate manipulation within the meaning of Section 17 of the Securities and Exchange Ordinance, 1069.”
- 9. The learned Metropolitan Magistrate by an order dated 02.04.1996 took cognizance into the case against the accused petitioners and another under Section 24 of the Securities and Exchange Commission Ordinance,1969.
- 10. On coming to know about the said fact of taking of cognizance the petitioners voluntarily surrendered before the High Court Division and obtained anticipatory bail and they are now on bail.
- 11. The case being ready for trial the case record was sent to the learned Metropolitan Sessions Judge, Dhaka and the case was registered as Sessions Case No.607 of 1997.
- 12. Subsequently, the case was transferred in the Court of Metropolitan Additional Sessions Judge, 3rd Court, Dhaka and renumbered as Sessions Case No 558 of 1999.
- 13. On 16.03.1999 the date was fixed for framing charge. The accused petitioners on that day filed an application under Section 265C of the Code of Criminal Procedure for discharging them from the charges brought against them on the ground interalia, that the allegations made in the petition of complaint are vague, uncertain and have no materials and ingredients required for an offence under Section 17 of the Securities and Exchange Ordinance,1969; the accused persons have been alleged as the member/ dealer/ broker of Dhaka Stock-Exchange and in such capacity they involved in fraudulent activities in the year 1996 which is totally false concocted, malafide and motivated. The petitioners firm Securities Consulted Ltd. is a Private Ltd. Company registered under the Companies Act and a juristic persons but it is not a syndicate as alleged in the petition of complaint. The complaint is imaginary and baseless, because Securities Consulted Ltd.(SCL), the accused No.1, or Professor Mahbub Ahmed, the accused No.4, were not the members of Dhaka Stock-Exchange or never acted as broker/ dealer in Dhaka Stock-Exchange or Chittagong Stock-Exchange and as such has no access of the place of occurrence as only members have access to Dhaka Stock Exchange or Chittagong Stock Exchange. No allegations have also been made specifically against accused No.2 Mr. M.G. Azam Chowdhury and accused No.3 Mr. Shahidullah.
- 14. In the said applications it was also stated that there was no sufficient ground to frame charge against the accused persons.
- 15. The learned Additional Sessions Judge after hearing the respective parties, perusing the petition of complaint and other relevant documents by the order dated 16.03.1999 framed charges against the present accused petitioners under Sections 17(e) (II) (IV) of the Securities and Exchange Ordiance,1969.
- 16. Thereafter, the petitioners moved this Court individually and obtained the Rules.
- 17. Ms. Safayat Sultana Rume the learned Advocate appeared on behalf of Mr. Rokonuddin Mahmud, the learned Advocate for the petitioners.
- 18. Ms. Safayat Sultana placing the application under Section 561A of the Code of Criminal Procedure and the petition of complaint submits that there being no ingredients of offence under Section 17(e)II)(IV) of the Securities and Exchange Ordinance,1969 and there being no documents in the case to proceed against the accused petitioners, the framing of charge against the petitioner is illegal and they are entitled to be discharged from the case. She further submits that even if the allegations made in the petition of complaint are taken to be true at their face value, no ingredients of offence under Section 17(e)(II)(IV) of the Ordinance,1969 have been disclosed against the petitioners and as such the impugned proceeding is nothing but an abuse of the processes of the Court and to secure ends of justice the proceeding may be quashed. In support of her submission she refers the case of Abdul Quader Chowdhury and others –Vs- The State, reported in 28 DLR(AD), page-38.
- 19. On the other hand Mr. A.K.M Ali, the learned Advocate appearing with Mrs. Ayesha Akhter for the complainant opposite party referring the case of Shinepukur Holdings Ltd. & others -Vs- Securities and Exchange Commission and another, reported in 50 DLR(AD), page-189 , submits that the questions raised by the present accused-petitioners have already been resolved in the said case, particularly with regard to propriety of the petition of complaint, which is similar to the present Case. He further submits that from the plain reading of the petition of complaint it would be evident that offence under Section 17 of the Securities and Exchange Commission Ordinance,1969 have been disclosed against the petitioners in it. Whether the allegations are false or true it will be decided after taking evidence and at this stage when prima-facie case have been disclosed within the mischief of Section 17 of the Securities Exchange, Ordinance,1969 the application under Section 561A of the Code of Criminal Procedure is not maintainable.
- 20. In this particular case it is very pertinent to mention here that the petitioners after framing the charge filed these applications under Section 561A of the Code of Criminal Procedure for quashing the proceeding. But, did not come before this Court in its Revisional Jurisdiction under Section 439 of the Code of Criminal Procedure against the order framing charge.
- 21. The scope of 561A of the Code of Criminal Procedure has already been decided by our Appellate Division in so many cases Particularly, in the cases of Abdul Quader Chowdhury and others –Vs- The State, reported in 28 DLR(AD), Page-38 (cited by the learned Advocated for the petitioner), Bangladesh –Vs- Tan Kheng Hock, reported in 31 DLR(AD), Page-69, Farruk Ahmed –Vs-Abdul Kader Chowdhury, reported in 38 DLR(AD), Page-18, Syed Mohammad Hashem alias Hashim –Vs- The State, reported in 48 DLR(AD), Page-87 and Ali Akkas –Vs- Enayet Hossain and others reported in 17 BLD(AD) page-44 respectively .
- 22. In view of the above cited cases it is settled proposition of law that to bring a case within the purview of Section 561A for the purpose of quashing a proceeding one of the following condition must be fulfilled:
(i) Interference even at an initial stage may be justified where the facts are so preposterous that even on admitted facts no case stands against the accused.
(ii) Where the institution and continuation of the proceeding amounts to an abuse of the process of the Court.
(iii) Where there is a legal bar against the initiation or continuation of the proceeding.
(iv) In a case where the allegations in the F.I.R or the petition of complaint, even if taken at their face value and accepted in their entirety, do not constitute the offence alleged and
(v) The allegations against the accused although constitute an offence alleged but there is either no legal evidence adduced in support of the case or the evidence adduced clearly or manifestly fails to prove the charge.
- 23. In the case of Shinepukur Holdings Ltd. and others Vs Securities Exchange Commis-sion and another, reported in 50 DLR(AD), referred by the learned Advocate of the complainant opposite party, it has been cate-gorically held that;
“When the SEC was making a complaint of fraudulent acts against certain companies and their directors on the basis of an enquiry undertaken by an expert committee, a Court would not be well advised not to try to be more expert at the complaint stage because otherwise it will be a example of nipping the prosecution in the bud.”
- 24. In the case of Securities and Exchange Commission -Vs- Runa N Alam, reported in 57 DLR(AD), page-161 it has been observed that;
“It appears that the learned Additional Sessions Judge considered the materials on record and the documents in the case and upon hearing the parties found that there are sufficient materials to proceed against the accused under Section 17 (e)(II)(IV) of the Securities and Exchange Ordinance,1969 and accordingly framed charges instead of discharging the accused. But at the trial before holding the petitioner guilty and convicted the accused could prove that the offence was committed without her knowledge or that she exercised all due diligence to prevent the commission of the offence.”
- 25. Let us now decide the fate of the present Rules in view of the above settled proposition of law.
- 26. We have carefully perused and scrutinized the petition of complaint and as well as the order dated 16.03.1999, annexure-C, passed by the Additional Sessions Judge in framing charge against the accused petitioner under Section 17(2)(II)(V) of the Securities and Exchange Ordinance, 1969.
- 27. In the petition of complaint on the basis of an Enquiry Committee allegations have been made categorically against the accused petitioners to the effect that the accused firm and other accused as dealer/broker in DSE being a syndicate were involved in fraudulent activities in July to December 1996 within the mischief of Section 17 of the Securities and Exchange Ordinance,1969, which were detected by the Enquiry Committee and that according to the enquiry report dated 27.03.1997 in the foreign D/P bank statement there has been huge sales in the account of Securities Consultants Ltd. and total transactions in volume and value of 7,09,530 shares and Tk. 27.14 cores of which unsettled amount was Tk. 2.50 cores, were done by the accused but those were not in SEC or DSE records, and no such trading took place in DSE and that the accused persons as buyer/seller influenced the market price as and when they choose to do so.
- 28. Section 17 of the Securities and exchange Ordinance 1969 is as under;-
17. Prohibition of fraudulent acts, etc.- No person shall, for the purpose of inducing, dissuading, effecting, preventing or in any manner influencing or turning to his advantage, the sale or purchase of any security, directly or indirectly,-
(a) employ any device, scheme or artifice, or engage in any act, practice or course of business, which operates or is intended or calculated to operate as a fraud or deceit upon any person; or
(b) make any suggestion or statement as a fact of that which he does not believe to be true; or
(c) omit to state or actively conceal a material fact having knowledge or belief of such fact; or
(d) induce any persons by deceiving him to or omit to do anything which he would not do or omit if he were not so deceived; or
(e) do any act or practice or engage in a course of business, or omit to do any act which operates or would operate as a fraud, deceit or manipulation upon any person, in particular-
(i) make any fictitious quotation;
(ii) create a false and misleading appearance of active trading in any security;
(iii) effect any transaction in such security which involves on change in its beneficial ownership;
(iv) enter into an order or orders for the purchase and sale of security which will ultimately cancel out each other and will not result in any change in the beneficial ownership of such security;
(v) directly or indirectly effect a series of transactions in any security creating the appearance of active trading therein or of raising of price for the purpose of including its purchase by others or depressing its price for the purpose of inducing its sale by other;
(vi) being a director or any officer of the issuer of a listed equity security or a beneficial owner of not less than ten percent of such security who is in possession of material facts omit to disclose any such facts while buying or selling such security.
- 29. If we consider the disclosed allegations, made in the petition of complaint against the petitioners and section 17 of the Securities Exchange Ordinance, 1969 we have no hesitation to hold that those allegations are very much within the mischief of Section 17 of the Securities and Exchange Ordinance 1969. The accused by their act had affected a series of transactions in various Securities creating the appearance of active trading and as the buyer/ seller influenced the market price when they choose to do so for their advantage. Thus, at this stage there is no scope to hold that the allegations made in the petition of complaint, which based on an enquiry report, are preposterous and the allegations at their face value and entirety do not constitute any offence and the continuation of the proceedings amounts to an abuse of the process of the Court. The allegations made in the petition of complaint are sufficient grounds to proceed with the trial against the accused petitioners.
- 30. Moreover, the Appellate Division in the case of Shinepukur Holding Ltd. Vs. Securities and Exchange Commission and others, reported in 50 DLR (AD), page-189 disappr-oved to nipping the prosecution in bud when the Securities Exchange Commission makes a complaint of fraudulent acts against certain Companies and their directors on the basis of an enquiry undertaken by an expert committee and also advised the Court not to be more expert at initial stage.
- 31. The learned Advocate of the petitioner tried to impress us that there is no sufficient ground for proceeding against the accused persons.
The word ‘sufficient ground for proceeding’ do not mean sufficient grounds for conviction. Prima-facie material is sufficient for forming an opinion to proceed against the accused.
- 32. The learned Additional Sessions Judge in framing charge against the accused petitioners under Section 17(e)(II)(IV) of the Securities and Exchange Ordiance,1969 categorically and consistently held to the effect:
“”Eiu frl hš²hÉ c¡¢Mm£ L¡NSfœ Hhw pw¢nÔø AdÉ¡cn fk¡Ñm¡Qe¡ Ll¡ qCmz Eiu frl hš²hÉ Hhw c¡¢Mm£ L¡NSfœ p¡r£ p¡h¤c à¡l¡ fËj¡e p¡frÉz ®kqa¥ Eõ¢Ma AdÉ¡cnl 21 d¡l¡ Ae¤p¡l N¢Wa L¢jne La«ÑL ac¿¹ A¿¹ Bp¡j£cl ¢hl¦Ü B¢ea A¢ik¡N fË¡b¢jLi¡h fËj¡¢ea qJu¡u LjfÔCe¾V ¢f¢Vne c¡ul Ll¡ qCu¡R Hhw c¡¢Mm£ L¡NSfœ fk¡Ñm¡Qe¡ L¢lu¡ Bp¡j£cl ¢hl¦Ü A¢ik¡N NWel kbø Ef¡c¡e ¢hcÉ¡j¡e l¢qu¡R h¢mu¡ ®cM¡ k¡CaR ®pqa¥ p¡r£ p¡h¤c à¡l¡ fËj¡e hÉ¢alL HC j¤ýaÑ Ap¡j£cl A¢ik¡Nl c¡u qCa AhÉ¡q¢a ®cJu¡l Bc± ®L¡e eÉ¡u pwNa L¡lZ e¡ b¡L¡u Bp¡j£ frl ®g±x L¡x ¢hx 265 ¢p d¡l¡l Bhce e¡ j”¤l Ll¡ ®Nmz
Bp¡j£l¡ BCe J ¢h¢d h¢qi¨Ña f¿Û¡u ®nu¡l h¡S¡lL A°hdi¡h fËi¡h¡¢eÄa L¢lu¡ L«¢œj EµQ j§mÉ h¡S¡l pª¢ø L¢lu¡R k¡q¡ 1969 p¡ml ¢p¢LE¢l¢VS J HLÈQ” AdÉ¡cnl ®pLne 17(2) (zz) (v) Ae¤k¡u£ Hhw Eš² BCel ®pLne 24 Ae¤k¡u£ n¡¢Ù¹ ®k¡NÉ Afl¡d L¢lu¡R —————————–z”
- 33. In view of the said clear findings of the learned Additional Sessions Judge in disposing an application under Section 561A of the Code of Criminal Procedure it is very difficult to hold that in the petition of complaint no offence has been disclosed within the mischief of Section 17 of the Securities and Exchange Ordinance, 1969 or the allegations are so preposterous or the impugned proceeding amounts to an abuse of the process of the Court.
- 34. It also manifests from the order framing charge against the accused petitioners, annexure-C, that the learned Additional Sessions Judge had considered the materials on record and the submissions advanced on behalf of the learned Advocates of the respective parties. As such there is no scope to say that the learned Additional Sessions Judge did not apply its judicial mind in framing charge against the accused petitioners and violated the mandatory provision of section 265C of the Code of Criminal Procedure and the charge has been framed mechanically. Thus, the order framing charge against the accused petitioners has not suffered from any illegality or infirmity which can be interfered or quashed.
- 35. The case of Abdul Quader Chowdhury and others –Vs- The State, reported in 28 DLR(AD), Page-38, as cited by the learned Advocate of the petitioners will not help the petitioners. Rather, it will go against the petitioners. In the above case in paragraphs 9 and 10 it has been observed by the Appellate Division to the effect;
The power to quash a proceeding under this section being in its nature extraordinary, it should be exercised sparingly, carefully and only where such exercise is justified to prevent the abuse of the process of the Court and to do the real and substantial Justice for the administration of which alone the Court exists.
10. The inherent jurisdiction should not be invoked where some other remedy is available. The jurisdiction given by section 561A is neither an alternative jurisdiction nor an additional jurisdiction but it is a jurisdiction preserved in the interest of justice to redress grievances for which no other procedure is available or has been provided by the code itself. This power can not be so utilised as to interrupt or divert the ordinary course of Criminal procedure as laid down in the Code.”
- 36. Having regard to fact that the petitioners did not challenge the order of framing charges against them by filing revisional application under Section 439 of the Code of Criminal Procedure but, they filed applications under Section 561A of the Code of Criminal Procedure to quash the entire proceeding. In such facts and circumstances we are unable to exercise the power under Section 561A of the Code of Criminal procedure to interrupt or divert the ordinary course of Criminal Procedure as laid down in the Code.
- 37. 36. In this particular case it is very pertinent to discuss about Section 24 of the Securities and Exchange Ordinance, 1969.
Section 24 of the securities and Exchange Ordinance 1969 is as under:
(1) Whenever contravenes the provision of section 17 shall be punish with imprison-ment a term which may be extended to 5 years or with fined which may extended to 5 lack taka with both.
(2) where the person guilty of an offence referred to sub-section (1) is a company or other body corporate, even Director, Manager or other Officer responsible for the conduct of its affairs shall, unless he proves that the offence was committed without his knowledge or that he exercised all diligent to prevent its commission be deemed to be guilty of the offence.
- 38. According to sub-section (2) of Section 24 of Securities Exchange Ordinance, 1969 the onus lies on the accused to prove that he is not guilty of the alleged offence. This provision of law is some extend different from ordinary Criminal Jurisprudence, that the prosecution has to prove its Case.
- 39. Having discussed as above, we find no merit in the Rules.
- 40. Accordingly, all the three Rules are discharged.
- 41. The order of stay passed at the time of issuance of the Rules are hereby recalled and vacated.
- 42. The learned Metropolitan Additional Sessions Judge, 3rd Court, Dhaka is directed to proceed with the trial in accordance with law.
- 43. Since it is an old case and considering the cry of a large number of victims of share market, the trial Court is also directed to conclude the trial as expeditiously as possible preferably within 6(six) months from the date of the receipt of this judgment.
Communicate the Judgment and order at once.