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NDA Securities Ltd. v. State (NCT of Delhi)

Criminal Appeal · 2025 INSC 676Decided 13 May 2025
Crl.A. No.-002582-002582-2025 (arising out of SLP (Crl.) No. 4379 of 2025)
Justice Sudhanshu Dhulia · Justice K. Vinod Chandran

Background

NDA Securities Ltd. alleged that in 2013 a fraudster impersonated its client to get it to purchase shares, and that an agent of the appellant colluded with the seller: a securities company represented through its director (Respondent No. 2), to defraud it. About Rs. 15.90 lakh in sale proceeds of the shares was withheld by the Bombay Stock Exchange pending investigation. While the actual accused who made the fraudulent call remained absconding, Respondent No. 2 applied to the Magistrate to release the withheld funds; the Magistrate and the Sessions (Revisional) Court both refused, but the Delhi High Court later allowed the release under its inherent powers (Section 482 CrPC).

Decision Breakdown

The Supreme Court set aside the High Court's order, holding that the High Court had exceeded its inherent jurisdiction under Section 482 CrPC by effectively conducting a "mini-trial" and giving a clean chit to Respondent No. 2 before the investigation was complete. Since the chargesheet itself noted that Respondent No. 2's role could only be clarified once the main accused (still absconding) was arrested and questioned, it was premature to release the funds, doing so could cause irreparable loss to the appellant and undermine the ongoing investigation. The Court restored the Magistrate's and Revisional Court's orders keeping the funds with the BSE and directed the trial to proceed expeditiously, without expressing any opinion on the merits.

Lesson Learnt

High Courts cannot use their inherent power under Section 482 CrPC to pre-judge factual disputes or release disputed funds while a criminal investigation is still ongoing: that power is meant to prevent abuse of process, not to substitute for a trial.

Official source (sci.gov.in)View Judgment (PDF)

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