KEDARNATH PRASAD AND ANOTHER vs SECURITY AND EXCHANGE BOARD OF INDIA

07.09.2026

Court No.39

ML/Item No.– 10

[Milan]
CRR 4073 of 2024

MR. KEDARNATH PRASAD & ANR.
VS
SECURITY AND EXCHANGE BOARD OF INDIA


Mr. Avik Ghattak,
Mr. Rakesh Poddar,
Mr. Saibal Krishna Dasgupta,
Mr. Samudra Neel Nandi
….for the Petitioners

Mr. Sudip Kumar Dutta,
Ms. Sritama Dutta,
Mr. Siddhartha Bose
….for the SEBI

1. By filing this revisional application, the two accused
persons/petitioners have challenged the orders dated
08.09.2021 and 18.05.2024 in connection with C/668 of
2004/SEBI/29/2021 [SEBI vs. M/s. Shekher Plantation
(P) Ltd. & Ors.].
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2. By the said impugned orders, the Ld. Judge, 5 Special
Court, Calcutta, issued a warrant of arrest against the
petitioners, who are both directors of M/S. Shekher
Plantation (P) Ltd. although they were on bail granted by
the CJM, Alipore, South 24 Parganas, and also rejected
the prayer for directing the Copy Department to accept the
application filed on behalf of the petitioners and supply the
certified copy of the complaint and all relevant orders
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passed by the Court of the learned Judge, 5 Special
Court, SEBI at Calcutta.

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3. The brief facts of the case are that the opposite party/SEBI
filed a complaint case against M/S. Shekher Plantation (P)
Ltd. and the petitioners herein for commission of offence
punishable under Sections 24(1) and 27 of SEBI Act, 1992
before the Ld. CJM, Alipore, South 24 Parganas, alleging
defalcation of Rs. 1 lakh 10 thousand. In the said case, the
petitioners herein surrendered and obtained bail from the
court of the CJM.
4. The matter was, subsequently, transferred from the Ld.
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CJM, Alipore to the Ld. Judge, 5 Special Court, Alipore,
Calcutta, in view of subsequent amendment of Section 26.
5. The learned advocate for the petitioners submits that the
petitioners were on bail. They were unaware of the transfer
of the case from the Court of Ld. CJM to the designated
Special Court and, as such, they could not appear on the
date fixed. However, the Trial Court issued a warrant of
arrest without issuing summons to the petitioners, which
is palpably illegal and the same is liable to be set aside.
6. The learned Advocate for the Petitioners placed reliance
upon a judgment in the case of Tarsem Lal vs.
Directorate of Enforcement Jalandhar Zonal Office
reported in 2024 SCC OnLine SC 971, particularly
paragraph 23 to support his contention that the
Magistrate should have given an opportunity to appear
before the transferee court. Operative conclusions of the
Hon’ble Supreme court is as follows:
“23. Now, we summarise our conclusions as under:

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a) Once a complaint under Section 44 (1)(b) of the
PMLA is filed, it will be governed by Sections 200
to 205 of the CrPC as none of the said provisions
are inconsistent with any of the provisions of the
PMLA;
b) If the accused was not arrested by the ED till
filing of the complaint, while taking cognizance on
a complaint under Section 44(1)(b), as a normal
rule, the Court should issue a summons to the
accused and not a warrant. Even in a case where
the accused is on bail, a summons must be
issued;
c) After a summons is issued under Section 204 of
the CrPC on taking cognizance of the offence
punishable under Section 4 of the PMLA on a
complaint, if the accused appears before the
Special Court pursuant to the summons, he shall
not be treated as if he is in custody. Therefore, it
is not necessary for him to apply for bail.
However, the Special Court can direct the accused
to furnish bond in terms of Section 88 of the CrPC;
d) In a case where the accused appears pursuant to
a summons before the Special Court, on a
sufficient cause being shown, the Special Court
can grant exemption from personal appearance to
the accused by exercising power under Section
205 of the CrPC;
e) If the accused does not appear after a summons
is served or does not appear on a subsequent
date, the Special Court will be well within its
powers to issue a warrant in terms of Section 70
of the CrPC. Initially, the Special Court should
issue a bailable warrant. If it is not possible to
effect service of the bailable warrant, then the
recourse can be taken to issue a non-bailable
warrant ……”.

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7. The learned advocate appearing on behalf of the opposite
party submits that the Trial Court can issue warrant of
arrest at the time of taking cognizance if the petitioners do
not appear on the date fixed, when the offence involves
economic offence as the petitioners are charged of
defalcation to the tune of Rs.1, 10,000/- in the year 1997.
The date was fixed for plea before the CJM on several
occasions, but the petitioners did not appear; as such the
impugned order is correct and requires no interference.
8. Having heard the learned counsels for the respective
parties and on perusal of the judgment as well as the
amendment, this Court finds that the Trial Court should
have, at least, issued summons upon the accused persons,
who were on bail at the initial stage and, thereafter, if
occasion arises, an arrest warrant could be issued.
9. This court would like to quote Section 26 (B) as under:
“26-B. Offences triable by Special Courts .–
Notwithstanding 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”.
10. Accordingly, this Court finds that the order of issuance of
warrant of arrest is palpable and illegal. The same is set
aside.

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11. The petitioners are directed to appear before the Trial
Court on the next date fixed positively without fail, and if
they fail to appear, the Trial Court shall exhaust all steps
in accordance with law to secure their attendance before
the Trial Court.
12. Upon considering, the Trial Court conclude the
proceedings logically, without giving any unnecessary
adjournment.
13. With the above observation, the criminal revisional
application being CRR 4073 of 2024 is disposed of.
Connected applications, if any, are also, thus, disposed of.
14. Interim order, if any, stands vacated.

15. Let a copy of this order be communicated to the concerned
Trial Court for information and necessary steps.
16. TCR is also transmitted to the Trial Court.
17. All parties shall act on the basis of a server copy of this
order duly downloaded from the official website of this
Court.
18. Urgent Photostat certified copy of this order, if applied for,
be supplied to the parties upon compliance of all legal and
necessary formalities.


(Ajay Kumar Gupta, J.)