High Court Emphasizes Fair Trial Rights in Securities Law Prosecutions
In a significant ruling, the Delhi High Court has directed the Securities and Exchange Board of India (SEBI) to furnish the Investigation Report to Siddharth Shankar, a petitioner in a criminal case involving alleged violations under the SEBI Act. The court's decision underscores the importance of ensuring a fair trial by providing accused individuals with access to documents that form the basis of the prosecution's case.
Presiding over the matter, Justice Neena Bansal Krishna highlighted that the Investigation Report is not merely an internal document but a crucial piece of evidence necessary for the accused to prepare a defense. The judgment aligns with principles of natural justice, asserting that non-disclosure of such vital documents violates the accused's rights under Article 21 of the Indian Constitution, which guarantees the right to a fair trial.
The petitioner, Siddharth Shankar, had challenged an earlier order by the Additional Sessions Judge (ASJ), which dismissed his application for the supply of the Investigation Report. Shankar, a former director of M/s Kassa Finvest Pvt. Ltd., was implicated in a criminal complaint filed by SEBI, alleging offences under Section 24 of the SEBI Act. Despite being summoned in January 2016, Shankar contended that he was denied access to essential documents, including the Investigation Report, which formed the basis of SEBI's complaint.
The High Court's ruling draws heavily on the precedent set by the Supreme Court in T. Takano v. SEBI (2022), where it was held that disclosure of relevant materials is integral to a fair trial. The court dismissed SEBI's argument that the Investigation Report was an internal document, emphasizing that the report is a critical component of SEBI's decision to prosecute and, therefore, must be disclosed to the accused.
The court also addressed SEBI's compliance with Sections 207 and 208 of the Criminal Procedure Code, which mandate the provision of certain documents to the accused. Justice Krishna noted that while SEBI had supplied documents formally relied upon in the complaint, it failed to provide the Investigation Report, thus breaching the principles of natural justice.
The judgment stressed that withholding the Investigation Report prejudices the accused's ability to contest the allegations effectively. It further clarified that transparency and accountability in judicial proceedings are essential, reinforcing the need for both parties to have access to all relevant information to ensure the integrity of the judicial process.
Bottom Line:
SEBI Investigation Report forming the basis of prosecution under SEBI Act must be disclosed to the accused, as it is relevant for preparing defense and ensuring a fair trial.
Statutory provision(s): Securities and Exchange Board of India Act, 1992 Sections 24, 26(D); Criminal Procedure Code, 1973 Sections 207, 208, 482
Siddharth Shankar v. SEBI, (Delhi) : Law Finder Doc Id # 2826992
