Supreme Court holds High Court exceeded Section 482 jurisdiction; directs BSE to retain disputed payout during trial

A bench of Justices Sudhanshu Dhulia and K. Vinod Chandran heard an appeal by NDA Securities Ltd. against a Delhi High Court order that allowed a Section 482 CrPC petition by respondent no. 2 and directed release of Rs. 15.90 lakhs withheld by the Bombay Stock Exchange as payout for sale of certain shares. The appeal challenged the High Court’s interference while a criminal investigation into alleged fraud and impersonation remained pending.

The Supreme Court allowed the appeal, set aside the High Court’s order dated 25.02.2025 and held that the High Court had “travelled beyond its inherent jurisdiction under Section 482 CrPC” by effectively conducting a mini-trial and making findings on the role of respondent no. 2 while investigation was incomplete. The Court emphasised that releasing the sale proceeds could “cause an irreparable loss to the appellant and vitiate the entire investigation” and therefore directed that the sale value be kept with the BSE during the pendency of the trial. The Court, in its reasoning, observed: “It is our considered opinion that the High Court has travelled beyond its inherent jurisdiction under Section 482 CrPC, by allowing the petition filed by respondent. The High Court ought not to have made any observations regarding the absence of any role played by respondent no. 2 in the whole transaction because investigation is yet to be completed. The charge sheet itself states that the main accused (Amit Jain) is absconding and the role of respondent no. 2 can only be ascertained once the main accused is arrested. Considering the same, we are of the opinion that the release of the sale value of the concerned shares in favour of respondent no. 2, may cause an irreparable loss to the appellant and vitiate the entire investigation.” The Court also noted, “We make it clear that we make no observations on the merits of the case,” and directed the trial court to proceed expeditiously.

Background The dispute arose from a complaint lodged by NDA Securities Ltd. alleging that on April 1, 2013, a person impersonating the company’s client induced the purchase of 1 lakh shares of Ashutosh Paper Mills Ltd.; the client later denied authorising the trade. The appellant alleged collusion by an agent and the seller, and sought to restrain payment to the seller. Following registration of an FIR under Sections 420 and 120B IPC on 07.08.2015, investigation revealed that respondent no. 2 had sold about 72,000 shares (value Rs. 15.90 lakhs) and was the principal beneficiary; the charge sheet named Amit Jain as the principal accused but recorded that his arrest was necessary to ascertain respondent no. 2’s role. Amit Jain remained absconding and investigation continued.

The BSE withheld the payout. An application by respondent no. 2 to the Magistrate for release was dismissed on 16.09.2016; a revisional petition was dismissed on 08.12.2016, both courts recording that release would impact appellant’s rights and directing expedition of investigation. The High Court allowed respondent no. 2’s Section 482 petition and directed release on the view that respondent no. 2’s role could not be presently ascertained. The Supreme Court found that the High Court in effect undertook facts that were the subject of ongoing investigation, contrary to precedents cautioning against a “mini-trial” in inherent jurisdiction (see Central Bureau of Investigation v. Aryan Singh & Ors. (2023) 18 SCC 399 and Dharambeer Kumar Singh v. State of Jharkhand & Anr. (2025) 1 SCC 392). The Supreme Court set aside the High Court order, directed that the disputed Rs. 15.90 lakhs remain with the BSE pending trial, and ordered speedy continuation of trial proceedings. No observations were made on the merits.

Case Details: Case No.: 2025 INSC 676 Case Title: NDA Securities Ltd. v. State (NCT of Delhi) & Anr. Appearances: For the Petitioner(s): Not indicated in the judgment For the Respondent(s): Not indicated in the judgment