The Supreme Court held that the High Court exceeded its jurisdiction under Section 482 CrPC by directing the release of funds during an ongoing fraud investigation. Emphasizing that inherent powers cannot preempt trial court findings, the SC ruled that releasing disputed money would prejudice the investigation. The funds must remain withheld until trial concludes.
Facts Of The Case:
The case involves a dispute between NDA Securities Ltd. (Appellant) and State (NCT of Delhi) & Anr. (Respondents) over the release of ₹15.90 lakhs withheld by the Bombay Stock Exchange (BSE). The appellant, a securities trading firm, alleged fraud after receiving a phone call in 2013 from an impersonator posing as client Brij Mohan Gagrani, instructing the purchase of 1 lakh shares of Ashutosh Paper Mills Ltd. When the real client denied authorizing the trade, the appellant accused its agent, Ashish Agarwal, of colluding with the seller (Respondent No. 2) to execute the fraudulent transaction. An FIR was registered under Sections 420 (cheating) and 120B (criminal conspiracy) IPC, and the BSE froze the payout.
Investigations revealed 72,000 shares (worth ₹15.90 lakhs) were sold by Respondent No. 2, but the main accused, Amit Jain (alleged impersonator), remained absconding. The trial court and revisional court refused to release the funds, citing incomplete investigations. However, the Delhi High Court, under Section 482 CrPC, ordered the amount’s release on superdari (custody) against a guarantee. The Supreme Court overturned this, ruling that the High Court overstepped its jurisdiction by pre-judging Respondent No. 2’s innocence prematurely, as the investigation was still pending. The funds were ordered to remain with the BSE until trial completion.
Procedural History:
The case originated with the filing of an FIR in 2015 under Sections 420 (cheating) and 120B (criminal conspiracy) IPC based on a complaint by NDA Securities Ltd. alleging fraud in a share transaction. The Bombay Stock Exchange (BSE) withheld ₹15.90 lakhs, the sale proceeds of the disputed shares, pending investigation. Respondent No. 2, the seller of the shares, filed an application before the Magistrate Court in 2016 seeking release of the funds, which was rejected on grounds of ongoing investigation.
Respondent No. 2 then filed a revision petition before the Revisional Court, which upheld the Magistrate’s order in December 2016, emphasizing that releasing the funds could prejudice the appellant’s rights. The court also directed expedited investigation. Unsatisfied, Respondent No. 2 approached the Delhi High Court under Section 482 CrPC in 2025, seeking quashing of the lower courts’ orders. The High Court allowed the petition, ordering the release of funds to Respondent No. 2 on superdari (custody) against a guarantee.
The appellant, NDA Securities Ltd., challenged this decision in the Supreme Court, which set aside the High Court’s order in May 2025. The apex court ruled that the High Court had exceeded its jurisdiction under Section 482 CrPC by preemptively assessing Respondent No. 2’s role while the investigation was still pending. The SC directed the funds to remain with the BSE until the trial’s conclusion, preserving the integrity of the ongoing proceedings.
Court Observation:
The Supreme Court made critical observations while overturning the Delhi High Court’s order. It emphasized that Section 482 CrPC grants inherent powers to prevent abuse of judicial process but cannot be used to conduct a mini-trial or preempt factual determinations. The Court noted the High Court erred in concluding Respondent No. 2 had no role in the alleged fraud while the investigation was still pending, particularly when the charge sheet explicitly stated the main accused was absconding and Respondent No. 2’s involvement remained under scrutiny.
The apex court underscored that releasing the disputed funds during an active investigation would irreparably prejudice the appellant’s rights and potentially vitiate the trial process. It reaffirmed the principle that courts must exercise restraint under Section 482 CrPC, especially in economic offenses where preservation of disputed assets is crucial for a fair trial. The Supreme Court clarified that the High Court’s observations on Respondent No. 2’s innocence were premature, as such determinations fall within the trial court’s domain after a complete examination of evidence.
Final Decision & Judgement:
The Supreme Court allowed the appeal and set aside the Delhi High Court’s order directing the release of ₹15.90 lakhs to Respondent No. 2. The bench comprising Justices Sudhanshu Dhulia and K. Vinod Chandran held that the High Court had overstepped its jurisdiction under Section 482 CrPC by prematurely ordering the release of disputed funds while the fraud investigation remained incomplete. The apex court restored the trial court’s original decision, mandating that the Bombay Stock Exchange (BSE) continue withholding the amount until the conclusion of criminal proceedings.
In its final judgment, the Supreme Court emphasized judicial restraint in exercising inherent powers under Section 482 CrPC, particularly in cases involving economic offenses and ongoing investigations. The Court refrained from making any observations on the merits of the case, leaving all substantive determinations to the trial court after proper examination of evidence. The decision prioritized safeguarding the investigation’s integrity over interim financial relief, ensuring no party would suffer irreparable prejudice during the pendency of trial.
Case Details:
Case Title: NDA Securities Ltd. vs. State (NCT of Delhi) & Anr. Citation: 2025 INSC 676 Criminal Appeal No.: Special Leave Petition (Crl.) No. 4379 of 2025 Date of Judgment: May 13, 2025 Judges/Justice Name: Justice Sudhanshu Dhulia & Justice K. Vinod Chandran
Download The Judgement Here