Stock Broker Merely Forwarding WhatsApp Messages With Details Of Dormant Shares Is Not Duping Shareholders: Bombay HC Grants Bail In Fake Demat Account Case
The Bombay High Court has observed that a stockbroker merely forwarding WhatsApp messages concerning details of dormant shares in itself cannot be the basis for claiming that he was allegedly duping the shareholders.
The Court granted bail to a stockbroker who had allegedly siphoned off a huge amount of money by creating fake Demat accounts of shareholders (victims) whose shares were lying dormant. The FIR was registered for offences under Sections 420, 465, 467, 468, and 471 read with 120(B) of the IPC, while the investigation was undertaken by the office of the Economic Offences Wing (EOW).
A Single Bench of Justice Manish Pitale observed, “Being a stock broker and in the business of shares, merely because the applicant was in touch with accused No.1 and he forwarded certain whatsapp messages concerning details of shares that could be said to be dormant, in itself cannot be the basis of claiming that the applicant had a major role to play in duping the shareholders (victims). Although it is stated in the charge-sheet that the applicant had an active role to play in opening of fake accounts of such victim shareholders, there does not appear to be any material to support such an assertion.”
Advocate Sujay Kantawala appeared for the applicant, while APP Sagar R. Agarkar represented the respondent.
The case involved allegations that unknown persons siphoned off large amounts of money by creating fake Demat accounts of shareholders whose shares were lying dormant. These shares were disposed of, and the proceeds were misappropriated. The FIR was initially registered against unknown persons based on a complaint.
The stockbroker argued that apart from certain WhatsApp chats exchanged, there was no material evidence linking him to the alleged offence. He submitted that he was a broker who forwarded details of certain shares as a routine business practice, which led to suspicion about his involvement.
The bail was opposed on the contention that the WhatsApp chats and Call Details Records (CDR) indicate constant communication between the stockbroker and the main accused. It was alleged that the stockbroker played a role in opening fake accounts of the shareholders, demonstrating a strong prima facie case against him.
The Bench stated that the stockbroker, who was in the business of shares, was merely forwarding certain WhatsApp messages concerning details of shares that could be said to be dormant. The Court further stated that such an act in itself cannot be the basis for claiming that the stockbroker had a major role in duping the shareholders (victims).
“It is brought to the notice of this Court that one of the employees of accused No.1 i.e. Mahadev Gavde, in his statement recorded under Section 164 of the Cr.P.C. has described in detail as to the manner in which the accused No.1 used to open such fake accounts of the victim shareholders. There is no role ascribed to the applicant in the said statement,” the Court remarked.
Consequently, the Court held, “There is presently no material on record to show that the applicant in any manner could be said to be a beneficiary of the alleged activities that led to registration of the FIR. The applicant has already spent more than 5 Months behind bars and in this situation, this Court is inclined to allow the present application.”
Accordingly, the High Court released the stockbroker on bail and allowed the bail application.
Cause Title: Manish Rameshchandra Shah v. The State of Maharashtra (Neutral Citation: 2024:BHC-AS:28234)
Appearance:
Applicant: Advocates Sujay Kantawala, Prasad Borkar and M. Borkar
Respondent: APP Sagar R. Agarkar
