Stock Broker Forwarding Messages About Dormant Shares Can't Be Booked For Duping Shareholders: Bombay High Court

A person in the business of shares, forwarding certain WhatsApp messages concerning details of shares that can be dormant, cannot be booked for duping shareholders, the Bombay High Court observed recently while granting bail to a man, booked under charges of forgery and fraud.

Single-judge Justice Manish Pitale while dealing with the bail application filed by one Manish Shah noted that he had only shared a few messages on WhatsApp with the main accused about details of certain shares of the complainant company.

"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)," Justice Pitale said in the order passed on July 18.

As per the prosecution case, the applicant Shah along with other co-accused in the case had siphoned off huge amount of money by creating fake Demat accounts of shareholders of a company, whose shares were lying dormant. Such shares were disposed of and the proceeds were misappropriated, the court noted. 

Further, the bench noted that the prosecution alleged that the applicant had created fake accounts but it observed that there was no material on record to substantiate it. It instead relied on the statements of a witness, who was the employee of the prime accused, who testified in his section 164 statement how the prime accused created fake accounts of shareholders and duped them. 

While granting bail, Justice Pitale noted that the applicant had spent more than five months in jail.

"In this situation, this Court is of the opinion that the applicant had been able to make out a case to contend that there is scant material to directly link the applicant with the incident in question, leading to registration of the FIR. 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 judge said while granting bail to the applicant on a surety of Rs one lakh.

Appearance:

Advocates Dr Sujay Kanawala, Prasad Borkar and MN Borkar appeared for the Applicant.

Assistant Public Prosecutor Sagar Agarkar represented the State.

Case Details: Manish Rameshchandra Shah vs State of Maharashtra (BA/1988/2024)

Click here to Read/Download the order