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Bhushan Khatri (Properietor)     04 July 2013

Powers of prosecution for forgery in share transfers

Respected Sir,

Shares of my late mother were transfered illegaly by my younger brother 2 years after her death. Based on my Criminal Petition, the Hon'be Mumbai High court instructed the concern Police officer to register offences u/s 420, 467, 468, 465 & 506 of IPC agaisnt my brother, investigate the matter & take appropirate necessary action . The Police dept after registering the offences investigated the matter by calling records like share transfer deed from the Company transfer agent M/s Karvy Computer Shares-Hyderabad as well as from the Company M/s Motherson Sumi Systems Ltd and it has been established by the Investigating Officer that in fact a forgery has been committed by my brother and he should be tried under the above  mentioned sections and for which he should be arrested  so as to bring on record the other players who helped him to forge and transfer the shares of my late mother  in his name and  a police custody will be required from the Court of Law. The lawyer of my brother is confussing the police officers that the powers to arrest a person for forgery committed in share transfer rest with SEBI and not with the police and he shouldn't be arrested instead the matter should be referred  to SEBI. The lawyer of my brother has given a booklet of  The Securities and Exchange Board Act, 1992 as ready referrence for the Police. 

I need your legal opinion & advise to clarrify

1. The difference between SEBI Act & Offences registered under IPC

2. Which authority has the powers to procecute my brother for the forgery & theft of my mothers shares- SEBI or POLICE

3. Is there a Central Govt  or SEBI's notification/GR restricting the Police department not to arrest persons who have committed forgery & theft in transfering shares illegally

With regards.



 1 Replies

Ashok, Advocate (Lawyer at Delhi)     12 July 2013

The power to investigate an offence wherein forgery and theft has been committed, is exclusively with police under the provisions of the Criminal Procedure Code. SEBI has no power in these cases. The police has the power to make arrest in such a case. There is no Government directive restricting the police from arresting accused person who has forged or stolen share certificates. It is the police officer, who is investigating the case, who has to decide about arrest depending upon the evidence that he has collected during his investigation. SEBI has no powers in this regard.

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