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of <h1>Delhi HC deems SFIO investigation illegal for exceeding Companies Act limit</h1> <h3>Rahul Modi, Mukesh Modi Versus Union of India & Ors.</h3> Rahul Modi, Mukesh Modi Versus Union of India & Ors. - [2019] 214 Comp Cas 365 (Del) Issues Involved:1. Legality and constitutionality of the investigation carried out by the Serious Fraud Investigation Office (SFIO) under Section 212(3) of the Companies Act, 2013, after the expiry of the initial time period.2. Validity of the arrest of the petitioners on 10.12.2018 and subsequent remand orders.3. Territorial jurisdiction of the Delhi High Court in habeas corpus proceedings concerning remand orders passed by a Magistrate in Gurugram.Detailed Analysis:1. Legality and Constitutionality of the Investigation:The petitioners challenged the legality of the SFIO's investigation under Section 212(3) of the Companies Act, 2013, after the initial time period specified in the order dated 20.06.2018 had expired. The SFIO was directed to complete its investigation within three months, but it failed to do so and sought an extension only on 13.12.2018, two and a half months after the original period had lapsed. The Competent Authority granted an ex post facto extension on 14.12.2018. The court noted that the SFIO's continued investigation without a valid extension was 'patently without jurisdiction' and illegal.2. Validity of the Arrest and Remand Orders:The petitioners argued that their arrest on 10.12.2018 was illegal as it occurred after the initial investigation period had expired and before the ex post facto extension was granted. The court agreed, stating that the arrest was 'unlawful and illegal' due to the lack of jurisdiction. The court also found that the remand orders from the Magistrate in Gurugram did not validate the illegal arrest. The court emphasized that the SFIO must adhere strictly to the legal standards and timelines set by the Competent Authority.3. Territorial Jurisdiction of the Delhi High Court:The respondents contended that the Delhi High Court lacked territorial jurisdiction to adjudicate the habeas corpus petition since the remand orders were passed by a Magistrate in Gurugram. However, the court held that it could examine the legality of the detention and the remand orders in habeas corpus proceedings. The court cited several precedents, including *Kanu Sanyal vs. District Magistrate, Darjeeling* and *Madhu Limaye and Others*, to affirm its jurisdiction to scrutinize the legality of the detention and remand orders.Conclusion:The Delhi High Court concluded that the SFIO's investigation beyond the initial three-month period and the subsequent arrest of the petitioners were illegal and without jurisdiction. The court also held that the remand orders did not sanctify the illegal arrest and detention. Consequently, the court ordered the release of the petitioners on interim bail, subject to certain conditions, including not leaving the National Capital Region without permission and surrendering their passports.
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