Supreme Court validates arrests in jurisdictional error case, emphasizes legal channels over habeas corpus.

The Supreme Court allowed the appeals, setting aside the High Court's order and directing the writ petitioners to surrender before the Special Court, Gurugram. The Court held that the ex post facto extension granted by the Competent Authority was valid, emphasizing that the investigation mandate did not end with the specified period. It ruled that the arrest of the applicants was not illegal due to vested rights and subsequent extension validating the arrests. The Court clarified that challenges to remand orders should be pursued through appropriate legal channels, not habeas corpus petitions. The High Court of Delhi had jurisdiction but erred in entertaining the petitions.

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Issues Involved:
1. Validity of ex post facto extension granted by the Competent Authority.
2. Whether vested rights created in favor of the applicants during the period of no legal sanction render their arrest illegal.
3. Whether the High Court can test the correctness, legality, and validity of an order of remand in a habeas corpus proceeding.
4. Territorial jurisdiction of the High Court to adjudicate habeas corpus proceedings.

Detailed Analysis:

1. Validity of Ex Post Facto Extension
The Supreme Court examined whether the ex post facto extension granted by the Competent Authority was valid. The Central Government had directed an investigation into the affairs of certain companies and LLPs by the SFIO, specifying a period within which the investigation report had to be submitted. The High Court had found that the arrest of the petitioners after the expiry of the specified period was illegal. However, the Supreme Court held that the stipulation of the period within which the report had to be submitted was directory, not mandatory. The Court emphasized that the legislative scheme did not contemplate any negative consequences for non-adherence to this period, and thus, the mandate for SFIO to investigate did not come to an end with the expiry of the specified period.

2. Vested Rights and Legality of Arrest
The Supreme Court addressed whether the rights created in favor of the applicants during the period of no legal sanction rendered their arrest illegal. The High Court had ruled that the arrest of the applicants was illegal due to the lapse of the investigation period. The Supreme Court disagreed, stating that the mandate to investigate by SFIO did not end with the expiry of the specified period, and the subsequent extension granted on 14.12.2018 validated the ongoing investigation and arrests. The Court concluded that the original arrest was not illegal or unauthorized by law.

3. Testing Validity of Remand Orders in Habeas Corpus Proceedings
The Supreme Court analyzed whether the High Court could test the validity of remand orders in a habeas corpus proceeding. The Court referred to established legal principles that the challenge to the legality of detention in habeas corpus proceedings should be based on the legality of detention at the time of the return, not at the initiation of the proceedings. The Court found that the High Court erred in entertaining the habeas corpus petition when there were valid remand orders passed by the Judicial Magistrate and the Special Court, Gurugram. The Court emphasized that the legality, validity, and correctness of remand orders should be challenged through appropriate appellate or revisional forums, not through habeas corpus petitions.

4. Territorial Jurisdiction of the High Court
The Supreme Court considered whether the High Court of Delhi had the territorial jurisdiction to adjudicate the habeas corpus proceedings. The writ petitioners were arrested in Delhi and kept in custody in Delhi, leading to the filing of the writ petitions in the High Court of Delhi. The Supreme Court acknowledged that the High Court of Delhi had jurisdiction to entertain the petitions due to the location of arrest and custody. However, the Court noted that since the accused were produced before a competent court in Gurugram, the High Court of Delhi should not have entertained the challenge. The Court emphasized that the Special Court, Gurugram, was the competent forum to deal with matters under Sections 435 and 436 of the Companies Act, 2013.

Conclusion
The Supreme Court allowed the appeals, set aside the High Court's order, and directed the writ petitioners to surrender before the Special Court, Gurugram, for further proceedings. The Court clarified that the mandate for SFIO to investigate did not end with the expiry of the specified period and that the High Court erred in entertaining the habeas corpus petition when valid remand orders were in place. The Court also emphasized the importance of challenging remand orders through appropriate legal forums rather than habeas corpus petitions.

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