2022 (4) TMI 1043 - HC - Companies Law

Court Dismisses Release Application, Upholds Remand Orders Pre-Cognizance

Hari Sankaran, Versus Serious Fraud Investigation Office, Through Assistant Director, Ministry of Corporate Affairs,

The application for release based on the alleged illegality of detention post-filing of the complaint was dismissed. The Court upheld the validity of ... Legality of detention/custody of the applicant - detention, post filing of charge sheet - cognizance of the complaint not taken - whether the detention/custody of the applicant i.e. remand orders are illegal, since the Special Court has not taken cognizance of the complaint filed by the SFIO, even after filing of the complaint? - HELD THAT:- The Court can remand an accused person to custody, under sub-section (2) of Section 309, pre and post filing of charge-sheet/complaint. On a plain reading of Section 309, it is evident that the said provision applies to an ‘inquiry’ or ‘trial’. The question is, when inquiry commences within the meaning of sub-section (2) of Section 309 - the issue of ‘taking cognizance’ has been dealt with by the Supreme Court in a catena of decisions. In a nutshell, the expression ‘taking cognizance’ means ‘application of mind’. Though the expression ‘cognizance’ has not been defined in the Cr.P.C, several decisions to the effect reveal that taking cognizance does not involve any formal action or indeed action of any kind, but occurs as soon as the Magistrate applies his mind to the suspected commission of an offence. Infact, the common practice is that when a police report is submitted before the Magistrate, it is not necessary that there has to be a formal order of taking cognizance. Infact, an inquiry within the meaning of Section 309(2) may commence before the Magistrate, no sooner than charge-sheet is submitted, so as to vest him with a power of remand under sub-section (2) of Section 309 of the Cr.P.C. In SURESH KUMAR BHIKAMCHAND JAIN VERSUS STATE OF MAHARASHTRA & ANR. [2013 (2) TMI 821 - SUPREME COURT], despite the charge-sheet having been submitted and the Magistrate not having taken cognizance of the same, yet, the accused was remanded to custody, post filing of charge-sheet. The arguments of the petitioner in Suresh Kumar was, that on filing of charge-sheet, the Magistrate could not have remanded the accused to custody, without taking cognizance and as the Magistrate was awaiting sanction to be accorded, the accused therein was entitled, as a matter of right, to be released on bail. The question that arose in Suresh Kumar was whether the remand of accused on submission of charge-sheet, without taking cognizance, was sustainable in law - Similar is the situation in the present case. In the instant case, despite charge-sheet having been filed, no cognizance has been taken of the same and the learned Magistrate has continued to pass remand orders, post filing of charge-sheet. In the present case, prima facie, it appears that the accused (non-applicant) in the said case, have been protracting the proceedings. It is always open to an accused to challenge the cognizance taken by the Court, in the event, cognizance is taken by the Court. No doubt, cognizance has to be taken at the earliest, as soon as the the complaint/charge-sheet is filed, ofcourse, unless there are inevitable circumstances resulting in delay in taking cognizance. Considering that the complaint is pending at the pre-cognizance stage from 30th May 2019, the trial Court is directed to decide the issue of cognizance as expeditiously as possible. Application dismissed. Issues Involved:1. Legality of detention/custody post-filing of the complaint by SFIO without the Special Court taking cognizance.2. Applicability of Section 167(2) and Section 309 of the Cr.P.C. in the context of remand orders.3. Timeliness and procedure for taking cognizance by the Special Court.Detailed Analysis:1. Legality of Detention/Custody Post-Filing of Complaint:The applicant was arrested by SFIO and remanded to custody. The applicant challenged the legality of his detention post-filing of the complaint by SFIO, arguing that the Special Court had not taken cognizance of the complaint, rendering his continued detention illegal. The applicant sought release from this alleged illegal detention.2. Applicability of Section 167(2) and Section 309 of the Cr.P.C.:The applicant argued that the power to remand under Section 167(2) Cr.P.C. is limited to 60 days and ceases once the complaint is filed. He contended that remand under Section 309 Cr.P.C. is permissible only after the Court takes cognizance of the complaint. The respondent-SFIO countered that Section 309(2) Cr.P.C. covers remands post-filing of the charge-sheet until cognizance is taken, maintaining continuity of custody.The Court referenced Supreme Court judgments, including Suresh Kumar and Rahul Modi, affirming that filing of a charge-sheet within the stipulated period is sufficient compliance with Section 167 Cr.P.C., and the accused remains in custody of the Magistrate until cognizance is taken by the trial court. The Court concluded that the remand orders passed post-filing of the complaint were valid under Section 309(2) Cr.P.C., even if cognizance had not yet been taken.3. Timeliness and Procedure for Taking Cognizance:The Court noted the prolonged delay in taking cognizance of the complaint filed on 30th May 2019. The reasons for the delay included multiple transfers of presiding officers, COVID-19 pandemic restrictions, and adjournments sought by the accused. The Court emphasized that taking cognizance should be expedited and that the accused has no right to be heard at the pre-cognizance stage, except as provided by Cr.P.C.Conclusion:The application for release based on the alleged illegality of detention was dismissed. The Court directed the trial court to decide on the issue of cognizance expeditiously, acknowledging the undue delay in the process. The Court underscored the necessity of maintaining continuity of custody and the validity of remand orders under Section 309(2) Cr.P.C. pending cognizance.