2022 (10) TMI 49 - HC - Indian Laws

Bail granted under Section 167(2) of Criminal Procedure Code with conditions

The court granted the applicant/accused bail under Section 167(2) of the Code of Criminal Procedure due to the incomplete charge sheet filed by the CBI, ... Default bail under Section 167(2) Cr.P.C. - piecemeal/incomplete charge-sheet and effect on statutory bail - regular bail under Section 439 Cr.P.C. in economic offences - economic offences as a class apart and gravity in bail jurisprudence - status of officials of a market infrastructure institution as public servants - sanction for prosecution not a condition precedent to investigation or filing charge-sheetRegular bail under Section 439 Cr.P.C. in economic offences - economic offences as a class apart and gravity in bail jurisprudence - Grant of regular bail to the applicant under Section 439 Cr.P.C. - HELD THAT: - The Court considered the nature and gravity of allegations relating to co-location, sharing of confidential information and the illegal appointment and remuneration of a senior executive at NSE. Having regard to the seriousness of the allegations, their potential impact on the national financial system and settled precedents holding economic offences to be a class apart, the Court found that no ground for grant of regular bail under Section 439 Cr.P.C. was made out. All arguments on cooperation, absence of mens rea, or administrative nature of certain acts were examined but the Court concluded that the gravity of the charges and ongoing interconnected investigation weighed against regular bail. [Paras 13, 14, 23]Application for regular bail under Section 439 Cr.P.C. rejected on merits.Default bail under Section 167(2) Cr.P.C. - piecemeal/incomplete charge-sheet and effect on statutory bail - Entitlement to statutory (default) bail under Section 167(2) Cr.P.C. - HELD THAT: - The Court analysed whether the charge-sheet filed on 21.04.2022 (within 60 days of arrest) sufficed to defeat the applicant's entitlement to default bail. Applying binding and persuasive authorities, the Court held that Section 173 envisages filing of a final report only after completion of the entire investigation and deprecated the practice of fragmenting an investigation to file piecemeal charge-sheets to frustrate statutory bail. The charge-sheet before the trial court related only to offences under the PC Act and Section 120B IPC while substantial investigation into other offences in the FIR (including IT Act and other IPC/PC Act heads) remained pending; therefore the 21.04.2022 filing was a piece meal/incomplete charge-sheet and did not extinguish the applicant's indefeasible right to default bail under Section 167(2). [Paras 41, 42, 43]Applicant entitled to default bail under Section 167(2) Cr.P.C.; bail granted on furnishing bond and conditions.Piecemeal/incomplete charge-sheet and effect on statutory bail - Whether the charge-sheet dated 21.04.2022 was a complete charge-sheet within the meaning of Section 173(2) Cr.P.C. - HELD THAT: - The Court examined the contents and scope of the 21.04.2022 filing and the state of the broader investigation. It found that investigation into several allegations in the FIR remained incomplete and that the 21.04.2022 filing covered only part of the alleged offences (appointment/remuneration-related offences) while co-location and related IT/offences were still under investigation. Consequently the charge-sheet was held to be piece meal/incomplete and could not be equated with a final report for the purposes of defeating the statutory right under Section 167(2). The Court emphasised the distinction between completion of investigation and subsequent further investigation under Section 173(8). [Paras 42]The 21.04.2022 filing is a piece meal/incomplete charge-sheet and does not satisfy Section 173(2) so as to defeat entitlement to default bail.Status of officials of a market infrastructure institution as public servants - Whether the applicant (an official of NSE) qualifies as a public servant for purposes of the PC Act offences alleged. - HELD THAT: - On the argument that the applicant was not a public servant, the Court referred to precedent holding the National Stock Exchange as a statutory body and its officials as public servants within the meaning of the PC Act. The submission that the applicant was never a public servant was rejected as without force. [Paras 15]Applicant held to fall within the ambit of 'public servant' as relevant to the PC Act allegations.Sanction for prosecution not a condition precedent to investigation or filing charge-sheet - Whether non-obtaining of sanction to prosecute precludes filing charge-sheet or affects Section 167(2) entitlement. - HELD THAT: - The Court observed that grant of sanction is an enabling provision for prosecution but is separate from the investigatory process and not a condition precedent for completion of investigation or filing of a charge-sheet. Reliance was placed on authority to the effect that filing of a charge-sheet within the statutory period is sufficient compliance with Section 167(2) and that the absence of sanction does not automatically confer a right to default bail. [Paras 16, 36]Non-obtaining of prosecution sanction does not prevent investigation or filing of a charge-sheet and is not a bar to proceedings; sanction requirement rejected as ground for default bail.Final Conclusion: The petition for regular bail under Section 439 Cr.P.C. was refused on merits given the gravity of the economic-offence allegations; however, because the investigating agency filed a piece meal/incomplete charge-sheet and failed to complete investigation of all offences in the FIR within the statutory period, the applicant acquired an indefeasible right to default bail under Section 167(2) Cr.P.C., and was admitted to bail subject to bond and conditions. Issues Involved:1. Abuse of server architecture of NSE.2. Illegal appointment and re-designation of Anand Subramanian.3. Entitlement to statutory bail under Section 167(2) of the Code of Criminal Procedure.Detailed Analysis:1. Abuse of Server Architecture of NSE:The FIR alleged that Sanjay Gupta, owner of OPG Securities Pvt. Ltd., exploited the server architecture of NSE from 2010 to 2014 in conspiracy with unknown NSE officials. Gupta managed to get preferential access to NSE servers, which allowed OPG Securities to log in first and gain a split-second advantage, resulting in significant financial gains. SEBI's Technical Advisory Committee and a forensic review by Deloitte confirmed these allegations. Further, Gupta influenced SEBI officials and destroyed evidence to ensure favorable reports.The investigation revealed that the applicant/accused, who was Joint MD and later MD and CEO of NSE during the relevant period, was responsible for the co-location architecture. It was also found that she communicated confidential information to an external email ID '[email protected],' which was operated by Anand Subramanian.2. Illegal Appointment and Re-designation of Anand Subramanian:The applicant/accused allegedly entered into a conspiracy with Anand Subramanian, appointing him as Chief Strategic Advisor and later re-designating him as Group Operating Officer (GOO) without following due process. Subramanian, who had no relevant experience, was offered an abnormally high salary and his compensation was frequently increased without performance evaluations. The applicant/accused did not seek necessary approvals from the MD or the Nomination and Remuneration Committee (NRC) of NSE, violating SECC Regulations and the Companies Act, 2013.The CBI's investigation, prompted by a request from the Ministry of Finance following SEBI's order dated 11.02.2022, linked these issues with the ongoing investigation into the co-location scam. The investigation into these allegations was completed, and a charge sheet was filed on 21.04.2022.3. Entitlement to Statutory Bail under Section 167(2) of the Code of Criminal Procedure:The applicant/accused argued that she was entitled to statutory bail as the CBI failed to complete the investigation within the stipulated 60 days and filed an incomplete charge sheet. The CBI filed a charge sheet on 21.04.2022, covering only some of the alleged offences, while the investigation into other offences was still pending.The court held that the charge sheet filed was a piece-meal charge sheet and did not comply with Section 167(2) of the Code, which requires the completion of the entire investigation. The court emphasized that the practice of filing incomplete charge sheets to extend remand beyond the statutory period should be deprecated. The court concluded that the applicant/accused was entitled to statutory bail as the investigation was not completed within the prescribed period.Conclusion:The court allowed the bail application under Section 167(2) of the Code, granting the applicant/accused bail on furnishing a personal bond and complying with certain conditions, such as not leaving the country without permission, surrendering her passport, cooperating with the investigation, not tampering with evidence, and providing her contact information to the Investigating Officer. The court clarified that this order would not affect the final merits of the case.