TaxTMI 
TaxTMI 
2022 (6) TMI 164
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....r for Directorate of Enforcement for the Respondent. FACTS OF THE CASE:- 4. The Petitioner is the Chairman and Managing Director of M/s. Karvy Stock Broking Ltd. (hereinafter 'KSBL'). The Respondent authority had registered ECIR/HYZO/14/2021 for the offence of money laundering under the Prevention of Money Laundering Act, 2002 (hereinafter 'PMLA') against KSBL. The allegations against KSBL and the Petitioner include diversion of large-scale clients funds through shell companies which resulted in huge losses to the investors. It is further alleged that the clients' money was misused by the shell companies created by KSBL and the said money was transferred to the Petitioner and his family members. 5. Various FIRs were registered against the Petitioner and he was arrested on 19.08.2021 in relation to Crime No. 100 of 2021 which is pending on the file of P.S. Central Crime Station Hyderabad. The Petitioner in the said crime was remanded to judicial custody. Pursuant to a P.T. warrant dated 10.01.2021, the Petitioner was produced before the Metropolitan Sessions Judge - cum - Special Court (hereinafter 'Designated Court') on 20.01.2021. On the same day, the Petitioner was reman....
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....for statutory bail under Section 167(2) of the Cr.P.C. 12. CONTENTIONS OF THE PETITIONER:- i. A complaint in the nature of interim report was filed on 19.03.2022. No complaint/charge sheet in terms of Section 173(2) of the Cr.P.C. is filed as the investigation admittedly is not completed. Therefore, in the absence of completion of investigation, the Petitioner is entitled for statutory bail under Section 167(2) of the Cr.P.C. after a period of sixty days which accrued on 21.03.2022. ii. The complaint dated 19.03.2022 was filed only to deny statutory bail to the Petitioner. iii. The object of Section 167(2) of the Cr.P.C. is to complete the investigation within the prescribed time. Failure of the prosecution to complete investigation and file charge sheet within prescribed time will give the accused a right of statutory bail. Reliance was placed on M. Ravindran v. Intelligence Officer, Directorate of Revenue Intelligence (2021) 2 SCC 485. iv. The Designated Court has no power to return the bail application filed under Section 167(2) of the Cr.P.C. Reliance was placed on Directorate of Enforcement v. Kamma Srinivasa Rao Order dated 15.02.2022 pa....
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...., and considers further detention unnecessary, he may order the accused to be forwarded to a Magistrate having such jurisdiction: Provided that- (a) the Magistrate may authorise the detention of the accused person, otherwise than in the custody of the police, beyond the period of fifteen days; if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorise the detention of the accused person in custody under this paragraph for a total period exceeding,- (i) ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years; (ii) sixty days, where the investigation relates to any other offence, and, on the expiry of the said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail, and every person released on bail under this sub- section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that Chapter. (b) no Magistrate shall authorise detention in any custody under this section unless the ....
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....nce with rule of law. 17.2. Under Section 167 of the Code of Criminal Procedure, 1898 ("the 1898 Code") which was in force prior to the enactment of the CrPC, the maximum period for which an accused could be remanded to custody, either police or judicial, was 15 days. However, since it was often unworkable to conclude complicated investigations within 15 days, a practice arose wherein investigating officers would file "preliminary charge-sheets" after the expiry of the remand period. The State would then request the Magistrate to postpone commencement of the trial and authorise further remand of the accused under Section 344 of the 1898 Code till the time the investigation was completed and the final charge-sheet was filed. The Law Commission of India in Report No. 14 on Reforms of the Judicial Administration (Vol. II, 1948, pp. 758-760) pointed out that in many cases the accused were languishing for several months in custody without any final report being filed before the courts. It was also pointed out that there was conflict in judicial opinion as to whether the Magistrate was bound to release the accused if the police report was not filed within 15 days. 17.3.....
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....ating officers are compelled to act swiftly and efficiently without misusing the prospect of further remand. This also ensures that the court takes cognizance of the case without any undue delay from the date of giving information of the offence, so that society at large does not lose faith and develop cynicism towards the criminal justice system. XXXX 17.9. Additionally, it is well-settled that in case of any ambiguity in the construction of a penal statute, the courts must favour the interpretation which leans towards protecting the rights of the accused, given the ubiquitous power disparity between the individual accused and the State machinery. This is applicable not only in the case of substantive penal statutes but also in the case of procedures providing for the curtailment of the liberty of the accused. 17.10. With respect to the CrPC particularly, the Statement of Objects and Reasons (supra) is an important aid of construction. Section 167(2) has to be interpreted keeping in mind the threefold objectives expressed by the legislature, namely, ensuring a fair trial, expeditious investigation and trial, and setting down a rationalised procedure that....
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....trary to what has been decided in Bhikamchand Jain (supra). In all the above judgments which are relied upon by either side, this Court had categorically laid down that the indefeasible right of an accused to seek statutory bail under Section 167(2) of CrPC arises only if the charge-sheet has not been filed before the expiry of the statutory period. Reference to cognizance in Madar Sheikh (supra) is in view of the fact situation where the application was filed after the charge-sheet was submitted and cognizance had been taken by the trial court. Such reference cannot be construed as this Court introducing an additional requirement of cognizance having to be taken within the period prescribed under proviso (a) to Section 167(2), CrPC, failing which the accused would be entitled to default bail, even after filing of the charge-sheet within the statutory period. It is not necessary to repeat that in both Madar Sheikh (supra) and M. Ravindran (supra), this Court expressed its view that non-filing of the chargesheet within the statutory period is the ground for availing the indefeasible right to claim bail under Section 167(2), CrPC. The conundrum relating to the custody of the accused ....
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.... (c) the names of the persons who appear to be acquainted with the circumstances of the case; (d) whether any offence appears to have been committed and, if so, by whom (e) whether the accused has been arrested; (f) whether he has been released on his bond and, if so, whether with or without sureties; and (g) whether he has been forwarded in custody under Section 170. Sub-section (5) of Section 173 makes it obligatory upon the police officer to forward along with the report all documents or relevant extracts thereof on which the prosecution proposes to rely and the statements recorded under Section 161 of all the persons whom the prosecution proposes to examine as witnesses at the trial. Similarly, the Supreme Court in Manu Sharma v. State (NCT of Delhi) (2010) 6 SCC 1 has held that the object behind Section 173 of the Cr.P.C. is to complete the investigation and file the charge sheet. The idea is to ensure that cognizance is taken without any delay. The relevant paragraph is extracted below: 206. Section 173 commands the investigating agency to complete the investigation expeditiously without unnecessary delay and when such an investigation is completed, the officer in....
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....arge sheet was already filed but the investigation is yet to be completed. The Court therein drew a distinction between completion of investigation and further investigation. It held that it is only after the completion of investigation and filing of charge sheet that further investigation can be resorted to. In other words, Section 173(8) of the Cr.P.C. comes into picture only after completion of investigation and filing of the charge sheet under Section 173(2) of the Cr.P.C. Further, the court held that by filing incomplete charge sheets, the State cannot circumvent Section 167(2) of the Cr.P.C. The relevant paragraphs therein are extracted below: 23. Reference here may usefully be made to a decision of the Supreme Court in Abhinandan Jha v. Dinesh Mitra, AIR 1968 SC 117, which points out that the investigation under the Code takes in several aspects and stages ending ultimately with the formation of an opinion by the police as to whether, as from the material covered and collected, a case is made out to place the accused before the Magistrate for trial and the submission of either a chargesheet or a final report is dependent on the nature of the opinion so formed. The f....
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.... 25. The learned Counsel for the State contended that the new provision added in sub-section (8) of section 173 of the Code can be resorted to by the Investigating Officer for collecting further evidence. According to him, it tends to indicate that the investigation is not shut but remains in suspended animation till the police report is sent to the Magistrate. As has already been pointed out, a police report as defined in section 2(r) of the Code can only be filed "as soon as the investigation is completed". If it is not complete; no such report can be filed. When no report is forwarded as required by the Code, the Magistrate cannot take cognizance. Thus, unless all these steps are crossed, sub-section (8) cannot be pressed in aid for collecting further evidence which really can be called in aid if further evidence is discovered after the filing of the charge-sheet or the police report on the completion of the investigation. 26. As stated earlier, sub-section (2) of section 173 of the Code also speaks of taking cognizance of the offence by a Magistrate on a police report. Thus, without the police report as defined in section 2(r) of the Code, the Magistrate is not em....
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.... the statute on the accused is an indefeasible right and he is entitled to bail as a matter of right on account of the default committed by the prosecuting agency in completing the investigation within the time stipulated by the statute. 20. It is significant to note that a plain reading of proviso (a) to Section 167(2) Cr.P.C. makes it manifest that what is required to claim for default bail under proviso (a) to Section 167(2) Cr.P.C. is failure on the part of the Investigating Agency to complete the investigation within the stipulated period of time. In other words, it is the default committed by the Investigating Agency to complete the entire investigation within the stipulated time that confers right on the accused to claim for default bail. So, filing of charge-sheet is not the criteria or the actual test to be applied to decide whether the accused is entitled to default bail or not. It is relevant to note that the charge-sheet after completion of investigation will be filed to enable the Court to take cognizance of the offence. So, the Court cannot take cognizance of the offence on the basis of a preliminary charge-sheet filed without completing the entire investigat....
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.... clever contrivance and subterfuge to prevent the accused from claiming default bail by exercising his right conferred under the Code. So, Courts must be on guard and should not fall in the trap of such trickery and tactics of the investigating agency when they only file preliminary charge-sheet without fully completing the investigation. Therefore, the real test to be applied to ascertain whether the accused is entitled to default bail or not in a given case is not to see whether the charge-sheet is filed or not. It has to be ascertained whether the entire investigation is completed or not within the stipulated period of time and whether the said charge-sheet is filed after completion of the entire investigation or not. A preliminary charge-sheet filed without completing the entire investigation cannot be allowed to serve as an impediment to come in the way of exercising the statutory right of the accused for default bail. 23. The very contents of the charge-sheet, which are extracted above, clinchingly establishes that the investigation is not completed and many crucial witnesses are yet to be examined to prove the overt acts of the accused in this crime and some other e....
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....iberty of an individual guaranteed under the Constitution of India. Personal liberty is a valuable right of an individual and it is one of the cherished objects of the Indian Constitution. It can be deprived only in accordance with law and in conformity with the provisions thereof, as stipulated under Article 21 of the Constitution. Therefore, when the law mandates that the Magistrate could authorise detention of the accused in custody up to a maximum period as indicated in the proviso to subsection (2) of Section 167 Cr.P.C. any further detention beyond the period when, the investigation is not completed and the final charge-sheet is not filed on completion of the entire investigation by the Investigating Agency would be a subterfuge and would not be in accordance with law and in conformity with the provisions of the Criminal Procedure Code. Therefore, it could be violative of Article 21 of the Constitution of India. At the cost of repetition, this Court holds that the complaint dated 19.03.2022 was not a final complaint based on which cognizance could have been taken. A complaint/report cannot be treated as final report unless the investigation is completed, In the present cas....
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....ower to return the said applications. This Court in Kamma Srinivas Rao (Supra) has held that it is incumbent on the Designated Court to pass a reasoned order and not merely return the applications. Neither the Cr.P.C. nor the PMLA contemplates any provision which empowers the Designated Court to return applications seeking remand or applications seeking bail. The relevant paragraphs are extracted below: 47. A perusal of above orders clearly indicates that the remand applications were returned. According to this Court, the Designated Court cannot return a remand application filed under Section 167(2) of Cr.P.C. It is relevant to note that a Court performs a judicial function while deciding an application for remand under Section 167(2) of the Cr.P.C. The Court while exercising the judicial function under Section 167(2) of the Cr.P.C. is bound to pass a judicial order by applying its mind. The Court under Section 167 of the Cr.P.C. by passing a judicial order has to, where there are adequate grounds for proceeding with the investigation, remand the accused to judicial custody or where no such further investigation is required release him on bail on satisfying conditions as p....