TaxTMI 
TaxTMI 
2022 (10) TMI 49
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....e petitioner prayed as under: a) Allow the present application; b) Grant regular bail to the Applicant and direct her release in connection with FIR No. RC/AC1/2018/A0011 dated 28.05.2018 lodged with P.S. CBI/AC-I; c) Pass any other order/s, which this Hon'ble court may deem fit and proper in the interest of justice. 2. The facts as alleged in FIR are that Sanjay Gupta who was owner and promoter of M/s OPG Securities Pvt. Ltd. during 2010 to 2014 abused the server architecture of National Stock Exchange (hereinafter referred to as "NSE") in criminal conspiracy with unknown officials of NSE. Sanjay Gupta with the help of his brother in law namely Aman Kokrady and other unknown persons in furtherance of the criminal conspiracy managed data centre staff of NSE who passed the information regarding switching on time of NSE exchange servers. OPG Securities Pvt. Ltd. by unknown officials of NSE was given access to technologically latest and least crowded servers at that particular period which helped OPG Securities Pvt. Ltd. to be mostly to login firstly on the Exchange Server of the NSE and this particular setup of server gives a 10:1 (Approx.) speed advanta....
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....ading days during the period 2010 to 2014 and also had access to servers with better hardware. As per forensic review of the NSE's co-location facility conducted by Deloittee Touche Thmatsu, OPG Securities was the first in most cases during trading sessions. 2.3 Sanjay Gupta dishonestly and fraudulently influenced the officials of SEBI and bribe money was also exchanged between Sanjay Gupta and some unknown officials of SEBI to ensure the favorable report in the on-going enquiry being carried out by SEBI against the role of OPG Securities Pvt. Ltd in the misuse of TBT architecture of NSE. Sanjay Gupta deliberately directed his employees to delete some important mails, text massages, logs etc. related to co-location to destroy evidence. 2.4 Ajay Narottam Shah was found to be instrumental in exploitation of NSE, TBT architecture as he had collected NSE trade data to carry out research and thereafter passed it to private persons who in turn developed an algo software named 'Chanakya' which was sold to selected brokers including OPG Securities and by using Chanakya exploited TBT architecture of NSE by using Chanakya Software. 2.5 Accordingly, present FIR was got regist....
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....was further surfaced that Anand Subramanian was offered to join NSE as Chief Strategic Advisor to MD with effect from 01.04.2013 vide NSE letter dated 18.01.2013 and his appointment was approved by the applicant/accused, then Joint Managing Director (JMD) vide internal note dated 18.01 2013. The applicant/accused did not obtain approval for the appointment of Anand Subramanian from Sh. Ravi Narain, then MD despite designation of the post was "Chief Strategic Advisor to MD" and even the draft contract agreement was also dictated by the applicant/accused. 4.1 It was also surfaced in investigation that then HR Head was not aware of any details for processing the recruitment of Anand Subramanian and also did not have any document related to him. The application form of Anand Subramanian was also filled up on a later date. The applicant/accused by misusing her official position fixed an abnormally high initial compensation of Anand Subramanian and his previous experience was not relevant to the position for which he was appointed at NSE. Anand Subramanian prior to joining NSE was Vice President, Leasing & Repair Services of Transafe Services Limited, a subsidiary of M/s Balmer & Lawr....
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....bramanian who in disclosure statement under section 27 of Indian Evidence Act admitted having operated the e-mail ID [email protected] and incriminating e-mails were also recovered. 4.6 It was established during investigation that the applicant/accused entered into criminal conspiracy and in pursuance of conspiracy and by abusing her official position as Joint MD as well as MD of NSE illegally and arbitrarily appointed Anand Subramanian as Chief Strategic Advisor to MD and disproportionately hiked his compensation and also re-designated him as Group Operating Officer without taking approval of NRC or Board. 4.7 The applicant/accused and Anand Subramanian have committed offences punishable under section 120-B IPC read with section13 (1) (d) read with section 13 (2) of the PC Act and substantive offences thereof. The applicant/accused was arrested and is in custody since 06.03.2022. The investigation qua these allegations has been completed and charge sheet under sections 13(1)(d) and 13(2) of the PC Act read with 120B IPC qua the applicant/accused and Anand Subramanian has already been filed on 21.04.22 wherein it is also mentioned that further investigation is kept ope....
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.....05.2018 were dealt with or investigated and on contrary a completely new offence was created and investigated by the respondent/CBI. 8.1 The applicant/accused is a Chartered Accountant and a reputed professional in the financial markets with no prior criminal antecedents. No concrete criminal role can be attributed to the applicant/accused at this stage as Final Report has not yet been filed in present FIR. The applicant/accused joined investigation on 18.02.2022, 19.02.2022, 20.02.2022, and 24.02.2022, at Mumbai in pursuance of notice dated 17.02.2022 and also joined investigation in Delhi. The applicant/accused was arrested on 06.03.2022. The applicant/accused also mentioned facts as stated in FIR and surfaced during investigation. The respondent/CBI has not arrested any person as named in FIR or surfaced during investigation and investigation qua them and offences is still pending and no charge sheet has been filed by the respondent/CBI till date. 8.2 The applicant/accused was one of the initial members of M/s. National Stock Exchange Ltd. (NSE) which is company registered under the Companies Act, 1956 whereof 54% shareholding is owned by public at large, and 46% sharehol....
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....l misdeeds relating to fixation and frequent revision of compensation of Anand Subramaniam; failed to raise concerns with respect to delegation of wide powers to Anand Subramaniam; shared internal confidential information of NSE with an unknown person in charge of email ID [email protected] and allowed her decision-making to be influenced by such unknown person alleging such person to be a "siddhapurusha"/"paramhansa". However in said case no allegation against the applicant/accused subject-matter of present FIR was made. SEBI vide order dated 11.02.2022 passed in Case No WTM/AB/MRD/DSA/21/2021-22 directed for imposition of monetary penalty of Rs. 3 Crore, directed NSEIL to transfer the withheld variable pay bonus and other emoluments due to the applicant/accused to the Investor Protection Fund and restrained the applicant/accused from associating with any market institution for three (3) years. 8.5 The applicant/accused on 17.02.2022 received a notice under section 160 of the Code from the respondent/CBI to join investigation in present FIR case and thereafter the applicant/accused has joined investigation in Mumbai and Delhi. The applicant/accused was arrested on 06.03.....
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....s. OPG Securities Pvt. Ltd. was also permitted to connect to the backup servers which had very less load, thereby far better and faster access to the market feed was given. The accused as named in FIR had dishonestly and fraudulently induced the officials of SEBI with bribe money in order to get a favourable report from SEBI. NSE officials had provided trade data to the accused Ajay Shah who, in turn, developed algo-trading software named "Chanakya" which was sold to selected brokers and they were benefited by exploiting tick-by-tick architecture by using the said software. The applicant/accused is not connected with these allegations. 8.6.3 The co-location facility was the brainchild of Shri Ravi Narain and conceived and introduced in Indian Market during his tenure as Managing Director. To place co-location system was the responsibility of Sh. N. Muralidaran and the applicant/accused had no direct concern with the system. Mr. Muralidharan was reporting to Mr Ravi Narain directly and or through the applicant/accused on matters relating to the co-location facility and not to the applicant/accused directly. 8.6.4 The scope of investigation was expanded by the respondent/CBI to....
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....o illegally benefitted from the colocation and to collect evidences against them. The execution report of MLAT is awaited from USA. 10. The application filed under section 167 (2) of the Code was pending before the concerned court at the time of filing present application for grant of regular bail and said bail application was dismissed by the court of Sh. Rakesh Kumar-III, Special Judge (PC Act) (CBI)-02, Rouse Avenue, District Courts, New Delhi vide dated 28.05.2022. The learned Senior Advocate for the applicant/accused during course of arguments also stated that the applicant/accused is also entitled for statutory bail/default bail under section 167(2) (a)(ii) of the Code besides grant of bail on merit as per section 439 of the Code. 11. The learned Senior Counsel on merit argued that bail is rule and jail is the exception. The applicant/accused being a woman has spent more than 140 days in judicial custody since the date of her arrest on 06.03.2022. The case of the respondent/CBI against the applicant/accused pertains to negligence in the administration of NSE which is a civil wrong and is not a criminal offence and as such criminal proceedings cannot be misused to defeat....
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....nd implementation of the co-location facilities and Mr. Ravi Apte (CTO from 2007 to 2012) was responsible for the choice of architecture, design and implementation of the co-location facilities. No authority including SEBI has found any fault with the architecture of the co-location facility implemented at the NSE. The technical Committee and all technical advisors of NSE including Mr. Muralidharan have unanimously agreed on the choice of architecture. During the tenure of the Applicant as MD, the TCP-IP architecture was eventually phased out and a Multicast Broadcast system was implemented. The applicant/accused being the MD, was not responsible for all alleged wrong-doings including co-location and the appointment of Anand Subramanian as NSE is a large organisational setup with proper and well-defined division of powers/responsibilities. 11.5 The concerned court in order dated 12.05.2022 whereby application for grant of regular bail was rejected erred in relying on contents of the charge sheet dated 21.04.2022 despite that cognizance has not yet been taken, sanction to prosecute the applicant/accused under PC Act has not been obtained by the respondent/CBI and copy of the char....
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....ntment of Anand Subramanian for which documentary evidences have already been collected by the respondent/CBI. There is no allegation against the applicant/respondent that she had ever attempted to tamper with evidence to influence witnesses since the registration of the FIR in 2018. 11.10 The Supreme Court regarding economic offences recently held that even economic offences have different aspects including the gravity of the offence, period of the sentence and other attending circumstances and bail ought not be denied on that basis alone. The learned Senior Counsel relied on Satender Kumar Antil V CBI & another, SLP Crl. No 5191 of 2021 decided on 11.07.2022, P. Chidambaram V Directorate of Enforcement, (2020) 13 SCC 791 and Sanjay Chandra v. CBI, (2012) 1 SCC 40. The learned Senior Counsel stated that the applicant/accused be granted bail on such reasonable terms and conditions as imposed by this court. 12. The Special Public Prosecutor for the respondent/CBI argued at length and also submitted written arguments and argued that present RC was got registered for offences punishable under sections 120-B and 204 IPC; under section 7, 12 & 13(2) read with section 13(1)(d) of P....
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....plication form dated 01.04.2013 of appointment of Anand Subramanian with NSE was submitted subsequent to contact agreement which is dated 18.01.2013. The pre-employment documents pertaining to Anand Subramanian were not handed over to HR of NSE or kept in his personal file. The applicant/accused also approved internal approval note dated January 18.01.2013 and also dictated draft contract agreement. HR Department of NSE did not make any communication with Anand Subramanian. There was no interview, medical or advertisement for this post. And Anand Subramanian was directly appointed by the applicant/accused without following the procedure. The applicant/accused did not obtain approval from then MD for designation of the post of Anand Subramaniam as Chief Strategic Advisor to MD. 12.3 Anand Subramanian despite without relevant experience was offered an annual remuneration of Rs. 1.68 crores per annum for working 4 days in a week which was 1100% in comparison to his previous salary. The applicant/accused frequently enhanced compensation of Anand Subramanian without any reasonable basis and performance evaluation and by misusing her official position. 12.4 The applicant/accused re....
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.... be dismissed. CONSIDERATION OF BAIL APPLICATION AS PER SECTION 439 OF THE CODE 13. The facts in brief which are reflecting from perusal of material placed on record that present RC was got registered for offences punishable under sections 120-B and 204 IPC; under section 7, 12 & 13(2) read with section 13(1)(d) of PC Act, 1988 and under section 66 of I.T. Act, 2000 dated on allegations of co-location and passing of confidential information to M/s OPG Securities by officials of NSE which led to wrongful gain to M/s OPG Securities. Accordingly the respondent/CBI conducted investigation relating to co-location architectural system of NSE. The applicant/accused is not named as an accused in present FIR. 13.1 The applicant/accused worked as Joint MD in NSE from 2009 till 31.03.2013 and was appointed as MD and CEO of NSE on 1st April, 2013. It was surfaced during investigation that the applicant/accused and Anand Subramanian were known to each other since 1999 and applicant/accused got appointed Anand Subramanian in NSE. SEBI passed an order dated 11.02.22 pertaining to illegal appointment of Anand Subramanian as 'Chief Strategic Advisor' (CSA), his redesignation as 'Group ....
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....ensitivity. It was also held that economic offence(s) are in itself a class of its own and they need to be viewed seriously and have to be considered as grave offences affecting the economy of the country as a whole, thereby posing serious threat to the financial health of the country. 14.1 It was held in Rohit Tandon V ED, AIR 2017 SC 5309 as under:- 21. The consistent view taken by this Court is that economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country. It was also held in Y.S. Jagan Mohan Reddy V Central Bureau of Investigation, (2013) 7 SCC 439 as under:- 15) Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. Then economic offence having deep rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health of t....
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....ption so as to ensure that the accused has the opportunity of securing fair trial. However, while considering the same the gravity of the offence is an aspect which is required to be kept in view by the Court. The gravity for the said purpose will have to be gathered from the facts and circumstances arising in each case. Keeping in view the consequences that would befall on the society in cases of financial irregularities, it has been held that even economic offences would fall under the category of "grave offence" and in such circumstance while considering the application for bail in such matters, the Court will have to deal with the same, being sensitive to the nature of allegation made against the accused. One of the circumstances to consider the gravity of the offence is also the term of sentence that is prescribed for the offence the accused is alleged to have committed. Such consideration with regard to the gravity of offence is a factor which is in addition to the triple test or the tripod test that would be normally applied. In that regard what is also to be kept in perspective is that even if the allegation is one of grave economic offence, it is not a rule that bail shoul....
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....le to obtain sanction to prosecute the accused, the accused was not entitled to grant of statutory bail since the charge-sheet had been filed well within the period contemplated under Section 167(2)(a)(ii) Cr.P.C. Sanction is an enabling provision to prosecute, which is totally separate from the concept of investigation which is concluded by the filing of the charge-sheet. The two are on separate footings. ABUSE OF SERVER ARCHITECTURE OF NSE 17. In regard to abuse of server architecture of SEBI, CBI has registered present FIR pertaining to co-location and passing of information to M/s OPG Securities Pvt. Ltd. by unknown officials of SEBI. The applicant/accused is not named in FIR and no specific allegations are made in FIR against the applicant/accused. The applicant/accused has joined investigation on at Mumbai in pursuance of notice dated 17.02.2022 and at Delhi. The learned Senior Counsel for the applicant/accused argued that the role of the applicant/accused during relevant period was to manage affairs and functions of the NSE but was not directly involved in the ground-level process of handling the technical aspects or servers or access thereto of the stock exchange mark....
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....rsuance of present FIR/RC. 19. The learned Senior Counsel for the applicant/accused further argued that a decision was taken to phase out TBT (tick-by-tick) technology which was the brainchild of her predecessor Mr. Ravi Narain who was MD till 2013 and the architecture was designed and implemented by Mr Ravi Apte and Mr. N. Murlidaran, during tenure of the applicant/accused as MD of NSE from 2013-2016. He further argued that as per allegations of the respondent/CBI that during 2010 to 2014, the accused as named in FIR had abused the server architecture (tick-by-tick) of NSE and as such enabled M/s. OPG Securities Pvt. Ltd. to log-in first to the server of the NSE resulted into unfair advantage was to M/s. OPG Securities Pvt. Ltd. but the applicant/accused is not connected with these allegations and other allegations as made in present FIR. As mentioned hereinabove that the applicant/accused during investigation was found communicating with an unknown person in charge of email ID [email protected] and this fact is also admitted by Anand Subramanian. The Senior Public Prosecutor for the respondent/CBI also argued that the applicant/accused and Anand Subramanian are responsi....
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....esent FIR. 20.3 The Senior Public Prosecutor for the respondent/CBI argued that Anand Subramanian was illegally and arbitrarily appointed by the applicant/accused by highlighting facts as surfaced during investigation that Anand Subramanian was known to the applicant/accused prior to his appointment as Chief Strategic Advisor at NSE in January, 2013; the applicant/accused did not obtain approval for the appointment of Anand Subramanian from Sh. Ravi Narain, then MD despite designation of the post was "Chief Strategic Advisor to MD"; the draft contract agreement was also dictated by the applicant/accused; HR Head was not aware of any details for processing the recruitment of Anand Subramanian and also did not have any document related to him; the application form of Anand Subramanian was also filled up on a later date; abnormally high initial compensation was fixed and his previous experience was not relevant to the position for which he was appointed at NSE; the applicant/accused enhanced compensation paid to Anand Subramanian at frequent intervals without any reasonable basis and without taking any inputs from HR department; there was no evaluation of performance of Anand Subra....
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.... in be taken by her. The Board discussed the matter and delegated the following general and financial power to Ms. Chitra Ramkrishna, Deputy Managing Director and while exercising such powers she should act subject to the superintendence control and direction of the Board of directors and the Managing Director of NSEIL and also ratified the decisions taken by the Deputy Managing Director pursuant to delegation of powers made by the Managing Director 22.1 The applicant/accused was also given power vide Board Resolution dated 23.02.2005 to appoint, employ, remove, dismiss, discharge, suspend, re-appoint, re-employ, or replace for the management of the business affairs of the company, officers, managers, secretaries and other employees, solicitors, advocates, accountants, advisers in the areas of systems and software , security, taxation, law accounts, etc technicians, medical practitioners of the company and with such powers and duties and upon such terms as the Deputy Managing Director may think fit. However this power was not absolute and was subject to the superintendence control and direction of the Board of directors and the Managing Director of NSEIL. The appointment of Anan....
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....s rule and jail is the exception. The applicant/accused was arrested on 06.03.2022. He further argued that the allegations against the applicant/accused pertain to negligence in the administration of NSE which is a civil wrong and is not a criminal offence; the applicant/accused is not named as an accused in FIR and is only accused who is arrested along with Anand Subramanium and other persons against whom the main allegations were registered by the CBI and are believed to be the beneficiaries have not been arrested; the respondent/CBI did not allege that the applicant/accused has ever received any amounts/benefits from the main accused persons/entities out of the alleged crime to show collusion or conspiracy and the applicant/accused was never summoned by CBI to assist in the investigation for a period of nearly 4 years; nature of allegations is primarily documentary and technical in nature and the relevant documents, electronic and physical have already been seized; the applicant/accused has always co-operated with the respondent/CBI in investigation and custodial interrogation of the applicant/accused has already been conducted. The applicant/accused satisfies the triple-test fo....
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....the PC Act and section 120 B IPC and not with respect to other offences as alleged in the FIR. 24.1 The investigation with respect to other allegations under section 66 of IT Act 2000, section 204 IPC and sections 7 and 12 of the PC Act is pending and yet to be completed. The respondent/CBI yet to receive relevant information from Microsoft (USA) with respect to the offences for which investigation is stated to be completed. The submission of the respondent/CBI about completion of investigation for any of the head as mentioned in charge sheet is without any substance. The respondent/CBI has not investigated the offences for which custody of the applicant/accused was sought or given by the concerned court at the time of remand or subsequently while sending the petitioner to judicial custody. 24.2 The Special Judge has continued to extend the judicial custody of the applicant under section 167 of the Code and not under section 309 of the Code due to non-taking of cognizance for want of sanction which is not permissible in law after lapse of period of 60 days from the date of arrest / first remand. The learned Senior Counsel cited Fakhrey Alam V State of UP, 2021 SCC On Line 532....
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....sactions were investigated regarding which separate charge-sheets were filed and the cases were tried as separate cases after taking cognizance. The Supreme Court refused to consider pendency of investigation in other transactions as a ground for bail holding that economic offences are a class apart. 25.3 The Special Public Prosecutor for the respondent/CBI further argued that mere fact that the cognizance is yet to be taken by the Magistrate for want of sanction cannot be consideration for grant of statutory bail in view of the State of Maharashtra V Sharadchandra Vinayak Dongre and others, AIR 1995 SC 231, SFIO V Rahul Modi, AIR 2022 SC 902, Suraj V State of Delhi NCT, Bail Application no. 120/2022 and Deepender Kumar Srivastava V State, MANU/DE/4193/2006. The accused continues to be in the custody of the Magistrate during the period i.e. between section 167 and section 309 of the Code and cannot be deemed to be under illegal custody. The charge sheet filed against the petitioner is complete and is sufficient to take cognizance against the petitioners and as such is not entitled to statutory bail merely because further investigation regarding other transactions is pending. ....
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....tive offences thereof have also been mentioned in the charge-sheet filed U/s 173 (2) Cr.P. C. So far as Sanction is concerned, it is totally separate from the concept of investigation. 22. In my opinion, charge-sheet has been filed mentioning the relevant sections and after completion of the investigation against the applicant/accused. Only because the prayer of further investigation is appearing in the concluding part of the charge-sheet would not confer a right upon the accused to claim bail U/s 167(2) of Cr. P. C. Hence, application U/s 167(2) of Cr. P. C. is dismissed. 27. Chapter XII of the Code deals with information to the police and their power to investigate. Section 173 of the Code deals with report of police officer on completion of investigation. Sub section (1) provides that every investigation shall be completed without unnecessary delay. Sub section (2) proves that the investigating officer shall forward the police report or charge sheet after completion of investigation to the magistrate who is empowered to take cognizance. Sub section (8) deals with further investigation if further evidence oral or documentary is obtained by the investigating officer. T....
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.... 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 subsection 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 of the accused in custody of the police under this section unless the accused is produced before him in person for the first time and subsequently every time till the accused remains in the custody of the police, but the Magistrate may extend further detention in judicial custody on production of the accused either in person or through the medium of electronic video linkage; (c) no Magistrate of the second class, not specially empowered in this behalf by the High Court, shall authorise detention in the custody of the police. Explanation I. For the avoidance of doubts, it is hereby declared that, notwithstanding the expiry of the period specified in paragraph (a), the accused shall be detained in custody so long as he does not furnish bail. Explanation II. If any question arises whether an accused person was produced before the Magistrate as requir....
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....tate of Maharashtra, (2001) 5 SCC 453 discussed and highlighted indefeasible right accrues in favour of the accused for being released on bail on account of default by the investigating agency in the completion of the investigation within the period prescribed. It was observed as under:- 13.3. On the expiry of the said period of 90 days or 60 days, as the case may be, an indefeasible right accrues in favour of the accused for being released on bail on account of default by the investigating agency in the completion of the investigation within the period prescribed and the accused is entitled to be released on bail, if he is prepared to and furnishes the bail as directed by the Magistrate. 13.4. When an application for bail is filed by an accused for enforcement of his indefeasible right alleged to have been accrued in his favour on account of default on the part of the investigating agency in completion of the investigation within the specified period, the Magistrate/court must dispose of it forthwith, on being satisfied that in fact the accused has been in custody for the period of 90 days or 60 days, as specified and no chargesheet has been filed by the investig....
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....nd deprivation of the same can only be in accordance with law and in conformity with the provisions thereof, as stipulated under Article 21 of the Constitution. When the law provides that the Magistrate could authorise the detention of the accused in custody up to a maximum period as indicated in the proviso to sub-section (2) of Section 167, any further detention beyond the period without filing of a challan 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, and as such, could be violative of Article 21 of the Constitution." 17.1. Article 21 of the Constitution of India provides that "no person shall be deprived of his life or personal liberty except according to procedure established by law". It has been settled by a Constitution Bench of this Court in Maneka Gandhi v. Union of India [Maneka Gandhi v. Union of India, (1978) 1 SCC 248] , that such a procedure cannot be arbitrary, unfair or unreasonable. The history of the enactment of Section 167(2) CrPC and the safeguard of "default bail" contained in the proviso thereto is intrinsically linked to Article 21 and i....
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....hat this could lead to serious abuse wherein "the arrested person can in this manner be kept in custody indefinitely while the investigation can go on in a leisurely manner." Hence the Commission recommended fixing of a maximum time limit of 60 days for remand. The Commission considered the reservation expressed earlier in Report No. 37 that such an extension may result in the 60 day period becoming a matter of routine. However, faith was expressed that proper supervision by the superior Courts would help circumvent the same. 17.5 The suggestions made in Report No. 41 were taken note of and incorporated by the Central Government while drafting the Code of Criminal Procedure Bill in 1970. Ultimately, the 1898 Code was replaced by the present CrPC. The Statement of Objects and Reasons of the CrPC provides that the Government took the following important considerations into account while evaluating the recommendations of the Law Commission: "3. The recommendations of the Commission were examined carefully by the Government, keeping in view among others, the following basic considerations:- (i) an accused person should get a fair trial in accordance with the ....
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....r the application for bail filed by the accused could be construed as an application for default bail, even though the expiry of the statutory period under Section 167(2) had not been specifically pleaded as a ground for bail. The majority opinion held that the 90 day limit is only available in respect of offences where a minimum ten year imprisonment period is stipulated, and that the oral arguments for default bail made by the counsel for the accused before the High Court would suffice in lieu of a written application. This was based on the reasoning that the Court should not be too technical in matters of personal liberty. Madan B. Lokur, J. in his majority opinion, pertinently observed as follows: "29. Notwithstanding this, the basic legislative intent of completing investigations within twenty four hours and also within an otherwise time bound period remains unchanged, even though that period has been extended over the years. This is an indication that in addition to giving adequate time to complete investigations, the legislature has also and always put a premium on personal liberty and has always felt that it would be unfair to an accused to remain in custody for a ....
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....een 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 three fold objectives expressed by the legislature namely ensuring a fair trial, expeditious investigation and trial, and setting down a rationalized procedure that protects the interests of indigent sections of society. These objects are nothing but subsets of the overarching fundamental right guaranteed under Article 21. 17.11 Hence, it is from the perspective of upholding the fundamental right to life and personal liberty under Article 21 that we shall clarify and reconcile the various judicial interpretations of Section 167(2) for the purpose of resolving the dilemma that has arisen in the present case. 31. Various High Courts also deliberated scope and ambit of section 167(2) of the Code. The Kerala High Court in S.M. Purtado V Dy. S.P., C.B.I., Kochin, 1996 Crl....
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.... filed only after completion of the investigation in the case relating to all the offences arising in the case. We are in respectful agreement with the said finding arrived at by U. L. Bhat, J., as he than was. Viewed in that light, it must be held that the 'charge report' stated to have been filed by the CBI on 10-4-1996 cannot be said to be a final report as contemplated under Section 173 of the Code and we must say that the prosecution was not justified in making piecemeal charge report in respect of various offences alleged to have been committed by the petitioners. In the absence of completion of the investigation of the case against the petitioners, we hold that the Magistrate cannot take cognizance of the case as contemplated under Section 309 of the Code. 12. A Magistrate can take cognizance of an offence only on filing of a report under Section 173(2) of the Code. Unless power is conferred by law, there is no inherent power to remand an accused to custody. Holding so, in the decision reported in Natabar Parida v. State of Orissa , the Supreme Court proceeded to say that under Section 167(2) proviso and under Section 309(2) of the new Code, the power of rem....
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....ade only after taking cognizance of the offence by the Court. The result is that if the investigation is not over and the period mentioned in Section 167(2) to detain the accused is custody is over, by invoking Section 309 of the Code, the custody of the accused cannot be extended and are to be released on bail. 31.1 The learned Single Judge of this Court after referring, considering and discussing Uday Mohanlal Acharya and S.M. Purtado in Tunde Gbaja V Central Bureau of Investigation, 2007 (95) DRJ 429 observed as under:- 20. It is well known that the court takes cognizance of the crime, not the offender. The argument that the respondent filed a charge-sheet, within time, when it did, is not correct. The charge-sheet pertains only to the offence under the Foreigners Act, for which, as per proviso to Section 167(2) had to be filed within 60 days. But for the other offences, in respect of which the period prescribed, for filing the charge sheet is 90 days, no charges were indicated. Though the right of the investigating agency to file a supplementary charge sheet, or a further report (under Section 173(8) pursuant to order of the court) cannot be disputed, yet the fact r....
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....f 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 charge of the police station shall forward to a Magistrate empowered to take cognizance of offence on a police report the details in the form as may be prescribed by the State Government and provide the information required under this section. 22. From the above decisions, it is clear that a charge sheet can be filed only after the completion of investigation. Investigation is said to be completed if sufficient material is collected by the Investigating Officer based on which cognizance can be taken under Section 167 of the Cr.P.C. 31.2.1 The learned Single Judge of the Telangana High....
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....l not be a police report within the meaning of sub-section (2) of section 173 of the Criminal Procedure Code read with section 2(r) of the Code and there is no question of the Magistrate taking cognizance of the offence within the meaning of section 190(1)(b) of the Code on the basis of an incomplete chargesheet. In the present case, admittedly an incomplete chargesheet has been filed and it is specifically stated therein that the investigation is not yet completed. The application, Exhibit 2, clearly further recites that the investigation is not completed and this fact is even admitted before me as stated in the reply affidavit filed by the Investigating Officer opposing the present Application. Consequently, the incomplete charge-sheets cannot be treated as a "police report" at all as contemplated under section 173(2) of the Code to entitle the Magistrate to take cognizance of the offences. The learned Counsel for the applicants is right in contending that the definition of "police report" as given in the Code cannot be enlarged under the guise of interpretation and it is contended that when the meaning of a statutory provision is plain and clear, the Court should not be impelled....
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....igatory requirements of law. If the view as contended by the State is accepted, the provisions of section 167(2) or to say section 468 of the Criminal Procedure Code can always be circumvented by the prosecution and the apparent legislative intents under those provisions would not only be not effectuated but undoubtedly stultified. 31.4 The Andhra Pradesh High Court in Akula Ravi Teja V State of A.P., (2021) 1 ALT (Cri) 291 dealt with a situation where a 'preliminary charge sheet' was filed without completing the investigation. The Court therein held that an incomplete charge sheet filed without completing the investigation cannot be used to defeat the right of statutory bail under Section 167(2) of the Cr.P.C. The relevant paragraphs are extracted below: 19. Now the crucial question that arises for determination is whether filing a preliminary charge-sheet without completing the investigation would defeat the right of the accused to claim default bail under proviso (a) to Section 167(2) Cr.P.C. In this context, it is relevant to note that the Parliament in its wisdom, considering the right of the accused to speedy investigation, stipulated period of time in pro....
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....atutory right of the accused to claim for default bail. 21. The 3-Judge Bench of the Supreme Court in the case of Rakesh Kumar Paul v. State of Assam held that right to personal liberty under Article 21 of the Constitution of India includes right to speedy investigation and entitlement to "default bail" where statutory period of filing charge-sheet has expired and accused has applied and is willing to furnish bail. 22. A plain reading of Section 167 Cr.P.C. makes it abundantly clear that it is not the intention of the legislation that charge-sheet is to be filed within the stipulated period. The intention of the legislation is that the investigation is to be completed within the stipulated time. Nowhere in Section 167 Cr.P.C. it is stated that the charge-sheet is to be filed within the prescribed period of time. All that it is stated in Section 167 Cr.P.C. is that the investigation is to be completed within the said stipulated period of 90 days or 60 days, as the case may be. Therefore, the Court has to see whether the investigation is completed or not while considering the plea of the accused for grant of default bail. Generally, charge-sheet will be filed only a....
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....e prerequisite for grant thereof. The Apex Court in another case Rajnikant JivanlalPatel v. Intelligence Officer, Narcotic Control Bureau, New Delhi held as follows: "The right to bail under Section 167(2) proviso (a) thereto is absolute. It is a legislative command and not Court's discretion. If the investigating agency fails to file charge-sheet before the expiry of 90/60 days, as the case may be, the accused in custody should be released on bail. But at that stage, merits of the case are not to be examined. Not at all. In fact, the Magistrate has no power to remand a person beyond the stipulated period of 90/60 days." Therefore, the legal position is very clear that irrespective of the gravity of the offence and the nature and seriousness of the offence, the moment the accused claims bail under proviso (a) to Section 167(2) Cr.P.C. on account of the default committed by the Investigating Agency to complete the investigation within the stipulated time, and he is prepared to furnish bail, the Court has no other option except to grant bail to him. The very nature of right which is "indefeasible right" indicates that the said right cannot be defeated or frustra....
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....efeasible right. The issue which was under consideration before the Supreme Court was whether an accused is entitled for statutory bail under Section 167(2) of the Code on the ground that cognizance has not been taken before the expiry of 60 days or 90 days, as the case may be, from the date of remand. It was observed as under:- 9.......The scheme of the provisions relating to remand of an accused first during the stage of investigation and thereafter, after cognizance is taken, indicates that the legislature intended investigation of certain crimes to be completed within the period prescribed therein, according to this Court in Bhikamchand Jain (supra). This Court held that in the event of investigation not being completed by the investigating authorities within the prescribed period, the accused acquires an indefeasible right to be granted bail, if he offers to furnish bail. This Court was of the firm opinion that if on either the 61st day or the 91st day, an accused makes an application for being released on bail in default of charge-sheet having been filed, the court has no option but to release the accused on bail. However, once the charge- sheet was filed within the ....
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....completed in 24 hours but practically that was never found feasible. It is in these circumstances that Section 167 of the Cr.P.C. provided for time period within which the investigation should be completed, depending upon the nature of offences. Since, liberty is a Constitutional right, time periods were specified in the default of which the accused will have a right to default bail, a valuable right. 34. The petitioners in Abdul Azeez P V and others V National Investigation Agency, 2014 AIR SCW 6537 relied on by the respondent / CBI filed a petition before the Special Court, NIA Cases by submitting that they were entitled to get statutory bail under Section 167(2) of the Code in as much as the investigating agency had failed to file the final report within 180 days. It was further submitted that the bank account details and mobile phone call details of the petitioners as stated in the charge-sheet itself were yet to be verified and that the charge-sheet filed in court was not a final report as contemplated under Section 173(2) of the Code. The submissions were negated by the Special Court by holding that the petitioners were not entitled to statutory bail under Section 167(2) o....
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....ms of Section 173 of the Code, a cognizance may be taken as against the person against whom an offence is said to have been made out and against whom no such offence has been made out even when investigation is pending. So long a charge sheet is not filed within the meaning of Sub-section (2) of Section 173 of the Code, investigation remains pending. It, however, does not preclude an investigating officer, as noticed hereinbefore, to carry on further investigation despite filing of a police report, in terms of Sub-section (8) of Section 173 of the Code. 36. The Supreme Court in Suresh Kumar Bhikamchand Jain V State of Maharashtra & another, 2013 Crl.L.J.1625 held that once a charge-sheet is filed within the stipulated time, the question of grant of default bail or statutory bail does not arise and filing of charge-sheet is sufficient compliance with the provisions of Section 167(2)(a)(ii) of the Code. It is not material whether cognizance is taken or not as far as Section 167 of the Code is concerned. It was also observed that grant of sanction is not contemplated under section 167 of the Code which is related to completion of investigation in respect of different types of cases....
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....tain sanction to prosecute the accused, the accused was not entitled to grant of statutory bail since the charge-sheet had been filed well within the period contemplated under Section 167(2)(a)(ii) Cr.P.C. Sanction is an enabling provision to prosecute, which is totally separate from the concept of investigation which is concluded by the filing of the charge-sheet. The two are on separate footings. 37. The Supreme Court in State of Maharashtra V Sharadchandra Vinayak Dongre, 1995 SCC (1) 42 observed that the power of Magistrate to take cognizance is not lost even if the investigating officer termed the police report as incomplete. It was observed as under:- 7. The purpose of the submission of the police report with the details as mentioned above, is to enable the Magistrate to satisfy himself, whether on the basis of the report and the material filed along with the police report, a case for taking cognizance has been made out or not. After applying his mind to the police report and the material submitted therewith, if the Magistrate is satisfied that cognizance of the offence is required to be taken, he shall proceed further in accordance with the provisions of the Code....
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.... iii) It is duty of the courts to ensure that benefit of Section 167(2) of the Code be given to the accused and detention beyond statutory period would be illegal being opposed to the liberty of the accused. iv) Section 173 of the Code does not stipulate a piece-meal investigation and filing of incomplete charge sheet before Court and contemplates filing of a final report after completion of the entire investigation of the case in respect of all offences and where several offences are involved in a case. The practice of filing preliminary charge sheets to seek extension of remand beyond the statutory period should be deprecated. v) The charge report can be filed before the court only after the investigation is over and formation of an opinion regarding all the offences alleged against the accused. vi) There is a distinction between completion of investigation and further investigation. The further investigation can be resorted to only after the completion of investigation and filing of charge sheet. vii) The investigating agency cannot circumvent section 167(2) of the Code by filing incomplete charge sheets. The police report or charge sh....
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....tion and issue highlighted in the order dated 11.02.2022 was found to be linked with ongoing investigation by the respondent/CBI in pursuance of present FIR. The applicant/accused was arrested on 06.03.2022. The respondent/CBI did not complete investigation in respect of all the offences as mentioned in FIR. The respondent/CBI has filed charge sheet before the concerned court on 21.04.2022 i.e. 46th day from the date of arrest only for offences punishable under sections 13 (1)(d) and 13(2) of the PC Act and section 120 B IPC. The investigation pertaining to other offences under section 66 of IT Act 2000, section 204 IPC and sections 7 and 12 of the PC Act is still pending and not completed. The Special Judge, CBI has not taken the cognizance on charge sheet filed on 21.04.2022 for want of sanction to prosecute the applicant/accused and Anand Subramanian. 41. Issue which needs judicial consideration and assessment is that whether filing of charge sheet by the respondent/CBI before concerned court on 21.04.2022 pertaining to offences punishable under sections 13 (1)(d) and 13(2) of the PC Act and section 120 B IPC is sufficient compliance of section 167 (2) of the Code to deny sta....
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....manian and subsequent re-designation and other related issues but investigation pertaining to allegations made in FIR is still pending which cannot be termed as further investigation within ambit of section 173 (8) of the Code. The further investigation can be resorted to only after the completion of investigation and filing of complete charge sheet. 42.1.1 The decisions rendered in Dinesh Dalmia CBI, 2008 Cri.LJ.337 and Abdul Azeez PV V NIA, 2014 AIR SCW 6537 and cited by the Special Public Prosecutor do not provide much assistance to arguments of the Special Public Prosecutor for the respondent/CBI. In Abdul Azeez P V and others V National Investigation Agency, investigation only pertaining to minor details such as the bank account details and mobile phone call details was pending for verification. The Special Court negated submissions for grant of statutory bail. The High Court after going through the charge-sheet found that the materials so disclosed and adverted to in the charge-sheet did show that it was a final report and dismissed the appeal. The Supreme Court observed that the charge-sheet so filed before the Special Court was complete in all respects so as to enable th....
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.... investigating agency. In the present case, the respondent/CBI itself preferred to club investigation of issues arising out of SEBI order dated 11.02.2022 with investigation of offences subject matter of present FIR. The investigating agency cannot circumvent section 167(2) of the Code by filing incomplete charge sheet and cannot be filed within the meaning of section 173 (2) till the investigation is completed and any report sent before the investigation is completed will not be a police report within the meaning of section 173 (2) of the Code. The respondent/CBI cannot take shelter of filing charge sheet in respect of offences pertaining to alleged illegal appointment of Anand Subramanian by giving nomenclature of complete charge sheet or final report as per section 173(2) of the Code to defeat the right of statutory bail under Section 167(2) of the Code. 42.3 The Special Judge while dismissing application for grant of statutory bail vide order dated 28.05.2022 did not appreciate legal provisions pertaining to section 167(2) in right perspective by holding that the charge sheet was complete containing all the details and was filed by mentioning therein the relevant sections. T....