TaxTMI 
TaxTMI 
2022 (9) TMI 1509
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....on Report dated 28.05.2018 bearing no. RC AC1 2018 A0011, subject to such conditions or directions, as deemed fit by this Hon'ble Court; and B. Pass any such other order(s) as it 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 advantage in comparison to other brokers. The information was disseminated till 2014 by exchange server to the broker....
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....eview of the NSE's co-location facility conducted by Deloitte Touche Tohmatsu, 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 registered under sections 120B/204 of the IPC and sections 7/12/13(2) read with 13(1) (d) of the PC Act and under sect....
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....t from 01.04.2013 vide NSE letter dated 18.01.2013 and his appointment was approved by co-accused, then Joint Managing Director (JMD) vide internal note dated 18.01.2013. The co-accused did not obtain approval for the appointment of the petitioner/accused from Sh. Ravi Narain., then MD. 4.1. It was also surfaced in investigation that then HR Head was not aware of any details for processing the recruitment of the petitioner/accused 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 petitioner/accused had not mentioned against the column "Position applied for" and kept the same "Blank". The date of the interview was not mentioned. The co-accused by misusing her official position fixed an abnormally high initial compensation of the petitioner/accused and his previous experience was not relevant to the position for which he was appointed at NSE. The petitioner/accused prior to joining NSE was Vice President, Leasing & Repair Services of Transafe Services Limited, a subsidiary of M/s. Balmer & Lawrie and his last drawn compensation was approximately Rs. 14 lakhs per annum. He was offered a disproportionat....
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[email protected] and incriminating e-mails were also recovered. MLAT request has been sent to USA for getting the complete details of this email-id. 4.6. It was established during investigation that the co-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 the petitioner/accused 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 co-accused and the petitioner/accused have committed offences punishable under section 120B IPC read with section 13(1)(d) read with section 13(2) of the PC Act and substantive offences thereof. 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 co-accused and the petitioner/accused has already been filed on 21.04.22. The further investigation is pending in FIR/RC forming part of other transactions and supplementary charge sheet would be filed after completion of the further investigation. The sanction ....
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....tage over other brokers by way of faster access to information/market feed. 8.3. The petitioner/accused is neither mentioned as an accused nor is any allegation raised against the petitioner/accused in present FIR. 8.4. SEBI vide order dated 30.04.2019 while adjudicating Show Causes Notices issued in respect of setup/misuse of the co-location facility of NSE using Tick by Tick (TBT) over Transmission Control Protocol/Internet Protocol (TCP/IP) has exonerated the petitioner/accused after detailed consideration from any liability. 8.4.1. SEBI vide order dated 11.02.2022 while deciding the Show Cause Notices issued in respect of governance of NSE held that it cannot be concluded that the unknown person having email id [email protected] was the petitioner/accused. SEBI had also imposed penalty of the Rs. 2,00,00,000 on the petitioner/accused and said order was stayed by the Securities Appellate Tribunal vide order dated 11.05.2022. The Ministry of Finance, Government of India subsequent to the order dated 11.02.2022 passed by SEBI a request to the respondent/CBI to investigate issues highlighted in the order dated 11.02.2022 passed by SEBI. 8.5. The respondent after 4 years ....
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..../accused regarding allegations made in present FIR qua co-location set up using tick by tick server between 2010-2014. 8.6.1. The use of Tick by Tick (TBT) over Transmission Control Protocol/Internet Protocol (TCP/IP) for co-location set up at NSE was introduced in 2009 and the petitioner/accused joined NSE as Chief Strategic Officer (later Group Operating Officer) on consultancy basis only on 01.04.2013. The petitioner/accused does not have any involvement with use/setup of servers at NSE and/or any technology related aspects during his consultancy with NSE between 01.04.2013 to October 2016. 8.6.2. SEBI vide order dated 30.04.2019 concluded that the petitioner/accused has no liability in respect of the setup/misuse of the co-location facility of NSE using Tick by Tick (TBT) over Transmission Control Protocol/Internet Protocol (TCP/IP). SEBI has in order dated 11.02.2022 concluded that there is no evidence or document to prove that the unknown person who used the email id '[email protected]' was the petitioner/accused. 8.7. The allegations made in charge sheet dated 21.04.2022 only in respect of terms of appointment/re-designation/salary of the petitioner/accused....
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....harge sheet creates an indefeasible right in favour of the petitioner/applicant for grant of bail. 8.11. The petitioner/accused prayed that the petitioner/accused be released on bail in First Information Report dated 28.05.2018 bearing no. RC AC1 2018 A0011 subject to such conditions or directions as deemed fit by this court. 9. The respondent/CBI in Status Report submitted the facts as mentioned in present FIR and also facts which were surfaced during further investigation as detailed hereinabove. It is stated that the bail application be dismissed as the applicant/accused is highly influential and is capable of influencing the witnesses. The examination of other witnesses is being carried out to unearth the whole conspiracy related to co-location set up. The applicant/accused may destroy the e-mails/digital evidence. The investigation is also underway to identify trading members/entities who had also illegally benefitted from the collocation and to collect evidences against them. The execution report of MLAT is awaited from USA. 10. The learned Senior Counsel for the petitioner/accused for grant of bail under section 439 of the Code argued that as per allegations in FIR that M....
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....tions of preferential access granted to the brokers and undue gain made out of it. The allegations pertaining to the co-location facility pertains to period from 2010-2014 but the petitioner/accused joined NSE in the month of April, 2013 and the Co-location setup existed in the NSE prior to his appointment. The petitioner was never a party to co-location and his role was confined to the regular operations of the exchange and it's regulatory. 10.5. SEBI had examined and adjudicated the role and involvement of the NSE employees including the role of the petitioner/accused in the system of dissemination of information through Co-location facility Tick by Tick System Architecture. SEBI after complete adjudication SEBI vide order dated 30.04.2019 had given a finding that the petitioner/accused was not involved in the co-location facility. 10.6. The petitioner/accused allegedly created an email id [email protected] and used said email id to communicate with co-accused. However SEBI vide order dated 11.02.2022 concluded that there is no evidence or document to prove that the unknown person who used the email id [email protected] was the petitioner/accused. 10.7. The l....
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.... by its CEO with some unknown persons thereby compromising the integrity of NSE which may have relevance to the co-location which was already being investigated by the respondent/CBI. SEBI had imposed heavy fines on the co-accused for causing wrongful gain to the petitioner/accused in course of her employment to the detriment to the corporate governance of the NSE as well as larger public interest. 11.1. The respondent/CBI was requested to investigate the issue raised in the order passed by SEBI. The respondent/CBI had already registered RC in co-location issue and passing of information so issues disclosed in the letter were also included in the investigation. It was surfaced during investigation that accused including the co-accused had adopted several ingenious ways to amass illegal wealth which resulted in public injury. The investigation in the present case relate to conspiracies which are independent to each other and are distinct conspiracies. The investigation has already been completed with regards to one of the method adopted to amass wealth and cause wrongful gain to themselves by abuse of appointment of the petitioner/accused as Chief Strategic Advisor to MD at NSE and....
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....he illegal appointment of the petitioner/accused. 11.5. The co-accused granted more powers to the petitioner/accused with more financial benefits without following the due process. The substantial powers were given to the petitioner/accused. The Board was kept in the dark that the petitioner/accused was a consultant and Advisor to MD. The investigation with regards to the employment of the petitioner/accused appointed by the co-accused is complete and regarding this charge sheet has already been filed. 11.6. The co-accused and the petitioner/accused are responsible for co-location. The team which was responsible for setting up co-location was reporting to the co-accused and further the team of Ravi Apte and N. Muralidharan which was responsible for setting up the co-location was reporting to the petitioner/accused. The co-accused was communicating with an external e-mail ID "[email protected]" through her e-mail IDs. The petitioner/accused also in disclosure statement under section 27 of Indian Evidence Act admitted having operated said email ID "[email protected]" and accessed the said e-mail ID. 11.7. The employment of the petitioner/accused established grave and....
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....n the investigation already undertaken in respect of co-location issue and passing of information. 12.2. It was surfaced during investigation that the co-accused approved internal approval note dated January 18.01.2013. The petitioner/accused was offered annual remuneration of Rs. 1.68 crores per annum for working 4 days in a week and his compensation was enhanced frequently by the co-accused. The co-accused re-designated the petitioner/accused as 'Group Operating Officer (GOO) and Advisor to MD with effect from 01.04.2015 vide letter dated 01.04.2015. The petitioner/accused was required to be designated as KMP as per regulation 2 (1) (i) of SECC Regulations 2012 and the compensation given to the petitioner/accused as GOO and Advisor to MD was required to be disclosed in the Annual Report of the NSE as per regulation 27 (5). 12.3. The co-location was conceptualized and implemented during tenure of co-accused as Joint MD and Muralidharan Natarajan, CTO of NSETECH (a subsidiary of NSE) was responsible for placing co-location architecture at NSE. The co-accused was found to be communicating with an external e-mail ID "[email protected]" through her e-mail IDs which was al....
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....wal and another, (1987) 2 SCC 364 held as under:- 26) Unfortunately, in the last few years, the country has been seeing an alarming rise in white-collar crimes, which has affected the fibre of the country's economic structure. Incontrovertibly, economic offences have serious repercussions on the development of the country as a whole. In State of Gujarat vs. Mohanlal Jitamalii Porwal and Anr. (1987) 2 SCC 364 this Court, while considering a request of the prosecution for adducing additional evidence, inter alia, observed as under:- "5 ..... The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful ....
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....ered present FIR pertaining to co-location and passing of information to M/s. OPG Securities Pvt. Ltd. by unknown officials of SEBI. The petitioner/accused is not named in FIR and no specific allegations are made in FIR against the petitioner/accused. The petitioner/accused has joined investigation during period with effect from 19.02.2022 to 22.02.2022 and during investigation, the respondent/CBI seized laptop, mobile phones, I-pad, pen drives and documents. 14.1. SEBI conducted enquiry in pursuance of complaints made against NSE in respect of its co-location facilities on allegations that NSE and its employees had committed fraudulent and unfair trade practices and violated SECC Regulations which was culminating into institution of Case No. WTM/GM/EFD/03/2018-2019 and SEBI vide order dated 30.04.2019 which is exhaustive and detailed order directed that the co-accused in her capacity as former MD & CEO of NSE should disgorge 25% of her salary drawn for FY 2013-14 and was prohibited from associating with a listed company or market corporation for five years. The relevant potion of order dated 30.04.2019 is reproduced as under:- iii) Chitra Ramkrishna, Noticee No. 3, (former MD &....
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....ior Counsel for the petitioner/accused in respect of the petitioner/accused argued that SEBI vide order dated 11.02.2022 has held that it cannot be concluded that the unknown person having email id [email protected] was the petitioner/accused. The perusal of order dated 11.02.2022 reflects that there was no conclusive evidence or finding that the unknown person who used email id was the petitioner/accused. The relevant portion of the order dated 11.02.2022 is reads as under:- 31.2.14.....In view of the above, I find that there is no conclusive evidence or finding from the E&Y Report or the documents before me to prove that the unknown person who used the email id '[email protected]' was in fact Noticee no. 6. 14.4. However the petitioner/accused was restrained from associating with any Market Infrastructure Institution or any intermediary registered with SEBI in any capacity for a period of three (03) years from the date of this order. SEBI had also imposed penalty of the Rs. 2,00,00,000 (Two Crores) on the petitioner/accused. Securities Appellate Tribunal (SAT) had stayed operation of order dated 11.02.2022 vide order dated 11.05.2022. 14.5. It is submitt....
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....d worked as Joint MD, NSE from 2009 till 31st March, 2013 and exercised the powers of MD and was appointed as MD and CEO of NSE on 01st April, 2013. The petitioner/accused was offered to join NSE as Chief Strategic Advisor to MD with effect from 01.04.2013 vide NSE letter dated 18.01.2013 on approval of the co-accused, then Joint Managing Director (JMD) vide internal note dated 18.01.2013 with annual compensation of Rs. 1.68 crores for working 4 days in a week. The petitioner/accused was re-designated as 'Group Operating Officer (GOO) and Advisor to MD with effect from 01.04.2015 vide letter dated 01.04.2015 issued by the co-accused. 15.2. It is apparent that the respondent/CBI received a request from the Ministry of Finance, Govt. of India vide letter dated 05.03.2022 to investigate the issues arising out of SEBI order dated 11.02.2022 which was passed in the matters pertaining to illegal appointment of the petitioner/accused as 'Chief Strategic Advisor' (CSA), his re-designation as 'Group Operating Officer' and Advisor to MD' and other issues. The respondent/CBI took up investigation and issue highlighted in the order dated 11.02.2022 was found to be link....
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.... dated 23.02.2005 which authorised the co-accused to appoint advisors & consultants with such powers and duties and upon such terms as she thinks fit, for managing the business affairs of NSE; the appointment of the petitioner/accused was within the knowledge and acceptance of the Board Members of NSE as well as the HR department/head Mr. Chandrasekar Mukherjee; Board Resolution dated 11.08.2015 clearly detailed the roles & responsibilities of the petitioner/accused as well as his appointment on the determined salary was approved by the Board: The petitioner/accused was not appointed as a Key Managerial Personnel (KMP) as he was not handling any KMP functions and role did not require approval of Nomination and Remuneration Committee (NRC) and the petitioner/accused was appointed as a consultant on a contractual basis and was advising on non-core business functions. 15.6. The learned Senior Counsel for the petitioner/accused argued that the petitioner/accused was appointed in the NSE as Chief Strategic Officer vide appointment letter dated 18.01.2013. The petitioner/accused was having experience of around 23 years in the industry with a well-rounded exposure in areas of strategy/Bu....
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....bail application filed on her behalf are perused and in this meeting "Delegation of power to Group Operating Officer" was discussed. It was resolved as under:- The Board noted that with the overall growth in the business activities and also due for various news initiative undertaken by the exchange. It is imperative that business decision and execution of certain powers to Mr. Subramanian Anand Group Operating Officer in order to further smoothen the day to day conduct of business operations of the Exchange subject to statutory restriction and conditions in any laid down by the Board or the Managing Director in this regard. The board discussed the matter and delegated the following powers to Mr. Subramanian Anand, Group operating Officer, subject to statutory restrictions and conditions if any laid down by the Board or the Managing Director in this regard. Vide this Minutes certain powers were delegated to the petitioner/accused as Group Operating Officer but it does not reflect that his re-designation as Group Operating Officer was as per Rules and Regulations and after following mandatory statutory provisions. 15.10 The e-mail dated 10.05.2016 sent by Chandershekhar Mukherjee....
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....particular when the investigation was conducted by the respondent/CBI after order dated 11.02.2022 passed by SEBI and letter written by the Ministry of Finance. Sanjay Gupta owner of the OPG Securities Pvt. Ltd. has already been arrested. The investigation is still pending. The allegations against the petitioner/accused are serious and grave and are directly related to national economy and financial interests. After considering gravity and seriousness of offence subject matter of present FIR and subsequent investigation, no ground for regular bail under section 439 of the Code is made out. It is pertinent to mention that every piece of legal and factual arguments advanced by the learned Senior Counsel for the petitioner/accused and the Senior Public Prosecutor is considered in right perspective. BAIL UNDER SECTION 167(2) OF THE CODE 16. The learned Senior Counsel for the petitioner/accused with regard to entitlement of the petitioner/accused for default bail argued that the statutory right to bail U/s. 167(2) of the Code is a fundamental right under Article 21 of the Constitution. The section 167 of the Code mandates to complete the entire investigation qua all offences within a ....
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....rpose of police report with details as mentioned under section 173(2) of the Code is to enable the Magistrate to satisfy himself that whether on the basis of report and the material filed along with it, a case for taking cognizance has been made out or not. If the police report and annexed material is sufficient to satisfy the Magistrate for taking cognizance then his power is not fettered by any label given by the investigating agency to the report under section 173(2) of the Code or by mentioning therein that investigation is pending and supplementary charge sheet shall be filed. It is the jurisdiction of the Magistrate alone to decide whether the material placed by the prosecution is sufficient or not and whether the charge sheet is incomplete charge sheet. The reliance was placed on State of Maharashtra V. Sharadchandra Vinayak Dogre & others, AIR 1995 SC 231 and Narendra Kumar Amin V. CBI, MANU/SC/0038/2015. 17.2. The Special Judge vide order dated 28.05.2022 also held that the charge sheet was complete containing all the details and was filed by mentioning therein the relevant sections. The provision of section 167(2)(a)(i) & (ii) of the Code relates to completion of investi....
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.... merely because further investigation after filling of the police report is to be on as permitted by sub Section 8 of 173 Cr. P. C., the applicant would be entitled to be released on bail U/s. 167(2) of the Code. 20. The very purpose of completing the investigation within 60 days/90 days as postulated U/s. 167(2) Cr.P.C. is that an accused who is in JC or whose liberty has been curtailed cannot remain incarcerated indefinitely due to non completion of investigation on the part of the investigating agency in a time bound manner. Rather it should be completed in above specified time failing which he will be entitled to statutory bail U/s. 167(2) Cr. P. C. 21. In the present case, the charge-sheet was filed on 57th day i.e. well within time. The charge-sheet filed in sum and substance meet all the requirements of Sec. 173(2) Cr.P.C. (a) to (g). The charge-sheet clearly describes in detail of all the material collected by the IO/Investigating agency during the investigation, as also role played by Chitra Ramakrishna and Anand Subramanium, including what offence(s) were committed and by whom which was in terms of Clause (d) of Section 173(2) Cr.P.C. on the basis of material collecte....
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....ts of the case. Section 167(2) of the Code reads as under:- Section 167. Procedure when investigation cannot be completed in twenty four hours.-- (2) The Magistrate to whom an accused person is forwarded under this section may, whether he has or has no jurisdiction to try the case, from time to time, authorise the detention of the accused in such custody as such Magistrate thinks fit, for a term not exceeding fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, 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 inv....
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....au of Investigation and another, MANU/SC/0851/2022 reiterated by observing that it is duty of the courts to see to it that an accused gets the benefit of Section 167(2) of the Code and any detention beyond this period would certainly be illegal being an affront to the liberty of the person concerned. It was observed as under:- Section 167(2) was introduced in the year 1978, giving emphasis to the maximum period of time to complete the investigation. This provision has got a laudable object behind it, which is to ensure an expeditious investigation and a fair trial, and to set down a rationalised procedure that protects the interests of the indigent sections of society. This is also another limb of Article 21. Presumption of innocence is also inbuilt in this provision. An investigating agency has to expedite the process of investigation as a suspect is languishing under incarceration. Thus, a duty is enjoined upon the agency to complete the investigation within the time prescribed and a failure would enable the release of the accused. The right enshrined is an absolute and indefeasible one, inuring to the benefit of suspect. Such a right cannot be taken away even during any unfore....
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....ersonal liberty except according to procedure established by law and as per Maneka Gandhi V. Union of India, (1978) 1 SCC 248 that such a procedure cannot be arbitrary, unfair or unreasonable. It was further observed that the history of Section 167(2) of the Code and the safeguard of 'default bail' contained in the proviso thereto is intrinsically linked to Article 21 and is nothing but a legislative exposition of the constitutional safeguard that no person shall be detained except in accordance with rule of law. The Supreme Court while tracing jurisprudential history of section 167 of The Code laid emphasis on safeguard attached with section 167 of the Code observed as under:- 17. Before we proceed to expand upon the parameters of the right to default bail under Section 167(2) as interpreted by various decisions of this Court, we find it pertinent to note the observations made by this Court in Uday Mohanlal Acharya [Uday Mohanlal Acharya v. State of Maharashtra, (2001) 5 SCC 453: 2001 SCC (Cri.) 760] on the fundamental right to personal liberty of the person and the effect of deprivation of the same as follows: (SCC p. 472, para 13) "13. ... Personal liberty is one of ....
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.... 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 Hence the Law Commission in Report No. 14 recommended the need for an appropriate provision specifically providing for continued remand after the expiry of 15 days, in a manner that "while meeting the needs of a full and proper investigation in cases of serious crime, will still safeguard the liberty of the person of the individual." Further, that the legislature should prescribe a maximum time period beyond which no accused could be detained without filing of the police report before the magistrate. It was pointed out that in England, even a person accused of grave offences such as treason could not be indefinitely detained in prison till commencement of the trial. 17.4 The suggestion made in Report No. 14 was reiterated by the Law Commission in Report No. 41 on The Code of Criminal Procedure, 1898 (Vol. I, 1969, pages 76-77). The Law Commission reemphasized the need to guard against the misuse of Section 344 of the 1898 Code by filing 'preliminary reports' for remanding the accused beyond the statutory period pre....
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....t 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. 17.7 Therefore, as mentioned supra, Section 167(2) is integrally linked to the constitutional commitment under Article 21 promising protection of life and personal liberty against unlawful and arbitrary detention, and must be interpreted in a manner which serves this purpose. In this regard we find it useful to refer to the decision of the three-Judge Bench of this Court in Rakesh Kumar Paul v. State of Assam, (2017) 15 SCC 67, which laid down certain seminal principles as to the interpretation of Section 167(2), CrPC though the questions of law involved were somewhat different from the present case. The questions before the three Judge Bench in Rakesh Kumar Paul were whether, firstly, the 90 day remand extension under Section 167(2)(a)(i) would be applicable in respect of offences where the maximum period of imprisonment was 10 years, though the minimum period was less than 10 years. Secondly, whethe....
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....ef Justice or the Court." (emphasis supplied) Therefore, the Courts cannot adopt a rigid or formalistic approach whilst considering any issue that touches upon the rights contained in Article 21. 17.8 We may also refer with benefit to the recent judgment of this Court in S. Kasi v. State Through The Inspector of Police Samaynallur Police Station Madurai District (Criminal Appeal No. 452 of 2020 dated 19th June, 2020), MANU/SC/0491/2020, wherein it was observed that the indefeasible right to default bail under Section 167(2) is an integral part of the right to personal liberty under Article 21, and the said right to bail cannot be suspended even during a pandemic situation as is prevailing currently. It was emphasized that the right of the accused to be set at liberty takes precedence over the right of the State to carry on the investigation and submit a chargesheet. 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 appli....
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....ynonymous, though an offence always leads to a case and a case would always involve an offence or offences. An occurrence or transaction may involve commission of only one offence; or it may involve several offences. When a police officer receives information about the commission of a cognizable offence, and records the same, he is said to register a case, sometimes called a crime case. 'Case' understood in this general sense means that the case before the police officer arising from the information placed before him regarding an occurrence in which an offence or offences are committed. 'Case' relates to the transactions of which information is given and not merely one of the offences committed during the course of the transaction. This Court further held that when Section 173 speaks of completion of investigation, it must ordinarily be taken to refer to completion of investigation of all the facts and circumstances relating to the case, whether the transaction involves one offence or plurality of offences and a final report or charge sheet under Section 173 could be filed only after completion of the investigation in the case relating to all the offences arising ....
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....eport in respect of all the offences, it cannot be said that a final report under Section 173(2) in respect of the offences alleged to have been committed by the petitioners under the Official Secrets Act could be legally filed by invoking the provisions of Section 173(8) of the Code. The finding of the Court below to the contra is, in our view, illegal. 15. Admittedly, no final report has been filed by the CBI against the petitioners in respect of the various offences. In its absence, the prosecution is not justified in resorting to Section 173(8) of the Code to submit a further report in respect of the alleged involvement of the petitioners under the Official Secrets Act, IPC, Act and the Order. Since the investigation of the case is not complete, we find no reason to deny the statutory bail to the petitioners under Section 167(2) of the Code. 16. The Supreme Court has held that in the scheme of the 1973 Code, remand to custody during investigation can be made only under Section 167 of the Code and remand to custody under Section 309 can be made only after taking cognizance of the offence by the Court. The result is that if the investigation is not over and the period mention....
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....er the completion of investigation. The relevant paragraph is extracted below: 9. Section 173(2)(1) provides that on completion of the investigation the police officer investigating into a cognizable offence shall submit a report in the form prescribed by the State Government and stating therein (a) the names of the parties; (b) the nature of the information; (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....
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....lice 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 charge-sheet or a final report is dependent on the nature of the opinion so formed. The formation of the said opinion by the police is the final step in the investigation evidenced by the "police report" contemplated under section 173(2) of the Code. 24. In my view, a plain reading of section 173 of the Code shows that every investigation must be completed without unnecessary delay and as soon as it is completed, the Officer-in-charge of the Police Station shall forward a report to the Magistrate in the form prescribed. Therefore, there is no question of sending up of a "police report" within the meaning of section 173, sub-section (2) of Criminal Procedure Code until the investigation is completed. Any report sent before the investigation is completed will 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 th....
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....ed 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 empowered and is incapacitated to take cognizance and unless cognizance has been taken, sub-section (8) cannot be set in motion. 27. The question thus emerges naturally is, whether the Magistrate can take cognizance on the admittedly "incomplete charge-sheet" forwarded by the police. The answer stubbornly and admittedly must be in the negative, because the investigation is yet incomplete and the "police report" yet remains to be filed. Thus, the filing of the incomplete charge-sheet cannot circumvent the provisions of sub-section (2) of section 173 of the Code and incomplete report or an incomplete charge-sheet with whatsoever expression it may be called does not meet the obligatory 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....
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....nvestigation 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 investigation. Therefore, the crucial aspect that needs to be ascertained to consider the claim of the accused for default bail is whether the investigation is completed within the stipulated time of 90 days or not. So, when the Investigating Agency files only preliminary charge-sheet within the said stipulated time keeping the investigation pending or without completing the investigation, it will not under any circumstances defeat the right conferred on the accused to claim for default bail. By mere filing a preliminary charge-sheet without completing the entire investigation and filing a final and full-fledged charge-sheet, the prosecuting agency cannot vanquish the indefeasible statutory 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 2 held that right to personal liberty under Article 21 of the Constitution of India includes right to speedy investigation and entitlement to "....
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....h 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 evidence as stated by the investigating officer is still to be secured. Therefore, on account of default committed by the prosecuting agency in completing the investigation within the stipulated period of time, the petitioner acquired an indefeasible right to claim default bail under proviso (a) to Section 167(2) Cr.P.C. 24. In a petition filed under proviso (a) to Section 167(2) Cr.P.C. for grant of default bail, no discretion is vested with the Magistrate/Court to deny bail to him. In the judgment of the aforesaid 3-Judge Bench of the Apex Court, it is clearly held that no discretion is vested with the Court while granting default bail where accused satisfies the prerequisite for grant thereof. The Apex Court in another case Rajnikant Jivanlal Patel v. Intelligence Officer, Narcotic Control Bureau, New Delhi 3 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 investigatin....
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....(a) to Section 167(2) of the Code and taking of cognizance is not material to section 167 of the Code. The scheme of the Code is such that once the investigation stage is completed, the court proceeds to the next stage, which is the taking of cognizance and trial. In Serious Fraud Investigation Office V. Rahul Modi, AIR 2022 SC 902 which is also relied upon by the Special Public Prosecutor for the respondent/CBI, the High Court considered the regular bail applications filed by the respondent Nos. 1 and 2 on 31.05.2019 and directed their release on bail on the ground that they were entitled to statutory bail on sole reason given for grant of bail by the High Court is that the trial court has not taken cognizance of the complaint before the expiry of the 60-day period which entitled the respondent Nos. 1 and 2 to statutory bail, as a matter of indefeasible 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.......Th....
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....rect in view of the judgment of this Court in Bhikamchand Jain (supra). 24. The Supreme Court in Fakhrey Alam V. The State of Uttar Pradesh, 2021(5) SCALE 346 observed that there can only be one charge sheet but there is no restriction on filing of number of supplementary charge sheets. It was observed as under:- 9. On the second aspect, it is urged that what is called as the second charge sheet is really a supplementary charge sheet as there is no restriction on the number of supplementary charge sheets which can be filed but there will be only one charge sheet in view of (2020) 10 SCC 616 judgment of this Court in the case of Vinay Tyagi vs. Irshad Ali @ Deepak & Ors., (2013)5 SCC 762. 11. On the second aspect we cannot lose sight of the fact that what was envisaged by the Legislature was that the investigation should be 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 hav....
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....ce thereupon should be taken or not. The power of the investigating officer to make a prayer for making further investigation in terms of Sub-section (8) of Section 173 is not taken away only because a charge sheet under Sub-section (2) thereof has been filed. A further investigation is permissible even if order of cognizance of offence has been taken by the Magistrate. It was observed asunder:- 28. It is a well-settled principle of interpretation of statute that it is to be read in its entirety. Construction of a statute should be made in a manner so as to give effect to all the provisions thereof. Remand of an accused is contemplated by the Parliament at two stages; pre-cognizance and post cognizance. Even in the same case depending upon the nature of charge sheet filed by the investigating officer in terms 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 precl....
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....years and 90 days where the offences are punishable for over 10 years or even death sentence. In the event, an investigating authority fails to file the charge-sheet within the stipulated period, the accused is entitled to be released on statutory bail. In such a situation, the accused continues to remain in the custody of the Magistrate till such time as cognizance is taken by the Court trying the offence, when the said Court assumes custody of the accused for purposes of remand during the trial in terms of Section 309 Cr.P.C. The two stages are different, but one follows the other so as to maintain a continuity of the custody of the accused with a court. 19. Having regard to the above, we have no hesitation in holding that notwithstanding the fact that the prosecution had not been able 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 fo....
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....cused in enforceable only prior to the filing of the charge-sheet and does not survive thereafter, if already not availed of. If the charge-sheet is not filed then right for default bail has ripened into status of indefeasibility which cannot be frustrated by the prosecution and the courts on any pretext. 30. The legal position pertaining to scope of section 167(2) of the Code emanating from above referred decisions can be summarised as under:- i) The object of the section 167(2) of the Code is to ensure an expeditious investigation and a fair trial and is another limb of Article 21. ii) The accused has indefeasible right in his favour for being released on bail on account of default by the investigating agency to complete investigation within the prescribed period. 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 investiga....
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....011 dated 28.05.2018 registered at PS CBI/AC-I for offences punishable under sections 120B/204 IPC and sections 7/12/13(2) read with 13(1)(d) of the PC Act and section 66 of the Information Technology Act, 2000 wherein the petitioner/accused was named or implicated. The respondent/CBI received a request from the Ministry of Finance, Govt. of India vide letter dated 05.03.2022 to investigate the issues arising out of SEBI order dated 11.02.2022 which was passed in the matters pertaining to illegal appointment of the petitioner/accused as 'Chief Strategic Advisor' (CSA), his re-designation as 'Group Operating Officer' and Advisor to MD' and other issues. The respondent/CBI took up investigation 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 petitioner/accused was arrested on 24.02.2022. 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. 57th day from the date of arrest only for offences punishable under sections 13(1)(d....
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....d by the Special Public Prosecutor for the respondent/CBI that the right of the applicant/accused under section 167(2) of the Code has come to an end immediately after filing of charge sheet on 21.04.2022 and said right under section 167(2) cannot be revived due to reason that further investigation is pending within the meaning of sub-section 8 of Section 173 of the Code. As mentioned and discussed hereinabove that there is a distinction between completion of investigation and further investigation. The respondent/CBI has conducted and concluded part investigation pertaining to alleged illegalities committed by the co-accused in initial appointment of the petitioner 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. 33.1.1. 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 ....
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....ned Special Court can take cognisance only in respect of some of offences for which charge sheet was filed on 21.04.22 but cannot take cognizance in respect of offence for which investigation is still pending and charge sheet is not filed. It is not permissible within mandate of legal provisions as contained in sections 173(2) and 167(2) to take cognizance in piece meal or in parts. It would amount to negation of indefeasible right given to the accused under section 167(2) of the Code. The constitutional right under section 167(2) of the Code and granted to accused in case of non-completion of investigation within stipulated period cannot be interpreted to convenience of 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....