TaxTMI 
TaxTMI 
2022 (9) TMI 1509
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....ishnan & Ors.." arising out of the First Information 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 ....
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....o had access to servers with better hardware. As per forensic review 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....
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....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 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 compensati....
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....der section 27 of Indian Evidence Act admitted having operated the e-mail ID [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....
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....by Tick based system architecture) in conspiracy with officials of NSE and as such was given an advantage 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 inves....
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....present FIR. The charge sheet dated 21.04.2022 does not contain any material reflecting involvement of the petitioner/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 ma....
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....section 167(2) of the Code and non-completion of investigation within the stipulated period of 60 days and filing of incomplete charge 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....
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....ther argued that the investigation conducted by the respondent/CBI does not establish any connection of the petitioner/accused regarding allegations 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 ....
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.... A letter dated 05.03.2022 was received from Ministry of Finance mentioning therein that the enquiry by SEBI revealed sharing of confidential information 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 ....
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....e NSE as per regulation 27 (5). SEBI in its order dated 11.02.2022 clearly stated the role played by the co-accused and the petitioner/accused in the matter of the 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 adm....
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.... compromised integrity of NSE. The respondent/CBI was requested to conduct investigation. The respondent/CBI included issues disclosed in the letter of Ministry of Finance in 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 fo....
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.... with, the larger interests of the public/State and other similar considerations. The Supreme Court in Nimmagadda Prasad V. CBI (2013) 7 SCC 466 after relying on State of Gujrat V. Mohanlal Jitamalji Porwal 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 th....
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....l have to be on case to case basis on the facts involved therein and securing the presence of the accused to stand trial. ABUSE OF SERVER ARCHITECTURE OF NSE 14. 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 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 ....
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....an unknown person in charge of email ID [email protected]. It is true that no such allegation against the applicant/accused were made in present FIR but these facts surfaced during further investigation conducted in pursuance of present FIR/RC. The learned Senior 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 perio....
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....IR 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 section 66 of the Information Technology Act, 2000 relating to abuse of server architecture of NSE besides other allegations as mentioned in FIR. The co-accused 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 appoin....
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....arned Senior Counsel for the co-accused during course of arguments in bail application filed on behalf of the co-accused laid emphasis that the co-accused in capacity of MD & CEO had the power to appoint and employ the petitioner/accused which was conferred by virtue of Board Resolution (BR) 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 Co....
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....pointment of the petitioner/accused was required to be made by the co-accused as per procedure and was not subjected to whims and fancies of the co-accused. 15.9. Minutes of the 125th Meeting of the Board of Directors of NSE held on 11.08.2015 as referred by the learned Senior Counsel for co-accused in 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 Mi....
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....er with evidence or influencing witnesses by the petitioner/accused. 15.12 It is true that the petitioner/accused was not named in FIR and was arrested about four years after registration of FIR. The role of the co-accused and the petitioner/accused was surfaced during investigation in pursuance of present FIR and in 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 Coun....
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....further investigation is pending within the meaning of sub-section 8 of Section 173 of the Code. The Special Public Prosecutor for the respondent/CBI relied on Dinesh Dalmia v. CBI, 2008 Cri. LJ. 337 and Abdul Azeez PV V. NIA, 2014 AIR SCW 6537. 17.1. The Special Public Prosecutor for the respondent/CBI further argued that the purpose 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 19....
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....e, it must be deemed to be one with a view to circumvent or defeat the provision of Section 167(2) of Cr.P.C. 18. More so there is no bar to further investigation and Section 173(8) of Cr.P.C. cannot be limited in its operation in respect of offences which are already the subject matter of police report. There is no merit in the arguments that 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. 1....
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....uch right came to an end and the accused would be entitled to pray for regular bail on merits. The right to bail under the proviso to section 167(2) of the Code is commonly known as 'default bail' or 'compulsive bail'. It is granted due to default of the investigating agency in not completing the investigation within the prescribed time irrespective of the merits 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 ....
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....ault of the investigating agency in not completing the investigation within the prescribed time, irrespective of the merits of the case. 21. Before entering into critical and analytical analysis of facts, it is necessary to discuss scope and magnitude of section 167(2) of the Code. The Supreme Court and High Courts in various cases have considered object and scope of section 167(2) of the Code. The Supreme Court in Satender Kumar Antil V. Central Bureau 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....
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....the investigation is complete and chargesheet is filed then the so called indefeasible right of the accused would stand extinguished. 22. The Supreme Court in M Ravindran V. The Intelligence Officer, (2021)2 SCC 485 while tracing history of enactment of section 167(2) of the Code and practice of filing preliminary charge sheets being followed by the investigating officers observed that 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 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. Be....
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....en request the magistrate to postpone commencement of the trial and authorize further remand of the accused under Section 344 of the 1898 Code till the time the investigation was completed and the final chargesheet was filed. The Law Commission of India in Report No. 14 on Reforms of the Judicial Administration (Vol. II, 1948, pages 758-760) pointed out that in many cases the accused were languishing for several months in custody without any final report being filed before the Courts. It was also pointed out that there was conflict in judicial opinion as to whether the magistrate was bound to release the accused if the police report was not filed within 15 days. 17.3 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 po....
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....he indefeasible right to bail. As is evident from the recommendations of the Law Commission mentioned supra, the intent of the legislature was to balance the need for sufficient time limits to complete the investigation with the need to protect the civil liberties of the accused. Section 167(2) provides for a clear mandate that the investigative agency must collect the required evidence within the prescribed time period, failing which the accused can no longer be detained. This ensures that the investigating officers are compelled to act swiftly and efficiently without misusing the prospect of further remand. This also ensures that the Court takes cognizance of the case without any undue delay from the date of giving information of the offence, so that society at large does not lose faith and develop cynicism towards the criminal justice system. 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 decisio....
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....w of expeditious conclusion of investigations and from the angle of personal liberty and not from a purely dictionary or textual perspective as canvassed by the learned counsel for the State. x x x 41. We take this view keeping in mind that in matters of personal liberty and Article 21 of the Constitution, it is not always advisable to be formalistic or technical. The history of the personal liberty jurisprudence of this Court and other constitutional courts includes petitions for a writ of habeas corpus and for other writs being entertained even on the basis of a letter addressed to the Chief 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 ....
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....r and formation of an opinion regarding all the offences alleged against the accused. It was further held as under:- 11. In the decision reported in Vijayaraghavan v. CBI 1984 Ker LT 522 : 1984 Cri. LJ 1277, this Court held that the investigation of a cases relates to the entire transaction of which information is given and not merely one of the offences committed in the course of the transaction. In paragraph 10, this Court held thus: 10. The expression 'case' used in the provisions under examination has to be understood in the general sense and not in a narrow or technical way. The words 'offence' and 'case' are not synonymous, 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 ....
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....he offences as required by Section 309(2) of the Code. The Magistrate is not empowered to order remand of the accused to judicial custody unless final report as contemplated under Section 173(2) of the Code is laid before Court. 14. Thus, in the light of the report filed by the CBI, a further investigation in respect of the offences under the Official Secrets Act, IPC, Act and the Order is necessary. If final report is laid before Court and the Magistrate takes cognizance of the offence, a further report under Section 173(8) of the Code regarding commission of offences or involvement of the accused in connection with the other offences can be made. But in the absence of a final report 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....
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....avindran held as under:- 16. From the above decision, it is clear that a time limit for completing investigation was incorporated in order to ensure that the accused does not languish in jail for the investigative authority's failure to complete investigation. It was held that the right to statutory bail accrues on a person if the charge sheet is not filed within the prescribed period of sixty days. The said right to bail is indefeasible and is interlinked with personal liberty as envisaged under Article 21 of the Constitution of India. 21. The Supreme Court in Satya Narain Musadi v. State of Bihar, (1980)3 SCC 152 discussing Section 173(2) of the Cr.P.C. has held that a charge sheet can be filed only after 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; ....
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....vestigation and further investigation and observed that it is only after the completion of investigation and filing of charge sheet that further investigation can be resorted to. In other words, Section 173(8) of the Code comes into picture only after completion of investigation and filing of the charge sheet under Section 173(2) of the Code Further, the court held that by filing incomplete charge sheets, the State cannot circumvent Section 167(2) of the Code. It was held as under:- 23. Reference here may usefully be made to a decision of the Supreme Court in Abhinandan Jha v. Dinesh Mitra, AIR 1968 SC 117, which points out that the investigation under the Code takes in several aspects and stages ending ultimately with the formation of an opinion by the police as to whether, as from the material covered and collected, a case is made out to place the accused before the Magistrate for trial and the submission of either a 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. ....
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....Officer for collecting further evidence. According to him, it tends to indicate that the investigation is not shut but remains in suspended animation till the police report is sent to the Magistrate. As has already been pointed out, a police report as defined in section 2(r) of the Code can only be filed "as soon as the investigation is completed". If it is not complete; no such report can be filed. When no report is forwarded as required by the Code, the Magistrate cannot take cognizance. Thus, unless all these steps are crossed, sub-section (8) cannot be pressed in aid for collecting further evidence which really can be called in aid if further evidence is discovered after the filing of the charge-sheet or the police report on the completion of the investigation. 26. As stated earlier, sub-section (2) of section 173 of the Code also speaks of taking cognizance of the offence by a Magistrate on a police report. Thus, without the police report as defined in section 2(r) of the Code, the Magistrate is not 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 nat....
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....ency in completing the investigation within the time stipulated by the statute. 20. It is significant to note that a plain reading of proviso (a) to Section 167(2) Cr.P.C. makes it manifest that what is required to claim for default bail under proviso (a) to Section 167(2) Cr.P.C. is failure on the part of the Investigating Agency to complete the investigation within the stipulated period of time. In other words, it is the default committed by the Investigating Agency to complete the entire investigation within the stipulated time that confers right on the accused to claim for default bail. So, filing of charge-sheet is not the criteria or the actual test to be applied to decide whether the accused is entitled to default bail or not. It is relevant to note that the charge-sheet after completion of investigation will be filed to enable the Court to take cognizance of the offence. So, the Court cannot take cognizance of the offence on the basis of a preliminary charge-sheet filed without completing the entire 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 complete....
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....on guard and should not fall in the trap of such trickery and tactics of the investigating agency when they only file preliminary charge-sheet without fully completing the investigation. Therefore, the real test to be applied to ascertain whether the accused is entitled to default bail or not in a given case is not to see whether the charge-sheet is filed or not. It has to be ascertained whether the entire investigation is completed or not within the stipulated period of time and whether the said charge-sheet is filed after completion of the entire investigation or not. A preliminary charge-sheet filed without completing the entire investigation cannot be allowed to serve as an impediment to come in the way of exercising the statutory right of the accused for default bail. 23. The very contents of the charge-sheet, which are extracted above, clinchingly establishes that the investigation is not completed and many crucial witnesses are yet to be examined to prove the overt acts of the accused in this crime and some other evidence as stated by the investigating officer is still to be secured. Therefore, on account of default committed by the prosecuting agency in completing ....
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.... of the Indian Constitution. It can be deprived only in accordance with law and in conformity with the provisions thereof, as stipulated under Article 21 of the Constitution. Therefore, when the law mandates that the Magistrate could authorise detention of the accused in custody up to a maximum period as indicated in the proviso to sub-section (2) of Section 167 Cr.P.C. any further detention beyond the period when, the investigation is not completed and the final charge-sheet is not filed on completion of the entire investigation by the Investigating Agency would be a subterfuge and would not be in accordance with law and in conformity with the provisions of the Criminal Procedure Code. Therefore, it could be violative of Article 21 of the Constitution of India. 23. The filing of charge-sheet is sufficient compliance with the provisions of proviso (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 whi....
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.... to remand the accused to police custody and/or judicial custody, up to a maximum period as prescribed under Section 167(2). 10. It is clear from the judgment of this Court in Bhikamchand Jain (supra) that filing of a charge-sheet is sufficient compliance with the provisions of Section 167, CrPC and that an accused cannot demand release on default bail under Section 167(2) on the ground that cognizance has not been taken before the expiry of 60 days. The accused continues to be in the custody of the Magistrate till such time cognizance is taken by the court trying the offence, which assumes custody of the accused for the purpose of remand after cognizance is taken. The conclusion of the High Court that the accused cannot be remanded beyond the period of 60 days under Section 167 and that further remand could only be at the post-cognizance stage, is not correct 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:- ....
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....ection 7 of the Explosive Substances Act were also accorded by the concerned authorities. The charge-sheet so filed before the learned Special Court was complete in all respects so as to enable the learned Special Court to take cognizance in the matter. Merely because certain facets of the matter called for further investigation it does not deem such report anything other than a final report. In our opinion Section 167(2) of Cr.P.C. stood fully complied with and as such the petitioners are not entitled to statutory bail under Section 167(2) of Cr.P.C. 5. The special leave petition is, therefore, dismissed. 26. The Supreme Court in Dinesh Dalmia V. C.B.I., 2008 Crl. L.J. 337 observed that a charge sheet is a final report within the meaning of Sub-section (2) of Section 173 of the Code and is filed so as to enable the court concerned to apply its mind as to whether cognizance of the offence 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 p....
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....d charge-sheet not been filed, is not attracted to the facts of this case. Merely because sanction had not been obtained to prosecute the accused and to proceed to the stage of Section 309 Cr.P.C., it cannot be said that the accused is entitled to grant of statutory bail, as envisaged in Section 167 Cr.P.C. The scheme of the Cr.P.C. is such that once the investigation stage is completed, the Court proceeds to the next stage, which is the taking of cognizance and trial. An accused has to remain in custody of some court. During the period of investigation, the accused is under the custody of the Magistrate before whom he or she is first produced. During that stage, under Section 167(2) Cr.P.C., the Magistrate is vested with authority to remand the accused to custody, both police custody and/or judicial custody, for 15 days at a time, up to a maximum period of 60 days in cases of offences punishable for less than 10 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....
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....ementary charge-sheet", it could not affect the jurisdiction of the Magistrate to take cognizance, if he was otherwise satisfied from the material placed before him along with the charge-sheet that cognizance of the offence was required to be taken. It is the jurisdiction of the Magistrate and Magistrate alone to decide whether the material placed by the prosecution with the report (charge-sheet) was sufficient to take cognizance or not. The power of the Magistrate to take cognizance cannot be controlled by the investigating agency, whose duty is only to investigate and place the facts and the evidence before the Magistrate. 29. The supreme court in Rakesh Kumar Paul V. State of Assam, (2017) 15 SCC 67 also held that the indefeasible right for default bail accrued to the petitioner when the period of 60 days for completing the investigation and filing a charge-sheet came to an end and the indefeasibility right accruing to the accused 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 frustrate....
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....ce is not material to Section 167. x) There can only be one charge sheet but there is no restriction on filing of number of supplementary charge sheets. xi) The charge-sheet can be said to be complete when it enable the court to take or not to take cognizance of the offence after application of mind and if certain facets called for further investigation does not render such report anything other than a final report. xii) The power of Magistrate to take cognizance is not lost even if the police report is termed as incomplete by the investigating officer. xiii) 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. xiii) Economic offences having deep rooted conspiracies and involving huge loss of public funds, constitute a class apart and need to be viewed seriously. 31. It is reflecting from record that the respondent/CBI registered FIR bearing no RC/AC1/2018/A0011 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 A....
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....al charge sheet and is not filed in respect all offences subject matter of present FIR. The respondent/CBI is not legally permitted to pick one portion of investigation and to complete it and thereafter file piece meal charge sheet in respect of few offences subject matter of FIR and to left open investigation in respect of other offences and subsequent filing of charge sheet in respect of left over offences. This would be complete negation of section 167(2) of the Code. The investigating agency cannot be permitted to fragment or break FIR for the purpose of different charge sheets and this will tantamount to negation of section 167(2) and would against mandate of Article of 21 of the Constitution. The practice of filing such types of charge sheets to seek extension of remand beyond the statutory period was deprecated by the Superior Courts in past. The investigating agency is required to form opinion regarding all offences subject matter of FIR after completion of entire investigation. 33.1. There is no force in the arguments advanced 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 e....
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....of Section 173 of the Code and is filed if it enables the court to apply its mind as to whether cognizance of the offence thereupon should be taken or not and the power of the investigating officer for making further investigation in terms of section 178(8) of the Code 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. The investigation arising out of present FIR is incomplete investigation as only one part of investigation regarding alleged appointment of the petitioner/accused is completed and pending investigation qua other offences for which charge sheet is not filed is still pending. It is not a case of further investigation as argued by the Special Public Prosecutor. 33.2. There cannot be any dispute to the legal proposition that the purpose of police report under section 173(2) of the Code is to enable the Magistrate to satisfy himself on issue of taking cognizance or not. The concerned 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 cogniz....
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....tecture. There can only be one charge sheet out of investigation although there is no restriction on filing of number of supplementary charge sheets. The decision in Y.S. Jagan Mohan Reddy V. CBI cited by the Special Public Prosecutor for the respondent/CBI where in one RC several transactions were investigated regarding which separate charge-sheets were filed and the cases were tried as separate cases after taking cognizance and 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. It is true that present FIR involves huge financial and economic offences but in present investigation, the offences for which charge sheet was filed on 21.04.2022 and offences for which investigation arising out of present FIR is still pending are interconnected and interlinked and cannot be separated and even this reflecting from Status Report filed by the respondent/CBI and written arguments submitted on behalf of the respondent/CBI. Moreover, the petitioner/accused was arrested for offences subject matter of present FIR and her arrest is not confined to offences for which charge sheet was filed on ....