2022 (10) TMI 49 - HC - Indian Laws

Seeking grant of Regular Bail - criminal conspiracy with unknown officials of NSE - exchange of bribe money - it is alleged that NSE and its employees had committed fraudulent and unfair trade practices and violated SECC Regulations - offences punishable under sections 120-B and 204 IPC; under section 7, 12 13(2) read with section 13(1)(d) of PC Act, 1988 and under section 66 of I.T. Act, 2000. Whether filing of charge sheet by the respondent/CBI before concerned court on 21.04.2022 pertaining to offences punishable under sections 13 (1)(d) and 13(2) of the PC Act and section 120 B IPC is sufficient compliance of section 167 (2) of the Code to deny statutory bail or default bail to the applicant/accused as argued by the respondent/CBI or said charge sheet is incomplete or piece meal charge sheet and does not fall within ambit of section 167(2) of the Code as argued by the learned Senior Counsel for the applicant/accused? HELD THAT - In view of the legal position pertaining to section 167(2) of the Code as discussed hereinabove, section 173 of the Code only permits filing of a final report after completion of the entire investigation in respect of all offences and does not permit a piece-meal investigation and filing of incomplete charge sheet before Court. The charge sheet filed by the respondent/CBI is a piece meal 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. 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 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 - 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 applicant/accused in initial appointment of Anand Subramanian 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. 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 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 - The investigating agency cannot circumvent section 167(2) of the Code by filing incomplete charge sheet and cannot be filed within the meaning of section 173 (2) till the investigation is completed and any report sent before the investigation is completed will not be a police report within the meaning of section 173 (2) of the Code. The respondent/CBI cannot take shelter of filing charge sheet in respect of offences pertaining to alleged illegal appointment of Anand Subramanian by giving nomenclature of complete charge sheet or final report as per section 173(2) of the Code to defeat the right of statutory bail under Section 167(2) of the Code. There is legal force and supported by judicial decisions as mentioned that the respondent/CBI has failed to complete investigation in respect of all the offences as mentioned in FIR and to file a Final Report under section 173 of the Code within stipulated time i.e. sixty days from the date of the arrest of the applicant/accused and filed an incomplete/piece-meal charge sheet before the concerned court on 21.04.2022 i.e. 46th day from the date of arrest. The application is allowed and the applicant is admitted to bail as per section 167(2) of the Code on furnishing a personal bond in the sum of Rs.5,00,000/- with one surety of the like amount to the satisfaction of the concerned trial Court subject to the conditions imposed.

Summary

Issues Involved:
1. Abuse of server architecture of NSE.
2. Illegal appointment and re-designation of Anand Subramanian.
3. Entitlement to statutory bail under Section 167(2) of the Code of Criminal Procedure.

Detailed Analysis:

1. Abuse of Server Architecture of NSE:

The FIR alleged that Sanjay Gupta, owner of OPG Securities Pvt. Ltd., exploited the server architecture of NSE from 2010 to 2014 in conspiracy with unknown NSE officials. Gupta managed to get preferential access to NSE servers, which allowed OPG Securities to log in first and gain a split-second advantage, resulting in significant financial gains. SEBI's Technical Advisory Committee and a forensic review by Deloitte confirmed these allegations. Further, Gupta influenced SEBI officials and destroyed evidence to ensure favorable reports.

The investigation revealed that the applicant/accused, who was Joint MD and later MD and CEO of NSE during the relevant period, was responsible for the co-location architecture. It was also found that she communicated confidential information to an external email ID "[email protected]," which was operated by Anand Subramanian.

2. Illegal Appointment and Re-designation of Anand Subramanian:

The applicant/accused allegedly entered into a conspiracy with Anand Subramanian, appointing him as Chief Strategic Advisor and later re-designating him as Group Operating Officer (GOO) without following due process. Subramanian, who had no relevant experience, was offered an abnormally high salary and his compensation was frequently increased without performance evaluations. The applicant/accused did not seek necessary approvals from the MD or the Nomination and Remuneration Committee (NRC) of NSE, violating SECC Regulations and the Companies Act, 2013.

The CBI's investigation, prompted by a request from the Ministry of Finance following SEBI's order dated 11.02.2022, linked these issues with the ongoing investigation into the co-location scam. The investigation into these allegations was completed, and a charge sheet was filed on 21.04.2022.

3. Entitlement to Statutory Bail under Section 167(2) of the Code of Criminal Procedure:

The applicant/accused argued that she was entitled to statutory bail as the CBI failed to complete the investigation within the stipulated 60 days and filed an incomplete charge sheet. The CBI filed a charge sheet on 21.04.2022, covering only some of the alleged offences, while the investigation into other offences was still pending.

The court held that the charge sheet filed was a piece-meal charge sheet and did not comply with Section 167(2) of the Code, which requires the completion of the entire investigation. The court emphasized that the practice of filing incomplete charge sheets to extend remand beyond the statutory period should be deprecated. The court concluded that the applicant/accused was entitled to statutory bail as the investigation was not completed within the prescribed period.

Conclusion:

The court allowed the bail application under Section 167(2) of the Code, granting the applicant/accused bail on furnishing a personal bond and complying with certain conditions, such as not leaving the country without permission, surrendering her passport, cooperating with the investigation, not tampering with evidence, and providing her contact information to the Investigating Officer. The court clarified that this order would not affect the final merits of the case.