9911796707
TMI Blog2022 (10) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al 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. - BAIL APPLN. 1522/2022 & CRL.M. (BAIL) 587/2022 - - - Dated:- 28-9-2022 - HON'BLE MR. JUSTICE SUDHIR KUMAR JAIN Petitioner Through: Mr. N. Hariharan, Senior Advocate with Mr. Rony Oommen John, Mr. Shivam Batra, Mr. Anubhav Nandan Tyagi, Mr. Akhil Ranganathan and Mr. Arshdeep Singh, Advocates. Respondent Through: Mr. Anupam S. Sharrma, SPP-CBI with Mr. Anurag K.Andley, Mr. Prakarsh Airan, and Ms. Harpreet Kalsi, Advocates. Mr. Puspal Paul, DSP-CBI. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... split-second faster access is considered to result in huge gains for any stock trader. 2.1 NSE did not have the system of starting TBT servers (tick by tick server) at a fixed time every day. Sanjay Gupta with the help of and from unknown persons managed the data centers staff of NSE who passed the information regarding switching on time of NSE exchange servers. NSE improved the system of imbalance load factor among different TBT co-location server during October 2012 and introduced load balancer among the various TBT co-location servers. Load balancer ensured that the load is evenly distributed among the TBT servers. There were back up servers were also available in NSE for providing connection to the servers of the brokers only in case if primary servers had some technical glitch or failure. The servers of all other brokers were connected to the primary servers of NSE but Sanjay Gupta once again dishonestly and fraudulently managed the data centre staff of NSE who started to let OPG Securities Pvt. Ltd. connected to the backup servers which were with zero load and therefore had provided far better and fast access to the market feed to the OPG Security Pvt. Ltd. in comparison ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placing co-location architecture at NSE and was reporting to the applicant/accused. It was also revealed that during the period 2010-15 when the applicant/accused was managing the affairs of NSE, OPG Securities Pvt. Ltd. had connected to the secondary POP server on 670 trading days in the Futures Options segment. The investigation regarding allegations of preferential access granted to certain brokers by officials of NSE and undue gains made out of it during the tenure of the applicant/accused and Anand Subramanian is underway. 3.1 It was surfaced during investigation that SEBI had passed an order dated 11.02.22 in the matters pertaining to illegal appointment of Anand Subramanian as Chief Strategic Advisor (CSA), his re-designation as 'Group Operating Officer' and Advisor to MD' and sharing of internal confidential information of NSE with unknown person by the applicant/accused. The respondent/ CBI received a request from the Ministry of Finance, Govt. of India to investigate the issues arising out of SEBI Final Order dated 11.02.2022. The respondent/CBI took up investigation as it has a serious bearing on the integrity and functioning of NSE and in turn on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant/accused dictated the internal notes for enhancement of salary of Anand Subramania who was paid compensation of approximately Rs 11.94 crores during the period with effect from 01.04.2013 to 21.10.2016. 4.3 The applicant/accused by misusing her official position re-designated the post of Anand Subramanian as Group Operating Officer (GOO) Advisor to MD from 01.04.2015 without bringing the same to the notice of Nomination and Remuneration Committee (NRC) of NSE and the NSE Board. 4.4 Anand Subramanian who was holding a position higher in hierarchy to the Head of Departments was required to be designated as Key Managerial Person (KMP) as per regulation 2 (1) (i) of SECC Regulations 2012 and compensation given to him as GOO and Advisor to MD was required to be disclosed in the Annual Report of the NSE as per regulation 27 (5) of the said regulations. Anand Subramanian being GOO was part of senior management and his re-designation and remuneration was required to have approval of NRC as per section 178 of Companies Act 2013. He was not designated as KMP as required under SECC Regulations, 2012 and his remuneration /re-designation was not brought to the notice of NRC or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing no 65/2022 titled as CBI V Chitra Ramkrishna which was dismissed by the court of Sh. Sanjeev Aggarwal, Special Judge (PC Act) (CBI)-02, Rouse Avenue, District Courts, New Delhi vide order dated 12.05.2022. 7. The applicant/accused also filed an application under section 167 (2) of the Code on ground that since investigation qua the offences as alleged in FIR is not completed by the respondent/CBI and no final report has been filed as such the applicant/accused should be given benefit of default bail and be released forthwith which was dismissed by the court of Sh. Rakesh Kumar-III, Special Judge (PC Act) (CBI)02, Rouse Avenue, District Courts, New Delhi vide dated 28.05.2022. 8. The applicant/accused in application for grant of regular bail which is under consideration stated that the applicant/accused in custody for about seventy (70) days without being named in FIR or any offence being committed by her. The respondent/CBI has filed a charge sheet on 21.04.2022 against the applicant/accused and Anand Subramanium as co-accused but without obtaining prosecution sanction and as such no cognizance can be taken on said charge sheet. The Special Judge has relied extensivel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in the ground-level process of handling the technical aspects or servers or access thereto of the stock exchange markets. The present FIR was lodged in the year 2018. 8.3 SEBI conducted enquiry in pursuance of complaints made against NSE in respect of its co-location facilities and issued various show-cause notices. It was alleged in respect of the applicant/accused that NSE and its employees had committed fraudulent and unfair trade practices and violated SECC Regulations besides raising other allegations against other persons which was culminating into institution of Case No. WTM/GM/EFD/03/2018-2019. SEBI vide order dated 30.04.2019 passed in Case No. WTM / GM / EFD/03/20182019 directed that the applicant/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 penalty was imposed on principles of vicarious liability principles only on account of alleged administrative violations and omissions only as specific allegation qua fraudulent and unfair trade practices was not proved. The order dated 30.04.2019 was challenged vide A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During tenure of the applicant/accused as MD of NSE from 2013-2016, a decision was taken to phase out TBT (tick-by-tick) technology which was the brainchild of her predecessor Mr. Ravi Narain who was MD till 2013 and the architecture was designed and implemented by Mr Ravi Apte and Mr. N. Murlidaran. The appointment of co-accused Anand Subramaniam was within the full knowledge and acceptance of the Board Members of NSE as well as the HR department head Mr. Chandrasekar Mukherjee who has acknowledged and appreciated the good work and performance of Anand Subramaniam and recommended an increase in his roles responsibilities as well as salary. There was not a single complaint / allegation regarding the performance of Anand Subramaniam or any loss caused to NSE or any of the investors due to his actions or inactions. 8.6.1 The applicant/accused had joined investigation on numerous dates with the respondent/CBI in Mumbai and New Delhi and search and seizure were also carried out qua the applicant/accused on 24.02.2022. The applicant/accused vide order dated 07.03.2022 was remanded to police custody and was subjected to custodial interrogation as such further custody of the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... link or nexus between appointment of Anand Subramaniam with sharing of emails and information by the applicant/accused to alleged commission of crimes in connection with the co-location system. 8.6.6 The case as per the nature of allegations is primarily documentary, technical and civil in nature and relevant documents, electronic and physical have already been seized by the respondent/CBI. 8.6.7 The applicant/accused meets the triple test for grant of bail which are i) the applicant/accused is NOT a flight-risk; ii) the applicant/accused is NOT a threat to any witness and c) the applicant/accused NO possibility of tampering of any evidence. 8.6.8 The applicant/accused is a single mother of a 24 years old daughter and is the primary caretaker for her 85 year old mother who is suffering from various age-related ailments. The applicant/accused is having deep roots in the society and is a reputed member of the society. There is no possibility or apprehension of tampering of witnesses / evidence or extension of threats. It was prayed that regular bail be granted to the applicant/accused. 9. The respondent/CBI in Status Report submitted the facts as mentioned in present FIR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest of the applicant/accused after such a long period of time in March, 2022 is arbitrary and contrary to the principles of natural justice. 11.2 The applicant/accused capacity of MD CEO of NSE had the power to appoint and employ co-accused Anand Subramaniam which was conferred by virtue of Board Resolution (BR) dated 23.02.2005. BR authorised the applicant/accused to appoint advisors consultants with such powers and duties and upon such terms as she thinks fit, for managing the business affairs of the Company i.e. NSE. The appointment of co-accused Anand Subramaniam was within the knowledge and acceptance of the Board Members of NSE as well as the HR department / head Mr. Chandrasekar Mukherjee, who has acknowledged and appreciated the good work and performance of Anand Subramaniam. There was not a single complaint/allegation regarding the performance of Anand Subramaniam or any loss caused to NSE or any of the investors due to his actions or inactions. 11.3 The Board Resolution dated 11.08.2015 passed by the Board of Directors clearly detailed the roles responsibilities of co-accused Anand Subramaniam, as well as his appointment on the determined salary was approved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was leaked and shared with outsiders does not survive. Even otherwise these allegations do not form part of FIR registered in the year 2018 and Show Cause proceedings initiated by SEBI into the co-location aspects, and were part of a separate SEBI proceedings. 11.7 The nature of allegations is primarily documentary, technical civil in nature and the relevant documents, electronic and physical have already been seized. The continued custody of the applicant/accused will not advance any cause of justice. The applicant has cooperated with the investigation. The applicant/accused has always co-operated with the respondent/CBI in investigation and custodial interrogation of the applicant/accused has already been conducted. 11.8 SEBI vide order dated 30.04.2019 held that allegations of fraud against NSE stood disproved and consequently do not survive against the applicant/applicant and directed that the applicant/accused in her capacity as former MD CEO of NSE should disgorge 25% of her salary drawn for FY 2013 -14 only on principles of vicarious liability principles due to alleged failure to ensure implementation of principle of equal fair and transparent access under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may have relevance to the co-location which was already being investigated by the respondent/CBI. SEBI had imposed heavy fines on the applicant/accused for causing wrongful gain to Anand Subramaniam in course of her employment to the detriment to the corporate governance of the NSE as well as larger public interest. 12.1 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 applicant/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 Anand Subramanian as Chief Strategic Advisor to MD at NSE and thereafter disproportionately increasing the salary of Anand Subramanian by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e powers to Anand Subramanian with more financial benefits without following the due process. The substantial powers were given to Anand Subramanian. The Board was kept in the dark that Anand Subramanian was a consultant and Advisor to MD. The investigation with regards to the employment of Anand Subramaniam appointed by the applicant/accused is complete and regarding this charge sheet has already been filed. 12.6 The applicant/accused and Anand Subramanian are responsible for Co-Location. The team which was responsible for setting up colocation was reporting to the applicant/accused and further the team of Ravi Apte and N. Muralidharan which was responsible for setting up the co-location was reporting to Anand Subramanian. The applicant/accused was communicating with an external e-mail ID [email protected] through her e-mail IDs. Anand Subramanian 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. 12.7 The employment of Anand Subramaniam establishes grave and serious economic offence which shakes the credibility of NSE and the entire financial securit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.2 It was surfaced during investigation that the applicant/accused approved internal approval note dated January 18.01.2013. Anand Subramanian 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 applicant/accused. The applicant/accused re-designated Anand Subramanian as Group Operating Officer (GOO) and Advisor to MD with effect from 01. O4. 2015 vide letter dated 01.04.2015. Anand Subramanian was required to be designated as KMP as per regulation 2 (1) (i) of SECC Regulations 2012 and the compensation given to Anand Subramanian as GOO and Advisor to MD was required to be disclosed in the Annual Report of the NSE as per regulation 27 (5). 13.3 The co-location was conceptualized and implemented during her tenure as Joint MD and Muralidharan Natarajan, CTO of NSETECH (a subsidiary of NSE) was responsible for placing co-location architecture at NSE. The applicant/accused was found to be communicating with an external e-mail ID [email protected] through her e-mail IDs which was also admitted by Anand Subramanian in disclosure statement under section 27 of Indian Evidence Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Guiarat vs. Mohanlal Jitamalii Porwal and Anr. (1987) 2 sec 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 of the damage done to the national economy and national interest .... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Joint Managing Director (JMD) in year 2010 and was appointed as the Managing Director (MD) and Chief Executive Officer (CEO) of NSE with effect from 01.04.2013 and the applicant/accused resigned from her position at on 02.12.2016. The Supreme Court in K.C. Sharma V Delhi Stock Exchange others, Appeal (Civil) 7055 of 2002 decided on 01st April, 2005 observed that NSE is a statutory body and a State within the meaning of Article 12 of the Constitution of India and officials of NSE are public servants in terms of Section 2(c)(viii) of the PC Act, 1988. So argument advanced by the learned Senior Counsel is without any force. ISSUE PERTAINING TO SANCTION 16. The learned Senior Counsel for the applicant/accused argued that the respondent/CBI has not obtained the permission for prosecution sanction against the applicant/accused and as such cognizance cannot be taken against the applicant/accused. The said argument advanced by the learned Senior Counsel for the applicant/accused is without any legal force as the grant of sanction is not a condition precedent for completion of investigation. The Supreme Court in Suresh Kumar Bhikamchand Jain V State of Maharashtra another ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Ramkrishna, Noticee No. 3, (former MD CEO of NSE): a. shall disgorge 25% of the salary drawn for FY 2013-14, to the IPEF created by SEBI under Section 11 of the SEBI Act, through NSE, within a period of 45 days from the date of this order; b. shall be prohibited from associating with a listed company or a Market Infrastructure Institution or any other market intermediary for a period of Five (5) years; 17.1.1 The order dated 30.04.2019 does not reflect that the penalty was imposed on principles of vicarious liability principles only on account of alleged administrative violations and omissions only as specific allegation qua fraudulent and unfair trade practices was not proved as argued by the learned Senior Counsel for the applicant/accused. It is correct that the order dated 30.04.2019 was challenged vide Appeal No 297/2019 before the Securities Appellate Tribunal (SAT), Mumbai and the operation of order dated 30.04.2019 was stayed during the pendency of the Appeal vide Order dated 06.06.2019. 18. It is also apparent that a separate and independent case was also filed before SEBI on the basis of various allegations including sharing of internal confidential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had illegally appointed Anand Subramanian without following due process. 20.1 It is appearing from record that the present FIR was got registered under sections 120-B /204 of the IPC and sections 7/12/13(2) read with 13(1) (d) of the Prevention of Corruption 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 applicant/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 1st April, 2013. Anand Subramanian was offered to join NSE as Chief Strategic Advisor to MD with effect from 01.04.2013 vide NSE letter dated 18.01.2013 on approval of the applicant/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. Anand Subramanian was re-designated as Group Operating Officer (GOO) and Advisor to MD with effect from 01. O4. 2015 vide letter dated 01.04.2015 by the applicant/accused. 20.2 It is apparent that the respondent/ CBI received a request from the Ministry of Finance, Govt. of India vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as GOO and Advisor to MD was required to be disclosed in the Annual Report of the NSE as per regulation 27 (5) of the said regulations. 21. The learned Senior Counsel for the applicant/accused during course of arguments laid emphasis that the applicant/accused in capacity of MD CEO had the power to appoint and employ Anand Subramaniam which was conferred by virtue of Board Resolution (BR) dated 23.02.2005 which authorised the applicant/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 Anand Subramaniam 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 Anand Subramaniam, as well as his appointment on the determined salary was approved by the Board: Anand Subramanian 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 Anand Subramaniam was appointed as a consultant on a contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Anand Subramanian 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. 22.3 The learned Senior Counsel for the applicant/accused in written arguments also referred e-mail dated 10.05.2016 sent by Chandershekhar Mukherjee (HRD) to R. Jayakumar (SECRE) wherein it was mentioned and clarified that Anand Subramanian is a consultant and not on roles of NSE and is not handling any KMP function. It was further mentioned that he is advising non-core functions. It is also case of the respondent/CBI that Anand Subramanian was not designated as Key Managerial Person (KMP) as per regulation 2 (1) (i) of SECC Regulations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already been arrested. The investigation is still pending. The allegations against the applicant/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 applicant/accused and the Senior Public Prosecutor is considered in right perspective. BAIL UNDER SECTION 167(2) OF THE CODE 24. The learned Senior Counsel for the applicant/accused with regard to entitlement of the applicant/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 applicant/accused in custody since 06.03.2022 and 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 sixty days from the date of the arrest of the applicant/accused who is in custody for mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 25.1 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 1995 SC 231 and Narendra Kumar Amin V CBI, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 46th 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 cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of fifteen days, if he is satisfied that adequate grounds exist for doing so, but no Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erits of the case. 29. 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, 2022 SCC OnLine SC 825 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 investigatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ished. 30. 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. Before we proceed to expand upon the parameters of the right to default bail under Section 167(2) as interpreted by various decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 758760) 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 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 judgement 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 19 th June, 2020), 2020 SCC OnLine SC 529, 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 pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. 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; (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture 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. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, subsection (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 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 r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 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 discr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 32. 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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). 33. 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 judgment of this Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther 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. 35. 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her 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. 38. 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 frustrated by the prosecution and the courts on any pretext. 39. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation 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. 40. 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 Act and section 66 of the Information Technology Act, 2000 wherein the applicant/accused was 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 Anand Subramanian as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 42.1 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 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 resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 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 Anand Subramanian 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. 42.2 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 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 constitutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 applicant/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 21.04.22. 43. There is legal force and supported by judicial decisions as mentioned hereinabove 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 in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
