Back
TELANGANA HIGH COURT
K. Lakshman, J.
C. Parthasarthy —Petitioner
versus
Director of Enforcement —Respondent
Criminal Petition Nos.3786, 4127 and 4137 of 2022
Decided on 17.5.2022
Criminal Procedure Code, 1973 – Section 167(2) – Prevention of Money Laundering Act, 2002 – Section 45 – Constitution of India – Article 21 – Default bail – Money laundering – Allegation of diversion of large-scale clients funds through shell companies which resulted in huge losses to investors – Filing of complaint and subsequent cognizance under PMLA is governed by provisions of Cr.P.C. in view of Section 65 of Cr.P.C. – Charge-sheet can be filed only after completion of investigation – Investigation is said to be complete if sufficient material is collected by Investigating Officer based on which cognizance can be taken under Section 167 of Cr.P.C. – Respondent cannot file complaint without completing investigation and seek extension of remand beyond statutory period of sixty days – A complaint/charge-sheet filed without completing investigation cannot be used to circumvent right of statutory bail under Section 167(2) of Cr.P.C. – In absence of complete investigation and absence of filing final complaint, Petitioner is entitled for statutory bail under Section 167(2) of Cr.P.C. – Investigative authority cannot rely on Section 45 of PMLA to deny statutory bail under Section 167(2) of Cr.P.C. – Petitioner is entitled for statutory bail under Section 167(2) of Cr.P.C. (Paras 19, 22, 23, 25, 27, 28 and 29)
Result: Criminal Petitions allowed.
ORDER
K. Lakshman, J.—The lis involved in these cases is connected to each other. Therefore, they were heard together and are being disposed of with the following common order.
2. Crl.P.No. 3786 of 2022 is filed seeking to quash the order dated 08.04.2022 passed in Crl.M.P. (Sr). No. 3550 of 2022 in File No. ECIR/HYZO/14/2021 by the Metropolitan Sessions Judge – cum – Special Court Under PMLA Act, 2002 at Hyderabad. Likewise, Crl.P.No. 4127 of 2022 and Crl.P.No. 4137 of 2022 are filed to quash the orders dated 13.04.2022 and 31.03.2022 in File No. ECIR/HYZO/14/2021 respectively. The petitioner is A.1 in the said crime.
3. Heard Mr. T. Niranjan Reddy learned Senior Counsel representing Mr. Avinash Desai learned counsel for the Petitioner and Mr. Anil Prasad Tiwari, learned Spl. Public Prosecutor for Directorate of Enforcement for the Respondent.
Facts of The Case:—
4. The Petitioner is the Chairman and Managing Director of M/s. Karvy Stock Broking Ltd. (hereinafter ‘KSBL’). The Respondent authority had registered ECIR/HYZO/14/2021 for the offence of money laundering under the Prevention of Money Laundering Act, 2002 (hereinafter ‘PMLA’) against KSBL. The allegations against KSBL and the Petitioner include diversion of large-scale clients funds through shell companies which resulted in huge losses to the investors. It is further alleged that the clients’ money was misused by the shell companies created by KSBL and the said money was transferred to the Petitioner and his family members.
5. Various FIRs were registered against the Petitioner and he was arrested on 19.08.2021 in relation to Crime No. 100 of 2021 which is pending on the file of P.S. Central Crime Station Hyderabad. The Petitioner in the said crime was remanded to judicial custody. Pursuant to a P.T. warrant dated 10.01.2021, the Petitioner was produced before the Metropolitan Sessions Judge – cum – Special Court (hereinafter ‘Designated Court’) on 20.01.2021. On the same day, the Petitioner was remanded to judicial custody.
6. The Petitioner has been in jail since 20.01.2022. According to the Petitioner, the offences alleged against him are not punishable for a term not less than ten years, death, life imprisonment. Therefore, he is entitled for statutory bail under Section 167(2) of the Cr.P.C. as the investigation is not completed within sixty (60) days of his remand.
7. According to the Petitioner, the period of sixty days expired on 21.03.2022. Therefore, on 21.03.2022, he filed an application seeking default bail under Section 167 (2) of the Cr.P.C. citing expiry of sixty days. The said application was returned as infructuous on the ground that a charge sheet/complaint was filed by the Respondent herein on 19.03.2022 which was before the expiry of sixty days.
8. However, subsequently on 31.03.2022 another application under Section 167 was filed by the Respondent herein seeking extension of remand. According to the Petitioner, the application was filed seeking further custody of the Petitioner to complete the investigation. The said application was allowed and the custody of the Petitioner was extended till 13.04.2022.
9. The Petitioner relying on the application dated 31.03.2022 filed by the Respondent which stated that investigation is yet to be completed, filed another default bail application dated 01.04.2022 under Section 167(2) of the Cr.P.C. In the said bail application, the Petitioner contended that no complaint/charge sheet was filed in terms of Section 173(2) of the Cr.P.C. as investigation is yet to be completed. The said bail application was returned as infructuous on 08.04.2022. The said order also stated that the application dated 31.03.2022 seeking extension of remand was returned as charge sheet was already filed on 19.03.2022.
10. Subsequently, another application dated 13.04.2022 under Section 167 of the Cr.P.C. was filed by the
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
