Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2022 Supreme(SC) 115

SUPREME COURT OF INDIA
(From the High Court of Punjab & Haryana at Chandigarh)
L. Nageswara Rao, B. R. Gavai, JJ.
Serious Fraud Investigation Office - Appellant
Versus
Rahul Modi & Ors. - Respondents
Criminal Appeal Nos.185-186 of 2022 (Arising out of Special Leave Petition (Crl.) Nos. 5180-5181 of 2019)
Decided On : 07-02-2022

Advocates appeared:
For the Petitioner(s): Mr. Aman Lekhi, Ld. ASG Mr. Zoheb Hossain, Adv. Mr. Kanu Agrawal, Adv. Mr. Udai Khanna, Adv. Mr. Ritwiz Rishabh, Adv. Mr. Gurmeet Singh Makker, AOR Mr. Arvind Kumar Sharma, AOR
For the Respondent(s): Mr. Ranjit Kumar Sharma, AOR Dr. Monika Gusain, AOR Mr. E. C. Agrawala, AOR

IMPORTANT POINTS
(1) Indefeasible right of an accused to seek statutory bail under Section 167(2), Cr.P.C. arises only if charge-sheet has not been filed before expiry of statutory period.
(2) Default bail – Filing of an additional complaint after accused has availed his right to be released on default bail, should not deter courts from enforcing this indefeasible right, if charge-sheet was not filed before expiry of statutory period.

Headnote:
Criminal Procedure Code, 1973 – Section 167(2) – Companies Act, 2013 – Section 439(2) read with Section 212(15) – Default bail – Non-submission of charge-sheet within statutory period – Filing of a charge-sheet is sufficient compliance with provisions of Section 167, Cr.P.C. and that an accused cannot demand release on default bail under Section 167(2) on the ground that cognizance has not been taken before expiry of 60 days – Accused continues to be in custody of Magistrate till such time cognizance is taken by court trying offence, which assumes custody of accused for the purpose of remand after cognizance is taken – Conclusion of High Court that accused cannot be remanded beyond period of 60 days under Section 167 and that further remand could only be at post-cognizance stage, is not correct – Indefeasible right accruing to accused is enforceable only prior to filing of challan and it does not survive or remain enforceable, on challan being filed – Once challan has been filed, question of grant of bail has to be considered and decided only with reference to merits of case under provisions relating to grant of bail to an accused after filing of challan – Filing of an additional complaint after accused has availed his right to be released on default bail, should not deter courts from enforcing this indefeasible right, if charge-sheet was not filed before expiry of statutory period – Order passed by High Court set aside. (Paras 10, 11, 12, 13, 14 and 15)
Facts of the case:
Order dated 31.05.2019 passed by the High Court of Punjab and Haryana granting bail to Respondent Nos. 1 and 2 is assailed in this Appeal by the Serious Fraud Investigation Office (SFIO). High Court considered the regular bail applications filed by 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. The sole reason given for grant of bail by the High Court is that the trial court has not taken cognizance of the complaint before the expiry of 60-day period, which entitled Respondent Nos. 1 and 2 to statutory bail, as a matter of indefeasible right. Only point that arises for consideration in this case is whether an accused is entitled for statutory bail under Section 167(2), Cr.P.C. on the ground that cognizance has not been taken before the expiry of 60 days or 90 days, as the case may be, from the date of remand.
Findings of Court:
Conundrum relating to the custody of the accused after expiry of 60 days has also been dealt with by this Court in Bhikamchand Jain. It was made clear that the accused remains in custody of the Magistrate till cognizance is taken by the relevant court. As the issue that arises for consideration in this case is squarely covered by judgment in Bhikamchand Jain, order passed by High Court on 31.05.2019 hereby set aside.
Result : Appeals allowed.

JUDGMENT :

L. NAGESWARA RAO, J.

Leave granted.

1. The order dated 31.05.2019 passed by the High Court of Punjab and Haryana granting bail to Respondent Nos. 1 and 2 is assailed in this Appeal by the Serious Fraud Investigation Office (“SFIO”).

2. An investigation was directed to be conducted into the affairs of Adarsh Group of Companies and LLPs by the Central Government in exercise of the powers conferred under Section 212(1)(c) of the Companies Act, 2013 and sub-sections (2) and (3)(c)(i) of Section 43 of the Limited Liability Partnership Act, 2008. Inspectors were appointed by the Director, SFIO to carry out the investigation. Respondent Nos. 1 and 2 were arrested pursuant to the approval granted by the Director, SFIO on 10.12.2018. On 20.12.2018, the High Court of Delhi directed interim release of Respondent Nos. 1 and 2 in Writ Petition (Criminal) Nos. 3842 of 2018 and 3843 of 2018. The order of the High Court was set aside by this Court on 27.03.2019, following which Respondent Nos. 1 and 2 surrendered on 01.04.2019. Respondent Nos. 1 and 2 were remanded to 14 days’ judicial custody on 05.04.2019. On account of continuation of the investigation, the Special Court, Gurugram extended the judicial custody of Respondent Nos. 1 and 2 to 16.05.2019. In the meanwhile, Respondent Nos. 1 and 2 filed regular bail applications for being released on bail before the High Court on 03.05.2019. The applications were directed to be listed on 21.05.2019 by the High Court. The High Court further directed the trial court to consider any application that may be filed by Respondent Nos.1 and 2 under Section 167 of the Code of Criminal Procedure, 1973 (“CrPC”), in the meanwhile. On 16.05.2019, the Special Court extended the judicial custody of Respondent Nos.1 and 2 till 30.05.2019.

3. Criminal complaint under Section 439(2) read with Section 212(15) of the Companies Act, 2013 was filed before the Special Court, Gurugram on 18.05.2019. The Special Court directed registration of the complaint and listed the matter on 24.05.2019 for considering summoning of the accused persons. Respondent Nos. 1 and 2 filed applications for statutory bail under Section 167(2) of the CrPC on 20.05.2019. The said applications were dismissed by the Sessions Judge, Gurugram on 22.05.2019 on the ground that the complaint under Section 439(2) of the Companies Act, 2013 was filed on 18.05.2019, i.e., before the expiry of the 60-day period prescribed in proviso (a) to Section 167(2) of the CrPC. The High Court considered the regular bail applications filed by 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. The sole reason given for grant of bail by the High Court is that the trial court has not taken cognizance of the complaint before the expiry of the 60-day period, which entitled Respondent Nos. 1 and 2 to statutory bail, as a matter of indefeasible right.

4. We have heard Mr. Aman Lekhi, learned Additional Solicitor General appearing on behalf of the Appellant, Mr. Vikram Choudhri, learned Senior Counsel appearing on behalf of Respondent Nos.1 and 2 and Mr. Mukul Rohatgi, learned Senior Counsel for the Intervenor. The learned ASG submitted that the High Court committed a serious error in granting statutory bail to Respondent Nos. 1 and 2, in spite of the fact that the complaint was filed well before the expiry of 60 days from the date of the remand. An egregious error has been committed by the High Court in holding that cognizance also has to be taken before the expiry of the 60-day period, or else, the accused would be entitled to statutory bail under Section 167(2), CrPC. He stated that the mischief that is sought to be addressed under Section 167(2) is failure to complete the investigation. According to the scheme of the CrPC, on completion of investigation, the final report/complaint is filed under Section 173(2), CrPC. Statutory bail under Section 167(2), CrPC can be granted only in a ca