Jain Vs Cbi
Jain Vs Cbi
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 04th May, 2023
Pronounced on: 18th May, 2023
JUDGMENT
AMIT SHARMA, J.
1. The present application under Section 439 read with Section 482 of the
Code of Criminal Procedure, 1973 (CrPC‘) seeks the following prayers:
―A. Pass necessary orders and directions, thereby directing for grant
of statutory / default bail to the Petitioner and directing for the
release of the Petitioner from custody in FIR bearing No.
RC2232020A0009 dated 19.11.2020 u/s 120B r/w 420, 468 and
471 of the IPC and 13(2) r/w 13 (1) (d) of the Prevention of
Corruption Act, 1988 registered by CBI, ACV, New Delhi, on such
terms and conditions as may deem fit and proper.
AND
B. Pass necessary orders and directions, thereby setting aside the
order dated 10.02.2023 passed by the Ld. Trial Court in the matter
titled as ‗CBI vs. M/s Arise India Ltd.‘ in IA No. 1/23 in CBI Case
No.10/2023 pertaining to FIR bearing No. RC2232020A0009 dated
19.11.2020 u/s 120B r/w 420, 468 and 471 of the IPC and 13(2) r/w
13 (1) (d) of the Prevention of Corruption Act, 1988 registered by
CBI, AC-V, New Delhi.
AND
C. Pass any other necessary and appropriate orders and direction, as
this Hon‘ble Court may deem fit and proper in the facts and
circumstances of the case, in the interest of justice.‖
Background
2. The present FIR was registered on the basis of a complaint received
from S. Bavani Sankaran, Deputy General Manager, State Bank of India,
SAMB-I (‗SBI‘) on behalf of a consortium of six banks alleging that M/s
Arise India Ltd. (‗the company‘) and its directors, including the present
applicant alongwith other unknown public servants availed credit facilities
from the said consortium of banks led by the SBI and diverted the borrowed
funds for purposes other than those for which they were released. The loan
account of the company was declared as a Non-Performing Asset (‗NPA‘) by
the SBI on 27.02.2017 and subsequently by other banks in the consortium,
with a total outstanding amount of Rs. 512.67 Crores. After a forensic audit,
the account of the company was declared as a ‗fraud‘ by the SBI on
27.05.2019.
3. On the basis of the aforesaid complaint, the present FIR was registered
against M/s Arise India Ltd., Avinash Jain (applicant herein), Virender
Mishra, Rajnish, unknown public servants and other unknown private persons
under Section 120B read with Sections 420, 468 and 471 of the Indian Penal
Code, 1860 (‗IPC‘) and Section 13(2) read with Section 13(1)(d) of the
Prevention of Corruption Act, 1988 (‗PC Act‘) for causing wrongful loss of
public money on 19.11.2020. The applicant was arrested on 14.11.2022 in the
said FIR for offences under Section 120B read with Sections 420, 468 and
471 of the IPC and Section 13(2) read with 13(1)(d) of the PC Act. He was
produced before the learned Special Judge on 15.11.2022 and remanded to
judicial custody for one day. Thereafter, after five days in police custody
granted vide order dated 16.11.2022, he was remanded to judicial custody on
21.12.2022. The CBI filed a chargesheet, dated 30.12.2022, on 06.01.2023
qua the applicant and other accused persons under Section 120B read with
Sections 420 and 471 of the IPC and substantive offences thereof. In the said
chargesheet, it was stated that further investigation was continuing in terms of
Section 173(8) of the CrPC.
4. An application for default bail under Section 167(2) of the CrPC was
moved on behalf of the applicant herein on 01.02.2023, which was dismissed
vide order dated 10.02.2023 passed by Sh. Raghubir Singh, Special Judge (PC
Act) (CBI) - 18, Rouse Avenue District Courts, New Delhi. While dismissing
the application, the learned Special Judge observed as under:
―11. On the basis of the findings given hereinabove, it becomes clear
that the investigating agency had filed the Charge Sheet u/s 173 Cr.
P.C qua 08 accused persons including the applicant/accused well
before the expiry of 60 days period by keeping the option of further
investigation ‗open‘ as per privions u/s 173 (8) Cr. P.C as the requisite
permission u/s 17A was in the process and it was beyond the control
of the IO to conduct & conclude the investigation in the absence of
the same. The right to statutory bail stands defeated once the Charge
Sheet is filed within the stipulated period as held in Suresh Kumar
Bhikamchand Jain Vs. State of Maharashtra & Ors., SLP (Crl)
No.147/2013 and as reaffirmed by the Apex Court in SFIO Vs. Rahul
Modi & Ors. Hon‘ble the Apex Court has gone to the extent of saying
that even the aspect of not taking cognizance was not at all to be
considered for the purpose of default bail. Accordingly, the
application in hand is disposed of as dismissed.‖
8. Learned Senior Counsel submitted that vide order dated 16.01.2023, the
learned Special Judge categorically recorded that the fact that the delay of 25
months in making an application for sanction under Section 17A of the PC
Act in itself, prima-facie renders the manner of investigation as unfair. The
learned Special Judge, in the said order dated 16.01.2023, recorded as under:
―The Charge Sheet in the present matter had been filed by the
IO on 06.01.2023 and the matter was placed by the Filing Agency
Official before the Ld. Principal District & Sessions Judge on the
very day. The Ld. Principal District & Sessions Judge assigned the
same to this Court vide order of that day itself while observing
certain glaring ambiguities in the Charge Sheet.
In para no. 16. 75 of the Charge Sheet, it has been mentioned
that for approval or the Competent Authorities qua the Public
Servants/Bank Officials has been sought fur as per the provision u/s
17 A. However, clandestinely it has nowhere been made clear in the
entire Charge Sheet as to on which date, month or even the year the
requisite 1etter etc., was written for the permission qua Bunk
Officials as per Section 17 A of the PC Act 1988. On being inquired,
10 has apprised that such letter of request through the 1 lead or the
Branch was sent addressed to the Chief Vigilance Officer, State Bank
of India, Vigilance Deptt. Corporate Centre, 81h Floor, Madame
Cama Road, Mumbai-40002 l as on 16.12.2022.‖
Learned Senior Counsel further drew the attention of this Court to the
compliance report dated 27.01.2023 filed by the CBI pursuant to the said
order dated 16.01.2023 passed by the learned Special Judge, wherein the CBI
admits that further investigation has been kept open to ascertain the role of
Virender Mishra and Rajnish - both of whom were named in the FIR. CBI
further admits that during the course of investigation, the role of public
servants/bank officials had come to light and thus, appropriate sanction under
Section 17A of the PC Act has been sought from the relevant authorities, vide
a request letter dated 16.12.2022.
9. Learned Senior Counsel drew the attention of this Court to the
complaint filed by the SBI, and specifically, to the following portions thereof:
9. Grave irregularities The Bank is not suspecting the
committed by public involvement of its staff in the fraud
servants perpetrated by the accused persons.
xxx
12. Action taken by the Staff accountability has been
It is submitted that the FIR in the present case was registered for
commission of offences under the PC Act without prior approval or sanction
in terms of Section 17A of the PC Act and thus, any investigation conducted
in furtherance of the said FIR is illegal. Learned Senior Counsel draws the
attention of this Court to paragraphs 16.73 and 16.75 of the chargesheet,
wherein it has been stated as under:
―16.73 Investigation therefore, has clearly established commission of
cognizable offence by M/s. Arise India Limited, Avlnash Jain, Amit
Jain, Naresh Chand Jain, Anju Jain, Pankaj Jain, Mohan Singh
Chauhan and Mukesh Kumar therefore chargesheet is being filed for
launching prosecution against (1) Avinash Jain, (2) Amit Jain, (3)
Naresh Chand Jain. (4) Anju Jain. (5) Pankaj Jain, (6) Mohan Singh
Chauhan and (7) Mukesh Kumar u/s 120-B r/w 420 and 471 of Indian
Penal Code and substantive offences thereof. Prosecution is also
recommended against M/s Arise India Limited U/s 420 IPC.
xxx
16.75 That during investigation role of certain public servants / Bank
Officials came to light for violations/omissions/comissions/
sanctioning/disbursing/ monitoring of credit facilities granted to M/s
Arise India Limited. Prior approval of the competent authorities of
concerned banks have been sought as per Section 17A of The
the letter dated 23.02.2023, the investigation qua offences under the PC Act
was continuing when the chargesheet was filed on 06.01.2023.
11. Learned Senior Counsel for the applicant placed reliance on M.
Ravindran v. Intelligence Officer, Directorate of Revenue Intelligence, (2021)
2 SCC 485, wherein the Hon‘ble Supreme Court, while discussing the
provision of Section 167(2) of the CrPC held that non-compliance of the said
provision would be violative of Article 21 of the Constitution of India and
observed as under:
―II. Section 167(2) and the Fundamental Right to Life and
Personal Liberty
17. Before we proceed to expand upon the parameters of the right
to default bail under Section 167(2) as interpreted by various
decisions of this Court, we find it pertinent to note the observations
made by this Court in Uday Mohanlal Acharya [Uday Mohanlal
Acharya v. State of Maharashtra, (2001) 5 SCC 453 : 2001 SCC
(Cri) 760] on the fundamental right to personal liberty of the person
and the effect of deprivation of the same as follows : (SCC p. 472,
para 13)
―13. … Personal liberty is one of the cherished objects of the
Indian Constitution and deprivation of the same can only be in
accordance with law and in conformity with the provisions thereof, as
stipulated under Article 21 of the Constitution. When the law
provides that the Magistrate could authorise the detention of the
accused in custody up to a maximum period as indicated in the
proviso to sub-section (2) of Section 167, any further detention
beyond the period without filing of a challan 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, and as such, could be violative of Article 21 of the
Constitution.‖
17.1. 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‖. It has been settled by a
Constitution Bench of this Court in Maneka Gandhi v. Union of
India [Maneka Gandhi v. Union of India, (1978) 1 SCC 248] , that
such a procedure cannot be arbitrary, unfair or unreasonable. The
***
32. … Such views and opinions over a prolonged period have
prompted the legislature for more than a century to ensure
expeditious conclusion of investigations so that an accused person is
not unnecessarily deprived of his or her personal liberty by remaining
in prolonged custody for an offence that he or she might not even
have committed. In our opinion, the entire debate before us must also
be looked at from the point of view 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.
***
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 [S. Kasi v. State, (2021) 12 SCC 1 :
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 emphasised that the right of the accused
to be set at liberty takes precedence over the right of the State to carry
on the investigation and submit a charge-sheet.
17.9. Additionally, it is well-settled that in case of any
ambiguity in the construction of a penal statute, the courts must
favour the interpretation which leans towards protecting the
rights of the accused, given the ubiquitous power disparity
between the individual accused and the State machinery. This is
applicable not only in the case of substantive penal statutes but
also in the case of procedures providing for the curtailment of the
liberty of the accused.
to minor details such as the bank account details and mobile phone
call details was pending for verification. The Special Court negated
submissions for grant of statutory bail. The High Court after going
through the charge-sheet found that the materials so disclosed and
adverted to in the charge-sheet did show that it was a final report and
dismissed the appeal. The Supreme Court observed that the charge-
sheet so filed before the Special Court was complete in all respects so
as to enable the learned Special Court to take cognizance and merely
because certain facets of the matter called for further investigation it
does not deem such report anything other than a final report and
dismissed the special leave petition. In present case substantial
investigation arising out of present FIR is still pending and even
allegations as made in charge-sheet filed on 21-4-2022 regarding
illegal appointment of the petitioner-accused are also directly related
to pending investigation pertaining to abuse of server architecture.
119. In Dinesh Dalmia v. CBI [Dinesh Dalmia v. CBI(2007) 8
SCC 770 : (2008) 1 SCC (Cri) 36 : 2008 Cri LJ 337] , the Supreme
Court 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 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.
120. 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 Special Court concerned can take
cognizance only in respect of some of offences for which charge-
sheet was filed on 21-4-2022 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
14. Learned Senior Counsel submitted that in the present case as well, the
FIR was registered under Section 120B read with Sections 420, 468 and 471
of the IPC and Section 13(2) read with Section 13(1)(d) of the PC Act and
the chargesheet was filed only under Section 120B read with Section 420 and
471 of the IPC. It was further urged that at the time of filing of the
chargesheet, admittedly, the CBI had written to the competent authority
seeking approval under Section 17A of the PC Act, which in itself
demonstrates that the investigation was continuing with respect to offences
under the provision of PC Act mentioned in the subject FIR. It was argued
that it has been stated in chargesheet that the role of certain public
servants/bank officials had come to light and prior approval under Section
17A of the PC Act has been sought from the competent authority for
be entitled to pray for regular bail on merits. It was held by this Court
that the filing of charge-sheet is sufficient compliance with the
provisions of proviso (a) to Section 167(2), CrPC and that taking of
cognizance is not material to Section 167. The scheme of CrPC is
such that once the investigation stage is completed, the court
proceeds to the next stage, which is the taking of cognizance and
trial. During the period of investigation, the accused is under the
custody of the Magistrate before whom he or she is first produced,
with such Magistrate being vested with power to remand the accused
to police custody and/or judicial custody, up to a maximum period as
prescribed under Section 167(2). Acknowledging the fact that an
accused has to remain in custody of some court, this Court concluded
that on filing of the charge-sheet within the stipulated period, 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, CrPC. This Court clarified
that the two stages are different, with one following the other so as to
maintain continuity of the custody of the accused with a court.
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).
xxx
15. A close scrutiny of the judgments in Sanjay
Dutt (supra), Madar Sheikh (supra) and M. Ravindran (supra) would
show that there is nothing contrary to what has been decided
in Bhikamchand Jain (supra). In all the above judgments which are
relied upon by either side, this Court had categorically laid down that
the indefeasible right of an accused to seek statutory bail under
Section 167(2), CrPC arises only if the charge-sheet has not been
19. Learned SPP for the CBI argued that reliance placed by learned Senior
Counsel on the judgment of a coordinate bench of this Court in Chitra
Ramkrishna (supra) is misplaced inasmuch as the facts therein were
completely distinct. It was pointed out that in the said case, the FIR was
initially registered under Section 120B read with Section 204 of the IPC,
Sections 7, 12 and 13(2) read with Section 13(1)(d) of the PC Act and Section
66 of the Information Technology Act. It was pointed out the during the
course of investigation in the said FIR, certain additional information was
given to the CBI, on the basis of which the scope for investigation was
extended and therefore, the chargehseet was filed with respect to the
subsequent information, and not with respect to the original allegations in the
FIR. Attention of this Court was drawn to the following paragraphs:
The incomplete charge sheet has been filed only with respect to
sections 13(1)(d) and 13(2) of the PC Act and section 120 B IPC
and not with respect to other offences as alleged in the FIR.
xxx
113. 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 limb of
Article 21.
ii) The accused has indefeasible right in his favour for being released
on bail on account of default by the investigating agency to
complete investigation within the prescribed period.
iii) It is duty of the courts to ensure that benefit of Section 167(2) of
the Code be given to the accused and detention beyond statutory
period would be illegal being opposed to the liberty of the
accused.
iv) Section 173 of the Code does not stipulate a piece-meal
investigation and filing of incomplete charge sheet before Court
and contemplates filing of a final report after completion of the
entire investigation of the case in respect of all offences and
where several offences are involved in a case. The practice of
filing preliminary charge sheets to seek extension of remand
beyond the statutory period should be deprecated.
v) The charge report can be filed before the court only after the
investigation is over and formation of an opinion regarding all the
offences alleged against the accused.
vi) There is a distinction between completion of investigation and
further investigation. The further investigation can be resorted to
only after the completion of investigation and filing of charge
sheet.
vii) The investigating agency cannot circumvent section 167(2) of the
Code by filing incomplete charge sheets. The police report or
charge sheet cannot be send 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.
viii) The incomplete charge sheet filed without completing the
investigation cannot be used to defeat the right of statutory bail
under Section 167(2) of the Code.
ix) The right of the accused to statutory bail came to an end once the
charge sheet is filed within the stipulated period. The filing of
charge sheet is sufficient compliance with the provisions of Section
167(2) of the Code and taking of cognizance 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.
114. 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 ‗Chief Strategic Advisor‘
(CSA), his re-designation as ‗Group Operating Officer‘ and Advisor
to MD‘ and other issues. The respondent/CBI took up investigation
and issue highlighted in the order dated 11.02.2022 was found to be
linked with ongoing investigation by the respondent/CBI in
pursuance of present FIR. The applicant/accused was arrested on
06.03.2022. The respondent/CBI did not complete investigation in
respect of all the offences as mentioned in FIR. The
respondent/CBI has filed charge sheet before the concerned court
on 21.04.2022 i.e. 46th day from the date of arrest only for
offences punishable under sections 13(1)(d) and 13(2) of the PC
Act and section 120 B IPC. The investigation pertaining to other
It was thus argued that the aforesaid judgment is not applicable to the
facts of the present case, inasmuch as all the allegations mentioned in the
present FIR have been investigated and the chargesheet has been filed with
respect to offences as mentioned in the chargesheet. It was argued that the
judgments of the Hon‘ble Supreme Court in Dinesh Dalmia v. CBI, 2008
CRL. L.J. 337 and Abdul Azeez P.V. & Ors. National Investigation Agency,
2014 AIR SCW 6537 squarely apply to the facts of the present case and
therefore, no right has accrued in favour of the present applicant under
Section 167(2) of the CrPC.
20. Learned SPP for the CBI further submits that insofar as the contention
of the learned Senior Counsel with respect to registration of FIR without prior
approval under Section 17A of the PC Act is concerned, attention of this
Court was drawn to orders passed by coordinate benches of this Court in
Central Bureau of Investigation v. Shyam Sunder Narang, (Order dated
22.02.2023 in W.P. (CRL.) 847/2021), Central Bureau of Investigation v.
State Bank Through Rajinder Kumar Dhingra, 2022/DHC/005288 and Central
Bureau of Investigation v. Union Bank of India Through Sh. Sanjay Manocha
or Succeeding Officer, Union Bank of India (Order dated 24.08.2022 in W.P.
(CRL.) 1909/2022). The aforesaid orders were passed with respect to
instances where the learned Special Judge had refused to issue search order
under Section 93 of the CrPC as there was no prior sanction under Section
17A of the PC Act. The coordinate benches, in the aforesaid orders, have
observed that since the concerned public servant was not identified, even if
the approval in terms of Section 17A of the PC Act is not taken, the
investigation under the provisions of the PC Act would continue for the
purposes of identification of the concerned public servant. It is argued that the
requirement for approval or sanction under Section 17A of the PC Act would
only come into picture once a public servant was identified and thus, there
was no bar on an investigation qua offences under the PC Act in general.
21. Learned SPP further placed reliance upon a judgment of the Hon‘ble
Supreme Court in State of Haryana v. Ch. Bhajan Lal & Ors., 1992 CRL. L.J.
527, and in particular, on the following paragraphs thereof:
―31. Be it noted that in Section 154(1) of the Code, the legislature
in its collective wisdom has carefully and cautiously used the
expression ―information‖ without qualifying the same as in Section
41(1)(a) or (g) of the Code wherein the expressions, ―reasonable
complaint‖ and ”credible information‖ are used. Evidently, the non-
qualification of the word ―information‖ in Section 154(1) unlike in
Section 41(1)(a) and (g) of the Code may be for the reason that the
police officer should not refuse to record an information relating to
the commission of a cognizable offence and to register a case thereon
on the ground that he is not satisfied with the reasonableness or
credibility of the information. In other words, ‗reasonableness‘ or
‗credibility‘ of the said information is not a condition precedent for
registration of a case. A comparison of the present Section 154 with
those of the earlier Codes will indicate that the legislature had
purposely thought it fit to employ only the word ―information‖
without qualifying the said word. Section 139 of the Code of
Criminal Procedure of 1861 (Act 25 of 1861) passed by the
Legislative Council of India read that ‗every complaint or
information‘ preferred to an officer in charge of a police station
should be reduced into writing which provision was subsequently
modified by Section 112 of the Code of 1872 (Act 10 of 1872) which
thereafter read that ‗every complaint‘ preferred to an officer in charge
of a police station shall be reduced in writing. The word ‗complaint‘
which occurred in previous two Codes of 1861 and 1872 was deleted
and in that place the word ‗information‘ was used in the Codes of
1882 and 1898 which word is now used in Sections 154, 155, 157 and
190(c) of the present Code of 1973 (Act 2 of 1974). An overall
reading of all the Codes makes it clear that the condition which is
sine qua non for recording a first information report is that there must
be an information and that information must disclose a cognizable
offence.
xxx
42. The expression ―reason to suspect‖ as occurring in Section
157(1) is not qualified as in Section 41(a) and (g) of the Code,
wherein the expression, ―reasonable suspicion‖ is used. Therefore, it
has become imperative to find out the meaning of the words ―reason
to suspect‖ which words are apparently clear, plain and unambiguous.
By way of the aforesaid judgment, learned SPP for the CBI submitted
that since there was a reasonable ground to believe that an offence under the
PC Act has been committed, therefore, the CBI was justified in registering the
FIR under provisions of the PC Act alongwith other provisions of the IPC and
carry out the investigation accordingly.
22. The case of the CBI is that on basis of suspicion of the commission of
offences under the PC Act by unknown public servants, the present FIR was
registered. The offences punishable under the PC Act are person specific,
therefore, without identifying a particular public servant, no sanction under
Section 17A of the PC Act could be sought. In absence of sanction under
Section 17A of the PC Act, the investigation in the present FIR was not
conducted for offences punishable under the PC Act. Once such a person was
identified during the course of investigation in the present FIR, the requisite
sanction was sought. However, the same was not granted and therefore, a
supplementary chargesheet for closure of offences under the PC Act was
filed. It was submitted that only because further investigation is continuing,
the present chargesheet cannot be stated to be incomplete. Reliance in that
regard has been placed on the following judgments:
i. Anantha Satya Udaya Bhaskara Rao Anantha Babu v. The State of
Andhra Pradesh, MANU/AP/1718/2022.
ii. Riyazuddin v. State NCT of Delhi, 2023:DHC:2436.
iii. Suraj v. State of Delhi NCT, 2022:DHC:963.
iv. Ujjwal bajaj v. State of Delhi (N.C.T), Order dated 23.02.2022 in
CRL.REV.P. 201/2021.
23. So far as the order dated 06.01.2023 passed by the learned Principal
District and Sessions Judge-cum-Special Judge (PC Act) (CBI), Rouse
Avenue District Court is concerned, it was pointed out that subsequently, the
chargesheet was marked to the learned Special Judge, where it is pending
adjudication.
24. On a pointed query from this Court about why the chargesheet was
filed before a Special Court if no offences under the PC Act were made out,
leaned SPP submitted that since the FIR in the present case was registered
under Section 13(2) read with 13(1)(d) of the PC Act, the Special Court
would be the court of competent jurisdiction before which the chargesheet
would be filed. It was further submitted that since sanction in terms of Section
17A of the PC Act was eventually denied, a supplementary chargesheet for
closure of offences under the PC Act was filed. It was thus, contended that if
there was no public servant involved, the question of there being a conspiracy
with one does not arise and therefore, in that regard, the investigation stood
complete.
25. In support of his contentions, learned SPP further placed reliance on the
following judgments:
i. Uday Mohanlal Acharya v. State of Maharashtra, (2001) 5 SCC 453.
ii. Sanjay Dutt v. State through CBI, Bombay (II), (1994) 5 SCC 410.
iii. Central Bureau of Investigation v. Shyam Sunder Narang, Order dated
22.02.2023 in W.P. (CRL.) 847/2021.
iv. Amarjeet Sharma v. Serious Fraud Investigation Office,
2022/DHC/004629.
v. Dilawar Singh v. Parvinder Singh @ Iqbal Singh & Anr., AIR 2006 SC
389.
vi. State of Maharashtra v. Sharadchandra Vinayak Dongre & Ors., AIR
1995 SC 231.
vii. Fakhrey Alam v. State of Uttar Pradesh, AIR Online 2021 SC 930.
viii. S.M. Purtado and etc. v. Dy. S.P. CBI Cochin and etc., 1996 CLL. L.J.
3042.
ix. Tunde Gbaja v. Central Bureau of Investigation, 2007 [2] JCC 1306.
x. Serious Fraud Investigation Office v. Rahul Modi & Ors., AIR 2022
SC 902.
xi. Akash & Ors. v. State of Maharashtra & Ors., MANU/MH/0554/2022.
xii. Ranjit Kumar Bohra v. Central Bureau of Investigation,
GAHC0010016032022 (Bail Appln. 229/2022)
Rejoinder on behalf of the Applicant/Avinash Jain
26. In rejoinder to the submissions made by the learned SPP appearing on
behalf of the CBI, learned Senior Counsel for the applicant submitted that as
per the chargehseet and the reply filed by the CBI, it is an admitted case that
the investigation qua offence under the PC Act in the present case was still
ongoing and therefore, the chargesheet cannot be stated to be a complete one.
27. It was further submitted that in an application seeking police remand of
the applicant filed before the learned Special Judge, the CBI stated that
custody of the applicant was required to ascertain the full import of the
alleged ‗conspiracy‘ which also involved public servants and bank officials.
Thus, it would be logical to assume that investigation qua the public servants
had begun. It was submitted that even though the mandate of Section 17A of
the PC Act requires prior sanction before investigating the role of public
servants, the same was applied for belatedly. The FIR was registered on
19.11.2020. The applicant was arrested on 14.11.2022 and remanded to
judicial custody on 21.11.2022. The sanction was applied for by the CBI only
on 16.12.2022. Thus, the applicant was arrested for offences under Section
13(2) read with Section 13(1)(d) of the PC Act alongwith other offences
under the IPC much before the CBI applied for sanction, meaning thereby, the
role of the public servants was already being investigated. Learned Senior
Counsel further drew the attention of this Court to the supplementary
chargesheet dated 01.04.2023 filed alongwith the Additional Status Report
placed on record by the CBI, wherein it has been stated that the CBI was
investigating the role of a public servant - Anil Kumar, qua whom sanction
under Section 17A of the PC Act was sought. In the said supplementary
chargesheet, it has been stated as under:
―16.4. That, during investigation, role of public servant/Bank Official
Sh. Anil Kumar, the then AGM and Relationship Manager, State Bank
of India came to light for violations/omissions/commissions in
sanctioning/disbursing/monitoring of credit facilities granted to M/s
Arise India limited. Accordingly, prior approval of the Competent
Authority of concerned bank was sought as per Section 17 A of the
Prevention of Corruption (as amended in 2018) Act, 1988 vide request
letter dated 16.12.2022 for investigating the role of the said public
servant/bank officer. The copy of the CBI letter dated 16.12.2022 is
submitted as Annexure ‗A‘.‖
Discussion
28. Heard learned counsel for the parties and perused the record.
Provision
29. Section 167(2) of the CrPC reads as under:
―(2) The Magistrate to whom an accused person is forwarded
under this section may, whether he has or has not 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 -
30. The fundamental right to personal life and liberty under Article 21 of
the Constitution of India and its co-relation with 167(2) of the CrPC has been,
over the years, clearly established by way of judicial precedents of the
Hon‘ble Supreme Court of India as well as various High Courts. The right of
an accused to default bail under Section 167(2) of the CrPC would arise in a
case where the chargesheet is not filed within the stipulated period. The other
circumstance giving rise to the right to default bail would be in case where the
prosecution files a preliminary or incomplete chargesheet, within the period
prescribed for offences mentioned therein and in that process, defeating the
right of the accused to statutory bail. In the present case, the chargesheet, as
per learned Senior Counsel appearing on behalf of the applicant, is incomplete
and therefore, the applicant is entitled to default bail as a matter of right. To
demonstrate that the present chargesheet is incomplete in nature, reliance was
placed on:
i. M. Ravindran v. Intelligence Officer, DRI 2021 (2) SCC 485.
ii. Fakhrey Alam v. State of Uttar Pradesh, 2021 SCC OnLine SC 532.
iii. Chitra Ramkrishna v. CBI, 2022 SCC OnLine Del 3124.
iv. S.M. Furtado v. CBI & Ors., 1996 SCC OnLine Ker 112.
v. Tunde Gbaja v. Central Bureau of Investigation, 2007 [2] JCC 1306.
31. Per contra learned SPP for the CBI submitted that the aforesaid
decisions were based on a different set of facts and circumstances. It was
pointed out that the decision in Fakhrey Alam (supra) was rendered with
respect to a factual background wherein the FIR was initially registered for
offences for which the stipulated period for filing of chargesheet in terms of
Section 167(2) of the CrPC was 180 days. After the lapse of the stipulated
period, chargesheet was filed for lesser offences and therefore, it was held that
the chargesheet was incomplete. It was further pointed out that in Tunde
Gbaja (supra), for the offences under which the FIR was registered, the
stipulated time period to file a chargesheet was 90 days. However, the
chargesheet was filed only for an offence under the Foreigners Act, 1946,
which was not a part of the FIR, within 60 days of arrest and therefore, the
chargesheet was held to be incomplete. Learned SPP for the CBI drew a
distinction on the basis of the fact that in the present case, the offences for
which the FIR was registered were all punishable up to seven years and
therefore, the stipulated period for filing the chargesheet would have been 60
days. It is urged that since the chargesheet was filed within the stipulated
period of 60 days, therefore, the present chargesheet cannot be called
incomplete and as being filed only to defeat the right of the applicant under
Section 167(2) of the CrPC.
Issue
32. The issue for consideration in the present case for this court is whether
the chargesheet, filed under Section 120B read with Section 420 and 471 of
the IPC and substantive offences thereof, in a case where the FIR was
registered under Section 120B read with Sections 420, 468 and 471 of the IPC
and Section 13(2) read with Section 13(1)(d) of PC Act while stating that
further investigation is continuing with respect to offences under the PC Act
is an incomplete chargesheet?
Precedents
33. For determining the said issue, it would be relevant to refer to some
precedents cited at the bar:-
33.1. In Fakhrey Alam (supra), the FIR was registered under Sections 420,
467, 468, 471 and 120B of the IPC; Sections 3, 5 and 30 of the Arms Act,
33.2. In S.M. Furtado (supra), the Hon‘ble High Court of Kerala held as
under:
―12. The other question is, whether the CBI was right in filing
a ‘charge report’ without making a final report in respect of the
offences alleged to have been committed by the petitioners under
the Official Secrets Act, 1923 and other enactments. Standing
counsel for the CBI pointed out that since the investigation in respect
of the offences other than the one under the Official Secrets Act has
already been completed, the CBI is entitled to file a final report under
S. 173 of the Code so far as those offences are concerned. Therefore,
19. Thus, in the light of the report filed by the C.B.I., 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 S. 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 S. 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 S. 173(8) of the Code.
The finding of the court below to the contra is, in our view, illegal.
20. Admittedly, no final report has been filed by the CBI
against the peti tioners in respect of the various offences. In its
absence, the prosecution is not justi fied in resorting to S. 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 other. Since the investigation of the case is not complete,
we find no reason to deny the statutory bail to the petitioners under S.
167(2) of the Code.‖
(emphasis supplied)
33.3. In Tunde Gbaja (supra), a learned Single Judge of this Court was
presented with a situation where an FIR was registered under Sections 489A,
489B, 489C, 489D and 489E read with Section 120B of the IPC, however, a
chargehseet was filed only under Section 14 of the Foreigners Act, albeit,
within 60 days of the applicant‘s arrest. After considering the decision of the
Hon‘ble Supreme Court in Uday Mohanlal Acharya v. State of Maharashtra,
AIR 2001 SC 1919 and the decision of the Hon‘ble High Court of Kerala in
S.M. Furtado (supra), it was held that even though the investigating agency
has a right to file a supplementary chargesheet in terms of Section 173(8) of
the CrPC, they cannot be permitted to file an incomplete chargesheet. While
granting bail to the applicant, the Court held as under:
―20. It is well known that the court takes cognizance of the
crime, not the offender. The argument that the respondent filed a
was stated that further investigation qua offences under Sections 7 and 12 of
the PC Act, Section 204 of the IPC and Section 66 of the IT Act was
continuing. It was held that the chargesheet so filed was incomplete. It was
observed that the mandate of Sections 173(2) and Section 167(2) of the CrPC
does not permit a Court to take cognizance piece-meal or in parts as that
would inevitably negate the right of an accused to statutory/default bail. It
was further observed that Section 167(2) provides for a right which cannot be
interpreted to the convenience of the investigation agency. While allowing the
application for bail, it was held as under:
―116. 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.
117. 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
33.6. In Riyazuddin v. State NCT of Delhi, 2023 SCC OnLine Del 2073, a
coordinate bench of this Court had the occasion to examine the question of
default bail in a case where an FIR was registered under Sections 489A and
489C read with Section 120B of the IPC, the applicant was arrested and
remanded to judicial custody and a chargehseet was filed, while keeping
further investigation open. Upon filing of the first chargesheet, the Court took
cognizance of offences under Sections 471, 489B, 489C, 120B of the IPC.
Upon filing of a supplementary chargesheet under Sections 419 and 420 of
the IPC over six months later, the Court took cognizance of offence
punishable only under Section 420 of the IPC. The Court, in the said case,
was of the opinion that the initial chargesheet was complete in all respects
qua the offences mentioned in the FIR and thus, the applicant‘s plea for
default bail was rejected. It was held as under:
―15. It would be therefore evident that as regards the offences
mentioned in the FIR, the initial charge-sheet filed was complete in all
respects and therefore the petitioner cannot be entitled to default bail
in that regard. It was only the discovery of the Aadhaar card which
required verification and a subsequent investigation and upon
discovery that it was a fake Aadhaar card which also needs to be
verified, consequently offences under Section 419 and 420 of
the IPC were added. This would not fall foul of the decisions noted
herein above considering that an additional offence was discovered
pursuant to a further investigation which is not precluded as per
Section 173(8) which provides for ―further investigation in respect of
an offence‖. This was not a case where the offence of Sections 419
and 420 was noted in the FIR and for which the charge sheet
ought to have been filed within the prescribed time under Section
167(2) but a discovery of a further fact which was relatable to an
additional offence which was thereafter added by a
supplementary charge-sheet. The detention of the accused under
Section 167(2) was in respect of offences for which the
investigation was underway and in respect of which the charge-
sheet was filed within the prescribed time. The discovery of yet
another offence from the articles recovered from the accused
would not preclude a further investigation and the addition of a
charge under another offence at a subsequent stage. In Tunde
Gbaja (supra), the charge-sheet was filed pertaining only to the
offences under the Foreigners Act within a prescribed time but for the
other offences under the Official Secrets Acts, IPC etc., the
supplementary charge-sheet was filed later. In the said case, the FIR
was registered against the accused for offences punishable under
Sections 120B, 489A to 489E of the IPC. It was later discovered that
he was in violation of the provision of the Foreigners Act, wherein
charge-sheet was filed within the stipulated time of 60 days.
Therefore, the decision in Tunde Gbaja was distinguishable and in the
considered opinion of this Court, the petitioner would not be entitled
to seeking default bail.‖
(emphasis supplied)
33.7. The Hon‘ble High Court of Bombay (Nagpur Bench) dealt with an
application seeking default bail in Akash & Ors. v. State of Maharashtra &
Ors., 2022 (2) Bom CR(Cri) 461. In the said case, initially, the FIR was
registered under Sections 302, 201, 120B, 364 and 212 read with Section 34
of the IPC, Section 4 and 25 of the Arms Act, 1959 and Section 142 of the
Maharashtra Police Act. During the course of investigation, the investigating
officer formed an opinion that the accused ought to be prosecuted for offences
committed under Sections 3(1)(ii), 3(2) and 3(4) of the Maharashtra Control
constitute the alleged offences and only ancillary aspects of the investigation
were pending, the Hon‘ble High Court of Gauhati rejected the application for
default bail. It was held as under:
―39. The power vested upon the investigating agency by section
173(8) of the Cr. P.C. is a wide power. The said sub-section opens up
with the wordings ―Nothing in this section shall be deemed to
preclude further investigation…‖ which is in the nature of a non
obstante clause giving overriding powers. Under this provision, the
investigating agency shall not be precluded by anything in the section
from making further investigation in respect of the report which has
been submitted under sub-section (2) and on obtaining further
evidence, the same should be forwarded to the Magistrate in the form
of a further report or reports regarding such evidence wherein the
provisions of sub-sections (2) to (6) shall apply.
40. When the investigating agency itself has come to a finding that
the substantive offences have been made out, as recorded in
paragraphs 16.23 and 16.24 of the charge sheet, this court in deciding
a bail application cannot enter into the merits of such findings which
are matters, strictly within the domain of the investigating agency. In
any case, the said findings are neither the subject-matters of challenge
nor required to be dealt with by this court, as no such occasion has
arisen.
41. As noted above, the contents of paragraph 16.25 of the charge
sheet would reveal that further investigation may be required mainly
with regard to the amount of Rs. 2,12,99,000 which has been
recovered from the residence of Shri Vijay Kumar Upadhyay which
was not specifically mentioned at the time of lodging of the FIR. A
bare look at the FIR would reveal that apart from the present three
petitioners, other unknown public servants and private persons, are
also involved. Section 173(8) of the Cr. P.C. having empowered the
investigating agency to make further investigation, this court is unable
to accept the submission made on behalf of the petitioners that they
are entitled to default bail.
42. Though the entire thrust on behalf of the petitioners was on
default bail which has been negated by this court, as held above, the
attempt to make out a case for regular bail is also required to be dealt
with even though the said attempt was a frail one.
43. From the side of the petitioners, it has been contended that
even the statements of the 27 numbers of witnesses recorded so far, do
not make out a case against the petitioners. The said contention is
42. The Division Bench has further held at para No. 5 that non-
filing of all the enclosures under Section 173(5) along with the report
filed under S. 173(2) is not a ground to release the accused on the
premise that full charge sheet is not filed within the stipulated time.
43. In Venkatarayanakota Krishnappa Raghavendra Buvanahalli
Muniyappa Nagesh Babu relied on by the learned Additional Public
Prosecutor, the Division Bench of High Court of Composite state of
Andhra Pradesh this Court while answering reference made to it
whether the charge sheet, which was filed within 90 days, but was
returned for compliance of certain technical objections of not filing the
scientific expert‘s opinion, is a proper compliance under section 173
Cr.P.C. and whether the same confer any right on the accused to seek
bail as a matter of right, as required under Section 167 Cr.P.C., at
para-22 held as follows:
―22. We accordingly answer the question referred as under : Once
the charge is filed within 90 days, but was returned for compliance of
certain technical objections of not filing the scientific expert‘s opinion,
is a proper compliance under Section 173 (2) Cr.P.C. and the same
will not confer any right on the accused to seek bail, as a matter of
right. Even in a case where the charge sheet is filed after 90 days, but
before accused seeks bail availing the benefit under proviso to sub-
section (2) of Section 167, his indefeasible right will be extinguished
on filing such charge sheet.‖
44. From the observations made in the aforementioned citations, it
is evident that the charge sheet must contain the particulars so as to
enable the Magistrate to take cognizance under Section under Sec.
190(1)(b) and charge sheet should be filed after concluding the
investigation in all respects and it is further evident that mere return of
charge sheet for compliance of certain technical objections of not
filing the scientific expert‘s opinion, is a proper compliance under
section 173 Cr.P.C.‖
from the SBI against M/s Arise India Ltd. and its Directors including
the present applicant alongwith ‗unknown public servants’.
ii. The applicant was arrested on 14.11.2022 for offences under Section
120B read with Sections 420, 468 and 471 of the IPC and 13(2) read
with 13(1)(d) of the PC Act. He was produced before the learned
Special Judge on 15.11.2020 and was remanded to judicial custody for
one day for the purposes of hearing the application of CBI on police
custody on 16.11.2020.
iii. On 16.11.2020, on an application moved by the CBI for police custody,
the present applicant was remanded to police custody for five days. In
the said application, the CBI averred as under:
―16. That in view of the aforesaid facts and circumstances,
arrest and custodial interrogation of Sh. Avinash Jain was
required in order to in order to unearth the whole conspiracy
and involvement of other co-accused persons including the
role of public servants.
xxx
19.That the custodial interrogation of accused Avinash Jain
is required to unearth the criminal conspiracy behind the
fraud perpetrated by the borrower company M/s. Arise India
Ltd. and to ascertain the diversion & siphoning off of the
credit limits availed by the‘ accused company. The custodial
interrogation of accused Avinash Jain is also required to
ascertain the role of other persons including bank officials,
who had aided him in the aforesaid conspiracy.‖
the PC Act to investigate the role of one Anil Kumar, the then Assistant
General Manager and Relationship Manager at SBI.
vi. The chargesheet in the present case was filed on 06.01.2023 under
Section 120B read with Sections 420 and 471 of the IPC against the
applicant and other accused persons. Apart from the applicant, all the
other accused persons were chargesheeted without arrest. Relevant part
of the chargesheet reads as under:
―16.73 Investigation therefore, has clearly established
commission of cognizable offence by M/s. Arise India
Limited, Avinash Jain, Amit Jain, Naresh Chand Jain, Anju
Jain, Pankaj Jain. Mohan Singh Chauhan and Mukesh
Kumar therefore chargesheet is being filed for launching
prosecution against (1) Avinash Jain, (2) Amit Jain, (3)
Naresh Chand Jain. (4) Anju Jain (5) Pankaj Jain, (6) Mohan
Singh Chauhan and (7) Mukesh Kumar u/s 120-B r/w 420
and 471 of Indian Penal Code and substantive offences
thereof. Prosecution is also recommended against M/s Arise
India Limited U/s 420 IPC.
xxx
16.75 That during investigation role of certain public
servants / Bank Officials came to light for violations/
omissions/comissions/sanctioning/ disbursing/ monitoring of
credit facilities granted to M/s Arise India Limited. Prior
approval of the competent authorities of concerned banks
have been sought as per Section 17 A of The Prevention of
Corruption (as amended in 2018) Act. 1988 for conducting
investigation of the offences against the said public servants/
bank officers.‖
The learned Special Judge sought clarification from the CBI with
regard to procedures/guidelines followed by CBI in an investigation with
regard to the alleged bank fraud cases.
ix. In compliance of the aforesaid order dated 16.01.2023 passed by the
learned Special Judge, the CBI filed a compliance report dated
27.01.2023, wherein it has been recorded as under:
―5. That during investigation, role of certain public
servants/Bank Officials came to light for violations/
omissions/commissions in sanctioning/disbursing/
monitoring of credit facilities granted to M/s Arise India
Limited. Prior approval of the competent authorities of
concerned banks have been sought as per Section 17 A of
the Prevention of Corruption (as amended in 2018) Act,
1988 vide request letter dated 16.12.2022 for conducting
investigation of the offences against the said public
servants/ bank officers.
xxx
14. That, in the instant case identification of public servant
and attributing the specific omission/commission of act(s) on
his part has been the subject matter of investigation and due
process for the same has been followed in light of the DoPT
Notification dated 03.09.2021 as mentioned above as the
same was processed only after collecting and analyzing
voluminous documents, which involved but not limited to
Financial Statements, ledgers. Stock Statements of the
accused company and Sanction Proposal, Disbursement
Notes voluminous Bank Statements/Transactions etc. from
all the consortium member Banks, during investigation of
the case. As the allegations mentioned in the complaint are
various and amount involved was huge i.e. to the tune of Rs.
512.67 Crores, the same were to be ascertained before
reaching to any conclusion regarding the role of FIR named
accused persons and before establishing the identity of
unknown public servants. Large number of witnesses were
also examined to identify and ascertain the allegations as
mentioned in the FIR.
15. That it is also submitted that after reaching to a
logical conclusion regarding the commission of offence on
the part of the main perpetrator without undue delay
and by following all the due procedure established by
law, he was taken into police custody on 14.11.2022 and
in the meantime, role of co-conspirators including the
Bank Official(s) was also looked into.
16. That, It is further submitted that only after
ascertaining the specific act(s) of commission or omission
punishable under Prevention of Corruption Act, 1988
and attributing the same to a particular public servant(s)
and analyzing whether such act(s) are relatable to the
official function or duty discharged by such public
35. Examination of the aforesaid facts clearly demonstrates the fact that
before filing the chargesheet, the CBI had formed an opinion with respect to
the involvement of a public servant for the purposes of offences under the PC
Act and therefore, had sought an approval under Section 17A of the said Act
on 16.12.2022. In anticipation of such approval, the chargesheet was filed
wherein it was stated that the approval has been sought and further
investigation is continuing. It is the case of the applicant that the distinction
between further investigation and incomplete investigation is that if a
chargsheet has been filed with respect to the offences alleged in the FIR, then
the same would be complete and if any ancillary investigation with respect to
the said offences has to be conducted, then the same can be filed by way of a
supplementary chargsheet. However, an incomplete chargesheet would be one
if the same has been filed with respect to certain offences mentioned in the
FIR without determining or expressing opinion with regard to investigation
with respect to the other offences mentioned in the said FIR. In the present
case, admittedly, the CBI, at the time of filing the chargesheet did not express
any opinion with respect to offences committed under the provisions of the
PC Act but it has come on record that the investigation with respect to the
aforesaid offences was pending approval of the competent authority under
Section 17A of the PC Act and therefore, it was continuing.
36. The contention of the learned SPP for the CBI is that cognizance of an
offence under the PC Act is always with respect to the offender and not the
offence would be applicable only after a chargesheet under the PC Act is
filed. At this point, it is relevant to reproduce Section 17A of the PC Act,
which reads as under:
“17-A. Enquiry or Inquiry or investigation of offences relatable
to recommendations made or decision taken by public servant in
discharge of official functions or duties.—(1) No police officer shall
conduct any enquiry or inquiry or investigation into any offence alleged
to have been committed by a public servant under this Act, where the
alleged offence is relatable to any recommendation made or decision
taken by such public servant in discharge of his official functions or
duties, without the previous approval—
(a) in the case of a person who is or was employed, at the time when the
offence was alleged to have been committed, in connection with the
affairs of the Union, of that Government;
(b) in the case of a person who is or was employed, at the time when the
offence was alleged to have been committed, in connection with the
affairs of a State, of that Government;
(c) in the case of any other person, of the authority competent to remove
him from his office, at the time when the offence was alleged to have
been committed:
Provided that no such approval shall be necessary for cases involving
arrest of a person on the spot on the charge of accepting or attempting to
accept any undue advantage for himself or for any other person:
Provided further that the concerned authority shall convey its
decision under this section within a period of three months, which may,
for reasons to be recorded in writing by such authority, be extended by a
further period of one month.‖
permission under Section 17A shall be sought and the due process will
be followed including the applicability of Section 17A of the PC.‖
Admittedly, in the present case, the investigation in the present FIR was
initiated on 19.11.2020. The investigation was being conducted at the time
when the present applicant was arrested on 14.11.2022 for the offences
mentioned in the FIR including the provisions of PC Act, as reflected in the
application seeking police custody. Investigation further continued during the
time when the applicant was in judicial custody. A communication dated
16.12.2022 was sent to the SBI seeking approval under Section 17A of the PC
Act with respect to a public servant identified during the investigation before
filing of chargesheet. Since the reply to the said communication was not
received till the time when the present chargesheet was filed, i.e., on
06.01.2023, the investigation was still continuing, as stated in the chargesheet.
Thereafter the competent authority denied the grant of approval vide a letter
dated 23.02.2023. On the basis of said communication, the CBI filed a
supplementary chargesheet dated 01.04.2023 with respect to the offences
under Sections 13(2) read with 13(1)(d) of the PC Act.
38. In Chitra Ramkrishna (supra), after a detailed analysis of the
precedents on the subject, a distinction was drawn between ‗completion of
investigation‘ and ‗further investigation‘. It was observed that further
investigation can be resorted to only after completion of investigation and
filing of the chargesheet. It was held that a chargesheet can be filed before the
Court of competent jurisdiction only when the investigation with respect to
the FIR is complete in all respects and an opinion has been given with regard
to the offences alleged against the accused in the FIR. It was held that the
investigating agency cannot fragment or break the FIR, and file different
chargesheets. It was held that if the investigating agencies are permitted to file
a chargesheet piece-meal, it would defeat the right of an accused under
Section 167(2) of the CrPC and that would be violative of Article 21 of the
Constitution of India. The contention of learned SPP for the CBI was that the
said judgement was passed in a different factual context. The said contention
does not appeal to this Court, inasmuch as the basic principle of the law that
investigation for the offences in relation to which an accused has been
arrested, should be complete at the time the chargesheet has been filed will
not vary on facts. A supplementary chargesheet is permissible only when
certain aspects of the investigation, which are otherwise complete in the main
chargesheet, are still required to be looked into.
39. It is pertinent to note that in the present case, the chargesheet
specifically records the fact that further investigation is pending with respect
to the offences under the PC Act on account of approval under Section 17A of
the said Act. The said chargesheet is silent about any further investigation
with respect to other offence, i.e., Section 468 of the IPC. In this case, the
Court of competent jurisdiction before which the chargesheet was filed did
not take cognizance, as recorded in the order dated 06.01.2023 passed by the
learned Principal District and Sessions Judge-cum-Special Judge (PC Act)
(CBI), Rouse Avenue District Court. By filing a supplementary report under
Section 173(8) of the CrPC, the CBI cannot change the nature of the first
chargesheet as one which can be termed as complete. The investigation
arising out of the present FIR is incomplete as only one part of the
investigation, i.e, the allegation pertaining to diversion of borrowed funds, is
complete and the other part pertaining to connivance/conspiracy with
unknown public servants is pending. As pointed out hereinabove, it is an
admitted case of the CBI as per the chargesheet itself, that investigation with
respect to the role of unknown public servants was being conducted. Further,
by way of the supplementary chargesheet, it has come on record that during
the course of investigation, a public servant, i.e., Anil Kumar, AGM and
Relationship Manager, State Bank of India had been identified, qua whom
approval under Section 17A of the PC Act was sought. It cannot be the case
of the CBI that public servant would have been chargesheeted for offences
under the PC Act without alleging conspiracy with the present applicant. It is
pertinent to note that the role of public servant was being examined/inquired
into during the investigation of the present FIR with respect to the present
applicant. Section 13 of the PC Act, as it stood before the Prevention of
Corruption (Amendment) Act, 2018 came into force, reads as under:
―13. Criminal misconduct by a public servant.—
(1) A public servant is said to commit the offence of criminal
misconduct,—
(a) if he habitually accepts or obtains or agrees to accept or
attempts to obtain from any person for himself or for any other
person any gratification other than legal remuneration as a motive
or reward such as is mentioned in section 7; or
(b) if he habitually accepts or obtains or agrees to accept or
attempts to obtain for himself or for any other person, any
valuable thing without consideration or for a consideration which
he knows to be inadequate from any person whom he knows to
have been, or to be, or to be likely to be concerned in any
proceeding or business transacted or about to be transacted by
him, or having any connection with the official functions of
himself or of any public servant to whom he is subordinate, or
from any person whom he knows to be interested in or related to
the person so concerned; or
(c) if he dishonestly or fraudulently misappropriates or otherwise
converts for his own use any property entrusted to him or under
his control as a public servant or allows any other person so to
do; or
(d) if he,—
Act had taken place. It is an admitted case of the CBI, as per the orders cited
by them passed by coordinate benches of this Court, that in an FIR registered
under PC Act, investigation can take place without approval under Section
17A of the PC Act, until such time that a public servant is identified.
40. It will be pertinent to observe that the supplementary report under
Section 173(8) of the CrPC for closure of investigation qua the offences under
the PC Act was filed after the applicant exercised his right under Section
167(2) of the CrPC by moving an application in that regard before the learned
Trial Court on 01.02.2023. Closure of an investigation connotes a prior
pendency/continuance of the same.
41. The ratio of Chitra Ramkrishna (supra) squarely applies to the present
case. In the present case as well, like in Chitra Ramakrishna (supra), the
investigation qua offences mentioned in the FIR was not complete. It is not
the case of the CBI that at the time of filing of the chargesheet, investigation
with respect to the offences under the PC Act was complete and therefore, the
chargesheet was filed with respect to the other offences mentioned in the FIR.
The Hon‘ble Supreme Court, in M. Ravindran (supra) had noted that in case
two interpretations of a penal statute are possible, the one leaning in favor of
the accused must be adopted. It was held as under:
―17.9. Additionally, it is well-settled that in case of any ambiguity in
the construction of a penal statute, the courts must favour the
interpretation which leans towards protecting the rights of the accused,
given the ubiquitous power disparity between the individual accused and
the State machinery. This is applicable not only in the case of substantive
penal statutes but also in the case of procedures providing for the
curtailment of the liberty of the accused.
17.10. With respect to the CrPC particularly, the Statement of Objects
and Reasons (supra) is an important aid of construction. Section 167(2)
has to be interpreted keeping in mind the threefold objectives expressed
by the legislature, namely, ensuring a fair trial, expeditious investigation
and trial, and setting down a rationalised procedure that protects the
interests of indigent sections of society. These objects are nothing but
subsets of the overarching fundamental right guaranteed under Article
21.‖
42. It is reflected from the records of the case that the FIR was registered
on 19.11.2020 under Section 120B read with Sections 420, 468 and 471 of the
IPC and Section 13(2) read with Section 13(1)(d) of the PC Act. The present
applicant was arrested on 14.11.2022 under the aforesaid sections. The CBI,
on 16.12.2022, sought approval from the competent authority under Section
17A of the of the PC Act, but proceeded to file the chargesheet, before the
expiry of the stipulated term of 60 days, while keeping the investigation for
offences under Section 13(2) read with Section 13(1)(d) of the PC Act open.
Therefore, it is clear that the CBI had not completed the investigation with
respect to offences under Section 13(2) read with Section 13(1)(d) of the PC
Act, for which the applicant was arrested. Permitting the CBI to pick up one
aspect of the investigation and file a piece-meal chargesheet with respect to
the same and consequently, defeating the right of the applicant to default bail,
goes against the mandate of Article 21 of the Constitution, as held by the
Hon‘ble Supreme Court in M. Ravindran (supra), Fakhrey Alam (supra) and
Satender Kumar Antil (supra).
43. In the facts and circumstances of the present case, the application is
allowed. The applicant is admitted to default bail under Section 167(2) of the
CrPC in case RC2232020A0009 registered by the CBI at PS: AC-V, Delhi
upon his furnishing a personal bond in the sum of Rs. 2,00,000/- alongwith
two sureties of like amount to the satisfaction of the learned Trial Court/Link
Court, further subject to the following conditions:
i. The memo of parties shows that the applicant is residing at B-38, Jain
Chowk, Mangala Puri, Palam, New Delhi, NCT of Delhi, South West
Delhi - 110045. In case of any change of address, the applicant is
directed to inform the same to the Investigating Officer.
ii. The applicant shall not leave India without the prior permission of the
learned Trial Court.
iii. The applicant is directed to give all his mobile numbers to the
Investigating Officer and keep them operational at all times.
iv. The applicant shall not, directly or indirectly, tamper with evidence or
try to influence the witness in any manner.
AMIT SHARMA
JUDGE