TMI Blog2023 (7) TMI 1187X X X X Extracts X X X X X X X X Extracts X X X X ..... at the stage when the final investigation report was filed before the learned Special Judge, the investigating officer did not seek that the petitioner be either arrested or remanded to judicial custody. This was presumably guided by the words of the Supreme Court in JOGINDER KUMAR VERSUS STATE OF UP. [ 1994 (4) TMI 385 - SUPREME COURT] and SIDDHARTH VERSUS THE STATE OF UTTAR PRADESH ANR. [ 2021 (8) TMI 977 - SUPREME COURT] . In view of the verdict of the Supreme Court in SUNDEEP KUMAR BAFNA VERSUS STATE OF MAHARASHTRA ANR [ 2015 (8) TMI 724 - SUPREME COURT ], what is settled is that a person is in custody , no sooner he surrenders before the appropriate court. But that custody does not tantamount to being under incarceration as referred to in SATENDER KUMAR ANTIL VERSUS CENTRAL BUREAU OF INVESTIGATION ANR. [ 2022 (8) TMI 152 - SUPREME COURT ]. Now, the word incarceration has not been defined either in the Code of Criminal Procedure 1973, nor in the Indian Penal Code 1860, nor in the Prisoners Act 1900, nor even in the Prisons Act 1894. Therefore, taking cue from what the Supreme Court has held in Satender Kumar Antil, evidently when the petitioner appeared befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u Bhasin, Mr. Vilas Sharma, Advocates. For the Respondent Through: Mr. Harish Vaidhyanathan Shankar, CGSC with Mr. Srish Kumar Mishra, Mr. Sagar Mehlawat and Mr. Alexander Mathai Paikaday, Advocates. JUDGMENT ANUP JAIRAM BHAMBHANI J. By way of the present petition under section 439 of the Code of Criminal Procedure, 1973 ( Cr.P.C. for short), the petitioner, who is accused in complaint case No. 245/2021 titled SFIO vs. Parul Polymers Pvt. Ltd Ors. pending before the learned Special Judge (Companies Act), Dwarka Courts, New Delhi, seeks regular bail. 2. The petitioner is arraigned as accused No. 2 in the trial court proceedings, among 12 other accused; 07 of the accused have been granted bail or anticipatory bail either by the High Court or the Special Court, and cognizance has been declined against 01 accused. 3. Notice on this bail petition was issued on 02.06.2022; consequent whereupon the respondent/Serious Fraud Investigation Office ( SFIO for short) has filed reply/counter-affidavit dated 11.11.2022 opposing grant of bail. 4. Nominal Roll dated 25.02.2023 has been received from the Jail Superintendent, which shows that the petitioner has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod even prior to the enactment of the Companies Act, 2013; and that investigation in the matter was commenced in compliance of order dated 07.12.2015 made by a Coordinate Bench of this court in Contempt Case (C) No. 531/2015; and after prolonged investigation and proceedings spanning more than 6 years, the SFIO filed the criminal complaint against the petitioner and other co-accused persons on 08.02.2021, which came to be registered as Complaint Case No. 245/2021. 10. It is submitted that cognisance of the offence was taken by the learned Special Judge vide order dated 07.03.2022, by which order the petitioner was directed to appear before the court on 25.05.2022. 11. It is emphasised that the petitioner was never arrested throughout the course of investigation and proceedings; and the complaint was also filed by the SFIO without arresting him. 12. That notwithstanding, it is argued, that when, in compliance of summons issued to him by the learned Special Judge, the petitioner appeared before the court on 25.05.2022, the bail application filed by him was rejected by the learned Special Judge there-and-then; he was taken into custody and sent to J/C on the spot; and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestigation Office, 2022 SCC OnLine Del 4543, Deepak Jha and Taranjeet Singh Bagga [ Deepak Jha vs. State NCT of Delhi Ors, Bail Appln No. 2633/2022, Order dated 06.02.2023 (Delhi High Court)] have already been admitted to bail by this court. 19. Another plank of the legal submissions made on behalf of the petitioner is that in Satender Kumar Antil vs. Central Bureau of Investigation Anr. (2022) 10 SCC 51 at para 89, the Supreme Court has held that the twin conditions in special statutes would apply only after an accused is already under incarceration, observing that : To clarify this position, we may hold that if an accused is already under incarceration , then the same would continue, and therefore, it is needless to say that the provision of the Special Act would get applied thereafter (emphasis supplied). It is submitted that therefore, in the present case, the learned Special Judge misdirected himself in applying the twin-conditions as specified in section 212(6)(ii) of the Companies Act, since on the date when the petitioner appeared before the learned Special Judge, he was not under incarceration. It is also submitted that at the time when he appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner s personal bank accounts and were used to purchase personal property. 23. Lastly, learned CGSC submits that merely because the petitioner was not arrested during the course of investigation, that cannot lead to the conclusion that he would not tamper with evidence or influence witnesses; and given his key role in the offending transactions, those factors cannot be disregarded. Besides, it is argued that the petitioner was not arrested during investigation only since the investigating officer was cautious in exercising the discretion conferred upon him by section 212(8) of the Companies Act; which however did not prevent the learned Special Judge from directing judicial custody of the petitioner once cognizance was taken, based upon material available after investigation. 24. In support of his submissions, learned CGSC places reliance on the following judgments : Vijay Madanlal Choudhary Ors. vs. Union of India Ors. 2022 SCC Online SC 929, Serious Fraud Investigation Office vs. Nittin Johari Anr. (2019) 9 SCC 165, Prahlad Singh Bhati vs. NCT. Delhi Anr. (2001) 4 SCC 280, Gudikanti Narashimhulu Ors. vs. Public Prosecutor, High Court of Andhra Pradesh ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... occur. 25.5. On the weightage to be given to a final report filed by an investigating officer under section 173 Cr.P.C., which is the equivalent of a criminal complaint filed by the SFIO, in K Veeraswami vs. Union of India Ors. (1991) 3 SCC 655 at para 76 the Supreme Court has expressed the view that the final report is nothing more than the opinion of the investigating officer. 25.6. On the broader principles of grant of bail, in Dataram Singh vs. State of Uttar Pradesh Anr. (2018) 3 SCC 22 at paras 4, 6 the Supreme Court has observed that discretion in the matter of grant of bail must be exercised judiciously, and in a humane and compassionate manner. 25.7. Though, in Gurcharan Singh Ors. vs. State (Delhi Administration) (1978) 1 SCC 118 at paras 24, 29 the well-worn principles that likelihood of an accused fleeing from justice and tampering with prosecution evidence have been reiterated as the two paramount considerations for grant of bail, in Ashok Sagar vs. State (NCT of Delhi) 2018 SCC OnLine Del 9548 at para 35(ii) it has been observed that equally it cannot be overlooked that theoretically every undertrial is a flight-risk if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like murder, kidnapping, rape, etc. On the other hand, the court in these cases under such special Acts, have to address itself principally on two facts : likely guilt of the accused and the likelihood of them not committing any offence upon release. This court has generally upheld such conditions on the ground that liberty of such citizens have to - in cases when accused of offences enacted under special laws - be balanced against the public interest. 20. A plain and literal interpretation of the conditions under Section 37 (i.e., that Court should be satisfied that the accused is not guilty and would not commit any offence) would effectively exclude grant of bail altogether, resulting in punitive detention and unsanctioned preventive detention as well. Therefore, the only manner in which such special conditions as enacted under Section 37 can be considered within constitutional parameters is where the court is reasonably satisfied on a prima facie look at the material on record (whenever the bail application is made) that the accused is not guilty. Any other interpretation, would result in complete denial of the bail to a person accused of offences such as those enacted u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (2) of Section 167 of the Code. Its power of remand can then be exercised in terms of sub-section (2) of Section 309 which reads as under: 309. Power to postpone or adjourn proceedings. (1) * * * * * (2) If the court, after taking cognizance of an offence, or commencement of trial, finds it necessary or advisable to postpone the commencement of, or adjourn, any inquiry or trial, it may, from time to time, for reasons to be recorded, postpone or adjourn the same on such terms as it thinks fit, for such time as it considers reasonable, and may by a warrant remand the accused if in custody: Provided that no Magistrate shall remand an accused person to custody under this section for a term exceeding fifteen days at a time: Provided further that when witnesses are in attendance, no adjournment or postponement shall be granted, without examining them, except for special reasons to be recorded in writing: Provided also that no adjournment shall be granted for the purpose only of enabling the accused person to show cause against the sentence proposed to be imposed on him. Explanation 1. If sufficient evidence has been obtained to raise a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only in view of Section 309(2) , but he who comes under the second category will be governed by Section 167 so long as further investigation continues. That necessarily means that in respect of the latter the Court which had taken cognizance of the offence may exercise its power to detain him in police custody, subject to the fulfilment of the requirements and the limitation of Section 167. (emphasis supplied) 25.13. Another facet that requires to be understood, is the legal meaning of the word arrest . The word arrest has not been defined either in the Cr.P.C. nor in the IPC. It has however been explained by the Supreme Court in Union of India vs. Padam Narain Aggarwal Ors. (2008) 13 SCC 305 in the following way : 20. The term arrest has neither been defined in the Code of Criminal Procedure, 1973 nor in the Penal Code, 1860 nor in any other enactment dealing with offences. The word arrest is derived from the French word arrater meaning to stop or stay . It signifies a restraint of a person. Arrest is thus a restraint of a man's person, obliging him to be obedient to law. Arrest then may be defined as the execution of the command of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tody thereof. To put it differently, the taking of the person into judicial custody is followed after the arrest of the person concerned by the Magistrate on appearance or surrender. It will be appropriate, at this stage, to note that in every arrest, there is custody but not vice versa and that both the words custody and arrest are not synonymous terms. Though custody may amount to an arrest in certain circumstances but not under all circumstances. If these two terms are interpreted as synonymous, it is nothing but an ultra legalist interpretation which if under all circumstances accepted and adopted, would lead to a startling anomaly resulting in serious consequences, vide Roshan Beevi [Roshan Beevi v. State of T.N., 1984 Cri LJ 134 : (1984) 15 ELT 289 (Mad)]. 49. While interpreting the expression in custody within the meaning of Section 439 CrPC, Krishna Iyer, J. speaking for the Bench in Niranjan Singh v. Prabhakar Rajaram Kharote [Niranjan Singh v. Prabhakar Rajaram Kharote, (1980) 2 SCC 559 : 1980 SCC (Cri) 508] observed that : (SCC p. 563, para 9) 9. He can be in custody not merely when the police arrests him, produces him before a Magistrate and gets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted: An arrest during the investigation of a cognizable case may be considered justified in one or other of the following circumstances: (i) The case involves a grave offence like murder, dacoity, robbery, rape etc., and it is necessary to arrest the accused and bring his movements under restraint to infuse confidence among the terror-stricken victims. (ii) The accused is likely to abscond and evade the processes of law. (iii) The accused is given to violent behaviour and is likely to commit further offences unless his movements are brought under restraint. (iv) The accused is a habitual offender and unless kept in custody he is likely to commit similar offences again. It would be desirable to insist through departmental instructions that a police officer making an arrest should also record in the case diary the reasons for making the arrest, thereby clarifying his conformity to the specified guidelines . The above guidelines are merely the incidents of personal liberty guaranteed under the Constitution of India. No arrest can be made because it is lawful for the police officer to do so. The existence of the power to arrest is one thing. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either police or judicial custody but it merely connotes the presentation of the accused by the investigating officer before the court while filing the charge-sheet. 10. We may note that personal liberty is an important aspect of our constitutional mandate. The occasion to arrest an accused during investigation arises when custodial investigation becomes necessary or it is a heinous crime or where there is a possibility of influencing the witnesses or accused may abscond. Merely because an arrest can be made because it is lawful does not mandate that arrest must be made. A distinction must be made between the existence of the power to arrest and the justification for exercise of it [ Joginder Kumar v. State of U.P., (1994) 4 SCC 260 : 1994 SCC (Cri) 1172 ]. If arrest is made routine, it can cause incalculable harm to the reputation and selfesteem of a person. If the investigating officer has no reason to believe that the accused will abscond or disobey summons and has, in fact, throughout cooperated with the investigation we fail to appreciate why there should be a compulsion on the officer to arrest the accused. * * * * * 12. In the present case when the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n between arrest and remand in a scenario where the additional twin-conditions contained in section 212(6) of the Companies Act apply, attention may be drawn to the following observations of the Supreme Court in Satendar Kumar Antil (supra) : 89. We may clarify on one aspect which is on the interpretation of Section 170 of the Code. Our discussion made for the other offences would apply to these cases also. To clarify this position, we may hold that if an accused is already under incarceration, then the same would continue, and therefore, it is needless to say that the provision of the Special Act would get applied thereafter. It is only in a case where the accused is either not arrested consciously by the prosecution or arrested and enlarged on bail, there is no need for further arrest at the instance of the court. Similarly, we would also add that the existence of a pari materia or a similar provision like Section 167(2) of the Code available under the Special Act would have the same effect entitling the accused for a default bail. Even here the court will have to consider the satisfaction under Section 440 of the Code. (emphasis supplied) 27. Now, in the backdrop o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot tantamount to being under incarceration as referred to in Satender Kumar Antil (supra) (2022) 10 SCC 51; para 89. Now, the word incarceration has not been defined either in the Code of Criminal Procedure 1973, nor in the Indian Penal Code 1860, nor in the Prisoners Act 1900, nor even in the Prisons Act 1894. Some effort at researching the meaning of this word shows, that it has been used in legal context in quite the same way as it is understood in common English parlance. In the Merriam Webster Dictionary (Online) [ Incarceration. Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/incarceration. Accessed 17 July 2023], incarceration has been defined to mean confinement in a jail or prison : the act of imprisoning someone or the state of being imprisoned . In the Cambridge Dictionary (Online) [ Incarceration. Dictionary.com, Cambridge Dictionary, https://dictionary.cambridge.org/dictionary/english/incarceration. Accessed 17 July 2023], incarceration is defined as the the act of putting or keeping someone in prison or in a place used as a prison; or the act of keeping someone in a closed place and preventing them fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he PMLA, are in the context of applicability of section 45 PMLA to anticipatory bail applications. It is in this context that the Supreme Court has held that the twin-conditions would apply even to anticipatory bail applications, by noting that there cannot be a difference between someone who applies for bail after arrest (regular bail) and someone who is yet to be arrested (anticipatory bail). Thus, it can safely be said that the interpretation of section 45 PMLA in Vijay Madanlal Choudhary does not contemplate a situation where the accused has never been arrested. 27.7. Accordingly, the judgments in Nittin Johari, Rohit Tandon and Vijay Madanlal Choudhary are all distinguishable on facts. On the other hand, a reasonable interpretation of the twin-conditions as mandated by Mohd Muslim 2023 SCC OnLine SC 352 at para 19 (supra) read with the observations in Satendar Kumar Antil (supra) (2022) 10 SCC 51 at para 89 that twin-conditions in special statutes would only apply after incarceration, leads to the inevitable conclusion that the twin-conditions in section 212(6) of the Companies Act would not apply to a case where the accused has never been arrested even till the stage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Judge, as if by reflex action, the court remanded the petitioner to judicial custody; whereupon the petitioner filed a bail application; which also came to be dismissed there-and-then invoking section 212(6). 27.11. In the present case, this court is at pains to explain, that when the petitioner appeared before the learned Special Judge in compliance of the summons issued to him, he was not under arrest. It must also be re-emphasised that on taking cognizance of the offence, the learned Special Judge issued only summons for the petitioner to appear and did not deem it necessary to issue warrants for his arrest. 27.12. Clearly therefore, learned Special Judge misdirected himself in applying section 212(6) of the Companies Act, on the flawed premise that that that was the stage for grant of bail, whereas, it was the stage of considering whether there was any need to remand the petitioner to judicial custody at all. As discussed above, it was for the Investigating Officer to seek that the petitioner be remanded to judicial custody, for justifiable reasons based on material gathered during investigation, which he did not do. 27.13. Even insofar as the usual and ordinary tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to protecting constitutional and legal rights. (emphasis supplied) 28. In the above view of the matter, this court is inclined to admit the petitioner to regular bail, subject to the following conditions : 28.1. The petitioner shall furnish a personal bond in the sum of Rs. 5,00,000/- (Rs. Five Lacs Only) with 02 sureties in the like amount from family members, to the satisfaction of the learned Special Judge; 28.2. The petitioner shall furnish to the Investigating Officer/SFIO a cell-phone number on which the petitioner may be contacted at any time and shall ensure that the number is kept active and switched-on at all times; 28.3. If the petitioner has a passport, he shall surrender the same to the learned Special Judge and shall not travel out of the country without prior permission of the learned Special Judge; 28.4. The petitioner shall not contact, nor visit, nor offer any inducement, threat or promise to any of the prosecution witnesses or other persons acquainted with the facts of case. The petitioner shall not tamper with evidence nor otherwise indulge in any act or omission that is unlawful or that would prejudice the proceedings in the pending tria ..... X X X X Extracts X X X X X X X X Extracts X X X X
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