TMI Blog2022 (9) TMI 1509X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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. There is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complete charge sheet and cannot be filed 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. The respondent/CBI cannot take shelter of filing charge sheet in respect of offences pertaining to alleged illegal appointment of the petitioner/accused by giving nomenclature of complete charge sheet or final report as per section 173(2) of the Code to defeat the right of statutory bail under Section 167(2) of the Code. The Special Judge while dismissing application for grant of statutory bail vide order dated 28.05.2022 did not appreciate legal provisions pertaining to section 167(2) in right perspective by holding that the charge sheet was complete containing all the details and was filed by mentioning therein the relevant sections. The Special Judge did not appreciate difference between incomplete investigation and further investigation and accepted both phrases as carrying same meaning. The Special Judge did not correctly observed and held that the charge-sheet filed on 21.04.2022 clearly describes details of all the material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and other unknown persons in furtherance of the criminal conspiracy managed data centre staff of NSE who passed the information regarding switching on time of NSE exchange servers. OPG Securities Pvt. Ltd. by unknown officials of NSE was given access to technologically latest and least crowded servers at that particular period which helped OPG Securities Pvt. Ltd. to be mostly to login firstly on the Exchange Server of the NSE and this particular setup of server gives a 10:1 (Approx.) speed advantage in comparison to other brokers. The information was disseminated till 2014 by exchange server to the brokers attached with co-location facility through 'tick by tick' (TBT) based system architecture. The architecture data was disseminated in a sequential manner whereby the stock broker who connected first to the server of Stock Exchange received ticks i.e. market feed before the stock broker who connected later. Sanjay Gupta had enjoyed unfair access to co-location facility of NSE between 2010 to 2014 that enabled OPG Securities Pvt. Ltd. to login first to the secondary server and to get the data before everyone else which allowed a split second faster access to the data feed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sages, logs etc. related to co-location to destroy evidence. 2.4. Ajay Narottam Shah was found to be instrumental in exploitation of NSE TBT architecture as he had collected NSE trade data to carry out research and thereafter passed it to private persons who in turn developed an algo software named 'Chanakya' which was sold to selected brokers including OPG Securities and by using Chanakya exploited TBT architecture of NSE by using Chanakya Software. 2.5. Accordingly present FIR was got registered under sections 120B/204 of the IPC and sections 7/12/13(2) read with 13(1) (d) of the PC Act and under section 66 of the Information Technology Act, 2000. 3. It was revealed during investigation that the Chitra Ramakrishna (hereinafter referred to as co-accused ) worked as Joint MD, NSE from 2009 till 31st March, 2013 and exercised the powers of MD. She was appointed as MD and CEO of NSE on 1st April, 2013. The co-location was conceptualized and implemented during her tenure as Joint MD and was responsible for day to day operations of the exchange during the relevant period. Muralidharan Natarajan, CTO of NSETECH (a subsidiary of NSE) was responsible for placing co-locat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner/accused had not mentioned against the column Position applied for and kept the same Blank . The date of the interview was not mentioned. The co-accused by misusing her official position fixed an abnormally high initial compensation of the petitioner/accused and his previous experience was not relevant to the position for which he was appointed at NSE. The petitioner/accused prior to joining NSE was Vice President, Leasing Repair Services of Transafe Services Limited, a subsidiary of M/s. Balmer Lawrie and his last drawn compensation was approximately Rs. 14 lakhs per annum. He was offered a disproportionately high annual remuneration of Rs. 1.68 crores for working 4 days in a week despite he was not having any relevant experience. 4.2. It was further surfaced in investigation that co-accused entered into criminal conspiracy with the petitioner/accused and arbitrarily enhanced his compensation at frequent intervals without any reasonable basis and by grossly abusing her official position and even without taking any inputs from HR department. No document was available in NSE regarding evaluation of performance of the petitioner/accused having been carried out by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proval of NRC or Board. 4.7. The co-accused and the petitioner/accused have committed offences punishable under section 120B IPC read with section 13(1)(d) read with section 13(2) of the PC Act and substantive offences thereof. The investigation qua these allegations has been completed and charge sheet under sections 13(1)(d) and 13(2) of the PC Act read with 120B IPC qua the co-accused and the petitioner/accused has already been filed on 21.04.22. The further investigation is pending in FIR/RC forming part of other transactions and supplementary charge sheet would be filed after completion of the further investigation. The sanction for prosecution against the co-accused and the petitioner/accused has been received from the competent authority. 5. The applicant/accused filed first bail application under sections 437/439 of the Code for grant of regular bail titled as Anand Subramanian V. CBI bearing Bail Matter No. 58/2022 which was dismissed vide order dated 24.03.2022 by the court of Sh. Sanjeev Aggarwal, Special Judge (PC Act) (CBI)-02, Rouse Avenue District Courts, New Delhi. 6. The petitioner/accused also filed another application under section 437/439 of the Code for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.4.1. SEBI vide order dated 11.02.2022 while deciding the Show Cause Notices issued in respect of governance of NSE held that it cannot be concluded that the unknown person having email id rigyajursama@outlook.com was the petitioner/accused. SEBI had also imposed penalty of the Rs. 2,00,00,000 on the petitioner/accused and said order was stayed by the Securities Appellate Tribunal vide order dated 11.05.2022. The Ministry of Finance, Government of India subsequent to the order dated 11.02.2022 passed by SEBI a request to the respondent/CBI to investigate issues highlighted in the order dated 11.02.2022 passed by SEBI. 8.5. The respondent after 4 years of registration of present FIR summoned the petitioner/accused for investigation on 19.02.2022-22.02.2022 and cooperated with the investigation. The petitioner/accused was informed by the CBI on 23.02.2022 to appear at New Delhi on 24.02.2022. The petitioner/accused on 24.02.2022 attended the Chennai office of the respondent/CBI and was arrested by the respondent/CBI in illegal and arbitrary manner. The respondent/CBI on 24/25.02.2022 conducted a search and seizure at the residence of the petitioner/accused and seized the electron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aspects during his consultancy with NSE between 01.04.2013 to October 2016. 8.6.2. SEBI vide order dated 30.04.2019 concluded that the petitioner/accused has no liability in respect of the setup/misuse of the co-location facility of NSE using Tick by Tick (TBT) over Transmission Control Protocol/Internet Protocol (TCP/IP). SEBI has in order dated 11.02.2022 concluded that there is no evidence or document to prove that the unknown person who used the email id 'rigyajursama@outlook.com' was the petitioner/accused. 8.7. The allegations made in charge sheet dated 21.04.2022 only in respect of terms of appointment/re-designation/salary of the petitioner/accused and alleged leakage of data of NSE by co-accused to email of unknown person (rigyajursama@outlook.com) allegedly operated by the petitioner/accused do not justify refusal of bail to the petitioner/accused. The allegations in the charge sheet dated 21.04.2022 qua email of unknown person rigyajursama@outlook.com allegedly being operated by the petitioner/accused are based on the alleged disclosure under section 27 of the Indian Evidence Act, 1872 which can only be proved during trial. The respondent/CBI could not show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that the bail application be dismissed as the applicant/accused is highly influential and is capable of influencing the witnesses. The examination of other witnesses is being carried out to unearth the whole conspiracy related to co-location set up. The applicant/accused may destroy the e-mails/digital evidence. The investigation is also underway to identify trading members/entities who had also illegally benefitted from the collocation and to collect evidences against them. The execution report of MLAT is awaited from USA. 10. The learned Senior Counsel for the petitioner/accused for grant of bail under section 439 of the Code argued that as per allegations in FIR that M/s. OPG Securities Pvt. Ltd. during the period of 2010-2014 abused the server architecture of NSE in criminal conspiracy with the unknown officials of NSE. Sanjay Gupta who was promoter and owner of M/s. OPG Securities had unfair preferential access to co-location facility of NSE between 2010-2014 that enabled M/s. OPG Security to login first to the main server and/or secondary server and get the data before everyone else. 10.1. SEBI had adjudicated said irregularity and vide order dated 30.04.2019 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and involvement of the NSE employees including the role of the petitioner/accused in the system of dissemination of information through Co-location facility Tick by Tick System Architecture. SEBI after complete adjudication SEBI vide order dated 30.04.2019 had given a finding that the petitioner/accused was not involved in the co-location facility. 10.6. The petitioner/accused allegedly created an email id rigyajursama@outlook.com and used said email id to communicate with co-accused. However SEBI vide order dated 11.02.2022 concluded that there is no evidence or document to prove that the unknown person who used the email id rigyajursama@outlook.com was the petitioner/accused. 10.7. The learned Senior Counsel for the petitioner further argued that as per allegations in charge sheet the appointment of the petitioner/accused in NSE was illegal and arbitrary but this allegation does not have any relation with the co-location facility against which the FIR was registered. The petitioner/accused was appointed in NSE as Chief Strategic Officer vide appointment letter dated 18.01.2013 and at that time was having experience of around 23 years in the industry with a well-rounded expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by SEBI. The respondent/CBI had already registered RC in co-location issue and passing of information so issues disclosed in the letter were also included in the investigation. It was surfaced during investigation that accused including the co-accused had adopted several ingenious ways to amass illegal wealth which resulted in public injury. The investigation in the present case relate to conspiracies which are independent to each other and are distinct conspiracies. The investigation has already been completed with regards to one of the method adopted to amass wealth and cause wrongful gain to themselves by abuse of appointment of the petitioner/accused as Chief Strategic Advisor to MD at NSE and thereafter disproportionately increasing the salary of the petitioner/accused by the co-accused from time to time, besides re-designating the petitioner/accused in 2015 and thereafter delegating substantial powers to him without making him KMP (Key Management Person), without bringing it in notice and approval of the Nomination and Remuneration Committee(NRC) of NSE. 11.2. The co-accused and the petitioner/accused were known to each other since 1999. The co-accused in pursuance con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et has already been filed. 11.6. The co-accused and the petitioner/accused are responsible for co-location. The team which was responsible for setting up co-location was reporting to the co-accused and further the team of Ravi Apte and N. Muralidharan which was responsible for setting up the co-location was reporting to the petitioner/accused. The co-accused was communicating with an external e-mail ID rigyajursama@outlook.com through her e-mail IDs. The petitioner/accused also in disclosure statement under section 27 of Indian Evidence Act admitted having operated said email ID rigyajursama@outlook.com and accessed the said e-mail ID. 11.7. The employment of the petitioner/accused established grave and serious economic offence which shakes the credibility of NSE and the entire financial securities system. Sanjay Gupta of M/s. OBG Securities has been arrested and the investigation with regards to the co-location matter is at an advanced stage. The magnitude of the scam is still under investigation which is one of the biggest scams in the stock market and confidence of the investors needs to be restored. FIR being RC No. 221 2022 E 0019/EO-III and 221 2022 E 0030/EO-III im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating Officer (GOO) and Advisor to MD with effect from 01.04.2015 vide letter dated 01.04.2015. The petitioner/accused was required to be designated as KMP as per regulation 2 (1) (i) of SECC Regulations 2012 and the compensation given to the petitioner/accused as GOO and Advisor to MD was required to be disclosed in the Annual Report of the NSE as per regulation 27 (5). 12.3. The co-location was conceptualized and implemented during tenure of co-accused as Joint MD and Muralidharan Natarajan, CTO of NSETECH (a subsidiary of NSE) was responsible for placing co-location architecture at NSE. The co-accused was found to be communicating with an external e-mail ID rigyajursama@outlook.com through her e-mail IDs which was also admitted by the petitioner/accused in disclosure statement under section 27 of Indian Evidence Act and also admitted having operated said email ID rigyajursama@outlook.com and accessed the said e-mail ID. 13. The present FIR/RC pertains to financial irregularities committed in NSE by Sanjay Gupta in connivance with unknown officials of NSE and illegal appointment of the petitioner/accused by the co-accused. The Supreme Court in various judgments has take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est of the prosecution for adducing additional evidence, inter alia, observed as under:- 5 ..... The entire Community is aggrieved if the economic offenders who ruin the economy of the State are not brought to book. A murder may be committed in the heat of moment upon passions being aroused. An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the national economy and national interest.... The Supreme Court in P. Chidambaram V. Directorate of Enforcement, Criminal Appeal No. 1831/2019 arising out of SLP (Criminal) No. 10493 of 2019 decided on 04.12.2019 held as under:- 21. Thus from cumulative perusal of the judgments cited on either side including the one rendered by the Constitution Bench of this Court, it could be deduced that the basic jurisprudence relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ives and documents. 14.1. SEBI conducted enquiry in pursuance of complaints made against NSE in respect of its co-location facilities on allegations that NSE and its employees had committed fraudulent and unfair trade practices and violated SECC Regulations which was culminating into institution of Case No. WTM/GM/EFD/03/2018-2019 and SEBI vide order dated 30.04.2019 which is exhaustive and detailed order directed that the co-accused in her capacity as former MD CEO of NSE should disgorge 25% of her salary drawn for FY 2013-14 and was prohibited from associating with a listed company or market corporation for five years. The relevant potion of order dated 30.04.2019 is reproduced as under:- iii) Chitra Ramkrishna, Noticee No. 3, (former MD CEO of NSE): a. shall disgorge 25% of the salary drawn for FY 2013-14, to the IPEF created by SEBI under Section 11 of the SEBI Act, through NSE, within a period of 45 days from the date of this order; b. shall be prohibited from associating with a listed company or a Market Infrastructure Institution or any other market intermediary for a period of Five (5) years; 14.2. The learned senior counsel for the petitioner/accused arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the order dated 11.02.2022 is reads as under:- 31.2.14.....In view of the above, I find that there is no conclusive evidence or finding from the E Y Report or the documents before me to prove that the unknown person who used the email id 'rigyajursama@outlook.com' was in fact Noticee no. 6. 14.4. However the petitioner/accused was restrained from associating with any Market Infrastructure Institution or any intermediary registered with SEBI in any capacity for a period of three (03) years from the date of this order. SEBI had also imposed penalty of the Rs. 2,00,00,000 (Two Crores) on the petitioner/accused. Securities Appellate Tribunal (SAT) had stayed operation of order dated 11.02.2022 vide order dated 11.05.2022. 14.5. It is submitted that a decision was taken to phase out TBT (tick-by-tick) technology which was the brainchild of Mr. Ravi Narain, predecessor of the co-accused who was MD till 2013 and the architecture was designed and implemented by Mr. Ravi Apte and Mr. N. Murlidaran, during tenure of the co-accused as MD of NSE from 2013-2016 and as per allegations of the respondent/CBI that during 2010 to 2014, the accused as named in FIR had abused t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1.68 crores for working 4 days in a week. The petitioner/accused was re-designated as 'Group Operating Officer (GOO) and Advisor to MD with effect from 01.04.2015 vide letter dated 01.04.2015 issued by the co-accused. 15.2. It is apparent that 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 the petitioner/accused 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 CBI in pursuance of present FIR. 15.3. The Senior Public Prosecutor for the respondent/CBI argued that the petitioner/accused was illegally and arbitrarily appointed by the co-accused by highlighting facts as surfaced during investigation that the petitioner/accused was known to the co-accused prior to his appointment as Chief Strategic Advisor at NSE in January, 2013; the co-accu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the roles responsibilities of the petitioner/accused as well as his appointment on the determined salary was approved by the Board: The petitioner/accused was not appointed as a Key Managerial Personnel (KMP) as he was not handling any KMP functions and role did not require approval of Nomination and Remuneration Committee (NRC) and the petitioner/accused was appointed as a consultant on a contractual basis and was advising on non-core business functions. 15.6. The learned Senior Counsel for the petitioner/accused argued that the petitioner/accused was appointed in the NSE as Chief Strategic Officer vide appointment letter dated 18.01.2013. The petitioner/accused was having experience of around 23 years in the industry with a well-rounded exposure in areas of strategy/Business Development/people management and general administration. The appointment of the petitioner/accused was approved by the co-accused on basis of delegation of powers made in her favour in the 74th Board meeting of NSE held on 02.02.2005. The appointment/employment of the petitioner/accused in NSE was not arbitrary and illegal but was made as per due process and was within the powers exercised by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up Operating Officer in order to further smoothen the day to day conduct of business operations of the Exchange subject to statutory restriction and conditions in any laid down by the Board or the Managing Director in this regard. The board discussed the matter and delegated the following powers to Mr. Subramanian Anand, Group operating Officer, subject to statutory restrictions and conditions if any laid down by the Board or the Managing Director in this regard. Vide this Minutes certain powers were delegated to the petitioner/accused as Group Operating Officer but it does not reflect that his re-designation as Group Operating Officer was as per Rules and Regulations and after following mandatory statutory provisions. 15.10 The e-mail dated 10.05.2016 sent by Chandershekhar Mukherjee (HRD) to R. Jayakumar (SECRE) which is part of record of bail application filed by co-accused perused wherein it was mentioned and clarified that the petitioner/accused is a consultant and not on roles of NSE and is not handling any KMP function. It was further mentioned that he is advising non-core functions. It is also case of the respondent/CBI that the petitioner/accused was not designated a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nancial interests. After considering gravity and seriousness of offence subject matter of present FIR and subsequent investigation, no ground for regular bail under section 439 of the Code is made out. It is pertinent to mention that every piece of legal and factual arguments advanced by the learned Senior Counsel for the petitioner/accused and the Senior Public Prosecutor is considered in right perspective. BAIL UNDER SECTION 167(2) OF THE CODE 16. The learned Senior Counsel for the petitioner/accused with regard to entitlement of the petitioner/accused for default bail argued that the statutory right to bail U/s. 167(2) of the Code is a fundamental right under Article 21 of the Constitution. The section 167 of the Code mandates to complete the entire investigation qua all offences within a specific period of 60/90 days (60 days in the present case) and after completion of the investigation in respect of all offences to file the charges sheet be filed under section 173 of the Code. In the present case the respondent/CBI has not filed charge sheet qua all offences and an incomplete charge sheet was filed merely to circumvent the provision of section 167(2) of the Code. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot fettered by any label given by the investigating agency to the report under section 173(2) of the Code or by mentioning therein that investigation is pending and supplementary charge sheet shall be filed. It is the jurisdiction of the Magistrate alone to decide whether the material placed by the prosecution is sufficient or not and whether the charge sheet is incomplete charge sheet. The reliance was placed on State of Maharashtra V. Sharadchandra Vinayak Dogre others, AIR 1995 SC 231 and Narendra Kumar Amin V. CBI, MANU/SC/0038/2015. 17.2. The Special Judge vide order dated 28.05.2022 also held that the charge sheet was complete containing all the details and was filed by mentioning therein the relevant sections. The provision of section 167(2)(a)(i) (ii) of the Code relates to completion of investigation pertaining to an 'offence' and not regarding 'transactions'. The Special Public Prosecutor relied on Y.S. Jagan Mohan Reddy V. CBI, 2013 Cri. L.J. 2734 where in one RC several transactions were investigated regarding which separate charge-sheets were filed and the cases were tried as separate cases after taking cognizance. The Supreme Court refused to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has been curtailed cannot remain incarcerated indefinitely due to non completion of investigation on the part of the investigating agency in a time bound manner. Rather it should be completed in above specified time failing which he will be entitled to statutory bail U/s. 167(2) Cr. P. C. 21. In the present case, the charge-sheet was filed on 57th day i.e. well within time. The charge-sheet filed in sum and substance meet all the requirements of Sec. 173(2) Cr.P.C. (a) to (g). The charge-sheet clearly describes in detail of all the material collected by the IO/Investigating agency during the investigation, as also role played by Chitra Ramakrishna and Anand Subramanium, including what offence(s) were committed and by whom which was in terms of Clause (d) of Section 173(2) Cr.P.C. on the basis of material collected by the investigating agency/IO. The details of Section(s)/offence(s) 120B, 204 IPC and Section. 7, 12, 13(2), r/w 13(2) (d) of PC Act and substantive offences thereof have also been mentioned in the charge-sheet filed U/s. 173(2) Cr.P.C. So far as Sanction is concerned, it is totally separate from the concept of investigation. 22. In my opinion, charge-sheet has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such Magistrate thinks fit, for a term not exceeding fifteen days in the whole; and if he has no jurisdiction to try the case or commit it for trial, and considers further detention unnecessary, he may order the accused to be forwarded to a Magistrate having such jurisdiction: Provided that (a) the Magistrate may authorise the detention of the accused person, otherwise than in the custody of the police, beyond the period of fifteen days, if he is satisfied that adequate grounds exist for doing so, but no Magistrate shall authorise the detention of the accused person in custody under this paragraph for a total period exceeding, (i) ninety days, where the investigation relates to an offence punishable with death, imprisonment for life or imprisonment for a term of not less than ten years; (ii) sixty days, where the investigation relates to any other offence, and, on the expiry of the said period of ninety days, or sixty days, as the case may be, the accused person shall be released on bail if he is prepared to and does furnish bail, and every person released on bail under this subsection shall be deemed to be so released under the provisions of Chapter XXXIII for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... troduced in the year 1978, giving emphasis to the maximum period of time to complete the investigation. This provision has got a laudable object behind it, which is to ensure an expeditious investigation and a fair trial, and to set down a rationalised procedure that protects the interests of the indigent sections of society. This is also another limb of Article 21. Presumption of innocence is also inbuilt in this provision. An investigating agency has to expedite the process of investigation as a suspect is languishing under incarceration. Thus, a duty is enjoined upon the agency to complete the investigation within the time prescribed and a failure would enable the release of the accused. The right enshrined is an absolute and indefeasible one, inuring to the benefit of suspect. Such a right cannot be taken away even during any unforeseen circumstances...... 21.1. The Supreme Court in Uday Mohanlal Acharya V. State of Maharashtra, (2001) 5 SCC 453 discussed and highlighted indefeasible right accrues in favour of the accused for being released on bail on account of default by the investigating agency in the completion of the investigation within the period prescribed. It was ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrinsically linked to Article 21 and is nothing but a legislative exposition of the constitutional safeguard that no person shall be detained except in accordance with rule of law. The Supreme Court while tracing jurisprudential history of section 167 of The Code laid emphasis on safeguard attached with section 167 of the Code observed as under:- 17. Before we proceed to expand upon the parameters of the right to default bail under Section 167(2) as interpreted by various decisions 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 indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t while meeting the needs of a full and proper investigation in cases of serious crime, will still safeguard the liberty of the person of the individual. Further, that the legislature should prescribe a maximum time period beyond which no accused could be detained without filing of the police report before the magistrate. It was pointed out that in England, even a person accused of grave offences such as treason could not be indefinitely detained in prison till commencement of the trial. 17.4 The suggestion made in Report No. 14 was reiterated by the Law Commission in Report No. 41 on The Code of Criminal Procedure, 1898 (Vol. I, 1969, pages 76-77). The Law Commission reemphasized the need to guard against the misuse of Section 344 of the 1898 Code by filing 'preliminary reports' for remanding the accused beyond the statutory period prescribed under Section 167. It was pointed out that this could lead to serious abuse wherein the arrested person can in this manner be kept in custody indefinitely while the investigation can go on in a leisurely manner. Hence the Commission recommended fixing of a maximum time limit of 60 days for remand. The Commission considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7(2) is integrally linked to the constitutional commitment under Article 21 promising protection of life and personal liberty against unlawful and arbitrary detention, and must be interpreted in a manner which serves this purpose. In this regard we find it useful to refer to the decision of the three-Judge Bench of this Court in Rakesh Kumar Paul v. State of Assam, (2017) 15 SCC 67, which laid down certain seminal principles as to the interpretation of Section 167(2), CrPC though the questions of law involved were somewhat different from the present case. The questions before the three Judge Bench in Rakesh Kumar Paul were whether, firstly, the 90 day remand extension under Section 167(2)(a)(i) would be applicable in respect of offences where the maximum period of imprisonment was 10 years, though the minimum period was less than 10 years. Secondly, whether the application for bail filed by the accused could be construed as an application for default bail, even though the expiry of the statutory period under Section 167(2) had not been specifically pleaded as a ground for bail. The majority opinion held that the 90 day limit is only available in respect of offences where a minimum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce Samaynallur Police Station Madurai District (Criminal Appeal No. 452 of 2020 dated 19th June, 2020), MANU/SC/0491/2020, wherein it was observed that the indefeasible right to default bail under Section 167(2) is an integral part of the right to personal liberty under Article 21, and the said right to bail cannot be suspended even during a pandemic situation as is prevailing currently. It was emphasized that the right of the accused to be set at liberty takes precedence over the right of the State to carry on the investigation and submit a chargesheet. 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 ke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the same, he is said to register a case, sometimes called a crime case. 'Case' understood in this general sense means that the case before the police officer arising from the information placed before him regarding an occurrence in which an offence or offences are committed. 'Case' relates to the transactions of which information is given and not merely one of the offences committed during the course of the transaction. This Court further held that when Section 173 speaks of completion of investigation, it must ordinarily be taken to refer to completion of investigation of all the facts and circumstances relating to the case, whether the transaction involves one offence or plurality of offences and a final report or charge sheet under Section 173 could be filed only after completion of the investigation in the case relating to all the offences arising in the case. We are in respectful agreement with the said finding arrived at by U.L. Bhat, J., as he than was viewed in that light, it must be held that the 'charge report' stated to have been filed by the CBI on 10-4-1996 cannot be said to be a final report as contemplated under Section 173 of the Code an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow to the contra is, in our view, illegal. 15. Admittedly, no final report has been filed by the CBI against the petitioners in respect of the various offences. In its absence, the prosecution is not justified in resorting to Section 173(8) of the Code to submit a further report in respect of the alleged involvement of the petitioners under the Official Secrets Act, IPC, Act and the Order. Since the investigation of the case is not complete, we find no reason to deny the statutory bail to the petitioners under Section 167(2) of the Code. 16. The Supreme Court has held that in the scheme of the 1973 Code, remand to custody during investigation can be made only under Section 167 of the Code and remand to custody under Section 309 can be made only after taking cognizance of the offence by the Court. The result is that if the investigation is not over and the period mentioned in Section 167(2) to detain the accused is custody is over, by invoking Section 309 of the Code, the custody of the accused cannot be extended and are to be released on bail. 22.1. The learned Single Judge of this Court after referring, considering and discussing Uday Mohanlal Acharya and S.M. Purtado i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the names of the parties; (b) the nature of the information; (c) the names of the persons who appear to be acquainted with the circumstances of the case; (d) whether any offence appears to have been committed and, if so, by whom (e) whether the accused has been arrested; (f) whether he has been released on his bond and, if so, whether with or without sureties; and (g) whether he has been forwarded in custody under Section 170. Sub-section (5) of Section 173 makes it obligatory upon the police officer to forward along with the report all documents or relevant extracts thereof on which the prosecution proposes to rely and the statements recorded under Section 161 of all the persons whom the prosecution proposes to examine as witnesses at the trial. Similarly, the Supreme Court in Manu Sharma v. State (NCT of Delhi), (2010)6 SCC 1 has held that the object behind Section 173 of the Cr.P.C. is to complete the investigation and file the charge sheet. The idea is to ensure that cognizance is taken without any delay. The relevant paragraph is extracted below: 206. Section 173 commands the investigating agency to complete the investigation expeditiously without unnecessary delay and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lice is the final step in the investigation evidenced by the police report contemplated under section 173(2) of the Code. 24. In my view, a plain reading of section 173 of the Code shows that every investigation must be completed without unnecessary delay and as soon as it is completed, the Officer-in-charge of the Police Station shall forward a report to the Magistrate in the form prescribed. Therefore, there is no question of sending up of a police report within the meaning of section 173, sub-section (2) of Criminal Procedure Code until the investigation is completed. Any report sent before the investigation is completed will not be a police report within the meaning of sub-section (2) of section 173 of the Criminal Procedure Code read with section 2(r) of the Code and there is no question of the Magistrate taking cognizance of the offence within the meaning of section 190(1)(b) of the Code on the basis of an incomplete charge-sheet. In the present case, admittedly an incomplete charge-sheet has been filed and it is specifically stated therein that the investigation is not yet completed. The application, Exhibit 2, clearly further recites that the investigation is not com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss cognizance has been taken, sub-section (8) cannot be set in motion. 27. The question thus emerges naturally is, whether the Magistrate can take cognizance on the admittedly incomplete charge-sheet forwarded by the police. The answer stubbornly and admittedly must be in the negative, because the investigation is yet incomplete and the police report yet remains to be filed. Thus, the filing of the incomplete charge-sheet cannot circumvent the provisions of sub-section (2) of section 173 of the Code and incomplete report or an incomplete charge-sheet with whatsoever expression it may be called does not meet the obligatory requirements of law. If the view as contended by the State is accepted, the provisions of section 167(2) or to say section 468 of the Criminal Procedure Code can always be circumvented by the prosecution and the apparent legislative intents under those provisions would not only be not effectuated but undoubtedly stultified. 22.4. The Andhra Pradesh High Court in Akula Ravi Teja V. State of A.P., (2021)1 ALT (Cri.) 291 dealt with a situation where a 'preliminary charge sheet' was filed without completing the investigation. The Court therein held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consider the claim of the accused for default bail is whether the investigation is completed within the stipulated time of 90 days or not. So, when the Investigating Agency files only preliminary charge-sheet within the said stipulated time keeping the investigation pending or without completing the investigation, it will not under any circumstances defeat the right conferred on the accused to claim for default bail. By mere filing a preliminary charge-sheet without completing the entire investigation and filing a final and full-fledged charge-sheet, the prosecuting agency cannot vanquish the indefeasible statutory right of the accused to claim for default bail. 21. The 3-Judge Bench of the Supreme Court in the case of Rakesh Kumar Paul v. State of Assam 2 held that right to personal liberty under Article 21 of the Constitution of India includes right to speedy investigation and entitlement to default bail where statutory period of filing charge-sheet has expired and accused has applied and is willing to furnish bail. 22. A plain reading of Section 167 Cr.P.C. makes it abundantly clear that it is not the intention of the legislation that charge-sheet is to be filed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, on account of default committed by the prosecuting agency in completing the investigation within the stipulated period of time, the petitioner acquired an indefeasible right to claim default bail under proviso (a) to Section 167(2) Cr.P.C. 24. In a petition filed under proviso (a) to Section 167(2) Cr.P.C. for grant of default bail, no discretion is vested with the Magistrate/Court to deny bail to him. In the judgment of the aforesaid 3-Judge Bench of the Apex Court, it is clearly held that no discretion is vested with the Court while granting default bail where accused satisfies the prerequisite for grant thereof. The Apex Court in another case Rajnikant Jivanlal Patel v. Intelligence Officer, Narcotic Control Bureau, New Delhi 3 held as follows: The right to bail under Section 167(2) proviso (a) thereto is absolute. It is a legislative command and not Court's discretion. If the investigating agency fails to file charge-sheet before the expiry of 90/60 days, as the case may be, the accused in custody should be released on bail. But at that stage, merits of the case are not to be examined. Not at all. In fact, the Magistrate has no power to remand a person beyond the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aud Investigation Office V. Rahul Modi, AIR 2022 SC 902 which is also relied upon by the Special Public Prosecutor for the respondent/CBI, the High Court considered the regular bail applications filed by the respondent Nos. 1 and 2 on 31.05.2019 and directed their release on bail on the ground that they were entitled to statutory bail on sole reason given for grant of bail by the High Court is that the trial court has not taken cognizance of the complaint before the expiry of the 60-day period which entitled the respondent Nos. 1 and 2 to statutory bail, as a matter of indefeasible right. The issue which was under consideration before the Supreme Court was whether an accused is entitled for statutory bail under Section 167(2) of the Code on the ground that cognizance has not been taken before the expiry of 60 days or 90 days, as the case may be, from the date of remand. It was observed as under:- 9.......The scheme of the provisions relating to remand of an accused first during the stage of investigation and thereafter, after cognizance is taken, indicates that the legislature intended investigation of certain crimes to be completed within the period prescribed therein, accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge sheets. It was observed as under:- 9. On the second aspect, it is urged that what is called as the second charge sheet is really a supplementary charge sheet as there is no restriction on the number of supplementary charge sheets which can be filed but there will be only one charge sheet in view of (2020) 10 SCC 616 judgment of this Court in the case of Vinay Tyagi vs. Irshad Ali @ Deepak Ors., (2013)5 SCC 762. 11. On the second aspect we cannot lose sight of the fact that what was envisaged by the Legislature was that the investigation should be completed in 24 hours but practically that was never found feasible. It is in these circumstances that Section 167 of the Cr.P.C. provided for time period within which the investigation should be completed, depending upon the nature of offences. Since, liberty is a Constitutional right, time periods were specified in the default of which the accused will have a right to default bail, a valuable right. 25. The petitioners in Abdul Azeez P. V. and others V. National Investigation Agency, 2014 AIR SCW 6537 relied on by the respondent/CBI filed a petition before the Special Court, NIA Cases by submitting that they were entitl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther investigation is permissible even if order of cognizance of offence has been taken by the Magistrate. It was observed asunder:- 28. It is a well-settled principle of interpretation of statute that it is to be read in its entirety. Construction of a statute should be made in a manner so as to give effect to all the provisions thereof. Remand of an accused is contemplated by the Parliament at two stages; pre-cognizance and post cognizance. Even in the same case depending upon the nature of charge sheet filed by the investigating officer in terms of Section 173 of the Code, a cognizance may be taken as against the person against whom an offence is said to have been made out and against whom no such offence has been made out even when investigation is pending. So long a charge sheet is not filed within the meaning of Sub-section (2) of Section 173 of the Code, investigation remains pending. It, however, does not preclude an investigating officer, as noticed hereinbefore, to carry on further investigation despite filing of a police report, in terms of Sub-section (8) of Section 173 of the Code. 27. The Supreme Court in Suresh Kumar Bhikamchand Jain V. State of Maharashtra a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a situation, the accused continues to remain in the custody of the Magistrate till such time as cognizance is taken by the Court trying the offence, when the said Court assumes custody of the accused for purposes of remand during the trial in terms of Section 309 Cr.P.C. The two stages are different, but one follows the other so as to maintain a continuity of the custody of the accused with a court. 19. Having regard to the above, we have no hesitation in holding that notwithstanding the fact that the prosecution had not been able to obtain sanction to prosecute the accused, the accused was not entitled to grant of statutory bail since the charge-sheet had been filed well within the period contemplated under Section 167(2)(a)(ii) Cr.P.C. Sanction is an enabling provision to prosecute, which is totally separate from the concept of investigation which is concluded by the filing of the charge-sheet. The two are on separate footings. 28. The Supreme Court in State of Maharashtra V. Sharadchandra Vinayak Dongre, 1995 SCC (1) 42 observed that the power of Magistrate to take cognizance is not lost even if the investigating officer termed the police report as incomplete. It was obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the prosecution and the courts on any pretext. 30. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed was named or 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 the petitioner/accused 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 petitioner/accused was arrested on 24.02.2022. 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. 57th day from the date of arrest only for offences punishable under sections 13(1)(d) and 13(2) of the PC Act and section 120B IPC. The investigation pertaining to other offences under section 66 of IT Act 2000, section 204 IPC and sections 7 and 12 of the PC Act is still pending and not completed. The Special Judge, CBI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 167(2) cannot be revived due to reason that further investigation is pending within the meaning of sub-section 8 of Section 173 of the Code. As mentioned and discussed hereinabove that there is a distinction between completion of investigation and further investigation. The respondent/CBI has conducted and concluded part investigation pertaining to alleged illegalities committed by the co-accused in initial appointment of the petitioner and subsequent re-designation and other related issues but investigation pertaining to allegations made in FIR is still pending which cannot be termed as further investigation within ambit of section 173(8) of the Code. The further investigation can be resorted to only after the completion of investigation and filing of complete charge sheet. 33.1.1. The decisions rendered in Dinesh Dalmia CBI, 2008 Cri. LJ. 337 and Abdul Azeez PV V. NIA, 2014 AIR SCW 6537 and cited by the Special Public Prosecutor do not provide much assistance to arguments of the Special Public Prosecutor for the respondent/CBI. In Abdul Azeez P V. and others V. National Investigation Agency, investigation only pertaining to minor details such as the bank account details and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not filed. It is not permissible within mandate of legal provisions as contained in sections 173(2) and 167(2) to take cognizance in piece meal or in parts. It would amount to negation of indefeasible right given to the accused under section 167(2) of the Code. The constitutional right under section 167(2) of the Code and granted to accused in case of non-completion of investigation within stipulated period cannot be interpreted to convenience of investigating agency. In the present case, the respondent/CBI itself preferred to club investigation of issues arising out of SEBI order dated 11.02.2022 with investigation of offences subject matter of present FIR. The investigating agency cannot circumvent section 167(2) of the Code by filing incomplete charge sheet and cannot be filed 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. The respondent/CBI cannot take shelter of filing charge sheet in respect of offences pertaining to alleged illegal appointment of the petitioner/accused by giving nomenclature of complete charge sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d hereinabove that the respondent/CBI has failed to complete investigation in respect of all the offences as mentioned in FIR and to file a Final Report under section 173 of the Code within stipulated time i.e. sixty days from the date of the arrest of the petitioner/accused and filed an incomplete/piece-meal charge sheet before the concerned court on 21.04.2022 i.e. 57th day from the date of arrest. 35. After considering all facts, the application is allowed and the applicant is admitted to bail as per section 167(2) of the Code on furnishing a personal bond in the sum of Rs. 5,00,000/- (Rupees Five Lakhs Only) with one surety of the like amount to the satisfaction of the concerned trial Court subject to the following conditions:- i. The applicant/accused shall not leave the country without prior permission of the Court; ii. The applicant/accused shall surrender his passport before the concerned trial Court, if not surrendered yet, within 7 days of release from the custody in pursuance of this order; iii. The applicant/accused shall co-operate and participate in the investigation as and when directed by the Investigating Officer; iv. The applicant/accused shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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