Serious Fraud Investigation Office vs Rahul Modi & Ors.

Facts of the Case

The Central Government initiated an investigation into the affairs of Adarsh Group of Companies and LLPs under Section 212(1)(c) of the Companies Act, 2013 and subsections (2) and (3)(c)(i) of Section 43 of the Limited Liability Partnership Act, 2008. Respondent no. 1 and 2 were arrested by the appointed Inspectors of the Director, SFIO during the investigation. Despite several legal proceedings, including their surrender and subsequent remands, the High Court granted them bail on the basis that the trial court had not taken cognizance of the complaint before the expiry of the 60-day period, entitling them to statutory bail. The legal dispute primarily revolves around the interpretation of Section 167(2) of the Code of Criminal Procedure, 1973 and whether the accused are entitled to statutory bail due to the non-cognizance of the complaint before the expiry of the 60-day period from the date of the remand.

Issues Involved

1. Whether the accused can claim statutory bail purely on the ground that cognizance has not been taken before the expiry of the statutory period, even if the charge-sheet has been filed within the stipulated time.
2. The interpretation of conflicting judicial opinions on the application of Section 167(2) of the CrPC, specifically in relation to the filing of the charge-sheet, taking cognizance, and the accused’s right to statutory bail.

Contentions of the parties 

Petitioner 

The petitioner asserted that the high court made a grave mistake by granting statutory bail to Respondent Nos. 1 and 2, despite the complaint being filed well before the 60-day period from the date of remand expired. In the petitioner’s view, the High Court’s decision contradicted the legal precedent set by the Supreme Court in the case of Suresh Kumar Bhikamchand Jain v. State of Maharashtra & Anr. The petitioner emphasized that the accused individuals are only entitled to statutory bail under Section 167(2) of the Code of Criminal Procedure (CrPC) in cases where the investigation is not completed within the specified period, and not otherwise. Furthermore, the petitioner argued that the filing of the charge-sheet satisfies the requirements of proviso (a) to Section 167(2) of the CrPC, and the act of taking cognizance is not relevant to Section 167. The petitioner’s position revolved around the interpretation of Section 167(2) of the CrPC and the necessity of adhering to the statutory provisions when granting bail.

Respondent 

The respondent’s arguments were based on the justification of the High Court’s action in granting statutory bail. The respondent claimed that since cognizance had not been taken before the expiration of the 60-day period, they were entitled to statutory bail. Furthermore, the respondent relied on the Supreme Court’s judgment in the case of Sanjay Dutt v. State, which stated that the maximum period of detention under Section 167 of the Code of Criminal Procedure (CrPC) is 60 days. After this period, detention can only be extended if the accused is unable to furnish bail. Additionally, the case of Mohamed Iqbal Madar Sheikh & Ors. v. State of Maharashtra was referenced to highlight the accused’s right to seek statutory bail under the proviso to Section 167(2) even after the charge-sheet is filed, until the court takes cognizance.

Judgement 

L. NAGESWARA RAO, J. authored the court’s judgment in favor of the Serious Fraud Investigation Office (“SFIO”), the appellant, against Rahul Modi & Ors., the respondents. The Appeals were allowed and the order of the High Court that granted bail to Respondent Nos. 1 and 2 was set aside. The decision was based on a thorough analysis of various judgments, including Bhikamchand Jain v. State of Maharashtra & Anr., Sanjay Dutt v. State, Mohamed Iqbal Madar Sheikh & Ors. v. State of Maharashtra, and M. Ravindran v. Intelligence Officer, Directorate of Revenue Intelligence. 

The judgment highlighted that an accused’s right to seek statutory bail under Section 167(2), CrPC is only indefeasible if the charge-sheet has not been filed before the expiry of the statutory period, and that taking cognizance is not relevant to Section 167. The court clarified that the custody of the accused after the filing of the charge-sheet is not governed by Section 167(2) but by different provisions of the CrPC. Therefore, the court allowed the Appeals and set aside the order passed by the High Court.

Conclusion 

This particular case played a significant role in resolving the contradictory judicial views regarding the implementation of Section 167(2) of the CrPC, particularly with regards to the submission of the charge-sheet, the recognition of the offense, and the defendant’s entitlement to statutory bail. It established that the defendant’s right to claim statutory bail under Section 167(2), CrPC is only absolute if the charge-sheet is not submitted before the expiration of the statutory time frame, and that the recognition of the offense is not pertinent to Section 167.

References

https://main.sci.gov.in/supremecourt/2019/20286/20286_2019_35_1501_33176_Judgement_07-Feb-2022.pdf

https://main.sci.gov.in/judgments

https://blog.ipleaders.in/section-167-crpc-1973/

https://www.registry.sci.gov.in/library-portal/suplis/famous2.asp?case1=78270

The case analysis is written by Harsha Shekhawat, a student of Lloyd Law College, Greater Noida, 1 st semester, an intern under Legal Vidhya.

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