Madras High Court
Central Bureau Of Investigation Bank ... vs Dinesh Dalmia on 22 December, 2006
ORDER R. Reghupathi, J.
1. The criminal revision petition has been filed by the CBI, New Delhi, aggrieved against the order passed by the learned V Additional Sessions Judge, Chennai, granting the respondent/A-1 statutory bail under Section 167(2) Cr.P.C reversing the order of dismissal passed by the learned Additional Chief Metropolitan Magistrate. As stay was granted the respondent/A-1 is in judicial custody. Counter and vacate stay petition has been filed by the respondent/A-1.
2. The case of the prosecution is that the respondent/A-1 Shri. Dinesh Dalmia. Managing Director of M/s. DSQ software Limited and others connived with each other to cheat the investors including the existing share holders and thereby committed the offences of conspiracy, cheating and criminal breach of trust, by making allotments to promoter related entitites, without receiving considerations and without making requisite disclosures, by deceiving the shareholders of M/s. DSQ Software Limited, introduced unlisted shares in the trading platform of the stock exchange and obtained wrongful gain for themselves to the tune of Rs. 6.30 Crore and thereby alleged to have committed an offence punishable under Sections 409, 420, 468 and 471 IPC.
3. The FIR was registered on 21.07.2003 and final report has been filed on 24.10.2005. NBW was issued on 14.02.2005 in the meantime. The learned Magistrate has taken cognizance of the case on 25.10.2005. The respondent was evading arrest and has absconded to USA. He was not available during investigation. Learned Additional Chief Metropolitan Magistrate issued an open ended non-bailable warrant of his arrest and a Red Corner Notice (RCN) has been issued against him through INTERPOL for locating him. His examination was felt necessary in this case as only he alone is aware of the end use of the funds. Application for issuance of process under Section 82 and 83 Cr.P.C was also filed and it was allowed. On 12.02.2006 the petitioner was arrested and was produced before the learned Chief Metropolitan Magistrate, New Delhi with a prayer for transit remand to produce him before the jurisdictional Magistrate at Chennai. On 14.02.2006 the petitioner was produced before the learned Magistrate at Chennai and on the request of the petitioner/CBI, police custody was entrusted with them upto 27.02.2006 and subsequently was remanded to judicial custody. A bail application has been filed on 02.05.2006 under Section 167(2) Cr.P.C on expiry of 60 days, since investigation has not been completed. On 30.05.2006 the prayer of the petitioner was declined and on revision before the Court of Sessions, it was allowed on 25.08.2006. Aggrieved against the orders passed, the present revision has been filed.
4. Learned Senior counsel and Additional Solicitor General appearing for the petitioner/CBI submits that by relying on a case reported in 1997 SCC Crl. 636 : 1997 Crl.L.J. 2989 : 2000 (1) SCC 438 CBI v. Dawood Ibrahim Kaskar, the Court of Sessions granted bail to the respondent/accused on incorrect interpretation. At Para-11 of the judgment of the Supreme Court it has been observed as follows:
the word "accused if in custody" appearing in Section 309(2) refer and relates to an accused who was before the Court when cognizance was taken or when enquiry or trial was being held in respect of him and not to an accused who is subsequently arrested in course of further investigation. So far as the accused in the first category is concerned, he can be remanded to judicial custody only in Section 309(2), but who comes under the second category will be governed under 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 fulfillment of the requirements and the limitation of Section 167.
5. That the indefeasible right under Section 167(2) Cr.P.C. comes to an end once charge sheet under Section 173(2) is filed before the Court and the case is taken cognizance of by the learned Magistrate. Further remand of the case can be done only under Section 309 Cr.P.C. and merely because of the reason that the remand extension has been ordered, invoking Section 167(2) Cr.P.C., the same cannot be taken advantage of. In view of the facts and circumstances of the case, the learned Magistrate has passed a perfect order.
6. The judgment of the Supreme Court should be understood in the proper sense. The name of the accused is already in the charge sheet and sufficient materials to implicate the accused has been collected during the initial investigation. As soon as a final report is filed under Section 173(2) Cr.P.C., the benevolent provision under the proviso will stop operating. If a person accused of an offence is absconding and surfaced later on, the proviso under Section 167(2) Cr.P.C. cannot be made applicable.
7. The petitioner/CBI contended that a final report under Section 173(2) Cr.P.C. has been filed on 24.10.2005 against the respondent/accused and the cognizance of the case was taken on the next day. Major part of the investigation was completed and as the accused was absconding all along, on the request of the CBI, MBW was issued on 14.2.2005 and it was pending.
8. It has been contended relying on a case reported in 1994 SCC (Cr8.) 1433 Sanjay Dutt v. State through C.B.I., Bombay (II) case that once charge sheet has been filed, the accused could be granted bail only on the merit of the case. The custody of the accused is not governed by Section 167 Cr.P.C. and is only governed by Section 309(2) Cr.P.C.
9. By relying on a judgment reported in 2006 Crl.L.J. 1307 Anil Somdatta Nagpaland Anr. v. State of Mahaarashtra, it has been contended that applicability of the proviso to Section 167 becomes inapplicable after filing of the charge sheet against the accused person. The filing of a further report under Section 173(8) of Cr.P.C will not have any bearing thereafter.
10. That the observation made at the time of dismissal of the bail application by the learned Magistrate was not appreciated by the Court of Sessions. It has been observed by the learned Magistrate that the petitioner should have been remanded to judicial custody under Section 309(2) Cr.PC and not under Section 167(2) Cr.P.C.
11. At any rate for remanding the accused to judicial custody after filing of the final report, a request by an application through the investigation agency is not required. Police custody was granted under Section 167(2) Cr.P.C. for a short period and thereafter remand to judicial custody was done under Section 309(2) Cr.P.C.
12. The petitioner/CBI has requested extension of remand by mistake under Section 167(2) Cr.P.C. and for having invoked such provision, it cannot be claimed that the petitioner is estopped from claiming that remand was made under Section 309(2) Cr.P.C.
13. That though such an application has been filed by mistake, the observation of the learned Magistrate may have to be taken into consideration. The accused was remanded to judicial custody only under Section 309(2) Cr.P.C. In such circumstances the claim of the accused that he is entitled for the benefit of Section 167(2) Cr.P.C. is unjustified and contrary to law.
14. That the Court of Sessions failed to appreciate the seriousness of the facts and circumstances of the case. A huge amount of Rs. 594 crores have been defrauded by the accused and the benevolent provisions under Section 167(2) Cr.P.C. cannot be extended to the white collar criminals like the accused herein.
15. Learned Counsel also relied on the observation of the Supreme Court made in 2006 Crl. L.J. 136 Himanshu Chandravadan Desai v. State of Gujarat, wherein it was has been held as follows:
Having regard to the huge amounts involved in the systematic fraud, there is a danger of the appellants absconding, if released on bail, or attempting to tamper with the evidence by pressurising witnesses. In the circumstances, we do not find any reason to interfere with the orders refusing bail as grant of relief sought may result in thwarting the course of justice....
16. That the respondent was not available during investigation and he has fled to USA and he was absconding for two years. A Red Corner notice of INTERPOL and Look Out notice were issued against him. Notwithstanding such Look Out notice, the accused managed to enter into India suruptitiously and there is no entry in his passport, denoting his departure in US and arrival in India. It is suspected that the accused is in possession of number of passports and if released on bail there is further possibility of absconding and leaving the Country suruptitiously and objected for such release.
17. That it is true that by mistake the petitioner has quoted a wrong provision of law i.e. Section 167 Cr.P.C. for extending the remand of the accused. Merely because of such act and mistake of wrong quoting of provision of law, one cannot come to a conclusion that the order passed is erroneous. The following case has been relied on to substantiate such contentions.
1. M.T. Khan v. Govt of Andra Pradesh and Ors. (Para 16 and 18)
2. 1993 Supp 1 SCC S83 Union of India v. Khazan Singh (Para 6)
3. Vikram Singh Junior High School v. Dist. Magistrate (Fin & Rev) (Para 3)
4. 1995 Supp (4) SCC 610 Loknath and Co., Shimla v. Commissioner of Wealth Tax (Para 9 and 10)
18. Learned Counsel for the petitioner further contended that there cannot an estoppel against a statute. To substantiate such contention relied on the following judgments:
1. Indersain Mittal v. Housing Board, Harvan (Para 12)
2. 1989 Supp (1) SCC 671 Elson Machines Pvt. Limited v. Collector of C.E (Para 10)
3. State of Punjab v. Devans Modern Breweries Limited (para 272)
19. Per contra the learned Senior Counsel for the respondent/accused submits that a report filed on 24.10.2005 before the learned Magistrate cannot be construed as a charge sheet. Documents were not produced at that time and it was stated by the prosecution that it will be produced at the time of trial. Copy of statements of witnesses were not served on the accused till date. After filing of the charge sheet no notice was issued to the first accused and the prosecution has treated the case of the respondent/accused as a case in which the investigation was still going on. If such a statement is accepted it is clear that no charge sheet whatsoever was filed on 24.10.2005 as against the respondent/accused and it must be construed as a case under investigation and as such, the respondent is not entitled to the protection of the proviso to Section 167(2) of Cr.P.C., namely that he is entitled to statutory bail. Even otherwise, it is an incomplete charge sheet and the prosecution were continuing further investigation and in such circumstances, the respondent/accused would be entitled to the benefit of the proviso of Section 167(2) Cr.P.C. If an accused is arrested subsequently during the course of further investigation, he will be entitled to the protection.
20. Learned Counsel relied on the case reported in 2000(1) SCC 43S CBI v. Dawood Ibrahim Kaskar especially para 11 of the judgment. The case of the respondent is squarely covered by the observation of the Supreme Court, as he was arrested subsequent to the filing of the charge sheet. The interpretation of the Bombay High in a case reported in 2006 Crl.L.J. 1307 Anil Somdatta Nagpal and Anr. v. State of Maharashtra has no application to the case on hand. For extension of remand, the prosecution has filed application only under Section 167 Cr.P.C. and only after filing the bail application by the respondent/accused, Section 309 Cr.P.C. has been sought for. It has been held in 1993 SCC 141 CBI v. Anupam Kulkarni that remand under Section 309 Cr.P.C. can only be made to judicial custody. If the contention of the prosecution is accepted, the consequence would be disastrous for a fair investigation. As the police will not be able to interrogate the accused in grave cases by taking him into police custody. Police custody could be easily avoided by the accused getting himself arrested after the filing of the charge sheet. That is the reason why the Supreme Court in Dawood case specifically observed that the person subsequently arrested after filing of the charge sheet can be subjected to police custody under Section 167 Cr.P.C.
21. The contention of the prosecution that while granting statutory bail the gravity and seriousness of the offence also must be kept in mind was negatived by the Supreme Court in a case reported in 1999 (4) SCC 602 (sic) Vishnu Thakur v. State of Maharashtra. This view has been reiterated by this Hon'ble in a case reported in 2001 (l) criminal 88 Basker and Ors. v. Inspector of Police.
22. A cognizance of a case without accompanying materials in the charge sheet cannot be taken by a Court. Such a cognizance is bad in law and such a charge sheet cannot be considered as a charge sheet filed under Section 173(2) Cr.P.C. as it is an incomplete one.
23. In a case reported in 1994 L.W.Crl. 257 M.C. Venkata Ready v. State of Andhra Pradesh it has been held that a charge sheet filed unaccompanied by the relevant documents cannot be considered as a charge sheet at all.
24. I have perused the materials available on record and heard the submissions made.
25. Section 167 deals with remand of an accused arrested during pre-cognizance stage. Section 309(2) deals with remand of an accused during post-cognizance stage. The Hon'ble Supreme Court in Dawood Ibrahim Kaskar's case deals with an accused at Post-Cognizance stage. The Supreme Court finds, investigating agency would be deprived of an opportunity to interrogate a person arrested during post cognizance stage, if further investigation is taken up and a scope must be made available. "accused if in custody" appearing in Section 309(2) only means judicial custody. But for an accused arrested during post cognizance a liberty was given to the police for further investigation under Section 167 Cr.P.C. by entrusting him with police custody. Police custody is not contemplated during post cognizance stage. In view of the interpretation given by the Supreme Court, police custody is permitted to interrogate a person arrested latter.
26. An accused in judicial custody during post cognizance will b remanded only under Section 309 Cr.P.C. till the accused is released on bail or acquitted. A further investigation may be required if an absconding accused is surfaced at later stage. At that time not only the congnizance would have been taken, but trial also would have started. There is no provision to entrust such accused to the police for further investigation. Only under such circumstance, the Supreme Court observed that under Section 167 police may take custody and interrogate. As soon as such a police custody is completed, it will revert back to judicial custody and remand can be made only under Section 309 Cr.P.C. The Supreme Court observed as follows:
he who comes under the second category (subsequently arrested) 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.
Because of this interpretation the learned Magistrate is empowered to give "police custody". Once police custody is completed the accused reverts back to judicial custody of post cognizance stage. Even if further investigation continues as far as such accused are concerned scope of Section 167 comes to an end. "subject to fulfilment of the requirement and the limitation of Section 167" only refers to the investigation during "police custody" especially when an accused is in remand under Section 167. When further investigation keeping him in police custody during post cognizance stage is completed, the remand of an accused is only governed under Section 309 Cr.P.C. Under such circumstances, invoking of proviso to Section 167 and demand for a benevolent provision is inapplicable to such accused.
27. The object of enactment of such proviso in Section 167 Cr.P.C. is to have control over a lethargic, delayed investigation, especially keeping a person in custody. It is a specific direction to the police to collect materials without any delay. If sufficient incriminating materials are not collected against the accused with the crime alleged, it safeguards the interest of such accused person. If materials are collected and reported to the Magistrate within the period stipulated by filing charge sheet, then the scope of proviso to Section 167 extinguishes and an accused can claim bail only on merit.
28. In the instant case most of the materials have been collected. The materials to connect the accused with the crime is already available. Final conclusion also was reached and charge sheet filed. However 'custodial interrogation' of the accused felt necessary. Such interrogation entrusting him in police custody was done between 12.02.2006 and 27.02.2006 cognizance of the case was taken much earlier on 25.10.2005. Only for custodial interrogation he was entrusted under Section 167 to the CBI. Section 167 Cr.P.C. can be invoked only for such purpose in a post cognizance case. Otherwise a remand must be made only under Section 309 Cr.P.C. If a wrong provision is quoted for further remand under Section 167 Cr.P.C. instead of 309 one cannot claim the benefit of a benevolent proviso to Section 167, Proviso to Section 167 is available only to safeguard an innocent person or a person against whom no materials collected in spite of detaining him for 60/90 days. In the instant case abundant materials have been already collected and final report filed. Two years after the cognizance he was apprehended. He was entrusted with police custody only for custodial interrogation. Further investigation may be pending to comply with other formalities. There may be delay to receive opinion from experts and such delay cannot be taken advantage of by invoking the proviso to Section 167 Cr.P.C.
29. It is the case of the prosecution that the final report has been filed on conclusion of the investigation. The accused was absconding at the time and he was not available. After the arrest, further investigation has been taken up under Section 173(8) Cr.P.C. It is the specific contention of the prosecution, that the absconding accused cannot claim the benevolent provisions of Section 167(2) Cr.P.C. After filing of the final report, I donot find any provisions, permitting the use of proviso to Section 167(2) Cr.P.C. in cases where further investigation have been taken up by the prosecution under Section 173(8) Cr.P.C. There is every possibility of the absconding accused to take advantage of their own wrong. Once a charge sheet is filed, the indefeasible right comes to an end and it extinguishes. Though the respondent has seriously contented that accompanying documents and statement of witnesses were not available at the time of the charge sheet under Section 173(2) Cr.P.C., on a perusal of the materials it appears that such documents have been produced before the Court. At any rate, cognizance of the offence was taken and in such circumstances, even though further investigation has been taken up subsequently, invoking, applicability of the provision to 167(2) of the Code may not arise. In the instant case the respondent/accused was absconding for two years and he has been declared as a proclaimed offendor.
30. Dawood Ibrahim Kaskar's case laid down the law that the police can ask for police custody even though the Court has taken cognizance of the offence. The Supreme Court has never laid down a law that a person who has been arrested subsequently after filing of the final report can avail the benefit of proviso to Section 167(2) Cr.P.C.
31. Once a final report is filed, the grant of bail may have to be considered on merits of the ease and in the instant case, the respondent/accused never taken any interest to canvass his bail on the merits of the case, though the prosecution is willing to submit the arguments on the merit of the case.
32. The Supreme Court has held that the Court which had taken cognizance of the offence may exercise its power to grant police custody during further investigation. "Subject to the fulfillment of the requirements and the limitation of Section 167(2) Cr.P.C.. This language of the Supreme Court cannot be interpreted to mean that an absconding accused remanded to judicial custody under Section 309 Cr.P.C after the expiry of the police custody is also entitled for the benefit provided under the proviso Section 167(2) Cr.P.C. The Supreme Court has held that after filing of the final report and after the case has been taken cognizance, judicial custody can be ordered only under Section 309 Cr.P.C. Even if wrong provision is quoted the fact remains that the iearned Magistrate has exercised the power only under Section 309 Cr.P.C. The accused can approach the Court to release him on bail on merits.
33. I do not find any merit in the order passed by the learned V Additional Sessions Judge, Chennai in Crl.R.C. No. 115 of 2003 dated 25.08.2006 and accordingly it is set aside and the order passed by the learned Additional Chief Metropolitan Magistrate, Egmore, Chennai in Crl.M.P. No. 788 of 2006 in C.C. No. 19189 of 2005 dated 30.05.2006 will prevail. The petition is ordered accordingly. The bail bonds and sureties, if any, executed by the accused shall stand cancelled.