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seeking SFIO remand. This court is to exercise the power of Magistrate in terms of Section 436(1)(B). At this stage, remand has been sought. The offence alleged is definitely serious in nature and the arrest orders are placed on record. Consequential to these documents, accused were arrested and produced. Undoubtedly, they have been appearing on notices issued by the SFIO but still the investigation has not been completed because some part of investigation needs personal involvement. This case prima facie attracts Section 447 of Companies Act, which certainly makes this offence cognizable and no bailable. The main grounds for which the investigation is to be conducted in custody is ascertainment of further trail qua withdrawn money and to locate the beneficiaries. In addition to this, identification of properties and explanation about loans and advances mentioned in the books of accounts can only be given by accused but they have not come up with any such explanations till now. Even the persons who are in custody are not going to facilitate the investigation in proper CRIMINAL APPEAL NOS. 538-539 .OF 2019 (@ SLP(Crl)Nos.94-95 OF 2019) Serious Fraud Investigation Office v. Rahul Modi and Another Etc. manner so that the real facts can be established. These grounds definitely require detained and comprehensive investigation so it would be proper to grant the custody of these accused to SFIO for three days. Accused be produced before the Special Court under Companies Act on 14.12.2018. Copy of this order be handed over to the IO and accused as they have requested. Custody of all three accused namely Mukesh Modi, Rahul Modi and Vivek Harivyasi is given to SFIO for three days. File be sent to the Special Court under the Companies Act.”

26. Reading of the provisions of 2013 Act shows that certain Sections in Chapter XXIX prescribe punishment for offences such as fraud, false statement, false evidence and withholding of property under Sections 447, 448, 449 and 452 respectively. The punishment for fraud involving an amount of at least Rs.10 lakhs or 1 per cent of the turnover of the Company, is imprisonment for a term which may extend to 10 years. The offence of fraud in relation to the affairs of a Company is considered to be a grave offence and the writ petitioners were allegedly guilty of such offence. Chapter XIV of 2013 Act deals with Inspection, Inquiry and Investigation. Under Section 210, investigation into the affairs of a Company can be undertaken. Section 211 contemplates establishment of Serious Fraud Investigation Offence (SFIO) which is to be headed by a Director and is to consist of Experts with ability, integrity and experience in fields like Banking, Corporate Affairs, Taxation, Forensic Audit, Capital Market, Information Technology, Law or such other fields. SFIO headed by a Director is thus a compact and competent unit consisting of experts in various domains. Section 212 empowers the Central Government to assign the investigation into the affairs of a Company to SFIO. Upon such assignment the Director SFIO may designate such number of inspectors under sub-Section (1) and shall cause the affairs of the Company to be investigated by an Investigating Officer under CRIMINAL APPEAL NOS. 538-539 .OF 2019 (@ SLP(Crl)Nos.94-95 OF 2019) Serious Fraud Investigation Office v. Rahul Modi and Another Etc. sub-Section (4). The expression used in sub-Section (1) is “assign the investigation”. Sub-Section (2) incorporates an important principle that upon such assignment by the Central Government to SFIO, no other investigating agency of the Central Government or any State Government can proceed with investigation in respect of any offence punishable under 2013 Act and is bound to transfer the documents and records in respect of such offence under 2013 Act to SFIO.

27. Under sub-Section (3) where the investigation is so assigned by the Central Government to SFIO, the investigation must be conducted in the manner and in accordance with the procedure provided in the Chapter and a report has to be submitted to the Central Government within such period as may be specified. This provision contemplates submission of a report within the period as may be specified. The subsequent provisions then contemplate various stages of investigation including arrest under sub-Section (8) and that SFIO is to submit an interim report to the Central Government, if it is so directed under sub Section (11). Further, according to sub-Section (12), on completion of the investigation, SFIO is to submit the “investigation report” to the Central Government. This report under sub-Section (12) may lead to further follow up actions. Under sub-Section (13) a copy of the “investigation CRIMINAL APPEAL NOS. 538-539 .OF 2019 (@ SLP(Crl)Nos.94-95 OF 2019) Serious Fraud Investigation Office v. Rahul Modi and Another Etc. report” could be obtained by any concerned person by making an application in that behalf to the Court while under sub-Section (14) on receipt of said “investigation report” the Central Government may direct SFIO to initiate prosecution against the Company.

2. For completion of investigation, sub-Section (12) of Section 212 does not contemplate any period.

3. Under sub-Section (11) of Section 212 there could be interim reports as and when directed.

CRIMINAL APPEAL NOS. 538-539 .OF 2019 (@ SLP(Crl)Nos.94-95 OF 2019) Serious Fraud Investigation Office v. Rahul Modi and Another Etc. In the face of these three salient features it cannot be said that the prescription of period within which a report is to be submitted by SFIO under sub-Section (3) of Section 212 is for completion of period of investigation and on the expiry of that period the mandate in favour of SFIO must come to an end. If it was to come to an end, the legislation would have contemplated certain results including re-transfer of investigation back to the original Investigating Agencies which were directed to transfer the entire record under sub-Section (2) of Section 212. In the absence of any clear stipulation, in our view, an interpretation that with the expiry of the period, the mandate in favour of SFIO must come to an end, will cause great violence to the scheme of legislation. If such interpretation is accepted, with the transfer of investigation in terms of sub Section (2) of Section 212 the original Investigating Agencies would be denuded of power to investigate and with the expiry of mandate SFIO would also be powerless which would lead to an incongruous situation that serious frauds would remain beyond investigation. That could never have been the idea. The only construction which is, possible therefore, is that the prescription of period within which a report has to be submitted to the Central Government under sub-Section (3) of Section 212 is purely directory. Even after the expiry of such stipulated period, the mandate in CRIMINAL APPEAL NOS. 538-539 .OF 2019 (@ SLP(Crl)Nos.94-95 OF 2019) Serious Fraud Investigation Office v. Rahul Modi and Another Etc. favour of the SFIO and the assignment of investigation under sub-Section (1) would not come to an end. The only logical end as contemplated is after completion of investigation when a final report or “investigation report” is submitted in terms of sub-Section (12) of Section 212. It cannot therefore be said that in the instant case the mandate came to an end on 19.09.2018 and the arrest effected on 10.12.2018 under the orders passed by Director, SFIO was in any way illegal or unauthorised by law. In any case, extension was granted in the present case by the Central Government on 14.12.2018. But that is completely besides the point since the original arrest itself was not in any way illegal. In our considered view, the High Court completely erred in proceeding on that premise and in passing the order under appeal.