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5.1 It is vehemently submitted that Section 167(2) Cr.P.C. fixes the outer limit within which the investigation has to be completed and if the same is not completed within the period prescribed, the accused has a right to be released on bail, if he is prepared to and does furnish bail. It is submitted that as per clause (a)(ii) of sub-section (2) of Section 167, he is deemed to be released under the provisions of Chapter XXXIII of the Cr.P.C. It is submitted that Chapter XXXIII of the Cr.P.C. includes Sections 437 and 439 whereunder the Court is empowered to cancel the bail granted to an accused in terms of Section 437(5) and Section 439(2). It is submitted that therefore, though the bail is granted under proviso to sub-section (2) of Section 167 Cr.P.C., by virtue of deeming fiction, the same can be cancelled by the Court in terms of Section 437(5) and Section 439(2) Cr.P.C.

8. Having heard the learned counsel appearing for the respective parties, the short question, which is posed for the consideration of this Court is whether the bail granted under the proviso to sub-section (2) of Section 167 Cr.P.C. for failure to complete the investigation within the period prescribed therein can be cancelled after the presentation of a chargesheet and if the said question is answered in affirmative, then, on what grounds and circumstances, the bail can be cancelled? 8.1 At the outset, it is required to be noted and it cannot be disputed that when an accused is released on default bail under proviso to sub- section (2) of Section 167 Cr.P.C., he is released on furnishing the bail bond by him on the failure of the investigating agency to complete the investigation and file the chargesheet within the stipulated time mentioned therein. The proviso to sub-section (2) of Section 167 fixes the outer limit within which the investigation must be completed and if the same is not completed within the period prescribed therein, the accused has a right to be released on bail if he is prepared to and does furnish bail. Considering proviso to Section 167(2) Cr.P.C., it cannot be disputed that a person released on bail (default bail) is deemed to be released under provisions of Chapter XXXIII of the Cr.P.C., which includes Section 437 and 439 also. The object and purpose of proviso to Section 167(2) Cr.P.C. is to impress upon the need for expeditious investigation within the prescribed time limit and to prevent laxity in that behalf. The object is to inculcate a sense of its urgency and on default the Magistrate shall release the accused if he is ready and does furnish bail. Thus, it cannot be said that order of release on bail under proviso to Section 167(2) Cr.P.C. is an order on merits. An accused is released on bail under proviso to Section 167(2) Cr.P.C. on the failure of the prosecuting agency. Therefore, the deeming fiction under Section 167(2) Cr.P.C. cannot be interpreted to the length of converting the order of bail not on merits as if passed on merits. Keeping in view the above, the issue involved in the present appeal is required to be considered.

9. While considering the issue involved, some observations made by this Court in the case of Aslam Babalal Desai (supra) and Abdul Basit Alias Raju and Ors. (supra) are required to be referred to. Speaking for the Bench, Justice A.M. Ahmadi (as he then was) has observed in paragraphs 14 and 15 as under:-

“14. We sum up as under:
The provisions of the Code, in particular Sections 57 and 167, manifest the legislative anxiety that once a persons's liberty has been interfered with by the police arresting him without a court's order or a warrant, the investigation must be carried out with utmost urgency and completed within the maximum period allowed by the proviso (a) to Section 167(2) of the Code. It must be realised that the said proviso was introduced in the Code by way of enlargement of time for which the arrested accused could be kept in custody. Therefore, the prosecuting agency must realise that if it fails to show a sense of urgency in the investigation of the case and omits or defaults to file a charge-sheet within the time prescribed, the accused would be entitled to be released on bail and the order passed to that effect under Section 167(2) would be an order under Section 437(1) or (2) or Section 439(1) of the Code. Since Section 167 does not empower cancellation of the bail, the power to cancel the bail can only be traced to Section 437(5) or Section 439(2) of the Code. The bail can then be cancelled on considerations which are valid for cancellation of bail granted under Section 437(1) or (2) or Section 439(1) of the Code. The fact that the bail was earlier rejected or that it was secured by the thrust of proviso (a) to Section 167(2) of the Code then recedes in the background. Once the accused has been released on bail his liberty cannot be interfered with lightly i.e. on the ground that the prosecution has subsequently submitted a charge-sheet. Such a view would introduce a sense of complacency in the investigating agency and would destroy the very purpose of instilling a sense of urgency expected by Sections 57 and 167(2) of the Code. We are, therefore, of the view that once an accused is released on bail under Section 167(2) he cannot be taken back in custody merely on the filing of a charge- sheet but there must exist special reasons for so doing besides the fact that the charge-sheet reveals the commission of a non-bailable crime. The ratio of Rajnikant case [(1989) 3 SCC 532] to the extent it is inconsistent herewith does not, with respect, state the law correctly.

9.3 Justice M.M. Punchhi (as he then was) in his dissenting judgment has observed in paragraphs 23, 25, 26, 27 and 28 as under:-

“23. The mere circumstance that Section 167(2) ordains that every person released on bail under this sub- section shall be deemed to be so released under the provisions of Chapter XXXIII for the purposes of that Chapter does not ipso facto mean that the bail order assumes the content and character of bail orders on merit, of the kind conceived of in sub-sections (1) and (2) of Section 437 or sub-section (1) of Section 439 of the Code. The deeming requirement of Section 167(2) puts the release on bail of such person as if under the provisions of Chapter XXXIII but only for the purposes of that Chapter. In other words, it means that by this fiction the provision is to be read as a part of Chapter XXXIII so that it invites the purposes of that chapter such as filling of bonds, provision of sureties etc., as also permitting cancellation of bail. It is on the thrust of such inclusion that cancellation under Section 437(5) can be attempted as if fictionally the bail order had been passed under sub-sections (1) and (2) of Section 437 but not on considerations as if the bail order was on merit. Fiction of this kind cannot be permitted to go to the length of converting an order of bail not on merit as if passed on merit.