In Bail Appln 583 of 2023- DEL HC- ‘Investigating authorities must adhere to letter and spirit of the criminal provisions to ensure no piecemeal charge-sheet is filed’: Delhi High reprimands CBI
Justice Amit Sharma [18-05-2023]

Read Order: Avinash Jain v Central Bureau of Investigation

Simran Singh

New Delhi, May 25, 2023: While expressing its aspersion at the “piecemeal” manner in which the Central Bureau of Investigation (CBI) filed the charge-sheet, the Delhi High Court granted bail to the applicant-accused under Section 167 (2) of the Code of Criminal Procedure, 1973 (CrPC). It further stated that permitting the CBI to pick up one aspect of the investigation and file a piecemeal charge-sheet would defeat the right of default bail of the applicant-accused which goes against the mandate of Article 21 of the Constitution.

In the case at hand, the applicant-accused had questioned the denial of his default bail, accused in a loan fraud case filed by CBI, who had registered a case in 2020 on the complaint of State Bank of India (‘SBI’) on behalf of a consortium of six banks alleging that M/s Arise India Ltd and its directors, along with other unknown public servants, had availed credit facilities from the banks and diverted the borrowed funds for purposes other than those for which they were released. The loan account of the company was declared as a non-performing asset, with a total outstanding amount of INR 512.67 Crores. After a forensic audit, the account of the company was declared as ‘fraud’ by SBI in May 2019.

Consequent to which an FIR dated 19-11-2020 was registered under Section 120B read with Sections 420, 468 and 471 of the Indian Penal Code, 1860 (‘IPC’) and Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. (‘Act of 1988’). The applicant-accused was arrested on 14-11-2022 under the aforesaid sections. The CBI, on 16-12-2022, sought approval from the competent authority under Section 17A of Act of 1988, but proceeded to file the chargesheet in January qua him and other accused under Section 120B read with Sections 420 and 471 of IPC, before the expiry of the stipulated term of 60 days, while keeping the investigation for offences under Section 13(2) read with Section 13(1)(d) of the Act of 1988 open for causing wrongful loss of public money.

It was the case of CBI that the requisite permission under Section 17A of the Act of 1988 was in the process and it was beyond the control of the Investigating Officer to conduct and conclude the investigation in the absence of the same thus, the right to statutory bail stood defeated once the charge sheet was filed within the stipulated period as held in Suresh Kumar Bhikamchand Jain v. State of Maharashtra which stated that even the aspect of not taking cognizance was not to be considered for the purpose of default bail.

However, the Court noted that CBI had not completed the investigation with respect to offences under Section 13(2) read with Section 13(1)(d) of Act of 1988, for which the applicant-accused was arrested. “Permitting the CBI to pick up one aspect of the investigation and file a piece-meal chargesheet with respect to the same and consequently, defeating the right of the applicant to default bail, goes against the mandate of Article 21 of the Constitution.”

The issue for consideration before the Court was that whether the chargesheet, filed under Section 120B read with Section 420 and 471 of IPC and substantive offences thereof, in a case where the FIR was registered under Section 120B read with Section 420, 468 and 471 of IPC and Section 13(2) read with Section 13 (1)(d) of Act of 1988 while stating that further investigation was continuing with respect to offences under the Act of 1988 was an incomplete chargesheet.

The Bench refers to Chitra Ramkrishna v. Central Bureau of Investigation, to draw a distinction between ‘completion of investigation’ and ‘further investigation’. It was observed that further investigation can be resorted to only after completion of investigation and filing of the chargesheet. It was held that a chargesheet can be filed before the Court of competent jurisdiction only when the investigation with respect to the FIR was complete in all respects and an opinion has been given with regard to the offences alleged against the accused in the FIR. It was held that the investigating agency could not fragment or break the FIR, and file different chargesheets.

The Bench stated that the fundamental right to personal life and liberty under Article 21 of the Constitution of India and its co-relation with Section 167(2) of CrPC has been, over the years, clearly established by way of judicial precedents of the Supreme Court as well as various High Courts. The Court explained, “The right of an accused to default bail under Section 167(2) of the CrPC would arise in a case where the chargesheet is not filed within the stipulated period. The other circumstance giving rise to the right to default bail would be in case where the prosecution files a preliminary or incomplete chargesheet, within the period prescribed for offences mentioned therein and in that process, defeating the right of the accused to statutory bail,”

The Bench observed that the chargesheet was silent about any further investigation with respect to Section 468 of the IPC and added that“In this case, the Court of competent jurisdiction before which the chargesheet was filed did not take cognizance, as recorded in the order dated 06.01.2023 passed by the learned Principal District and Sessions Judge-cum-Special Judge (PC Act) (CBI), Rouse Avenue District Court. By filing a supplementary report under Section 173(8) of the CrPC, the CBI cannot change the nature of the first chargesheet as one which can be termed as complete. The investigation arising out of the present FIR is incomplete as only one part of the investigation, i.e, the allegation pertaining to diversion of borrowed funds, is complete and the other part pertaining to connivance/conspiracy with unknown public servants is pending,”

The Bench further said that the supplementary report under Section 173(8) of CrPC was filed for the closure of investigation qua the offences under the Act of 1988, after the applicant-accused had exercised his right under Section 167(2) of CrPC by moving an application in that regard before the Trial Court. “Closure of an investigation connotes a prior pendency/continuance of the same,” observed the Court.

The Court held that CBI had not completed the investigation with respect to offences under Section 13(2) read with Section 13(1)(d) of the Act of 1988, for which the applicant was arrested, thus, granted bail under the applicant-accused under Section 167 (2) of the Code of Criminal Procedure, 1973 (‘CrPC’) upon furnishing a personal bond in the sum of IN3 2,00,000-/ along with 2 sureties of like amount, to the satisfaction of the Trial Court.