SC: Order’s legality at time of return, not institution valid in Habeas Corpus

Today, i.e. on 27th March 2019, in the matter of Serious Fraud Investigation Office v. Rahul Modi and Another Etc., the Hon’ble Supreme Court observed that an order of remand is not to be entertained in a habeas corpus petition. However, during Habeas Corpus proceedings, the legality of the detention at the time of return, not at the time of institution of the proceedings is to be regarded.

The Hon’ble Supreme Court, inter alia, observed that:

In Habeas Corpus proceedings a Court is to have regard to the legality or otherwise of the detention at the time of the return and not with reference to the institution of the proceedings. (Para 17)

The act of directing remand of an accused is thus held to be a judicial function and the challenge to the order of remand is not to be entertained in a habeas corpus petition. (Para 19)

If the act of directing remand is fundamentally a judicial function, correctness or validity of such orders could, if at all, be tested in a properly instituted proceedings before the appellate or revisional forum. (Para 24)

There is no fixed period within which the investigation under Criminal Procedure Code must be completed. If the investigation proceeds for a longer period, under Section 167 of the Code certain rights may flow in favour of the Accused. But it is certainly not the idea that in case the investigation is not over within any fixed period, the authority to investigate would come to an end. (Para 28)

The transfer under sub- Section (2) of Section 213 Companies Act, 2013 would not stand revoked or recalled in any contingency. The transfer is irrevocable and cannot be recalled in any manner. Once assigned, Officers Of Serious Fraud Investigation continue to have the power to conduct and complete investigation.(Para 29)

While laying down a particular procedure if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory. Furthermore, the provision has to be seen in the context in which it occurs in the Statute. (Para 30)

It cannot be said that the prescription of period within which a report is to be submitted by Officers Of Serious Fraud Investigation under sub-Section (3) of Section 212 of the Companies Act, 2013 is for completion of period of investigation and on the expiry of that period the mandate in favour of Officers Of Serious Fraud Investigation 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 of the Companies Act, 2013. (Para 30)

In the absence of any clear stipulation, an interpretation that with the expiry of the period, the mandate in favour of OFFICERS OF SERIOUS FRAUD INVESTIGATION 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 Companies Act, 2013, the original Investigating Agencies would be denuded of power to investigate and with the expiry of mandate, the Officers Of Serious Fraud Investigation 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. (Para 30)

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 Companies Act, 2013 is purely directory. Even after the expiry of such stipulated period, the mandate in favour of the Officers Of Serious Fraud Investigation 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. (Para 30)

Copy of judgement: Judgement_27-Mar-2019

-Tushar Kaushik

Leave a Reply

Your email address will not be published. Required fields are marked *