Dalmia Vs. C.B.I.  Insc 944 (18 September 2007)
Sinha & Harjit Singh Bedi
APPEAL NO. 1249 OF 2007 [Arising out of SLP (Crl.) No. 513 of 2007] S.B. SINHA,
Interpretation of Sub-section (2) of Section 167 of the Code of Criminal
Procedure, 1973 (for short "the Code") vis-`-vis Sub-section (2) of
Section 309 thereof falls for consideration of this Court in this appeal which
arises out of an order dated 22.12.2006 passed by a learned Single Judge of the
High Court of Judicature at Madras in Crl. R.C. No. 1173 of 2006 setting aside
an order dated 25.08.2006 passed by the 5th Additional Sessions Judge, Chennai
in R.C. 4/(E)/03/BSC/FC/CBI New Delhi in Crl. R.C. No. 115 of 2006 whereby an
order dated 30.05.2006 passed by the Special Court in Crl. M.P. No. 788 of 2006
in C.C. No. 19189 of 2005 was set aside.
Appellant was proceeded against for commission of offences under Sections 409,
420 and 120B of the Indian Penal Code.
Central Bureau of Investigation (CBI) lodged a first information report against
the appellant and three companies registered and incorporated under the
Companies Act, 1956 on a complaint made by the Securities and Exchange Board of
India. Indisputably, Appellant was named therein. He was, however, evading
arrest. He had gone to the United States.
The learned Magistrate by an order dated 14.02.2005, on a prayer made in that
behalf by the CBI, issued a non-bailable warrant of arrest against him. Upon
completion of investigation, a charge sheet was submitted before the Magistrate
in terms of Sub-section (2) of Section 173 of the Code. In the said charge
sheet, name of the appellant appeared in Column No. 1 along with the said three
companies. Name of one of the companies named in the first information report,
viz., M/s. DSQ Software Ltd., has been shown in Column No. 2. In the said
charge sheet, it was stated:
has revealed that Sh. Dinesh Dalmia, the then Managing Director & Custodian
of properties, including shares, of M/s. DSQ Software Ltd., fraudulently got
dematerialized un- allotted and unlisted share of DSQ Software Ltd.
name of three entities namely New Vision Investment Ltd., UK; Dinesh Dalmia
Technology Trust and Dr. Suryanil Ghosh, Trustee Softec Corporation and
thereafter these shares were sold in the market and the proceeds of sale of
said shares were credited in the accounts of M/s. DSQ Holdings Ltd., M/s. Hulda
Properties and Trade Ltd. and M/s. Powerflow Holding and Trading Pvt. Ltd. and
thereby dishonestly misappropriated and cheated investors including existing
share holders and obtained undue gain to the tune of Rs. 5,94,88,37,999/-.
Dinesh Dalmia has committed fraudulent acts prima facie disclosing commission
of offences of cheating, breach of trust, forgery and using forged documents as
genuine by getting wrongful gain in the matter of partly paid shares.
Software Ltd. in the name of New Vision Investment Ltd., UK; unallotted shares
in the name of Dinesh Dalmia Technology Trust and "Dr. Suryanil Ghosh
Trustee Softec Corporation". M/s. DSQ Holdings Ltd., M/s. Hulda Properties
and Trades Ltd. and M/s. Powerflow Holding & Trading Pvt Ltd have also
committed offence of cheating in the matter of above mentioned shares and the
above facts disclose commission of offences punishable U/s 409, 420, 468 and
471 IPC on the part of accused Sh. Dinesh Dalmia (A- 1) and U/ 420 IPC on the
part of accused companies namely M/s DSQ Holdings Ltd (A-2) represented by Sh. Dinesh
Dalmia, Director, M/s. Hulda Properties & Trades Ltd (A-3) represented by Sh
Ashok Kumar Sharma, Director & M/s Powerflow Holding & Trading Pvt Ltd
(A-4) represented by Sh Ashok Kumar Sharma, Director.
investigation the allegations against DSQ Software Ltd could not be substantiated
and hence it is not being charge sheeted.
Dinesh Dalmia is evading arrest and has absconded to USA. He has not joined investigation. Ld. ACMM, Egmore
Chennai 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 is necessary in this case as only he alone is aware of the
end use of the funds.
investigation on certain vital points including end use of the funds, foreign
investigation in the matter of genuineness of New Vision Investment Ltd and as
shown as its authorized signatory, Sh. Hitendra Naik, in United Kingdom and
other foreign investigation are still continuing and after completion of the
remaining investigation the report of the same will be filed under section
173(8) Cr. PC in due course.
questioned documents have been sent to GEQD for expert opinion, it is still
awaited. After being obtained, the same will be submitted with additional list
of witnesses and list of documents are enclosed herewith and additional list of
documents & witnesses, if necessary, will be submitted in due course.
therefore, prayed that this Hon'ble court may be pleased to take cognizance of
the offences, issue the process to secure the presence of the accused and they
may be tried according to law."
Although statements made by the witnesses under Section 161 of the Code
accompanied the charge sheet, the relevant documents could not be filed as they
were sent for examination before the Government Examiner of Questioned
Documents (GEQD). Cognizance was taken by the Magistrate on the said charge
sheet by an order dated 25.10.2005. It was specifically noted that non-bailable
warrant as against the appellant was still pending.
CBI contended that the appellant entered into India illegally as no endorsement had been made in his passport
showing a valid travel undertaken by him. He was produced before a Magistrate
in Delhi for transit remand to Chennai. An order
to that effect was passed. On 14.02.2006, when he was produced before the
concerned Magistrate at Chennai, an order for police custody was prayed for and
was granted till 24.02.2006. Another application was filed for further police
custody for four days on 21.02.2006. An application was also filed seeking
permission to conduct brain mapping, polygraph test, on the appellant which was
Appellant had been handed over to the police for conducting investigation till
8.03.2006. He, however, was remanded to judicial custody till 14.03.2006 by an
order dated 9.03.2006. Allegedly, on the plea that further investigation was
pending, the CBI prayed for and obtained order of remand to judicial custody
from the learned Magistrate on 14.03.2006, 28.03.2006, 10.04.2006 and
28.04.2006. All the applications were made purported to be under Sub-section
(2) of Section 167 of the Code.
Appellant, on expiry of 60 days from the date of his arrest, filed an
application for statutory bail purported to be in terms of the proviso appended
to Sub-section (2) of Section 167 of the Code on the premise that no further
charge sheet in respect of the investigation under Sub-section (8) of Section
173 of the Code has been filed. When the said application was pending consideration,
the CBI sought for his remand in judicial custody under Sub-section (2) of
Section 309 thereof.
said application for statutory bail was rejected by the learned Magistrate
in this case, the petitioner was arrested on the basis of Non-bailable warrant
issued by this court, after taking cognizance of the offences in charge sheet.
Further, the respondent side has clearly stated that before further
investigation commenced on 14.2.2006, the petitioner was remanded to police custody,
hence he was in the custody of the court since his arrest on 12.2.2006.
Therefore, after expiry of the police custody, the petitioner should be
remanded to judicial custody u/s 309(2) Cr. P.C. and not u/s 167(2) Cr.P.C.
However, in this case, by mistake, provision of law under which the petitioner
was remanded to judicial custody was mentioned as Section 167(2) Cr.P.C. in the
remand report. In fact for remanding an accused in custody against whom charge
sheet has already been filed and an application for remand is not required.
Hence this court is inclined to state that the petitioner was remanded to
police custody u/s 167(2) Cr.P.C. and thereafter was remanded to judicial
custody u/s 309 Cr.P.C."
learned Magistrate further took note of the fact that two other cases have been
registered against him by the Calcutta Police.
revision application filed by the appellant herein before the learned Sessions
Judge was allowed inter alia relying on or on the basis of the decision of this
Court in State Through CBI v. Dawood Ibrahim Kaskar and Others [(2000) 10 SCC
Taking into consideration of all these facts and circumstances of the case and
principle of law laid down by the Hon'ble Apex Court I feel that in view of the
positive conduct of the respondent in relying upon Section 167(2) Cr. P.C. in
all their applications (up to the filing of the bail application), the
petitioner can also rely upon it and seek necessary orders thereunder, that the
respondent is now estopped from pleading opposite to their own previous conduct
and that Section 309(2) cannot be applied to a person like the petitioner, who
was arrested in the course of further investigation."
CBI moved the High Court thereagainst. Its application was registered as Crl.
R.C. No. 1173 of 2006. The decision of the learned Sessions Judge was
over-turned by the High Court by reason of the impugned judgment stating:
of this interpretation the learned Magistrate is empowered to give "Police
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
fulfillment 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.
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 material 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.
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."
Appellant is, thus, before us.
Mr. Mukul Rohatgi, learned senior counsel appearing on behalf of the appellant,
has raised two contentions before us:
The charge sheet filed against the appellant and cognizance taken thereupon is
illegal and invalid and by reason thereof, a valuable right of the appellant to
be released on bail has been taken away.
Even if the charge sheet is legal, the right of the appellant under Sub-section
(2) of Section 167 of the Code continued to remain available in the facts and
circumstances of the case.
his submission, Mr. Rohatgi urged that a police report must strictly conform to
the requirements laid down under Section 173 of the Code and the prescribed
form for submission of the final form wherefrom it would be evident that no
charge sheet can be filed upon purported completion of investigation against
the appellant as he had been absconding. As the CBI kept investigation as
against the appellant open, as would appear from the charge sheet itself as
also the prayers made and granted by the learned Magistrate which is
permissible only under Sub- section (2) of Section 167 of the Code, no chargesheet
in law can be said to have been filed so far as the appellant was concerned.
The CBI moreover itself proceeded on the basis that the investigation against
the appellant had been pending and only in that view of the matter applications
for remand were filed under Sub-section (2) of Section 167 of the Code. It was
contended that only when the appellant applied for grant of statutory bail, the
CBI changed its stand and filed an application for remand under Sub- section
(2) of Section 309 of the Code.
Mr. Amarendra Sharan, learned Additional Solicitor General appearing on behalf
of the CBI, on the other hand, would submit that a charge sheet having been
submitted before the Court and cognizance having been taken on the basis
thereof, the only provision applicable for remand of the accused would be
Sub-section (2) of Section 309 of the Code and, thus, even if a wrong provision
has been mentioned by CBI in their applications for remand, the same by itself
would not render the order of the Court invalid in law.
this case the CBI took a conscious decision to file charge sheet against the
appellant. His name was shown in Column No. 1 thereof although he was
absconding. It was found that a case for trial has been made out. There were
five accused against whom allegations were made by the complainant. One of the
companies was not sent for trial as nothing was found against it. All the other
accused named in the first information report had been sent for trial.
learned Magistrate took cognizance of the offence. The said power can be
exercised only under Section 190(1)(b) of the Code. The learned Magistrate
noticed the fact, while taking cognizance of the offence, that the appellant
had been absconding and a non-bailable warrant of arrest had been issued
the charge sheet was submitted on 24.10.2005, the appellant was arrested only
on 12.02.2006. According to Mr. Sharan, the additional documents were filed on
charge sheet is a final report within the meaning of Sub-section (2) of Section
173 of the Code. It is filed so as to enable the court concerned to apply its
mind as to whether cognizance of the offence thereupon should be taken or not.
The report is ordinarily filed in the form prescribed therefor.
the requirements for submission of a police report is whether any offence
appears to have been committed and, if so, by whom. In some cases, the accused
having not been arrested, the investigation against him may not be complete.
There may not be sufficient material for arriving at a decision that the
absconding accused is also a person by whom the offence appears to have been
committed. If the investigating officer finds sufficient evidence even against
such an accused who had been absconding, in our opinion, law does not require
that filing of the charge sheet must await the arrest of the accused.
Indisputably, the power of the investigating officer to make a prayer for
making further investigation in terms of Sub-section (8) of Section 173 is not
taken away only because a charge sheet under Sub-section (2) thereof has been
filed. A further investigation is permissible even if order of cognizance of
offence has been taken by the Magistrate.
may notice that a Constitution Bench of this Court in K. Veeraswami v. Union of
India and Others [(1991) 3 SCC 655] stated the law in the following terms :
observed by this Court in Satya Narain Musadi v. State of Bihar that the statutory requirement of
the report under Section 173(2) would be complied with if the various details
prescribed therein are included in the report. This report is an intimation to
the magistrate that upon investigation into a cognizable offence the
investigating officer has been able to procure sufficient evidence for the
Court to inquire into the offence and the necessary information is being sent
to the Court. In fact, the report under Section 173(2) purports to be an
opinion of the investigating officer that as far as he is concerned he has been
able to procure sufficient material for the trial of the accused by the Court.
The report is complete if it is accompanied with all the documents and
statements of witnesses as required by Section 175(5). Nothing more need be
stated in the report of the Investigating Officer. It is also not necessary
that all the details of the offence must be stated. The details of the offence
are required to be proved to bring home the guilt to the accused at a later
stage i.e. in the course of the trial of the case by adducing acceptable
is true that ordinarily all documents accompany the charge sheet.
in this case, some documents could not be filed which were not in the
possession of the CBI and the same were with the GEQD. As indicated
hereinbefore, the said documents are said to have been filed on 20.01.2006
whereas the appellant was arrested on 12.02.2006. Appellant does not contend
that he has been prejudiced by not filing of such documents with the charge
sheet. No such plea in fact had been taken. Even if all the documents had not
been filed, by reason thereof submission of charge sheet itself does not become
vitiated in law. The charge sheet has been acted upon as an order of cognizance
had been passed on the basis thereof. Appellant has not questioned the said
order taking cognizance of the offence. Validity of the said charge sheet is
also not in question.
of Sub-section (2) of Section 173 of the Code vis-`-vis Sub-section (2) of
Section 309 must be considered having regard to the aforementioned factual and
legal backdrop in mind.
Concededly, the investigating agency is required to complete investigation
within a reasonable time. The ideal period therefor would be 24 hours, but, in
some cases, it may not be practically possible to do so. The Parliament,
therefore, thought it fit that remand of the accused can be sought for in the
event investigation is not completed within 60 or 90 days, as the case may be.
But, if the same is not done with the stipulated period, the same would not be
detrimental to the accused and, thus, he, on the expiry thereof would be
entitled to apply for bail, subject to fulfilling the conditions prescribed therefor.
right of bail although is a valuable right but the same is a conditional one;
the condition precedent being pendency of the investigation. Whether an
investigation in fact has remained pending and the investigating officer has
submitted the charge sheet only with a view to curtail the right of the accused
would essentially be a question of fact. Such a question strictly does not
arise in this case inasmuch as, according to the CBI, sufficient materials are
already available for prosecution of the appellant. According to it, further
investigation would be inter alia necessary on certain vital points including
end use of the funds.
Apart from the appellant, three companies, registered and incorporated under
the Companies Act, have been shown as accused in the charge sheet. It was,
therefore, not necessary for the CBI to file a charge sheet so as to curtail
the right of the accused to obtain bail. It is, therefore, not a case where by
reason of such submission of charge sheet the appellant has been prejudiced in
any manner whatsoever.
is also not a case of the appellant that he had been arrested in course of
further investigation. A warrant of arrest had already been issued against him.
The learned Magistrate was conscious of the said fact while taking cognizance
of the offence.
now well settled that the court takes cognizance of an offence and not the
offender. [See Anil Saran v. State of Bihar and another (1995) 6 SCC 142 and Popular Muthiah v. State represented
by Inspector of Police (2006) 7 SCC 296]
The power of a court to direct remand of an accused either in terms of
Sub-section (2) of Section 167 of the Code or Sub-section (2) of Section 309
thereof will depend on the stages of the trial. Whereas Sub-section (2) of
Section 167 of the Code would be attracted in a case where cognizance has not
been taken, Sub-section (2) of Section 309 of the Code would be attracted only
after cognizance has been taken.
submission of Mr. Rohatgi is to be accepted, the Magistrate was not only
required to declare the charge sheet illegal, he was also required to recall
his own order of taking cognizance. Ordinarily, he could not have done so. [See
Adalat Prasad v. Rooplal Jindal and Ors. (2004) 7 SCC 338, Subramanium Sethuraman
v. State of Maharashtra and Anr. 2004 (8) SCALE 733 and
Everest Advertising Pvt. Ltd. v. State, Govt. of NCT of Delhi and Ors. JT 2007 (5) SC529] It is
also well-settled that if a thing cannot be done directly, the same cannot be
permitted to be done indirectly.
order taking cognizance exists, irrespective of the conduct of the CBI in
treating the investigation to be open or filing applications for remand of the
accused to police custody or judicial remand under Sub-section (2) of Section
167 of the Code stating that the further investigation was pending, would be of
no consequence if in effect and substance such orders were being passed by the
Court in exercise of its power under Sub-section (2) of Section 309 of the
We, however, have no words to deprecate the stand of the CBI. It should have
taken a clear and categorical stand in the matter.
however, are proceeding on the basis that irrespective of the stand taken by
the CBI, law will prevail. We may notice the law operating in the field in this
support of the submission in regard to interpretation of Sub-section (2) of
Section 167 and Sub-section (2) of Section 309 of the Code, strong reliance has
been placed by Mr. Rohatgi on Central Bureau of Investigation, Special
Investigation Cell I, New Delhi v. Anupam J. Kulkarni [(1992) 3 SCC 141] and Dawood
Ibrahim Kaskar (supra).
J. Kulkarni (supra), the question which inter alia arose for consideration of
this Court was as to whether the period of remand ordered by an Executive
Magistrate in terms of Section 57 of the Code should be computed for the
purpose of Sub-section (2) of Section 167 thereof. This Court, keeping in view
the provisions of Clause (2) of Article 22 of the Constitution of India,
answered the question in the affirmative. It was held that a total period of
remand during investigation is fifteen days. In that context, this Court
taking into account the difficulties which may arise in completion of the
investigation of cases of serious nature the legislature added the proviso
providing for further detention of the accused for a period of ninety days but
in clear terms it is mentioned in the proviso that such detention could only be
in the judicial custody.
this period the police are expected to complete the investigation even in
within the period of sixty days they are expected to complete the investigation
in respect of other offences. The legislature however disfavoured even the
prolonged judicial custody during investigation. That is why the proviso lays
down that on the expiry of ninety days or sixty days the accused shall be
released on bail if he is prepared to and does furnish bail"
regard to the question as to whether such an order of remand would be
permissible in law when an accused is wanted in different cases, the answer was
again rendered in affirmative. We are not faced with such a problem in the
Dawood Ibrahim Kaskar (supra), this Court held:
There cannot be any manner of doubt that the remand and the custody referred to
in the first proviso to the above sub-section are different from detention in
custody under Section 167. While remand under the former relates to a stage
after cognizance and can only be to judicial custody, detention under the
latter relates to the stage of investigation and can initially be either in
police custody or judicial custody. Since, however, even after cognizance is
taken of an offence the police has a power to investigate into it further,
which can be exercised only in accordance with Chapter XII, we see no reason
whatsoever why the provisions of Section 167 thereof would not apply to a
person who comes to be later arrested by the police in course of such
investigation. If Section 309(2) is to be interpreted - as has been interpreted
by the Bombay High Court in Mansuri (supra) - to mean that after the Court
takes cognizance of an offence it cannot exercise its power of detention in
police custody under Section 167 of the Code, the Investigating Agency would be
deprived of an opportunity to interrogate a person arrested during further
investigation, even if it can on production of sufficient materials, convince
the Court that his detention in its (police) custody was essential for that
purpose. We are therefore of the opinion that the words "accused if in
custody" appearing in Section 309(2) refer and relate 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 view of Section
309(2), but he who comes under the second category 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, subject to the fulfilment
of the requirements and the limitation of Section 167."
had noticed the dicta of the Constitution Bench judgment of this Court. At this
juncture, we may notice the dicta laid down by this Court in Sanjay Dutt v.
State Through C.B.I. Bombay (II) [(1994) 5 SCC 410] wherein it was held:
The 'indefeasible right' of the accused to be released on bail in accordance
with Section 20(4)(bb) of the TADA Act read with Section 167(2) of the CrPC in
default of completion of the investigation and filing of the challan within the
time allowed, as held in Hitendra Vishnu Thakur is a right which enures to, and
is enforceable by the accused only from the time of default till the filing of
the challan and it does not survive or remain enforceable on the challan being
filed. If the accused applies for bail under this provision on expiry of the
period of 180 days or the extended period, as the case may be, then he has to
be released on bail forthwith. The accused, so released on bail may be arrested
and committed to custody according to the provisions of the CrPC.
right of the accused to be released on bail after filing of the challan,
notwithstanding the default in filing it within the time allowed, is governed
from the time of filing of the challan only by the provisions relating to the
grant of bail applicable at that stage."
is a well-settled principle of interpretation of statute that it is to be read
in its entirety. Construction of a statute should be made in a manner so as to
give effect to all the provisions thereof. Remand of an accused is contemplated
by the Parliament at two stages; pre-cognizance and post cognizance. Even in
the same case depending upon the nature of charge sheet filed by the
investigating officer in terms of Section 173 of the Code, a cognizance may be
taken as against the person against whom an offence is said to have been made
out and against whom no such offence has been made out even when investigation
is pending. So long a charge sheet is not filed within the meaning of
Sub-section (2) of Section 173 of the Code, investigation remains pending. It,
however, does not preclude an investigating officer, as noticed hereinbefore,
to carry on further investigation despite filing of a police report, in terms
of Sub-section (8) of Section 173 of the Code.
The statutory scheme does not lead to a conclusion in regard to an
investigation leading to filing of final form under Sub-section (2) of Section
173 and further investigation contemplated under Sub-section (8) thereof.
only when a charge sheet is not filed and investigation is kept pending,
benefit of proviso appended to Sub-section (2) of Section 167 of the Code would
be available to an offender; once, however, a charge sheet is filed, the said
right ceases. Such a right does not revive only because a further investigation
remains pending within the meaning of Sub-section (8) of Section 173 of the
The High Court, in our opinion, is correct in its finding that, in the fact
situation obtaining, the appellant had no statutory right to be released on
do not, thus, find any infirmity in the judgment of the High Court.
the appeal is dismissed.