Case Note & Summary
The appeal arose from a challenge by the CBI against orders of the Special Court and High Court granting default bail to respondents Kapil Wadhawan and Dheeraj Wadhawan under Section 167(2) Cr.P.C. in a bank fraud case. An FIR was registered on 20.06.2022 for offences under IPC and the Prevention of Corruption Act, 1988, alleging a conspiracy to cheat a consortium of banks, causing a loss of approximately Rs. 34,000 crores. The respondents were arrested on 19.07.2022, and a chargesheet was filed on 15.10.2022 against 75 accused, including them, with further investigation pending against some others. The respondents applied for default bail on 29.10.2022, arguing the chargesheet was incomplete. The Special Court, after taking cognizance on 26.11.2022, granted bail on 03.12.2022, upheld by the High Court on 30.05.2023. The CBI appealed, contending the chargesheet was complete and the right to default bail ceased upon its filing and cognizance. The respondents argued the chargesheet was incomplete due to pending investigation. The Supreme Court analyzed Sections 167(2) and 173 Cr.P.C., holding that the right to default bail accrues only if investigation is not completed and chargesheet not filed within the statutory period. It found the chargesheet complied with Section 173(2) against the respondents, and further investigation under Section 173(8) did not render it incomplete. The Court also noted that cognizance had been taken, extinguishing the default bail right. Relying on precedents like Dinesh Dalmia vs. CBI and M. Ravindran v. Intelligence Officer, it held the respondents were not entitled to default bail. The appeal was allowed, setting aside the bail orders.
Headnote
A) Criminal Procedure - Default Bail - Statutory Right Under Section 167(2) Cr.P.C. - Code of Criminal Procedure, 1974, Section 167(2) - The respondents were arrested on 19.07.2022 and a chargesheet was filed on 15.10.2022 against 75 accused including respondents, with further investigation pending against some others. The Special Court and High Court held the chargesheet incomplete and granted default bail. The Supreme Court analyzed that the right to default bail accrues if investigation is not completed and chargesheet not filed within the statutory period, but once a complete chargesheet is filed, the right ceases. Held that the chargesheet filed was complete as per Section 173(2) Cr.P.C. against the respondents, and pending further investigation under Section 173(8) does not render it incomplete, thus the respondents were not entitled to default bail. (Paras 13-20) B) Criminal Procedure - Investigation and Chargesheet - Completion of Investigation Under Section 173 Cr.P.C. - Code of Criminal Procedure, 1974, Section 173 - The CBI filed a chargesheet on 15.10.2022 stating further investigation was pending against some accused. The courts below deemed it incomplete. The Supreme Court held that a chargesheet under Section 173(2) is complete if it contains details as per the provision against the accused in question, and further investigation under Section 173(8) is permissible but does not affect the completeness of the initial report. Thus, the chargesheet was complete, and the right to default bail did not survive. (Paras 14-20) C) Criminal Procedure - Cognizance and Default Bail - Effect of Cognizance on Bail Right - Code of Criminal Procedure, 1974, Sections 167(2), 173 - The Special Court took cognizance on 26.11.2022 before considering the bail application on 03.12.2022. The Supreme Court held that once cognizance is taken, the stage of investigation is over, and the right to default bail under Section 167(2) is extinguished, as the proviso applies only when investigation is pending and chargesheet not filed. Thus, the grant of bail after cognizance was erroneous. (Paras 13-20)
Issue of Consideration
Whether the respondents were entitled to default bail under Section 167(2) Cr.P.C. on the ground that investigation qua some accused was pending, though a chargesheet against them was filed within the prescribed time and cognizance was taken before considering their bail application.
Final Decision
Supreme Court allowed the appeal, set aside the orders of Special Court and High Court granting default bail, and held respondents not entitled to default bail.
Law Points
- Default bail under Section 167(2) Cr.P.C.
- statutory right of accused
- completion of investigation
- filing of chargesheet
- further investigation under Section 173(8) Cr.P.C.
- cognizance of offence
- indefeasible right to bail
