Case Note & Summary
The Supreme Court heard an appeal by the Serious Fraud Investigation Office (SFIO) against a bail order dated 31.05.2019 passed by the High Court of Punjab and Haryana, which had granted bail to two directors of Adarsh Group of Companies and LLPs. The directors were arrested on 10.12.2018 following an investigation ordered under the Companies Act, 2013 and Limited Liability Partnership Act, 2008 into alleged fraud offences. They were remanded to judicial custody on 05.04.2019, and their custody was extended multiple times. On 18.05.2019, a criminal complaint under the Companies Act was filed before the Special Court, Gurugram, before the expiry of the 60-day period from remand. The directors filed applications for statutory bail under Section 167(2) of the Code of Criminal Procedure, 1973 on 20.05.2019, which were dismissed by the Sessions Judge on 22.05.2019 on the ground that the complaint was filed before the expiry of 60 days. However, the High Court granted bail on 31.05.2019, holding that the directors were entitled to statutory bail as a matter of indefeasible right because cognizance had not been taken before the expiry of the 60-day period. The sole legal issue before the Supreme Court was whether an accused is entitled to statutory bail under Section 167(2) CrPC on the ground that cognizance has not been taken before the expiry of the prescribed period from remand. The appellant SFIO argued that the High Court erred, as statutory bail is only available if investigation is not completed within the period, not if cognizance is not taken, and cited Suresh Kumar Bhikamchand Jain v. State of Maharashtra & Anr. The respondents argued that the High Court was justified, relying on Sanjay Dutt v. State and Mohamed Iqbal Madar Sheikh & Ors. v. State of Maharashtra, contending that the right to statutory bail persists until cognizance is taken. An intervenor highlighted conflicting Supreme Court judgments on this issue and sought referral to a larger bench. The Supreme Court analyzed Section 167(2) CrPC, emphasizing that the provision addresses failure to complete investigation within the prescribed period. It held that the right to statutory bail under Section 167(2) CrPC is extinguished once the complaint or charge-sheet is filed before the expiry of the period, regardless of whether cognizance is taken. The Court found the High Court's reasoning flawed, as it overlooked that the complaint was filed before the expiry of 60 days, and set aside the bail order, clarifying that statutory bail is not available merely because cognizance is not taken before the period expires.
Headnote
A) Criminal Procedure - Statutory Bail - Section 167(2) Code of Criminal Procedure, 1973 - The Supreme Court held that statutory bail under Section 167(2) CrPC is available only if investigation is not completed within the prescribed period, not if cognizance is not taken before expiry of that period, and filing of complaint before expiry extinguishes the right to statutory bail. The Court set aside the High Court's bail order, which had erroneously granted bail on the ground that cognizance was not taken before the expiry of 60 days. (Paras 8-9) B) Company Law - Investigation and Prosecution - Sections 212(1)(c), 439(2), 447 Companies Act, 2013 - The case involved an investigation into Adarsh Group of Companies and LLPs under the Companies Act, 2013, with directors accused of offences including fraud under Section 447. The Supreme Court addressed the interplay between the Companies Act and CrPC provisions regarding bail, but the core issue centered on interpretation of Section 167(2) CrPC. (Paras 1-3, 7)
Issue of Consideration
Whether an accused is entitled to statutory bail under Section 167(2) of the Code of Criminal Procedure, 1973 on the ground that cognizance has not been taken before the expiry of 60 days or 90 days, as the case may be, from the date of remand
Final Decision
Supreme Court set aside the bail order dated 31.05.2019 passed by the High Court of Punjab and Haryana, holding that respondents are not entitled to statutory bail under Section 167(2) CrPC as complaint was filed before expiry of 60-day period
Law Points
- Statutory bail under Section 167(2) CrPC is available only if investigation is not completed within the prescribed period
- not if cognizance is not taken before expiry of that period
- filing of complaint before expiry of period extinguishes right to statutory bail
