Default Bail under Section 167(2) CRPC cannot be claimed on the ground that Cognizance has not been taken before the expiry of 60 days: Supreme Court

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PC: Supreme Court of India
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The Court while hearing a criminal appeal has observed that filing of a charge-sheet is sufficient compliance with the provisions of Section 167 CrPC and an accused cannot demand release on default bail under Section 167(2) on the ground that cognizance has not been taken before the expiry of 60 days.

Issues considered by the Court
Right of Default bail.
Custody of the accused through out the trial.

Facts in Brief:

In the instant case, Respondent Nos. 1 and 2 are the directors of Adarsh Group of Companies and LLPs, who were accused of committing an offence under Section 447 of the Companies Act, 2013, Section 120-B read with Sections 417, 418, 420, 406, 463, 467, 468, 471, 474 of the Indian Penal Code, 1860 (“IPC”).

After their arrest, Respondent Nos. 1 and 2 filed applications for statutory bail under Section 167(2) of the CrPC on 20.05.2019. The said applications were dismissed by the Sessions Judge, Gurugram on 22.05.2019 on the ground that the complaint under Section 439(2) of the Companies Act, 2013 was filed on 18.05.2019, i.e., before the expiry of the 60-day period prescribed in proviso (a) to Section 167(2) of the CrPC.

Thereafter, the respondents filed regular bail applications before the the High Court and the High Court by the impugned order directed their release.

The sole reason given for grant of bail by the High Court is that the trial court has not taken cognizance of the complaint before the expiry of the 60-day period, which entitled Respondent Nos. 1 and 2 to statutory bail, as a matter of indefeasible right. It is the same order which was assailed in this Appeal by the Serious Fraud
Investigation Office (“SFIO”).

Arguments on behalf of the Appellant:

Mr. Aman Lekhi, learned Additional Solicitor General appearing on behalf of the Appellant submitted that the High Court committed a serious error in granting statutory bail to Respondent Nos. 1 and 2, in spite of the fact that the complaint was filed well before the expiry of 60 days from the date of the remand. An egregious error has been committed by the High Court in holding that cognizance also has to be taken before the expiry of the 60-day period, or else, the accused would be entitled to statutory bail under Section 167(2), CrPC.

He further submitted that the mischief that is sought to be addressed under Section 167(2) is failure to complete the investigation.

He also stated that, according to the scheme of the CrPC, on completion of investigation, the final report/complaint is filed under Section 173(2), CrPC. Statutory bail under Section 167(2), CrPC can be granted only in a case where investigation is not complete within the prescribed period and not otherwise. He submitted that the judgment of the High Court is contrary to the law laid down by this Court in Suresh Kumar Bhikamchand Jain v. State of Maharashtra & Anr.

Arguments on behalf of the Respondent nos. 1 and 2:

It was argued on behalf of Respondent Nos. 1 and 2 that the High Court was justified in granting statutory bail to them as, admittedly, cognizance was not taken before the expiry of the 60-day period.

Placing reliance on a judgment of this Court in Sanjay Dutt v. State, Mr. Chaudhri argued that the maximum period of detention that the accused can be remanded to under Section 167, CrPC is 60 days, beyond which detention can be extended only if the accused is unable to furnish bail.

Also Read:  Default Bail: Plea of filing supplementary charge-sheet cannot be used to extend the time limit under Section 167(2) CrPC

He submitted that this Court in Mohamed Iqbal Madar Sheikh & Ors. v. State of Maharashtra explained the judgment in Sanjay Dutt (supra) and held that the right under Section 167(2), CrPC cannot be exercised after the charge-sheet has been submitted and cognizance has been taken. It was further argued that an accused has a right to seek statutory bail under the proviso to Section 167(2) even after the charge- sheet is filed, till the court takes cognizance.

Mr. Mukul Rohatgi, learned Senior Counsel appearing for the Intervenor, submitted that there is a conflict of opinion regarding the interpretation of Section 167(2), CrPC.

According to him, this Court in Madar Sheikh (supra) has taken a view that an accused can invoke his right for statutory bail if the court has not taken cognizance of the complaint before the expiry of the statutory period from the date of remand.

This Court in Bhikamchand Jain (supra) has taken a different view without referring to the judgment of this Court in Madar Sheikh (supra). Mr. Rohatgi submitted that this Court in M. Ravindran v. Intelligence Officer, Directorate of Revenue Intelligence took the same view as that of this Court in Madar Sheikh (supra), without reference to the judgment in Bhikamchand Jain (supra).

To settle the conflicting opinions of this Court, it is imminently necessary to refer this matter to a larger bench, according to Mr. Rohatgi.

Observations of the Court:

The Court framed only one question for consideration in this case i.e., whether an accused is entitled for statutory bail under Section 167(2), CrPC 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.

To answer the question the Court referred to the judgment of this Court in Suresh Kumar Bhikamchand Jain v. State of Maharashtra & Anr. wherein it was held that:

9. ***The petitioner in the said case was arrested on 11.03.2012 on the allegation of misappropriation of amounts meant for development of slums in Jalgaon City. The petitioner therein was accused of committing offences punishable under Sections 120-B, 409, 411, 406, 408, 465, 466, 468, 471, 177 and 109 read with Section 34, IPC and also under Sections 13(1)(c), 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988. The contention of the petitioner therein was that he could not have been remanded to custody in view of cognizance not being taken for want of sanction within the statutory period of 90 days. The scheme of the provisions relating to remand of an accused first during the stage of investigation and thereafter, after cognizance is taken, indicates that the legislature intended investigation of certain crimes to be completed within the period prescribed therein, according to this Court in Bhikamchand Jain (supra).

This Court held that in the event of investigation not being completed by the investigating authorities within the prescribed period, the accused acquires an indefeasible right to be granted bail, if he offers to furnish bail. This Court was of the firm opinion that if on either the 61st day or the 91st day, an accused makes an application for being released on bail in default of charge-sheet having been filed, the court has no option but to release the accused on bail.

However, once the charge- sheet was filed within the stipulated period, the right of the accused to statutory bail came to an end and the accused would be entitled to pray for regular bail on merits.

It was held by this Court that the filing of charge-sheet is sufficient compliance with the provisions of proviso (a) to Section 167(2), CrPC and that taking of cognizance is not material to Section 167. The scheme of CrPC is such that once the investigation stage is completed, the court proceeds to the next stage, which is the taking of cognizance and trial. During the period of investigation, the accused is under the custody of the Magistrate before whom he or she is first produced, with such Magistrate being vested with power to remand the accused to police custody and/or judicial custody, up to a maximum period as prescribed under Section 167(2).

Acknowledging the fact that an accused has to remain in custody of some court, this Court concluded that on filing of the charge-sheet within the stipulated period, the accused continues to remain in the custody of the Magistrate till such time as cognizance is taken by the court trying the offence, when the said court assumes custody of the accused for purposes of remand during the trial in terms of Section 309, CrPC. This Court clarified that the two stages are different, with one following the other so as to maintain continuity of the custody of the accused with a court.

The Court after analyzing the provision contained in Section 167(2) CrPC and after relying on the judgment in Suresh Kumar Bhikamchand Jain v. State of Maharashtra & Anr. made the following observations:

10. It is clear from the judgment of this Court in Bhikamchand Jain (supra) that filing of a charge-sheet is sufficient compliance with the provisions of Section 167, CrPC and that an accused cannot demand release on default bail under Section 167(2) on the ground that cognizance has not been taken before the expiry of 60 days. The accused continues to be in the custody of the Magistrate till such time cognizance is taken by the court trying the offence, which assumes custody of the accused for the purpose of remand after cognizance is taken. The conclusion of the High Court that the accused cannot be remanded beyond the period of 60 days under Section 167 and that further remand could only be at the post-cognizance stage, is not correct in view of the judgment of this Court in Bhikamchand Jain (supra)

15. A close scrutiny of the judgments in Sanjay Dutt (supra), Madar Sheikh (supra) and M. Ravindran (supra) would show that there is nothing contrary to what has been decided in Bhikamchand Jain (supra). In all the above judgments which are relied upon by either side, this Court had categorically laid down that the indefeasible right of an accused to seek statutory bail under Section 167(2), CrPC arises only if the charge-sheet has not been filed before the expiry of the statutory period.

In view of the above, the Court allowed the appeal and set aside the order of the High Court.

Also Read:  Magistrate has no jurisdiction to extend the period of filing of chargesheet under Section 167 beyond ninety days in scheduled offences.

Click here to download the Judgment

Case Details:
Title: Serious Fraud Investigation Office Versus Rahul Modi & Ors.                           
Case No.: Criminal Appeal Nos.185-186 of 2022
Coram: Justice L. Nageswara Rao and Justice B. R. Gavai
Date of Judgment: 07-02-2022