Rahul Modi v. Union of India

8. Mr. Kapil Sibal, learned Senior Counsel and Mr. Siddharth Aggarwal, learned counsel appearing on behalf of the applicants would urge that, in view of the circumstance that the original period of time granted to the SFIO to carry out the investigation into the affairs of the subject entities had come to an end by efflux of time on 19.09.2018, the action taken by the SFIO to carry on with the investigation, without an express permission from the Competent Authority so to do, was patently without jurisdiction. It is, therefore, urged that, the arrest of the applicants on 10.12.2018, after the specified period had expired and prior to the SFIO obtaining ex post facto extension from the Competent Authority, suffers from the vice of illegality and lack of jurisdiction.

9. It is further urged on behalf of the applicants that, consequently, once the action of the SFIO is without jurisdiction, it is for the latter to establish before this Court that, the orders of remand, rendered by the Judicial Magistrate First Class, Gurugram and Sessions Judge, Gurugram dated 11.12.2018 and 14.12.2018 (hereinafter referred to as the ‘remand order’) stand the test of validity and consequently do not suffer from the vice of lack of jurisdiction rendering them illegal.

10. It is also urged on behalf of the applicants that, the order of extension passed by the Competent Authority on 14.12.2018, is inter alia without application of mind and non est, since the same was granted without the formulation of a prior opinion, in accord with the mandate of the provisions of Section 212 of the said Act. In other words, it is the case of the applicants that, the time specified by the Central Government, after the formulation of an opinion, in accordance with law, is sine qua non for the conduct of an investigation by the SFIO; and the period specified by the Competent Authority, in the order directing the conduct of such an investigation, is sacrosanct.

11. It is further urged on behalf of the applicants that on 11.12.2018, when they were produced before the Duty Magistrate, JMIC, Gurugram by the SFIO seeking police remand, at that point of time the applicants raised objections qua the territorial jurisdiction of the said Magistrate, however, the said objections were not dealt with by the concerned Magistrate.

12. Lastly, our attention has been invited to the norms formulated by the SFIO itself for the discharge of its functions, to urge that, they are required thereby to complete the investigation, within the time frame specified by the Competent Authority.

13. Per contra, Ms. Maninder Acharya, learned Additional Solicitor General appearing on behalf of the official respondents would urge that, neither does this Court have territorial jurisdiction over the valid remand orders rendered by the concerned Magistrate in Gurugram, nor can this Court grant interim protection/release on bail to the applicants in the present applications.

14. In order to buttress the above submissions, our attention has been invited to the following decisions:-

(i) State of Maharashtra and Others vs. Tasneem Rizwan

(ii) Manubhai Ratilal Patel vs. State of Gujarat and Others, reported as (2013) 1 SCC 314;

(iii) Serious Fraud Investigation Office vs. Neeraj Singal &

Anr., in Criminal Appeal No.1114/2018, arising out of SLP (CRL.) No.7241/2018 and Union of India vs. Neeraj Singal & Anr., in Criminal Appeal No.1115/2018, arising out of SLP (CRL.) No.7242/2018.

15. In view of the submissions made on behalf of the parties, the issues that arise for consideration in the present applications are:a) Whether this Court can in a proceeding for habeas corpus under Article 226 of the Constitution of India, test the correctness, legality and validity of an order of remand, passed by a Competent Magistrate? and b) Whether this Court has the territorial jurisdiction to adjudicate the present habeas corpus proceedings, in view of the circumstance that the remand orders were rendered by a Competent Magistrate at Gurugram, which have not been specifically assailed in these proceedings?

16. In this behalf, there is no gainsaying the legal position, that a writ in the nature of habeas corpus is essentially a procedural writ. It deals with the machinery of justice, not the substantive law. The object of the writ is to secure the release of a person who is illegally restrained of his liberty. The writ of habeas corpus is, therefore, primarily designed to give a person restrained of his liberty a speedy and effective remedy for having the legality of his detention enquired into and determined, and if the detention is found to be unlawful, having himself discharged and freed from such restraint. (Ref: Kanu Sanyal vs. District Magistrate, Darjeeling, reported as (1973) 2 SCC 674).

17. The Constitution Bench of the Hon’ble Supreme Court in Kanu Sanyal (supra) observed as follows:-

18. A Three Judge Bench of the Hon’ble Supreme Court in the matter of Madhu Limaye and Others, reported as 1969 (1) SCC 292 whilst affirming the dictum of their Lordships in Ram Narayan Singh vs. State of Delhi & Ors, reported as AIR (1953) SC 277, observed that “those who feel called upon to deprive other persons of liberty in the discharge of what they conceive to be their duty must, strictly and scrupulously, observe the forms and rules of law.” It further went on to reaffirm the ratio in Ram Narayan Singh (supra) to the effect that “the Court must have regard to the legality or otherwise of the detention at the time of the return.”

19. In Tasneem Rizwan Siddiquee (supra), which is heavily relied upon on behalf of the official respondents, a Three Judge Bench of the Hon’ble Supreme Court of India observed in paragraph 10 as follows:-

20. In Manubhai Ratilal Patel (supra) the Hon’ble Supreme Court of India pleased to observe as follows:-

31. Coming to the case at hand, it is evincible that the arrest had taken place a day prior to the passing of the order of stay. It is also manifest that the order of remand was passed by the learned Magistrate after considering the allegations in the FIR but not in a routine or mechanical manner. It has to be borne in mind that the effect of the order [Manubhai Ratilal Patel v. State of Gujarat, Criminal Misc. Application No. 10303 of 2012, order dated 17-7-2012 (Guj)] of the High Court regarding stay of investigation could only have a bearing on the action of the investigating agency. The order of remand which is a judicial act, as we perceive, does not suffer from any infirmity. The only ground that was highlighted before the High Court as well as before this Court is that once there is stay of investigation, the order of remand is sensitively susceptible and, therefore, as a logical corollary, the detention is unsustainable. It is worthy to note that the investigation had already commenced and as a resultant consequence, the accused was arrested. Thus, we are disposed to think that the order [Manubhai Ratilal Patel v. State of Gujarat, Special Criminal Application No. 2207 of 2012, decided on 7-8-2012 (Guj)] of remand cannot be regarded as untenable in law. It is well-accepted principle that a writ of habeas corpus is not to be entertained when a person is committed to judicial custody or police custody by the competent court by an order which prima facie does not appear to be without jurisdiction or passed in an absolutely mechanical manner or wholly illegal. As has been stated in B. Ramachandra Rao [(1972) 3 SCC 256: 1972 SCC (Cri) 481: AIR 1971 SC 2197] and Kanu Sanyal [(1974) 4 SCC 141: 1974 SCC (Cri) 280], the court is required to scrutinise the legality or otherwise of the order of detention which has been passed. Unless the court is satisfied that a person has been committed to jail custody by virtue of an order that suffers from the vice of lack of jurisdiction or absolute illegality, a writ of habeas corpus cannot be granted. It is apposite to note that the investigation, as has been dealt with in various authorities of this Court, is neither an inquiry nor trial. It is within the exclusive domain of the police to investigate and is independent of any control by the Magistrate. The sphere of activity is clear cut and well demarcated. Thus viewed, we do not perceive any error in the order passed by the High Court refusing to grant a writ of habeas corpus as the detention by virtue of the judicial order passed by the Magistrate remanding the accused to custody is valid in law.”

21. In Neeraj Singal (supra), which has also been strongly relied upon on behalf of the official respondents, the Hon’ble Supreme Court has observed as follows:-

22. On a conspectus of the above decisions and in the light of the arguments advanced on behalf of the parties, what we are called upon to determine at this stage is whether the arrest of the applicants was illegal and without the authority of law; and whether the subsequent remand orders, which are cited to sanctify the arrest, are beyond the pale of examination by this Court in the present applications.

23. There is no denying the fact that, the Competent Authority vide its order dated 20.06.2018 directed the SFIO to conduct an investigation into the affairs of the subject entities, in public interest. There is also no quarrel with the circumstance that, the period specified by the Competent Authority in the said order dated 20.06.2018 lapsed on 19.09.2018. There is also no dispute with regard to the fact that, the SFIO sought an extension of time, from the Competent Authority, to carry out further investigation under the mandate of the provisions of Section 212 of the said Act, only on 13.12.2018, admittedly two and half months after the period granted to them by the Competent Authority for the said purpose, had come to an end by efflux of time.

24. There is also no quarrel with the circumstance that, the ex post facto extension granted by the Competent Authority, retrospectively, was granted only on 14.12.2018. It is, therefore, prima facie axiomatic that, when the applicants were arrested by the SFIO on 10.12.2018, the period specified in the said order dated 20.06.2018 for the submission of the report, post investigation, had already elapsed. It is further relevant to state that, at that juncture the SFIO had neither applied nor obtained the ex post facto extension of the period specified in the said order dated 20.06.2018.

25. It is, in these circumstances, read in conjunction with the norms set out by the SFIO itself, warranting investigation to be completed within the timeframe, stipulated by the Central Government, that we are of the considered view that the order of arrest suffers from the vice of lack of jurisdiction, unlawful and illegal.

26. A statutory body must be strictly held to the standards by which it professes its conduct to be judged.

27. Illegal detention of the applicants, in our considered view, cannot be sanctified by the subsequent remand orders, passed by the concerned Magistrate. The right of the applicants to insist upon the strict and scrupulous discharge of their duty by the SFIO and observe the forms and rules of law, is absolute. The arrest of the applicants on 10.12.2018 in the light of the circumstances antecedent and attendant was an absolute illegality and patently suffers from the vice of lack of legal sanction and jurisdiction.

28. This Court in a petition for habeas corpus cannot justify the continued illegal detention of the applicants; merely on account of the circumstance that the concerned Magistrate has rendered remand orders. The further custody of the applicants would, in our considered view, violate the principles of personal liberty, enshrined in Article 21 of the Constitution of India. The continued detention of the applicants does not admit of lawful sanction.

29. Even otherwise, the remand order dated 14.12.2018, insofar as, it observes as follows:-

is wrong, incorrect and patently contrary to law and the official record.

30. This is quite apart from the circumstance that, the applicants were arrested at the SFIO office at New Delhi on 10.12.2018, thereby rendering the remand orders passed by the concerned Magistrate in Gurugram wholly without jurisdiction.

31. In view of the foregoing, the ratio of the decision in Tasneem Rizwan Siddiquee (supra) does not come to the aid of the official respondents, since in that case the stated offence was being investigated, in terms of a valid sanction, in accordance with law, against the detenue. Further, from a perusal of the observations made by the Hon’ble Supreme Court in Neeraj Singal (supra), it is evident that, prima facie the reasons for grant of interim relief to those applicants, in the order of the High Court under challenge, were for reasons of constitutional validity of the provisions; which course of action, in the view of the Hon’ble Supreme Court, ought not to have been considered with the High Court for grant of interim relief. The Hon’ble Supreme Court had further observed that, before granting interim relief to the petitioner in those proceedings, the High Court ought to have applied the broad contours, required to be kept in mind for grant of bail under Section 439 of the Code of Criminal Procedure, 1973, which aspect, it was found has not been adverted to at all in the order of the High Court.

32. In the present case, it is an admitted position that subsequent upon the rendering of the said order dated 20.06.2018 by the Competent Authority, the applicants joined investigation and have appeared before the officer concerned on numerous occasions, in response to notices received from the latter.

33. It is further an admitted position that, in compliance to the notice by way of telephonic communications, the applicants, as directed, appeared before the official respondents on 10.12.2018, and were thereafter arrested at

06.15 p.m. on the same day at the office of SFIO at New Delhi.

34. In addition, it is observed that, a plain reading of the order of arrest dated 10.12.2018 clearly and unequivocally establishes that the applicants, who were appearing in response to a notice in this behalf, were detained at the office of SFIO, New Delhi.

35. In other words, it can be emphatically observed that, the applicants are co-operating with the investigation.

36. We must also add that no cogent material has been brought to our notice on behalf of the SFIO to urge that, the applicants are a flight risk or that they will misuse the liberty granted to them by this Court.

37. We must also add that, the applicants have deep roots in the society and belong to a respectable business family and have no criminal antecedents. Consequently, there is no possibility of their absconding and not being available for further investigation.

38. In view of the foregoing discussion, the issues framed in the present applications are answered in favour of the applicants and against the official respondents. We have already hereinbefore expressed our considered view that, the facts and circumstances of the present case do not admit the continued unlawful detention of the applicants.

39. In view of the foregoing, the present application is allowed. The applicants shall be released on interim bail, during the pendency of the accompanying petitions, on their furnishing a personal bond in the sum of Rs.5,00,000/- each with two local sureties each of the like amount to the satisfaction of the trial court subject to the following conditions:-

(i) That the applicants shall not leave the territorial jurisdiction of

(ii) That the applicants shall co-operate with the investigation and appear before the concerned Investigating Officer, SFIO, as and when called upon to do so, with sufficient prior notice in writing.

(iii) That the applicants are directed to surrender their Passports with the concerned Investigating Officer, SFIO in this case, forthwith.

40. With the above directions, the applications stand disposed of.

41. A copy of this order be given dasti under the signature of Court Master to counsel for the parties.

SIDDHARTH MRIDUL (JUDGE)

SANGITA DHINGRA SEHGAL (JUDGE) DECEMBER 20, 2018 dn