While setting the record straight and not leaving even a scintilla of doubt in the mind of anyone, the Delhi High Court has in a most learned, laudable, logical, landmark and latest judgment titled Central Bureau of Investigation vs Kapil Wadhawan & Anr in CRL.M.C. 6544/2022, CRL.M.A. 25503/2022 and cited in 2023 LiveLaw (Del) 473 that was reserved on May 8 and then finally pronounced on May 30, 2023 has minced just no words to hold unambiguously that the right to statutory bail of an accused cannot be defeated merely because police report has been filed by the investigating agency even when investigation in the case is incomplete. The Single Judge Bench of Hon’ble Mr Justice Dinesh Kumar Sharma clearly propounded that, “The police has a right to conduct further investigation. However, at the same time, the investigating agency under the garb of further investigation cannot be allowed to file the police report without completion of investigation, only to defeat the right of statutory bail. The basic concept is that to fulfill the provision of Section 167, the charge sheet has to be filed upon completion of investigation.” It must be noted that the Court made the observations while it dismissed the CBI’s plea challenging the Trial Court’s order granting default bail to former Dewan Housing Finance Corporation Limited (DHFL) promoters Kapil Wadhawan and his brother Dheeraj in the alleged bank loan scam case.
Preface
At the very outset, this brief, brilliant and balanced judgment authored by the Single Judge Bench of Hon’ble Mr Justice Dinesh Kumar Sharma sets the ball in motion by first and foremost putting forth in para 1 that, “This is a petition under sections 482 r/w 439 (2) Cr.P.C moved on behalf of petitioner CBI seeking quashing and/or cancellation of order dated 03.12.2022 passed by Ld. Spl. Judge, P.C. Act, Rouse Avenue District Courts, New Delhi, whereby the respondents no. 1 & 2 have been granted default bail under Section 167 (2) Cr.P.C.”
To put things in perspective, the Bench envisages in para 2 that, “Allegations in brief are that M/s Dewan Housing Finance Corporation Ltd. (hereinafter referred to as DHFL), Kapil Wadhawan, the then Chairman & MD of DHFL, Dheeraj Wadhawan, Director of DHFL, Shri Sudhakar Shetty, M/s Amaryllis Realtors LLP (ARLLP), M/s Gulmarg Realtors LLP (GRLLP), M/s Skylark Buildcon Pvt. Ltd., M/s Darshan Developers Pvt. Ltd., M/s Sigtia Constructions Pvt. Ltd., M/s Creatoz Builders Pvt. Ltd., M/s Township Developers Pvt. Ltd., M/s Shishir Reality Pvt. Ltd., M/s Sunblink Real Estate Pvt. Ltd. and other unknown persons including public servants, entered into a criminal conspiracy thereby cheating and inducing a consortium of 17 banks led by Union Bank of India (UBI) to sanction huge loans aggregating to Rs. 42,000 Crores approx. The respondents accused siphoned off, and misappropriated a significant portion of the said funds by falsifying the books of account of DHFL and deliberately and dishonestly defaulted on repayment of the legitimate dues, thereby causing a wrongful loss of Rs. 34,000 Crores approx. to the consortium lenders during the periods January, 2010 to December, 2019.”
As things stand, the Bench specifies in para 3 that, “Basis the said allegations, the present FIR- RC 2242022A0001 u/s 120B, 409, 420, 477A of IPC, 13(2) r/w 13(1)(d) of PC Act, 1988 (as amended in 2018) was registered by the Petitioner CBI, AC-VI/SIT, New Delhi on 20.06.2022 against fourteen persons/entities including M/s Dewan Housing Finance Corporation Limited (DHFL), its Chairman cum MD namely Kapil Wadhawan who is respondent No.1 herein and its director at the relevant time namely Dheeraj Wadhawan respondent No. 2 herein and certain others. Respondents Kapil Wadhawan and Dheeraj Wadhawan were formally arrested by the Petitioner-CBI in connection with the instant case on 19.07.2022. Thereafter, respondents Kapil and Dheeraj Wadhawan were remanded to JC on 30.07.2022.”
As it turned out, the Bench then enunciates explicitly in para 4 that, “Subsequently, chargesheet u/s 173 Cr.P.C. was filed before the Ld. Special Judge (CBI), New Delhi on 15.10.2022 against eighteen individuals including Respondents and fifty-seven companies/entities for commission of offences punishable u/s 120B r/w 206, 409, 411, 420, 424, 465, 468 & 477A of IPC and u/s 13(2) r/w 13(1)(d) of PC Act, 1988 and substantive offences thereof. The chargesheet was filed within the expiry of the stipulated time of 90 days.”
As we see, the Bench discloses in para 6 that, “Respondents Kapil Wadhawan and Dheeraj Wadhawan filed an application u/s 167 (2) Cr. PC before the Court of Ld. Special Judge, CBI-08, RAC, New Delhi on 29.10.2022.”
Briefly stated, the Bench propounds in para 8 that, “Vide impugned order dated 03.12.2022, the Ld. Special Judge (PC Act) granted statutory bail under Section 167 (2) Cr.P.C to the Respondent nos. 1 and 2 holding that the chargesheet filed although within stipulated time is incomplete and hence Respondents were entitled to mandatory bail as per law.”
Needless to say, the Bench then states in para 9 that, “Aggrieved thus, the petitioner CBI, has impugned the said order as the Ld. Spl. Judge granted default bail to respondents herein without appreciating the correct standpoint of law. CBI has primarily challenged the said order on the ground that the right to claim default bail u/s 167(2) Cr.P.C. can be invoked only if the chargesheet is not filed within the stipulated time. However once chargesheet is filed, the accused is no longer entitled to default bail under Section 167 Cr.P.C. It is also the contention of Petitioner CBI that moreover, a chargesheet is a final report within the meaning of Section 173(2) Cr.P.C. if the same is filed so as to enable the Court to apply its judicial mind as to whether cognizance of the offence thereupon should be taken or not. The petitioner thus contends that the chargesheet in the present case was complete and the respondents were not entitled to default bail. Hence the present petition.”
Most remarkably, the Bench expounds in para 31 that, “The Court is very clear in its mind that merely because in the charge sheet if the investigating agency has stated they want to conduct further investigation, the charge sheet cannot be termed as a preliminary charge sheet. The police has a right to conduct further investigation. However, at the same time, the investigating agency under the garb of further investigation cannot be allowed to file the police report without completion of investigation, only to defeat the right of statutory bail. The basic concept is that to fulfil the provision of Section 167, the charge sheet has to be filed upon completion of investigation. It may be possible that investigation against the persons who are charge sheeted are complete and further investigation qua other accused persons is continuing, then the persons against whom the investigation is complete cannot be extended the benefit of the statutory bail. But in the present case as has been shown by the learned defence counsels during the course of arguments that substantial investigation even qua the present accused persons is incomplete. The question to be considered is that whether the material evidence having been placed on record by CBI against the present respondents/accused persons is sufficient to conduct the trial in respect of the offences alleged against him. The offence alleged against the accused persons are very serious and very high in magnitude. The material collected by the investigating agency so far, to the mind of this Court falls too short. Rather, if, this report is considered to be a complete investigation qua the accused persons, the investigating agency will suffer a lot. The Court as a guardian of the administration of justice has to ensure that there is strict compliance of the provisions. The investigating agency in its anxiety of keeping the accused persons in custody may take a plea that investigation is complete. However, the best judge in this regard should be the trial Court.”
Equally remarkable is what is then pointed out in para 32 that, “This Court considers that the learned Trial has rightly made an observation that now the time has come when the legislature will have to make certain provisions where the period of investigation for such serious offences have to be extended subject to certain limitations and restrictions. It has repeatedly been held that merely because cognizance has been taken, the right to statutory bail cannot be extended or defeated. The basic parameter is that the charge sheet has been filed after the completion of the investigation or not. We have not to go by the label of the charge sheet but to examine whether actually investigation has been completed or not. If the investigation is not completed then merely because the report has been filed, the right of statutory bail cannot be defeated. Certainly it depends upon the facts of each case and no fixed formula can be laid down in this regard.”
Most fundamentally, the Bench sought to clearly hold in para 33 that, “A perusal of the various judgments cited by the CBI and defence counsel reflects the emphasis on “sufficient evidence”. Thus in the report filed by the investigating agency there should be sufficient evidence to bring home the guilt of the accused. The purpose should not be merely to detain the accused. The purpose is that if an offence has been committed it must reach to its logical end. The detention during investigation or trial cannot be turned into a punitive detention. It is also a settled proposition that further investigation can be conducted only after the investigation is complete.”
Most significantly, the Bench underscores in para 35 stating that, “It is pertinent to mention here that neither of the parties have discussed the merits of the case. It is also important to mention that the learned ASJ has passed a detailed and reasoned order inter alia holding that the charge sheet so filed was incomplete. I consider that there is no ground to interfere with or alter this opinion. It is a settled proposition that it is the jurisdiction of the Magistrate/learned Special Judge alone to decide that whether the material placed by the prosecution along with the report (charge sheet) was having sufficient evidence or not. Since the learned Special Judge has recorded a reasoned and conscious view that the charge sheet so filed on the face of it was incomplete, therefore this Court finds it difficult to interfere with the same. It is also pertinent to mention that though the cognizance has been taken in this case, which to the mind of this Court will not make any difference, in view of the fact that the charge sheet itself has been held to be incomplete. But it is imperative to mention that despite repeated directions of expeditious disposal of default bail applications by the superior Courts, in the present case, the application for default bail was filed before the learned Special Judge on 29.10.2022 and was decided on 03.12.2022. The cognizance was taken during the interregnum period. This Court is of the considered opinion that the charge sheet filed by the CBI in the present case is an incomplete/piecemeal charge sheet and terming the same as a final report under section 173 (2) Cr.P.C. merely to ruse the statutory and fundamental right of default bail to the accused shall negate the provision under Section 167 Cr. PC and will also be against the mandate of Article 21 of the Constitution of India.”
Most forthrightly, the Bench mandates in para 36 that, “I consider that the order passed by learned Sessions Judge is based on good reasoning and logic. There is no illegality or perversity in the order of the learned Sessions Judge. I do not find any force in the arguments of learned SPP that once the charge sheet had been filed qua the respondents, the right of the statutory bail could not have been granted to them. The Court is the guardian of the rights bestowed upon the accused persons. Strict compliance of the procedure is necessary to protect the fundamental rights of an individual. Merely, filing of the chargesheet, whether incomplete or piecemeal cannot defeat the basic purpose of Section 167 (2) Cr. P.C. The Court at this stage, also cannot be expected to minutely appreciate the evidence, so as to ascertain whether the same is “sufficient evidence or not”. On the face of it, as reflected by the learned senior counsels, a major part of the fraud is yet to be investigated. It is also a settled proposition that in criminal law if two views are possible the Courts should favour an interpretation that safeguards and protects the rights of the accused. The statement of objects and reasons of the Code plays a significant role in guiding its interpretation. Section 167 (2) Cr.P.C. must be interpreted bearing in mind the three-fold objectives expressed by the legislature namely ensuring a fair trial, expeditious investigation and trial, and establishing a rationalized procedure that protects the interests of the indigent strata of society. These objects essentially serve as components of the overarching fundamental right guaranteed under Article 21 of the Constitution of India.”
Adding more to it, the Bench propounds in para 37 that, “This Court has examined all the judgements cited by both the parties. First and foremost, what needs to be borne in mind is that the instant case has to be decided on the facts and circumstances of the present case. However, as highlighted by the learned Special Judge in its order dated 03.12.2022, it is made clear, that this Court too, has not gone into the merits of the case and no expression made herein shall tantamount to be an expression of the merits of the case.”
Finally, the Bench concludes by directing in para 38 that, “Accordingly, the order dated 03.12.2022 passed by Ld. Special Judge, P.C. Act, Rouse Avenue District Courts, New Delhi, is upheld. The present petition is dismissed.”
In brief, we thus see quite distinctly that Hon’ble Mr Justice Dinesh Kumar Sharma of the Delhi High Court has most commendably, courageously and convincingly held point blank that the investigating agency can’t defeat right of statutory bail by filing police report without completing investigation. It thus merits no reiteration that it is the bounden duty of the investigating agency to adhere in totality to what the Delhi High Court has held so explicitly, elegantly and eloquently in this leading case. No denying or disputing it!
Sanjeev Sirohi
