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Synopsis

The Supreme Court has said an accused cannot claim default bail on the ground that the investigation against other accused was still pending and the charge sheet filed against him within the stipulated time is incomplete or piecemeal.

Accordingly, top court on January 24, 2023 cancelled the default bail granted to DHFL's chairman cum managing director Kapil Wadhawan and his brother director Dheeraj Wadhawan in a case investigated by the CBI for allegedly inducing a consortium of banks to sanction loans aggregating to Rs 42,000 Cr.

"We have no hesitation in holding that the charge sheet having been filed against the respondents-accused within the prescribed time limit and the cognizance having been taken by the Special Court of the offences allegedly committed by them, the respondents could not have claimed the statutory right of default bail under Section 167(2) on the ground that the investigation qua other accused was pending," a bench of Justices Bela M Trivedi and Ujjal Bhuyan said.

Court has ordered both the accused to be taken into custody if not released on default bail.

Upon an appeal filed by the CBI, the bench set aside the Delhi High Court as well as the special court's orders for having committed serious error of law in disregarding the legal position enunciated and settled by this court.

"The benefit of proviso appended to sub-section (2) of Section 167 of the Code would be available to the offender only when a charge sheet is not filed and the investigation is kept pending against him. Once however, a charge sheet is filed, the said right ceases," the bench said.

It further said the right of the investigating officer to pray for further investigation in terms of sub-section (8) of Section 173 is not taken away only because a charge sheet is filed under against the accused.

Also, the bench said that even if all the documents are not filed along with the charge sheet, that reason by itself would not invalidate or vitiate the charge sheet. It is also well settled that the court takes cognizance of the offence and not the offender. 

"Once from the material produced along with the charge sheet, the court is satisfied about the commission of an offence and takes cognizance of the offence allegedly committed by the accused, it is immaterial whether the further investigation in terms of Section 173(8) is pending or not. The pendency of the further investigation qua the other accused or for production of some documents not available at the time of filing of charge sheet would neither vitiate the charge sheet, nor would it entitle the accused to claim right to get default bail on the ground that the charge sheet was an incomplete charge sheet or that the charge sheet was not filed in terms of Section 173(2) of CrPC," the bench said.

Respondent-accused sought default or statutory bail on the ground that the charge sheet filed against them was an incomplete as the investigation qua other accused were pending.

The CBI having kept the investigation open qua other respondents, the ingredients of Section 173 CrPC could not be said to have been complied with and therefore the report/ charge sheet could not be said to be a complete charge sheet, they said. 

It is immaterial whether cognizance has been taken by the court or not. The charge sheet filed against the respondents and others was a subterfuge or ruse to defeat their indefeasible right conferred under Section 167(2) CrPC, they contended.

Citing the Constitution Bench judgement in 'K Veeraswami Vs Union of India and Others’ (1991), the bench said there remains no shadow of doubt that the statutory requirement of the report under Section 173 (2) would be complied with if the various details prescribed therein are included in the report. 

The bench further pointed out the report under Section 173 is an intimation to the court that upon investigation into the cognizable offence, the investigating officer has been able to procure sufficient evidence for the court to inquire into the offence and the necessary information is being sent to the court. The report is complete if it is accompanied with all the documents and statements of witnesses as required by Section 175 (5). It is not necessary that all the details of the offence must be stated.

Born the accused were arrested in connection with the FIR on July 19, 2022, and the charge sheet running into about 900 pages under Section 173(2) was filed by the CBI against the respondents along with other 73 accused on October 15, 2022. 

The Special Court had granted the accused default bail on December 3, 2022 on the ground that the charge sheet was incomplete and piecemeal. The High Court upheld the order on May 30, 2023.

CBI had lodged the FIR on June 20, 2022 on the basis of the complaint lodged by Vipin Kumar Shukla, DGM, Union Bank of India for the offences punishable under Section 120-B r/w Section 409, 420 and 477A of IPC and Section 13(2) r/w Section 13(1)(d) of PC Act, 1988 against Dewan Housing Finance Corporation Ltd (DHFL) and 12 other accused persons/companies. 

It was alleged that the accused siphoned off and misappropriated funds by falsifying the books of account of DHFL and deliberately and dishonestly defaulted on repayment of the legitimate dues of the consortium of banks, and thereby caused a wrongful loss of Rs 34,000 crores during the period of January, 2010 to December, 2019.

Case Title: Central Bureau of Investigation vs. Kapil Wadhawan & Anr.