SC Quashes Order Granting Bail to Rahul Modi Passed by Punjab & Haryana High Court

Appeal filed against the order dated 31.05.2019 passed by the High Court of Punjab and Haryana granting bail to Respondents is assaulted in this Appeal by the Serious Fraud Investigation Office (“SFIO”). 

Facts 

• An investigation was directed to be conducted into the affairs of Adarsh Group of Companies and LLPs by the Central Government in exercise of the powers conferred under Section 212(1)(c) of the Companies Act, 2013 and subsections (2) and (3)(c)(i) of Section 43 of the Limited Liability Partnership Act, 2008.
• Respondents were arrested pursuant to the approval granted by the Director, SFIO on 10.12.2018. 
• On 20.12.2018, the High Court of Delhi directed interim release of Respondents in Writ Petition (Criminal) Nos. 3842 of 2018 and 3843 of 2018. The order of the High Court was set aside by this Court on 27.03.2019, following which Respondents surrendered on 01.04.2019.
• Criminal complaint  was filed under Section 439(2) with Section 212(15) of the Companies Act, 2013  before the Special Court, Gurugram.
• The High Court considered the regular bail applications filed by Respondents on 31.05.2019 and directed their release on bail on the ground that they were entitled to statutory bail. 

Findings 

This Court restored the order of the trial court while setting aside the judgment of the High Court, by holding that the accused is deemed to have “availed of” or enforced his right to be released on default bail, once application for bail has been filed under Section 167(2) on expiry of the stipulated time period. Taking into account the fact that before the expiry of 180 days, no charge-sheet had been submitted nor any application filed seeking extension of time to investigate, this Court held that the appellant was entitled to be released on statutory bail notwithstanding the subsequent filing of an additional complaint. The point that was decided in the said case was that the filing of an additional complaint after the accused has availed his right to be released on default bail, should not deter the courts from enforcing this indefeasible right, if the charge-sheet was not filed before the expiry of the statutory period. 

Judgment

It is held by the Supreme Court that the conundrum relating to the custody of the accused after the expiry of 60 days has also been dealt with by this Court in Bhikamchand Jain (supra). It was made clear that the accused remains in custody of the Magistrate till cognizance is taken by the relevant court. As the issue that arises for consideration in this case is squarely covered by the judgement in Bhikamchand Jain (supra), the order passed by the High Court on 31.05.2019 is hereby set aside.

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