India: White-Collar Crimes News Updates

DATE

DETAILS OF THE RECENT DEVELOPMENTS

CASES

09.01.2023

The Petitioners, Chanda Kochar and Deepak Kochar filed petitions under Article 226 of the Constitution of India, 1950 and under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) seeking: a) quashing of FIR registered under Sections 120B and 420 of the Indian Penal Code, 1860 b) quashing of their illegal arrest and c) quashing of remand orders passed by the CBI Court. The petitions were being heard only for considering whether the arrest of the petitioners was illegal, i.e., contrary to the constitutional mandate and statutory provisions.

The Bombay High Court observed that arrest may be authorised only if the concerned officer has “reason to believe” and there is “satisfaction qua an arrest” that the person has committed an offence.

The Hon'ble Court further noted that there was not satisfactory compliance with Section 41A of the CrPC as, in the arrest memo, in the column, “grounds of arrest” it is merely stated that “the accused is named in FIR. She has been not cooperating and disclosing true and full facts of the Case.” The Court considered this to be prima facie contrary to the facts on record and in violation of the guidelines laid down in Arnesh Kumar v. State of Bihar as well as Section 41(1)(b), Section 41-A and Section 60-A of CrPC.

Therefore, the Bombay High Court ordered the release of the petitioners from judicial custody in the said fraud case since the arrest was not made in conformity with mandatory provisions of the CrPC by the CBI.

Chanda Deepak Kochar v. Central Bureau Investigation, Criminal Writ Petition (Stamp) No. 22494 of 2022

[Bombay High Court]

09.01.2023

The Supreme Court reserved its orders in the admission hearing of a PIL that sought chargesheets filed by the police and other investigative agencies to be made public for easy access by the general public.

The petitioners relied on Youth Bar Association of India v. Union of India wherein the Supreme Court had directed uploading of FIRs on the police or state government website (unless the matter is sensitive) within 24 hours of its registration.

It was also argued that while FIRs are based on unsubstantiated allegations, chargesheets are filed only after the investigation has been completed by the agency and are documents of a public nature since trial is conducted on its basis in an “open court.” It was also argued that the chargesheet, unlike an FIR, was a public document under the ambit of Section 74 of the Indian Evidence Act, 1872 (the Act) which required mandatory public disclosure under Section 76 of the Act.

The bench orally observed that if chargesheets are made available to public, they are likely to be misused. The court expressed its reservations about passing blanket directions to investigating agencies such as the Enforcement Directorate, in respect of which specific observations had been made in Vijay Madanlal Chaudhary observing that ECIR could not be provided as a matter of right, even to the accused.

The Court proceeded to reserve its order for considering the detailed submissions and examining the precedents.

Saurav Das v. Union of India, W.P.(C) No. 1126/2022

[Supreme Court]

12.01.2023

The applicant had filed the Anticipatory Bail Application in Special CBI Case No. 1233 of 2021, registered for the offence punishable under Sections 11, 12 and 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 and under section 120-B and 420 of the Indian Penal Code, 1860. The case pertained to the alleged loan scam involving promoters of Yes Bank and the Avantha Realty Group.

The Bail Application had been filed after completion of investigation and filing of chargesheet. The primary objection of the CBI to grant of bail was that Anticipatory Bail is not maintainable after filing of the chargesheet since there is no imminent threat of arrest once the investigation is complete.

The High Court while relying on the judgment of the Supreme Court in Bharat Chaudhary v. State of Bihar held that mere filing of chargesheet cannot act as a prohibition against grant of anticipatory bail.

Bindu Rana Kapoor v. Union of India, ABA No. 478 of 2022

[Bombay High Court]

13.01.2023

The petitioner had approached the Hon'ble High Court under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) seeking quashing of multiple FIRs registered against him based on the same incident. The Petitioner had sought quashing of 10 out of 11 FIRs registered against him, on the ground of harassment and multiplicity of proceedings aimed at settling political scores.

The Hon'ble Bombay High Court while directing the investigating agency not to take any coercive steps against the petitioner, observed orally that the petitioner would not be required to separately take bail in all the FIRs while the High Court is examining whether prima facie the 10 subsequent FIRs based on the same complaint would be maintainable. The Court further directed the State to seek instructions as to whether they would close the proceedings in all the other cases except the first FIR.

Anand Paranjape v. State of Maharashtra, Crl. W.P. (Stamp) No. 22529 of 2022

[Bombay High Court]

13.01.2023

A petition was filed in the Kerala High Court under Section 482 of the Code of Criminal Procedure, 1973 (CrPC) to quash an order passed by a Special Judicial Magistrate First-Class in a complaint under Section 138 of the Negotiable Instruments Act, 1881 (NI Act), dismissing the complaint filed by the Complainant. The Magistrate had dismissed the complaint on the ground that the fact that the complainant was represented by his power of attorney holder had been pointed out in the address portion of the complaint, but there was no mention of the same in the body of the complaint. The court had further held that the power of attorney holder had failed to verify the complaint.

The Hon'ble High Court observed that even though the complaint under Section 138 NI Act through the power of attorney holder is perfectly legal and valid, the power of attorney holder can depose and verify on oath before the court in order to prove the contents of the complaint, only when he has witnessed the transaction as an agent of the payee/holder in due course or possesses knowledge regarding the said transactions. It is required that the complainant makes specific assertion as to the knowledge of the power of attorney holder.

The Court further observed that the Lower Court took cognizance of the complaint acting on the affidavit filed by the power of attorney holder under Section 145 NI Act, however there was no averment in the complaint that the power of attorney holder had witnessed transactions as an agent of the payee in due course. The court allowed remanding the complaint back to the pre-cognizance stage with liberty to the original complainant to file an affidavit under Section 145 NI Act in his personal capacity.

Razak Mether v. State of Kerala and Anr., Crl.M.C. No. 8287 of 2022

[Kerala High Court]