SERIOUS FRAUD INVESTIGATION OFFICE versus RAHUL MODI AND ANR. ETC.

Citation: [2019] 5 S.C.R. 91 · Decided: 27-03-2019 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Disposed off

Cited by 4 judgment(s) · cites 5 · see the full citation network in Lexace

Judgment (excerpt)

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SERIOUS FRAUD INVESTIGATION OFFICE
v.
RAHUL MODI AND ANR. ETC.
(Criminal Appeal Nos. 538-539 of 2019)
MARCH 27, 2019
[ABHAY MANOHAR SAPRE AND
UDAY UMESH LALIT, JJ.]
Companies Act, 2013 –  ss. 212(1), (2) and (3) –
Investigation into affairs of Company by Serious Fraud
Investigation Office – Period within which report is contemplated
to be submitted to the Central Government under sub-section (3),
mandatory or directory – On facts, SIFO directed to investigate
into the affairs of certain entities and furnish the report within the
period of three months – However, petitioners arrested by SIFO
after the expiry of the  specified period for investigation u/s. 213(2)
– Writ petition by  petitioners seeking declaration that investigation
carried out after the specified period was illegal and prayed for
writ of habeas  corpus directing release from illegal arrest –
Thereafter, the  petitioners released on bail – On appeal, held: Under
sub-Section (3) where the investigation is so assigned by the
Central  Government to SFIO, the investigation must be conducted
in the manner and in accordance with the procedure provided in
the Chapter and a report has to be submitted to the Central
Government within such period as may be specified – Section 212(3)
by itself does not lay down any fixed period within which the report
has to be submitted – Even under sub-Section (12) which is
regarding “investigation report”, there is no stipulation of any
period – Such a report is to be submitted “on completion of the
investigation” – Statute has not prescribed any period for
completion of investigation – in view thereof, prescription of
period within which a report is to be submitted by SFIO u/s. 212(3)
is not for completion of period of investigation and on the expiry of
that period the mandate in favour of SFIO does not come to an end
– Prescription of period within which a report has to be submitted
to the Central Government u/s.212(3) is purely directory – Thus, it
cannot be said that the mandate came to an end on expiry of three
      [2019] 5 S.C.R. 91
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SUPREME COURT REPORTS
[2019] 5 S.C.R.
months and the arrest effected thereafter, was in any way illegal or
unauthorised by law – Arrest was effected when the period had
expired but by the time the High Court entertained the petition and
passed the order, the orders of remand were passed by the Judicial
Magistrate as well as the Special Court, Gurugram as also order of
extension was passed by the Central Government – Thus, the High
Court was not justified in directing release of the accused – Order
passed by the High Court is set aside.
Interpretation of statutes: Provisions, when mandatory or
directory – Held: While laying down a particular procedure if no
negative or adverse consequences are contemplated for non-
adherence, relevant provision is normally not taken to be mandatory
and is considered to be purely directory - Provision to be seen in
the context in which it occurs in the Statute.
Allowing the appeals and disposing of the transfer petition,
the Court
Per Uday Umesh Lalit, J:
HELD: 1.1 In Habeas Corpus proceedings a Court is to
have regard to the legality or otherwise of the detention at the
time of the return and not with reference to the institution of the
proceedings. The act of directing remand of an accused is held to
be a judicial function and the challenge to the order of remand is
not to be entertained in a habeas corpus petition. In the instant
case, as on the date when the matter was considered by the High
Court and the Order was passed by it, not only were there
orders of remand passed by the Judicial Magistrate as well as
the Special Court, Gurugram but there was also an order of
extension passed by the Central Government on 14.12.2018. The
legality, validity and correctness of the order or remand could
have been challenged by the original Writ Petitioners by filing
appropriate proceedings. However, they did not raise such
challenge before the competent Appellate or Revisional Forum.
The orders of remand passed by the Judicial Magistrate and the
Special Court, Gurugram had dealt with merits of the matter and
whether continued detention of the accused was justified or not.
After going into the relevant issues on merits, the accused were
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remanded to further police custody. These orders were not put
in challenge before the High Court. It was, therefore, not open
to the High Court to entertain challenge with rega

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