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

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A 212 is purely directory. Even after the expiry of such stipulated period, the mandate in favour of the SFIO and the assignment of investigation under sub-Section (1) would not come to an end. The only logical end as contemplated is after completion of investigation when a final report or “investigation report” is submitted in terms of sub-Section (12) of Section 212. It cannot therefore be said that in the instant case the mandate came to an end on 19.09.2018 and the arrest effected on 10.12.2018 under the orders passed by Director, SFIO was in any way illegal or unauthorised by law. In any case, extension was granted in the present case by the Central Government on 14.12.2018. But that is completely besides the point since the original arrest itself was not in any way illegal. In our considered view, the High Court completely erred in proceeding on that premise and in passing the order under appeal.

31Copy pinpoint31. These appeals therefore deserve to be allowed and the Order under appeal must be set aside. Since the writ petitioners were directed to be released on bail, by way of interim relief, we direct as under:- D (a) The Order dated 20.12.2018 passed by the High Court in W.P. (Crl.) No.3842 of 2018 and in W.P. (Crl.) No.3843 of 2018 is set aside. (b) The writ petitioners namely Rahul Modi and Mukesh Modi are directed to surrender and remain present on 01.04.2019 at 11.00 E a.m. before the Special Court, Gurugram. The Special Court may then consider the matter on merits and whether the accused are required to be remanded to custody. (c) In case, said writ petitioners do not appear on the day and at the time stipulated above, the personal bonds executed by them and the F surety bonds shall stand forfeited and the appellant shall be at liberty to arrest said writ petitioners. (d) The writ petitioners shall file affidavits of compliance in this Court by 08.04.2019.

32Copy pinpoint32. Transfer Petition (Crl.) No.35 of 2019 was filed by Serious G Fraud Investigation Office (SFIO) and Deputy Director, SFIO (Original Respondents seeking transfer of Writ Petition (Crl.) No.3960 of 2018. Said writ petition preferred on 21.12.2018 by Vivek Harivyasi claimed similar relief as was granted by the High Court in Writ Petition (Crl) Nos.3842 and 3843 of 2018 on 21.12.2018. However, before the writ H

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petition could be taken up, the decision of the High Court dated 20.12.2018 A was put in challenge before this Court and Transfer Petition (Crl.) No.35 of 2019 seeking transfer of Writ Petition (Crl.) No.3960 of 2018 was also preferred.

33Copy pinpoint33. On 08.03.2019 learned counsel appearing for Vivek Harivyasi submitted that his client would prefer an application for bail before the B concerned court and following direction was passed by this Court: “The respondent No.1 in T.P. (Crl.) No.35/20-19 may prefer application for bail and if such an application is preferred, the concerned court in question may consider the matter on merits without being influenced by any observations in the order of the C High Court, impugned herein.

34Copy pinpoint34. In view of our above decision in Criminal Appeals arising from Special Leave Petition (Crl.) Nos.94-95 of 2019, no separate orders are called for in the transfer petition. The transfer petition is, therefore, disposed of. D

35Copy pinpoint35. In the end, we must state that we have not and shall not be taken to have expressed any opinion on merits of the matter which shall be gone into independently by the concerned courts.

E ABHAY MANOHAR SAPRE, J.

1. I have had the advantage of going through an elaborate, well considered and scholarly draft judgment proposed by my esteemed brother Justice Uday Umesh Lalit.

2. I entirely agree with the reasoning and the conclusion, which my erudite brother has drawn, which are based on remarkably articulate process of reasoning. However, having regard to the nature of the controversy, I wish to add a few words of mine.

3. One of the questions which fell for consideration in these appeals and was ably argued at length by the learned senior counsel for both the parties was in relation to the scope, extent and the purpose of Section 212 of the Companies Act, 2013 (hereinafter referred to as the “Act”) and, in particular, whether the compliance of sub-section (3) of Section 212 of the Act is mandatory or directory and, if so, why.

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A 4. As rightly reasoned out by my learned brother Lalit, J., having regard to the scheme of the Act underlined in Chapter XIV (Sections 206 to 229 of the Act) dealing with the matters relating to inspection, inquiry and investigation of the companies in juxtaposition with Chapter XXIX which prescribes the punishment/penalties for commission of various offences specified under the Act, the compliance of sub-section B (3) of Section 212 of the Act is essentially directory.

5. If the submission of the learned counsel for the respondents (writ petitioners) that the compliance of sub-section (3) of Section 212 of the Act in relation to the submission of the report be held mandatory is accepted (which I am afraid, I cannot accept) in our view, the very purpose of enacting Section 212 of the Act would get defeated and will become nugatory.

6. Indeed, when I apply the well-known principle of purposive interpretation while interpreting the relevant provisions in juxtaposition and hold that sub-section (3) of Section 212 of the Act is directory in nature, it serves the legislative intent for which Chapter XXIX is enacted.

7. I, therefore, agree with the reasoning and the conclusion arrived at by brother Justice Lalit on the interpretation of sub-section (3) of Section 212 of the Act.

E 8. In the light of what is held above, the other arguments of learned counsel for the respondents do not survive for consideration.

9. So far as the other issues are concerned, brother Lalit, J. has dealt with them succinctly. I entirely agree with him.

Nidhi Jain Matters disposed of.