1997 JTR(SC) 1556
1998 1 AICLR 81 ; 1998 AIR(SC) 696 ; 1998 AIR(SCW) 361 ; 1998 1 ALD(Cri)(SC) 86 ; 1998 36 AllCriC 150 ; 1998 91 CompCas 413 ; 1997 4 Crimes(SC) 299 ; 1998 CrLJ 841 ; 1998 1 EastCrC(SC) 492 ; 1997 9 JT 379 ; 1998 1 RCR(Cri) 354 ; 1997 7 Scale 258 ; 1998 1 SCC 52 ; 1998 SCC(Cri) 261 ; 1997 SCR 566 ; 1998 KHC 633 ; 1997 2 KLT(Online) 1150 ; 1997 10 Supreme 62
1997(10) Supreme 62
SUPREME COURT OF INDIA
(From Calcutta High Court)
M.K. Mukherjee & K.T. Thomas, JJ.
Dukhishyam Benupani, Asstt. Director, Enforcement Directorate (FERA) -Appellant
versus
Arun Kumar Bajoria -Respondent
Criminal Appeal No. 1116 of 1997
(Arising out of Special Leave Petition (Crl.) No. 3015 of 1997)
Decided on 28-11-1997
Counsel for the Parties :
For the Appellant, S.B. Wad, Sr. Advocate, D. Roy Chowdhary, (Wasim A. Qadri,) Advocate for V.K. Verma, Advocate/Advocates.
For the Respondent, R.K. Jain, Sr. Advocate, Utpal Mazumdar, Tripurari Ray, Ms. Sarla Chandra, P. Ghose, Dr. Laxmi Shastri, Advocates.
IMPORTANT POINT
A blanket order fully insulating a person from arrest would make his interrogation a mere ritual and it is not the function of the court to monitor investigation processes so long as such investigation does not transgress any provision of law.
Act
Referred
:CONSTITUTION OF INDIA : Art.136
CRIMINAL PROCEDURE CODE : S.439, S.160, S.439(2), S.167, S.161, S.438
(A) The Enforcement Directorate, acting under the provisions of the Foreign Exchange Regulation Act, initiated proceedings and issued summons to the respondent under Section 40 to appear for interrogation regarding a serious fraud involving alleged FERA violations. The respondent challenged the summons through a writ petition, and when interim relief was denied, filed an anticipatory bail application under Section 438 of the Code of Criminal Procedure before the City Sessions Court, which granted an ad-interim bail order. This order was challenged by the prosecution before the High Court under Section 439(2) of the Code, and although a single judge directed the respondent to appear for interrogation, the appellate Division Bench subsequently passed an order interfering with the investigation by fixing dates and conditions for interrogation while restraining arrest. The Directorate then invoked Article 136 of the Constitution by means of a Special Leave Petition to this court, invoking the supervisory jurisdiction under Section 439(2) of the Code to address the alleged overreach by the High Bench. The court also examined the powers under Sections 160, 161, and 167 of the Code relating to the investigation and the duty of the court to avoid trenching upon the functions of the statutory authorities.
(B) The core legal principles affirmed are that a court must not interfere with or supervise the investigative process of a statutory authority so long as the investigation remains lawful; pre-arrest bail is to be granted sparingly and with extreme caution, especially in serious cases involving large sums; the court must consider the material on record including prior denials of relief; and an appellate court has residual powers to interfere when a lower court erroneously grants bail in a manner that impedes the course of justice.
Facts of the case:
The respondent was under ongoing bail in a separate FERA case involving a sum of 37 crores and had previously been arrested in 1990. The Enforcement Directorate sought to interrogate him in connection with fresh allegations and issued summons under Section 40 of FERA. After the respondent challenged the summons without success, he obtained an anticipatory bail order from the City Sessions Court on 25.4.1997 with conditions. The High Court intervened via revision and then passed an impugned order on 20.6.1997 directing the interrogations at a fixed venue and time while restraining arrest, despite the prosecution's claims that this would severely impair the investigation. The respondent had a history of evading interrogation and the High Court had earlier refused to halt the proceedings.
Findings of Court:
The Division Bench was found to have overstepped its jurisdiction by effectively taking over the investigative process, fixing dates, and issuing a blanket order against arrest, thereby creating a risk of turning the interrogation into a mere ritual. The court noted that the respondent had willfully eluded questioning and that the High Court had repeatedly denied interim relief in the same case. The court held that the seriousness of the allegations and the substantial amount involved necessitated a swift and unimpeded investigation, and that the pre-arrest bail order failed to consider these critical aspects.
Issues:
Whether a High Court Division Bench can fix dates, conditions, and supervise the interrogation of a person accused of serious FERA offences while restraining his arrest; whether pre-arrest bail can be granted in a case involving huge sums and prior instances of evasion; and whether the court should interfere with the investigative functions of a statutory authority.
Ratio Decidendi:
When the investigation involves serious allegations and large sums, the court must not encroach upon the investigative domain by issuing supervisory orders or restraining arrest, as this undermines the statutory inquiry. Pre-arrest bail is only appropriate where the circumstances justify it, and the court must consider the material on record, including prior denials of relief and the nature of the offences, without being swayed by speculative assertions of availability for interrogation.
Result:
The impugned order of the Division Bench is set aside, the pre-arrest bail order of the City Sessions Judge is annulled, and the appeal is allowed.
(A) The Enforcement Directorate, acting under the provisions of the Foreign Exchange Regulation Act, initiated proceedings and issued summons to the respondent under Section 40 to appear for interrogation regarding a serious fraud involving alleged FERA violations. The respondent challenged the summons through a writ petition, and when interim relief was denied, filed an anticipatory bail application under Section 438 of the Code of Criminal Procedure before the City Sessions Court, which granted an ad-interim bail order. This order was challenged by the prosecution before the High Court under Section 439(2) of the Code, and although a single judge directed the respondent to appear for interrogation, the appellate Division Bench subsequently passed an order interfering with the investigation by fixing dates and conditions for interrogation while restraining arrest. The Directorate then invoked Article 136 of the Constitution by means of a Special Leave Petition to this court, invoking the supervisory jurisdiction under Section 439(2) of the Code to address the alleged overreach by the High Bench. The court also examined the powers under Sections 160, 161, and 167 of the Code relating to the investigation and the duty of the court to avoid trenching upon the functions of the statutory authorities.
(B) The core legal principles affirmed are that a court must not interfere with or supervise the investigative process of a statutory authority so long as the investigation remains lawful; pre-arrest bail is to be granted sparingly and with extreme caution, especially in serious cases involving large sums; the court must consider the material on record including prior denials of relief; and an appellate court has residual powers to interfere when a lower court erroneously grants bail in a manner that impedes the course of justice.
Facts of the case:
The respondent was under ongoing bail in a separate FERA case involving a sum of 37 crores and had previously been arrested in 1990. The Enforcement Directorate sought to interrogate him in connection with fresh allegations and issued summons under Section 40 of FERA. After the respondent challenged the summons without success, he obtained an anticipatory bail order from the City Sessions Court on 25.4.1997 with conditions. The High Court intervened via revision and then passed an impugned order on 20.6.1997 directing the interrogations at a fixed venue and time while restraining arrest, despite the prosecution's claims that this would severely impair the investigation. The respondent had a history of evading interrogation and the High Court had earlier refused to halt the proceedings.
Findings of Court:
The Division Bench was found to have overstepped its jurisdiction by effectively taking over the investigative process, fixing dates, and issuing a blanket order against arrest, thereby creating a risk of turning the interrogation into a mere ritual. The court noted that the respondent had willfully eluded questioning and that the High Court had repeatedly denied interim relief in the same case. The court held that the seriousness of the allegations and the substantial amount involved necessitated a swift and unimpeded investigation, and that the pre-arrest bail order failed to consider these critical aspects.
Issues:
Whether a High Court Division Bench can fix dates, conditions, and supervise the interrogation of a person accused of serious FERA offences while restraining his arrest; whether pre-arrest bail can be granted in a case involving huge sums and prior instances of evasion; and whether the court should interfere with the investigative functions of a statutory authority.
Ratio Decidendi:
When the investigation involves serious allegations and large sums, the court must not encroach upon the investigative domain by issuing supervisory orders or restraining arrest, as this undermines the statutory inquiry. Pre-arrest bail is only appropriate where the circumstances justify it, and the court must consider the material on record, including prior denials of relief and the nature of the offences, without being swayed by speculative assertions of availability for interrogation.
Result:
The impugned order of the Division Bench is set aside, the pre-arrest bail order of the City Sessions Judge is annulled, and the appeal is allowed.
JUDGMENT
Thomas, J.-Leave granted.
2. When the Enforcement Directorate (under Foreign Exchange Regulation Act, for short FERA ) moved the High Court of Calcutta challenging an order passed by a sessions judge granting anticipatory bail to the respondent, a Division Bench of the High Court made the position worse for the Enforcement Directorate (for short the Directorate ). It necessitated the Directorate to move this court with the special leave petition.
3. The officials of the Directorate wanted to interrogate the respondent in connection with recovery of certain documents and other materials in raid conducted in the residential premises of the respondent. So they issued summons to the respondent under Section 40 of FERA to appear before the officials at New Delhi. But the respondent, instead of appearing in response to the summons, approached the High Court with a writ petition challenging the summons and praying for interim orders restraining the officials from proceeding with the summons. A single judge of the High Court, however, refused to grant any interim relief despite repeated motions made by the respondent for that purpose. While the said writ petition was pending the respondent filed an application in the City Sessions Court, Calcutta for an order under Section 438 of the Code of Criminal Procedure (for short the Code). The City Sessions Judge granted ad-interim bail order on 19.3.1997 in favour of the respondent with a condition that he should report to the office of the Directorate at Calcutta on every Monday. Appellant challenged the said order before the High Court in revision and a single judge of the High Court disposed of the revision directing the City Sessions Court to hear both parties and to take a final decision on merits. The City Sessions Judge thereupon heard the parties and passed final order on 25.4.1997 in favour of the respondent. The aggrieved appellant moved the Calcutta High Court under Section 439(2) of the Code for cancellation of the said bail order. A Division Bench of the High Court (R. Bhattacharyya and M.A. Chowdhury, JJ.) has passed the impugned order on 20.6.1997 the operative part of which reads thus :
"Persuaded by the aforesaid circumstances, we direct the department to interrogate the accused at the Calcutta office, 8A Lindsay Street, 2nd Floor, Calcutta-700 087, available from the summons. (No. T3/CP/179/Cal/97/MLA/4852 dated 13.6.97) issued by the Enforcement Directorate But the petitioner must not be put on arrest till the applications pending disposal are decided. The petitioner is to attend on Monday, Tuesday, Wednesday, Thursday and Friday i.e. on 23rd June 1997 to 27th June, 1997 at 8A Lindsay street and shall report to Shri M.L. Acharya, Chief Enforcement Officer at 2 O clock on the aforesaid dates. The interrogation is to continue until 5 O clock for each day. The prayer for further interrogation is left open which will be considered on hearing the parties. Hearing to continue as before."
4. Despite several postings thereafter and repeated requests made by the appellant for modification of the said order the Division Bench did not do anything in the matter and hence the appellant approached this court.
5. According to the appellant the pre-arrest bail order passed by the Sessions Court and the subsequent order passed by the High Court would very badly affect the effectiveness and utility of the inquiry which the Directorate has to conduct as enjoined by the statutory provisions into the serious allegations of FERA violations glaringly observed against the respondent. Learned counsel produced the files concerning the FERA violation cases against the respondent in which the magnitude of the amount involved is indicated. Appellant pointed out that the City Sessions Judge as well as the Division Bench of the High Court have not given any consideration to certain serious aspects involved. One such aspect is that this respondent was caught earlier in a serious case a FERA violation involving a whopping sum of 37 crores of rupees and he was arrested in connection with that case on 16.3.1990 and he is continuing on bail. A complaint was filed against him on 2.9.1994 before the Chief Metropolitan Magistrate. Calcutta for offence under Section 96 of FERA and the case is still pending. Another aspect is, the High Court of Calcutta had earlier refused to stop proceedings against the respondent in the present case in spite of repeated motions made by him in that behalf. The next is that when the respondent failed to get any relief from the High Court he adopted an alternative strategy by filing yet another writ petition challenging the constitutional validity of the provisions of FERA, and in that writ petition he again moved for interim reliefs but a single judge of the High Court, after hearing the respondent, declined to grant any relief to him. Yet another fact pointed out is that respondent was successfully eluding from grilling interrogatories by adopting dilatory and contumacious tactics.
6. Learned counsel for the respondent defended both orders on the premises that the respondent presented himself for being interrogated on many days subsequent to the High Court order and nothing incriminating was elicited from him so far and that the respondent is a sick person entitled to a pre-arrest bail order.
7. It seems rather unusual that when the aggrieved party approached the High Court challenging the order passed by a subordinate court the High Court made the position worse for the aggrieved party. The officials of the Directorate are now injuncted by the Division Bench from arresting the respondent and the time and places for carrying out the interrogations were also fixed by the Division Bench. Such kind of supervision on the enquiry or investigation under a statute is uncalled for. We have no doubt that such type of interference would impede the even course of enquiry or investigation into the serious allegations now pending. For what purpose the Division Bench made such interference with the functions of the statutory authorities, which they are bound to exercise under law, is not discernible from the order under challenge. It is not the function of the court to monitor investigation processes so long as such investigation does not transgress any provision of law. It must be left to the investigating agency to decide the venue, the timings and the questions and the manner of putting such questions to persons involved in such offences. A blanket order fully insulating a person from arrest would make his interrogation a mere ritual, (vide State rep. by the CBI v. Anil Sharma1).
8. This court has pointed out time and again that considerations to be weighed with the court while dealing with a prayer for pre-arrest bail order are materially different from a post-arrest bail application. (vide Pokar Ram v. State of Rajasthan & Ors2, State rep. by the CBI v. Anil Sharma (supra) and The State of Andhra Pradesh v. Bimal Krishna Kundu & Anr3).
9. The argument of the learned counsel for the respondent that he made himself available for interrogation for several days after being armed with an order preventing his arrest is not of much relevance now because that is not an aspect which can be taken advantage of by the respondent in this case. Similarly, the contention that respondent is a sick person is not enough to claim pre-arrest bail order. Hence we are not inclined to go into the dispute whether respondent is suffering from any such health condition.
10. That apart, how could the City Sessions Judge have ignored the fact that the High Court of Calcutta has repeatedly refused to grant any relief to the respondent in spite of different motions made by him regarding the very accusation against him. Of course appellant has a contention that respondent has suppressed those facts in the application filed before the City Sessions Court for anticipatory bail. An endeavour has been made before us by the respondent to show that in fact he had mentioned about it in the application for anticipatory bail, though by some lapse it did not find a place in the copy of the application furnished to the opposite party. Even if we assume that there was no sinister motive for the respondent to keep such facts out of the said copy what we are now concerned about is that the City Sessions Judge has not considered those facts at all.
11. We have no doubt that the Division Bench of the High Court has gone ostensibly wrong in passing the impugned order. When we perused the files concerning the allegations against the respondent (which the Directorate had made available to us) we strongly feel that any further loss of time would further impair the effectiveness of the inquiry and/or investigation into those allegations. Considering the nature and seriousness of the allegations as well as largeness of the amount involved we have no doubt that the order granted by the City Sessions Judge should not remain alive. We are, therefore, constrained to stretch the arms of the residual powers of this court to deal with the said order also.
12. In the result we set aside the impugned order passed by the Division Bench of the Calcutta High Court and we also annul the pre-arrest bail order dated 25.4.1997 passed by the City Sessions Judge. The petition filed by the appellant before the Calcutta High Court for cancellation of the bail order will stand disposed of in the above terms. Appeal is accordingly allowed.
Appeal allowed.
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Parallel Citations of other Journals :
Dukhishyam Benupani, Asstt. Director, Enforcement Directorate (FERA) v. Arun Kumar Bajoria, 1997(10) Supreme 62
00043
00044