Summary
The Supreme Court set aside interim release of persons arrested during an SFIO investigation. The reporting period specified under Section 212(3) was directory and did not terminate the investigation mandate or arrest power on expiry. Valid, unchallenged judicial remand orders also prevented release through the habeas-corpus route adopted. The accused were directed to surrender for the Special Court’s independent consideration of further custody; guilt and ordinary bail merits were not determined.
Issues
- Whether expiry of the stipulated reporting period ended SFIO’s mandate.
- Whether habeas relief could bypass the operative judicial remand orders.
- Whether Delhi arrest made Gurugram production unlawful.
Provisions considered
- Sections 212(2)–(3) and 212(11)–(12), Companies Act, 2013The statutory assignment and reporting scheme made the prescribed period directory. Investigation continued despite expiry of the order’s reporting timeline. (¶ 25–30)
- Section 212(8), Companies Act, 2013The arrest power did not lapse merely because the prescribed reporting period expired; the arrest was not unlawful on that ground. (¶¶ 25, 30)
Held
- The assignment transferred investigation to SFIO, with no statutory mechanism for automatic retransfer upon expiry of a reporting period. The Act specified no fixed completion deadline or lapse consequence. Treating the period as jurisdictional would leave serious fraud beyond investigation; Section 212(3) was directory. (¶ 26–30)
- Habeas proceedings examine the legal basis of current detention. The competent courts had passed reasoned remand orders which were not challenged through the proper appellate or revisional route. An alleged earlier arrest defect did not by itself invalidate that custody. (¶ 17–20)
- The company’s registered office supplied the statutory basis for Gurugram proceedings. Although the Delhi High Court could not be said wholly to lack territorial writ jurisdiction, it ought not to have entertained this challenge to custody under valid Gurugram remand orders. (¶ 21–24)
- Sapre J fully concurred and additionally emphasised purposive interpretation: making the reporting timeline mandatory would defeat the statutory investigative scheme. (¶ Sapre J: 1–9)
- Interim release was set aside and surrender directed for the Special Court to consider further remand on merits. The Court expressed no view on the underlying case; the related transfer petition required no separate substantive order. (¶ Lalit J: 31–35)
Result
SFIO appeals allowed; interim-release order set aside. Rahul and Mukesh Modi directed to surrender before the Special Court on 1 April 2019 for custody consideration, with forfeiture/arrest consequences for default and compliance affidavits due 8 April. Related transfer petition disposed of; substantive merits left open.