CBI filing piecemeal chargesheet is against mandate of Article 21: Delhi High Court grants bail to man in SBI funds siphoning case

The practice of the Central Bureau of Investigation (CBI) picking up one aspect of an investigation and filing a piecemeal chargesheet defeats the right of an applicant to default bail and goes against the mandate of Article 21 of the Constitution, the Delhi High Court said on Thursday..Justice Amit Sharma was hearing the bail plea of businessman accused in a corruption case, also involving public officials, relating to the siphoning of funds of State Bank of India (SBI). The Court held that the CBI had filed an incomplete chargesheet in the case with respect to the offences alleged in the FIR and granted the applicant bail. .The CBI had registered a first information report (FIR) on November 19, 2020 after an SBI official alleged that a company, M/s Arise India Ltd, and its directors, including the present applicant, had availed credit facilities from a consortium of banks led by the SBI but diverted the borrowed funds. The account of the company was declared a non-performing asset with a total outstanding amount of ₹512.67 crore. A subsequent forensic audit of the company’s account termed the company as a “fraud" on May 27, 2019.The FIR dated November 19, 2020, alleged offences under Sections 120B (criminal conspiracy) read with Sections 420 (cheating), 468 (forgery for purpose of cheating) and 471 (using a forged document as genuine) of the IPC besides corruption charges under Section 13(2) read with Section 13(1)(d) of the Prevent of Corruption Act. The applicant was arrested on November 14, 2022 under these Sections and the investigating agency sought approval to probe the role of public servants in the case..The Court underlined that the CBI had, however, proceeded to file the chargesheet before the expiry of the stipulated term of 60 days while keeping the investigation under Section 13(2) read with Section 13(1)(d) of the PC Act open. “Therefore, it is clear that the CBI had not completed the investigation with respect to offences under Section 13(2) read with Section 13(1)(d) of the PC Act, for which the applicant was arrested,” it held.The bail order highlighted that the chargesheet had specifically recorded the fact that further investigation was pending for offences under the PC Act on account of approval under Section 17A, but was silent about any further investigation into the other offence under Section 468 of the IPC. .The chargesheet was filed on January 6, 2023 while the investigation continued. The competent authority rejected the grant of approval through a letter to the CBI on February 23, 2023. On the basis of this communication, the CBI filed a supplementary chargesheet dated April 1, 2023 for offences under the PC Act.“In this case, the Court of competent jurisdiction before which the chargesheet was filed did not take cognisance, as recorded in the order dated January 6, 2023, passed by the Principal District and Sessions Judge-cum-Special Judge (PC Act) (CBI), Rouse Avenue District Court. By filing a supplementary report under Section 173(8) of the CrPC, the CBI cannot change the nature of the first chargesheet as one which can be termed as complete,” noted the High Court. .The Court further observed that only a part of the investigation concerning the diversion of borrowed funds was complete, but the aspect of conspiracy with respect to unknown public servants was pending. .Senior counsel Vikas Pahwa and Advocates Mudit Jain, Pratyansh Pandey, Arun Kanwa, Namisha Jain and Rudraksh Nakra represented the applicant.Special Public Prosecutor Anupam S Sharma and Advocates Ripudaman Sharma, Harpreet Kalsi, Prakarsh Airan and Abhishek Batra appeared for the CBI..[Read Order]