In a recent judicial pronouncement, the Supreme Court grappled with a pivotal legal query regarding the role of Serious Fraud Investigation Office (SFIO) officers under the Code of Criminal Procedure, 1973. The court, while rejecting a plea seeking to quash a complaint filed by SFIO, refrained from definitively settling the contentious issue.
The judicial conundrum unfolded before Justices Sanjiv Khanna and Dipankar Datta, who were entrusted with the matter. The backdrop of the case originated from the Ministry of Corporate Affairs (MCA) triggering an inquiry into the operations of 15 companies. SFIO, in response, deployed a team of inspectors to conduct the investigation. Subsequently, SFIO obtained approval to investigate additional companies, leading to the submission of its Investigation Report under Section 212(12) of the Companies Act.
Trouble ensued when MCA, armed with a sanction letter, directed SFIO to initiate legal proceedings against the accused parties for offenses under the Indian Penal Code and the Companies Act. A complaint was duly filed, encompassing charges under various sections, including Section 447 (Punishment for Fraud). Dissatisfied with the allegations, the petitioners sought recourse in the High Court.
During the proceedings, the petitioners contended that the authority to investigate offenses under the IPC lies exclusively with “police officers.” According to their argument, the jurisdiction of SFIO is confined to probing offenses under the Companies Act, rendering investigations and subsequent complaints under IPC provisions legally unsustainable.
The High Court, in its judgment, invoked Section 4(2) of the CrPC, asserting that investigations into offenses under statutes like the Companies Act must adhere to the CrPC unless expressly specified otherwise. It further relied on Section 212(15) of the Companies Act, deeming an investigation report filed before the Special Court as equivalent to a report filed by a police officer.
Drawing from these provisions, the High Court concluded that an SFIO officer, within the framework of the Companies Act, should be considered akin to an officer in charge of a police station. It emphasized that if an Investigating Officer encounters offenses punishable under IPC during the investigation, such matters should be seamlessly integrated into the ongoing inquiry under Section 4(1) of the CrPC.
However, the Supreme Court, in its order dated January 16, clarified that the crucial question of whether SFIO officers qualify as police officers under the Code of Criminal Procedure was not directly addressed by the High Court. Consequently, it decreed that the High Court’s decision should not be deemed as a binding precedent.
The legal saga, encapsulated in the case of R.K. GUPTA vs. UNION OF INDIA, continues to leave the door ajar for further exploration of the intricate relationship between SFIO’s investigative powers and their alignment with the Code of Criminal Procedure.
