The Bombay High Court has dismissed a plea filed by Hari Sankaran, former vice chairman, Infrastructure Leasing and Finance Ltd (IL&FS) against his claimed illegal detention without taking any cognisance of the charge-sheet submitted by the Serious Fraud Investigation Office (SFIO).
In an order, the bench of justice Revati Mohite Dere says, "It appears from the roznama that on several dates, it is at the behest of the accused (non-applicant) that the matter was adjourned, as the said accused had raised an objection to taking cognisance of the complaint. It is under these circumstances, that till date cognisance has not been taken by the Court. Cognisance of any complaint has to be taken expeditiously and the accused has no right to be heard at the pre-cognizance stage, except as provided by the Code of Criminal Procedure (Cr PC)."
"In the present case, prima facie, it appears that the accused (non-applicant) in the said case, have been protracting the proceedings. It is always open to an accused to challenge the cognizance taken by the Court, in the event, cognizance is taken by the Court...Considering that the complaint is pending at the pre-cognisance stage from 30 May 2019, the trial Court is directed to decide the issue of cognisance as expeditiously as possible," the bench says.
In April 2019, the SFIO had arrested Hari Sankaran for abusing his powers in IL&FS Financial Services Ltd (IFIN), through his fraudulent conduct and in granting loans to entities which were not creditworthy or have been declared non-performing assets and caused wrongful loss to the company and its creditors. (
Read: IL&FS Scam: SFIO Arrests Ex-chairman Hari Sankaran)
On 28 May 2019, the SFIO submitted a report to the ministry of corporate affairs (MCA) against IFIN’s directors, including Mr Sankaran and auditors, running into more than 32,000 pages. The next day, the MCA issued a sanction letter asking SFIO to file a complaint before the special court against Mr Sankaran and others in this case.
However, aggrieved by the direction issued by the MCA to file a criminal complaint, Mr Sankaran filed a writ petition in the Bombay HC seeking quashing of the said direction, the complaint and consequently, the prosecution lodged by SFIO, on the premise that the MCA had not applied its mind whilst granting sanction.
Similar petitions were also filed by the other directors and auditors of IFIN.
A division bench of chief justice BP Dharmadhikari and justice Nitin R Borkar, observed that the SFIO had admitted that the court had not taken cognisance of the report and in these facts, if cognisance is not taken, the court may not have power to remand and, as such, the detention of the petitioner-director may not be legal.
The bench also observed that however, since in that petition, they were not required to answer the question of detention of Mr Sankaran, the issue was kept open for consideration and liberty was granted to him to file appropriate proceedings for his release.
Mr Sankaran had filed an application before the sessions court which, on 28 April 2020, granted interim bail to him.
SFIO, however, challenged the order passed by the sessions court granting interim bail to Mr Sankaran. The application was allowed by the Bombay HC. However, Mr Sankaran challenged it before the Supreme Court.
After hearing the counsel for Mr Sankaran, the apex court, on 16 June 2020, permitted him to withdraw his special leave petition (SLP) and allowed him to pursue appropriate remedies available in the law. Mr Sankaran then approached the Bombay HC seeking his release on the premise that his detention, post filing of charge-sheet, was illegal as no cognisance of the complaint has been taken by the special judge.
Hiten Venegaonkar, counsel for the SFIO, submitted that the issues raised in Mr Sankaran's application have already been considered and decided by the HC in an order dated 5 May 2020. The order was challenged in the apex court and with Mr Sankaran having withdrawn the SLP, the order dated 5 May 2020 had attained finality, Mr Venegaonkar contended.
During a previous hearing on 14 January 2022, the bench had asked the SFIO counsel why cognisance of the criminal complaint was not taken by the special court. Mr Venegaonkar sought time to take instructions and place on record the reasons for the delay. He submitted a compilation of documents and a note setting out reasons for the delay by the special court in taking cognisance.
The Bombay HC says, "Whether or not to take cognisance of an offence or offences, is a decision to be taken by the concerned court before whom the complaint or charge-sheet is filed. An accused has no right to be heard before taking of cognisance, except as provided under section 167(2) of Cr PC."
It then dismissed the plea filed by Mr Sankaran, former VC of IL&FS.
