Are SFIO Officers Police Officers Under Code Of Criminal Procedure? Supreme Court Leaves Question Of Law Open

The matter was placed before Justices Sanjiv Khanna and Dipankar Datta.

The High Court, in its impugned order, had concluded that from a conjoint and harmonious reading of the provisions of the CrPC and the Companies Act, it could not be said that the SFIO is barred from investigating an offence under the IPC.

However, in its January 16 order, the Top Court clarified the above question did not directly arise for consideration before the High Court. Thus, it ordered that the impugned judgment would not be treated as a precedent.

The present litigation arose when the Ministry of Corporate Affairs (MCA) ordered an investigation into the affairs of 15 companies. Accordingly, SFIO appointed a team of inspectors to carry out the investigation. However, SFIO later got sanctioned to investigate certain other companies as well. Pursuant to this, it submitted its Investigation Report under Section 212(12) of the Companies Act.

Pertinently, MCA issued a sanction letter directing the SFIO to initiate prosecution against the petitioners for the commission of offences under the Act. Accordingly, a complaint was filed, naming petitioners accused of commission of offences under the Indian Penal Code and the Companies Act, including Section 447 (Punishment for Fraud). Aggrieved by this, the petitioners approached the High Court.

Before the High Court, the petitioners, inter-alia, had argued that the power and the jurisdiction to investigate offences under the IPC only lies with the 'police officer. '

It was submitted that as per the scheme of the Companies Act and the CrPC, the power of SFIO is limited to investigating offences under the Act only; therefore, investigation and subsequent complaints filed under the various provisions of the IPC are not maintainable.

It was further pointed out that petitioners have been arrayed as accused of the alleged commission of offences under the IPC as well. It was averred that a conjoint reading of the relevant provisions clarifies that only an officer in charge of a police station can commence an investigation under the IPC. It was submitted that such a power has not been given to any of the officers of the SFIO.

The High Court noted that Section 4(2) of the CrPC provides that investigation into offences under other statutes, like the Companies Act, shall be done in accordance with the CrPC unless the statute provides for otherwise. Section 212(15) of the Companies Act provides that an investigation report filed before the learned Special Court shall be treated as a report filed by a police officer.

Basis this, the Court observed that the investigation report within the scheme of the Act will be treated as a police report. Therefore, the officer filing the said report shall also be considered an officer in charge of a police station, although not specifically provided for in the said Act.

“If during course of investigation under the present Act, the concerned Investigating Officer comes across commission of offences punishable under the IPC or any other law relating to the transactions being investigated, then the same cannot give rise to distinct proceedings. Such investigation can be carried out under Section 4(1) of the CrPC. If the report which is subsequently filed is to be treated as a police report under Section 173(2) of the CrPC, then the officer, as explained hereinabove, is to be considered to be vested with powers of an officer in charge of a police station.,” the High Court added.

Accordingly, the High Court had dismissed the petition.

Case Title: R.K. GUPTA vs. UNION OF INDIA., Diary No.- 785 - 2024

Citation : 2024 LiveLaw (SC) 45

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