Holding

The right to default bail under the proviso to Section 167(2) CrPC ceases once a chargesheet is filed within the statutory period, regardless of any pending further investigation.

Summary

The Central Bureau of Investigation (CBI) filed a chargesheet on 15 October 2022 against 75 persons, including Kapil Wadhawan and Dheeraj Wadhawan, for alleged conspiracy, fraud and corruption involving DHFL. The respondents applied for default bail under the proviso to Section 167(2) of the CrPC, arguing that the chargesheet was incomplete and that investigation against other accused was still pending. The Special Court and the Delhi High Court granted default bail, holding that the pending investigation justified it. On appeal, the Supreme Court held that once a chargesheet is filed within the prescribed period, the statutory right to default bail under Section 167(2) ceases, irrespective of any further investigation under Section 173(8). The Court clarified that a chargesheet satisfying Section 173(2) is complete even if some documents are pending, and that the right to default bail is extinguished upon filing of the chargesheet. Consequently, the orders granting default bail were set aside and the appeal was allowed.

Issues considered

The respondents' entitlement to default bail under the proviso to Section 167(2) CrPC when a chargesheet has been filed but investigation against other accused remains pending.
Whether a chargesheet filed under Section 173(2) is considered complete if some documents or witness statements are yet to be produced.
The effect of cognizance being taken by the court on the applicability of the default bail provision.
The scope of the investigating officer's power to seek further investigation under Section 173(8) after filing a chargesheet.

Legislation cited

Code of Criminal Procedure, 1973s. 167(2), s. 173(2), s. 173(8), s. 175(5)
Constitution of Indias. Article 21
Indian Penal Code, 1860s. 120-B, s. 206, s. 409, s. 411, s. 420, s. 424, s. 465, s. 468, s. 477A
Prevention of Corruption Act, 1988s. 13(1)(d), s. 13(2)

Subjects

Right of default bailStatutory requirement of the report/chargesheetFurther investigationFurther investigation pending qua other accusedIncomplete chargesheetRight of the investigating officer to pray for further investigationSpecial Court

Judgment

[2024] 1 S.C.R. 677 : 2024 INSC 58

Central Bureau of Investigation
v.
Kapil Wadhawan & Anr.
(Criminal Appeal No. 391 of 2024)
24 January 2024
[Bela M. Trivedi* and Pankaj Mithal, JJ.]

Issue for Consideration
Whether the respondents were entitled to the benefit of the statutory
right conferred under the proviso to s.167(2), Cr.P.C, on the ground
that the investigation qua some of the accused named in the FIR
was pending, though the report u/s.173(2) against respondents
along with the other accused was filed within the prescribed time
limit and the cognizance of the offence was taken by the special
court before the consideration of the application of the respondents
seeking default bail u/s.167(2).

Headnotes
Code of Criminal Procedure, 1973 – Proviso to s.167(2), s.173
– Statutory right conferred under Proviso to s.167(2) – Benefit
of – When entitled to – FIR was registered for the offences
punishable u/s.120-B r/w s.409, 420 and 477A, IPC and s.13(2)
r/w s.13(1)(d), PC Act, 1988 – Chargesheet for the offences
u/s.120B r/w s.206, 409, 411, 420, 424, 465, 468 and 477A, IPC
and s.13(2) r/w 13(1)(d), PC Act was filed against 75 persons/
entities including the respondents-accused – Special Court
took the cognizance of the alleged offences against all the
accused and issued warrants/summons – Subsequently,
Special Court holding that the investigation was incomplete
and the chargesheet filed was in piecemeal, respondents were
granted default bail u/s.167(2) – Order upheld by High Court:
Held: The statutory requirement of the report/chargesheet u/s.173(2)
would be complied with if the various details prescribed therein are
included in the report – It is complete if it is accompanied with all
the documents and statements of witnesses as required by s.175(5)
and it is not necessary that all the details of the offence must be
stated – The benefit of proviso appended to sub-section (2) of s.167
would be available to the offender only when a chargesheet is not
filed and the investigation is kept pending against him – However,
* Author
678 [2024] 1 S.C.R.

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once a chargesheet is filed, the said right ceases – Thus, once
from the material produced along with the chargesheet, the court is
satisfied about the commission of an offence and takes cognizance
of the offence allegedly committed by the accused, it is immaterial
whether the further investigation in terms of s.173(8) is pending
or not – The pendency of the further investigation qua the other
accused or for production of some documents not available at the
time of filing of chargesheet would neither vitiate the chargesheet,
nor would it entitle the accused to claim right to get default bail on
the ground that the chargesheet was an incomplete chargesheet
or that the chargesheet was not filed in terms of s.173(2) – In
the present case, the chargesheet having been filed against the
respondents within the prescribed time limit and the cognizance
having been taken by the Special Court of the offences allegedly
committed by them, the respondents could not have claimed the
statutory right of default bail u/s.167(2) on the ground that the
investigation qua other accused was pending – Special Court as
well as High Court committed serious error of law – Impugned
orders set aside. [Paras 22, 23 and 25]
Code of Criminal Procedure, 1973 – s.167(2) – Right of default
bail – Constitution of India – Article 21:
Held: Right of default bail is not only a statutory right but is a right
that flows from Article 21 – It is an indefeasible right, however, it is
enforceable only prior to the filing of the challan or the chargesheet,
and does not survive or remain enforceable on the challan being
filed, if already not availed of – Once the challan has been filed,
the question of grant of bail has to be considered and decided
only with reference to the merits of the case under the provisions
relating to grant of bail to the accused after the filing of the challan.
[Para 15]
Code of Criminal Procedure, 1973 – s.173 – Report/chargesheet
under:
Held: Is an intimation to the court that upon investigation into
the cognizable offence, the investigating officer has been able to
procure sufficient evidence for the court to inquire into the offence
and the necessary information is being sent to the court – Though
ordinarily all documents relied upon by the prosecution should
accompany the chargesheet, nonetheless for some reasons, if all
the documents are not filed along with the chargesheet, that by
itself would not invalidate or vitiate the chargesheet. [Paras 22, 23]
[2024] 1 S.C.R. 679

Central Bureau of Investigation v. Kapil Wadhawan & Anr.

Code of Criminal Procedure, 1973 – ss.173(2), (8):
Held: The right of the investigating officer to pray for further
investigation in terms of s.173(8) is not taken away only because
a chargesheet is filed under sub-section (2) thereof against the
accused. [Para 23]

Case Law Cited
Sanjay Dutt v. State through CBI, Bombay (II) [1994] 3
Suppl. SCR 263 : (1994) 5 SCC 410; K. Veeraswami v.
Union of India and Others [1991] 3 SCR 189 : (1991)
3 SCC 655 – followed.
Dinesh Dalmia v. CBI [2007] 9 SCR 1124 : (2007) 8
SCC 770; Suresh Kumar Bhikamchand Jain v. State
of Maharashtra & Anr. [2013] 1 SCR 1037 : (2013) 3
SCC 77; Serious Fraud Investigation Office v. Rahul
Modi & Ors. [2022] 1 SCR 597 : 2022 SCC OnLine
SC 153 – relied on.
M. Ravindran v. Intelligence Officer, Directorate of
Revenue Intelligence [2020] 12 SCR 915 : (2021) 2
SCC 485; Rakesh Kumar Paul v. State of Assam [2017]
8 SCR 785 : (2017) 15 SCC 67– referred to.

List of Acts
Code of Criminal Procedure, 1973; Penal Code, 1860; Prevention
of Corruption Act, 1988; Constitution of India.

List of Keywords
Right of default bail; Statutory requirement of the report/chargesheet;
Further investigation; Further investigation pending qua other
accused; Incomplete chargesheet; Right of the investigating officer
to pray for further investigation; Special Court.

Case Arising From

CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.391
of 2024.
From the Judgment and Order dated 30.05.2023 of the High Court
of Delhi at New Delhi in CRLMC No.6544 of 2022.
680 [2024] 1 S.C.R.

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Appearances for Parties
S.V. Raju, A.S.G., Mukesh Kumar Maroria, Zoheb Hussain, Annam
Venkatesh, Akshay Nain, Advs. for the Appellant.
Mukul Rohatgi, Amit Desai, Sr. Advs., Mahesh Agarwal, Ankur
Saigal, Rohan Dakshini, Ms. Pooja Kothari, Ms. Kamakshi Sehgal,
Ms. Kajal Dalal, Archit Jain, Rajesh Kumar, E. C. Agrawala, Advs.
for the Respondents.

Judgment / Order of the Supreme Court

Judgment
Bela M. Trivedi, J.
1. Leave granted.
2. The appellant-CBI has sought to challenge the impugned order
dated 30.05.2023 passed by the High Court of Delhi at New Delhi in
CRL. M.C. No. 6544 of 2022 upholding the order dated 03.12.2022
passed by the Special Judge (PC Act), CBI-08, New Delhi (hereinafter
referred to as the Special Court), by which respondent nos. 1 and 2
have been granted default bail under Section 167(2) Cr.P.C.
3. The short facts giving rise to the present appeal are that an FIR
bearing no. RC2242022A0001 came to be registered in CBI, AC-VI /
SIT, New Delhi on 20.06.2022, on the basis of the complaint lodged by
Sh. Vipin Kumar Shukla, DGM, Union Bank of India, Nariman Point,
Mumbai, for the offences punishable under Section 120-B r/w Section
409, 420 and 477A of IPC and Section 13(2) r/w Section 13(1)(d) of
PC Act, 1988 (hereinafter referred to as the PC Act), against Dewan
Housing Finance Corporation Ltd. (DHFL) and 12 other accused
persons/companies. It was alleged in the said FIR inter alia that
the DHFL, Sh. Kapil Wadhawan, the then Chairman and Managing
Director, DHFL, along with 12 other accused persons entered into
a criminal conspiracy to cheat the consortium of 17 banks led by
Union Bank of India, and in pursuance to the said criminal conspiracy,
the said accused persons/entities induced the consortium banks to
sanction huge loans aggregating to Rs. 42,000 crores approx. and
thereafter they siphoned off and misappropriated a significant portion
of the said funds by falsifying the books of account of DHFL and
deliberately and dishonestly defaulted on repayment of the legitimate
dues of the said consortium banks, and thereby caused a wrongful
[2024] 1 S.C.R. 681

Central Bureau of Investigation v. Kapil Wadhawan & Anr.

loss of Rs. 34,000 crores to the consortium lenders during the period
January, 2010 to December, 2019.
4. The respondent no. 1- Kapil Wadhawan and respondent no. 2-Dheeraj
Wadhawan came to be arrested by the appellant-CBI in connection
with the said FIR on 19.07.2022 and were remanded to judicial
custody on 30.07.2022.
5. After carrying out the investigation, a chargesheet for the offences
under Section 120B r/w Section 206, 409, 411, 420, 424, 465, 468
and 477A of IPC and Section 13(2) r/w 13(1)(d) of PC Act came to be
filed by the CBI against 75 persons/entities including the respondent
nos. 1 and 2 on 15.10.2022.
6. Respondent nos. 1 and 2 filed an application under Section 167(2) of
Cr.P.C. on 29.10.2022 before the Special Court seeking statutory bail
on the ground that the chargesheet filed by the CBI was incomplete
and no final report as defined under Section 173(2) Cr.P.C. was filed
within the statutory period provided under Section 167(2) Cr.P.C., or
in the alternative seeking their release from judicial custody in view
of lack of jurisdiction of the court as there was no approval under
Section 17A of the PC Act as amended in 2018.
7. The Special Court vide the order dated 26.11.2022 held that the
Special Court had the jurisdiction to deal with the matter and the bar
under Section 17A of the PC Act was not applicable to the facts of the
case. By a separate order dated 26.11.2022, the Special Court took
the cognizance of the alleged offences against all the 75 accused
and issued production warrants against the present respondent nos.
1 and 2 (A-1 and A-2) as also against accused no. 7. The Special
Court also issued warrants/summons against the other accused.
8. Thereafter, the Special Court vide the order dated 03.12.2022 holding
that the investigation was incomplete and the chargesheet filed was
in piecemeal, further held that the respondent nos. 1 and 2 (A-1 and
A-2) were entitled to the statutory bail under Section 167(2) Cr.P.C.
9. The appellant-CBI, being aggrieved by the said order dated 03.12.2022
passed by the Special Court filed a petition being Crl.M.C. No. 6544
of 2022 before the High Court under Section 482 r/w Section 439(2)
of Cr.P.C. The High Court vide the impugned order dated 30.05.2023
dismissed the said petition and upheld the order dated 03.12.2022
passed by the Special Court.
682 [2024] 1 S.C.R.

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SUBMISSIONS:
10. The learned ASG, Mr. S.V. Raju for the appellant vehemently
submitted that the chargesheet was filed by the appellant-CBI on the
completion of the investigation qua 75 accused including the present
respondents stating that further investigation qua some other accused
was pending, which did not mean that an incomplete chargesheet
was filed against the respondents. Learned ASG submitted that
report under Section 173 Cr.P.C. filed by the CBI was complete
containing all the details as required by law. In the instant case,
the statutory bail under Section 167(2) Cr.P.C. has been granted
by the courts below after the Special Court took the cognizance of
the alleged offences against the respondents, which is against the
statutory scheme of the Code. According to him, it is only when a
chargesheet is not filed and investigation is kept pending, the benefit
of the proviso appended to sub-section (2) of Section 167 of the Code
would be available to the offender, however once the chargesheet
is filed, the said right of the accused ceases, and such a right does
not revive merely because a further investigation remains pending
within the meaning of Section 173(8) of the Code. To buttress
his submissions, Mr. S.V. Raju has placed heavy reliance on the
decision in case of Dinesh Dalmia vs. CBI1. He also relied upon
the judgment in M. Ravindran v. Intelligence Officer, Directorate
of Revenue Intelligence2, to submit that where the accused fails
to apply for default bail when his right accrues, and subsequently
a chargesheet, additional complaint or a report seeking extension
of time is preferred before the Magistrate, the right to default bail
would be extinguished.
11. Per contra, the learned Senior Advocate Mr. Mukul Rohatgi for the
respondent no. 1 submitted that the issue of cognizance had nothing
to do with the default bail, in as much as the right under Section
167(2) is a statutory right, when the chargesheet is not filed within the
prescribed time limit and even if filed, a complete chargesheet is not
filed. According to him, the courts below have concluded that it was
an incomplete chargesheet that was filed by the CBI, which entitled
the respondents to the statutory right of getting the benefit of default

1 (2007) 8 SCC 770
2 (2021) 2 SCC 485
[2024] 1 S.C.R. 683

Central Bureau of Investigation v. Kapil Wadhawan & Anr.

bail under Section 167(2) of Cr.P.C. Mr. Mukul Rohatgi has relied
upon the decision in Suresh Kumar Bhikamchand Jain Vs. State
of Maharashtra & Anr.3 to buttress his submission that cognizance
is not relevant basis for determining whether the investigation is
complete or not for the purpose of default bail under Section 167(2)
Cr.P.C. Reliance is also placed on the decision in case of Rakesh
Kumar Paul vs. State of Assam4, to submit that if the chargesheet
is not filed and the right for default bail has ripened into the status
of indefeasibility, it cannot be frustrated by the prosecution on any
pretext. Mr. Rohatgi sought to distinguish the Dalmia’s case (supra)
relied upon by Ld. ASG Mr. S.V. Raju by submitting that in the said
case, the accused was absconding and the chargesheet was already
filed, whereas in the instant case, the chargesheet filed has been
held to be incomplete. According to him, the concurrent findings
recorded by two courts, unless perverse should not be interfered
with, even if there was an error of law. He further submitted that
once the bail is granted and interim order staying the operation of
such order passed by the High Court is not passed by the Supreme
Court, the proceeding partakes the colour of cancellation of bail for
which the criteria are absolutely different.
12. Learned Senior Advocate Mr. Amit Desai appearing for the respondent
no. 2 adopted the arguments made by the Ld. Senior Advocate
Mr. Mukul Rohatgi for the respondent no. 1, and further submitted
that the filing of chargesheet was a subterfuge or ruse to defeat
the indefeasible right of the respondents conferred under Section
167(2) Cr.P.C.
ANALYSIS:
13. In the instant appeal, the main question that falls for our consideration
is, whether the respondents were entitled to the benefit of the statutory
right conferred under the proviso to sub section 2 of Section 167
Cr.P.C, on the ground that the investigation qua some of the accused
named in the FIR was pending, though the report under sub-section
(2) of Section 173 (Chargesheet) against respondents along with the
other accused was filed within the prescribed time limit and though

3 (2013) 3 SCC 77
4 (2017) 15 SCC 67
684 [2024] 1 S.C.R.

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the cognizance of the offence was taken by the special court before
the consideration of the application of the respondents seeking default
bail under Section 167 (2) Cr.P.C.?
14. For better appreciation of the submissions made by the learned
Counsels for the parties, the relevant parts of Section 167 and
Section 173 are reproduced as under: -
“167. Procedure when investigation cannot be
completed in twenty-four hours. –
1. ………………………………..
2. The Magistrate to whom an accused person is forwarded
under this section may, whether he has or has not
jurisdiction to try the case, from time to time, authorise
the detention of the accused in such custody as such
Magistrate thinks fit, for a term not exceeding fifteen
days in the whole; and if he has no jurisdiction to try the
case or commit it for trial, and considers further detention
unnecessary, he may order the accused to be forwarded
to a Magistrate having such jurisdiction:
Provided that—
5
[(a) the Magistrate may authorise the detention of the
accused person, otherwise than in custody of the police,
beyond the period of fifteen days, if he is satisfied that
adequate grounds exist for doing so, but no Magistrate
shall authorise the detention of the accused person in
custody under this paragraph for a total period exceeding—
(i) ninety days, where the investigation relates to an
offence punishable with death, imprisonment for life or
imprisonment for a term of not less than ten years;
(ii) sixty days, where the investigation relates to any other
offence, and, on the expiry of the said period of ninety
days, or sixty days, as the case may be, the accused
person shall be released on bail if he is prepared to and
does furnish bail, and every person released on bail under

5 Subs. by Act 45 of 1978, sec. 13(a), for paragraph (a) (w.e.f. 18-12-1978).
[2024] 1 S.C.R. 685

Central Bureau of Investigation v. Kapil Wadhawan & Anr.

this sub-section shall be deemed to be so released under
the provisions of Chapter XXXIII for the purposes of that
Chapter;]
(b)……………………………………
(c)……………………………………
173. Report of police officer on completion of
investigation. —
(1) Every investigation under this Chapter shall be
completed without unnecessary delay.
6
[(1A) The investigation in relation to 3 [an offence under
sections 376, 376A, 376AB, 376B, 376C, 376D, 376DA,
376DB or 376E] from the date on which the information
was recorded by the officer in charge of the police station.]
(2) (i) As soon as it is completed, the officer in charge of the
police station shall forward to a Magistrate empowered to
take cognizance of the offence on a police report, a report
in the form prescribed by the State Government, stating—
(a) the names of the parties;
(b) the nature of the information;
(c) the names of the persons who appear to be acquainted
with the circumstances of the case;
(d) whether any offence appears to have been committed
and, if so, by whom;
(e) whether the accused has been arrested;
(f) whether he has been released on his bond and, if so,
whether with or without sureties;
(g) whether he has been forwarded in custody under
section 170.
[(h) whether the report of medical examination of the
7

woman has been attached where investigation relates to

6 Inst. By Act 5 of 2009, sec. 16(a) (w.e.f. 31-12-2009).
7 Ins. By Act 5 of 2009, sec. 16(b) (w.e.f. 31-12-2009).
686 [2024] 1 S.C.R.

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an offence under 2 [sections 376, 376A, 376AB, 376B,
376C, 376D, 376DA, 376DB] or section 376E of the Indian
Penal Code (45 of 1860)].]
(ii) The officer shall also communicate, in such manner as
may be prescribed by the State Government, the action
taken by him, to the person, if any, by whom the information
relating to the commission of the offence was first given.
(3)……………………………..
(4)……………………………..”
15. There cannot be any disagreement with the well settled legal position
that the right of default bail under Section 167(2) Cr.P.C. is not only a
statutory right but is a right that flows from Article 21 of the Constitution
of India. It is an indefeasible right, nonetheless it is enforceable only
prior to the filing of the challan or the chargesheet, and does not
survive or remain enforceable on the challan being filed, if already
not availed of. Once the challan has been filed, the question of
grant of bail has to be considered and decided only with reference
to the merits of the case under the provisions relating to grant of
bail to the accused after the filing of the challan. The Constitution
Bench in Sanjay Dutt vs. State through CBI, Bombay (II)8, while
considering the provisions of Section 20(4)(bb) of the Terrorist and
Disruptive Activities (Prevention) Act, 1987 read with Section 167
(2) Cr.P.C. had very pertinently held that:-
“48. We have no doubt that the common stance before
us of the nature of indefeasible right of the accused to be
released on bail by virtue of Section 20(4)(bb) is based on
a correct reading of the principle indicated in that decision.
The indefeasible right accruing to the accused in such
a situation is enforceable only prior to the filing of the
challan and it does not survive or remain enforceable on
the challan being filed, if already not availed of. Once the
challan has been filed, the question of grant of bail has
to be considered and decided only with reference to the
merits of the case under the provisions relating to grant

8 (1994) 5 SCC 410
[2024] 1 S.C.R. 687

Central Bureau of Investigation v. Kapil Wadhawan & Anr.

of bail to an accused after the filing of the challan. The
custody of the accused after the challan has been filed is
not governed by Section 167 but different provisions of
the Code of Criminal Procedure. If that right had accrued
to the accused but it remained unenforced till the filing of
the challan, then there is no question of its enforcement
thereafter since it is extinguished the moment challan is
filed because Section 167 CrPC ceases to apply. The
Division Bench also indicated that if there be such an
application of the accused for release on bail and also a
prayer for extension of time to complete the investigation
according to the proviso in Section 20(4)(bb), both of
them should be considered together. It is obvious that no
bail can be given even in such a case unless the prayer
for extension of the period is rejected. In short, the grant
of bail in such a situation is also subject to refusal of the
prayer for extension of time, if such a prayer is made. If
the accused applies for bail under this provision on expiry
of the period of 180 days or the extended period, as the
case may be, then he has to be released on bail forthwith.
The accused, so released on bail may be arrested and
committed to custody according to the provisions of the
Code of Criminal Procedure. It is settled by Constitution
Bench decisions that a petition seeking the writ of habeas
corpus on the ground of absence of a valid order of remand
or detention of the accused, has to be dismissed, if on the
date of return of the rule, the custody or detention is on the
basis of a valid order. (See Naranjan Singh Nathawan v.
State of Punjab [(1952) 1 SCC 118 : 1952 SCR 395 : AIR
1952 SC 106 : 1952 Cri LJ 656] ; Ram Narayan Singh v.
State of Delhi [1953 SCR 652 : AIR 1953 SC 277 : 1953
Cri LJ 1113] and A.K. Gopalan v. Government of India
[(1966) 2 SCR 427 : AIR 1966 SC 816 : 1966 Cri LJ 602] .)
16. In Suresh Kumar Bhikamchand Jain Vs. State of Maharashtra
& Anr. (supra), the appellant-accused had sought default bail under
Section 167(2) on the ground that though the chargesheet was filed
within the stipulated time, the cognizance was not taken by the court,
for want of sanction to prosecute the accused. The court dispelling
the claim of the accused held: -
688 [2024] 1 S.C.R.

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“17. In our view, grant of sanction is nowhere contemplated
under Section 167 CrPC. What the said section
contemplates is the completion of investigation in respect
of different types of cases within a stipulated period and the
right of an accused to be released on bail on the failure of
the investigating authorities to do so. The scheme of the
provisions relating to remand of an accused, first during the
stage of investigation and, thereafter, after cognizance is
taken, indicates that the legislature intended investigation
of certain crimes to be completed within 60 days and
offences punishable with death, imprisonment for life or
imprisonment for a term of not less than 10 years, within
90 days. In the event, the investigation is not completed
by the investigating authorities, the accused acquires an
indefeasible right to be granted bail, if he offers to furnish
bail. Accordingly, if on either the 61st day or the 91st day,
an accused makes an application for being released on
bail in default of charge-sheet having been filed, the court
has no option but to release the accused on bail. The said
provision has been considered and interpreted in various
cases, such as the ones referred to hereinbefore. Both
the decisions in Natabar Parida case [(1975) 2 SCC 220
: 1975 SCC (Cri) 484] and in Sanjay Dutt case [(1994) 5
SCC 410 : 1994 SCC (Cri) 1433] were instances where the
charge-sheet was not filed within the period stipulated in
Section 167(2) CrPC and an application having been made
for grant of bail prior to the filing of the charge-sheet, this
Court held that the accused enjoyed an indefeasible right
to grant of bail, if such an application was made before the
filing of the charge-sheet, but once the charge-sheet was
filed, such right came to an end and the accused would
be entitled to pray for regular bail on merits.
18. None of the said cases detract from the position that
once a charge-sheet is filed within the stipulated time, the
question of grant of default bail or statutory bail does not
arise. As indicated hereinabove, in our view, the filing of
charge-sheet is sufficient compliance with the provisions
of Section 167(2)(a)(ii) in this case. Whether cognizance
is taken or not is not material as far as Section 167 CrPC
[2024] 1 S.C.R. 689

Central Bureau of Investigation v. Kapil Wadhawan & Anr.

is concerned. The right which may have accrued to the
petitioner, had charge-sheet not been filed, is not attracted
to the facts of this case. Merely because sanction had not
been obtained to prosecute the accused and to proceed to
the stage of Section 309 CrPC, it cannot be said that the
accused is entitled to grant of statutory bail, as envisaged in
Section 167 CrPC. The scheme of CrPC is such that once
the investigation stage is completed, the court proceeds
to the next stage, which is the taking of cognizance and
trial. An accused has to remain in custody of some court.
During the period of investigation, the accused is under
the custody of the Magistrate before whom he or she is
first produced. During that stage, under Section 167(2)
CrPC, the Magistrate is vested with authority to remand
the accused to custody, both police custody and/or judicial
custody, for 15 days at a time, up to a maximum period of
60 days in cases of offences punishable for less than 10
years and 90 days where the offences are punishable for
over 10 years or even death sentence. In the event, an
investigating authority fails to file the charge-sheet within
the stipulated period, the accused is entitled to be released
on statutory bail. In such a situation, the accused continues
to remain in the custody of the Magistrate till such time
as cognizance is taken by the court trying the offence,
when the said court assumes custody of the accused for
purposes of remand during the trial in terms of Section
309 CrPC. The two stages are different, but one follows
the other so as to maintain a continuity of the custody of
the accused with a court.”
17. Again, in Serious Fraud Investigation Office vs. Rahul Modi
& Ors.9, this Court following Suresh Kumar Bhikamchand Jain
(supra) observed: -
“11. It is clear from the judgment of this Court in
Bhikamchand Jain (supra) that filing of a charge-sheet
is sufficient compliance with the provisions of Section
167, CrPC and that an accused cannot demand release

9 2022 SCC OnLine SC 153
690 [2024] 1 S.C.R.

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on default bail under Section 167(2) on the ground that
cognizance has not been taken before the expiry of 60
days. The accused continues to be in the custody of the
Magistrate till such time cognizance is taken by the court
trying the offence, which assumes custody of the accused
for the purpose of remand after cognizance is taken. The
conclusion of the High Court that the accused cannot be
remanded beyond the period of 60 days under Section
167 and that further remand could only be at the post-
cognizance stage, is not correct in view of the judgment
of this Court in Bhikamchand Jain (supra).”
18. In the instant case as transpiring from the record, the respondents
(A1 and A2) were arrested in connection with the FIR in question
on 19.07.2022, and the report (the chargesheet) running into about
900 pages under Section 173(2) was filed by the CBI against the
respondents along with other 73 accused on 15.10.2022. In the said
report it was stated in Para no. 66 that: -
“66. With regard to ascertaining roles of remaining FIR
named accused persons namely Sh. Sudhakar Shetry,
M/s Amaryllis Realtors & M/s Gulmarg Realtors, remaining
CAs (who had audited balance sheets of e-DHFL &
Shell companies and who had facilitated the promoters),
ultimate beneficiaries/end use of diverted funds through
shell companies & other Wadhawan Group Companies,
the DHFL officials, insider share trading of DHFL shares,
bank officials, NHB officials and other connected issues,
further investigation u/s 173 (8) of Cr. PC is continuing.
List of additional witnesses and additional documents will
be filed as and when required.
It is, therefore, humbly prayed that the aforesaid accused
persons may be summoned and be tried in accordance
with the provisions of law.”
19. The Special Court thereafter had taken cognizance of the alleged
offences as per the order dated 26.11.2022. It appears that earlier
the Special Court had rejected the application of the respondents
(accused) seeking statutory bail under Section 167(2) Cr.P.C.,
however at that time the issue was whether qua the offences against
[2024] 1 S.C.R. 691

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the respondents, period of sixty days or ninety days was applicable
for grant of mandatory bail due to non-filing of chargesheet by the
investigating agency, and it was held by the Special Court that the
period of ninety days was applicable in case of the respondents, in
which the chargesheet could be filed by the CBI. The respondents
thereafter filed another application under Section167(2) after the
cognizance of the offences was taken by the Special Court, on the
ground that the chargesheet filed against them was an incomplete
chargesheet.
20. The bone of contention raised by the learned Senior Counsels for
the Respondents in this appeal is that the appellant – CBI having
kept the investigation open qua other respondents as stated in Para
66 of the chargesheet, the ingredients of Section 173 Cr.P.C. could
not be said to have been complied with and therefore the report/
chargesheet under Section 173 could not be said to be a complete
chargesheet. It is immaterial whether cognizance has been taken
by the court or not. According to them the chargesheet filed against
the respondents and others was a subterfuge or ruse to defeat the
indefeasible right of the respondents conferred under Section 167(2)
Cr.P.C.
21. In our opinion, the Constitution Bench in K. Veeraswami vs. Union of
India and Others10 has aptly explained the scope of Section 173(2).
“76. The charge-sheet is nothing but a final report of police
officer under Section 173(2) of the CrPC. The Section
173(2) provides that on completion of the investigation the
police officer investigating into a cognizable offence shall
submit a report. The report must be in the form prescribed
by the State Government and stating therein (a) the names
of the parties; (b) the nature of the information; (c) the
names of the persons who appear to be acquainted with
the circumstances of the case; (d) whether any offence
appears to have been committed and, if so, by whom (e)
whether the accused has been arrested; (f) whether he
had been released on his bond and, if so, whether with or
without sureties; and (g) whether he has been forwarded
in custody under Section 170. As observed by this Court in

10 (1991) 3 SCC 655
692 [2024] 1 S.C.R.

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Satya Narain Musadi v. State of Bihar [(1980) 3 SCC 152,
157 : 1980 SCC (Cri) 660] that the statutory requirement
of the report under Section 173(2) would be complied
with if the various details prescribed therein are included
in the report. This report is an intimation to the magistrate
that upon investigation into a cognizable offence the
Investigating Officer has been able to procure sufficient
evidence for the court to inquire into the offence and the
necessary information is being sent to the court. In fact,
the report under Section 173(2) purports to be an opinion
of the Investigating Officer that as far as he is concerned
he has been able to procure sufficient material for the trial
of the accused by the court. The report is complete if it is
accompanied with all the documents and statements of
witnesses as required by Section 175(5). Nothing more
need be stated in the report of the Investigating Officer.
It is also not necessary that all the details of the offence
must be stated. The details of the offence are required
to be proved to bring home the guilt to the accused at
a later stage i.e. in the course of the trial of the case by
adducing acceptable evidence.”
22. In view of the above settled legal position, there remains no shadow
of doubt that the statutory requirement of the report under Section
173 (2) would be complied with if the various details prescribed
therein are included in the report. The report under Section 173 is
an intimation to the court that upon investigation into the cognizable
offence, the investigating officer has been able to procure sufficient
evidence for the court to inquire into the offence and the necessary
information is being sent to the court. The report is complete if it is
accompanied with all the documents and statements of witnesses
as required by Section 175 (5). As settled in the afore-stated case,
it is not necessary that all the details of the offence must be stated.
23. The benefit of proviso appended to sub-section (2) of Section
167 of the Code would be available to the offender only when a
chargesheet is not filed and the investigation is kept pending against
him. Once however, a chargesheet is filed, the said right ceases.
It may be noted that the right of the investigating officer to pray for
further investigation in terms of sub-section (8) of Section 173 is not
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taken away only because a chargesheet is filed under sub-section
(2) thereof against the accused. Though ordinarily all documents
relied upon by the prosecution should accompany the chargesheet,
nonetheless for some reasons, if all the documents are not filed
along with the chargesheet, that reason by itself would not invalidate
or vitiate the chargesheet. It is also well settled that the court takes
cognizance of the offence and not the offender. Once from the
material produced along with the chargesheet, the court is satisfied
about the commission of an offence and takes cognizance of the
offence allegedly committed by the accused, it is immaterial whether
the further investigation in terms of Section 173(8) is pending or not.
The pendency of the further investigation qua the other accused or
for production of some documents not available at the time of filing
of chargesheet would neither vitiate the chargesheet, nor would it
entitle the accused to claim right to get default bail on the ground
that the chargesheet was an incomplete chargesheet or that the
chargesheet was not filed in terms of Section 173(2) of Cr.P.C.
24. In Dinesh Dalmia (supra), this Court has elaborately explained
the scope of Section 167(2) vis-à-vis Section 173(8) Cr.P.C. The
paragraphs relevant for the purpose of this appeal are reproduced
hereinbelow: -
“19. A charge-sheet is a final report within the meaning
of sub-section (2) of Section 173 of the Code. It is filed
so as to enable the court concerned to apply its mind as
to whether cognizance of the offence thereupon should
be taken or not. The report is ordinarily filed in the form
prescribed therefor. One of the requirements for submission
of a police report is whether any offence appears to have
been committed and, if so, by whom. In some cases, the
accused having not been arrested, the investigation against
him may not be complete. There may not be sufficient
material for arriving at a decision that the absconding
accused is also a person by whom the offence appears
to have been committed. If the investigating officer finds
sufficient evidence even against such an accused who
had been absconding, in our opinion, law does not require
that filing of the charge-sheet must await the arrest of the
accused.
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20. Indisputably, the power of the investigating officer to
make a prayer for making further investigation in terms
of sub-section (8) of Section 173 is not taken away only
because a charge-sheet under sub-section (2) thereof
has been filed. A further investigation is permissible even
if order of cognizance of offence has been taken by the
Magistrate.
21. …………………………………….
22. It is true that ordinarily all documents accompany the
charge-sheet. But, in this case, some documents could
not be filed which were not in the possession of CBI and
the same were with GEQD. As indicated hereinbefore, the
said documents are said to have been filed on 20-1-2006
whereas the appellant was arrested on 12-2-2006. The
appellant does not contend that he has been prejudiced
by not filing of such documents with the charge-sheet. No
such plea in fact had been taken. Even if all the documents
had not been filed, by reason thereof submission of charge-
sheet itself does not become vitiated in law. The charge-
sheet has been acted upon as an order of cognizance had
been passed on the basis thereof. The appellant has not
questioned the said order taking cognizance of the offence.
Validity of the said charge-sheet is also not in question.
23 to 27.………………………………….
28. It is now well settled that the court takes cognizance of
an offence and not the offender. (See Anil Saran v. State
of Bihar [(1995) 6 SCC 142 : 1995 SCC (Cri) 1051] and
Popular Muthiah v. State [(2006) 7 SCC 296 : (2006) 3
SCC (Cri) 245] .)
29. The power of a court to direct remand of an accused
either in terms of sub-section (2) of Section 167 of the
Code or sub-section (2) of Section 309 thereof will depend
on the stages of the trial. Whereas sub-section (2) of
Section 167 of the Code would be attracted in a case
where cognizance has not been taken, sub-section (2)
of Section 309 of the Code would be attracted only after
cognizance has been taken.
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30. If submission of Mr Rohatgi is to be accepted, the
Magistrate was not only required to declare the charge-
sheet illegal, he was also required to recall his own order
of taking cognizance. Ordinarily, he could not have done
so. (See Adalat Prasad v. Rooplal Jindal [(2004) 7 SCC
338 : 2004 SCC (Cri) 1927], Subramanium Sethuraman
v. State of Maharashtra [(2004) 13 SCC 324 : 2005 SCC
(Cri) 242 : (2004) 7 Scale 733] and Everest Advertising
(P) Ltd. v. State, Govt. of NCT of Delhi [(2007) 5 SCC 54
: (2007) 2 SCC (Cri) 444 : JT (2007) 5 SC 529].) It is also
well settled that if a thing cannot be done directly, the same
cannot be permitted to be done indirectly. If the order taking
cognizance exists, irrespective of the conduct of CBI in
treating the investigation to be open or filing applications
for remand of the accused to police custody or judicial
remand under sub-section (2) of Section 167 of the Code
stating that the further investigation was pending, would
be of no consequence if in effect and substance such
orders were being passed by the court in exercise of its
power under sub-section (2) of Section 309 of the Code.
31 to 37……………………………………….
38. It is a well-settled principle of interpretation of statute
that it is to be read in its entirety. Construction of a statute
should be made in a manner so as to give effect to all the
provisions thereof. Remand of an accused is contemplated
by Parliament at two stages; pre-cognizance and post-
cognizance. Even in the same case, depending upon the
nature of charge-sheet filed by the investigating officer in
terms of Section 173 of the Code, a cognizance may be
taken as against the person against whom an offence is
said to have been made out and against whom no such
offence has been made out even when investigation is
pending. So long a charge-sheet is not filed within the
meaning of sub-section (2) of Section 173 of the Code,
investigation remains pending. It, however, does not
preclude an investigating officer, as noticed hereinbefore,
to carry on further investigation despite filing of a police
report, in terms of sub-section (8) of Section 173 of the
Code.
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39. The statutory scheme does not lead to a conclusion in
regard to an investigation leading to filing of final form under
sub-section (2) of Section 173 and further investigation
contemplated under sub-section (8) thereof. Whereas
only when a charge-sheet is not filed and investigation is
kept pending, benefit of proviso appended to sub-section
(2) of Section 167 of the Code would be available to an
offender; once, however, a charge-sheet is filed, the said
right ceases. Such a right does not revive only because a
further investigation remains pending within the meaning
of sub-section (8) of Section 173 of the Code.”
25. In view of the afore-stated legal position, we have no hesitation
in holding that the chargesheet having been filed against the
respondents-accused within the prescribed time limit and the
cognizance having been taken by the Special Court of the offences
allegedly committed by them, the respondents could not have claimed
the statutory right of default bail under Section 167(2) on the ground
that the investigation qua other accused was pending. Both, the
Special Court as well as the High Court having committed serious
error of law in disregarding the legal position enunciated and settled
by this Court, the impugned orders deserve to be set aside and are
accordingly set aside.
26. The respondents-accused shall be taken into custody in this case, if
released on default bail pursuant to the impugned orders. However,
it is clarified that observations made in this judgment shall not
influence the Special Court or High Court while deciding the other
proceedings, if any pending before them, on merits.
27. The Appeal stands allowed accordingly.

Headnotes prepared by: Divya Pandey Result of the case: Appeal allowed.