Exercise Of Right To Silence By Accused Cannot Be Equated With Non-Cooperation: Bombay HC In Chanda Kochhar Case

The Bombay High Court in Chanda Kocchar’s loan fraud case observed that that the exercise of the right to remain silent by the accused cannot be equated with non co-operation

The court observed that an arrest without application of mind and due to regard to law amounts an abuse of power and does not satisfy the requirement of Section 41A(3) Criminal Procedure Code (CrPC).

The former Managing Director and Chief Executive Officer (CEO) of ICICI Bank Chanda Kochhar and her husband Deepak Kochhar had filed writ petitions seeking quashing of FIR, their arrest, and remand order passed by the Special Judge, CBI (Central Bureau of Investigation).

A Division Bench comprising Justice Anuja Prabhudessai and Justice N.R. Borkar held, “The arrest on 23.12.2022 was not on the basis of any additional material discovered in the course of the investigation, but was based on the same material which was within the knowledge of the Investigating Officer at the time of issuance of notice under Section 41A. Such routine arrest without application of mind and due regard to the law amounts to an abuse of power and does not satisfy the requirement of Section 41A(3) Cr.P.C.”

The Bench said that the involvement of the other bank officials in the conspiracy was not discovered in the course of the investigation but were to the knowledge of the Investigating agency, as on the date of registration of the FIR, despite which the Investigating Agency did not feel the need to arrest and interrogate Kochhar and her husband for a period of over three years.

Senior Advocate Amit Desai appeared for the petitioners while Advocate Kuldeep Patil and APP Rutuja Ambekar appeared for the respondents.

Brief Facts -

Chanda Kochhar and her husband sought quashing of an FIR registered under Sections 120B and 420 of the Indian Penal Code (IPC) and Section 7 and 13(2) read with 13(1)(d) of the Prevention of Corruption Act, 1988 (PCA). They also sought quashing of their arrest being in violation of settled tenets of law under Sections 46 and 41A(3) of CrPC and quashing of the remand order passed by the Special CBI Judge. In 2017, CBI had registered a preliminary inquiry based on the information that the officials of ICICI Bank had sanctioned credit facilities/high value loan to the Videocon Group of Companies promoted by Venugopal Dhoot, in violation of the Banking Regulation Act under RBI (Reserve Bank of India) guidelines and the Bank’s credit policy.

Chanda Kochhar was one of the members of the sanctioning committee and it was alleged that as a part of quid pro quo, Dhoot made an investment of Rs. 64 crores in a company and a Trust managed by Deepak Kochhar (her husband) through circuitous route. The preliminary inquiry revealed that Kochhar abused her official position in sanctioning load and got illegal gratification through her husband and this led to registration of FIR against the couple. Thereafter, both were arrested and the Special Judge remanded them to judicial custody. Hence, the couple sought for reliefs.

The High Court in view of the facts and circumstances of the case noted, “There can be no dispute that it is within the domain of the Investigating Agency to interrogate the accused and to arrive at a subjective satisfaction on the issue of arrest. We are conscious and mindful that the satisfaction of the investigating agency is subjective in nature and the Court cannot go into the reasonableness of the reasons of arrest and or substitute its objective opinion for the subjective satisfaction. Nevertheless, the subjective satisfaction is not wholly immune from judicial reviewability. The Court can consider whether the reasons for deprivation of liberty are rational, reasonable or fanciful.”

The Court further said that in case it is established that there was no material information or factual basis, the exercise of power becomes illegal and it is thus within the powers of the court to ensure that the subjective satisfaction is on factual basis and not on the basis of the whims or caprice of the investigating agency.

“It is relevant to note that though it is within the powers of the Investigating Agency to interrogate the accused has a right to remain silent. The right to silence emanates from Article 20(3) of the Indian Constitution, which gives an accused the right against self incrimination. Suffice it to say that exercise of the right to remain silent cannot be equated with non co-operation. Reliance is placed on the decision in Santosh Dwarkadas Fajat and Pankaj Sansal (supra)”, it also noted.

The Court observed that the Investigating agency has not been able to demonstrate existence of circumstances or supportive material based on which the decision to arrest was taken and that the absence of such circumstances, information or material which is the sine qua non for the decision of arrest reduces the provision a dead letter and renders the arrest illegal.

“The allegations that the petitioners are involved in the conspiracy, similarly the gravity of the offence and alleged quid pro quo were to the knowledge of the Investigating Agency as on the date of the registration of the FIR. The FIR states that the loan sanctioning Committees of ICICI Bank had sanctioned loan to Videocon Group of Companies. Some of the senior officials of ICICI Bank were also named in the first information report, and it was stated that the role of these senior officers of the sanctioning committee was also required to be investigated”, it said.

Furthermore, the Court took note of the fact that Kochhar was arrested before sunset and hence sub-section (4) of Section 46 CrPC is not attracted. It concluded that the arrest of the petitioners was illegal for breach of mandatory provision under Section 41A CrPC.

Accordingly, the High Court allowed the petitions.

Cause Title- Chanda Kochhar v. Central Bureau of Investigation & Anr. (Neutral Citation: 2024:BHC-AS:7554-DB)

Appearance:

Petitioners: Senior Advocate Amit Desai, Advocates Gopalakrishna Shenoy, Rohan Dakshini, Pooja Kothari, Deepa Shetty, Pranav Narsaria, and Tejas Popat.

Respondents: APP Rutuja Ambekar, Advocates Kuldeep Patil and Limosil Ala.

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