Supreme Court Withholds Decision on SFIO Officer’s Status as Police Under CrPC-Leaves Question Of Law Open

Vaibhav Ojha

2 years ago

The Supreme Court, while dismissing a petitiion for quashing a complaint filed by the Serious Fraud Investigation Office (SFIO), has left a crucial question of law open i.e., whether SFIO are police officer(s) under the Code of Criminal Procedure, 1973.

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NEW DELHI: The Supreme Court of India, presided over by Justices Sanjiv Khanna and Dipankar Datta, chose not to definitively answer whether officers of the Serious Fraud Investigation Office (SFIO) are considered police officers under the Code of Criminal Procedure (CrPC). This decision leaves a significant question of law open, stemming from a case involving the Ministry of Corporate Affairs (MCA) and the SFIO’s investigation powers.

The case originated when the MCA ordered an investigation into the affairs of 15 companies, leading to the SFIO appointing a team of inspectors for the task. The SFIO’s investigation later expanded to include additional companies, culminating in a report submitted under Section 212(12) of the Companies Act. Following this, the MCA sanctioned prosecution against the petitioners for offences under the Companies Act, including Section 447 (Punishment for Fraud), which led to a complaint that also implicated them in offences under the Indian Penal Code (IPC).

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The petitioners contested this in the High Court, arguing that the SFIO, as per the Companies Act and the CrPC, is limited to investigating offences under the Companies Act only. They contended that investigations and subsequent complaints under the IPC were not maintainable, as the SFIO officers are not ‘police officers’ as defined in the CrPC.

The High Court, however, observed that Section 4(2) of the CrPC allows for the investigation of offences under other statutes, like the Companies Act, in accordance with the CrPC unless stated otherwise. It noted that Section 212(15) of the Companies Act treats an investigation report filed before the Special Court as equivalent to a report filed by a police officer. Consequently, the High Court ruled that the officer filing such a report should be considered an officer in charge of a police station within the Act’s framework.

The High Court added,

“If during the 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.”

Despite these observations, the Supreme Court clarified that this question did not directly arise for consideration before the High Court and thus, the impugned judgment should not be treated as a precedent. This leaves the legal community with an unresolved question about the status of SFIO officers under the CrPC, a matter with significant implications for corporate law enforcement and criminal procedure in India.

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