Facts of the Case

The accused-petitioner, Raju Sakthivel, filed an application under Section 439 of the Code of Criminal Procedure seeking regular bail in connection with CBI ACB Guwahati RC 7(A) 2022/CBI-GWH.

The case was registered under Section 120B IPC read with Sections 7 and 7A of the Prevention of Corruption Act, 1988. The accused had remained in custody since 29.09.2022.

The prosecution case originated from an FIR lodged on 14.09.2022 by Chittaranjan Nath of Tezpur, proprietor of Pawan Enterprise and a registered contractor of N.F. Railway, Maligaon.

According to the FIR allegations:

  • the complainant had submitted bills relating to construction work to the Deputy Chief Electrical Engineer (Construction), N.F. Railway, Maligaon;
  • the Additional Commissioner, Central Goods & Service Tax, Dibrugarh had raised a demand of ₹48,43,034 through an order/communication dated 23.07.2021;
  • according to the complainant, service tax was not required to be paid, and N.F. Railway had also issued a certificate to that effect;
  • the complainant preferred an appeal on 10.10.2021 before the Commissioner (Appeals), CGST, Central Excise and Customs, Guwahati against the adjudication order dated 23.07.2021; and
  • it was alleged that in August 2022, the accused demanded ₹4,50,000, stated to be 10% of the service-tax demand, through conduits for securing a favourable order in the appeal.

Upon the FIR, the CBI registered the case. The CBI thereafter laid a trap at Guwahati on 29.09.2022 and arrested the accused from the office of the Commissioner (Appeals), CGST, Central Excise and Customs, GST Bhawan, Machkhowa, Guwahati.

The CBI further alleged that Mahabir Jain Shyamsukha was caught red-handed while accepting illegal gratification of ₹3,83,000 on behalf of the accused.

The Court’s factual summary on pages 2 to 4 of the order records the service-tax demand, the alleged ₹4.50 lakh demand for a favourable appellate order, the CBI trap, the alleged acceptance of ₹3.83 lakh by another person, and the continuing investigation.

Issues Involved

The principal issues before the High Court were:

  1. Whether the accused was entitled to regular bail under Section 439 CrPC.
  2. Whether failure of the investigating/arresting authority to comply with Sections 41 and 41A CrPC before arrest materially affected the legality of continued detention.
  3. Whether non-compliance with the safeguards laid down by the Supreme Court in Arnesh Kumar vs State of Bihar, (2014) 8 SCC 273 supported grant of bail.
  4. Whether the principle stated in Satender Kumar Antil vs Central Bureau of Investigation & Anr., 2022 LiveLaw (SC) 577, concerning judicial satisfaction regarding compliance with Sections 41 and 41A CrPC, applied to the case.
  5. Whether the seriousness of the allegations, continuing investigation, and abscondence of one co-accused justified further custodial detention.
  6. Whether the fact that the accused had remained in custody for approximately 42 days made further detention unwarranted.
  7. Whether the prosecution’s apprehension that release of the accused, alleged to be the main culprit, could hamper investigation outweighed the procedural non-compliance and period of detention.

Petitioner’s Arguments

Learned counsel for the accused submitted that:

  • the accused had been arrested on 29.09.2022 and had remained in custody since then;
  • nothing had been recovered from the possession of the accused;
  • before arrest, the accused had never been served with a notice under Section 41A CrPC;
  • failure to comply with Section 41A entitled the accused to bail in light of the Supreme Court’s ruling in Satender Kumar Antil vs Central Bureau of Investigation & Anr.;
  • the High Court had also granted bail to another accused in B.A. No. 1940 of 2022 by order dated 07.09.2022 on account of non-compliance with Section 41A CrPC;
  • the accused had already remained behind bars for approximately 42 days; and
  • further custodial detention was unnecessary.

The accused accordingly sought release on bail.

Respondent’s Arguments / CBI’s Stand

The CBI strongly opposed the bail application and filed a written objection.

The CBI contended that:

  • Mahabir Jain Shyamsukha had been caught red-handed while accepting illegal gratification of ₹3,83,000 on behalf of the accused;
  • the investigation was still continuing;
  • one accused was still absconding;
  • the Investigating Officer had collected sufficient material against the accused;
  • the present accused was alleged to be the main culprit; and
  • releasing him on bail could hamper the investigation.

Regarding non-compliance with Section 41A CrPC, learned counsel for the CBI sought to explain that the offence was serious in nature and there was a possibility of absconding.

The CBI therefore sought dismissal of the bail petition.

Court’s Findings

After hearing both sides, examining the petition, documents, case diary and cited case law, the High Court recorded several findings:

  • the FIR was registered on 14.09.2022;
  • the accused was arrested on 29.09.2022;
  • the accused had remained in custody for approximately 42 days;
  • the accused was working as Commissioner (Appeals), CGST, Central Excise and Customs, GST Bhawan, Machkhowa, Guwahati;
  • the allegation was that the accused had demanded ₹4,50,000, described as 10% of the service-tax demand, through conduits for a favourable order in the complainant’s appeal;
  • Mahabir Jain Shyamsukha was alleged to have been caught red-handed while accepting ₹3,83,000 on behalf of the accused;
  • investigation was still continuing;
  • one co-accused remained to be arrested; and
  • importantly, the Investigating Officer had not complied with Sections 41 and 41A CrPC before effecting the arrest.

The Court held that such non-compliance constituted a clear violation of the dictum of the Supreme Court in Arnesh Kumar vs State of Bihar, (2014) 8 SCC 273.

The Court further found that the CBI counsel’s attempt to explain why the statutory safeguards had not been complied with was far from satisfactory.

The High Court noted that:

  • the maximum punishment prescribed under Section 7 of the Prevention of Corruption Act could extend to five years;
  • the maximum punishment under Section 7A of the Prevention of Corruption Act could extend to seven years;
  • nothing had been recorded by the arresting authority explaining why the relevant directions could not be complied with; and
  • the court below had also failed to record satisfaction regarding compliance or non-compliance with Sections 41 and 41A CrPC and the observations in Satender Kumar Antil.

The critical findings are reflected particularly on page 5 of the uploaded order, where the High Court records the violation of Arnesh Kumar and applies the principle from Satender Kumar Antil concerning compliance with Sections 41 and 41A CrPC.

Court Order / Final Directions

The High Court held that further custodial detention of the accused appeared unwarranted and that the case was fit for extension of the privilege of bail.

Accordingly, the Court directed that:

  • the accused be released on bail upon furnishing a bond of ₹1,00,000;
  • the accused furnish two sureties of like amount;
  • the bond and sureties be to the satisfaction of the learned Special Judge, CBI, Assam, Chandmari; and
  • the bail application stand disposed of.

Important Clarification

This order is significant because the High Court did not ignore the seriousness of the allegations. The Court expressly recorded:

  • the alleged demand of ₹4.50 lakh;
  • the alleged acceptance of ₹3.83 lakh by another person on behalf of the accused;
  • the fact that investigation was ongoing; and
  • the fact that one co-accused had yet to be arrested.

Nevertheless, the Court found procedural non-compliance with Sections 41 and 41A CrPC, considered the period of detention, nature of accusation, prescribed punishment and binding Supreme Court principles, and concluded that further custodial detention was unwarranted.

A further important clarification is that grant of bail does not amount to acquittal or a final finding that the corruption allegations were false. The order concerns entitlement to bail and legality/necessity of continued custody; it does not finally determine guilt or innocence.

Sections / Provisions Involved

Section 439 CrPC — provision under which the accused approached the High Court seeking regular bail.

Section 41 CrPC — concerns the statutory framework governing arrest without warrant and the necessity-related safeguards applicable to arrest.

Section 41A CrPC — concerns notice of appearance before police officer in applicable circumstances and formed a central part of the accused’s bail argument.

Section 120B IPC — criminal conspiracy provision forming part of the registered CBI case.

Section 7, Prevention of Corruption Act, 1988 — corruption-related offence provision; the Court noted the punishment aspect while considering bail.

Section 7A, Prevention of Corruption Act, 1988 — corruption-related offence provision; the Court noted that punishment may extend to seven years.

Article 21 Constitutional Liberty Principles — while not separately elaborated as a substantive issue in the order, the bail analysis operates within the broader legal framework governing personal liberty and lawful detention.

Link to download the order -

https://mytaxexpert.co.in/uploads/1783318596_1104compressed.pdf 

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