ED / SFIO / CBI / EOW MATTERS

CBI

CBI Investigation

Process And Rules To Follow:-

After a complaint has been received and verified by the CBI, a preliminary enquiry is conducted by the Bureau into the allegations that are included in the complaint.

If the preliminary enquiry reveals the occurrence of a cognizable offence that falls under the purview of the Bureau’s jurisdiction, a First Information Report is recorded under Section 154 of the CrPC (Code of criminal procedure) and CBI Investigation is initiated.

The DSPE provides the CBI officers with the necessary powers to investigate any case related to an offence mentioned in Section 3 of the DSPE Act.

These powers, however, aren’t restricted only to the territory of Delhi. The DSPE Act, in Articles 5 and 6 provides for the investigating officers- under CBI- to investigate cases occurring in Union Territories or in Territories of other States with the consent of the Union Government or the s\State governments respectively.

Once the consent has been provided, it can not be revoked under any case.[1]

CBI Investigation Process

The first step to be taken by any investigating officer who is handling a case is to create a Plan of Investigation.

This is a very methodical process which involves-

  1. Analyzing the allegations reported in the FIR,
  2. Categorizing the analysed allegations into the main allegations and secondary allegations,
  3. Drawing points as to how the investigation is to be proceeded with.

This “Plan of Investigation” is to be made by the Investigating officer with the help of the Superintendent of police and should contain among other things a list of the following:

  • Main allegations to be proved as per the FIR.
  • Witnesses to be examined during the course of the investigation.
  • Any documents to be seized during the course of the investigation.
  • Any technical existence required and if so, then what?
  • Any expert opinions to be obtained.
  • Searches to be conducted.
  • Interpol references required.
  • Any CBI Investigation required outside the territory of India.

A Plan of Investigation, once made, will not be considered to be final and binding.

It is a flexible document that can be altered as and when necessary. If due to any change in circumstances, modification or addition is required in the Plan, it can be done at any point during the CBI Investigation.

The Superintendent of police has to review the same whenever he makes a progress report on the same and the report is to be based around the information provided in such Plans.

In cases of supreme importance, the Director In General of Police also has the power to review such plans and issue any order as he may deem necessary regarding modifications and alterations of such plans.

Once the Plan of CBI Investigation has been made, the 2nd step involved in the investigation process is to proceed to the spot of the crime.[2]

The CBI Investigation process proceeds with an inspection of the spot of crime.

As defined by the CBI manual, a scene of crime or an event under CBI Investigation can be any place through which an investigating officer can get crucial evidence regarding the case.

This step forms the base of the CBI Investigation as the information that one gets at the scene of the crime usually includes evidence like information on the victiminformation of the Modus Operandi used by the criminals, circumstantial evidence revolving around the commission of the crime, physical evidence tying suspects to the scene of the crime and so on.

The importance is usually more so in cases of physical harm like offences of rape, murder, dacoit, riot and so on. Cases involving corruption and bribery usually do not bear much fruit in this stage as there is no physical evidence that can be found at such place regarding such crimes.

However, with improving digital security and improved forensic abilities, this step has become as important for solving these offences as well.

This step involves the following two processes:

  • Getting a Plan of the scene of offence: In all cases of CBI Investigation, the investigating officers has to make or has to procure from others a plan of the building or the area in which the crime has been committed. This not only helps in studying the area better, but also allows the investigating officer to better understand the way in which the crime being investigated was committed.
  • Photographing/video graphing/trapping the scene of crime and search proceedings: This is an important part of the CBI Investigation process and should be adhered to at all times. In case the photos are being taken in the conventional method, the negatives are to be preserved. The videos should be burned into a Write Only Disk in front of the witnesses.

This step helps in ensuring that an exact image of the crime scene as it was found remains with the Investigating Officer so that any clue that was initially missed can be later found. It also  ensures that witnesses do not turn hostile at the last moment and so on.

In all important cases of disproportionate assets/ recoveries, search proceedings should also be video graphed so that the Court may appreciate the evidence collected by CBI- about the luxurious lifestyle of the accused or the circumstances under which a particular recovery was made.

The 3rd step in the process involves ascertaining all the facts and circumstances of the case[3].

For the purpose of this step, the investigating officer is allowed to take assistance of any officer of a different department who might be well versed with the facts and the circumstances of the case.

This, however, can only be done with the approval of the Superintendent of Police. This step has to be carried out very judicially, especially in cases regarding corruption, embezzlement and fraud or while conducting an inquiry- on offences relating to misconduct.

In such cases, the Investigating officer should not only familiarize himself with the facts but, also with the rules and regulations as regards the working of an organizations, with which such inquiries are related to.

If any information is required from the Head of Departments or Vigilance officers, it should be so obtained in a comely fashion. Their cooperation and help should also be taken to understand the way a particular department works.

The fourth step involved is Discovery and arrest of the suspected officer.

For the purpose of carrying out this step in the process, the investigating officers have been given the same powers as that of a police officer as laid down in the Code of Criminal procedure.

The fifth step involved is collection of evidence relating to the commission of the offence which consists of acts like-

  • examining various people.
  • Recording of statements.
  • The search and seizure of the places or any document that may be deemed necessary for the purpose of the investigation.

However, it is necessary to ensure that the evidence so collected is not done with force, coercion or any such unfair means or practice. It is the duty of the Senior Superintendent of Police to ensure that there is no inducement, threat or promise made to any person from whom the information is collected.

If the information is collected in such a manner, the evidence so accrued will not be admissible and court and the actions of the officer can lead to dismissal from service. Wherever necessary, orders of the competent Court should be obtained for the custody and disposal of the case property in accordance with the provisions of Sections 451, 452 and 457 Cr. P. C.

Also, any documents that have been seized should be reviewed properly and necessary action should be taken to ensure that all those documents that are not required as a part of the CBI Investigation are returned as soon as possible.

If any photocopy of the documents seized by the CBI from a department is asked by the department, the same can be prepared by the department under the supervision of the Investigating Officers. In case this is not possible, the CBI has the responsibility to supply the same to them.

The sixth and the final stage in the process of CBI Investigation involves formulation of expert opinion on the guilt of the accused on the basis of the material evidence collected during the period of the investigation.

Once the investigating officer has reviewed all the evidence collected by him over the course of CBI Investigation, he has to make a decision regarding whether there is reasonable doubt against the accused and whether such doubt is enough to place him before the magistrate on trial.

If the answer to that question is yes, it becomes the duty of the investigating officer to take the necessary steps involved in getting him before the magistrate. This involves things like filing of a charge-sheet under section 173 of the Cr. P. C. before the competent court and so on.

Powers Of The Investigating Officer During CBI Investigation

The powers conferred upon the Investigating Officer during the course of CBI Investigation are mentioned in the Delhi Special Police Enforcement Act.

However, the powers so granted to the CBI are not that different to the powers granted by the Cr. P. C. Under section 153

All the police employees who are above the rank of an officer have a duty to investigate any action that constitutes a cognizable offence.

The same power is vested in the officers of the CBI under Section 6 of the DSPE Act. Similarly, the power to depute subordinates to go and investigate the crime scene conferred upon the Police by Section 157 of the Cr. P. C. is endowed upon the officers of the CBI by section 2(3) of the DSPE Act.

Therefore, it can be said that the powers and duties of an investigating officer are the same as that of an officer under Section 157-153 of the Cr. P. C.

This includes-

  • The powers to summon any person to attend an investigation (provided that the person so summoned is not under the age of 15).
  • To examine such witnesses, to record confessions and statements and so on.

If the case is against senior gazetted officers, then the case should be investigated by the additional Superintendent of Police and the same is to be supervised by the Superintendent through case diaries and case reports, communications with Investigating Officers, examination of Important witnesses and so on.

In cases where accused person(s) has(have) escaped from the country after committing the crime or part of the crime has been committed abroad or the witnesses and other material evidence are available in a foreign country, it may be considered necessary to conduct investigation abroad.

While informal information/material may be collected through Interpol and diplomatic channels, formal investigation to collect evidence and gather material objects/documents may be conducted through formal Letter of Request sent through a competent Court under provisions of 166-A of the Criminal Procedure Code.

The diplomatic missions which are situated in various countries abroad cannot help with such CBI Investigation except for providing information collected from informal channels like the Interpol.

For those countries who do not require a Letter of Request from the court for conducting such investigations, a notice containing relevant facts including various important facets of the investigation are to be sent to the Interpol wing of the CBI, who then continue with the investigation.

When, in cases of utmost importance and absolute necessity, officers of the CBI are sent abroad for the conduct of an investigation, it is important to keep in mind that such officers have no powers in that country.

Any action which impedes upon the law on a foreign land may lead to impeding the sovereignty of the country. In such cases, the National Central Bureau (Interpol) of that country may be requested through the Interpol Wing of CBI and the Competent Authority of the country through the diplomatic channels for taking necessary permission/approving visit of the Police Officers to the concerned country.

Any work that needs to be done out of the territory of India can only be started once such permission has been obtained from the relevant authorities.

This’s all about CBI Constitution- It’s Structure And Relations With State Police for now. Did you find this post useful? Let us know in the comments section below. Don’t forget to Share.

ED

Enforcement Directorate Matter

The Enforcement Directorate was established in the year 1956. Its Headquarters is situated at New Delhi.

ED is responsible for enforcement of the Foreign Exchange Management Act, 1999 (FEMA) and certain provisions under the Prevention of Money Laundering Act (PMLA).

he Directorate is under the administrative control of Department of Revenue (under the Ministry of Finance) for operational purposes.

The Directorate enforced regulations under the Foreign Exchange Regulation Act, 1973 but later on FERA is being replaced by the FEMA.

Enforcement Directorate has 10 Zonal offices each of which is headed by a Deputy Director and 11 sub Zonal Offices each of which is headed by an Assistant Directors.

Functions of the Enforcement Directorate:-

1. ED; investigates suspected violations of the provisions of the FEMA. Suspected violations include; non-realization of export proceeds, “hawala transactions”, purchase of assets abroad, possession of foreign currency in huge amount, non-repatriation of foreign exchange, foreign exchange violations and other forms of violations under FEMA.

2. ED collects, develops and disseminates intelligence information related to violations of FEMA, 1999. The ED receives the intelligence inputs from Central and State Intelligence agencies, complaints etc.

3. ED has the power to attach the asset of the culprits found guilty of the violation of FEMA. “Attachment of the assets” means prohibition of transfer, conversion, disposition or movement of property by an order issued under Chapter III of the Money Laundering Act [Section 2(1) (d)].

4.  To undertake, search, seizure, arrest, prosecution action and survey etc. against offender of PMLA offence.

5. To provide and seek mutual legal assistance to/from respective states in respect of attachment/confiscation of proceeds of crime and handed over the transfer of accused persons under the Money Laundering Act.

6. To settle cases of violations of the erstwhile FERA, 1973 and FEMA, 1999 and to decide penalties imposed on the conclusion of settlement proceedings.

So this was all about the reason behind the establishment and functions of the Enforcement Directorate. ED is playing a very crucial role in fighting the menace of corruption in the country. Currently, it is investing the assets purchased by the Robert Vadra and some time ago it attached the assets of the fugitive offender Vijay Mallya.

SFIO

Serious Fraud Investigation Office.

In this piece of writing, the author throws light on the new concept introduced under Companies Act, 2013 (‘the Act’) regarding of “Establishment of Serious Fraud Investigation Office” (SFIO) by Central Government and investigation of affairs of company by established SFIO & their powers to arrest the accused. Its laid down procedure and mechanism for conducting such investigations are briefly discussed in this article.

Establishment of SFIO by Central Government and Investigation into the affairs of company by SFIO are guided by section 211 & section 212 of the Companies Act, 2013 respectively. Enforcement of the provisions of these sections and applicable rules thereof are notified on following dates accordingly:

no
Particulars
Notification
1
Section 211 of the Act
The Ministry of Corporate Affairs notified via notification no SO 902(E) dated 26.03.2014, effective from 01.04.2014
2
Section 212 of the Act
The Ministry of Corporate Affairs notified certain sections via notification no SO 902(E) dated 26.03.2014, effective from 01.04.2014
3
Subsection (8) to (10) of section 212 of the Act
The Ministry of Corporate Affairs notified certain sections via notification no SO 2751(E) dated 24.08.2017, effective from 24.08.2014
4
Companies (Inspection, Investigation and Inquiry) Rules, 2014
Effective from 01.04.2014
5
Companies (Arrest in connection with Investigation by Serious Fraud Investigation Office) Rules, 2017
The Ministry of Corporate Affairs notified certain sections via notification no GSR 1062(E) dated 24.08.2017 effective from the date of the publication into the official gazette

SERIOUS FRAUD INVESTIGATION OFFICE:

Section 211 of the Act deals with the establishment of the Serious Fraud Investigation Office by the Central Government as a multi-disciplinary organization, guided by separate new section under the Companies Act, 2013.

What is SFIO…..?

SFIO is an agency in India carrying investigation of a serious case of FRAUDS. It is under the jurisdiction of Ministry of Corporate Affairs, Government of India. It is a multi-disciplinary organization having experts from the financial sector, capital market, accountancy, forensic audit, taxation, law, information technology, company law, customs and investigation for the prosecution of white-collar crimes and frauds under the company’s law. Agency headquarters is in the Indian capital, New Delhi; the agency has 4 regional offices in Hyderabad, Mumbai, Kolkata and Chennai

This was a major recommendation made by the Naresh Chandra Committee which was set up by the government on 21 August 2002 on corporate governance and Government approved the setting up of organization on 9th January 2003.

The whole and sole purpose behind the establishment of SFIO was the protection of interest of investors. Investors are the real owners of a company but the power of management of the company is vested in the Board of Directors. There are chances to abuse of power like committing fraud, by few directors of the company. Therefore the Central Government has established SFIO to deal specifically with the investigation of corporate frauds, to prevent and catch such crimes.

SFIO will undertake only those cases, which involves:

a) Complexity and having inter-departmental and multi-disciplinary ramifications.

b) Substantial involvement of public interest in terms of monetary misappropriation or in terms of the number of persons affected and

c) The possibility of investigations leading to or contributing towards a clear improvement in systems, the law of procedure.

Constitution of SFIO…..?

The SFIO is headed by a director, not below the rank of a Joint Secretary to the Government of India having knowledge and experience in dealing with the matters relating to corporate affairs.
The other experts are to be appointed by the Central Government from amongst persons of ability, integrity and experience in the field of banking,  Corporate  Affairs,  Taxation,  Forensic audit,  Capital Market, Information Technology, Law, or Other fields as required.

(Accordingly, the Central Government has framed Ministry of Corporate Affairs, Serious Fraud Investigation Office, Additional Director (Capital Market)/ Joint Director (Capital Market) and Additional Director (Financial Transaction) Group ‘A’ post recruitment Rules, 2015.)

INVESTIGATION INTO THE AFFAIRS OF THE COMPANY BY SFIO

The Companies Act empowers the Central Government with the right to investigate the affairs of the company, especially in cases of alleged fraud or even in the oppression of the minority shareholders.

There are three types of investigation mentioned in the Companies Act 20131. An investigation into the affairs of the Companies2. An investigation into the company’s affairs in other cases3. An investigation into the ownership of the Companies

As per section 212 of the Act, the Central Government may refer any matter for investigation to SFIO, of it is of the opinion that it is necessary to investigate on the basis of:

a) on receipt of a report of the Registrar or inspector under section 208 where the further   investigation into the affairs of the company is necessary;

b) on intimation of a  special resolution passed by a  company that  its affairs  are required  to be investigated;

c) in the public interest; or

d) on request from any Department of the Central Government or a State Government

The case shall not be investigated by other departments when assigned to SFIO

As per section 212 (2) of the Act, when any case has been assigned by the Central Government to the SFIO for investigation under this Act, no other investigating agency of Central Government or any State Government shall proceed with the investigation in such case in respect of any offence under this Act and all existing cases will be transferred to SFIO.

The investigation officer of SFIO shall have powers of an inspector under section 217. The company and its officers and employees, who are or have been in the employment of the company, shall be responsible to provide all information, explanation, documents and assistance to the investigating officer as he may require for conduct of the investigation

Criminal Liabilities of Company in cases of Fraud

The certain corporate activities have been regarded as a fraud and kept under the category of cognizable as well as non-bailable offences and punishable under section 447 of the Companies Act, 2013.

Provided the special court shall not take cognizance of any offence except upon a complaint in writing made by –

The Director, Serious Fraud Investigation office,
Any officer of the Central Government authorized by general or special order in writing in this behalf

SFIO will now have the power to arrest in respect of certain offences which are punishable for fraud provided in section 447 and such person.

POWERS TO ARREST

Companies (Arrest in connection with Investigation by Serious Fraud Investigation Office) Rules, 2017 read with Section 212 of the Act

Most provisions of the Act came into force on April 1, 2014. While powers of arrest to the SFIO, which comes under the corporate affairs ministry, the provision has been notified only now. The ministry has notified the rules pertaining to arrests in connection with Investigation by the SFIO and they came into effect from August 24, 2017. 

As per the notification:

The director as well as additional or assistant director level officials at the SFIO after carrying investigation into the affairs of the company (not being Government or Foreign Company)
Has reason to believe the person is guilty of any offence with regards to the case being investigated, on the basis of material information in his possession.
Then Director, Additional Director or Assistant Director may arrest such person.

(Provided “In case of an arrest being made by the additional director or assistant director, the prior written approval of the director SFIO shall be obtained,” as per the Notification)

The SFIO director would be the competent authority for all decisions pertaining to arrest.
(Arrest in case of Government or Foreign Company); the person found guilty with regards to the case being investigated can be arrested only with “the prior approval of Central Government”