Bombay High Court declares the arrest of Kochhar couple illegal

A division bench of the high court gave bail to Chanda and Deepak Kochhar, arrested last month for a loan fraud case filed in 2019, on the ground that not disclosing true and correct facts cannot be the reason for one’s arrest.

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IN a significant decision, the Bombay High Court on Monday declared the arrest of Chanda Kochhar, former ICICI bank managing director and chief executive officer, and her husband, businessman Deepak Kochhar, illegal, holding that their non-disclosure of true and correct facts cannot be a reason for their arrest inasmuch as the right against self-incrimination is provided for in Article 20(3) of the Constitution.

The duo were arrested by the Central Bureau of Investigation (‘CBI’) last month in lieu of a first information report (‘FIR’) registered against them in 2019 in a case linked to alleged irregularities in a Rs. 3,000-crore loan provided to the Videocon Group when Chanda Kochhar was heading the private sector bank. Both are facing charges under Sections 120B and 420 of the Indian Penal Code, and Sections 7 and 13(2) read with 13(1)(d) (this latter provision was removed by a legislative amendment in 2018) of the Prevention of Corruption Act.

A division bench of Justices Revati Mohite Dere and Prithviraj K. Chavan found the arrest of the duo not in accordance with the law as there was non-compliance with the mandate of Sections 41(1)(b)(ii), 41A and 60A of the Code of Criminal Procedure Code (‘CrPC’).

Section 41(1)(b)(ii) of the CrPC spells out the necessity to arrest without warrant a person suspected of having committed an offence punishable with imprisonment up to seven years, whose arrest is necessary: “(a) to prevent such person from committing any further offence; or (b) for proper investigation of the offence; or (c) to prevent such person from causing the evidence of the offence to disappear or tampering with such evidence in any manner; or (d) to prevent such person from making any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the Court or to the police officer; or (e) unless such a person is arrested, his presence in the Court whenever required cannot be ensured.”

Examining the grounds mentioned in the arrest memo, the bench said that “it is evident that the officer, in the arrest memo, in the column, `Grounds of arrest’ has merely stated that ‘The accused is an FIR named. She has been not cooperating and disclosing true and full facts of the Case.’ The bench found these grounds contrary to the facts on record.

The bench also found that petitioners, after registration of the preliminary inquiry in December 2017, had reported to the CBI, pursuant to the summons issued; that they not only appeared but also submitted documents, details of which are mentioned in the seizure memos.

The delay of four years in the arrest also weighed in favour of the Kochhar couple, as the bench noted that “during the period, 2019 till June 2022, for around four years, neither any summons were issued to the petitioners nor any communication was established by the respondent No.1– CBI with the petitioners.” In addition, the bench noted that the reason to arrest the petitioners after four years was not spelt out in the arrest memos, as mandated by section 41(1)(b)(ii) of CrPC.

The bench also held that the reasons given in the arrest memos, that the accused had not been cooperating and disclosing true and full facts of the case, were casual, mechanical and perfunctory, clearly without application of mind.

Pertinently, the bench also linked the arrest to the violation of Article 20(3) of the Constitution, which confers the right against self-incrimination. The bench held that “`Not disclosing true and correct facts’ cannot be a reason, inasmuch as, the right against self-incrimination is provided for in Article 20(3) of the Constitution.

“It is a well-settled position in view of the Constitution Bench decision in Selvi vs. State of Karnataka. Article 20(3) is an essential safeguard in criminal cases and is meant to be a vital safeguard against torture and other coercive methods used by investigating agencies. Hence, merely because an accused does not confess, it cannot be said that the accused have not co-operated with the investigation”, the bench held.

The bench then highlighted that the judiciary has time and again reiterated the role of courts in protecting personal liberty and ensuring that investigations are not used as a tool of harassment.

Commenting on the role of Constitutional courts, the bench said “as a Constitutional Court, we cannot be oblivious to the contravention of the mandatory provisions of law and the judgments of the Apex Court, in particular, the directions given in Arnesh Kumar vs. State of Bihar and Satender Kumar Antil vs. CBI.

“Personal liberty of an individual is an important aspect of our constitutional mandate. Merely because an arrest can be made because it is lawful, does not mandate that arrest must be made. As emphasized by the Apex Court, a distinction must be made between the existence of the power to arrest and the justification for exercise of it. It is further observed that if arrests are made in a routine manner, it could cause incalculable harm to the reputation and self-esteem of a person and that presumption of innocence is a facet of Article 21, which would enure to the benefit of an accused.”, the bench held.

The bench also took a grim view of the magistrate’s order authorising detention of the petitioners. The bench noted that it was incumbent on the judicial officer authorising detention under Section 167 of the CrPC to be first satisfied that the arrest made was legal and in accordance with law, and that all the constitutional rights of the person arrested were satisfied, adding that the same is not an empty formality.

“A perusal of the remand order passed by the learned Special Judge, Mumbai, does not record the satisfaction as required to be given for authorising the detention of the petitioners with the respondent No.1-CBI. The onus of recording satisfaction lies not only on the officer but even on the Judge”, the bench held.

Senior advocates Amit Desai and Vikram Choudhary appeared for Chanda Kochhar and Deepak Kochhar respectively.