CBI’s Summons to Manappuram CEO Upheld: Madras High Court Dismisses Quash Petition

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Case Name

V.P. Nandhakumar vs. The Inspector of Police, Central Bureau of Investigation, Anti-Corruption Branch, Madurai (High Court of Madras)

Crl.O.P.(MD).No.19086 of 2024 and Crl.M.P.(MD).Nos.11790 & 11791 of 2024

Date: 7th November 2024

Key Takeaways

• CBI’s Summons Valid: The court confirmed that the CBI’s notice under Section 41(A) of the Cr.P.C. was proper and lawful, as the investigation began before the new BNSS law came into force.
• No Right to Video Appearance: The petitioner cannot demand to appear via video conference; personal appearance is required for investigation.
• Health Grounds Rejected: The court found no sufficient medical reason to excuse the petitioner from appearing in person, as his advised rest period had already expired.
• Precedents Distinguished: The court distinguished this case from the Karnataka High Court’s “Manish Maheswari vs. State of Uttar Pradesh” and “Arunkumar Case,” finding the facts here justified the CBI’s actions.
• Section 531(2)(a) of BNSS: Ongoing investigations started under the Cr.P.C. must continue under the old law, not the new BNSS.

Issue

Was the CBI’s notice under Section 41(A) of the Cr.P.C. to the Managing Director/CEO of Manappuram Finance Ltd. valid, and should it be quashed due to alleged procedural and legal defects, including the applicability of the new BNSS law?

Facts

• Who: V.P. Nandhakumar, Managing Director and CEO of Manappuram Finance Ltd. (a large NBFC), was summoned by the CBI.
• What Happened: An office assistant at Punjab National Bank (PNB), Pudukkottai, allegedly stole over 14,700 grams of gold pledged by PNB customers and re-pledged it at Manappuram’s Pudukkottai branch, receiving money in 2018-2019. The stolen gold was later auctioned by Manappuram.
• Complaint & Investigation: PNB complained to local police in 2019, who registered a case and informed Manappuram. Later, PNB sought a CBI probe, which was granted by the High Court in January 2024. The CBI registered a new case and summoned the petitioner under Section 41(A) of the Cr.P.C.
• Petitioner’s Response: Nandhakumar sought to quash the CBI’s notice, arguing it was illegal under the new BNSS law and that he had no personal knowledge of the transactions.

Arguments

Petitioner (V.P. Nandhakumar)

• The CBI’s notice under Section 41(A) of the Cr.P.C. is invalid after the BNSS came into force.
• The notice lacks specific allegations or evidence showing his personal involvement or knowledge.
• Relied on the Karnataka High Court’s “Manish Maheswari vs. State of Uttar Pradesh” (W.P.No.11028 of 2021), where a similar notice was quashed for lack of material.
• Cited health issues (rib fracture) and requested to appear via video conference.

Respondent (CBI/Special Public Prosecutor)

• Section 531(2)(a) of BNSS allows ongoing investigations started under Cr.P.C. to continue under the old law.
• The CBI had sufficient material to justify the notice, including evidence that the petitioner approved the auction after being informed of the criminal case.
• There is no legal requirement to disclose all evidence in the notice itself.
• Personal appearance is necessary for investigation; video conference is not permitted.

Key Legal Precedents

• Manish Maheswari vs. State of Uttar Pradesh (Karnataka High Court, W.P.No.11028 of 2021): Quashed a Section 41(A) notice where there was no material linking the Managing Director to the alleged offence. The Madras High Court distinguished this case, noting that here, there was evidence of the petitioner’s involvement.
• Arunkumar Case (Karnataka High Court, Criminal Petition No.200913 of 2024): Held that cases registered after BNSS came into force must follow BNSS, not Cr.P.C. The Madras High Court found this inapplicable since the investigation here began before BNSS.
• Section 41(A) of Cr.P.C.: Allows police to summon a person for investigation if there is a reasonable complaint, credible information, or reasonable suspicion of a cognizable offence.
• Section 531(2)(a) of BNSS: States that ongoing investigations under Cr.P.C. before BNSS came into force must continue under Cr.P.C.

Judgement

• Petition Dismissed: The court dismissed the petition to quash the CBI’s notice.
• Reasoning: The investigation began under Cr.P.C., so the old law applies. There was enough material to justify the notice. The petitioner must appear in person; health grounds were not sufficient to excuse him, as his rest period had expired.
• Orders: The petitioner must comply with the CBI’s notice and appear in person for investigation. The request for video conference appearance was denied. All connected miscellaneous petitions were closed.

FAQs

Q1: Why did the court refuse to quash the CBI’s notice?

A: Because the investigation started under the old Cr.P.C. law, and there was enough evidence to justify summoning the petitioner. The court found no procedural or legal defect in the CBI’s actions.

Q2: Can the petitioner appear via video conference instead of in person?

A: No. The court held that personal appearance is required for investigation, and the accused cannot dictate the mode of investigation.

Q3: What about the petitioner’s health issues?

A: The court found that the medical advice to avoid travel had already expired, and there were sufficient travel facilities for the petitioner to appear in person.

Q4: Does the new BNSS law apply to this case?

A: No. Section 531(2)(a) of BNSS says that ongoing investigations started under Cr.P.C. must continue under Cr.P.C., not BNSS.

Q5: What is the significance of this judgment?

A: It clarifies that ongoing criminal investigations started before BNSS will continue under the old law, and that company heads can be summoned if there is material linking them to the alleged offence, even if they claim no personal knowledge.