INDIA Law and Practice Contributed by: Vijayendra Pratap Singh, Asif Ahmed, Bhanu Jindal and Khushi Mittal, AZB & Partners
EOW is responsible for dealing with, inter alia, bank - ing crimes, housing crimes, corporate fraud, general cheating, and crimes relating to the security and com - modities markets. Regulatory Oversight Certain regulators are also empowered to investigate regulatory offences. For example, SEBI is empowered to investigate fraudulent and prohibited transactions in securities, including insider trading. The Reserve Bank of India (RBI) can also prosecute banks and non- banking financial companies (NBFCs) for regulatory offences. Conflict of Jurisdiction Different authorities investigating the same offence have defined jurisdictions. The SFIO investigates offences under the Companies Act. In RK Gupta v Union of India , 2023:DHC:9243, the Delhi High Court held that the SFIO can also investigate offences under the IPC (now BNS). The ED has exclusive jurisdiction to investigate mon - ey laundering offences but only after registration of a predicate offence listed under the PMLA. If the predi - cate offence is quashed or the accused discharged, the ED cannot continue proceedings under the PMLA. Similarly, state police cannot exercise general inves - tigative powers once a case falls under the exclusive jurisdiction of the CBI. Civil/Administrative Enforcement Against White- Collar Offences White-collar crime does not have any civil enforce - ment mechanisms, except a duty to disclose in certain cases and restitution under tort law. However, certain legislation, like the Securities and Exchange Board of India Act, 1992 (“SEBI Act”) and the Insolvency and Bankruptcy Code, 2016 (IBC) provides for a claw- back/disgorgement of undue benefit received by the offender. Public policy can influence enforcement actions in India, primarily aiming to protect public interest and uphold the rule of law. Notable cases like the Saty - am scandal (2009), which exposed massive financial fraud and corporate governance failures, led to strin -
gent reforms in regulatory oversight and prosecution under the IPC (now BNS). 2.2 Initiating an Investigation Investigations typically commence upon the filing of a complaint with the appropriate investigative authority, although certain legislation empowers authorities to initiate investigations suo motu. Under Section 173 (3) of the BNSS, a preliminary enquiry is now mandatory before investigating any cognisable offence punishable with imprisonment of three years or more but less than seven years. This enquiry, which must be completed within 14 days of receiving the information, requires the investigating officer to determine whether a prima facie case exists to proceed – representing a higher threshold than under the previous regime, which required only verifi - cation that a cognisable offence had been identified. The first information report (FIR) marks the formal commencement of an investigation. The BNSS intro - duced several new provisions relating to the registra - tion of an FIR. Under Section 173, a Zero FIR may be registered at any police station, regardless of where the offence occurred. However, it must eventually be forwarded to the police station with territorial jurisdic - tion. Section 173 has introduced the e-FIR, whereby a complaint is submitted electronically on the online e-FIR portal of the relevant police authority. There - after, the complainant is required to visit the police station within three days and sign a physical copy of the complaint. The BNSS also mandates that a copy of the e-FIR be shared with the complainant. The MHA has introduced a Standard Operating Pro - cedure (MHA SOP) detailing the necessary steps for registering a Zero FIR and e-FIR, and also the proce - dure for conducting the preliminary enquiry. The court may also direct the investigation of a crime, where the police fail to initiate an investigation by reg - istering an FIR. A public servant cannot be prosecuted for offences of bribery and corruption without prior sanction from the government.
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