ORDER : M.I.ARUN, J. Petitioner No.3 is a private limited company and petitioner Nos.1 and 2 are its directors. Petitioner No.3 borrowed a loan from a consortium of banks headed by the State Bank of India (for short, 'the SBI'). It has committed default in repayment of the said loan. The loan account has been declared as a Non-Performing Asset (NPA). The banks have initiated recovery proceedings. In the process, they discovered that they have been defrauded by petitioner No.3-private limited company, its directors and some of its employees. Hence, the SBI lodged a complaint with respondent No.1-Central Bureau of Investigation (for short, 'the CBI') on 16.10.2017, wherein they have made allegations on the petitioners, their auditors and their employees. However, in the complaint, they have categorically stated that they do not suspect any of their employees being involved in the said offences. Paragraph No.13 of the complaint reads as under: "13. Subsequent to the account becoming a NPA, staff accountability exercise had been conducted by the Bank, which did not reveal any malafide discernible on the part of any of the bank officials, who dealt with the account during the material time. We do not suspect any criminal connivance of our officials in the fraud. We also do not suspect the role of any Stock Auditor, Empanelled Valuer or Concurrent Auditor (Chartered Accountant). However, the role of Statutory Auditors, who audited the books of accounts of the company for the year 2011-12 and 2012-13, is suspicious." 2. But, in paragraph No.18 of the complaint, they have stated, they suspect certain persons of having committed the offences and the same reads as under: "18. Hence, as authorized by the competent authority of State of India and the consortium of Bankers, (Copies of the authorization letters issued by the other bankers placed as Annexure-N, O & P), I request your goodselves to receive this complaint on your records, investigate and bring the culprits (alleged as under) to book, in order to render justice to the Bank and to safeguard the public money involved. 1. Shri B.Prashanth Hegde (PAN-AAIPH2121D) S/o.V.Ratnakar Hegde Hindu, aged about 66 years Residing at 261, Defence Colony, Indiranagar, Bengaluru 560038. (Last Known address as per available records) 2. Smt.Shereen Hegde (PAN-AALPH0765Q) Wife of Shri.B.Prashant Hegde Hindu, aged about 61 years Residing at 261, Defence Colony, Indiranagar, Bengaluru 560038. 1. Shri B.Prashanth Hegde (PAN-AAIPH2121D) S/o.V.Ratnakar Hegde Hindu, aged about 66 years Residing at 261, Defence Colony, Indiranagar, Bengaluru 560038. (Last Known address as per available records) 2. Smt.Shereen Hegde (PAN-AALPH0765Q) Wife of Shri.B.Prashant Hegde Hindu, aged about 61 years Residing at 261, Defence Colony, Indiranagar, Bengaluru 560038. (Last Known address as per available records) 3.Mahesh Hegde Chief Financial Officer Metal Closures Pvt Ltd 39/4B, Doddakallasandra, 12 KM, Kanakapura Road, Bangalore-560 062 4. Shri.Sudhakar (Partner) M/s Venkat, Kollali & Murthy (Chartered Accountants) No 25, 1 st Floor, Gover Road, Cox Town, Bangalore-560 005. 5. Unnamed Officials and employees of Metal Closures Pvt Ltd., A Private Limited Company having its registered office at 39/4B, Doddakallasandra, 12 KM, Kanakapura Road, Bangalore-560 062 6. Unknown Public Servants & Unknown others." 3. The complaint has been lodged with respondent No.1-CBI, based on a circular issued under Section 35A of the Banking Regulation Act, 1949. The said provision reads as under: " 1 [35A. Power of the Reserve Bank to give directions. —(1) Where the Reserve Bank is satisfied that— (a) in the [public interest]; or [(aa) in the interest of banking policy; or] (b) to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company; or (c) to secure the proper management of any banking company generally, it is necessary to issue directions to banking companies generally or to any banking company in particular, it may, from time to time, issue such directions as it deems fit, and the banking companies or the banking company, as the case may be, shall be bound to comply with such directions. (2) The Reserve Bank may, on representation made to it or on its own motion, modify or cancel any direction issued under sub-section (1), and in so modifying or cancelling any direction may impose such conditions as it thinks fit, subject to which the modification or cancellation shall have effect.]" The relevant circular reads as under: "CHAPTER VI 6.Guidelines for Reporting Frauds to Police/CBI 6.1 In dealing with cases of fraud/embezzlement, banks should not merely be actuated by the necessity of recovering expeditiously the amount involved, but should also be motivated by public interest and the need for ensuring that the guilty persons do not go unpunished. Therefore, as a general rule, the following cases should invariably be referred to the State Police or to the CBI as detailed below: 4. Based on the aforementioned complaint, the CBI has registered a Regular Case (RC No.11(E)/2017) and has taken up the matter for investigation. Aggrieved by the same, the present petition is filed. 5. Apart from other grounds, the petitioners are challenging the prosecution initiated by respondent No.1- CBI on the ground that it does not have the jurisdiction to register the case and investigate the same. 6. Attention of this Court is drawn to Sections 3, 5 and 6 of the Delhi Special Police Establishment Act, 1946. The said provisions read as under: " 3. Offences to be investigated by special police establishment. —The Central Government may, by notification in the Official Gazette, specify the offences or classes of offences which are to be investigated by the Delhi Special Police Establishment. 5. Extension of powers and jurisdiction of special police establishment to other areas.— (1) The Central Government may by order extend to any area (including Railway areas) in a State, not being a Union territory the powers and jurisdiction of members of the Delhi Special Police Establishment for the investigation of any offences or classes of offences specified in a notification under section 3. (2) When by an order under sub-section (1) the powers and jurisdiction of members of the said police establishment are extended to any such area, a member thereof may, subject to any orders which the Central Government may make in this behalf, discharge the functions of a police officer in that area and shall, while so discharging such functions, be deemed to be a member of the police force of that area and be vested with the powers, functions and privileges and be subject to the liabilities of a police officer belonging to that police force. (3) Where any such order under sub-section (1) is made in relation to any area, then, without prejudice to the provisions of sub-section (2), any member of the Delhi Special Police Establishment of or above the rank of Sub-Inspector may, subject to any orders which the Central Government may make in this behalf, exercise the powers of the officer-in-charge of a police station in that area and when so exercising such powers, shall be deemed to be an officer-in-charge of a police station discharging the functions of such an officer within the limits of his station. 6. Consent of State Government to exercise of powers and jurisdiction .—Nothing contained in section 5 shall be deemed to enable any member of the Delhi Special Police Establishment to exercise powers and jurisdiction in any area in a State, not being a Union territory or railway area, without the consent of the Government of that State." 7. Based on the aforementioned provisions, it is contended that respondent No.1, which is constituted under the Act, gets jurisdiction to investigate an offence in a state only when the State Government gives its consent as contemplated under Section 6 of the Delhi Special Police Establishment Act, 1946, and not otherwise. It is submitted that the Reserve Bank of India (for short, ‘the RBI’) does not have the authority, under the provisions of the Banking Regulation Act, 1949, to issue a circular conferring jurisdiction on the CBI to investigate any offence. 8. Per contra, the learned counsel for the respondents submits that the RBI has a right to confer jurisdiction on the CBI to investigate into the offences by issuing necessary circulars. Further, it is contended that the State of Karnataka, in exercise of its powers under Section 6 of the Delhi Special Police Establishment Act, 1946 has issued a Notification dated 10.01.2005, which reads as under: "GOVERNMENT OF KARNATAKA No.HD 234 PCR 2004 Karnataka Government Secretariat, Vidhana Soudha, Bangalore, dated 10.01.2005. Further, it is contended that the State of Karnataka, in exercise of its powers under Section 6 of the Delhi Special Police Establishment Act, 1946 has issued a Notification dated 10.01.2005, which reads as under: "GOVERNMENT OF KARNATAKA No.HD 234 PCR 2004 Karnataka Government Secretariat, Vidhana Soudha, Bangalore, dated 10.01.2005. NOTIFICATION In exercise of the powers conferred by section 6 of the Delhi Special Police Establishment Act, 1946 (Central Act No.25 of 1946) and in supersession of the previous orders/Notifications the State of Karnataka hereby accords consent under the said Section for the exercise of powers and jurisdiction by the Members of the Delhi Special Police Establishment within the State of Karnataka for the investigation of all types of cases involving either Central Government servants or officers belonging to public sector undertakings under the Central Government, under different State and Central Acts. By order and in the name of the Governor of Karnataka, (V.S.VASANTHAMONEY) Joint Secretary to Government, Home and Transport Department, (Law and Order)" 9. It is further submitted that, in the instant case, it is not only respondent No.2 who has given the complaint, but petitioner No.3 has also lodged a complaint with the jurisdictional state police alleging fraud, forgery and cheating by its own employees in connivance with certain officials of the banks. It is further submitted that the case is still pending. It is further submitted that the trail of the money that is, how the money came to be disbursed, who took the money and how it has been utilized has not been investigated by the State Police. 10. The case of the respondents is, even presuming, though not admitting, that the RBI does not have the jurisdiction to confer investigative powers on respondent No.1 solely based upon the circulars issued under the Banking Regulation Act, 1949, it is submitted that in the light of the Notification dated 10.01.2005 issued by the State, when the offence pertains to the involvement of employees of public sector undertaking, the CBI is empowered to investigate into the case. It is contended that very perusal of the complaint lodged by respondent No.2-SBI shows that one of the persons named in the complaint against whom investigation is sought, is an 'unknown public servant'. It is contended that very perusal of the complaint lodged by respondent No.2-SBI shows that one of the persons named in the complaint against whom investigation is sought, is an 'unknown public servant'. It is further submitted that the said fact is corroborated by the complaint lodged by petitioner No.3, who has requested the State Police to investigate into the offences committed by the bank officials. 11. It is also contended that the CBI is a police station and when it receives the information in respect of cognizable offences, as per Section 154 of the Code of Criminal Procedure, 1973 (for short, 'the Cr.P.C'), it is bound to register the case and only upon investigation, if it is found that it has no jurisdiction it shall not proceed further and if upon investigation, it is found that the bank officials who are public sector employees are also involved in the case, then in that case, the CBI will have the jurisdiction. 12. The question that arises for consideration in the instant case is: Whether the CBI has the jurisdiction to register an FIR and investigate the case depending upon the present facts and circumstances? 13. Respondent No.1-CBI is constituted under the provisions of the Delhi Special Police Establishment Act, 1946. When an offence is committed within the territorial jurisdiction of the State, normally the State Police will have the jurisdiction to investigate the said offence. However, when a notification is passed by the relevant State giving consent as contemplated under Section 6 of the Delhi Special Police Establishment Act, 1946, or when the matter is referred to the CBI, by the Constitutional Courts, respondent No.1-CBI will get the necessary jurisdiction to investigate the offence. 14. However, the RBI is not empowered to confer the jurisdiction on the CBI by issuing a circular under the provisions of the Banking Regulation Act, 1949, irrespective of the gravity of the offence or the amount of money involved. The attention of this Court is drawn to two judgments passed by the co-ordinate Bench of this Court. In Crl.P.No.7325/2022 and other connected matters, this Court, while examining the ratio to the offence, in paragraph Nos.14 to 19, has held as under: "14. On declaration of fraud a complaint comes to be registered against the petitioners before the CBI by the Bank on 15-02-2022. In Crl.P.No.7325/2022 and other connected matters, this Court, while examining the ratio to the offence, in paragraph Nos.14 to 19, has held as under: "14. On declaration of fraud a complaint comes to be registered against the petitioners before the CBI by the Bank on 15-02-2022. Clauses of the complaint which are germane to be noticed are extracted hereunder for the purpose of ready reference: “ 3.0 Introduction M/s Associate Lumbers Pvt.Ltd. (ALPL) was incorporated on 10 th May 1986 as a private company for carrying on the business of trading in timber. The company was provided with CIN – U20101MH1986PTC039719 and registration No.039719. The Company has its Registered Office at Associated House 85-A, Victoria Road, Mustafa Bazar, Mumbai-4000010 and operates from its offices at Mumbai, Delhi, Kandla, Tuticorin and Mangalore. The Associate Lumbers group of companies is an agglomeration of two business houses viz., (i) M/s Farouq Soudagar Darvesh & Co and (ii) M/s Jawahar Saw Mills (Agicha). The Company imports logs from foreign countries (particularly from Myanmar) through different parts of India, viz., Mangalore, Cochin, Chennai, Tuticorin, Visakhapatnam and Mumbai. The affairs of the Company are managed by Mr. Mohamed Farouk Suleman Darvesh,Mr.Srichand Satramdas Agicha, Mr.Abrahim Suleman Darvesh and Mr. Manoharlal Satramdas Agicha, who are the Directors of the Company. Details of the Directors:- Mohamed Farouk Suleman Darvesh (DIN- 00364297) resident of 85-A, Victoria Road, Mustafa Bazar, Mazagaon, Mumbai – 400001 also at 7 Perry Cross Road, Bandra (W), Mumbai 400050. Srichand Satramdas Agicha (DIN-00364370) resident of Kunjethur Village, Manjeshwar Taluk, Kasargod District also at ‘THE AGICHA’S’, 6, Vinayak Road, Bandra West, Mumbai 400050. Ebrahim Suleman Dervesh (DIN -00364630) resident of 85-A, Victoria Road, Mustafa Bazar, Mazagaon, Mumbai 400001 also at ‘HOOR MANZIL’ 7 Perry Cross Road, Bandra (W), Mumbai 400050. Manoharlal Satramdas Agicha (DIN – 00364700) resident of The AGICHA’S’, 6, Vinayaka Road, Bandra West, Mumbai 400050 also at No.6, Perry Cross Road, Bandra (W) Mumbai-400050. The company was doing business with our Poonja Arcade Branch, Mangalore (erstwhile Corporation Bank) since 2003. The limit of RS.60.00 crores were last renewed on 27-03-2014 with sub-limits of Import Trust Receipt Loa/CC (Hyp.) WCDL/dl OF 50.00 Crores., PCL/PCFC/FDBN/P/ PSCFC of 14.00 crores, DBC/BDD/BE 10.00 Crores, Bank Guarantee of Rs.10.00 Crores., Buyers credit of 30.00 Crores and foreign Currency DL of 37.80 Crores. A short renewal was done on 21-09-2015 of the above limit of 60.00 crores. A short renewal was done on 21-09-2015 of the above limit of 60.00 crores. Personal guarantee was given for the above mentioned limits by 4 directors and 3 other persons. The Account was classified as NPA as the account remained irregular and interest was not served for more than 3 months as on 29-01-2016 effective date of account turning NPA was 31.10.2015 as per RBI Inspection and the laid down procedure of the Bank. The outstanding amount as on the date of NPA was Rs.560058977.00.” 4.0 Investigation Findings: 4.1 The investigation conducted by Vigilance Division, Head Office, Mangalore has observed the following: 4.2 The then Corporation Bank, Poonja Arcade Branch, Mangalore obtained a letter of Undertaking from the Company stating that it would not undertake guarantee to any other company without the permission from our Bank during the tenure of credit facility. However, the borrower Company extended the corporate guarantee to other loan accounts. 4.3 On verifying the statement of the CC account of the Company, it was found that the sale proceeds were not routed through said account. The major part (more than 50%) of the Sundry Debtors were of the sister concerns viz., M/s Farouq Soudagar Darvesh & Co Pvt.Ltd. and M/s Jawahar Saw Mills. 4.4 M/s Farouq Soudagar Darvesh & Co.Pvt.Ltd. have the directors Mr. Mohd. Farouk Suleman Darvesh, Mr.Ebrahim Suleman Darvesh, Mr. Yahya M.F. Darvesh, Mr. Zakira M.F., Darvesh and Mr.Rurab Darvesh. 4.5 M/s Jawahar Saw Mills having registered address at 47, Victoria Road, Musafa Bazar, Byculla, Mumbai 400010 have directors Mr. Gaurav M. Agicha, Mr., Rajesh M.Agicha, Mr.Aditya S.Agicha, Mr.Siddartha S. Agicha. 4.6 It can be clearly seen that the directors of all the companies belonged to the same families i.e., ‘Darvesh and Agicha family’ and hence they could easily divert the funds. 4.7 During 2014-15 an amount of Rs.9.19 crore was diverted from CC account through NEFT/RTGS/ transfer to the accounts of M/s Farouq Soudaar Darvesh & Co.Pvt.Ltd. 4.8 In addition to the above, an amount of Rs.2.82 crore was diverted from CC account of M/s Associate Lumbers through RTGS/NEFT to their account held with Union Bank of India, where M/s Farouq Soudagar Darvesh & Co. Ltd. is enjoying credit limits. The above details indicate diversion of funds. Ltd. is enjoying credit limits. The above details indicate diversion of funds. 4.9 It was observed by the Bank officials and stock auditor that the stocks of the company claimed to be held at Chennai yard was not found at the time of inspection. The company had disposed of the stocks without taking prior consent of the Bank and did not bring the proceeds to clear the dues of the Bank. 4.10 The Branch has reported that even though the Company/Directors have the capacity to repay the loan, they are not extending any co-operation to clear the overdue. 4.11 Stock Audit Observations: As per the Stock Audit Report dated 9-09-2015 conducted by M/s Kamath & Kamath Associates, the total Book Debts as on 30.06.2015 was Rs.32,75,12,625/-, outstanding up to 180 days. The Associate Concerns viz., M/s Jawahar Saw Mills and M/s Farouq Soudagar Darvesh & Co.Pvt.Ltd. were having more than 50% of the total outstanding of the Book Debts [Rs.2,09,25,208/- and Rs.14,55,01,571.00 (6.38% and 44.43%)]. As per the auditors, there was an excess drawing, aggregating to an extent of Rs.1.13 crore over the aggregate DP available for the working facilities. The above reports clearly indicated diversion of funds and the account was declared as fraud on 12- 04-2019 and the same was reported to RBI on 2-05- 2019. We respectfully submit that the loan is not a consortium loan account. Modus Operandi: The sale proceeds of the stock of Company were not routed through their CC account held with the Branch and the Company resorted to Diversion of Funds. The major part (more than 50%) of the Sundry Debtors of the Company pertains to its sister concerns viz., M/s Farouq Soudagar Darvesh and Co.Pvt.Ltd., and M/s Jawahar Saw Mills. The stocks of the Company were disposed of by the company and proceeds not brought in to clear the Bank dues. Recovery Acton:- SARFAESI: Demand notice issued on 08-03-2017; Mangalore property sold out (e-auction dated 12-02- 2019) and registered in favour of buyer in April 2019 for Rs.1.00 crore. Possession notice of ‘Sharma Resorts Complex’ Gandhidham, District – Kuchehh State – Gujrat have been issued on 14-06-2017. Demand notice dated 6-12-2017 and possession notice dated 21-06-2018 have been issued for Kirti Nagar Packaging Complex, Kriti Nagar, New Delhi. The Bank have been ordered to maintain Status Quo against the Kirti Nagar property under SA 276/2018 by DRT-1, New Delhi. Possession notice of ‘Sharma Resorts Complex’ Gandhidham, District – Kuchehh State – Gujrat have been issued on 14-06-2017. Demand notice dated 6-12-2017 and possession notice dated 21-06-2018 have been issued for Kirti Nagar Packaging Complex, Kriti Nagar, New Delhi. The Bank have been ordered to maintain Status Quo against the Kirti Nagar property under SA 276/2018 by DRT-1, New Delhi. The case is now listed 18-02-2022 for hearing matter. Suit file: DERT Suit is filed in Bangalore DRT-1 on 18.07.2017 (O.A.1136/2017) has been disposed on 29.01.2021. We submit that the documents pertaining to the account are with the Bank the same will be produced as and when required. We also submit that the Staff Accountability Study has been conducted in the account and no staff found accountable. However, the role and involvement of any unknown persons or others may also be looked into. In view of the above facts, we request you to register our complaint against the Company M/s Associate Lumbers Pvt.td., and its directors and any other unknown persons including any public servant involved for committing the act of fraud with an intention to gain wrongfully and thereby causing wrongful loss to the Bank to the extent of Rs.122.19 crores. We request you to take appropriate actions against those involved in committing the offences of Fraud, Cheating, Criminal breach of trust and criminal misappropriation of funds. All the required documents connected to this complaint are with the Bank and will be provided to your office as and when required.” (Emphasis added) It is based upon this complaint, a FIR comes to be registered by the CBI. The issue now to be considered is, in the teeth of the complaint, not alleging offences against any of the staff or public servants, whether a complaint can be made to the CBI and the CBI in turn could have registered a crime. The Reserve Bank of India has issued certain Master Circulars or guidelines for Prevention, Classification and Reporting of Frauds and is communicated to all the Banks. In the guidelines Clause-8 of the said Master Circular deals with guidelines for reporting frauds to Police/CBI and Clause 8.1 therein reads as follows:- “8. The Reserve Bank of India has issued certain Master Circulars or guidelines for Prevention, Classification and Reporting of Frauds and is communicated to all the Banks. In the guidelines Clause-8 of the said Master Circular deals with guidelines for reporting frauds to Police/CBI and Clause 8.1 therein reads as follows:- “8. GUIDELINES FOR REPORTING FRAUDS TO POLICE/ CBI 8.1 RBI has advised that in dealing with cases of fraud/embezzlement, banks should not merely be actuated by the necessity of recovering expeditiously the amount involved, but should also be motivated by public interest and the need for ensuring that the guilty persons do not go unpunished. Therefore, as a general rule, the following cases should invariably be referred to the State Police or to the CBI as detailed below: (Emphasis supplied) Clause 8.1 mandates that the amount involved in the fraud, if it is more than Rs.25.00 crores and up to Rs.50.00 crores the Bank would complain to the Banking Security and Fraud Cell of the CBI “ irrespective of the involvement of a public servant ” Therefore, there can be no submission that the CBI cannot be complained of in a Bank fraud which does not involve any public servant. The Master Circular mandates that the Bank shall complain to the CBI if the amount involved is between Rs.25.00 crores to Rs.50.00 crores. Therefore, the jurisdiction of the CBI is amount specific, as depicted in the Master Circular and it cannot be said that the CBI does not get any jurisdiction to entertain complaints where there are no public servants. 15. The jurisdiction of the CBI, as narrated hereinabove, is in terms of the Master Circular or guidelines issued by the RBI. The Apex Court has considered the purport of the circular so issued by the RBI and for the purpose for which it is issued and holds that those circulars have statutory flavour as they are guidelines and administrative instructions issued in terms of the Banking Regulation Act. The Apex Court in the case of CENTRAL BANK OF INDIA v. RAVINDRA AND OTHERS, (2002) 1 SCC 367 has held as follows: “56. The Apex Court in the case of CENTRAL BANK OF INDIA v. RAVINDRA AND OTHERS, (2002) 1 SCC 367 has held as follows: “56. In view of the law having been settled with this judgment, it is expected henceforth from the banks, bound by the directives of the Reserve Bank of India, to make an averment in the plaint that interest/compound interest has been charged at such rates, and capitalised at such periodical rests, as are permitted by, and do not run counter to, the directives of the Reserve Bank of India. A statement of account shall be filed in the court showing details and giving particulars of debit entries, and if debit entry relates to interest then setting out also the rate of, and the period for which, the interest has been charged. On the court being prima facie satisfied, if a dispute is raised in that regard, of the permissibility of debits, the onus would be on the borrower to show why the amount of debit balance appearing at the foot of the account and claimed as principal sum cannot be so accepted and adjudged. This practice would narrow down the scope of controversy in suits filed by banking institutions and enable an expeditious disposal of the suits, the issues wherein are by and large capable of being determined by documentary evidence. RBI directives have not only statutory flavour, any contravention thereof or any default in compliance therewith is punishable under sub-section (4) of Section 46 of Banking Regulation Act, 1949. The court can act on an assumption that transactions or dealings have taken place and accounts maintained by banks in conformity with RBI directives.” (Emphasis supplied) The Apex Court in the aforesaid paragraph holds that RBI directives have not only a statutory flavour but any contravention thereof or any default in compliance therewith is punishable under sub-section (4) of Section 46 of the Banking Regulation Act, 1949. The Court can act on an assumption that transactions or dealings have taken place and accounts maintained by Banks in conformity with RBI guidelines. Therefore, the Five Judge Bench of the Apex Court clearly holds that the guidelines/directives issued by the RBI, to have a statutory flavour. The Court can act on an assumption that transactions or dealings have taken place and accounts maintained by Banks in conformity with RBI guidelines. Therefore, the Five Judge Bench of the Apex Court clearly holds that the guidelines/directives issued by the RBI, to have a statutory flavour. If it is held by the Apex Court that those guidelines have statutory flavour, the contention of the learned senior counsel that the CBI would not get jurisdiction unless it is conferred by the statute tumbles down. The CBI does have jurisdiction in terms of what is depicted in the Master Circulars and such Master Circulars are held to have a statutory flavour. 16. The jurisdiction of the RBI to issue such circulars in furtherance of its role of being a ‘Bankers Bank’ or a ‘Lender of the Last Resort’ (LLR) is recognized by the Apex Court way back in the year 1992 in the case of PEERLESS GENRAL FINANCE AND INVESTMENT CO.LTD. AND ANOTHER v. RESERVE BANK OF INDIA 2 wherein the Apex Court following its earlier dictum has held as follows: “53. In State of U.P. v. Babu Ram Upadhya [ (1961) 2 SCR 679 : AIR 1961 SC 751 : (1961) 1 Cri LJ 773] this Court held that rules made under a statute must be treated, for all purposes of construction or obligations, exactly as if they were in that Act and are to the same effect as if they were contained in the Act and are to be judicially noticed for all purposes of construction or obligations. The statutory rules cannot be described or equated with administrative directions. In D.K.V. Prasada Rao v. Government of A.P. [ AIR 1984 AP 75 : (1983) 2 Andh WR 344] the same view was laid down. Therefore, the directions are incorporated and become part of the Act itself. They must be governed by the same principles as the statute itself. The statutory presumption that the legislature inserted every part thereof for a purpose and the legislative intention should be given effect to, would be applicable to the impugned directions. 54. The RBI issued the directions to regulate the operations of the RNBCs, to safeguard the interest of the depositors. Payment of interest, bonus, premium or other advantage, in whatever name it may be called is reward for waiting or parting with liquidity. 54. The RBI issued the directions to regulate the operations of the RNBCs, to safeguard the interest of the depositors. Payment of interest, bonus, premium or other advantage, in whatever name it may be called is reward for waiting or parting with liquidity. It is paid because of positive time preference (one rupee today is preferred to one rupee tomorrow) on the part of the depositor. Therefore, the directions avowed to preserve the right of the depositors to receive back the amount deposited with the contracted rate of interest; it aims to prevent depletion of the deposits collected from the weaker segments of the society and also tends to affect free flow of the business of the RNBCs who would desire to operate in their own way. The question, therefore, emerges whether the directions in (1992)2 SCC 343 paras (6) and (12) violate Articles 14 and 19(1)(g) of the Constitution.” (Emphasis supplied) The Apex Court here also holds that the directions issued by the RBI are incorporated to become part of the Act itself. They must be governed by the same principles as the statute itself. The statutory presumption is that the legislature has inserted every part thereof for a purpose and the legislative intention of such purpose should be given effect to and that would become applicable to the directions. Therefore, the Apex Court has consistently held that the directives of the RBI by way of its Master Circular do have the legislative intent and statutory flavour and it is the Master Circular of the kind that had fallen for interpretation before the Apex Court, which are the ones that are continued by the RBI. Objection, taken to by contending that the CBI in terms of the directives of the RBI cannot get jurisdiction unless the statute accords such jurisdiction, is rendered unsustainable and the submission sans countenance. 17. Insofar as the contention that these offences cannot be looked into as there is no public servant involved in the case at hand, the offences that are alleged are punishable under Section 120B and 420 of the IPC. It is necessary to notice the Delhi Special Police Establishment Act, 1946 (for short ‘the 1946 Act’) under which the Central Bureau of Investigation takes its genesis. Section 3 of the 1946 Act reads as follows: “3. Offences to be investigate by special police establishment. It is necessary to notice the Delhi Special Police Establishment Act, 1946 (for short ‘the 1946 Act’) under which the Central Bureau of Investigation takes its genesis. Section 3 of the 1946 Act reads as follows: “3. Offences to be investigate by special police establishment. – The Central Government may, by notification in the Official Gazette, specify the offences or classes of offences which are to be investigated by the Delhi Special Police Establishment.” (Emphasis supplied) In terms of Section 3, the Central Government by notification is empowered to declare the offences or classes of offences that could be investigated by the Delhi Special Police Establishment. The Government of India in terms of Section 3 has issued notification which forms part of the CBI Manual as to what are the offences that can be investigated into by the CBI which forms part of the Indian Penal Code. Both Sections 420 and 120B of the IPC, form a part of the said notification. Therefore, the contention that the CBI would not get jurisdiction to enquire into any offence other than the offences under the Act is again rendered unacceptable. 18. The aforesaid submission is made on the strength of the fact that the staff accountability being given up at the time of registration of the complaint. It is rather surprising to note as to how staff accountability has been given up in the case at hand, as the report of the auditor clearly brought out grave lacunae in the sanctioning process. Such lacuna in the sanctioning process only has led to registration of the complaint before the CBI by the Bank. But while so registering a crime, the staff accountability is completely given up though the offence under the Act is invoked against unknown officials. The matter is still at the stage of investigation. The CBI is investigating into the matter and not yet filed its final report. It is too early in the day for the petitioners to contend that no Bank official being named as accused, the offence under the Act is unnecessarily made, only to empower the CBI to conduct investigation are all contentions that cannot be countenanced at this stage. 19. The complaint or the FIR, as it is settled principle of law, cannot be a mirror to all the allegations or offences as it triggers conduct of investigation. 19. The complaint or the FIR, as it is settled principle of law, cannot be a mirror to all the allegations or offences as it triggers conduct of investigation. There are scores and scores of cases where the complaint itself does not inspire confidence or is filled with several embellishments where this Court has exercised its jurisdiction under Section 482 of the Cr.P.C. and obliterated the proceedings against those accused. This is not a case where the proceedings at the stage of investigation should be interfered with, in the light of unequivocal finding by the Committee that conducted audit and also inspection later in the year 2017 where no staff was available at the place where they mandated to be available. Therefore, this is not a case where this Court would interfere at the stage of investigation. The matter requires to be investigated into on every aspect – role of public servants, as also, the role of the petitioners, as it is prima facie brought out in the complaint against the petitioners and giving up of the staff qua their accountability is also, prima facie, is a matter to be investigated into." The aforementioned judgment is dated 30.09.2022. 15. Subsequently, the same co-ordinate Bench in W.P.No.17274/2024, by order dated 13.11.2024 in paragraph Nos.14, 15 and 18, has held as under: " The Issue: 14. The issue in the lis sprung from certain allegations of misappropriation of funds. In furtherance of which, as observed hereinabove, two crimes are registered – one by the State and the other by the CBI. Why did the Bank go before the CBI is in terms of a Circular issued by the RBI under Section 35A of the Act. Observing that wherever the amount of alleged fraud exceeds `50/- crores, the matter shall be investigated only by the CBI. The petitioner being a banking company is undoubtedly bound by it. Therefore, it has knocked at the doors of the CBI. 15. The State Government has, on a complaint so registered by the 6 th respondent, registers a crime in Crime No.118 of 2024. Certain Banking officials were also accused at the time of registration of crime. They are all dropped while filing the charge sheet. The investigation is complete and the charge sheet is filed. 15. The State Government has, on a complaint so registered by the 6 th respondent, registers a crime in Crime No.118 of 2024. Certain Banking officials were also accused at the time of registration of crime. They are all dropped while filing the charge sheet. The investigation is complete and the charge sheet is filed. In the considered view of this Court, Section 35A of the Act will not give teeth to any banking industry to choose the investigating agency of the investigation being conducted in a particular State. If this would be permitted, it would be doing violence to the statute itself. This renders the DSPE Act redundant, as existence of CBI is under DSPE Act, and it can intervene in any State only in terms of the DSPE Act or when such investigations are handed over to the CBI by the Apex Court or this Court. 18. As observed hereinabove, the case at hand projects interpretation of Section 35A of the Act to be the sheet anchor for claiming entrustment of investigation to the hands of the CBI. This is unacceptable, as interpretation of Section 35A, if permitted to any banking institution to seek transfer of investigation to the hands of the CBI, it would be giving Section 35A the powers that the Statute itself does not confer. A caveat, that would not put any shackles on the hands of this Court to refer any matter, to any independent investigating agency in exercise of its jurisdiction under Article 226 of the Constitution of India read with Section 482 of the Cr.P.C. or otherwise. But that cannot be in a case projected for interpretation of Section 35A. If it were to be any other interpretation, the Court would have considered the issue. Section 35A, as observed hereinabove, is only empowering the RBI the supervisory and complete control of the affairs of any banking institution. Merely because certain officers of the Union Bank of India/the petitioner are accused at the stage of registration of crime and the fact that the Union Bank of India, as necessary in law qua the Bank, has approached the CBI, would not mean that this Court would accept such far fetched interpretation of Section 35A. Merely because certain officers of the Union Bank of India/the petitioner are accused at the stage of registration of crime and the fact that the Union Bank of India, as necessary in law qua the Bank, has approached the CBI, would not mean that this Court would accept such far fetched interpretation of Section 35A. Non acceptance of the submission of the learned Attorney General of India would not however mean that the CBI which is investigating into the crime registered by the petitioner cannot draw those persons into the web of proceedings, even if they are dropped by the State in Crime No.118 of 2024 or any other person accused in the crime, but that can happen only in accordance with law. The observations made in this order will not come in the way of any action by the petitioner in accordance with law." 16. The respondents have sought to rely upon the earlier judgment, while the petitioners have sought to rely upon the second judgment. 17. A perusal of the earlier judgment shows that the co-ordinate Bench of this Court was of the opinion that the RBI could confer jurisdiction on the CBI to investigate matters by issuing the necessary circulars under the provisions of the Banking Regulation Act, 1949. However, subsequently, the same co-ordinate Bench has held it otherwise. 18. In my opinion, the view taken by the co-ordinate Bench subsequently is the correct view, and being the later decision, I am inclined to follow the same. This is because when an offence takes place within the State of Karnataka, normally it is for the jurisdictional police to investigate the case. However, if notifications are issued as contemplated under the provisions of the Delhi Special Police Establishment Act, 1946, wherein it is mandatory for the State to issue a notification by giving its consent as contemplated under Section 6 of the Delhi Special Police Establishment Act, 1946, then in that event, respondent No.1 will have the necessary jurisdiction to investigate the offence. In the absence of it, respondent No.1 will not get any jurisdiction to try the case unless the matter is referred to it by the Constitutional Courts. 19. In the absence of it, respondent No.1 will not get any jurisdiction to try the case unless the matter is referred to it by the Constitutional Courts. 19. The RBI does not have a right to refer an offence to be investigated by the CBI by passing a circular under the provisions of the Banking Regulation Act, 1949, when there is no such consent given by the State. In the instant case, the respondents have relied upon the Notification dated 10.01.2005 wherein the State of Karnataka had given consent for investigation by the CBI when the offences are alleged to have been committed by the employees of the public sector undertakings. It is submitted in the course of the arguments that the said notification has been subsequently withdrawn on 27.09.2024. However, in the instant case, the complaint has been lodged with the CBI in the year 2017. 20. In my opinion, the notification dated 10.01.2005 does not come to the rescue of the respondents. Though at the end of the complaint, which is lodged by respondent No.2-Bank, it is mentioned that the complaint has also been issued against unknown public servants, reading of the entire complaint discloses that respondent No.2-Bank is registering a complaint with the CBI alleging fraud against the petitioners herein, their auditors and their employees. The bank has categorically stated that it does not suspect the involvement of any of its employees. Thus, the entire complaint is against petitioner No.3, its directors, its auditors and its employees with a rider that the bank does not suspect any of its employees being involved and it is a clear case of the bank trying to save its own employees and it does not want respondent No.1 to investigate its own employees even if they are involved in the commission of the offence as complained by petitioner No.3. It is at the end of the complaint, unknown public servants and unknown others are also named. This has to be construed as having been done with a vain attempt to confer jurisdiction on respondent No.1-CBI when it does not have such jurisdiction. Thus, the complaint registered by respondent No.2-Bank/SBI cannot be considered as a complaint against any public servant and has to be construed as a complaint only against the petitioners and their associates. 21. True CBI is a police station. Thus, the complaint registered by respondent No.2-Bank/SBI cannot be considered as a complaint against any public servant and has to be construed as a complaint only against the petitioners and their associates. 21. True CBI is a police station. When it receives the complaint, it is required to examine the complaint and determine whether it has the jurisdiction to receive the same or not. It can register the complaint only if the complaint discloses that the CBI has the necessary jurisdiction. The same has to be determined in reference to the notifications issued by the State conferring the jurisdiction on the CBI or the orders of the Constitutional Courts. 22. In the instant case, the complaint that is received by respondent No.1-CBI does not disclose that it has a jurisdiction to register the same and investigate the offences alleged. Under the said circumstances, I am of the opinion that respondent No.1 is exercising its powers without any jurisdiction. Hence the following: ORDER i. The Writ Petition is hereby disposed of. ii. The proceedings initiated by respondent No.1 in pursuant to the complaint received from respondent No.2 in RC No.11(E)/2017, stands quashed. iii. It is hereby made clear that this order will not come in the way of the jurisdictional police to investigate the offences alleged against the petitioners in accordance with law. iv. Liberty is also granted to respondent No.2 to initiate appropriate proceedings against the petitioners with the jurisdictional police. v. It is needless to state all other contentions are left open.