A division bench of the Apex Court held as follows,
From Paras 10 and 11,
10. Power of the police to conduct further investigation, after laying final report, is recognised under Section 173(8) of the Code of Criminal Procedure.Even after the court took cognizance of any offence on the strength of the police report first submitted, it is open to the police to conduct further investigation. This has been so stated by this Court in Ram Lal Narang v. State (Delhi Administration) AIR 1979 SC 1791. The only rider provided by the aforesaid decision is that it would be desirable that the police should inform the court and seek formal permission to make further investigation.
11. In such a situation the power of the court to direct the police to conduct further investigation cannot have any inhibition. There is nothing in Section 173(8) to suggest that the court is obliged to hear the accused before any such direction is made. Casting of any such obligation on the court would only result in encumbering the court with the burden of searching for all the potential accused to be afforded with the opportunity of being heard. As the law does not require it, we would not burden the Magistrate with such an obligation.
Citations: [1999 ACR SC 2 1580], [1999 AIR SC 2332], [1999 ALD CRI 2 340], [1999 CRI LJ 3661], [1999 CRIMES SC 3 117], [1999 JT SC 4 537], [1999 OLR 2 344], [1999 PLJR 9 83], [1999 SCALE 4 86], [1999 SCC 5 740], [1999 SCR 3 870], [1999 UJ 2 1270], [1999 SCC CRI 1047], [1999 KERLJ 2 272], [1999 CRLJ 0 366], [11999 SCC CR 0 1047], [1999 AIR SC 0 2429], [1999 SUPREME 6 47], [1999 CRLJ 0 1661], [1999 BOMCR SC 4 248], [1999 AIR SCW 0 2429], [1999 CRLJ SC 3661], [1999 JT 4 537], [1999 UJ SC 2 1270], [1999 CRLJ 3661], [1999 OLR SC 2 344], [1999 AIR SCW 2429], [1999 SCC CR 1047], [1999 CRILJ 3661]
Other Sources:
https://indiankanoon.org/doc/1308855/
https://www.casemine.com/judgement/in/5609ad59e4b0149711411248