Prevention of Corruption Act 1988 – s.13(2) r/w s.13(1)(e) – Penal Code, 1860 – s.109 – Central Bureau of Investigation (Crime) Manual 2005 – Constitution of India – Article 226 – Code of Criminal Procedure, 1973 – s.482 – Corruption cases – Preliminary enquiry if mandatory before registering an FIR – FIR registered against first respondent, Commissioner of Income Tax on the basis of “source information” for allegedly possessing assets disproportionate to her known sources of income – Second respondent, her husband is alleged to have abetted the offence – FIR quashed by High Court inter alia holding that the appellant should have conducted a Preliminary Enquiry before registration of the FIR – On appeal, held: Institution of a Preliminary Enquiry in cases of corruption is not made mandatory before the registration of an FIR under the CrPC, PC Act or even the CBI Manual – In case the information received by the CBI, through a complaint or a “source information” under Chapter 8, discloses the commission of a cognizable offence, it can directly register a Regular Case instead of conducting a Preliminary Enquiry – This does not take away from the value of conducting a Preliminary Enquiry in an appropriate case – High Court should have only considered whether the contents of the FIR as they stand, prima facie make out a cognizable offence instead of conducting a mini-trial – Documents relied upon by the respondents cannot form the basis of quashing the FIR as the value and weight to be ascribed to the documents is a matter of trial – Impugned judgment of High Court set aside – Appellant can continue with investigation based upon the FIR – Delhi Special Police Establishment Act, 1946 – s.6. Constitution of India – Article 226 – Code of Criminal Procedure, 1973 – s.482 – Quashing of FIR – Review by High Court – Scope of – Discussed.
Allowing the appeal, the Court
HELD: 1.1 If a Preliminary Enquiry is necessary, it is covered by Chapter 9 of the CBI Manual. Two distinct principles emerge from Para 9.1: (i) a Preliminary Enquiry is registered when information (received from a complaint or source information ) after verification indicates serious misconduct on part of a public servant but is not enough to justify the registration of a Regular Case; and (ii) when the information available or after its secret verification reveals the commission of a cognizable. The precedents of this Court and the provisions of the CBI Manual make it abundantly clear that a Preliminary Enquiry is not mandatory in all cases which involve allegations of corruption. Para 9.1 of the CBI Manual notes that a Preliminary Enquiry is required only if the information (whether verified or unverified) does not disclose the commission of a cognizable offence. Even when a Preliminary Enquiry is initiated, it has to stop as soon as the officer ascertains that enough material has been collected which discloses the commission of a cognizable offence. Hence, the proposition that a Preliminary Enquiry is mandatory is plainly contrary to law, for it is not only contrary to the decision of the Constitution Bench in Lalita Kumari but would also tear apart the framework created by the CBI Manual. [Paras 27, 29] [400-G-H; 401-E-H]
Lalita Kumari v. Govt. of UP and others (2014) 2 SCC
1 : [2013] 14 SCR 713– followed.
1.2 Since the institution of a Preliminary Enquiry in cases of corruption is not made mandatory before the registration of an FIR under the CrPC, PC Act or even the CBI Manual, for this Court to issue a direction to that affect will be tantamount to stepping into the legislative domain. Hence, in case the information received by the CBI, through a complaint or a “source information” under Chapter 8, discloses the commission of a cognizable offence, it can directly register a Regular Case instead of conducting a Preliminary Enquiry, where the officer is satisfied that the information discloses the commission of a cognizable offence. The said formulation does not take away from the value of conducting a Preliminary Enquiry in an appropriate case. The registration of a Regular Case can have disastrous consequences for the career of an officer, if the allegations ultimately turn out to be false. In a Preliminary Enquiry, the CBI is allowed access to documentary records and speak to persons just as they would in an investigation, which entails that information gathered can be used at the investigation stage as well. Hence, conducting a Preliminary Enquiry would not take away from the ultimate goal of prosecuting accused persons in a timely manner. However, it is once again clarified that if the CBI chooses not to hold a Preliminary Enquiry, the accused cannot demand it as a matter of right. [Paras 32, 33][403-E-H; 404-A-C] Union of India v. State of Maharashtra (2020) 4 SCC
761 : [2019] (12) SCR 1125; The State of Telangana v. Managipet (2019) 19 SCC 87; Vinod Dua v. Union of India and others 2021 SCC OnLine SC 414; P.
Sirajuddin v. State of Madras (1970) 1 SCC 595 : [1970]
(3) SCR 931; Charansingh v. State of Maharashtra (2021) 5 SCC 469 – relied on.
2.1 The High Court has taken note of the following documents filed by the respondents: (i) Income Tax Returns; (ii) disclosures by the first respondent to her Department under the CCS Rules; (iii) an affidavit filed by the second respondent under the RP Act and the Rules; (iv) a letter dated 14 March 2016 by the first respondent to Principal Chief Commissioner of Income Tax (CCA), Chennai in relation to the details of the construction of her house, and proof of it having been taken on the record by an Office Memorandum dated 12 June 2017; and (v) a letter dated
15 June 2016 from the Deputy Commissioner of Income Tax, Hyderabad noting the intimation received from the first respondent in relation to the sale of her property and value realized on 27 February 2016, and the intimation by the first respondent in regard to the investment undertaken by her. There is a fundamental error on the part of the Single Judge in conflating a document which is in the public realm with the truth of its contents. [Para 37][409-D-H]
State of Haryana & others v. Bhajan Lal (1992) Sup 1 SCC 335 : [1990] (3) Suppl. SCR 259; Neeharika Infrastructure Pvt. Ltd. v. State of Maharashtra and others 2021 SCC OnLine SC 315 – relied on.
2.2 The Single Judge of the Telangana High Court has acted completely beyond the settled parameters which govern the power to quash an FIR. The Single Judge has donned the role of a Chartered Accountant. The Single Judge has completely ignored that the Court was not at the stage of trial or considering an appeal against a verdict in a trial. The Single Judge has enquired into the material adduced by the respondents, compared it with the information provided by the CBI in the FIR and their counteraffidavit, and then pronounced a verdict on the merits of each individual allegation raised by the respondents largely relying upon the documents filed by them (by considering them to be ‘known sources of income’ within the meaning of Section 13(1)(e) of the PC Act). This exercised has been justified on account of the appellant not having conducted a Preliminary Enquiry and hence, not having addressed the respondents’ objections relying upon the documents adduced by them. The reasons provided by the Single Judge for entering into the merits of the dispute while quashing the FIR are specious, especially so considering the finding of this Court that the CBI need not hold a Preliminary Enquiry mandatorily. While exercising its jurisdiction under Article 226 of the Constitution to adjudicate on a petition seeking the quashing of an FIR, the High Court should have only considered whether the contents of the FIR – as they stand and on their face – prima facie make out a cognizable offence. However, it is evident that in a judgment spanning a hundred and seven pages (of the paper-book in this appeal) the Single Judge has conducted a mini-trial, overlooking binding principles which govern a plea for quashing an FIR. A court cannot conduct a minitrial at the stage of framing of charges. Hence, doing so at the stage of considering a petition for quashing an FIR under Section
482 of the CrPC or Article 226 of the Constitution is obviously also impermissible. Therefore, the reasoning provided by the Telangana High Court in its impugned judgment for quashing the FIR is disapproved. [Paras 40, 41][413-A-E; 414-B-C] Gunmala Sales (P) Ltd. v. Anu Mehta (2015) 1 SCC
103 : [2014] (10) SCR 1117 – relied on.
3. The documents which have been relied upon by the respondents cannot form the basis of quashing the FIR. The value and weight to be ascribed to the documents is a matter of trial. The appellant is challenging the very “source” of the respondents’ income and the questioning the assets acquired by them based on such income. Hence, at the stage of quashing of an FIR where the Court only has to ascertain whether the FIR prima facie makes out the commission of a cognizable offence, reliance on the documents produced by the respondents to quash the FIR would be contrary to fundamental principles of law. The High Court has gone far beyond the ambit of its jurisdiction by virtually conducting a trial in an effort to absolve the respondents. There is no clash between the decisions in Kedari Lal and J. Jayalalitha for two reasons: (i) the judgment in J. Jayalalitha notes that a document like the Income Tax Return, by itself, would not be definitive evidence in providing if the source of one’s income was lawful since the Income Tax Department is not responsible for investigating that, while the facts in the judgment in Kedari Lal were such that the – source of the income was not in question at all and hence, the Income Tax Returns were relied upon conclusively; and (ii) in any case, the decision in Kedari Lal was delivered while considering a criminal appeal challenging a conviction under the PC Act, while the present matter is at the stage of quashing of an FIR. [Paras 48, 49][421-C-G]
4. Extensive arguments had been raised by the respondents in relation to whether the appellant could even register the case against the respondents, since the State of Andhra Pradesh has withdrawn the general consent given to the appellant under Section 6 of the DSPE Act through an order dated 8 November 2018. This has been countered by the appellant by noting: (i) that the FIR has been registered in Chennai, and that the general consent by the State of Tamil Nadu under Section 6 of the DSPE Act still stands; (ii) that the first respondent is an employee of the Central Government; and (iii) that the second respondent is alleged to be an abettor under Section 109 of the IPC. Similarly, arguments have also been raised by both sides in relation to the jurisdiction of the Telangana High Court and whether the FIR could have been registered against the second respondent without the consent of the Speaker (since he is a sitting MLA). However, at this stage it is not necessary to adjudicate them and these issues are being left open without commenting upon their merits. The impugned judgment of the Single Judge of the Telangana High Court quashing the FIR and any proceedings pursuant to it is set aside. The appellant can continue with its investigation based upon the FIR. [Paras 51, 52][422-E-H; 423-A]
Kedari Lal v. State of M.P. (2015) 14 SCC 505 – distinguished.
K. Veeraswami v. Union of India (1991) 3 SCC 655 : [1991] (3) SCR 189 – followed.
State of Karnataka v. J. Jayalalitha (2017) 6 SCC 263 : [2017] (5) SCR 525; Union of India and another v. W.N. Chadha (1993) Supp (4) SCC 260 : [1992] (3) Suppl. SCR 594; State of Maharashtra v. lshwar Piraji Kalpatri (1996) 1 SCC 542 : [1995] (5) Suppl. SCR 812; Narendar G. Goel v. State of Maharashtra (2009)
6 SCC 65 : [2009] (8) SCR 1004; Samaj Parivarthan Samudhaya v. State of Karnataka (2012) 7 SCC 407 : [2012] (5) SCR 1074; Shanti Devi Alia Shanti Mishra v. Union of India (2020) 10 SCC 766; Navinchandra N. Majithia v. State of Maharashtra (2000) 7 SCC 640 : [2000] (3) Suppl. SCR 82; Pepsi Foods Ltd. v. Special Judicial Magistrate (1998) 5 SCC 749 : [1997] (5) Suppl. SCR 12; Kapil Agarwal v. Sanjay Sharma (2021)
5 SCC 524; Shashikant v. CBI (2007) 1 SCC 630 : [2006] (8) Suppl. SCR 474; Vineet Narain v. Union of India (1998) 1 SCC 226 : [1997] (6) Suppl. SCR 595; CBI v. Ashok Kumar Aggarwal (2014) 14 SCC 295 : [2013] (14) SCR 983; State of Jharkhand v. Lalu Prasad Yadav (2017) 8 SCC 1 : [2017] (3) SCR 630; Nirmal Singh Kahlon v. State of Punjab (2009) 1 SCC 441 : [2008] (14) SCR 1049; Yashwant Sinha v. CBI (2020)
2 SCC 338 : [2019] (17) SCR 917; P.V. Narasimha Rao v. State (CBI/SPE) (1998) 4 SCC 626 : [1998] (2) SCR 870; State of Kerala v. K. Ajith and others Criminal Appeal No 698 of 2021; State of West Bengal v. Committee for Protection of Democratic Rights (2010)
3 SCC 571 : [2010] (2) SCR 979; Mayawati v. Union of India (2012) 8 SCC 106 : [2012] (7) SCR 33; M. Balakrishna Reddy v. CBI (2008) 4 SCC 409 : [2008]
(4) SCR 1154; Central Bureau of Investigation v. State of Rajasthan (1996) 9 SCC 735 : [1996] (3) Suppl. SCR 127; Kazi Lhendup Dorji v. CBI 1994 Supp (2) SCC 116 : [1994] (3) SCR 201; Harshendra Kumar D. Rebatilata Koley (2011) 3 SCC 351 : [2011] (2) SCR 670; Suresh Kumar Goyal v. State of U.P. (2019) 14 SCC 318 : [2019] (1) SCR 236; Pooja Ravinder Devidasani v. State of Maharashtra (2014) 16 SCC 1 : [2014] (14) SCR 1468; State of M.P. v. Mohanlal Soni (2000) 6 SCC 338; Subhash Kashinath Mahajan v. State of Maharashtra (2018) 6 SCC 454 : [2018] SCR
4 877; State of Orissa v. Debendra Nath Padhi (2005)
1 SCC 568 : [2004] (6) Suppl. SCR 460; Bharat Parikh v. CBI (2008) 10 SCC 109 : [2008] (10) SCR 950; Indu Jain v. State of M.P. (2008) 15 SCC 341 : [2008] (14) SCR 1137; Asian Resurfacing of Road Agency (P) Ltd. v. CBI (2018) 16 SCC 299 : [2018] (2) SCR 1045 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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