Holding

A Special Judge may order further investigation under Section 173(8) of the CrPC but cannot direct that a particular officer or rank, such as a DIG, conduct it.

Summary

Hemant Dhasmana filed a complaint under the Prevention of Corruption Act alleging that the sons of a Chief Commissioner of Income Tax demanded a bribe. The CBI conducted a trap, recovered cash, but its final report exonerated the respondents and accused Dhasmana of false information. The Special Judge rejected the CBI report, ordered a fresh investigation and directed that a DIG‑rank CBI officer conduct it. The Allahabad High Court set aside the Special Judge’s order, holding that the magistrate could not order further investigation and could not specify the officer’s rank. The Supreme Court allowed the appeal, held that under Section 173(8) of the CrPC a court may order further investigation but cannot prescribe a particular officer or rank, and deleted the direction to the DIG while restoring the power to order fresh investigation. The Court also clarified that the provisions of Chapter XII and Section 173(2) apply to CBI investigations under the Prevention of Corruption Act.

Issues considered

Whether a Special Judge/Magistrate can order further investigation under Section 173(8) of the CrPC when a CBI report contradicts the complaint.
Whether the magistrate may specify the rank or identity of the officer (e.g., DIG) to conduct such further investigation.
Whether Chapter XII of the CrPC and Section 173(2) apply to investigations conducted by the CBI under the Prevention of Corruption Act.

Legislation cited

Code of Criminal Procedure, 1973s. 173(2), s. 173(8), s. 190(1)(b)
Delhi Special Police Establishment Act, 1946
Prevention of Corruption Act, 1988

Subjects

CrPC Section 173Further investigationCBIPrevention of Corruption ActMagistrate powersOfficer specificationSpecial JudgeAppeal

Judgment

A HEMANT DHASMANA
v.
CENTRAL BUREAU OF INVESTIGATION AND ANR.

AUGUST 17, 2001

B [K.T. THOMAS AND S.N. VARIAVA, JJ.)

Criminal Procedure Code, 1973

Chapter XU-Section 173(8)-Power under-Scope of-Complaint
C under Prevention of Corruption Act, 1988-/nvestigation by CBI-Its report
contrary to a/legations in complaint-Special Judge ordering further
investigation by an officer of particular rank-Held, Special Judge has
power to order for further investigation, though the Section does not
specifical(y mention about the power-However, he does not have power to
D specify a particular officer to Conduct Investigation ..

Chapter XII-Section 173(2)-/nvestigation under for offences under
Preventipn of Corruption Act-Held applicable to CBI official as well-
Delhi Special Police Establishment Act, 1946-Prevention of Corruption
Act, 1988.
E Appellant made complaint under Prevention of Corruption Act. After
investigation of the case, the final report filed by CBI was found contrary to
the allegations in the complaint. The Special Judge after hearing the complaint
ordered the CBI to re-investigate the matter and further ordered to depute
an officer of the rank of DIG of CBI to re-investigate the matter. On appeal
F High Court held that there was no case for any fresh investigation or for
any further investigation and deprecated the direction of the Special Judge
for specifying an officer to conduct the investigation.

In appeal to this Court appellant contended that the High Court should
not have interfered with the order of the Special Judge, particularly when
G the said order did not contain any final conclusion on the report.

Allowing the appeal, the Court

HELD : I. I. When the CBI report is against the allegations contained
in the complaint and concluded that no offence has been committed by any
H 646
HEMANT DHASMANA v. C.B.I. 647

person it is open to the Court to accept the report after hearing the complainant A
at whose behest the investigation had commenced. If the Court feels, on a
persual of such a report that the alleged offences have in fact been committed
by some persons, the Court has the power to ignore the contrary conclusions
made by the investigating officer in the final report. Then it is open to the
Court to independently apply its mind to the facts emerging therefrom and B
it can even take cognizance of the offences which appear to him to have been
committed, in exercise of his power under Section 190(1) (b), Cr.P.C. The
third option is the one adumbrated in Section 173(8), Cr.P.C. Although the
said sub-section does not, in specific terms, mention about the powers of the
Court to order further investigation the power uf the police to conduct
further investigation envisaged therein can be triggered into motion at the C
instance of the Court. [652-E-G; 653-B[

Bhagwant Singh v. Commissioner of Police and Anr., [19851 2 SCC
537; Mis. India Carat Pvt. Ltd. v. State of Karnataka and Anr., [19891 2 SCC
132 and Union Public Service Commission v. S.Papaiah and Ors., [19971 7
sec 614, referred to. D
1.2 However, it is not within the province of the Magistrate while
exercising the power under Section 173 (8), Cr.P.C. to specify any particular
officer to conduct such investigation, not even to suggest the rank of the
officer who should conduct such investigation. [654-GI
E
2. When the final report is laid after conclusion of the investigation
the Court has the power to consider the same and issue notice to the
complainant to be heard in case the conclusions in the final report are not
in concurrence with the allegations made by them. Though the investigation
was conducted by the CBI, the provisions under Chapter XII of the Cr.P.C. F
would apply to such investigation. 'Police' referred to in the Chapter, for the
purpose of investigation , would apply to the officer/officers of the Delhi
Police Establishment Act. On completion of the investigation the report has
to be filed by the CBI in the manner provided in Section 173 (2) of the Code,
with the exception that the Magistrate referred to in the section would be
understood as a Special Judge when the offences involved are under the G
Prevention of Corruption Act, 1988. [651-E-GI

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No,
829 of 200 I.

From the Judgment and Order dated 27.4.2000 of the Allahabad High H
648 SUPREME COUR I REPORTS [2001] SUPP. I S.C.R.

A Court in Crl. R. No. 146 of 1998.
Rajinder Sacher and R.P. Gupta for the Appellant.

Altaf Ahmad, Additional Solicitor General, A.K. Raina and P. Parmeswaran
for the Respondent No. I.
B
Praveen Swarup for the Respondents Nos. 3-6.

The Judgment of the Court was delivered by

THOMAS, J. Leave granted.
c
A complainant, after investigation, was transposed as an accused. Such
a prodigy happened in this case. A trap to catch a big fish (Chief Commissioner
of Income Tax) was orchestrated by the Central Bureau of Investigation ('the
CBI' for short) with a bewitching bait, but still he did not bite it. But the
D appellant says that two sons of the said Chief Commissioner collected the
bulky cash offered to their father. On such a complaint the CBI conducted
investigation. After the investigation the CBI turned against the complainant/
appellant and ordered him to be prosecuted for giving false information with
intent lo cause the public servant use his lawful power to the detriment of
the public. However, the final report laid by the CBI was not acceptable to
E the Special Judge and he directed further investigation into the matter but the
High Court reversed the said direction by the impugned order.

Appellant styles himself as a disciple of one Swami Rama, a non-
resident Indian, who founded a Trust by name "Himalayan Institute of Medical
Sciences" at Dehra Dun with high profile public personage shown as its
F patrons. The Trust had a lot of income tax problems. Appellant felt that the
then Commissioner of Income Tax, Meerut, was troubling the Trust and its
founder with notices frequently issued. It was in the said context that they
approached B.P. Gupta, Chief Commissioner of Income Tax, Kanpur (the third
respondent) for redressal of their grievances.
G
Appellant claims to have forwarded a complaint to the DIG of CBI, New
Delhi on 6.3.1996, complaining that at the behest of Respondent No.3 the
Trust people including the appellant contacted Janardhan Gupta (the son of
the third respondent) who demanded Rs. 20 lacs to be paid to his father as
bribe and after a lot of haggling. the amount was reduced to Rs. I 0 lacs and
H that the amount should be paid to the third respondent within two days.
HEMANT DHASMANA v. C.B.I. [THOMAS, J.] 649

What happened thereafter, according to the version of the appellant, A
can be summarised as follows:

On 8.3.1996, CBI made all preparations for a trap. The team of CBI
officers reached the house of one Roshan Lal who was the treasurer of the
Trust and waited for the opportune time to hand over the bribe amount to
the third respondent. A micro-cassette supplied by the CBI to the appellant B
with which he recorded the conversation between the appellant and Janardhan
Gupta (the fourth respondent) and his father (the third respondent). At the
pre-arranged time a bag containing the cash was handed over to Sudhanshu
Gupta, another son of the third respondent,(he is fifth respondent in this
appeal) at his residence in the presence of the fourth respondent. The signal C
was then transmitted to the CBI officers who made a swoop and surrounded
the house and caught the fifth respondent. The bag containing the cash was
recovered from below the bed of the house of the third respondent. The
investigation thereupon was commenced by the CBI.

When the investigation concluded the CBI filed its final report before D
the Special Judge, Anti Corruption (Central) Lucknow. In the final report the
case was given a totally reverse picture. The CBI exonerated the third, fourth
and the fifth respondents in full measure and wanted the court to initiate
prosecution proceedings against the appellant for the offence under Sections
182 and 211 of the Indian Penal Code. The CBI took the stand in strident tone
that the complaint made by the appellant is not only false but it was aimed E
at deterring the Income Tax officials from discharging their functions fearlessly.
It was a calculated move to forestall the strong measures devised against
Swami Rama and the Trust founded by him, according to the CBI.

The Special Judge on receipt of the aforesaid final report issued notice F
to the appellant and after hearing him ordered the CBI to re-investigate the
matter. The operative part of that order is extracted below:

"Under these circumstances perusal of the final report submitted

.. shows that the investigation of the case was not properly conducted
and this final report was submitted without properly going through G
the provisions contained in the Cr.P.C. and Prevention of Corruption
Act. It is also necessary to point out that preliminary investigation
was conducted by Sh.V.K. Gupta, DIG (CBI). In my view, in this
situation it would be proper that this case is again investigated by
DIG level officer. The final report, not being legitimate is liable to be
rejected. The final report is therefore rejected and the Director CBI, H
650 SUPREME COURT REPORTS [2001) SUPP. I S.C.R.

A New Delhi is ordered to depute an officer of the rank of DIG in this
matter who would investigate this case afresh and submit his report."

The CBI moved the High Court of Allahabad in revision, against the
said order of the Special Judge. The contention of the CBI before the High
Court of Allahabad was that the alleged micro-cassettes of the tape recorded
B conversation purported to have made between the appellant and the fourth
respondent were neither attested by any independent witness nor recorded
by any officials of the CBI nor authenticated by it and that it was a "self-
managed cassette" of the appellant. The learned Single Judge of the High
Court who passed the impugned order expressed like this:
c "On a consideration of the entire materials submitted along with the
report and made available before the learned Special Judge, there was
no case for any fresh investigation or for any further investigation.
It has been mentioned above that further investigation could only be
ordered when some other evidence was in sight and was not collected
D or was left over, and could help the merit of the case. In the instant
case every relevant material was collected and no material was left
over, and every such material so collected was made the basis of the
final report and thus every material was placed before the Special
Judge."
E
The High Court deprecated the direction of the Special Judge for
specifying an officer of the DIG rank of the CBI to conduct the investigation.
Learned Single Judge of the High Court upheld the contention of the CBI that
an officer of the rank of DIG is mainly a supervisory officer and the CBI
Manual contains the measures to be adopted for conducting investigation.
F In the view of the High Court the order of the Special Judge is clearly against
Section 173(8) of the Code of Criminal Procedure (for short 'the Code'). This
is how the High Court has expressed on that aspect in the final portion of
the impugned judgment:

G
"The Special Judge could have either rejected or could have accepted
the final report under the circumstances of the case after applying his
..
judicial mind and after recording the basis of his opinion. There was
no sense in ordering the fresh investigation in the circumstances of ·
the case in disregard of provisions of Section 173(8) of the Code and
making the entire investigation a futile exercise. It was not a case of
H further investigation. The order is bad in law."
HEMANT DHASMANA v. C.B.I. (THOMAS, J.] 651

Ultimately the learned Single Judge, after setting aside the order of the A
Special Judge, directed him to consider the materials before him once again
and to pass suitable orders in accordance with law.
I
Learned counsel for the appellant contended that the Hi~h Court should
not have interfered with the order of the Special Judge, particularly when the
said order did not contain any final conclusion on the report. According to B
him, all that the Special Judge said was that further investigation should be
conducted. At any rate, the CBI recovered 10 lakh:> of rupees from the house
of the third respondent and hence a further investigation would have only
helped the CBI to know how it reached there and through whom, etc., contended
the counsel. C
Mr. Altaf Ahmad, learned Additional Solicitor General, submitted that
.. the conclusion of the CBI was based on the materials collected by them and
that was filtered at different levels of the organisation of the CBI. The final
report was laid only when the CBI was convinced of the conclusions reached
therein. D
The. real question is not whether the conclusion reached by the CBI had
been subjected to verification or supervision at different departmental level.
Nor even whether the conclusion is correct. When the final report is laid after
conclusion of the investigation the Court has the power to consider the same
and issue notice to the complainant to be heard in case the conclusions in E
the final report are not in concurrence with the allegations made by them.
Though the investigation was conducted by the CBI the provisions under
Chapter XII of the Code would apply to such investigation. The police
referred to in the Chapter, for the purpose of investigation, would apply to
the officer/officers of the Delhi Police Establi~hment Act. On completion of F
the investigation the report has to be filed by the CBI in the manner provided
in Section 173(2) of the Code, with the exception that the magistrate referred
to in the section would be understood as a Special Judge when the offence
involved are under the Prevention of Corruption Act, 1988.

The first sub-section. to Section 173 says that the investigation shall be G
completed without unnece_ssary delay. It is sub-section (2) which contemplates
the report on conclusion of the investigation. It reads thus:

"(2)(i) As soon as it is completed, the officer in charge of the police
station shall forward to a Magistrate empowered to take cognizance
of the offence on a police report, a report in the form prescribed by H
652 SUPREME COURT REPORTS [2001] SUPP. I S.C.R.

A the State Government, stating-

(a) the names of the parties; (b) the nature of the information; (c)
the names of the persons who appear to be acquainted with the
circumstances of the case; (d) whether any offence appears to
have been committed and, if so, by whom; (e) whether the
B accused has been arrested; (f) whether he has been released on
his bond and, if so, whether with or without sureties; (g) whether
he has been forwarded in custody under section 170.

(ii) The officer shall also communicate, in such manner as may be
prescribed by the State Government, the action taken by him, to the
C person, if any, by whom the information relating to the commission of
the offence was first given."

When the report is filed under the Sub-section the magistrate (in this ...
case the Special Judge) has to deal with it by bestowing his judicial
D consideration. If the report is to the effect that the allegations in the original
complaint were found true in the investigation, or that some other accused
and/or some other offences were also detected, the Court has to decide
whether cognizance of the offences should be taken or not on the strength
of that report. We do not think that it is necessary for us to vex our mind,
in this case, regarding that aspect when the report points to the offences
E committed by some persons. But when the report is against the allegations
contained in the complaint and concluded that no offence has been committed
by any person it is open to the Court to accept the report after hearing the
complainant at whose behest the investigation had commenced. If the Court
feels, on a perusal of such a report that the alleged offences have in fact been
committed by some persons the Court has the power to ignore the contrary
F conclusions made by the investigating officer in the final report. Then it is
open to the Court to independently apply its mind to the facts emerging
therefrom and can even take cognizance of the offences which appear to hi11o
to have been committed, in exercise of his power under Section 190(1 )(b) of

G
the Code. The third option is the one adumbrated in Section 173(8) of the
Code. That sub-section reads thus:
..
"Nothing in this section shall be deemed to preclude further
investigation in respect of an offence after a report under sub-section
(2) has been forwarded to the Magistrate and, where upon such ·
investigation, the officer in charge of the police station obtains further
H evidence, oral or documentary, he shall forward to the magistrate a
HEMANT DHASMANA v. C.B.I. [THOMAS, .I.] 653

further report or reports regarding such evidence in the form prescribed; A
and the provisions of sub-sections (2) to (6) shall, as far as may be,
apply in relation to such report or reports as they apply in relation to
a report forwarded under sub-section (2)."

Although the said sub-section does not, in specific terms, mention
about the powers of the Court to order further investigation the power of the B
police to conduct further investigation envisaged therein can be triggered
into motion at the instance of the Court. When any such order is passed by
a court which has the jurisdiction to do so it would not be a proper exercise
of revisional powers to interfere therewith because the further investigation
would only be for the ends of justice. After the further investigation, the C
authority conducting such investigation can either reach the same conclusion
and reiterate it or it can reach a different conclusion. During such extended
investigation the officers can either act on the same materials or on other
materials which may come to their notice. It is for the investigating agency
to exercise its power when it is put back to that track. If they come to the
same conclusion it is of added advantage to the persons against whom the D
allegations were made, and if the allegations are found false again the
complainant would be in trouble. So from any point of view the Special
Judge's direction would be of advantage for the ends of justice. It is too
premature for the High Court to predict that the investigating officer would
not be able to collect any further material at all. That is an area which should E
have been left to the investigating officer to survey and recheck.

In Bhagwant Singh v. Commissioner of Police and Anr., [I 985] 2 SCC
537 a three-Judge Bench of this Court has said, though in a slightly different
context, that three options are open to the court on receipt of a report under
Section 173(2) of the Code, when such report states that no offence has been F
committed by the persons accused in the complaint. They are:

(I) The court may accept and drop the proceedings; or
(2) The court may disagree with the report and take cognizance of
the offence and issue process if it takes the view that there is G
sufficient ground for proceeding further; or
(3) The court may direct further investigation to be made by the
police.
Another three Judge Bench in Mis. India Carat Pvt. ltd v. State of
Karnataka and Anr., [1989] 2 sec 132 has stated thus: H
654 SUPREME COURT REPORTS (2001] SUPP. I S.C.R.

A "The position is, therefore, now well settled that upon receipt of a
police report under Section 173(2) a Magistrate is entitled to take
cognizance of an offence under Section 190(1 )(b) of the Code even if
the police report is to the effect that no case is made out against the
accused. The Magistrate can take into account the statements of the
witnesses examined by the police during the investigation and take
B cognizance of the offence complained of and order the issue of process
to the accused. Section 190( I )(b) does not lay down that a Magistrate
can take cognizance of an offence only if the investigating officer
gives an opinion that the investigation has made out a case against
the accused. The Magistrate can ignore the conclusion arrived at by
c the investigating officer and independently apply his mind to the
facts emerging from the investigation and take cognizance of the case,
if he thinks fit, in exercise of his powers under Section 190( l )(b) and
direct the issue of process to the accused."
r
In Union Public Service Commission v. S. Papaiah and Ors., [1997] 7
D sec 614 a two Judge Bench considered the scope of Section 173(8) of the
Code in extenso. Dr.A.S. Anand, J (as the learned Chief Justice then was) after
extracting Section 173(8) of the Code has observed thus:

"The Magistrate could, thus in exercise of the powers under Section
173(8) Cr.P.C. direct the CBI to 'further investigate' the case and
E collect further evidence keeping in view the objection raised by the
appellant to the investigation and the 'new' report to be submitted by
the investigating officer would be governed by sub-sections (2) to (6)
of Section 173 Cr.P.C."

When the Special Judge has opted to order for a further investigation
F the High Court should have stated to the CBI to comply with that direction.
Nonetheless, we are in agreement with the observation of the learned Single
Judge of the High Court that the Special Judge or the magistrate could not '··
direct that a particular police officer or even an officer of a particular rank
should conduct such further investigation. It is not within the province of the
G magistrate while exercising the power under Section 173(8) to specify any
particular officer to conduct such investigation, not even to suggest the rank
of the officer who should conduct such investigation.

In the result, we allow th is appeal and set aside the judgment under
challenge. However, while restoring the order of the Special Judge we make
H it clear that the direction made by the Special Judge that further investigation
HEMANT DHASMANA v. C.B.I. [THOMAS, J.] 655
shall be conducted by an officer of the DIG rank of the CBI, will stand deleted. A
We make it abundantly clear that we have not considered the merits of the
allegations made against the respondent or the conclusions reached by the
CBI in the report already laid before a Special Judge. Hence, further investigation
as ordered by the Special Judge can be conducted untrammeled by any of the
observations made by the Special Judge or by us.
B
K.K.T. Appeal allowed.