STATE OF ORISSA & ORS.versusUJJAL KUMAR BURDHAN

                       [2012] 2 S.C.R. 512


A                  STATE OF ORISSA & ORS.
                                 v.
                    UJJAL KUMAR BURDHAN
                (Criminal Appeal No. 546 of 2012)
                         MARCH 19, 2012
B
              [D.K. JAIN AND ANIL R. DAVE, JJ.]

        CODE OF CRIMINAL PROCEDURE, 1973:

c        s.482 - Inherent jurisdiction of the High court - Scope of
  - Allegation of irregularities against the respondent -
  Departmental inquiries - Preliminary inquiry revealing certain
  irregularities in the procurement and milling of paddy -
  Vigilance Cell of the Police department directed by State to
0 conduct an inquiry regarding the alleged criminal acts - Writ
  petition by respondent ~ High Court directing the completion
  of the said inquiry within twelve weeks - Respondent filing yet ·
  another writ petition praying for quashing of inquiry
  proceedings by the vigilance department on the ground that
E an inquiry had already been conducted on the same
  complaint - By way of an interim order, High Court directing
  State Government not to take any coercive action against the
  respondent till further orders - For a similar relief, respondent
  filing another petition uls.482 - High Court quashing the
  investigation proceedings - On ~ppeal, held: Commencement
F and completion of an investigation is necessary to test the
  veracity of the alleged commission of an offence - Any kind
  of hindrance or obstruction of the process of law from taking
  its normal course, without any supervening circumstances, in
  a casual manner, merely on the whims and fancy of the court
G tantamounts to miscarriage of justice - High Court had itself
  directed the completion of inquiry within a set time-frame of
  twelve weeks, which was subsequently interjected by an interim
  order and finally the entire investigation/inquiry came to be

H                               512
     STATE OF ORISSA & ORS. v. UJJAL KUMAR                   513
                   BU ROHAN
 quashed by the impugned judgment - . ft seems incongruous          A
 that in the first instance the court set into motion the process
 of law only to ultimately quash it on the specious plea that it
 would cause unnecessary embarrassment to the respondent
 - High Court's interference with the investigation was totally
 unwarranted - The investigation initiated against the              B
 respondent restored and the Vigilance Cell directed to
 proceed with and complete the investigation expeditiously, in
 accordance with law.

      s.482 - Scope of - Discussed.
                                                                    c
      CRIMINAL LAW: Existence of an arbitration agreement
 - Held: Cannot take the criminal acts out of the jurisdiction of
 the courts of law.

       The respondent was the owner of a proprietary                o
  concern. The Food and Supply department of the State
  Government initiated an inquiry against the said concern,
  relating to the processing of paddy for and on behalf of
· the Food Corporation of India. Preliminary inquiry
  revealed certain irregularities in the procurement and            E
  milling of paddy by the respondent. The State
  Government directed the Vigilance Cell of the Police
  department to conduct a preliminary inquiry regarding the
  alleged criminal acts. The respondent filed a writ petition
  before the High Court. The High Court while ordering the
  issue of the enforcement certificate to the respondent            F
  pending the ongoing inquiry, directed the completion of
  the said inquiry within twelve weeks. In compliance with
  that order, the Civil Supply Department issued
  enforcement certificate to the respondent. However, the
  respondent filed yet another writ petition inter-alia,            G
  praying for quashing of inquiry proceedings initiated by
  the State vigilance department on the ground that an
  inquiry had already been conducted on the same
  complaint by the department concerned. By way of an
  interim order, the High Court directed the State                  H
     514      SUPREME COURT REPORTS           [2012] 2 S.C.R.


 A Government not to take any coercive action against
                                                  .J..,.
                                                         the
   respondent till further orders. As a result thereof, the
   preliminary inquiry came to a standstill. For a similar
   relief, respondent filed another petition under Section
   482, Cr.P.C. The High Court quashed the investigation
 B proceedings. The instant appeal was filed by the State
   Government as also its two functionaries, viz. Director-
   cum-Addi. D.G.P., Vigilance and Dy. Superintendent of
   Police, Vigilance Cell.

           Allowing the appeal, the Court
 c
         HELD: 1. It is true that the inherent powers vested in
    the High Court under Section 482 of the Code are very
    wide. Nevertheless, inherent powers do not confer
    arbitrary jurisdiction on the High Court to act according
  D to whims or caprice. This extra-ordinary power has to be
    exercised sparingly with circumspection and as far as
    possible, for extra-ordinary cases, where allegations in
    the complaint or the first information report, taken on its
    face value and accepted in their entirety do not constitute
. E the offence alleged. Unless a case of gross abuse of
    power is made out against those incharge of
    investigation, the High Court should be loath to interfere
    at the early/premature stage of investigation. [Para 7]
    [519-E-G]
 F      2. In the fact-situation at hand, the impugned
   decision is clearly indefensible. In the instant case, the
   S.P., Vigilance Cell, had merely approved the opening of
   an inquiry and convert~d it into a Cell File. The
   preliminary inquiry was yet to commence and an FIR was
 G yet to be lodged. In the first instance, the High Court
   stayed the preliminary inquiry by an interim order in the
   Writ Petition, and then by the impugned judgment
   quashed the same. Commencement and completion of
   an. investigation is necessary to test the veracity of the
 H alleged commission of an offence. Any kind of hindrance
    STATE OF ORISSA & ORS. v. UJJAL KUMAR                515
                  BURDHAN

or obstruction of the process of law from taking its            A
normar course, without any supervening circumstances,
in a casual manner, merely on the whims and fancy of the
court tantamounts to miscarriage of justice, which seems
to be the case here. [Para 1OJ [521-E-H]
                                                                B
      3. The circumstances that have weighed with the
High Court, do not justify the conclusion it has arrived
at. The High Court has allowed the petition under Section
482 of the Code, inter-alia, on the following grounds;
firstly, the enforcement certificate had been issued to the     C
respondent which evidences compliance with the Rice
and Paddy Procurement (Levy) and Restriction on sale
and Movement Order, 1982. The observation came to be
made by losing sight of the fact that the said enforcement
certificate had been issued pursuant to the order passed
by the High Court. The second ground was that the two           D
inquires on the same facts had already been conducted,
wherein the respondent had been exonerated. The High
Court committed a grave error of fact in observing that
the respondent had been exonerated in the two inquiries
held previously as both the inquiry reports had in fact         E
concluded that the respondent had committed serious
irregularities and proper action needs to be initiated
against him. As far as the two previous inquiries are
concerned, it 'may also be noted that those inquiries were
departmental inquiries and what has been quashed by             F
the impugned judgment is the initiation of police
investigation. Both the inquiries are entirely different in
nature; operate in different fields and have different object
and consequences. Further, the impugned order also
noted that in view of the arbitration agreement between         G
the agent and the Government, all the alleged violations
fell within the purview of Arbitration and Conciliation Act,
1996 and therefore, the respondent could not be held
liable for any criminal offence. This observation is against
the well settled principle of law that the existence of an      H
    516     SUPREME COURT REPORTS              [2012] 2 S.C.R.


A arbitration agreement cannot take the criminal acts out
  of the jurisdiction of the courts of law. [Paras 11, 12] [522-
    A~G]

       4. The High Court also adversely commented upon
  the progress of the preliminary inquiry and recorded that
8
  no new rr.aterial has been placed on record by the
  Vigilance Cell. This has been recorded without having
  regard to the fact that the High Court by another order,
  dated 5th September 2005, had, by way of an interim
  order, directed the State Government not to take any
C coercive steps against the respondent, with the result that
  there was no occasion for the department concerned to
  bring to the fore any material to unravel the truth. The
  High Court had itself, by order dated 18th July, 2005
  directed the completion of inquiry within a set time-frame
D of twelve weeks, which was subsequently interjected by
  an interim order and finally the entire investigation/inquiry
  came to be quashed by the impugned judgment. It seems
  Incongruous that in the first instance the court set into
  motion the process of law only to ultimately quash it on
E the specious plea that it would cause unnecessary
  embarrassment to the respondent. The High Court's
  interference with the investigation was totally
  unwarranted and therefore, the impugned order cannot
  be sustained. The impugned judgment is quashed and
F the investigation initiated against the respondent is
  restored and the Vigilance Cell of the State is directed to
  proceed with and complete the investigation
  expeditiously, in accordance with law. [Paras 13, 14] [523-
  F-H; 524-A-C]
G
      State of West Bengal and Ors. v. Swapan Kumar Guha
  and Ors. (1982) 1 sec 561: 1982 sec (Cri) 283: (1982) 3
  SCR 121; Jeffrey J. Diermeier & Anr. v. State of West Bengal
  & Anr. (2010) 6 SCC 243: 2010 (7) SCR 128; S.W Palanitkar
H & Ors. v. State of Bihar & Anr. (2002) 1 SCC 241: 2001 (4)
    Suppl. SCR 397 - relied on.
    STATE OF ORISSA & ORS. v. UJJAL KUMAR                 517
                  BURD HAN
                     Case Law Reference:                          A
   (1982) 3 SCR 121               relied on         Para 8

  2010 (7) SCR 128                relied on         Para 9

  2001 (4) Suppl. SCR 397         relied on         Para 12
                                                                  B
    CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No. 546 of 2012.

    From the Judgment & Order dated 12.02.2008 of the High
Court of Orissa at Cuttack, in Crl. MC No. 2808 of 2006.          c
    Suresh Chandra Tripathy for the Appellants.

    Randhir Singh Jain, Ruchika Jain, Dhananjai Jain for the
Respondent.
                                                                  D
    The Judgment of the Court was delivered by

   ; D.K. JAIN, J. 1. Leave granted.

      2. This appeal by special leave, assails the judgment
dated 12th February, 2008, rendered by a learned Single Judge     E
of the High Court of Orissa at Cuttack. By the impugned order,
on a petition under Section 482 of the Code of Criminal
Procedure, 1973 (for short "the Code"), the investigation
initiated by the Vigilance Department of the State Government
into the allegations of irregularities in the receipt of excess   F
quota, recycling of rice and distress sale of paddy by one Mis
Haldipada Rice Mill, a proprietary concern of the respondent,
has been quashed.

     3. On receipt of a complaint, the civil supply department
of the State Government initiated an inquiry against the said G
concern, relating to the processing of paddy for and on behalf
of the Food Corporation of India. Preliminary inquiry conducted
by the Food and Supply department revealed certain
irregularities in the procurement and milling of paddy by the
respondent. A subsequent departmental inquiry recommended H
    518      SUPREME COURT REPORTS                [2012] 2 S.C.R.


A   initiation of a proper administrative action against the
    respondent. Consequently, the State Government directed the
    Vigilance Cell of the Police department to conduct a preliminary
    inquiry regarding the alleged criminal acts.

B      .4. In the meantime, on filing of a Writ Petition, being W.P.
  No.8315 of 2005, by the respondent, a Division Bench of the
  High Court while ordering the issue of the enforcement
  certificate to the respondent pending the ongoing inquiry,
  directed the completion of the said inquiry within twelve weeks
  of the receipt of that order. In compliance with that order, the
C Civil Supply Department of the State Government issued
  enforcement certificate to the respondent. However, the
  respondent filed yet another Writ Petition, being W.P. No.10761
  of 2005, inter-alia, praying for quashing of inquiry proceedings
  initiated by the State vigilance department on the ground that
D an inquiry had already been conducted on the same complaint
  by the department concerned. By way of an interim order, the
  High Court directed the State Government not to take any
  coercive action against the respondent till further orders. As a
  result thereof, the preliminary inquiry came to a standstill. For
E a similar relief, respondent filed another petition, being
  Crl.M.C.No.2808 of 2006 under Section 482 of the Code in
  which the impugned order has been passed. Aggrieved by the
  said order, the State Government as also its two functionaries,
  viz. Director-cum-Addi. D.G.P., Vigilance and Dy.
F Supe~intendent of Police, Vigilance Cell have preferred this
  appeal.

       5. Mr. Suresh Chandra Tripathy, learned counsel
  appearing for the appellants submitted that it is settled law that
  a preliminary inquiry ought not to be quashed by the High Court
G in exercise of its jurisdiction under Section 482 of the Code.
  He argued that the High Court was not at all justified in
  interfering with the investigation at the threshold even before ·
  the registration of an FIR, particularly when in his report dated
  4th June 2005, the civil supply officer had reported fabrication
H
      STATE OF ORISSA & ORS. v. UJJAL KUMAR                    519
              BURDHAN [D.K. JAIN, J.]
and forgery of accounts maintained by the respondent as also           A
violation of the guidelines laid down in the Food and
Procurement Policy for the marketing season 2004-2005.
Referring us to the order dated 18th July 2005, passed by a
Division Bench of the High Court in W.P.(C) No.8315 of 2005,
whereby, as aforesaid, a direction was issued for expediting           B
the inquiry, learned counsel stressed that having observed that
if in the inquiry any irregularity is established, the respondent
could be proceeded under the relevant provisions of law, the
High Court committed a serious illegality in law in quashing the
same inquiry/investigation.                                            c
     6. Per contra, Mr. Randhir Jain, learned counsel appearing
for the respondent supported the impugned judgment and
submitted that the respondent was being harassed by repeated
investigations on the same set of facts. It was alleged that the
inquiry was ordered at the behest of an Ex-M.L.A. who                  D
belonged to the ruling party and with whom the respondent
shared a long history of animosity and antagonism. He thus,
contended that the appeal deserved to be dismissed.

     7. It is true that the inherent powers vested in the High Court   E
under Section 482 of the Code are very wide. Nevertheless,
inherent powers do not confer arbitrary jurisdiction on the High
Court to act according to whims or caprice. This extra-ordinary
power has to be exercised sparingly with circumspection and
as far as possible, for extra-ordinary cases, where allegations        F
in the complaint or the first information report, taken on its face
value and accepted in their entirety do not constitute the offence
alleged. It needs little emphasis that unless a case of gross
abuse of power is made out against those incharge of
investigation, the High Court should be loath to interfere at +he      G
early/premature stage of investigation.

   8. In State of West Bengal and Ors. Vs. Swapan Kun;ar
Guha and Ors. 1 , emphasising that the Court will not normally

1.   (1982) 1 sec 561: 1982 sec (Cri) 283: (1982) 3 scR 121.           H
    520       SUPREME COURT REPORTS                 [2012] 2 S.C.R.


A interfere with an investigation and will permit the inquiry into the
  alleged offence, to be completed, this Court highlighted the
  necessity of a proper investigation observing thus:
          "An investigation is carried on for the purpose of
          gathering necessary materials for establishing and
8         proving an offence which is disclosed. When an offence
          is disclosed, a proper investigation in the interests of
          justice becomes necessary to collect materials for
          establishing the offence, and for bringing the offender to
          book. In the absence of a proper investigation in a case
c          where an offence is disclosed, the offender may succeed
          in escaping from the consequences and the offender
          may go unpunished to the detriment of the cause of
          justice and the society at large. Justice requires that a
          person who commits an offence has to be brought to book
D         and must be punished for the same. If the court interferes
          with the proper investigation in a case where an offence
          has been disclosed, the offence will go unpunished to the
          serious detriment of the welfare of the society and the
          cause of the justice suffers. It is on the basis of this
E         principle that the court normally does not interfere with the
          investigation of a case where an offence has been
          disclosed .... Whether an offence has been disclosed or not
          must necessarily depend on the facts and circumstances
          of each particular case .... /f on a consideration of the
F         relevant materials, the court is satisfied that an offence
          is disclosed, the court will normally not interfere with the
          investigation into the offence and will generally allow the
          investigation into the offence to be completed for
          collecting materials for proving the offence."
G                                         (emphasis supplied by us)
        9. On a similar issue under consideration, in Jeffrey J.
    Diermeier & Anr. Vs. State of West Bengal & Anr. 2, while
    explaining the scope and ambit of the inherent powers of the
H 2. (2010) s sec 243.
    STATE OF ORISSA & ORS. v. UJJAL KUMAR                     521
            BURDHAN [D.K. JAIN, J.]
High Court under Section 482 of the Code, one of us (D.K. Jain,      A
J.) speaking for the Bench, has observed as follows:

    "20 ...... The section itself envisages three circumstances
    under which the inherent jurisdiction may be exercised,
    namely, (i) to give effect to an order under the Code; (ii)      B
    to prevent abuse of the process of Court; and (iii) to
    otherwise secure the ends of justice. Nevertheless, it is
    neither possible nor desirable to lay down any inflexible
    rule which would govern the exercise of inherent jurisdiction
    of the Court. Undoubtedly, the power possessed by the
    High Court under the said provision is very wide but it is       C
    not unlimited. It has to be exercised sparingly, carefully and
    cautiously, ex debito justitiae to do real and substantial
    justice for which alone the court exists. It needs little
    emphasis that the inherent jurisdiction does not confer an
    arbitrary power on the High Court to act aceording to whil"n     D
    or caprice. The power exists to prevent abuse of authority
    and not to produce injustice."

      10. Bearing in mind the afore-said legal position with
regard to the scope and width of the power of the High Court. E
under Section 482 of the Code, we are constrained to hold that
in the fact-situation at hand, the impugned decision is clearly
indefensible. In the present case, the S.P., Vigilance Cell, had
merely approved the opening of an inquiry and converted it into
a Cell File. The preliminary inquiry was yet to commence and F
an FIR was yet to be lodged. In the first instance, the High Court
stayed the preliminary inquiry by an .interim order in the Writ
Petition, and then by the impugned judgment quashed the same.
It goes without saying that commencement and completion of
an investigation is necessary to test the veracity of the alleged G
commission of an offence. Any kind of hindrance or obstruction
of the process of law from taking its normal course, without any
supervening circumstances, in a casual manner, merely on the
whims and fancy of the court tantamounts to miscarriage of
justice, which seems to be the case here.
                                                                   H
     522       SUPREME COURT REPORTS               [2012] 2 S.C.R.


A        11. We are convinced that the circumstances that have
  weighed with the High Court, do not justify the conclusion it has
  arrived at. The High Court has allowed the petition under
  Section 482 of the Code, inter-alia, on the following grounds;
  firstly, the enforcement certificate had been issued to the
B respondent which evidences compliance with the Rice and
  Paddy Procurement (Levy) and Restriction on sale and
  Movement Order, 1982. The observation came to be made by
  losing sight of the fact that the said enforcement certificate had
  been issued pursuant to the order dated 18th July 2005, passed
c by the High Court in W.P. (C) No.8315 of 2005. Secondly, two
  inquires on the same facts had already been conducted,
  wherein the respondent had been exonerated. The High Court
  has committed a grave error of fact in observing that the
  respondent had been exonerated in the two inquiries held
  previously as both the inquiry reports had in fact concluded that
0
  the respondent had committed serious irregularities and proper
  action needs to be initiated against him. As far as the two
  previous inquiries are concerned, it may also be noted that
  those inquiries were departmental inquiries and what has been
  quashed by the impugned judgment is the initiation of police
E investigation. Both the inquiries are entirely different in nature;
  operate in different fields and have different object and
  consequences.

          12. Further, the impugned order also notes that in view of
F the arbitration agreement between the agent and the
    Government, all the alleged violations fell within the purview of
    Arbitration and Conciliation Act, 1996 and therefore, the
    respondent could not be held liable for any criminal offence. This
  . observation is against the well settled principle of law that the
G existence of an arbitration agreement cannot take the criminal
    acts out of the jurisdiction of the courts of law. On this aspect,
    in S. W Palanitkar & Ors. Vs. State of Bihar & Anr. 3, this Court
    has echoed th_e following views:

H   3.   (2002i 1 sec 241.
     STATE OF ORISSA & ORS. v. UJJAL KUMAR                     523
             BURDHAN [D.K. JAIN, J.]

     "22. Looking to the complaint and the grievances made A
     by the complainant therein and having regard to the
     agreement, it is clear that the dispute and grievances arise
     out of the said agreement. Clause 29 of the agreement
     provides for reference to arbitration in case of disputes or
     controversy between the parties and the said clause is B
     wide enough to cover almost all sorts of disputes arising
     out of the agreement. As a matter of fact, it is also brought
     to our notice that the complainant issued a notice dated
     3-10-1997 to the appellants invoking this arbitration clause
     claiming Rs.15 lakhs. It is thereafter the present complaint c
     was filed. For the alleged breach of the agreement in
     relation to commercial transaction, it is open to the
     Respondent 2 to proceed against the appellants for his
     redressal for recovery of money by way of damages for
     the loss caused, if any. Merely because ther-e is an D
     arbitration clause in the agreement, that cannot prevent ,
     criminal prosecution against the accused if an act
     constituting a criminal offence is made out even prima
     facie."

                                             (Emphasis supplied)       E

        13. The High Court has also adversely commented upon
  the progress of the preliminary inquiry and has recorded that
  no new material has been placed on record by the Vigilance
  Cell. This has been recorded without having regard to the fact       F
  that the High Court by another order, dated 5th September
  2005, had, by way of an interim order, directed the State
  Government not to take any coercive steps against the
  respondent, with the result that there was no occasion for the
  department concerned to bring to the fore any material to            G
  unravel the truth. It is also pertinent to note here that the High
  Court had itself, by order dated 18th July, 2005 directed the
" completion of inquiry within a set time-frame of twelve weeks,
  which was subsequently interjected by an interim order and
  finally the entire investigation/inquiry came to be quashed by       H
     524      SUPREME COURT REPORTS               [2012] 2 S.C.R.

A the impugned judgment. It seems incongruous that in the first
  instance the court set into motion the process of law only to
  ultimately quash it on the specious plea that it would cause
  unnecessary embarra'ssment to the respondent.

           14. For all these reasons, in our opinion, High Court's
8
     interference with the investigation was totally unwarranted and
     therefore, the impugned order cannot be sustained. We,
     accordingly, allow the appeal, quash and set aside the
     impugned judgment and restore the investigation initiated
·c   against the respondent and direct the Vigilance Cell of the
     State to proceed with and complete the investigation
     expeditiously, in accordance with law.

     D.G.                                         Appeal allowed.