Supreme Court of India

UNION OF INDIAversusPRAKASH P. HINDUJA AND ANR.

Citation: 2003 INSC 302
Decided: 7 July 2003
Disposal: Appeal(s) allowed
Bench: S RAJENDRA BABU

Holding

The Supreme Court held that the CBI is not required to obtain CVC approval before filing a charge‑sheet; procedural irregularities in investigation do not invalidate the charge‑sheet or the court’s cognizance, and the High Court’s order quashing cognizance was erroneous.

Summary

The case arose from the Bofors scandal where the CBI filed charge‑sheets against Prakash P. Hinduja and others for offences under the IPC and the Prevention of Corruption Act. The accused contended that the charge‑sheets were illegal because the CBI had not placed the investigation report before the Central Vigilance Commission (CVC) as required by the Supreme Court’s directions in Vineet Narain, and therefore the Special Judge’s cognizance and subsequent proceedings should be quashed. The Delhi High Court accepted this argument and set aside the cognizance. On appeal, the Supreme Court held that Vineet Narain does not obligate the CBI to obtain CVC’s prior approval before filing a charge‑sheet; any procedural lapse in investigation does not vitiate the charge‑sheet or the court’s jurisdiction to take cognizance. Consequently, the High Court’s order was reversed and the Special Judge was directed to proceed with trial. The Court emphasized that investigation is an executive function insulated from judicial interference, and that errors in investigation do not automatically invalidate subsequent criminal proceedings.

Issues considered

The validity of quashing cognizance on the ground that the CBI filed charge‑sheets without CVC approval, contrary to Vineet Narain directions.
Whether Vineet Narain requires the CBI to obtain prior concurrence or sanction from the CVC before filing a charge‑sheet.
Whether an error or illegality in the investigation vitiates the charge‑sheet and the court’s jurisdiction to take cognizance.
The scope of the CVC’s superintendence over the CBI and its power to direct the CBI not to file a charge‑sheet.
The extent to which courts can interfere with the investigative process under the CrPC.

Legislation cited

Code of Criminal Procedure, 1973s. 156, s. 157, s. 169, s. 170, s. 173, s. 190, s. 2(h), s. 482, s. 561A
Contempt of Courts Acts. 19(2)(c)
Delhi Special Police Establishment Act, 1946s. 4
Indian Penal Code, 1860s. 120B, s. 420
Prevention of Corruption Act, 1947s. 5(1)(d), s. 5(2), s. 5-A

Subjects

CBICVCVineet Naraincharge sheetSection 482 CrPCinvestigationsuperintendencePrevention of Corruption ActBofors scandaljudicial reviewcognizanceprocedural irregularity

Judgment

UNION OF INDIA A
v.
PRAKASH P. HINDUJA AND ANR.

JULY 7, 2003

[S. RAJENDRA BABU AND G.P. MATHUR, JJ.] B

Code of Criminal Procedure 1973-Sections 482, 173, 190, 156 and
157-0ffence under Penal Code and Prevention ofCorruption Act-CBI filing
charge sheet without approval of Central Vigilance Commission (CVC)- C
Cognizance of offence by Special Judge-High Court holding that filing of
charge sheet without approval ofCVC violative ofdirections issued by Supreme
Court in Vineet Narain 's case empowering CVC to have superintendence over
the working of CBI, therefore illegality in investigation-Dismissal of charge
sheet and quashing of cognizance taken and all consequential proceedings-
On appeal held: Court cannot interfere with the investigation-Vineet Narain 's D
case does not lay down that CBI will have to take concurrence or sanction
from CVC before filing charge sheet in Court, thus investigation not i/legal-
Also no right conferred upon accused to approach CVC or to challenge the
action of CBI in submission of charge sheet in Court on the ground of some
purported irregularity in making a report to eve regarding progress of
investigation- Hence, order of High Court set aside-Penal Code, 1860- E
Section 120B read with section 420-Prevention of Corruption Act, 1947-
Section 5(2) read with section 5(/)(d)-Delhi Special Police Establishment
Act, 1946-Section 4.

Words and Phrases:
F
'Investigation '-Meaning of in the context of Section 2(h) of the Code
of Criminal Procedure, 1973.

Government of India and private company of Sweden viz. Bofors
Co. entered into a contract for supply of gun systems along with vehicles, G
ammunition and other accessories. There were allegations against the
company that they had obtained the contract from the Government of·
India after paying large amount of bribe. Investigations were carried out.
Thereafter, CBI filed charge sheet under Section 120-8 read with 420 IPC
and Section 5(2) read with Section 5(I)(d) of the Prevention of Corruption
307 II
308 SUPREME COURT REPORT~ 003) SUPP. I S.C.R.

A Act, 1947 against accused persons. It was mentioned that the investigations
concerning the role of respondents and others was continuing. Special
Judge took cognizance of the offence and registered a case. Thereafter,
CBI submitted a supplementary charge sheet against the respondents and
issued summons against them. Respondent No I then filed an application
B for dismissing the charge sheets and revoking the cognizance taken and
the process issued against the accused since the cases were never reported
to Central Vigilance Commission(CVC) and CVC neither reviewed the
cases nor considered them fit for continuance of the prosecution leading
to non-compliance of the directions issued by this Court in Vineet Narain 's
case empowering CVC to have superintendence over the working of CBI.
C Special Judge dismissed the application. Respondents then filed a petition
under Section 482 Cr.P.C. for dismissing the charge sheets and revoking
the cognizance taken and the process issued against the accused. High
Court held that there was violation of the directions issued in Vineet
Narain 's case as CBI had filed the charge sheet before the Special Judge
without placing the same before CVC thus illegality had been committed
D in the course of investigation. It allowed the petition quashing the
cognizance taken and all the consequential proceedings. Hence the present
appeals.

Appellants contended that the High Court has completely
E misunderstood the judgment of this Court in Vineet Narain 's case; that it
does not give any kind of a right to an accused to challenge the charge
sheet on account of any alleged non-observance or violation of the
directions issued regar.ding the functioning and responsibility of CVC; that
the entire object is to insulate the CBI from any kind of external influence
or pressure so that it may perform its duty as enjoined in Delhi Special
F Police Establishment Act; and that the appellant has been taking steps to
comply with the directions issued in Vineet Narain 's case.

Respondents contended that as the CVC has been entrusted with the
responsibility of superintendence over the CBI's functioning, the CVC has
the right to give a direction to the CBI not to submit a charge-sheet against
G the accused; and that the directions issued in Vineet Narain 's case have
not been complied by the Union of India as the CVC has not been given
a statutory status; and that as the appellant-Union of India has committed
contempt of the order, therefore it should not be heard.

Allowing the appeals, the Court
H
U.O.l.1. PRAKASH P. HINDUJA 309
HELD: 1.1. The Court cannot go into the validity or otherwise of A
the investigation done by the authorities charged with the duty of
investigation under the relevant statutes. 1317-E]

1.2. The manner and the method of conducting the investigation are
left entirely to the officer in charge of the police station or a subordinate
officer deputed by him. A Magistrate has no power to interfere with the B
same. The formation of the opinion whether there is sufficient evidence
or reasonable ground of suspicion to justify the forwarding of the case to
a Magistrate or not as contemplated by Sections 169 and 170 Cr.P.C. is
of the officer in charge of the police station and a Magistrate has absolutely
no role to play at this stage. Similarly, after completion of the investigation C
while making a report to the Magistrate under Section 173, the requisite
details have to be submitted by the officer in charge of the police station
without any kind of interference or direction of a Magistrate and this will
include a report regarding the fact whether any offence appears to have
been committed and if so, by whom. These provisions are applicable to
cases under Prevention of Corruption Act. 1319-C, D, E] D
1.3. The Magistrate is not bound to accept a final report {sometimes
called as closer report) submitted by the police and if he feels that the
evidence and material collected during investigation justifies prosecution
of the accused, he may not accept the final report and take cognizance of
the offence and summon the accused but this does not mean that he would E
be interfering with the investigation as such. He would be doing so in
exercise of powers conferred by Section 190 Cr. P.C. 1319-F, G]

Emperor v. Nazir Ahmad, AIR {1945) PC 18; H.N. Rishbud 1. The
State of Delhi, 11955] l SCR tl50; State of West Bengal v. SN Basak, AIR p
{1963) SC 447; Abhmandan Jha and Ors. v. Dinesh Mishra, AIR 1968 SC
ll7 and State of Bihar and Anr. v. JAC Saldanha and Ors., [1980] 1 SCC
554, referred to.

2. l. Any error or illegality committed during the course of
investigation would not vitiate the charge sheet so as to render the G
cognizance taken thereon bad and invalid. The view taken by the High
Court that as the CBI committed an error or irregularity in submitting
the charge-sheet without reporting and taking approval or consent from
the CVC, the same was illegal and no cognizance could be taken by the
Special Judge on the basis of such a charge sheet nor further proceedings
in pursuance thereof could be quashed is, wholly erroneous. Also the H
310 SUPREME COURT REPORTS (2003) SUPP. I S.C.R.

A judgment of High Court is quite confusing and self contradictory.
Therefore, the judgment is set aside. (323-G, H; 324-A, Bf

2.2. In Vineet Narain 's case it was held that as no one is above the
law, the persons holding high offices are not able to escape either on
account of inertia or inaction of the CBI to investigate the c:ommission of
B offence or on account of incomplete or improper investigation or faulty
prosecution in Court. A duty has been cast on the CVC to review the
progress of all cases moved by the CBI for sanction of prosecution,
specially those in which sanction has been delayed or refused. The
judgment nowhere says that the CBI will have to take concurrence or
C sanction from the CVC before filing charge sheet in Court. The directions
issued in Vineet Narain 's case cannot be interpreted in abstract but have
to be read and understood in the context of the facts and circumstances
leading to the filing of the writ petition. The facts which were revealed
and were brought to light during the course of hearing showed that the
CBI had failed to perform its statutory duty and legal obligation of
D investigating offences and after completing the investigation taking it to
its logical conclusion of launching prosecution against all those who were
found to have committed offences. The directions issued do not confer any
kind of a right upon the alleged offender or the accused to approach the
CVC for taking any steps to stop the CBI from either proceeding against
E him or from launching prosecution against him by filing a charge sheet
or to challenge the action of CBI in submission of charge sheet in Court
on the ground of some purported irregularity in making the report to the
CVC regarding progress of investigation. 1328-H; 329-A-G(

2.3. The averments made in the affidavits filed by CBI and CVC
F clearly show that the investigation report was sent to the CVC by the CBI
before filing of the first charge sheet and the eve was also apprised of
the developments in the case. In the first charge sheet, it was clearly
mentioned that the investigation regarding the role played by the
respondent was also continuing and ·thereafter a supplementary charge
sheet was filed. On account of·the fact that CVC Bill could not be passed
G by the Rajya Sabha and the Ordinance was going to lapse, the functioning
of the CVC was being regulated by the Government Resolution dated
4.4.1999 and it is nowhere provided in the resolution for CBI to take any
concurrence or approval from the CVC before filing of the charge sheet.
Investigatio!l of cases, filing of charge sheets and then prosecution of such
H cases are essentially for the CBI, the duty of the CVC being to ensure that
U.0.1. v. PRAKASH P. HINDU.IA 311
the CBI discharges its duties without any interference and without undue A
favour to any person. Therefore, the High Court committed serious error
in not giving due consideration to the counter affidavits filed by the CBI
and CVC. 1333-A, D-HI

Gokul Chand Dwarka Das Morarka v. King, AIR (1948) PC 82 and
Prabhu Dayal Deorah v. District Magistrate, AIR (1974) SC 183, B
distinguished.

Vineet Narain v Union of India, (1998] I SCC 226; H.N. Rishbud v.
State of Delhi, (1955] SCR 1150; State of U.P. v. Bhagwant Kishore Joshi,
AIR (1964) SC 221; Prabhu v. Emperor, AIR (1944) SC 73 and Lumbhardar C
Zutshi v. The King, AIR (1950) PC 26, referred to.

3. Under our constitutional scheme the Parliament exercises
sovereign power to enact laws and no outside power or authority can issue
a direction to enact a particular piece of legislation. Similarly, when an
executive authority exercises a legislative power by way of subordinate D
legislation pursuant to the delegated authority of a legislature, such
executive authority cannot be asked to enact a law which he has been
empowered to do under the delegated legislative authority. TherefWe, the
direction issued in Vineet Narain 's case regarding conferment of statutory
status on CVC cannot be treated to be of such a nature, the non-
compliance whereof may amount to contempt of the order passed by this E
Court (331-D-G(

Supreme Court Employees' Welfare Association v. Union of India,
(1989] 4 SCC 187; State of J and K v. AR Zakki and Ors., AIR (19921 SC
1546 and AK Roy v. Union of India, AIR (1982) SC 710, referred to.
F
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 666 of2002.

From the Judgment and Order dated I 0.6.2002 of the Delhi High Court
in Crl. Misc. (Main) No. 1354 of 2002. ·

WITH G
Criminal Appeal No. 746 of 2002.

K.N. Raval, Soliciter General, Ms. Meenakshi Sakhardande, ADN Rao,
A Mariarputham, P. Parmeswaran, D.N. Ray, Ms. Prena Kumari, Ms. Vinita
H
312 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A Sinha and B.V. Balramdas for the Appellant.

Ram Jethmalarli, Amite Desai, UA Rana, Arvind Kumar Nigam,
Alok Kumar Sen Gupta, Sajan Narain, Rajeev Jha, Amit Bhagat, Mrinal
Manda!, Ashim Aggarwal, Rajan Narain and Prashant Bhushan for the
Respondents.
B
The Judgment of the Court was delivered by

G.P. MATHUR, J. I. Union of India through Central Bureau of
Investigation (for short 'CBI') and Central Vigilance Commission (for short
'CVC') have preferred these appeals by special leave against the judgment
C and order dated I0.6.2002 of a learned Single Judge of Delhi High Court by
which the petition preferred by Prakash Hinduja respondent No. I has been
allowed and the cognizance taken by the learned Special Judge and all
consequential proceedings have been quashed. It has, however, been left
open to the prosecution to file a fresh charge-sheet after following the
D procedure laid down by this Court in Vineet Narain and Ors. v. Union of
India, [ 1998] I SCC 226.

2. In order to appreciate the controversy ra:sed it is necessary to briefly
notice the relevant facts. A contract was entered between Government of
India and Mis. AB Bofors on 24.3 .. 1986 for supply of 400 FH 77-B gun
E systems along with vehicles, ammunition and other accessories at a total cost
of SEK 8,410,660,984 (equivalent to about Rs.1437.72 crores as per exchange
rate on 21.3.1986) and on 2.5.1986 advance payment equivalent to 20 per
cent of the contract value was paid to Mis. AB Bofors. On 16.4.1987 Swedish
Radio came out with a story that Bofors had managed to obtain the contract
from Government of India after payment of large amounts as bribe. On
F 21.4.1987 the Government of India made a formal request to Government of
Sweden for an investigation into the allegations. The CBI registered a case
being RC 1Al90-ACU. IV on 22.1.1990 and proceeded to investigate the
matter. Thereafter on 22.10.1999 the CBI submitted charge sheet No.0 I under
Section 120-B IPC read with 420 IPC and Section 5(2) read with Section
G 5(l)(d) of the Prevention of Corruption Act, 1947 in the Court of Special
Judge, Delhi wherein (I) S.K. Bhatnagar (2) W.N. Chaddha (3) Ottavio
Quattrocchi (4) Martin Ardbo, former President of Mis AB Bofors, and (5)
Mis. AB Bofors, Sweden (private company) were arrayed as accused. The
charge-sheet is a long document and in para 62 thereof it was stated that the
investigation relating to the further transfer of funds (details of which were
H
U.. 0.1. v. PRAKASH P. HINDUJA [G.P. MATHUR. .I.] 313
given in paragraphs 55 to 57) routed through various countries is still A
continuing in order to find out the details of other beneficiaries and the
Letters Rogatory issued by the Court of learned Special Judge, Delhi to
Switzerland, Sweden, Panama, Luxembourgh, Bahamas, Jordan, Liechtenstein
and Austria with a view to find out other beneficiaries of the commission
amounts are still pending execution. It was also mentioned that investigations
concerning the role of GP Hinduja, Prakash Hinduja, Srichand Hinduja, Harsh B
Chaddha and Maria Quattrocchi and some others are also continuing. The
learned Special Judge took cognizance of the offence on U 1.1999 and Crl.
Case No.39/1999 was registered in his Court. In pursuance of Letters Rogatory
issued by the Special Judge, the Swiss Government handed over a set of
documents comprising 7 I pages to CBI on I 8.12.1999. Thereafter on 9.10.2000 C
the CBI submitted a supplementary charge sheet bearing No.03 against GP
Hinduja, Prakash Hinduja and Srichand Hinduja. The charge sheet gives the
details as to how Mis. AB Bofors transferred funds to the accounts opened
by these accused and how they took up British nationality and obtained
British passports and how they had opposed the handing over of documents
by Swiss Government to the agencies of Government of India. The learned D
Special Judge thereafter summoned the three Hinduja brothers by the order
dated 12.12.2000.

3. On 15.4.2002 accused Prakash Hinduja moved an application before
the Special Judge praying that "the charge sheets submitted by the CBI be
dismissed and the cognizance taken and the process issued against the accused E
be revoked." The application was moved on the ground that the cases were
never reported to eve and the eve has neither reviewed the cases nor had
considered them fit for continuance of the prosecution and as such there was
a non-compliance of the directions issued by this Court in the case of Vineet
Narain. The application was opposed by the CBI by filing a written reply F
wherein it was _stated, inter alia, that the allegations made by the accused to
the effect that the case was never reported to the CVC was not correct; that
a copy of the investigation report was sent to CVC on 14.7.1997 and further
developments were also brought to the notice of eve from time to time; that
a special counsel for prosecuting the case had been appointed on the
recommendation of Attorney General for India and that in para 62 of the first G
charge-sheet it was mentioned that investigation regarding the role played by
Hinduja brothers was in progress; and that the supplementary charge sheet
had been filed under Section 173 (8) Cr. P.C. which was co-related with the
first charge sheet.
H
314 SUPREME COURT REPORTS (2003] SUPP. I S.C.R.

A 4. The learned Special Judge, after hearing counsel for the parties and
noticing their contentions held that generally it was not in the province of the
courts and particularly the Trial Court to see in what manner and to what
extent the CBI is reporting the progress of investigation and this was within
the province of eve. It was further held that "the intent of the directions
given in Vineel Narain is not to dismiss or throw the charge sheets when
B there is incomplete or partial compliance. The primary function of the Trial
Court however is to proceed with expedition strictly on the merits of the
accusations entirely in accordance with law uninfluenced by what happened
during investigation and which counsel represent CBI". Learned Special Judge
also observed that the Court was not powerless and if necessary, appropriate
C directions can be issued in terms of Vineel Narain to ensure a fair and
efficient trial. The application was accordingly rejected by the order dated
18.4.2002.

5. Thereafter, Prakash Hinduja filed a petition under Section 482 Cr.P.C.
in Delhi High Court praying for the reliefs asked for in the application moved
D before the learned Special Judge i.e. to revoke the cognizance taken, to
revoke the process issued and to dismiss the charge sheets. The other prayer
made was that notice be issued to the Attorney General and his views on the
effect of non-compliance of the directions be ascertained and notice be also
issued to the Chief Vigilance Commissioner to report to the Court as to his
E role in the filing of the two charge-sheets and the manner in which the
directions of Supreme Court had been complied with in the case in hand. The
petition was opposed and separate counter-affidavits were filed by CBI and
CVC. The High Court has held that in terms of directions issued in Vineel
Narain, CVC is entrusted with the responsibility of superintendence over tl·e
CBl's function. The CBI shall report to CVC about all cases taken up by it
F for investigation; progress of the investigation: cases in which charge-sheets
are filed and their progress. The CVC cannot abdicate its functions nor CBI
can violate the mandate and it was bound to place the final results of its
investigation along with all material collected before the eve for the purposes
of review. It has been further held that in the present case CBI had not placed
G before the eve the results of its investigations and had by-passed it by filing
a charge-sheet before the Special Judge, while the CVC had abdicated its
function which it was obliged to perform under the directives of the Supreme
Court even if the Government Resolution restricted its powers. Finally, the
High Court has held that in view of the mandate of the Supreme Court the
Special Judge ought not to have entertained the charge-sheet filed in violation
H of the directives. On these findings the petition was allowed and the cognizance
U.O.l. v. PRAKASH P. HINDUJA [G.P. MATHUR, J] 315
taken by the learned Special Judge and all consequential proceedings were A
quashed.

6. Feeling aggrieved by the judgment of the High Court, Union of India
through CBI and CVC through its Director have preferred separate appeals
by special leave.
B
7. Shri Kirit N. Rawat, learned Solicitor General appearing for the
appellants has submitted that in Vineet Narain this C'lur \vas dealing with
the allegations of failure of the CBI to investigate freely and fairly commission
of offences by persons holding high offices. In order to impart a degree of
independence to the CBI and yet to maintain the power of superintendence
(which is inevitably necessary in relation to any police force), the Court C
issued a mandamus based upon the suggestion which had also been made by
the Independent Review Committee. It was with this object in view and
having regard to the statutory provisions that the directions were issued to the
effect that the Government shall remain answerable for the CBI's functioning
which flowed from the power of the Government under Section 4 of Delhi D
Special Police Establishment Act (for short 'DSPE Act') and in order to
introduce visible objectivity in the mechanism to be established for civer-
viewing the CBl's working, the CVC was entrusted with the responsibility of
superintendence. Learned counsel has also submitted that the duty to report
the steps taken in the course of investigation cannot be equated with the duty
to obtain prior approval or consent of any other authority. It has been urged E
that the contention of the accused in fact amounts to equating the role cast
upon the eve with the role of an authority empowered to sanction the
institution of a criminal case in absence whereof the court lacks the jurisdiction
to take cognizance on the report filed under Section 173 Cr.P.C. The
acceptance of such a contention would result into introduction of a new p
provision of law which was never intended by this Court in Vineet Narain.
The directions issued were never intended to provide additional safeguards in
favour of an accused. It has thus been urged that the whole premise of the
judgment of the High Court is fundamentally wrong and the same is liable
to be set aside.
G
8. Shri Ram Jethmalani, learned senior counsel for the respondent has
submitted that in Vineet Narain this Court cut down the power of the
Government under Section 4 of the DSPE Act and within the hierarchy of
CBI there is a power of superintendence as provided in Section 36 Cr.P.C.
According to learned counsel, the judgment of this Court in Vineet Narain H
316 SUPREME COURT REPORTS (2003] SUPP. I S.C.R.

A mandates the creation of a eve with statutory powers and such eve, while
over-viewing the functioning of the CBI, will also have power to prevent or
stop investigation or arrest or launching of frivolous prosecution wherever it
considers it appropriate to do so. Learned counsel has furtiler submitted that
Vineet Narain did not change substantive law but ordains new safeguards
B which were not there earlier and they are in addition to and not in derogation
of already existing safeguards. Learned counsel has aiso submitted that what
Vineet Narain ordained was part of fair procedure as contemplated by Article
21 of the Constitution and the action of the CBI in submitting charge sheet
against the respondent without reporting the matter to eve has resulted in
denial of his right of fair procedure leading to violation of Article 21.
c 9. Section 482 Cr.P.C. saves inherent powers of the High Co;.Jrt and
such a power can be exercised to prevent abuse of the process of any Court
or otherwise to secure the ends of justice. The power can therefore be exercised
to quash the criminal proceedings. The grounds on which the prosecution
initiated against an accused can be quashed by the High Court in exercise of
D power conferred by Section 482 Cr.P.C. has been settled by a catena of
decisions of this Court rendered in R. P. Kapoor v. State of Punjab, AIR
(1960) SC 866; Madhu Limaye v. State, AIR (1978) SC 47; Delhi Municipality
v. Ram Kishan, AIR (1983) SC 67 and Raj Kapoor v. State, AIR (1980) SC
258. The matter was examined in considerable detail in State of Haryana v.
E Bhajan Lal, AIR (1992) SC 604 and after review of practically all the earlier
decisions, the Court in para 108 of the Reports laid down the grounds on
which power under Section 482 Cr.P.C. can be exercised to quash the criminal
proceedings and basically they are (I) where the allegations made in the FIR
or complaint, even if they are taken at their face value and accepted in their
entirety do not prima facie constitute any offence or make out a case against
F the accused, (2) where the uncontraverted allegations made in the FIR or
complaint and the evidence collected in support of the same do not disclose
the commission of any offence and make out a case against the accused, (3)
where there is an express legal bar engrafted in any of the provisions of Code
of Criminal Procedure or the concerned Act to the institution and continuance
G of the proceedings. But this power has to be exercised in a rare case and with
great circumspection. There are some statutes which create a bar on the
power of the Court in taking cognizance of an offence in absence of a sanction
by the competent authority like Section 6 of Prevention of Corruption Act,
1947 or Section 19 of Prevention of Corruption Act, 1988. Similar provision
is contained in Section 196 Cr.P.C. which mandates that no Court shall take
H cognizance of the offences enumerated in the Section except with the previoi:s
U.0.1. v. PRAKASH P. HINDU.IA [G.P. MA THUR . .I.] 317
sanction of the Central Government or of the State Government. Section 197 A
Cr.P.C. also creates an embargo on the power of the Court to take cognizance
of an offence alleged to have been committed by any person who is or was
a Judge or a Magistrate or a public servant not removable from his office
save by or with the sanction of the government. But the proceedings in the
present case have not been quashed on any one of the above mentioned
grounds. The High Court has not examined the nature of the allegations made B
in the FIR or the evidence by which the prosecution seeks to establish the
charge against the accused during the trial. There is not even a whisper in the
impugned order of the High Court that the FIR does not disclose a cognizable
offence. Similarly, there is no reference to any statutory bar like want of
valid sanction etc. to the taking of the cognizance of the offence. In fact the C
respondent Prakash Hinduja is not a public servant and consequently no
sanction is required from any authority for his prosecution. The only ground
on which the High Court has proceeded and has quashed the cognizance
taken by the learned Special Judge and all consequential proceedings is that
the CBI.had filed the charge sheet without placing the same before the CVC
and therefore an illegality had been committed in the course of investigation D
which entitled the High Court to quash the cognizance taken by the Special
Judge and all proceedings of the case.

10. The principal question which, therefore, requires consideration is
whether the Court can go into the validity or otherwise of the investigation E
done by the authorities charged with the duty of investigation under the
relevant statutes and whether any error or illegality committed during the
course of investigation would so vitiate the charge-sheet so as to render the
cognizance taken thereon bad and invalid.

11. We will first examine the statutory provisions made in that regard. p
Section 2(h) Cr.P.C. defines "investigation" and it includes all the proceedings
under the Code for the collection of evidence conducted by a police officer
or by any person (other than a Magistrate) who is authorised by a Magistrate
in this behalf. It ends with the formation of the opinion as to whether on the
material collected, there is a case to place the accused before a Magistrate for
trial and if so, taking the necessary steps for the same by filing of a charge- G
sheet under Section 173 (See State of U.P. v. Bhagwant Kishore Joshi~ AIR
(1964) SC 221 (Para 8) and H.N. Rishbud & Inder Singh v. The State of
Delhi, [1955] 1 SCR 1150 at 1157. Chapter XII of the Code of Criminal
Procedure deals with "Information To The Police And Their Powers To
Investigate". Section 154 provides that every information relating to the H
318 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A commission of a cognizable offence, if give;i orally to an officer in charge
of a police station, shall be reduced to writing by him or under his direction,
and the substance thereof shall be entered in a book to be kept by such
officer in such form as the State Government may prescribe in this behalf.
Sub-section ( 1) of Section 156 lays down that any officer in charge of a
B police station may, without the order of a Magistrate, investigate any
cognizable case which a Court having jurisdiction over the local area within
the limits of such station would have power to inquire into or try under the
provisions of Chapter XIII. Sub-section (2) of this Section provides that no
proceeding of a police officer in any such case shall at any stage be called
in question on the ground that the case was one which such otlicer was not
C empowered under this section to investigate. Section 157 Jays down that if,
from information received or otherwise, an officer in charge of a police
station has reason to suspect the commission of an offence which he is
empowered under Section 156 to investigate, he shall proceed in person or
shall depute one of his subordinate officers to proceed to the spot to investigate
the facts and circumstances of the case and, if necessary, to take measures for
D the discovery and arrest of the offender. Sections 160 to 163 deal with the
power of the police officer making an investigation under Chapter XII to
require the attendance of all witnesses, and their examination. Sections 165
and 166 confer power upon a police officer making investigation to search
or cause search to be made. Section 169 authorises a police officer to release
E a person from custody on his executing a bond, to appear, if and when so
required, before a Magistrate in case upon an investigation under Chapter XII
it appears to the officer in charge of the police station that there is not
sufficient evidence or reasonable ground of suspicion to justify the forwarding
of the accused to a Magistrate. Section 170 empowers the officer in charge
of a police station to forward the accused under custody to a competent
F Magistrate or to take security from the accused for his appearance before the
Magistrate in case where the offence is bailable, if after investigation it
appears that there is sufficient evidence or reasonable ground for doing so.
Section 173 and sub-section (2) thereof is important and it lays down that
after the investigation is completed, the officer in charge of the police station
G shall forward to a Magistrate empowered to take cognizance of the offence
on a police report, a report in the form prescribed by the State Government
giving details of the matters enumerated in clauses (a) to (g) of this sub-
section.

12. Chapter XIV of the Code of Criminal Procedure deals with
H "Conditions Requisite For Initiation Of Proceedings". Section 190 deals with
U.0.1. v. PRAKASH P. HINDUJA [G.P. MATHUR, J.] 319

cognizance of offences by Magistrate and it provides that a Magistrate may A
take cognizance of any offence (a) upon receiving a complaint of facts which
constitute such offence, (b) upon a police report of such facts, or (c) upon
information received from any person other than a police officer or upon his
own knowledge, that such offence has been committed.

13. The provisions referred to above occurring in Chapter XII of the B
Code show that detail and elaborate provisions have been made for securing
that an investigation takes place regarding an offence of which information
has been given and the same is done in accordance with the provisions of the
Code. The manner and the method of conducting the investigation are left
entirely to the officer in charge of the police station or a subordinate officer C
deputed by him. A Magistrate has no power to interfere with the same. The
fonnation of the opinion whether there is sufficient evidence or reasonable
ground of suspicion to justify the forwarding of the case to a Magistrate or
not as contemplated by Sections 169 and 170 is to be that of the officer in
charge of the police station and a Magistrate has absolutely no role to play D
at this stage. Similarly, after completion of the investigation while making a
report to the Magistrate under Section 173, the requisite details have to be
submitted by the officer in charge of the police station without any kind of
interference or direction of a Magistrate and this will include a report regarding
the fact whether any offence appears to have been committed and if so, by
whom, as provided by clause (d) of sub-section (2)(i) of this Section. These E
provisions will also be applicable in cases under Prevention of Corruption
Act, 1947 by virtue of Section 7A thereof and Prevention of Corruption Act,
1988 by virtue of Section 22 thereof.

14. The Magistrate is no doubt not bound to accept a final report F
(sometimes called as closer report) submitted by the police and if he feels
that the evidence and material collected during investigation justifies
prosecution of the accused, he may not accept the final report and take
cognizance of the offence and summon the accused but this does not mean
that he would be interfering with the investigation as such. He would be
doing so in exercise of powers conferred by Section 190 Cr. P.C. The statutory G
provisions are, therefore, absolutely clear that the Court cannot interfere with
the investigation.

15. The question whether the High Court can exercise its inherent
powers under Section 561A of Code of Criminal Procedure, 1908, which was H
320 SUPREME COURT REPORTS [2003) SUPP. I S.C.R.

A similar to Section 482 of 1973 Code, was considered by the Privy Council
in Emperorv. Nazir Ahmad, AIR (1945) PC 18. It will be useful to reproduce
the relevant part of the observations made by Their Lordships as this decision
has been approved and has been referred to in several decisions of this Court:

"In India as has been shown there is a statutory right on the part of
B the police to investigate the circumstances of an alleged cognizable
crime without requiring any authority from the judicial authorities,
and it would, as their Lordships think, be an unfortunate result if it
should be held possible to interfere with those statutory rights by an
exercise of the inherent jurisdiction of the Court. The functions of the
c judiciary and the police are complementary not OV(:rlapping and the
combination of individual liberty with a due observance of law and
order is only to be obtained by leaving each to exercise its own
function, always, of course, subject to the right of the Court to intervene
in an appropriate case when moved under Section 491, Criminal P.C.,
to give directions in the nature of habeas corpus. In such a case as the
D present, however, the Court's functions begin when a charge is
preferred before it and not until then."

I 6. In H.N. Rishbud v. The State of Delhi, [ 1955] SCR I I 50 the Court
was called upon to consider the effect of investigation having been done by
E a police officer below the rank of a Deputy Superintendent of Police contrary
to the mandate of Section 5(4) of Prevention of Corruption Act, 1947. While
examining the scheme of Chapter XIV of the Code of Criminal Procedure ,
1908 (same as Chapter XII of 1973 Code) it was held that the investigation
primarily consists in the ascertainment of the facts and circumstances of the
F case and by definition it includes "all the proceedings under the Code for the
collection of evidence conducted by a police officer." It was further observed
that the final step in the investigation viz., the formation of the opinion as to
whether or not there is a case to place the accused on trial is to be that of
the officer in charge of the police station. In State of West Bengal v. SN
Basak, AIR (1963) SC 447 this Court approved the view taken by the Privy
G Council in Nazir Ahmad (supra) and held as under in para 3 of the reports:

" ......... The powers of investigation into cognizable offences are
contained in Chapter XIV of the Code of Criminal Procedure. Section
154 which is in that Chapter deals with information in cognizable
offences and Section I56 with investigation into such offences and
H
U.0.1. v. PRAKASH P. HINDUJA [G.P. MATHUR. J.] 321
under these sections the police has the statutory right to .investigate A
into the circumstances of any alleged cognizable offence without
authority from a Magistrate and this statutory power of the police to
investigate cannot be interfered with by the exercise of power under
Section 439 or under the inherent power of the court under Section
561-A of the Criminal Procedure Code."
B
17. This question was again considered in Abhinandan Jha and Ors.
v. Dinesh Mishra, AIR (1968) SC 117 and after examining the scheme
of the Act and the decision of the Privy Council in Nazir Ahmad
(supra) and the earlier decision of this Court in H.N. Rishbud and
S.N. Basak (supra) it was held as under:
c
"The investigation under the Code, takes in several aspects, and stages,
ending ultimately with the formation of an opinion by the police as
to whether , on the material covered and collected, a case is made out
to place the accused before the Magistrate for trial, and the submission
of either a charge sheet or a final report is dependent on the nature D
of the opinion, so formed. The formation of the said opinion, by the
police, is the final step in the investigation, and that final step is to
be taken only by the police and by no other authority."

Vineet Narain has also relied upon this decision.

18. In State of Bihar and Anr. v. JAC Saldanha and Ors., [1980] I
E
4 SCC 554 the same principle was reiterated and was succinctly stated in the
following words in para 25 of the report:

"There is a clear-cut and well demarcated sphere of activity in the
field of crime detection and crime punishment. Investigation of an F
offence is the field exclusively reserved for the executive through the
police department the superintendence over which vests in the State
Government. The executive which is charged with a duty to keep
vigilance over law and order situation is obliged to prevent crime and
if an offence is alleged to have been committed it is its bounden duty
to investigate into the offence and bring the offender to book. Once G
it investigates and finds an offence having been committed it is its
duty to collect evidence for the purpose of proving the offence. Once
that is completed and the investigating officer submits report to the
Court requesting the Court to take cognizance of the offence under
Section 190 of the Code its duty comes to an end. On a cognizance H
322 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A of the offence being taken by the Court the police function of
investigation comes to an end subject to the provision contained in
Section 173 (8), there commences the adjudicatory function of the
judiciary to determine whether an offence has been committed and if
so, whether by the person or persons charged with the crime by the
police in its report to the Court, and to award adequate punishment
B according to law for the offence proved to the satisfaction of the
Court. There is thus a well defined and well demarcated function in
the field of crime detection and its subsequent adjudication between
the police and the Magistrate. This had been recognised way back in
King Emperor v. Khwaja Nazir Ahmad, AIR (1945) PC 18 where the
c Privy Council observed as under: \l

(Omitted as already quoted in para 15)
In para 26 it was observed that the power of the police to investigate into a
D cognizable offence is ordinarily not to be interfered with by the judiciary.
19. Thus the legal position is absolutely clear and also settled by judicial
authorities that the Court would not interfere with the investigation or during
the course of investigation which would mean from the time of the lodging
of the First Information Report till the submission of the rep01t by the officer
E in charge of police station in court under Section 173(2) Cr.P.C., this field
being exclusively reserved for the investigating agency.

20. An incidental question as to what will be the result of any error or
illegality in investigation on the trial of the accused before the Court may
F also be examined. Section 5-A of the Prevention of Corruption Act, 1947
provided that no police officer below rank of a Deputy Superintendent of
Police shall investigate any offence punishable under Section 161, Section
165 and Section 165-A !PC or under Section 5 of the said Act without the
order of a Magistrate of the First Class. In H.N. Rishbud (supra) the
investigation was entirely completed by an officer of the rank lower than the
G Deputy Superintendent of Police and after permission was accorded a little
or no further investigation was made. The Special Judge quashed the
proceedings on the ground that the investigation on the basis of which the
accused were being prosecuted was in contravention of the provisions of the
Act, but the said order was set aside by the High Court. The appeal preferred
H by the accused to this Court assailing the judgment of the High Court was
U.0.1. v. PRAKASH P. HINDUJA [G.P. MATHUR. J.] 323
dismissed and the following principle was laid down:- A
"The question then requires to be considered whether and to what
extent the trial which follows such investigation is vitiated. Now, trial
follows cognizance and cognizance is preceded by investigation. This
is undoubtedly the basic scheme of the Code in respect of cognizable
cases. But it does not necessarily follow that an invalid investigation B
nullifies the cognizance or trial based thereon. Here we are not
concerned with the effect of the breach of a mandatory provision
regulating the competence or procedure of the Court as regards
cognizance or trial. It is only with reference to such a breach that the
question as to whether it constitutes an illegality vitiating the C
proceedings or a mere irregularity arises. A defect or illegality in
investigation, however serious, has no direct bearing on the competence
or the procedure relating to cognizance or trial. No doubt a police
report which results from an investigation is provided in section 190
of the Code of Criminal Procedure as the material on which cognizance
is taken. But it cannot be maintained that a valid and legal police D
report is the foundation of the jurisdiction of the Court to take
cognizance. Section I 90 of the Code of Criminal Procedure is one
out of a group of sections under the heading "Conditions requisite for
initiation of proceedings." The language of this section is in marked
contrast with that of the other sections of the group under the same E
heading, i.e. sections 193 and 195 to 199. These latter sections regulate
the competence of the Court and bar its jurisdiction in certain cases
excepting in compliance therewith. But Section 190 does not. While
no doubt, in one sense, clauses (a),(b) and (c) of section 190(1) are
conditions requisite for taking of cognizance, it is not possible to say
that cognizance on an invalid police report is prohibited and is therefore F
a nullity. Such an invalid report may still fall either under clause (a)
or (b) of section 190( I) (whether it is one or the other we need not
pause to consider) and in any case cognizance so taken is only in the
nature of error in a proceeding antecedent to the trial."

The Court after referring to Prabhu v. Emperor, AIR (1944) SC 73 and G
lumbhardar Zutshi v. The King, AIR (1950) PC 26 held that if cognizance
is in fact taken on a police report initiated by the breach of a mandatory
provision relating to investigation, there can be no doubt that the result of the
trial, which follows it cannot be set aside unless the illegality in the
investigation can be shown to have brought about a miscarriage of justice H
324 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A and that an illegality committed in the course of investigation does not affect
the competence and the jurisdiction of the Court for trial. This being the legal
position, even assuming for the sake of argument that the CBI committed an
error or irregularity in submitting the charge sheet without the approval of
CVC, the cognizance taken by the learned Special Judge on the basis of such
a charge sheet could not be set aside nor further proceedings in pursuance
B thereof could be quashed. The High Court has clearly erred in setting aside
the order of the learned Special Judge taking cognizance of the offence and
in quashing further proceedings of the case.

2 I. The sheet anchor of the plea raised by the accused-respondent for
C dismissing the charge sheets and revoking the cognizance and the process
issued against him is based upon certain directions issued by this Court in
Vineet Narain. The High Court has accepted this plea and has quashed the
cognizance taken by the learned Special Judge and all consequential
proceedings in the case on the ground that the CBI had not placed before the
eve the result of the investigation and had by passed it by filing a charge
D ~heet before the court which in its opinion was a violation of the directions
issued by this Court in Vineet Narain. In fact Shri Jethmalani also tried to
support the judgment of the High Court by placing extensive reliance upon
the observations made in this case. Shri Rawal, learned Solicitor General has,
however, submitted that the High Court has completely misunderstood the
E judgment and in fact it does not give any kind of a right to an accused to
challenge the charge sheet on account of any alleged non-observance or
violation of the directions issued regarding the functioning and responsibility
of CVC. The contention is that the directions relate to inter-departmental
working and the manner in which the power of superintendence has to be
exercised by CVC over the working of CBI, the entire object being to insulate
F the CBI from any kind of external influence or pressure so that it may
perform its duty as enjoined in Delhi Special Police Establishment Act (DSPE
Act). The question is whether Vineet Narain really meant to lay down as a
principle of law that in every case the result of investigation done by CBI had
to be placed before the eve and further before submission of the charge
G sheet in Court the same was also to be examined by the CVC which was to
give some sort of approval or concurrence and if the same was not done, the
charge sheet so submitted would be a nullity in the eyes of law or would be
of such a nature on which cognizance could not be taken or if the cognizance
was taken by the court the same would be illegal and could not form the basis
for trial of the accused.
H
U.0.1. v. PRAKASH P. HINDUJA [G.P. MATHUR. J.] 325
22. In view of the contentions raised it becomes necessary to examine A
the judgment in Vineet Narain in little detail so as to understand its real
content and import. A terrorist belonging to Hizbul Mujahideen organisation
was arrested in Delhi on 25.3.1991 and after his interrogation the CBI
conducted raids on the premises of SK Jain, his brothers, relatives and
businesses. Besides Indian and foreign cu1Tency, two diaries and notebooks B
were seized which contained detailed accounts of vast payments made to
certain persons who were identified by initials only which corresponded to
high ranking politicians and bureaucrats. The CBI did not investigate the
matter of Jains or the contents of their diaries for more than two and a half
years. It was in these circumstances that a writ petition was filed under
Article 32 of the Constitution by way of a public interest litigation. C
23. It will be convenient and useful to reproduce certain parts of the
judgment which are as under:-

"5. The gist of the allegations in the writ petitions is that government
agencies like the CBI and the Revenue authorities had failed to perfonn D
their duties and legal obligations inasmuch as they had ·failed to
investigate matters arising out of the seizure of the "Jain Diaries";
that the apprehension of terrorists had led to the discovery of financial
support to them by clandestine and illegal means using tainted funds
obtained through "havala" transactions; that this had also disclosed a
nexus between politicians, bureaucrats and criminals, who are E
recipients of money from unlawful sources, given for. unlawful
consideration; that the CBI and other government agencies had failed
to investigate the matter, take it to its logical conclusion and prosecute
all persons who were found to have committed an offence; t~ at this
was done with a view to protect the persons involved, who were very F
influential and powerful; that the matter disclosed a nexus between
crime and corruption at high places in public life and it posed a
serious threat to the integrity, security and economy of the nation;
that probity in public life, the rule of law and the preservation of
democracy required that the government agencies be compelled to
duly perform their legal obligations and to proceed in accordance G
with law against every person involved, irrespective of where he was
placed in the political hierarchy. The writ petitions prayed, inter alia,
for the following reliefs :

(a) that the abovesaid offences disclosed by the facts mentioned in
the petition be directed to be investigated in accordance with law; H
326 SUPREME COURT REPORTS (2003] SUPP. I S.C.R.

A (b) that this Hon'ble Court may be pleased to appoint officers of the
police or others in whose integrity, independence and competence
this Hon'ble Court has confidence for conducting and/or supervising
the said investigation;

(c) that suitable directions be given by this Hon'ble Court and orders
B issued to ensure that the culprits are dealt with according to law.

* * *
(t) that directions be given so that such evil actions on the part of the
investigating agencies and their political superiors are not repeated in
C future."

24. The Court instead of issuing a writ of mandamus considered it proper to
keep the matter pending and the investigation was monitored and in that
connection several orders were passed from time to time reference of which
has been made in para 7 of the judgment. Para 8 of the judgment shows that
D the Court came to the conclusion that the CBI and other governmental agencies
had not carried out their public duty to investigate the offences disclosed and
the investigation was monitored till the point of time when charge sheet was
filed and thereafter ordinary process of law was to '.:ie followed. In para 9 of
the judgment it is mentioned that even after the matter had been brought to
the Court complaining of the inertia of the CBI and the other agencies to
E investigate into the offences because of the alleg~d involvement of several
persons holding high officers in the executive, the disinclination of the agencies
to proceed with the investigation was apparent. It is further mentioned that
the accusation, if true, revealed a nexus between high ranking politicians and
bureaucrats who were alleged to have been funded by a source linked with
p the source funding the terrorists. Some other paragraphs which have a bearing
on the controversy are being reproduced below.

15. Inertia was the common rule whenever the alleged offender was
a powerful person. Thus, it became necessary to take measures to
ensure permanency in the remedial effect to prevent reversion to
G inertia of the agencies in such matters.

19. Before we refer to the report of the Independent Review Committee
(!RC), it would be appropriate at this stage to refer to the Single
Directive issued by the Government which requires prior sanction of
the designated authority to initiate the investigation against officers
H of the Government and the Public Sector Undertakings (PSUs),
U.0.1. v. PRAKASH P. HINDU.IA [G.P. MATHUR. .I.] 327
nationalised banks above a certain level.......................................... A
42. Once the jurisdiction is conferred on the CBl to investigate an
offence by virtue of notification under Section 3 of the Act, the
powers of investigation are governed by the statutory provisions and
they cannot be estopped or curtailed by any executive instruction
issued under Section 4(1) thereof. This result follows from the fact B
that conferment of jurisdiction is under Section 3 of the Act and
exercise of powers of investigation is by virtue of the statutory
provisions governing investigation of offences. It is settled that
statutory jurisdiction cannot be subject to executive control.

43. There is no similarity between a mere executive order requiring C
prior permission or sanction for investigation of the offence and the
sanction needed under the statute for prosecution. The requirement of
sanction for prosecution being provided in the very statute which
enacts the offence, the sanction for prosecution is a prerequisite for
the court to take cognizance of the offence. In the absence of any D
statutory requirement of prior permission or sanction for investigation,
it cannot be imposed as a condition precedent for initiation of the
investigation once jurisdiction is conferred on the CBI to investigate
the offence by virtue of the notification under Section 3 of the Act.
The word "superintendence" in Section 4(1) of the Act in the context
must be construed in a manner consistent with the other provisions of E
the Act and the general statutory powers of investigation which govern
investigation even by the CBI... ................... .

48. In view of the common perception shared by everyone including
the Government of India and the Independent Review Committee F
(JRC) of the need for insulation of the CBI from extraneous influence
of any kind, it is imperative that some action is urgently taken to
prevent the continuance of this situation with a view to ensure proper
implementation of the rule of law. This is the need of equality
guaranteed in the Constitution. The right to equality in a situation like
this is that of the Indian polity and not merely of a few individuals. G
The powers conferred on this Court by the Constitution are ample to
remedy this defect and to ensure enforcement of the concept of
equality.

50. There is another aspect of rule of law which is of equal
significance. Unless a proper investigation is made and it is followed H
328 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A by an equally proper prosecution, the effort made would not bear
fruition. The recent experience in the field of prosecution is also
discouraging ......................... .

58. As a result of the aforesaid discussion, we hereby direct as under:-

B I. CENTRAL BUREAU OF INVESTIGATION (CBI) AND
CENTRAL VIGILANCE COMMISSION (CVC)

I. The Central Vigilance Commission (CVC) shall be given statutory
status.

2............................ ..
c
3. The CVC shall be responsible for the efficient functioning of the
CBI. While Government shall remain answerable for the CBI's
functioning, to introduce visible objectivity in the mechanism to be
established for overviewing the CBl's working, the CVC shall be
entrusted with the responsibility of superintendence over the CBI's
D
functioning. The CBI shall report to the CVC about cases taken up
by it for investigation; progress of investigations; cases in which
charge-sheets are filed and their progress. The eve shall review the
progress of all cases moved by the CBI for sanction of prosecution
of public servants which are pending with the competent authorities,
E specially those in which sanction has been delayed or refused.

PROSECUTION AGENCY
F
I. ...............................................

2. ·Every prosecution which results in the discharge or acquittal of
the accused must be reviewed by a lawyer on the panel and, on the
basis of the opinion given, responsibility should be fixed for dereliction
G of duty, if any, of the officer concerned. In such cases, strict action
should be taken against the officer found guilty of dereliction of duty.

25. The facts and circumstances in which the writ petition was filed, the
allegations made and the relief claimed therein would show that the CBI and
H other Government Agencies had not performed their statutory duty for a very
long time to investigate commission of offences as the accused involved
U.0.1. v. PRAKASH P. fllNDUJA [G.P. MA THUR, J.] 329
were holding high offices. The Single Directive issued by the Government A
created an embargo on the power of the CBI in registering or investigating
cases against officers of the Government, Public Sector Undertakings and
Nationalised Banks above a certain level without prior sanction of the
designated authority. The proceedings of the case revealed that there was a
complete disinclination on the part of the CBI to proceed with investigation B
of offences against persons holding high offices even after the matter had
been brought to Court. The Court came to the conclusion that wherever the
alleged offender was a powerful person, the CBI rei.1ai11~d a silent spectator
and practically took no steps to investigate the matter. After examination of
the statutory provisions, the Court came to the conclusion that the Single
Directive had the effect of restraining the recording of FIR and initiation of C
investigation, which could not be issued in exercise of power under Section
4(1) of the DSPE Act as the powers of investigation are governed by statutory
provisions. It was therefore considered expedient that the CBI should be
insulated from extraneous influence of any kind. The Court also came to the
conclusion that in order to establish rule of law, it was necessary that proper
investigation is made which is followed by equally proper prosecution. It was D
in these circumstances that various directions were issued with regard to the
functioning of CBI and CVC, Enforcement Directorate, Nodal Agencies and
Prosecution Agencies. The entire emphasis in the judgment is that as no one
is above the law, the persons holding high offices are not able to escape
either on account of inertia or inaction of the CBI to investigate the commission E
of offence or on account of incomplete or improper investigation or faulty
prosecution in Court. A duty has been cast on the CVC to review the progress
of all cases moved by the CBI for sanction of prosecution, specially those in
which sanction has been delayed or refused. The judgment nowhere says that
the CBI will have to take concurrence or sanction from the CVC before filing
charge sheet in Court. No right of any kind has been conferred upon the F
alleged offender or the accused to approach the CVC or to challenge the
action of CBI in submission of charge-sheet in Court on the ground of some
purported irregularity in making a report to the eve regarding progress of
investigation.

26. The view taken by the High Court that as the CBI submitted the
G
charge-sheet without reporting and taking approval or consent from the CVC,
the same was illegal and no cognizance could be taken thereon is, therefore,
wholly erroneous and does not at all follow from the judgment.

27. Shri Jethmalani has strenuously urged that as the eve has been H
330 SUPREME COURT REPORTS [2003) SUPP. I S.C.R.

A entrusted with the responsibility of superintendence over the CBl's functioning,
the CVC can as well direct CBI not to submit a charge sheet in a given case.
The accused can bring to the notice of the CVC that either there was not
sufficient material or it was not a fit case where prosecution should be launched
and ifthe CVC is satisfied with the plea of the accused, it will have the right
B to give a direction to the CBI not to submit a charge-sheet against the accused.
According to learned counsel the power with the CVC is akin to Section 36
Cr.P.C. which lays down that police officers superior in rank to an officer in
charge of a police station may exercise the same powers, throughout the local
area to which they are appointed, as may be exercised by such officer within
the limits of his station and, therefore, the eve has the authority to direct the
C CBI not to submit charge sheet in a given case just as a Superintendent of
Police can give this type of direction to an officer incharge of a police
station. We are unable to accept the contention raised. The directions issued
cannot be interpreted in abstract but have to be read and understood in the
context of the facts and circumstances leading to the filing of the writ petition.
The facts which were revealed and were brought to light during the course
D of hearing showed that the CBI had failed to perform its statutory duty and
legal obligation of investigating offences and after completing the investigation
taking it to its logical conclusion of launching prosecution against all those
who were found to have committed offences. The direction issued never
meant to create or confer some kind of additional rights in favour of the
E accused as held by the High Court. The accused has absolutely no right to
approach the CVC for taking any steps to stop the CBI from either proceeding
against him or from launching prosecution against him by filing a charge
sheet. Further, the directions issued do not confer any kind of a right upon
the accused to assail the charge sheet on the ground that the CBI had not
reported the progress of investigation to the eve or had not taken some kind
F of approval or concurrence from it before submission of the charge sheet in
Court.

28. Shri Jethmalani has contended that the directions issued in Vineet
Narain have not been complied by the Union of India in as much as the CVC
G has not been given a statutory status and strict compliance of other directions
has also not been made. Seeking analogy from Section I 9(2)(c) of Contempt
of Courts Act, learned counsel has urged that the appellant Union of India
has committed contempt of the order passed by this Court in the case of
Vineet Narain and therefore it should not be heard. Learned Solicitor General
has controverted this argument by submitting that Central Vigilance
H Commission Ordinance 15 of 1998 was promulgated on 25.8.1998 and on
U.0.1. v. PRAKASH P. HINDUJA (G.P. MA THUR . .I.] 33 I
27.10.1998 Central Vigilance Commission (Amendment) Ordinance, 1998 A
was promulgated. Thereafter, CVC Bill 1998 was introduced in the Lok
Sabha on 7.12.1998 but the matter was referred to the Standing Committee.
On 8.1.1999 CVC Ordinance 4 of 1999 was promulgated to continue the
provisions of earlier Ordinances. The Lok Sabha passed CVC Bill 1999 on
15.3.1999 and thereafter it was listed in the Rajya Sabha but could not be B
taken up. On 4.4.1999 the Government of India Resolution No.371/20/99 -
AVD (III) was published in the Gazette to continue the Central Vigilance
Commission as the Parliament being in session no fresh Oruinance could be
issued and Ordinance No.4 of I 999 was going to expire on 5.4.1999. The
Lok Sabha dissolved on 26.4.1999 and consequently CVC Bill 1999 pending
consideration in the Rajya Sabha also lapsed. On 20.12.1999, CVC Bill 1999 C
was introduced in Lok Sabha which passed the same on 26.2.2003 and on
5.3.2003 notice was sent to Secretary General, Rajya Sabha for consideration
of CVC Bill 2003 as passed by the Lok Sabha. These facts show that the
appellant has been taking steps to comply with the directions issued in Vineet
Narain.
D
29. Under our constitutional scheme the Parliament exercises sovereign
power to enact laws and no outside power or authority can issue a direction
to enact a particular piece of legislation. In Supreme Court Employees' Welfare
Association v. Union of India, [I989] 4 SCC 187 (para 51) it has been held
that no Court can direct a legislature to enact a particular law. Similarly, E
when an executive authority exercises a legislative power by way of
subordinate legislation pursuant to the delegated authority of a legislature,
such executive authority cannot be asked to enact a law which he has been
empowered to do under the delegated legislative authority. This view has
been reiterated in State of J&K v. AR Zakki and Ors., AIR (1992) SC 1546. F
In AK Roy v. Union ofIndia, AIR (1982) SC 710 it was held that no mandamus
can be issued to enforce an Act which has been passed by the legislature.,
Therefore, the direction issued regarding conferment of statutory status on
CVC cannot be treated to be of such a nature, the non-compliance whereof
may amount to contempt of the order passed by this Court.
G
30. Shri Jethmalani has also referred to some correspondence which
ensued between the Embassy of India and Federal Office for Police Matters
of the Federal Department of Justice and Police, Bern, Switzerland and has
laid emphasis on the following sentence occurring therein - "The requesting
authority has examined those documents in detail and has reached at the
conclusion that the documents transmitted are unfortunately too limited to H
332 SUPREME COURT REPORTS [2003] SUPP. I S.C.R.

A sustain a charge sheet against Hinduja brothers and do not correspond to the
mission of its request for assistance dated 23.01.1990." Learned counsel has
submitted that as the CBI itself was of the opinion that the documents
transmitted could not sustain a charge against Hinduja brothers, there was no
justification for submitting a charge sheet and the trial would be abuse of the
B process of the Court. It has been further urged that the evidence sought to be
relied upon by the CBI is wholly deficient and can under no case establish
any charge against accused-respondent No. I. According to learned counsel
the charge sheet has been submitted only on account of political vendetta and
to malign the name of the Prime Minister, who was in office at the time when
the contract was signed. It may be stated at the very outset that the letter,
C reliance on which has been placed by Shri Jethmalani, was written by the
Federal Office of Police to the Investigating Judge in Switzerland in connection
with execution of Letters rogatory in Switzerland. This letter has not been
written either by the CBI or by any authority in India. Therefore, it cannot
form the basis for assailing any action of the CBI. That apart we are not
D concerned here with the merits of the allegations and the nature of the evidence
which the prosecution would produce in Court to establish the charge as this
was not the plea of the accused before the High Court nor the High Court has
examined the same. The High Court has proceeded on entirely different
grounds for quashing the cognizance taken by the learned Special Judge.

E 31. In reply to the petition filed by respondent Prakash Hinduja in the
High Court, separate counter-affidavits on behalf of CBI and CVC were
filed. In the counter-affidavit filed by CBI in para 5 the details of the
Ordinances issued are given and it is stated that the Bill is pending before the
Parliament and consequently no statutory power of superintendence had as
F yet been conferred upon the eve and its role in relation to investigation of
offences under the Prevention of Corruption Act was governed by the
Government Resolution dated 4.4.1999 which was issued as the Ordinance
was going to lapse. The Resolution provided that CVC shall have the power
to inquire or cause an inquiry or investigation to be made on a reference
made by the Central Government wherein it is alleged that a public servant
G above a particular level has committed an offence under the Prevention of
Corruption Act and to review the progress of applications pending with the
competent authorities for sanction of prosecution under the aforesaid Act.
The CVC shall exercise superintendence over the vigilance, administration of
various Ministries of the Central Government or Corporations established by
or under any Central Act and shall tender advice to them. In para 7 of the
H counter-affidavit it is stated that under the existing administrative directions
U.0.1. v. PRAKASH P. HINDUJA [G.P. MATHUR, J.] 333
the CBI has a practice of reporting to the eve all developments in cases A
involving public servants. Accordingly, well before filing of the first charge
sheet, an investigation report was sent to the eve and the eve was apprised
of the developments in the case. It is further stated that the name of G.P.
Hinduja is mentioned in the FIR itself and since in the first charge sheet it
was mentioned that further investigations are being carried out to unearth the B
full details of the commission paid by Bofors and the papers received in
December 1999 revealed with sufficient particularity receipt of commissions
by Hinduja brothers, a supplementary charge sheet was filed against them.
The counter-affidavit on behalf of the CVC was filed by Shri RK Bajaj,
Director in the Central Vigilance Commission. In para 3 of the affidavit it is
categorically stated that the statements made in the counter-affidavit filed by C
CBI as to the presentation of the investigation report to the CVC are correct.
It is further stated that eve has no role in filing of the charge sheets and the
conduct of cases as pleaded by the accused and the directions of the Supreme
Court in Vineet Narain only require the CVC to function in a supervisory
character. Investigation of cases, filing of charge sheets and then prosecution
of such cases are essentially for the CBI, the duty of the CVC being to ensure D
that the CBI discharges its duties without any interference and without undue
favour to any person. In para 7 it is stated that the CVC holds review meetings
with the CBI to review the progress of cases and the meetings are held on
monthly basis and in this manner the CVC is discharging its duties under the
Government Resolution dated 4.4.1999 as well as the directions of this Court. E
It is also specifically stated that the registration of cases and its investigation
is primarily the duty of CBI and filing of charge sheet does not in any
manner require any approval of the CVC. The averrnents made in these
affidavits clearly show that the investigation report was sent to the CVC by
the CBI before filing of the first charge sheet and the CVC was also apprised
of the developments in the case. As mentioned earlier, in para 62 of the first F
charge sheet, it was clearly mentioned that the in vestigation regarding further
1

transfer of the funds routed through various countries was continuing and
investigation regarding the role played by three Hinduja brothers was also
continuing. On account of the fact that CVC Bill could not be passed by the
Rajya Sabha, the functioning of the eve was being regulated by the G
Government Resolution dated 4.4.1999 and this nowhere provided for taking
any concurrence or approval from the CVC before filing of the charge sheet.
The CVC having filed an affidavit stating that investigation report had been
submitted to it by the CBI and that it had no role in the filing of the charge-
sheet and the conduct of the cases, the plea raised by the accused fell to the
H
334 SUPREME COURT REPORTS (2003] SUPP. I S.C.R.

A ground and the petition filed by him ought to have been dismissed straight
away. The High Court committed serious error in not giving due consideration
to the counter affidavits filed by the CBI and CVC and especially to the fact
that on account of non-passing of the CVC Bill by the Rajya Sabha and
lapsing of the Ordinance, the duties and functions of the CVC are to be
B performed in accordance with the Government of India Resolution dated
5.4.1999, which nowhere provided for taking any kind of a concurrence or
approval from the eve before submission of the charge sheet.

32. In para 31 of the judgment, the High Court has placed reliance on
Gokul Chand Dwarka Das Morarka v. King, AIR (1948) PC 82. But here the
C conviction was set aside as the sanction granted to prosecute the accused,
which was a requirement of the statute, was found to be invalid. As discussed
earlier there is no requirement of any sanction by the CVC either under any
statute or even under the directions of Vineet Narain and, therefore, the ratio
of this case can have no application at all. In para 34 of the judgment the
High Court has placed reliance on Prabhu Dayal Deorah v. District Magistrate,
D AIR (1974) SC 183, wherein the detention order passed under Maintenance
of Intemal Security Act was set aside on the finding that one of the grounds
communicated to detenu was vague. We fail to understand how the principle
laid down in a case where challenge is made to preventive detention can have
any application whatsoever to the case in hand.
E 33. With respect we find the High Court judgment to be quite confusing
and self contradictory. In para 18(c) it is observed that "there is no requirement
to seek clearance before charge sheets are filed" and in para 19 it is said that
"the only requirement in this regard is of reporting and the role of the eve
on this would be to give its comments in its annual report." In para 20 it is
p said that "the direct power of review granted to the eve is only of pending
applications for sanction" and "the CVC is not cast with the role of reviewing
as such the steps taken in the course of investigation and thereafter." In para
21 it is said that "the duty to report of the steps taken in the course of
investigation is not and cannot be equated with the duty to obtain prior
approval or consent of any other authority to these steps." Again in para 24
G it is said that ·'the contention of the petitioner that a breach of these directions
would render the action of the CBI void since the directions are to be rigidly
complied with is equally misconceived." It is further said that "even the rigid
compliance with these directions cannot go beyond the CVC over-viewing
CBI 's working and the CBI 's reporting to the CVC."
H
U.0.1. v. PRAKASH P. HINDU.IA [G.P. MATHUR, .I.] 335
34. The High Court having arrived at the aforesaid findings, the only A
result which could logically follow was to dismiss the petition. There was
absolutely no occasion for allowing the same and quashing the cognizance
and further proceedings in the case.

35. In view of the discussion made above the appeals are allowed and
the judgment and order dated 10.6.2002 of the High Court is set aside. The B
learned Special Judge shall proceed with the trial of the case. While framing
the charge he shall carefully scrutinise the material on record and other
circumstances of the case in accordance with law.

N.J. Appeals allowed. C

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