Holding

The Single Directive No. 4.7(3) is invalid; the CBI’s investigative jurisdiction under Section 3 cannot be curtailed by executive instructions, and the Court may issue continuing mandamus and structural reforms to ensure independent investigation and prosecution.

Summary

The Supreme Court examined public‑interest writ petitions filed after the CBI seized diaries implicating senior politicians and bureaucrats. The petitions alleged that the CBI and revenue authorities had failed to investigate the allegations and that a government "Single Directive" requiring prior sanction of the concerned ministry before investigating decision‑making level officials was unconstitutional. The Court held that the Single Directive could not be sustained as a valid exercise of the Central Government's superintendence under Section 4(1) of the Delhi Special Police Establishment Act, 1946, and that once the CBI is vested with jurisdiction under Section 3, its investigative powers cannot be curtailed by executive instructions. The Court issued extensive "continuing mandamus" directions, struck down Directive No. 4.7(3), and laid down a comprehensive scheme to give statutory status to the Central Vigilance Commission, reform the appointment and tenure of the CBI and Enforcement Directorate heads, and establish a nodal agency for coordinated action against politico‑bureaucratic‑criminal nexus.

Issues considered

The constitutionality of Single Directive No. 4.7(3) requiring prior ministerial sanction before CBI investigations of decision‑making level officials.
Whether the term "superintendence" in Section 4(1) of the Delhi Special Police Establishment Act permits the executive to restrict CBI investigations.
Whether the CBI's investigative powers, once conferred by notification under Section 3, can be overridden by executive instructions.
The appropriate judicial remedy for executive inertia in investigating high‑level corruption (continuing mandamus).
The need for structural reforms of the CBI, CVC, Enforcement Directorate and related agencies.

Legislation cited

Code of Criminal Procedure, 1973s. 173(8)
Delhi Special Police Establishment Act, 1946s. 3, s. 4(1)
Police Act, 1861s. 3

Subjects

CBISingle DirectiveSuperintendenceContinuing mandamusPublic interest litigationRule of lawCentral Vigilance CommissionInvestigationProsecutionStatutory interpretationEqualityAdministrative law

Judgment

VINEET NARAIN AND ORS. A
v.
UNION OF INDIA AND ANR.

DECEMBER 18, 1997

(J.S. VERMA, CJ, S.P. BHARUCHA AND S.C. SEN, J.J.] B

Delhi Special Police Establishment Act, 1946, Ss. 3, 4( 1)-Single Direc-
tive No. 4. 7(3 )-Powers of investigation of the Central Bureau of Investigation
(CBI)-Requirement of prior sanction of Secretary of concerned Ministry
before any enquiry is instituted against officials at decision-making levels of C
govemment-Validity of-Held, Single Directive strnck down as not valid-Not
pennissible as exercise of power of superintendence of Central Govemment
under s.4(1) DSPE Act-Fwther held, power of CBI to investigate offences
cannot be cwtailed by executive instmction-Police Act 1861, s.3.

Constitution of India, Articles 14, 32, 141, 142 and 144--lssuing D
guidelines and consequential directions-Justification f 01~Held, where there
is inaction by executive to issue orders to fill vacuum in legislation, judiciary
must step in to provide solution till such time legislature acts-Guildelines
and Directions having force of law issued.
E
Public Interest Litigation---Co11stitutio11 of India A1ticles 32, 142--Con-
tirming mandamus-Concept explained-Practice and Procedure.

Practice and Procedure-In camera proceedings-Need for--Ex-
plai11ed-Constitutio11 of India, Articles 32, 142.
F
l11te1pretation of Statutes-Hannonious const111ction-'Supe1intend-
e11ce' in s.4( 1) DSPE Act, 1946 cannot be constrned in wider sense to pennit
supe1vision of CBI's investigation contlary to manner provided by statutory
provisions-Words and Phrases.

Conse11nent upon the arrest in 1991 of AHL, alleged to belong to a G
terrorist organization, raids were conducted by the Central Bureau of
Investigation (CBI) on the premises of SKJ, his brothers, relations and
businesses. Along with Indian and foreign currency, the CBI seized two
diaries ('Jain Diaries') and tw'l notebooks which contained detailed ac-
counts of vast payments made tu persons identified only by initials. H
595
596 SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R.

A The initials corresponded to those of various high ranking
politicians, in power anid out of power, and of' high ranking bureaucrats.

The present writ petitions were filed in October, 1993, in the public
interest under Article :32 of the Constitution of India alleging that the
B government agencies like the CBI and the revenue authorities had failed
to perform their legal obligation to investigate the 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' transaction; that this
had also disclosed a nexus between 1101iticians, bureaucrats and criminals,
C who were recipients of money from unlawful sources, given for unlawful
consideration; that the failure to investigate was with a view to protect the
persons involved, who were very inlluential and powerful; that the rule of
law required that the government agencies be compelled to proceed in
accordance with law against every person involved, irrespective of where
D he was placed in the poliLtical hierarchy.

This Court passed a series of orders, through the device of 'continu-
ing mandamus', monitoring the investigation of the case by the CBI. This
resulted' in the filing of 34 chargesheets against 54 persons.
E
In its report submitted to the Central Government in October, 1993
the Vohra Committee painted a dismal picture of the powerful nexus
between the bureaucracy and politicians with the mafia gangs, smugglers
and the underworld. It rrecommended the setting up of a nodal agency
under the Ministry of Home Affairs for compilation of all information
F received from the agencies.

In September, 1997 the Central Government appointed an Inde-
pendent Review Committee (IRC) which reaffirmed the need to restructure
the agencies with a view to improving their hitherto unsatisfactory perfor-
G mance. The IRC made several recommendations including conferring
statutory status on the Central Vigilance Commission (CVC). However,
the IRC accepted the legality af the Single Directive No. 4.7(3) whereunder
prior sanction of the Secretary to the concerned ministry had to be
obtained before instituting an enquiry or search against officials at the
H decision-making level of government.
VINEETv. U.O.l. 597

The Union of India informed this Court that although there was no A
negative reaction to tlle report of the IRC, further action could not be
taken due to certain practical difliculties. This Court then examined the
constitution and control of the agencies, including the validity of the Single
Directive, and the need to frame a scheme to insulate them from ex-
traneous influences, even of the controlling executive.
B
Disposing of the petition, this Court

HELD : 1.1. The Single Directive could not be upheld as valid on the
ground of it being permissible in exercise of the power of superintendence
of the Central Government under s.4(1) of the DSPE Act. It was liable to
be struck down. [640-E]
c
1.2. Once the jurisdiction was conferred on the CBI to investigate an
offence by virtue of notification under s3 of the DSPE Act, the powe1·s of
investigation would be governed by the statutory provisions and they could
not be estopped or curtailed by any executive instruction issued under D
s.4(1) thereof. [638-C]

13. In the absence of any statutory requirement of prior permission
or sanction for investigation, it could not be imposed as a condition
precedent for investigation, once jurisdiction was conferred on the CBI to
investigate the offence by virtue of the notification under s3 of the DSPE E
Act. This could not be included within the meaning of "superintendence"
in s.4(1). [638-F; 637-D]

K. Veeraswami v. Union of India, [1991] 3 SCC 655 and State of Bihar
v. JA. C. Saldanha, [1980] 1 SCC 554, referred to.
F
1.4. The powers of a Minister were subject to the condition that none
of them would extend to permit the Minister to interfere with the course
of investigation and prosecution in any individual case and in that respect
• the concerned oflicers were to be governed entirely by the mandate of law
and the statutory duty cast upon them. [630-G] G
Union of India v. Sushi! Kumar Modi, [1997] 4 SCC 770, referred to.

2.1. It was the duty of the executive to fill the vacuum by executive
orders because its field was coterminus with that of the legislature. Where
there was inaction even by the executive, for whatever reason, it was H
598 SUPREME COURT REPORTS 11997] SUPP. 6 S.C.R.

A essential and indeed the constitutional obligation of this Court to issue the
necessary directions for strict compliance which were to operate till such
time they were replaced by suitable legislation. [641-C-D]

2.2. There were ample powers conferred by Article 32 read with
Article 142 to make orders which had the effect of law by virtue of Article
B 141 and there was a mandate to all authorities to act in aid of the orders
of this Court as provided in Article 144 of the Constitution. [640-H]

Erach Sam Kanga v. Union of India, Writ Petition No. 2632 of (1978)
decided on March 20, (1979); Lakshmi Kant Pandey v. Union of India (in
C Re.Foreign Adoption), [1984] 2 SCC 244; State of West Bengal v. Sampat
Lal, [1985] 2 SCR 256; K. Veeraswami v. Union of India, [1991] 3 StC 655;
Union Carbide Cmporation v. Union of India, [1991] 4 SCC 584; Delhi
Judicial Se1vice Association v. State of Gujarat (Nadiad Case), [1991] 4 SCC
406; Delhi Development Authmity v. Skipper Constmction Co. (P) Ltd.,
D [1996] 4 SCC 622, Dinesh Trivedi v. Union of India, [1997] 4 SCC 306;
Supreme Cowt Advocates-on-Record Association v. Union of India (llnd
Judges case), [1993] 4 SCC 441 and Vishaka v. State of Rajasthan, '[1997]
6 sec 2_41, referred to.

Lord Nolan's repmt [1995] Vol. I and R. v. Secretmy of State for
E Foreign and Commonwealth Affai1:1-, (1995) 1 WLR 386, referred to.

3.1. The procedure adopted was nne of 'continuing mandamus'. The
continuing inertia of the agencies to even commence a proper investigation
could not be tolerated any longer. Mere issuance of a mandamus directing
the agencies to perform tl!Jeir task would have heen futile.-This necessitated
F issuance of directions from time to time, keeping the matter pending and
requiring the agencies to report the progress of investigation so that
monitoring by the court could ensure continuance of the investigation.
[604-B; E-F]
3.2. The task of the monitoring would end the moment a charge sheet
G was filed in respect of a particular investigation. The ordinary processes
of the law would then take over. It was necessary to direct the CBI not to
report the progress of t:he investigations to the person occupying the
highest office in the political executive;. this was done to eliminate any
impression of bias and to maintain the credibility of the investigations.
H [603-H; 604-A]
VINEETv. U.0.1.[VERMA, CJ.) 599

Vi11eet Narai11 v. U11ion of India, Orders dated 18.4.1995, 16.1.1996 A
(1996) 2 Scale SP 42, 30.1.1996 (1996] 2 SCC 199, 22.2.1996, (1996] 2 Scale
SP 84, 1.3.1996 [1997] 4 SCC 778, 13.3.1996 (1996) 4 Scale SP 3, 1.5.1996
[1996] 4 Scale SP 56, 26.7.1996, (1996) 6 Scale SP 24, 9.7.1997 (1997) 5 Scale
254, explained.

Dr. Subramainam Swamy v. Director, CBI, Orders dated 24.2.97 and B
18.3.97 in Writ Petition (Civil) No. 38 of (1997), referred to.

A1111kul Chandra Pradhan v. Union of India, Orders dated 12.2.1996
(1996) 3 Scale SP 35, 2.4.1996, 26.4.1994 (1996) 4 Scale SP 71, 26.7 .1996
(1996) 6 Scale SP 23 and 7.10.1996 [1996] 6 SCC 354, referred to.
c
4. The innovation in procedure by holding some of the hearings in
camera was made, on request, to reconcile the interest of justice with that of
the accused. The requirement of a public hearing in a court of law for a fair
trial was subject to the need of proceedings being held in camera to the extent
necessary in public interest and to avoid prejudice to the accused. [612-E-F]
D
5. The word "superintendence" ins. 4 (1) could not be construed in a
wider sense to permit supervision of the actual investigation of an offence
by the CBI contrary to the manner provided by the statutory provisions.
[638-E; HJ
CRIMINAL ORIGINAL JURISDICTION Writ Petition (Crl.) E
Nos. 340-43 of 1993.

(Under Article 32 of the Constitution of India.)

Anil B. Divan, (AC.), Abani Kumar Sahu, A.K. Panda, Mukul
Mudgal and Anil Nauriya for the Petitioners. F
Ashok H. Desai, Attorney, K.N. Bhat, Additional Solicitor General,
Pallav Shishodia, Ms. Anuradha Bindra and P. Parmeswaran for the
Respondents.

The Judgment of the Court was delivered by G
VERMA, CJI. These writ petitions under Article 32 of the Constitu-
tion of India brought in public interest, to begin with, did not appear to
have the potential of escalating to the dimensions they reached or to give
rise to several issues of considerable significance to the implementation of
rule of law, which they have,. during their progress. They began as yet H
•
•
600 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A another complaint of inertia by the Central Bureau of Investigation (CBI)
in matters where the accusation made was against high dignitaries. It was
not the only matter of its kind during the recent past. The primary question
was : Whether it is within the domain of judicial review and it could be an
effective instrument for activating the investigative process which is under
the control of executive ? The focus was on the question, whether any
B judicial remedy is available in such a situation? However, as the case
progressed, it required innovation of a procedure within the constitutional
scheme of judicial review to permit intervention by the court to find a
solution to the problem. This case had helped to develop a procedure
within the discipline of law for the conduct of such a proceeding in similar
situatic~n.s. It has also generated awareness of the need of probity in public
c life and provided a mode of enforcement of accountability in public life.
Even though the matter was brought to the court by certain individuals
claiming to represent public interest, yet as the case progressed, in keeping
with the requirement of public interest, the procedure devised was to
appoint the petitioners' counsel as the amicus cwiae and to make such
D orders from time to time as were consistent with public interest. Interven-
tion in the proceedings by everyone else was shut out but permission was
granted to all, who so desired, to render such assistance as they could, and
to provide the relevant material available with them to the amicus cwiae
for being placed before the court for its consideration. In short, the
...
proceedings in this matter have had great educative value and it does
E appear that it has helped in future decision making and functioning of the
public authorities.

We must <it the outset place on record our great appreciation of the
assistance rendered by the amicus cwiae, Shri Anil B. Divan and the
lawyers assisting him, namely, Shri Abani Kumar Sahu, Shri Anil Kumar
F Panda, Shri Mukul Mudgal, Shri Anil Nauriya and also Ms. Latha Krish-
namurthy. We also place on record equal appreciation of the law officers
and the team which has assisted them in these proceedings. At the com-
mencement of the proceedings, the then Solicitor General Shri Dipankar
P. Gupta appeared for the Union of India and the government agencies.
G Later after Dipankar P. Gupta demitted office, the Attorney General Shri
Ashok H. Desai appeared in this case throughout. The law officers and
their team of assistants, namely Shri K.N. Bhat, Additional Solicitor
General, Shri Pallav Shishodia, Shri P. Parmeswaran and Ms. Anuradha
Bindra, rendered very able assistance throughout and discharged the duty
expected of law officers. All of them, at great personal inconvenience and
H expense, rose to extraordinary heights in keeping with the true traditions
•
•
VINEET v. U.O.l.[VERMA, CJ.] 601

of the Bar. In essence, everyone of them discharged the role of amicus A
cwiae, without, at any stage, adopting the adversarial stance. If it has been
possible to achieve some success in these proceedings to improve and
innovate the procedure and fructify new ideas for betterment of the polity,
it is only because of the positive response of the Bar and the assistance
rendered by it. We must also record our appreciation of the officers of the
CBI .and the Revenue Department who actively participated in these B
proceedings and showed a definite improvement in their perception of the
rule of law as the case progressed; and their ability to perform improved
once they were assured of protection in the honest discharge of their
duties.

This experience revealed to us the need for the insulation of these c
agencies from any extraneous influence to ensure the continuance of the
good work they have commenced. It is this need which has impelled us to
examine the structure of these agencies and to consider the necessary steps
which would provide permanent insulation to the agencies against ex-
traneous influences to enable them to discharge their duties in the manner
required for proper implementation of the rule of law. Permanent
D
measures are necessary to avoid the need of every matter being brought to
the court for taking ad hoc measures to achieve the desired results. This is
the occasion for us to deal with the structure, constitution and the per-
manent measures necessary for having a fair and impartial agency. The
faith and commitment to the rule of law exhibited by all concerned in these E
proceedings is the surest guarantee of the survival of democracy of which
rule of law is the bedrock. The basic postulate of the concept of equality :
'Be you ever so high, the law is above you', has governed all steps taken by
us in these proceedings.

Facts F

A brief narration of the facts of this case is necessary; On 25th
March, 1991, one Ashfak Hussain Lone, alh;ged to be an Official of the
terrorist organisation Hizbul Mujahideen, was arrested in Delhi. Conse-
quent upon his interrogation, raids were conducted by the Central Bureau G
of Investigation (CBI) on the premises of Surender Kumar .T ain, his
brothers, relations and businesses. Along with Indian and foreign currency,
the CBI seized two diaries and two note books from the premises. They
contained detailed accounts of vast payments made to persons identified
only by initials. The initials corresponded to the initials of various high
ranking politicians, in power and out of power, and of high ranking H
602 SUPREME COURT REPORTS [1997] SUPP. 6 S.C.R.

A bureaucrats. Nothing having been done in the matter of investigating the
Jains or the contents of their diaries, the present writ petitions were filed
on 4th October, 1993, in the public interest under Article 32 of the
Constitution of India.

The gist of the allegations in the writ petitions is that Government
-
B agencies like the '::BI and the revenue authorities had failed to perform
their duties and legal obligations inasmuch as they had failed to investigate
matters arising out of the seizure of the "Jain diaries"; that the apprehen-
sion of terrorists had led to the discovery of financial support to them by
clandestine and illegal means using tainted funds obtained through 'havala'
C transactions; that this had also disclosed a nexus between politicians,
bureaucrats and criminals, who were recipients of money from unlawful
sources, given for unlawful consideration; that the CBI and other Govern-
ment 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; that this was done with a view to protect the persons involved,
D who were very 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 with law against every
E 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 above said offences disclosed by the facts mentioned
in the petition be directed to be investigated in accordance with
F law;

(b) that this Hon'ble Court may be pleased to appoint officers of
the police or others in whose integrity, independence and com-
petence this Hon'ble Court has confidence for conducting and/or
supervising the said investigation;
G
(c) that suitable clirections be given by this Hon'ble Court and
orders issuec! to ensure that the culprits are dealt with according
to law;

H xxx xxx xxx
VINEETv. U.0.1.jVERMA, CJ.] 603

(I) that directions be given so that such evil actions on the part of A
the investigating agencies and their political supenors are not
repeated in future."

It will be seen that the reliefs sought in the writ petitions fall into two
broad classes. The first class relates to investigations in the matter of the
"Jain diaries". The second class !prayer (f)] relates to the manner in which B
investigations of offences of a similar nature that may occur hereafter
should be conducted.

Procedure adopted

We have taken the view that, given the political personalities of the c
people to be investigated in the ".Jain diaries" case and the time already lost
in commencing the investigations, it was advantageous not to hear the
matter through and issue a writ of.mandamus, leaving it to the authorities
to comply with it, but to keep the matter pending while the investigations
were being carried on, lmsuring that this was done by monitoring them D
from time to time and issuing orders in this behalf.

Our reasoned orders are dated 18.4.1995, 16.1.1996 (1996) 2 Scale
SP 42, 30.1.1996 (1996] 2 SCC 199, 22.2.1996 (1996) 2 Scale SP 84, l.3.1996
(1997] 4 SCC 778, 13.3.1996 (1996) 4 Scale SP 3, 1.5.1996 (1996) 4 Scale
SP 56, 26.7.1996 (1996) 6 Scale SP 24, 9.7.1997 (1997) 5 Scale 254. Orders E
in similar matters, being the orders dated 12.2.1996 (1996) 3 Scale SP 35,
2.4.1996, 26.4.1996 (1996) 4 Scale SP 71, 26.7.1996 (1996) 6 Scale SP 23 a.nd
7.10.1996 (1996] 6 SCC 354 in Writ Petition (Civil) No. 640of1995 -Anukul
Chandra Pradhan v. Union of India and Others, and orders dated 24.2.1997
and 18.3.1997 in Writ Petition (Civil) No. 38 of 1997 - Dr. Subramaniam
Swamy v. Direct01; CBI & Ors., are also relevant. F

The sum and substance of these orders is that the CBI and other
Governmental agencies had not carried out their public duty to investigate
the 9ffences disclosed; that none stands above the law so that an alleged
offence by him is not required to be investigated; that we would monitor G
the investigations, in the sense that we would do what we permissibly could
to see that the investigations progressed while yet ensuring that we did not
direct or channel those investigations or in any other manner prejudice the
right of those who might be accused to a full and fair trial. We mad~ it
clear that the task of the monitoring court would end the moment a
charge-sheet was filed in respect of a particular investigation and that the H
604 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A ordinary processes of the law would then take over. Having regard to the
direction in which the investigations were leading, we found it necessary to
direct the CBI not lo report the progress of the investigations to the person
occupying the highest office in the political executive; this was done to
eliminate any impression of bias or lack of fairness or objectivity and to
maintain the credibility of the investigations. In short, the procedure
B adopted was of 'continuing mandamus'.

Even after this matter was brought to the court complaining of the
inertia of CBI and the other agencies to investigate into the offences
because of the alleged involvement of several persons holding high offices
in the executive, for quite some time the disinclination of the agencies to
c proceed with the investigation was apparent. 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 the source
funding the terrorists. In view of the funding also through foreign currency,
some undesirable foreign elements appeared to be connected. This
D revealed a grave situation posing a serious threat even to the unity and
integrity of the nation. The serious threat posed to the Indian polity could
not be underscored. The obvious need for an expeditious and thorough
probe which had already been delayed for several years could not but be
countenanced. The continuing inertia of the agencies to even commence a
proper investigation could not be tolerated any longer. In view of the
E persistence of that situation, it became necessary as the proceedings
progressed to make some orders which would activate the CBI and the
other agencies to at least commence a fruitful investigation. Merely is-
suance of a mandamus directing the agencies to perform their task would
be futile and, therefore, it was decided to issue directions from time to time
and keep the matter pending requiring the agencies to report the progress
F of investigation so that monitoring by the court cou.ld ensure continuance
of the investigation. It was, therefore, decided to direct the CBI and other
agencies to complete the investigation expeditiously, keeping the court
informed from time to time of the progress of the investigation so that the
court retained siesin of the matter till the investigation was completed and
the chargesheets were filed in the competent court for being dealt with,
G thereafter, in accordance with law.

The first order to this effect was made on 5.12.1994 when the CBI
Director was required to personally supervise the investigations carried-on
by the CBI as the overall incharge and to report to the court the progress
H made from time to time. The true scope of the matter was indicated in an
VINEETv. u.o.qvERMA, CJ.] 605

order dated 30th .January, 1996 [reported in [1996) 2 sec 199 as under : A
"The true scope of this writ petition has been indicated during
the earlier hearings. At this stage, when some charge sheets have
been filed in the Special Court and there is considerable publicity
in the media regarding this matter, with some speculation about
its true scope, it is appropriate to make this order to form a part B
of the record.

The gist of the allegations in the .writ petition are that Govern-
ment agencies, like the CBI and the revenue authorities have failed
to perform their duties and legal obligations inasmuch as they have
failed to properly investigate matters arising out of the seizure of c
the so called "Jain Diaries" in certain raids conducted by the CBI.
It is alleged that the apprehending of certain terrorists led to the
discovery of financial support to them by clandestine and illegal
means, by use of tainted funds obtained through 'havala' transac-
tions; that this also disclosed a nexus between several important
D
politicians, bureaucrats and criminals, who are all recipients of
money from unlawful sources given for unlawful considerations;
that the CBI and other Government agencies have failed to fully
investigate into the mater and take it to the logical end point of
the trial and to prosecute all persons who have committed any
crime; that this is being done with a view to protect the persons E
involved, who are very influential and powerful in the present set
up; that the matter discloses a definite nexus between crime and
corruption in public life at high places in the country which poses
a serious threat to the integrity, security and economy of the nation;
that probity in public life, to prevent erosion of the rule of law and
the preservation of democracy in the country, requires that the F
Government agencies be compelled to duly perform their legal
obligations and to proceed in accordance with law against each
and every person involved, irrespective of the height at which he
is placed in the power set up.
G
The facts and circumstances of the present case do indicate
that it is of utmost public importance that this matter is examined
thoroughly by this Court to ensure that all Government agencies,
entrusted with the duty to discharge their functions and obligations
in accordance with law, do so, bearing in mind constantly the
concept of equality enshrined in the Constitution and the basic H
606 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.

A tenet of rule of law : "Be you ever so high, the law is above you".
Investigation into every accusation made against each and every
person on a reasonable basis, irrespective of the position and status
of that person, must be conducted and completed expeditiously.
This is imperative to retain public confidence in the impartial
working of the Government agencies.
B
In this proceeding we are not concerned with the merits of the
accusations or the individuals alleged to be involved, but only with
the performance of the legal duty by the Government agencies to
fairly, properly and fully investigate into every suca accusation
against every person, and to take the logical final action in accord-
c ance with law.

In case of persons against whom a prima facie case is made out
and a charge sheet is filed in the competent court, it is that court
which will then deal with that case on merits, in accordance with law.
D
However, if in respect of any such person the final report after
full investigation is that no prim af acie case is made out to proceed
further, so that the case must be closed against him, that report
must be promptly submitted to !his Court for its satisfaction that
the concerned authorities have not failed to perform their legal
E obligations and have reasonably come to such conclusion. No such
report having been submitted by the CBI or any other agency till
now in this Court, action on such a report by this Court would be
considered, if and when that occasion arises. We also direct that
no settlement should be arrived at nor any offence compounded
by any authority without prior leave of this Court.
F
We may add that on account of the great public interest
involved in this matter, the CBI and other Government agencies
must expedite their action to complete the task and prevent pen-
dency of this matter beyond the period necessary. It is needless to
observe that the resuits achieved so far do not match the available
G
time and opportunity for a full investigation ever since the matter
came to light. It is of utmost national significance that no further
time is lost in completion of the task."

Relevant .portions of other significant orders dated 1.3.1996 reported in [1997]
H 4 sec 778 and 9.7.1997 [reported in 1997 5 Scale 254] read as under :
VINEETv. u.o.qVERMA, CJ.) 607

Order dated 01.03.1996: A

V. Oiminal Misc. Petition Nos. 1153-5611996:

We have heard Shri Anil Diwan and the learned Solicitor B
General. Insofar as the larger relief of suitable guidelines is sought
therein, that matter is deferred for consideration at the appropriate
later stage of these proceedings. As for the interim relief claimed
in the application, it is sufficient for us to direct as stated hereafter.

To eliminate any impression of bias and avoid erosion of c
credibility of the investigations being made by the C.B.I. and any
reasonable impression of lack of fairness and objectivity therein,
it is directed that the C.B.L would not take any instructions from,
report to, or furnish any particulars thereof to any authority per-
sonally interested in or likely to be affected by the outcome of the
investigations into any accusation. This direction applies even in D
relation to any authority which exercises administrative control
over the C.B.L by virtue of the office he holds, without any
exception. We may add that this also accords with what the
Learned Solicitor General has very fairly submitted before us about
the mode of functioning o[ the C.BJ. in this matter.
E
We also place on record the further statement made by the
learned Solicitor General on instructions from the C.B.L Director that
neither the C.BJ. Director nor any of his officers has been reporting
to any authority about any particulars relating to these investigations.
No further direction in this behalf is necessary at this stage."
F
Order dated 09.07.1997:

"The question pertaining to interference with or shifting of any
of the officer in any of the investigative teams of the C.BJ. or any
other connected investigative agency such as the Enforcement
Directorate in the several matters under investigation by them
G
which are being monitored by this Court and some c>f the High
Courts, is under consideration by this Court in this matter which
is being heard by a 3-Judge Bench and for this reason the same
question even though raised in some other pending matters in this
Court is not being considered therein. It is, therefore, inap- H
r
I

608 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.
'
A propriate that the same question or any question connected with
it in any manner be entertained or dealt with by any other court
including any High Court in any of the matters before it. It has
become necessary to say so in view of the fact that we are informed
that the same question in different forms is being raised in some other
courts including High Courts by different persons. The question being
I3 comprehensively dealt with by this 3-Judge Bench in this matter by
this Court, we make it clear that no other court including any High
Court will entertain or deal with the same in any direct or indirect
manner. Such a course is essential in public interest.

c
It is significant that the machinery of investigation started moving as
a result of these orders and after investigation of the allegations made
against several persons on the basis of the contents of the Jain Diaries,
chargesheets were filed in the competent court in the first instance against
D 14 persons, as reported to the court on 22.2.1996. Chargesheets against
many other persons were filed in the competent court thereafter as
reported later from time to time. In all, 34 chargesheets against 54 persons
have been filed on this basis. Thus, as indicated earlier, the purpose of '
these proceedings to the extent to the complaint of inertia of the investigat-
ing agencies come to an end with the filing of these chargesheets, since the
E merits of the accusation against each individual has, thereafter, to be
considered and dealt with by the competent court at the trial, in accord-
ance with law. Trial in the competent court is now a separate proceeding.

After the commencement of these proceedings, some other matters
of a similar nature came to this Court in which the inaction of the
F investigating agencies to investigate into some serious offences was alleged.
Two such significant matters are Writ Petition (Civil) No. 640 of 1995 -
Anukul Chandra Pradhan v. U11io11 of India a11d Others - and Writ Petition
(Civil) No. 38 of 1997 - Dr. Subramaniam Swamy v. Director, CBI & Ors.
These cases revealed a serious situation eroding the rule of law, where the
G accusation was against persons holding high offices and wielding power.
Relevant portions of some significant orders made in the above two cases
read as under :-

A1mkul Chandra Pradhan

H Order dated 12.02.1996 frepo1ted in ( 1996} 3 Scale SP 35J:
VINEETv. U.0.1.[VERMA, CJ.] 609

"We do not consider it appropriate to permit any intervention A
in this matter. Shri Anil Diwan has been requested by us to appear
as Amicus Cwiae in this matter. He has kindly agreed to do so. It
is open to anyone who so desires, to assist Shri Anil Diwan and to
make available to him whatever material he chooses to rely on in
public interest to enable Shri .Diwan to effectively and properly
discharge functions as Amiciis Cwiae. Except for this mode of B
assistance to the learned Amicus Cwiae, we do not permit any
person either to be impleaded as party or to appear as an inter-
venor. In our opinion, this is necessary for expeditious disposal of
the matter and to avoid the focus on the crux of the matter getting
diffused in the present case by the appearance of many persons
acting independently in the garb of public interest.
c

_, Order dated 02.04.1996
D

Learned S.G. as well as Shri Anil Diwan, learned counsel, are
heard. The Secretary, Revenue Shri Sivaraman, the C.B.I. Director
- Shri K. Vijay Rama Rao and the Commissioner of Police - Shri
Nikhil Kumar are also present. We direct that from now each of
these three officers would be overall incharge of the investigations
E
which arc being carried OI' by their respective departments per-
taining to the matters within the scope of this Writ Petition.
Learned S.G. on instructions prayed for deferring the further
hearing to enable the above officers to report the progress made
in the investigations by these agencies on the next date." F
Order dated 07.10.1996 [rep01ted in [ 1996} 6 SCC 354]:

In accordance with the directions so given, it has been reported
G
to us that chargesheets have been filed by the C.B.I. in two cases
and the Delhi Police in one case which they were investigating.
These cases are :

(1) St. Kitts' Forgery Case
(Chargesheet filed by C.B.I.) H
••
610 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A (2) Lakhubhai Pathak Cheating Case
(Chargesheet filed by C.B.I.)

(3) Rajendra Jain Case
(Chargesheet filed by Delhi Police)

B In view of the fact that chargesheet has been filed under Section
173 Criminal Procedure Code in each of the above three cases in
the competent court, it is that court which is now to deal with the
case on merits, in accordance with law. Any direction considered
necessary for further investigation, if any, or to proceed against any
c other person who also appears to have committed any offence in that
transaction, is within the domain of the concerned court according to
the procedure prescribed by law. The purpose of this proceeding is
to command performance of the duty under law to properly inves-
tigate into the accusation of commission of the crime and to file a

D
chargesheet in the competent court, if a prim a f acie case is made ·-
out. This purpose has been served in the above three cases, in
respect of which no further action in this proceeding is called for.

Accordingly, this proceeding has come to an end, in so far as
it relates to the above three criminal cases. Fo.r the remaining part,
it is to continue till the end result prescribed by law is achieved.
E
The concerned court in which the chargesheet has been filed has
to proceed entirely in accordance with law without the slightest
impression that there is any parallel proceeding in respect of the
same matter pending in this court.

F We may also observe, that the concerned court dealing with
the above matters has to bear in mind that utmost expedition in
•
the trial and its early conclusion is necessary for the ends of justice
and credibility of the judicial process. Unless prevented by any
dilatory tactics of the accused, all trials of this kind involving public
men should be concluded most expeditiously, preferably within
G
three months of commencement of the trial. This is also the
requirement of speedy trial read into Article 21.

A note of caution may be appropriate. No occasion should arise
for an impression that the publicity attaching to these matters has
H tended to dilute the emphasis on the essentials of a fair trial and
VINEETv. U.O.I.[VERMA, CJ.] 611

the basic principles of jurisprudence"including the presumption of A
innocence of the accused unless found guilty at the end of the trial.
This requirement, undoubtedly has to be kept in view during the
entire trial. It is reiterated, that any observation made by this Court
for the purpose of the proceedings pending here has no bearing
on the merits of the accusation, and is not to influence the trial in
any manner. Care must be taken to ensure that the credibility of
B
the judicial process is not undermined in any manner.

This proceeding is to continue in respect of the remaining
matter only which are incomplete.
c
D1: Subramaniam Swamy

Order dated 24.02.1997:
D

It is also made clear to the petitioner that the petition having
been entertained as a public interest litigation in view of the public
interest involved, the locus of the petitioner is confined only to
assisting the court through amicus curiae appointed by the court E
and that the petitioner has no independent or additional right in
the conduct or hearing of the proceedings hereafter.

We request Shri Anil B. Divan, Sr. Advocate to appear as
amicus cwiae in this case......"
F
Order dated 18.03.1997:

In accordance with the practice followed by the Court in other
similar pending matters, we also direct that any person wishing to
G
bring any material or point before this Court for consideration in
this behalf may do so by furnishing the same to Shri Anil B. Divan,
the learned amicus curiae who would take the necessary steps in
accordance with the need and relevance thereof, to place it before
this Court in this proceeding." H
612 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.

A /11-cainera proceedings
During the monitoring of the investigations, the Solicitor
General/Attorney General, from time to time, reported the progress made
during the course of investigation, in order to satisfy us that the agencies
B were not continuing to drag their feet and the "continuing mandamu~" was
having the effect of making the agencies perform their statutory function.
The procedure adopted by us was merely to• hear what they had to report
or the CBI Director and the Revenue Secretary had to tell us to be satisfied
that the earlier inaction was not persisting. We maintained this stance
throughout. We also ensured that no observation of any kind was made by
C us nor was any response given which may be construed as our opinion
about the merits of the case or the accusation against any accused. We also
did not identify or name any accused during performance of this task. At
the very outset, the then Solicitor General Shri Dipankar P. Gupta
requested that a part of the proceedings be held 'in camera' to enable him ,_
D to state certain facts and, if necessary, place before us material, the secrecy
of which was required to be maintained for integrity of the investigation
and also to avoid any prejudice to the concerned accused. In these
circumstances, such a procedure was adopted only to the extent necessary
for this purpose, in the interest of justice, and that is how a part of some
E hearings was held in camera. This innovation in the procedure was made,
on request, to reconcile the interest of justice with that of the accused.

It is settled that the requirement of a public hearing in a court of law
for a fair trial is subject to the need of proceedings being held in camera
to the extent necessary in public interest and to avoid prejudice to the
F accused. We consider it appropriate to mention these facts in view of the
nature of these proceedings wherein innovations in procedure were
required to be made from time to time to sub-serve the public interest,
avoid any prejudice to the accused and to advance the cause of justice. The
medium of "continuing mandamus'', was a new tool forged because of the
G peculiar needs of this matter.

Inertia was the common rule whenever the alleged offender was a
powerful person. Thus, it became necessary to take measures to ensure
perm~nency in the remedial effect to prevent reversion to inertia of the
H agencies in such matters.
VINEETv. U.O.I.[VERMA, CJ.) 613

Everyone against whom there is reasonable suspicion of committing A
a crime has to be treated equally and similarly under the law and probity
in public life is of great significance. The constitution and working of the
investigating agencies revealed the lacuna of its inability to perform when-
ever powerful persons were involved. For this reason, a close examination
of the constitution of these agencies and their control assumes significance.
No doubt, the overall control of the agencies and responsibility of their B
functioning has to be in the executive, but then a scheme giving the needed
insulation from extraneous influences even of the controlling executive, is
imperative. It Is this exercise which became necessary in these proceedings
for the future. This is the surviving scope of these writ petitions.

c
Poillt for consideration

As a result of the debate in these proceedings and the experience
gained thereby the Union of India came to realise that an in- depth study
of the selection of personnel of these agencies, particularly the CBI and D
the Enforcement Directorate of the Revenue Department, and their
functioning is necessary. The Government of India, sharing this perception,
by an Order No. S/7937/SS(ISP)/93 dated 9th July, 1993 constituted a
Committee headed by the then Home Secretary Shri N.N. Vohra to take
stock of all available information about the activities of crime syndi-
cates/mafia organisations which had developed links with, and were being E
protected by, government functionaries and political personalities. It was
stated that on the basis of recommendations of the Committee the Govern-
ment shall determine the need, if any, to establish a special organisa-
tion/agency to regularly collect information and pursue cases against such
elements. The Committee wa~ headed by the then Home Secretary Shri
N.N. Vohra and had as its Members-Secretary (Revenue), Director, Intel- F
ligence Bureau, Director, CBI, Joint Secretary (PP), Ministry of Home
Affairs. The Committee gave its recommendations dated 5.10.1993. It has
made scathing comments and has painted a dismal picture of th~ existing
scene. It has said that the network of the mafia is virtually running a parallel
government pushing the State apparatus into irrelevance. The Committee G
recommended the creation of a nodal agency under the Ministry of Home
Affairs for the collation and compilation of all information received from
Intelligence Bureau (IB ), Central Bureau of Investigation (CBI) and Re-
search and Analysis Wing (R&AW) and the various agencies under the
Department of Revenue. The report is significant for the dismal picture of
the existing scenario which discloses a powerful nexus between the H
614 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A bureaucracy and politicians with the mafia gangs, smugglers and the un-
derworld. The report of the Vohra Committee is the opinion of some top
bureaucrats and it confirmed our worst suspicions focusing the need of
improving the procedure for constitution and monitoring the functioning
of intelligence agencies. There is, thus, no doubt that this exercise cannot
be delayed further.
B
The same perception of the Government of India led it to constitute
another Committee by Order No. 226/2/97-AVD-II dated 8th September,
1997 comprising of Shri B.G. Deshmukh, former Cabinet Secretary, Shri
N.N. Vohra, Principal Secretary to the Prime Minister and Shri S.V. Giri,
Central Vigilance Commissioner, called the Independent Review Commit-
C tee (IRC). The order reads as under :

"WHEREAS the Government of India is of the opinion that it
is necessary to set up a Committee for going into the matters
mentioned hereinafter;
D 2. NOW, THEREFORE, a Committee of the following is hereby
set up:-

(i) Shri B.G. Deshmukh,
Former Cabinet Secretary
E (ii) Sh;·i N.N. Vohra,
Principal Secretary to the Prime Minister

(iii) Shri S.V. Giri
Central Vigilance Commissioner
F
Shri N.N. Vohra shall act as Convenor.

3. The terms of reference of the Committee are as under :-

(i) To monitor the functioning of the nodal agency established by
the Ministry of Home Affairs in pursuance of the reccmmenda-
G
tions of the Vohra Committee Report

(ii) To examine the present structure and working of the Central
Bureau of Investigation (CBI), the Enforcement Directorate
and related agencies to suggest the changes, if any, needed to
H ensure:
VINEETv. U.O.L[VERMA, CJ.] 615

(a) that offences alleged to have been committed by any person, A
particularly those in positions of high authority, are registered,
investigated and prosecuted fairly and expeditiously, ensuring
against, inter alia, external pressure, arbitrary withdrawals or trans-
fers of personnel etc., and ensuring· adequate protection to the
concerned functionaries to effectively discharge their duties and
responsibilities; B
(b) that there are sufficient checks and balances to ensure that the
powers of investigation and prosecution are not misused;

(c) that there are no arbitrary restrictions to the initiation of
investigations or launching of prosecutions. c
4. The Committee should give its report with regard to the items
mentioned in paragraph 3(ii) above within a period of 3 months."

Before we refer to the report of the Independent Review Committee
(IRC), it would be appropriate at this stage to refer to the Single Directive D
issued by the Government which requires prior sanction of the designated
authority to initiate the investigation against officers of the Government
and the Public Sector Undertakings (PSUs), nationalised banks above a
certain level. The Single Directive is a consolidated set of instructions
issued to the CBI by the various Ministries/Departments in this behalf. It E
was first issued in 1969 and thereafter amended on many occasions. The
Single Directive contains certain instructions to the CBI regarding
modalities of initiating an inquiry of registering a case against certain
categories of civil servants. Directive No. 4.7(3) in its present form is as
under :-
F
"4.7(3)(i) In regard to any person who is or has been a decision making
level officer (Joint Secretary or equivalent or above in the
Central Government or such officers as are or have been on
deputation to a Public Sector Undertaking; officers of the
Reserve Bank of India of the level equivalent to Joint
Secretary or above in the Central Government, Executive G
Directors and above of the SEBI and Chairman & Managing
Director and Executive Directors and such of the Bank of-
ficers who are one level below the Board of Nationalised
Banks), there should be prior sanction of the Secretary of the
Ministry/Department concerned before SPE takes up any H
616 SUPREME COURT REPORTS (1997] SUPP. 6S.C.R.

A enquiry (PE or RC), including ordering search in respect of
them. Without such sanction, no enquiry shall be initiated by
the SPE.

(ii) All cases referred to the administrative Ministries/Depart-
ments by CBI for obtaining necessary prior sanction as
B aforesaid, except those pertaining to any officer of the rank
of Secretary or Principal Secretary, should be disposed of by
them preferably within a period of two months of the receipt
of such a reference. In respect of the officers of the rank of
Secretary or Principal Secretary to Government, such refer-
c ences should be made by the Director, CBI to the Cabinet
Secretary for consideration of a Committee consisting of the
Cabinet Secretary as its Chairman and the Law Secretary and
the Secretary (Personnel) as its members. The Committee
should dispose of all such reference preferably within two
months from the date of receipt of such a reference by the
D Cabinet Secretary.

(iii) When there is any difference of opinion between the Director,
CBI and the Secretary of the Administrative Ministry/Depart-
ment in respect of an officer up to the rank of Additional
E Secretary or equivalent, the matter shall be referred by CBI
to Secretary (Personnel) for placement before the Committee
referred to in Clause (ii) above. Such a matter should be
considered and disposed of by the Committee preferably
within two months from the date of receipt of such a reference
by Secretary (Personnel).
F
(iv) In regard to any person who is or has been Cabinet Secretary,
before SPE takes any step of the kind mentioned in (i) above
the case should be submitted to the Prime Minister for c
orders."
G
We were informed that the above Directive, in this application, is
limited to officials at decision making levels in the Government and certain
other public institutions like the RBI, SEBI, nationalised banks, etc. and
its scope is limited to official acts. The slated objective of the Directive is
H to protect decision making level officers from the threat and ignominy of
VINEETv. U.0.1.[VERMA, CJ.] 617
malicious and vexat~ous inquiries/investigations. It 1s said that such A
protection to officers at the decision making level is essential to protect
them and to relieve them of the anxiety from the likelihood of harassment
for taking honest decisions. It was also stated that absence of any such
protection to them could adversely affect the efficiency and efficacy of
these institutions because of the tendency of such officers to avoid taking B
·- any decisions which could later lead to harassment by any malicious and
vexatious inquiries/investigations. It was made clear that the Directive does
not extend to any extraneous or non-official acts of the government
functionaries and a time frame has been prescribed for grant of sanction
in such cases to prevent any avoidable delay.
c
Two questions arise in relation to Directive No. 4.7(3) of the Single
Directive, namely, its propriety/legality and the extent of its coverage, if it
be valid.

The learned Attorney General categorically stated in response to our D
repeated query that the Single Directive acts as a restriction only on the
CBI but is inapplicable against the general power of the State Police to
register and investigate any such offence under the general law, i.e. Code
of Criminal Procedure. He added that it is also not an inhibition against a
complaint being lodged under the Cr.P .C. before the competent court for
any such offence. The Single Directive was sought to be supported by the E
Attorney General on the ground that the CBI being a special agency
created by the Central Government, it was required to function according
to the mandate of the Central Government which has constituted this
special agency for specified purpose. The desirabifay of the Single Direc-
tive was supported by the learned Attorney General on the ground that the F
officers at the decision making level need this protection against malicious
or vexatious investigations in respect of honest decisions taken by them.
We were also informed that during hearing of this matter when this aspect
was being debated, the Ministry of Finance has set up a High Power Board
of experts in finance and a retired High Court Judge to examine the merits
in every case for the purpose of grant of sanction to the CBI for recording G
the information and investigating into any such offence, and a time frame
for the decision has also been specified. Similarly, in the case of govern-
ment servants, the authority for grant of sanction with a provision for
appeal in case the sanction is declined has been provided. It was submitte.d
that such a structure to regulate the grant of sanction by a high authority H
618 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A together with a time frame to avoid any delay is sufficient to make the
procedure reasonable and to provide for an objective decision being taken
for the grant of sanction within the specified time. It was urged that refusal
of sanction with reasons would enable judicial review of that decision in
case of any grievance against refusal of the sanction. Reliance was placed
by the learned Attorney General on the decisions of this Court in K.
B Veeraswami v. Union of India and Other;; [1991] 3 SCC 655 and State of
Bihar and Another Etc. V. J.A.C. Sa Idanha and Others, [1980] l sec 554 to
support the argument of legality of the Single Directive. We shall advert to
this aspect later.

C The provision made for deciding the question of grant of sanction in
the cases of officers to whom the Single Directive applies is, as under :

OFFICE MEMORANDUM DATED FEBRUARY 17, 1997 OF THE
RESERVE BANK OF INDIA, CENTRAL OFFICE, DEPARTMENT
OF ADMINISTRATION & PERSONNEL MANAGEMENT
D
''Advis01y Board on bank frauds

It has been decided to set~up an 'Advisory Board on bank frauds'
to advise the Bank on the cases referred the Central Bureau uf
Investigation either directly or through the Ministry of Finance for
E
investigation/registration of cases against bank officers of the rank
of General Manager and above. The constitution of the Board will
be as under:

Shri S.S. Tarapore, Chairman
F Ex-Deputy Governor
Reserve Bank of India

. Justice Shri B.V. Chavan Member
Retd. Judge of Barnaby
High Court & Member,
G Reserve Bank of India
Services Board.

Shri B.N. Bhagwat, Member
Retd. Secretary,
H Government of India.
VINEETv. U.0.1.[VERMA, CJ.] 619

Shri Satish Sawhney, Member A
Retd. Director
General of Police
Maharashtra.

Shri Y.H. Malegam, Mamber
Chartered Accountant B
& Senior Partner in
Mis S.S. Bilimoria & Co."

Another action taken by the Government of India is, as under :-

Letter No. I I 1011/33/95-IS DI(B) dated 1st/2nd August, 1995 of Minisfly of C
Home Affairs, Govemment of India

"Government had through its Order No. S- 7937/SS(ISP)/93
dated 9th July, 1993 constituted a Committee under the Chairman-
ship of former Home Secretary (Shri N.N. Vohra) to take stock of D
all available information about the activities of the crime syndi-
cates/mafia organisations which had developed links with and were
being protected by ·Govcrmnent functionaries and political per-
sonalities. The Vohra Committee in its Report submitted to the
Govermnent recommended a Nodal Set-up directly under the Home
Secretary to which all existing intelligence and enforcement agencies E
of the Govermnent shall promptly pass on any information which they
may come across, relating to links of crime syndicates with
functionaries of the Government and political personalities.

2. Accordingly, Govermnent have now decided to set up a Group
under the Chairmanship of the Home Secretary to act as a Nodal F
Set-up to collect and collate the information and to decide on the
action that is required to be tabn to ensure that the nexus of
criminals with businessmen, politicians or bureaucrats is broken.

. (3) The Group shall comprise :
G
(i) Home Secretary, Chairman
(ii) Secretary (Revenue) Member
(iii) Director, IB Member
(iv) Director, CBI Member
(v) Secretary, R&AW Member H
620 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A 4. It is felt that it would be necessary for this Group to interact
with various State Governments in order to both make use of such
information as may be available with the States as well as to utilise
the expertise of the relevant agencies of the State Governments.
For this purpose, the above Group would interact appropriately
from time to time with Chief Secretaries and other senior
B functionaries of the State Governments.

5. All the Intelligence and enforcement agencies under the Govern-
ment like the Intelligence Bureau, the CBI and various bodies
functioning under the Department of Revenue shall forthwith
report to the Home Secretary whenever substantive informa-
c tion/evidence of collusion of officials/politicians with criminal syn-
dicates comes to their knowledge in the course of their working.
The Group shall meet periodically to decide upon the action
required to be taken and identify an agency or agencies to take up
further investigations. The Nodal Group would also review the
D information in the above context already available with the various
agencies and decide upon the follow up action that is required to
be taken.

6. This issues with the approval of Home Minister."

E Rep01t of !RC
The IRC has in its report accepted the legality of the Single Directive
placing reliance on the decision of this Court in K. Veeraswami (supra).
After considering the functions of the CBI and the Directorate of Enfor-
cement, it has made certain recommendations which are as under :-
F
"MEASURES FOR SPEEDY INVESTIGATIONS AND TRIALS

4.1. The Committee recommends that the following measures
should be taken to ensure speedy investigations and trials :

(a) Special Courts should be got established at identified stations
G
to deal exclusively with FERA offences so that cases can be
decided speedily.

(b) To ensure against delays in investigations abroad, the
Revenue Secretary should be the competent authority to
H approve filing of applications for Letters Rogatory.
VINEETv. U.0.1.[VERMA, CJ.] 621

( c) The Directorate of Enforcement should be delegated powers A
to appoint special counsels for conducting trials, who may
also act as legal advisers for the Department in respect of the
cases entrusted to them.

( d) In many of the major cases of the Directorate, the suspects
have been able to abuse the process of law by stalling the B
.. investigations at the initial stages through litigation at various
levels, obtaining stay orders from High Courts and injunctions
on flimsy grounds. In consultation with the Attorney General,
the Revenue Department may examine the possibility of
making a representation to the Apex Court to consider issuing c
appropriate directions so that the pace and progress of cases
is not thwarted by interlocutory procedures or stay orders
issued by the Courts below.

( e) Taking into account the instances in which suspected persons
have been able to stall investigations on alleged health D
grounds, the Revenue Department should approach the Min-
istry of Health to establish standing medical boards in iden-
tified cities to examine such persons. Such boards should
comprise outstanding medical experts of unimpeachable in-
tegrity. The Courts can be requested to refer the prayer of E
the accused for staying proceedings on health grounds to such
medical boards before passing judgment.''.

"CHECKS AND BALANCES

5.1. The Directorate must be provided adequate financial and F
administrative delegations to enable it to exercise autonomy in the
conduct and pursuit of investigations without let or hindrance. Side
by side, it is necessary to provide appropriate checks and balances
to ensure against miscarriage of justic~. In this context, the Com-
mittee recommends the following :
G
(a) The Revenue Department should undertake regular review
of the progress of cases before the Directorate. To enable
this, the Directorate should regularly furnish information
regarding the number of cases instituted, progress of inves-
tigations, cases settled in adjudication and those put to H
622 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A Courts. The Committee note that while such information is
already being supplied in reply to Parliament Questions,
information to be placed before the Parliamentary Commit-
tee/Standing Committee, etc., there is no established proce-
dure for the Directorate to furnish relevant information in a
well devised format.
B
(b) The present system of the Directorate furnishing fortnightly
reports providing statistical information and brief outline of
the cases taken up for investigation should be further fine
tuned. These reports should be carefully examined by the
c Revenue Department to ensure that the Directorate is per-
forming its functions efficiently. The Revenue Secretary
should hold regular review meeting with the Director Enfor-
cement, also involving the Director Revenue Intelligence and
other concerned officers.

D (c) Guidelines relating to interrogation, prosecution, adjudica-
tion, time frame for completion of investigation, etc., have
been issued by the Directorate from time to time. These
guidelines should be comprehensively reviewed and, based
thereon, a circular should be released for the information of
E the public at large, to enable all concerned to know the
systems and procedures followed by the Directorate. This
shall contribute to greater transparency. This effort should be
conclu"ded within 2-3 months.

5.2. It is important that the Directorate lays down a clearly spelt
F out time frame for the completion of investigation, launching of
prosecution and completion of adjudication proceedings and for
the Director to ensure that the prescribed time limits are strictly
adhered to. The Committee are of the view that the Directorate
would be able to more efficiently discharge its functions if imme-
diate steps are taken to upgrade the level and quality of its in-house
G
legal advice mechanism. At our request, the Cabinet Secretary
convened a meeting 1vith the Revenue Department, Enforcement
Directorate and other concerned officers to consider various
proposals for strengthening the Directorate. The Committee hope
that the various decisions taken at the Cabinet Secretary's level
H shall witness implementation within 6-8 weeks.
VINEETv. U.O.I.[VERMA, CJ.] 623

5.3. The Committee recommends that the Directorate should take A
time bound steps to establish a grievances redressal mechanism to
promptly deal with complaints received from the public against
actions of the Enforcement Directorate. Insofar as complaints of
arbitrary action by senior officers of the Directorate are concerned,
the Committee recommends that these should be looked into by a B
Committee headed by the Central Vigilance Commissioner and
comprising Revenue Secretary, Director General Revenue Intel-
ligence, Enforcement Director and a senior representative of the
Ministry of Law.

5.4. As regards the pursuit of cases which appear to have a politico-
c
beaurocrat-criminal nexus, the Home Secretary agreed with the
Committee's suggestion that the Nodal Agency in the Home Min-
istry (chaired by Home Secretary) shall also include Member
(Investigation) of the Central Board of Direct Taxes, Director
General Revenue Intelligence and the Director Enforcement as D
members.

5.5. The Committee recommends that the Annual Report of the
Department of Revenue shouid have a section devoted exclusively
to the functioning of the Enforcement Directorate. This report E
should highlight the number of cases taken up for investigation by
ED, raids and searches conducted, amount of Indian and foreign
currency seized etc. The report should also indicate the number
of persons arrested, prosecutions launched and convictions or-
dered by the Courts. The Committee feels that enhanced public F
knowledge about the work being done by the Directorate shall
demystify its operations and contribute to improved public con-
fidence."

"SUMMARY OF RECOMMENDATIONS
G
I. CBI AND eve

1. CVC to be conferred statutory status; appointment of Central
Vigilance Commissioner to be made under the hand and seal
of the President (para 4.2.) H
624 SUPREME COURT REPORTS [1997] SUPP. 6 S.C.R.
f1
A 2. Constitution of a Committee for selection of CVC (para 4.3.) •
,t
3. CVC to overview CBI's functioning (para 5) t

4. CBI's reporting to Government to be streamlined without
diluting its functional autonomy (para 3.3) ..
B
5. CVC to have a separate section in its Annual Report on the
CBl's functioning after the supervisory function is transferred
to it (para 6)
'
~

6.
c Constitution of a Selection Committee for identifying a panel
of names for selection of Director CBI; final selection to be
.
made by ACC from such panel (para 8.2.)

7. Central Government to pursue with the State Governments
to set up a credible mechanism for selection of Police Chief
D (para 3.3) •
8. Director CBI to have a minimum tenure of 2 years (para 8.4)
..
)-
9. Transfer of incumbent Director CBI would need endorse-
ment of the Selection Committee (para 8.5)
E
10. Director CBI to ensure full freedom for allocation of work
within the Agency, including constitution of investigation
teams (para 8.6)

11. Selection/extension of tenure of officers upto to the level of
F Joint Director (JD) to be decided by a Board under Central
Vigilance Commissioner; JD and above would need the ap-
-·I"'
proval of ACC (para 8.7)

12. Change in the existing Tenure Rules not recommended (para
8.8)
G
13. Proposals for improvement of infrastructure, methods of in-
vestigation, etc., to be decided urgently (para 8.9.2.)

14. No need for creation of a permanent core group in. the CBI
H (para 8.9.3)
626 SUPREME COURT REPORTS [1997] SUPP. 6 S.C.R.

A 25. Cases falling within the jurisdiction of the State Police which
do not have inter-state or inter-national ramifications should
not be handed over to CBI by States/Courts (para 11.2)

26. Government to establish Special Courts for the trial of CBI
cases (11.3)
B
27. Severe action against officials found guilty of high handed-
ness; prompt action against those officials chastised by the
Courts (para 11.4)

28. Director CBI to conduct regular appraisal of personnel to
c weed out the corrupt and inefficient, and maintain strict
discipline within the organisation (para 11.5)

JI. ENFORCEMENT DIRECTORATE

1. Selection Committee headed by Central Vigilance Commis-
D
sioner to recommend panel for appointment of Director
Enforcement by the ACC (para 2.2)

2. Director Enforcement to have minimum tenure of 2 years.
For his premature transfer, the .selection Committee headed
E by Central Vigilance Commissioner to make suitable recom-
mendatjons to the ACC (para 2.3.)

3. Post of Director Enforcement to be upgraded to that of
Additional Secretary/Special Secretary to the Government
(para 2.4)
F
4. Officern of the Enforcement Directorate handling sensitive
assignments to be provided adequate security for enabling
fearless discharge of their functions (para 2.5)

5. Extension of tenures up to the level of Joint Directors in the
G
Enforcement Directorate to be decided by a Committee
headed by Central Vigilance Commissioner (para 2.6)

6. Proposals for foreign visits to conduct investigations to be
cleared by the Revenue Secretary and the Financial Adviser
H (para 2.7)
VINEETv. U.O.L[VERMA,CJ.] 627

7. While enjoying full internal autonomy Enforcement Direc- A
torate to be made accountable. Responsibility of Government
to ensure efficient and impartial functioning (para 3.1)

8. Premature media publicity to be ensured against (para 3.3)

9. Adjudication proceeding; prosecution to be finalised by the En- B
.
forcement Directorate within a period of one year (para 3.4)

10. Director Enforcement to monitor speedy completion of in-
vestigation and launching of adjudications/prosecution.
Revenue Secretary to review regul<!rly (para 3.4)
c
IL The Director Enforcement to keep close watch against vexa-
tions search; action against functionaries who act without due
care (para 3.5)

12. Special Courts to be established to deal with FERA offences
for speedy completion of trials [para 4.1.(a)) D
13. For speedy conduct of investigations abroad, Revenue
Secretary be authorised to approve filing of applications for
Letters Rogatory [para 4.l(b)I

14. The Enforcement Directorate to be delegated powers to E
appoint Special Counsels for trials [para 4.l(C)J

15. The Revenue Department to consult Attorney General
regarding measures against conclusion of cases being
thwarted by stay orders, etc. jpara 4.l(d))
F
16. Revenue Department to approach Health Ministry to estab-
lish Standing Medical Boards in identified cities for examina-
tion of accused persons seeking deferment of proceedings on
health grounds [para 4.l(c))
G
J 7. Revenue Department to undertake regular reviews of cases
pending with the Directorate Iparas 5.1( a) and (b) ].

18. Comprehensive circular to be published by the Directorate
.. to inform public about procedures/systems of its functioning
(para 5.l(c)l H
628 SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R.

A 19. In-house legal advice mechanism to be strengthened (para
5.2)

20. Proposals for strengthening the Directorate to be imple-
mented within 8 weeks (para 5.2)

B 21. Directorate to establish· a grievance redressal mechanism
(para 5.3)

22. Committee headed by Central Vigilance Commissioner to
decide complaints of arbitrary action by Directorate officials
(para 5.3)
c
23. Nodal Agency headed by Home Secretary on politico-beauro-
crat-criminal nexus to include Member investigation CBDT,

D
Director General Revenue Intelligence and Director Enfor-
cement as members (para 5.4)

24. Annual Report of the Department of Revenue to contain an
-
:--

exhaustive section on the working of the Enforcement Direc-
• torate (para 5.5)

25. Suitable incentives to be provided to functionaries of Enfor-
cement Directorate at various levels, to attract best material,
E
to be decided within two months (para 6.1)

Ill. NODAL AGENCY ON CRIMINAL NEXUS

1. Requirements of inter-agency co-ordination al field unit level
to be evolved by Home Secretary (para 2.1)
F
2. NA's functioning to be watched for some time before con-
sidering need for structural changes (para 3)

3. Home Secretary will hold meetings of NA every month (para
G 3)"

The reference to paragraphs within brackets at the end of each
recommendation is to the paragraphs of the report containing discussion
pertaining to the Central Bureau of Investigation (CBI) and the Central
Vigilance Commission (CVC) in Part I and Directorate of Enforcement in
H Part II of the report. These recommendations haVf~, therefore, to be read
VINEETv. U.0.1.[VERMA, CJ.] 629
along with the discussion in the corresponding paras in Part I and Part II A
of the report.

Need for Cowt's inteivention

The IRC is a body constituted by the Central Government itself as a
result of its perception that tlie constitution and functioning of the CBI,
B
CVC and Directorate of Enforcement require a close scrutiny in the
background of the recent unsatisfactory functioning of these agencies with
a view· lo improve their functioning. The view taken by the IR C is a
reaffirmation of this belief shared by everyone. The preface to the report
indicates the reason for the constitution of the IRC and says that "In the c
past several years, there has been progressive increase in allegations- of
corruption involving public servants. Understandably, cases of this nature
have attracted heightened media and public attention. A general impres-
sion appears to have gained ground that the concerned Central investigat-
ing agencies are subject to extraneous pressures and have been indulging D
in dilatory tactics in not bringing the guilty to book. The decisions of higher
courts to directly monitor investigations in certain cases have added to the
aforesaid belief." There can thus be no doubt that there is need for the
exercise we were called upon to perform and which has occasioned con-
sideration of this crucial issued by this Court in exercise of its powers
conferred by the Constitution of India. The conclusions reached by the IRC E
and the recommendation it has made for improving the functioning and
thereby the image of these agencies is a further reaffirmation of this general
belief. There can also be no doubt that the conclusions reached by the IRC
and its recommendations are the minimum which require immediate ac-
ceptance and implementation in a bid to arrest any further decay of the F
polity. It follows that the exercise to be performed now by this Court is
really to consider whether any modifications/additions are required to be
made to the recommendations of the IRC for achieving the object for
which the Central Government itself constituted the IRC. We are informed
by the learned Attorney General that further action on the report of the
IRC could not be taken so far because of certain practical difficulties faced G
by the Central Government but there is no negative reaction to the repprt
given hy the Central Government.

The only caveat entered by the Attorney General is on the basis of
a note by an individual Minister in the Central Cabinet in which emphasis H
630 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.

A has been laid that the ultimate responsibility for the functioning of these
agencies to the Parliament is that of the concerned Minister and this aspect
may be kept in mind. It has been specifically mentioned that the Minister
would remain the final disciplinary authority and would have the power to
refer complaints against the agency or its officers lo an appropriate
authority for necessary action. There can be no quarrel with the Minister's
B ultimate responsibility to the Parliament for the functioning of these agen-
cies and he being the final disciplinary authority in respect of the officers
of the agency with power to refer complaints them to the appropriate
authority. Some other specific powers of the Minister were indicated as
under :-
c
l. The Minister has the power lo re\~ew the working of the agencies
which are under his Department.

2. The Minister has the power to give broad policy directions
regarding investigation and prosecution of classes or categories of
D cases.

3. The Minister has the power to appraise the quality of the work
of the Head of the agency as well as other senior officers of the
agency.
E
4. The Minister has the power lo call for information regarding
progress of cases.

ft is sufficient to say that the Minister's general power to review the
working of the agency and to give broad policy directions regarding the
F functioning of the agencies and to appraise the quality of the work of the
Head of the agency and other officers as the executive head is in no way
to be diluted. Similarly, the Minister's power lo call for information
generally regarding the cases being handled by the agencies is not to be
taken away. However, all the powers of the Minister are subject to the
G condition. that none of them would extend to permit the Minister to
interfere with the course of investigation and prosecution in any indi~dual
case and in that respect the concerned officers are to be governed entirely
by the mandate of law and the statutory duty cast upon them.

It is useful to remember in this context what this Court has on
H several occasions in the past said about the nature of duty and functions
VINEETv. U.O.L[VERMA, CJ.) 631

of Police officers in the investigation uf an offence. It is sufficient to refer A
to one of them, namely, Union of India and Others v. Sushi/ Kumar Modi
and Other:.; [1997] 4 SCC 770, (Bihar Fodder Scam case), wherein it was
said, as under :-

4. At the outset, we would indicate that the nature of proceedings
before the High Court is somewhat similar to those pending in this B
Court in Vineet Narain v. Union of India, [1996] 2 SCC 199 and
Anukul Chandra Pradhan v. Union of India, I1996] 6 sec 354 and,
therefore, the High Court is required to proceed with the matter
in a similar manner. It has to be borne in mind that the purpose
of these proceedings is essentially to ensure performance of the c
statutory duty by the CBI and the other government agencies in
accordance with law for the proper implementation of the rule of
law. To achieve this object a fair, honest and expeditious investiga-
tion into every reasonable accusation against each and every per-
son reasonably suspected of involvemet'it in the alleged offences
has to be made strictly in accordance with law. Tlie duty of th~
D
Court in such proceedings is, therefore, to ensure that the CBI and
other government agencies do their duty and do so strictly in
conformity with law. In these proceedings, the Court is not re-
quired to go into the merits of the accusation or even to express
any opinion thereon, which is a matter for consideration by the E
competent court in which the charge-sheet is filed and the accused
have to face trial. It is, therefore, necessary that not even an
observation relating to the merits of the accusation is made by the
Court in these proceedings lest in prejudice the accused at the
trial. The nature of these proceedings may be described as that of
F
"continuing mandamus" to require performance of its duty by the
CBI and the other government agencies concerned. The agencies
concerned must bear in mind and, if needed, be reminded of the
.. caution administered by Lord Denning in this behalf in R. v.
Metropolitan Police Comnu~, [1968] 1 All ER 763/(1968) 2 QB 118.
Indicating the duty of the Commissioner of Police, Lord Denning G
stated thus : (All ER p. 769)

''I have no hesitation, however in holding that, like every
constaole in the land, he should be, and is, independent of the
executive. He is not subject to the orders of the Secretary of H
632 SUPREME COURT REPORTS [1997] SUPP. 6 S.C.R.

A State, ... I hold it to be the duty of the Commissioner of Police,
as it is of every chief constable, to enforce the law of the land.
He must take steps so to post his men that crimes may be
detected; and that honest citizens may go about their affairs
in peace. He must decide whether or not suspected persons
are to be prosecuted; and if need be, bring the prosecution
B or see that it is brought; but i11 all these things he is 1101 the
se1vant of a11yo11e, save of the law itself. No Minister of the
Crow11 can tell him that he must, or must not, keep obse1vatio11
011 this place or that; or that he must, or must not prosecute
this man or that one. Nor can a11y police auth01ity tell him so.
c The respo11sibility for law enforcement lies on him. He is
answerable to the law and to the law alone."

The nature of such a proceeding in a court of law was also
indicated by Lord Denning, as under :

D "A QUestion m"'1y be raised as to the machinery by which he
could be compelled to do his duty. On pri11ciple, it seems to
me that once a duty c~r:ists, there should be a means of enforci11g
it. This duty can be enfarced. I think, either by action at the
suit of the Attorney General; or by the prerogative order of
E mandamus." (emphasis supplied)

There can hardly be any doubt that the obligation of the police in
our constitutional scheme is no less.

5. According to the Code of Criminal Procedure, 1973 the
F formation of the opinion as to whether or not there is a case
to place the accused for trial is that of the police officer
making the investigation and the final step in the investigation
is to be taken only by the police and by no other authority,
see Abhinandan lha v. Dinesh Mishra, [1967] 3 SCR 668. This
must be borne in mind as also that the scope and purpose of
G
a proceeding like the present is to ensure a proper and
faithful performance of its duty by the police officer by resort
to the prerogative writ of mandamus."

The Minister's power in these matters has, therefore, to be under-
H stood as circumscribed by these limitations under the law.

·-
VINEETv. U.0.1.[VERMA, CJ.] 633

Histo1y of CBI A

It is useful to refer at this stage to the history of the CBI. The Special
Police E91.ablishmenl was formed during the World War Il when large sums
of public money were being spent in connection with the War and there
arose enormous potential for corruption amongst the officers dealing with
the supplies. An executive order was made by the Government of India in B
1941 setting up the Special Police Establishment (SPE) under a DIG in the
then Department of War. The need for a central goviy-nment agency to
investigate cases of bribery and corruption by the Central Government
servants continued and, th.erefore, the Delhi Special Police Establishment
Act was brought into force in 1946. Under this Act, the superintendence c
of the Special Police Establishment was transferred to the Home Depart-
ment and its functions were enlarged to cover all departments of the
Government of India. The jurisdiction of the SPE extended to all the Union
Territories and could also be extended to the States with the consent of
the concerned State Governments. Then the SPE was put under the charge
of Director, Intelligence Bureau. Later in 1948 a post of Inspector General
D
of Police, SPE was created and the organisation was placed under his
charge. The Central Bureau of Investigation was established on l.4.1963
vide Government of India's Resolution No. 4/31/61-T/MHA. This was done
to meet the felt need of having a central police agency at the disposal of
the Central Government to investigate into cases not only of bribery and E
corruption but also those relating to the breach of central fiscal laws, frauds
in government departments and PSUs and other serious crimes. On enlar-
gement of the role of CBI and Economic Offences Wing was added to the
existing Divisions of tile CBI. In 1987 two Divisions were created in the
CBI known as Anti-Corruption Division and Special Crimes Division, the
F
latter dealing with cases of conventional crimes besides economic offences.
In 1994 due to increased workload relating to bank frauds and economic
offences a separate Economic Offences Wing was established in CBI with
the result that since then the CBI has three Investigation Divisions, namely,
Anti-Corruption Division, Special Crimes Division and Economic Offences
Division. Further particulars thereof arc not necessary in the present G
context

We are informed that almost all the State Governments have given
concurrence for extension of the jurisdiction of the D.elhi Special Police
Establishment in ihc States with the exception of only a few. The result is H
634 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.

A that for all practical purposes, the jurisdiction in respect of all such
offences is exercised in the consenting States only by the CBI and not by
the State Police. This is the significance of the role of the CBI in such
matters and, therefore, technically the additional jurisdiction under the
general law of the State Police in these matters is of no practical relevance.
The pragmatic effect of the Single Directive is, therefore, to inhibit inves-
B tigation against the specified category of officers without sanction in ac-
cordance with the Single Directive.

Validity of Directive No. 4.7(3) of the Single Directive

We may now refer to the two decisions on which specific reliance
c has been placed by the learned Attorney General before us as well as the
IRC in its report.

The decision in JA.C. Saldanha (supra) is on Section 3 of the Police
Act, 1861 and deals with the am.bit and scope of State Government's power
D of 'superintendence' thereunder. It was held in JA.C. Saldanlla (supra)
that the power uf superintendence of the State Government includes its
power to direct further.investigation under Section 173(8) Cr.P.C. That was
a case in which there was occasion to require further investigation because
of the unsatisfactory nature of the investigation done earlier of a cognizable
offence. Thus, in that case the power of superintendence was exercised for
E directing further investigation to complete an unsatisfactory investigation
of a cognizable offence to promote the cause of justice and not to subvert
it by preventing investigation. In our opinion, in the present context, that
decision has no application to support the issuance of the Single Directive
in exercise of the power of superintendence, since the effect of the Single
F Directive might thwart investigation of a cognizable offence and not to
promote the cause of justice by directing further investigation leading to a
prosecution.

The other decision of this Court is in K. Veeraswami (supra). That
was a decision in which the majority held that the Prevention of Corruption
G Act applies even to the Judges of the High Court and the Supreme Court.
After taking that view, it was said by the majority (per Shetty, J.) that in
order to protect the independence of judiciary, it was essenfral that no
criminal case shall be registered under Section 154 Cr.P.C. against a Judge
of the High Court or of the Supreme Court unless the Chief Justice of India
H is consulted and he assents to such an action being taken. The learned
VINEETv. U.O.I.[VERMA, CJ.) 635
Attorney General contended that this decision is an authority for the A
proposition that in case of high officials, the requirement of prior permis-
sion/sanction from a higher officer or Head of the Department is permis-
sible and necessary to save the concerned officer from harassment caused
by a malicious or vexatious prosecution. We are unable to accept this
submission.
B
The position of Judges of High Courts and Supreme Court, who are
constitutional functionaries, is distinct, and the independence of judiciary,
keeping it free from any extraneous influence, including that from execu-
tive, is the rationale of the decision in K. Veerasawami (supra). In strict
terms the Prevention of Corruption Act, 1946 could not be applied to the c
superior Judges and, therefore, while bringing those Judges within the
purview of the Act yet maintaining the independence of judiciary, this
guideline was issued as a direction by the Court. The feature of inde-
pendence of judiciary has no application to the officers covered by the
Single Directive. The need for independence of judiciary from the execu-
tive influence does not arise in the case of officers belonging to the
D
executive. We have no doubt that the decision in K. Veeraswami (supra)
has no application to the wide proposition advanced by the learned Attor-
ney General to support the Single Directive. For the same reason, reliance
on that decision by the IRC to uphold the Single Directive is misplaced.
E
The question, however, is whether, without the aid of these decisions,
the Single Directive can be upheld. In this context, meaning of the word
• "superintendence" in Section 4(1) of the Delhi Special Police Establishment
Act, 1946 requires considerntion.
F
The Delhi Special Police Establishment Act, 1946 is an Act to make
provision for the constitution of a special police force in Delhi for the
investigation of certain offences in the Union Territories for the superin-
tendence and administration of the said force and for the extension to other
areas of the powers and jurisdiction of members of the said force in regard
to the investigation of the said offences. Section 6 of the Act requires G
consent of the State Government to exercise powers and jurisdiction under
the Act by the Delhi Special Police Establishment. This is bec;mse 'Police'
is a State subject, being in List II, Entry 2 of the Seventh Schedule. For
this reason, the learned Attorney General contended that the power and
jurisdiction of the State Police in respect of an offence within its jurisdic- H
636 SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R.

A tion remains intact and is not inhibited by the Single Directive; and that
the CBI alone is inhibited thereby. Section 2 of the Act deals with constitu-
tion and powers of the Special Police Establishment (SPE). This is how
the CBI has been constituted. Section 3 provides for offences to be inves-
tigated by the SPE and says that the offences or class of offences to be
investigated by the agency may be specified by notification in the Official
B Gazette by the Central Government.

Section 3 of the Police Act, 1861 is in pwi 111ate1ia with Section 4 of
the Delhi Special Police Establishment Act, 1946. These Sections read as
under :-
c Section 3 of the Police Act, 1861 :

"3 Superintendence in the State Government.- The superinten-
dence of the police throughout a general police district shall vest
in and shall be exercised by the State Government to which such
D district is subordinate, and except as authorised under the
provisions of this Act, no person, officer or Court shall be em-
powered by the State Government to supersede or control any
police functionary.

Sections 3 and 4 of the Delhi Special Police Establishment Act,
E 1946:

Offences to be investigated by S.P.E.

3. The Central Government may, by notification in the Official
Gazette specify the offences or classes of offences which are to be
F investigated by the Delhi Special Police Establishment.

S11pe1intendence & Administration of S.P.E.

4(1) The Superintendence of the Delhi Special Police Estab-
lishment shall vest in the Central Government.
G
(2) The administration of the said police establishment shall vest
in an officer appointed in this behalf by the Central Government
who shall exercise in respect of that police establishment such of
the powers exercisable by an Inspector-General of Police in
respect of the police force in a State, as the Central Government
H may specify in this behalf."
VINEETv. U.O.l.[VERMA CJ.j 637

The meaning of the word "superintendence" in Section 4( 1) of the A
Delhi Special Police Act, 1946 determines the scope of the authority of the
Central Government in this context.

There can be no doubt that the overall administration of the said
force, i.e., CBI vests in the Central Government, which also includes, by
virtue of Section 3, the power to specify the offences or class of offences
B
which are to be investigated by it. The general superintendence over the
functioning of the Department and specification of the offences which are
to be investigated by the agency is not the same as and would not include
within it the control of the initiation and the actual process of investigation,
i.e., dirt:ction. Once the CBI is empowered to investigate an offence c
generally by its specification under Section 3, the process of investigation,
including its initiation, is to be governed by the statutory provisions which
provide for the initiation and manner of investigation of the offence. This
is not iin area which can be included within the meaning of "superinten-
dence" in Section 4(1).
D
It is, therefore, the notification made by the Central Government
under Section 3 which confers and determines the jurisdiction of the CBI
to investigate an offence; and once that jurisdiction is attracted by virtue
of the notification under Section 3, the actual investigation is to be
governed by the statutory provisions under the general law applicable to E
such investigations. This appears to us the proper construction of Section
4(1) in the context, and it is in harmony with the scheme of the Act, and
Section 3 in particular. The word "superintenrl.ence" in Section 4(1) cannot
be construed in a wider sense to permit supervision of the actual investiga-
tion of an offence by the CBI contrary to the manner provided by the F
statutory provisions. The broad proposition urged on behalf of the Union
of India that it can issue any directive to the CBI to curtail or inhibit its
jurisdiction to investigate an offence specified in the notification issued
under Section 3 by a directive under Section 4(1) of the Act cannot be
accepted. The jurisdiction of the CBI to investigate an offence is to be
determined with reference to the notification issued under Section 3 and G
not by any separate order not having that character.

This view does not conflict with the decision in JA. C. SaIdanha
(supra) as earlier indicated. In Salda111ia, the question was whether an
unsatisfactory investigation aiready made could be undertaken by another H
638 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A officer for further investigation of the offence so that the offence was
properly investigated as required by law, and it ·was not to prevent the
investigation of an offence. The Single Directive has the effect of restrain-
ing recording of FIR and initiation of investigation and not of proceeding
with investigation, as in Saldanha. No authority lo permit control of
statutory powers exercised by the police to investigate an offence within its
B jurisdiction has been cited before us except K. Veeraswami which we have
already distinguished. The view we take accords not only with reason but
also with the very purpose of the law and is in consonance with the basic
tenet of the rule of law.

C Once the jurisdiction is conferred on the CBI to investigate an
offence by virtue of notification under Section 3 of the Act, the powers of
investigation arc 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 that conferment ef jurisdic-
tion is under Section 3 of the Act and exercise of powers of investigation
D is by virtue of the statutory provisions governing investigation of offences.
It is settled that statutory jurisdiction cannot be subject to executive con-
trol.

There is no similarity between a mere executive order requiring prior
E 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 pre-requisite for the court to take cog-
.nisance of the offence. Jn the absence of any statutory requirement of prior
permission or sanction for investigation, it cannot be imposed as a condi-
F tion precedent for initiation of the investigation once jurisdiction is con-
ferred 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 the Act and the general statutory powers of !nvestiga-
G tion which govern investigation even by the CBI. The necessity of pre\~ous
sanction for prosecution is provided in Section 6 of the Prevention of
Corruption Act, 1947 (Section 19 of the 1988 Act) \vithout which no court
can take cognizance of an offence punishable under Section 5 of that Act.
There is no such previous sanction for investigation provided for either in
the Prevention of Corruption Act or the Delhi Special Police· Estab-
H lishment Act or in any other statutory provision. The above is the only
VINEET ''· U.O.I.[VERMA, CJ.] 639

manner in which Section 4(1) of the Act can be harmonised with Section A
3 and the other statutory provisions.

The Single Directive has to be exami11ed in this background. The law
does not classify offenders differently for treatment thereunder, including
investigation of offences and prosecution for offences, according to their
status in life. Every pen,on accused of committing the same offence is to B
be dealt with in the same manner in accordance with law, which is equal
in its application lo everyone. The Single Directive is applicable only to
certain persons above the specified level who are described as "decision
making officers". The question is whether any distinction can be made for
them for the purpose of investigation of an offence of which they are
accused.
c
Obviously, where the accusation of corruption is based on dii'ect
evidence and it does nu! require any inference to be drawn dependent on
the d-.:cision making process, there is no rational basis to classify them
differently. In other words, if the accusation he of bribery which is sup- D
ported by direct evidence of illegal gratification by them, including trap
cases, it is obvious that no other factor is relevant and the level or status
of the offender is irrelevant. lt is for this reason that it was conceded that
such cases, i.e., of bribery, including trap cases, are outside the scope of
the Single Directive. After some debate at the Bar, no serious attempt was
made by the learned Attorney General tu support inclusion within the E
Single Directive of cases in which the offender is alleged lo be in possession·
of disproportionate assets. It is clear that the accusation of possession of
disproportionate assets by a person is also based on direct evidence and
no factor pertaining to the expertise of decision making is involved therein.
We have, therefore, no doubt that the Single Directive cannot include F
within its ambit cases of possession of disproportionate assets by the
offender. The question now is only with regard to cases other than those
of bribery, including trap cases, and of possession of disproportionate
assets being covered by the Single Directive.

There may be other cases where the accusation cannot be supported G
by direct evidence and is a matter of inference of corrupt motive for the
decision, with nothing to prove directly any illegal gain to the decision
maker. Those are cases in which the inference drawn is that the decision
must have been made for a corrupt motive because the decision could not
have been reached otherwise by an officer at that level in the hierarchy. H
640 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.
I
l
A This is, therefore, an area where the opinion of persons with requisite
expertise in decision making of that kind is relevant and, may be even
decisive in reaching the conclusion whether the allegation requires any
investigation to he made. In view of the fact that the CBI or the Police
force does not have the expertise within its fold for the formation of the
requisite opinion in such cases, the need for the inclusion of such a
B
mechanism comprising of experts in the field as a part of the infrastructure
of the CBI is obvious, to decide whether the accusation made discloses
grounds for a reasonable suspicion of the commission of an offence and it
requires investigation. In the absence of any such mechanism within the
infrastructure of the CBI, comprising of experts in the field who can
C evaluate the material for the decision to be made, introduction therein of
a body of experts having expertise of the kind of business which requires
the decision to be made, can be appreciated. But then, the final opinion is
to be of the CBI with the aid of that advice and not that of anyone else. It
would be more appropriate to have such a body within the infrastructure
D of the CBI itself.

The Single Directive cannot, therefore, be upheld as valid on the
ground of it being permissible in exercise of the power of superintendence
of the Central Government under Section 4(1) of the Act. The matter has
now to be considered de hors the Single Directive.
E
Power of tlze Supreme Court

In view of the common perception shared by everyone including the
Government of India and the Independent Review Committee (IRC) of
the need for insulation of the CBI from extraneous influence of any kind,
F it is imperative that some action is urgently taken to prevent the con-
tinuance 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. The powers conferred on this Court by the
G Constitution are ample to remedy this defect and to ensure enforcement
of the concept of equality.

There are ample powers conferred by Article 32 read with Article
142 to make orders which have the effect of law by virtue of Article 141
and there is mandate to all authorities to act in aid of the orders of this
H Court as provided in Article 144 of the Constitution. In a catena of
VINEETv. U.O.L[VERMA, CJ.] 641

decisions of this Court, this power has been recognised and exercised, if A
need be, by issuing necessary directions to fill the vacuum till such time the
legislature steps in to cover the gap or the executive discharges its role. It
is in the discharge or this duty that the IRC was constituted by the
Government of India with a view to obtain its recommendations after an
indepth study of .the problem in order to implement them by suitable
executive directions till proper legislation is enacted. The report of the IRC B
has been given to the Government of India but because of certain difficul-
ties in the present context, no further action by the executive has been
possible. The study having been made by a Committee considered by the
Government of India itself as an expert body, it is safe to act on the
recommendations of the IRC to formulate the directions of this Court, to
the extent they are of assistance. In the remaining area, on the basis of the
c
study of the IRC and its recommendation, suitable directions can be
formulated to fill the entire vacuum. This is the exercise we propose lo
perform in the present case since this exercise can no longer be delayed.
It is essential and indeed the constitutional obligation of this Court under
the aforesaid provisions to issue the necessary directions in this behalf. We D
now consider formulation of the needed directions in the performance of
this obligation. The directions issued herein for strict compliance are to
operate till ,;uch time as they are replaced by witahlc legislation in this
behalf.

There is another aspect of rule of law which is of equal significance. E
Unless a proper investigation is made and it is followed by an equally
proper prosecution, the effort made would not bear fruition. The recent
experience in the field of prosecution is also discouraging. To emphasise
this point, some reference has to be made to a large number of prosecu-
tions launched as a result of monitoring by the court in this matter which F
have resulted in discharge of the accused at the threshold. It took several
years for the CBI to commence investigation and that too as a result of the
monitoring by this Court. It is not as if the CBI, on conclusion of the
investigation, formed the opinion that no case was made out for prosecu-
tion so that the earlier inaction may have been justified. The CBI did file
numerous chargesheets which indicated that in its view a p1ima facie ca'e G
for prosecution had been made out. This alone is sufficient to indicate that
the earlier inaction was unjustified. However, discharge of the accused on
filing of the chargesheet indicates, irrespective of the ultimate outcome of
the matters pending in the higher courts, that the trial court at least was
not satisfied that a p1ima facie case was made out by the investigation. H
642 SUPREME COURT REPORTS (1997) SUPP. 6 S.C.R.

A These facts are sufficient to indicate that either the investigation or the
prosecution or both were lacking. A similar result of discharge of the
accused in such a large number of cases where chargesheets had been filed
by the CBI is not consistent with any other inference. The need for a strong
and competent prosecution machinery and not merely a fair and competent
investigation by the CBI can hardly be overemphasised. This is the occasion
B for us to take the view that a suitable machinery for prosecution of the
cases filed in court by the CBI is also essential to ensure discharge of its
. full responsibility by the CBI. Unless a competent prosecution follows a
fair and competent investigation, the exercise in the ultimate analysis would •
be futile. Investigation and prosecution are inter-related and improvement
C of investigation without improving the prosecution machinery is of no
practical significance. We would, therefore, consider the aspect of prosecu-
tion also in the formulation of the guidelines.

In exercise of the powers of this Court under Article 32 read with
D Article 142, guidelines and directions have been issued in a large number
of cases and a brief reference to a few of them is sufficient. In Erach Sai11
Kanga Etc. v. U11io11 of India & A11r., (Writ Petition No. 2632 of 1978 Etc.
Etc.) decided on 20th March, 1979, the Constitution Bench laid down
certain guidelines relating to Emigration Act. In Lakshmi Kant Pa11dey v.
E U11iv11 of I11dia, (i11 re: Foreig11 Adoptio11), (1984) 2 sec 244, guidelines for
adoption of minor children by foreigners were laid down. Similarly in State
of West Bengal & Ors. Etc. v. Sampat Lal & Ors. Etc., (1985) 2 SCR 256, K
Veeraswami v. U11io11 of India and Others, (1991) 3 SCC 655, U11io11 Carbide
Corporatio11 and Others V. U11io11 of India and Others, (1991) 4 sec 584,
F Delhi Judicial Se1vice Association Etc. v. State of Gujarat a11d Others Etc.
(Nadiad Case), (1991) 4 SCC 406, DeU1i Development Authority v. Skipper
Const111ctio11 Co. (P) Ltd. A11d Another, (1996] 4 SCC 622 and Di11esh
Trivedi, M.P. and Others v. U11io11 of India a11d Others, (1997) 4 SCC 306,
guidelines were laid down having the.· effect of law, requiring rigid
compliance. In Supreme Cowt Advocates-011- Record Associatio11 a11d
G Others V. Union of India (II11d Judges case), (1993) 4 sec 441, a Nine Judge
Bench laid down guidelines and norms for the appointment and transfer
of Judges which are being rigidly followed in the matter of appointments
of High Court and Supreme Court Judges and transfer of High Court
Judges. More recently in Vishakha a11d Others v. State of Rajasthan and
H Others, (1997) 6 sec 241, elaborate guidelines have been· laid down for
. "'-
VINEETv. U.O.I.(VERMA, CJ.] 643

observance in work places relating to sexual harassment of working women. A
In Vishaka, it was said :

"The obligation o~ this court under Article 32 of the Constitu-
tion for the enforcement of these fundamental rights in the absence
of legislation must be viewed along with the role of judiciary
envisaged in the Beijing Statement of Principles of the Inde- B
pendence of the .Judiciary in the LAWASIA region. These prin-
ciples were accepted by the Chief Justices of Asia and the Pacific
at Beijing in 1995(*) (As amended at Manila, 28th August, 1997] as
those representinz the minimum standards necessary to be ob-
served in order to maintain the independence and effective c
functioning of the judiciary. The objectives of the judiciary men-
tioned in the Beijing Statement are :

"Objectives of the Judiciary :
D
10. The objectives and functions of the Judiciary include the
following;

(a) to ensure that all persons are able to live securely under the
Rule of Law;
E
(b) to promote, within the proper limits of the judicial function,
the observance and the attainment of human rights; and

(c) to administer the law impartially among persons and between
persons and the State."
F
Thus, an exercise of this kind by the court is now a well settled practice
which has taken firm roots in our constitutional jurisprudence. This exer-
cise is essential to fill the void in the absence of suitable legislation to c:over
the field.

As pointed out in Vishakha (supra), it is the duty of the executive to G
fill the vacuum by executive orders because its field is coterminous with
that the legislature, and where there is inaction even by the executive for
whatever reason, the judiciary must step in, in exercise of its constitutional
obligations under the aforesaid provisions to prm~de a solution till such
time as the legislature acts to perform its role hy enacting proper legislation H
644 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.

A to cover the field.
On this basis, we now proceed to give the directions enumerated
hereafter for rigid compliance till such time as the legislature steps in to
substitute them by proper legislation. These directions made under Article
32 read with Article 142 to implement the rule of law wherein the concept
B of equality enshrined in Article 14 is embedded, have the force of law
under Article 141 and by virtue of Article 144, it is the duty of all
authorities. civil and judicial, in the territory of India to act in aid of this
Court. In the issuance of these directions, we have accepted and are
reiterating as. far as possible the recommendations made by the IRC.
c It is a similar perception in England which has led to the constitution
of a Committee headed by Lord Nolan on 'Standards in Public Life'. In
Volume 1 of Lord Nolan's Report (1995), the general recommendations
made.are:

D General reco1111i1endations

4. Some of our conclusions have general application across the
entire service :

P1i11ciples of public life
E
5. The general principles of conduct which underpin public life
need to be restated. We have done this. The seven principles of
selflessness, integrity, objectivity, accountability, openness, honesty
and leadership are set out in full on page 14.

F Codes of Conduct

6. All public bodies should draw up Codes of Conduct incorporat-
ing these principles.

!11depe11de11t Scmtiny
G
7. Internal systems for maintaining st;indards should be supported
by independent scrutiny.

Education

H 8. More needs to be done to promote and reinforce standards of

\,
VINEETv. U.O.I.[VERMA, CJ.] 645

conduct in public bodies, in particular through guidance and A
training, including induction training."

The Seven Principles of Public Life are stated in the Report by Lord
Nolan, thus :

"The .Seven P1inciples of Public Life B

Selflessness

Holders of public office should take decisions solely in terms of the
public interest. They should not do so in order to gain financial
or other material benefits for themselves, their family, c
or their friends.

lntqpity
·v
Holders of public office should not place themselves under any
D
financial or other obligation to outside individuals or
organisation that might influence them in the
performance of their official duties.

Objectivity
E
In carrying out public business, including making public appointments,
awarding contracts, or recommending individuals for rewards
and benefits, holders of public office should
make choices on merit.

Accountability F

Holders of public office are accountable for their decisions and actions
to the public and must submit themselves to whatever scrutiny is
appropriate to their office.

Openness G

Holders of public office should be as open as possible about all the
decisions and actions that they take. They should give reasons
for their decisions and restrict information only when
the wider public interest clearly demands. H
646 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.

A Honesty

Holders of public office have a duty to declare any private interests
relating to their public duties and to take steps to resolve
any conflicts arising in a way that protects
the public interest.
B
Leadership

Holders of public office should promote and support these-principles
by leadership and example."
c These principles of public life are of general application in every
democracy and one is expected to bear them in mind while scrutinising the
conduct of every holder of a public office. It is trite that the holders of
public offices are entrusted with certain power to be exercised in public
.....
interest alone and, therefore, the office is held by them in trust for the \

D people. Any deviation from the path of rectitude by any of the them
amounts to a breach of trust and must be severely dealt with instead of
being pushed under the carpet. If the conduct amounts an offence, it must
be promptly investigated and the offender against whom aprima facie case
is made out should be prosecuted expeditiously so that the majesty of law
E is upheld and the rule of law vindicated. It is the duty of the judiciary to
enforce the rule of law and, therefore, to guard against erosion of the rule
of law.

The adverse impact of lack of probity in public life leading to a high
degree of corruption is manifold. It also has adverse effect ori foreign
F
investment and funding from the International Monetary Fund and the
Wor\d Bank who have warned that future aid to under-developed countries
may be subject to the requisite steps being taken to eradicate corruption,
which prevents international aid from reaching those for whom it is meant.
Increasing corruption has led to investigative journalism which is of value
G to a free society. The need to highlight corruption in public life through
the medium of public interest litigation invoking judicial review may be
frequent in India but is not unknown in other countries : R v. Secretary of
State for Foreign and Commonwealth Affair~~ (1955) 1 WLR 386.

H Of course, the necessity of desirable procedures evolved by court

'·
VINEETv. U.O.I.[VERMA, CJ.] 647

rules to ensure that such a litigation is properly conducted and confined A
only to matters of public interest is obvious. This is the effort made in these
proceedings for the enforcement of fundamental rights guaranteed in the
Constitution in exercise of powers conferred on this Court for doing
complete justice in a cause. It cannot be doubted that there is a serious
human rights aspect involved in such a proceeding because the prevailing B
corruption in public life, if permitted to continue unchecked, has ultimately
the deleterious effect of eroding the Indian polity.

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

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

1. The Central Vigilance Commission (CVC) shall be given statutory
status.
D
2. Selection for the post of Central Vigilance Commissioner shall be
made by a Committee comprising the Prime Minister, Home Minister and
the Leader of the Opposition from a panel of outstanding civil servants and
others with impeccable integrity, to be furnished by the Cabinet Secretary.
The appointment shall be made by the President on the basis of the E
recommendations made by the Committee. This shall be done immediately.

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 CBI's working, the CVC shall be entrusted with the F
responsibility of superintendence over the CBl's functioning. The CBI shall
report to the eve about cases taken ~p by ~t for invesrigation; progress of
investigations; cases in which chargesheets are filed and their progress. The
CVC shall review the progress of all cases moved by the CBI for sanction
of prosecution of public servants which are pending with the competent G
authorities, specially those in which sanction has been delayed or refused.

4. The Central Government shall take all measures necessary to
ensure that the CBI functions effectively and efficiently .and is viewed as a
non-partisan agency. H
648 SUPREME COURT REPORTS (1997] SUPP. 6 S.C.R.

A 5. The CVC shall have a separate section in its Annual Report on
the CBJ's functioning after the supervisory function is transferred to it.

6. Recommendations for appointment of the Director, CBI shall be
made by a Committee headed by the Central Vigilance Commissioner with
the Home Secretary and Secretary (Personnel) as members. The views of
B
the incumbent Director shall be considered by the Committee for making
the best choice. The Committee shall draw up a panel of JPS officers on
the basis of their seniority, integrity, experience in investigation and anti-
corruption work. The final selection shall be made by the Appointments
Committee of the Cabinet (ACC) from the panel recommended by the
C Selection Committee. If none among the panel is found suitable, the
reasons thereof shall be recorded and the Committee asked to draw up a
fresh panel.

7. The Director, CBI shall have a minimum tenure of two years,
D regardless of the date of his superannuation. This would ensure that an
officer suitable in all respects is not ignored merely because he has less
than two years to superannuate from the date of his appointment.

8. The transfer of an incumbent Director, CBI in an extraordinary
situation, including the need for him to take up a more important assign-
E ment, should have the approval of the Selection Committee.

9. The Director, CBI shall have full freedom for allocation of work
within the agency as also for constituting teams for investigations. Any
change made by the Director, CBI in the Head of an investigative ttcam
p should be for cogent reasons and for improvement in investigation, the
reasons being recorded.

10. Selection/extension of tenure of officers upto the level of Joint
Director (JD) shall be decided by a Board comprising the Central
Vigilance Commissioner, Home Secretary and Secretary (Personnel) ,with
G the Director, CBI providing the necessary inputs. The extension of tenure
or premature repatriation of officers upto the level of Joint Director shall
be with final approval of this Board. Only cases pertaining lo the appoint-
ment or extension of tenure of officers of the rank of Joint Director or
above shall be referred to the Appointments Committee of the Cabinet
H (ACC) for decision.
VJNEETv. U.0.1.[VERMA, CJ.j 649

11. Proposals for improvement of infrastructure, methods of inves- A
ligation, etc. should be decided urgently. In order to strengthen CBI's
in-house expertise, professionals from the revenue, banking and security
sectors should be inducted into the CBI.

12. The CBI Manual based on statutory provisions of the Cr.P.C.
provides essential guidelines for the CB I's functioning. It is imperative that B
the CBI adheres scrupulously to the provisions in the Manual in relation
to its investigative functions, like raids, seizure and arrests. Any deviation
from the established procedure should be viewed ~eriousl;- and severe
disciplinary action taken against the concerned officials.

13. The Director, CBI shall be responsible for ensuring the filing of .
c
chargesheets in courts within the stipulated time limits, ;nd the matter
should be kept under constant review by the Director, CBI.

14. A document on CBI's functioning should be published within
three months to provide the general public with a feedback on investiga- D
lions and information for redress of genuine grievances in a manner which
does not compromise with the operational requirements of the CBI.

15. Time limit of three months for grant of sanction for prosecution
must be strictly adhered to. However, additional time of one month may
be allowed where consultation is required with the Attorney General (AG) E
or any other law officer in the AG's office.

16. The Director, CBI should conduct regular appraisal of personnel
to prevent corruption and/or inefficiency in the agency.

II. ENFORCEMENT DIRECTORATE F

l. A Selection Committee headed by the Central Vigilance Commis-
sioner and including the Home Secretary, Secretary (Personnel) and
Revenue Secretary, shall prepare a panel for appointment of the Director,
Enforcement Directorate. The appointment to the post of Director shall G
be made by the Appointment~ Committee of the Cabinet (ACC) from the
panel recommended by the Selection Committee.

2. The Director, Enforcement Directorate like the Director, CBI
shall have a minimum tenure of two years. In his case also, premature
transfer for any extraordinary reason should be approved by the aforesaid H
650 SUPREME COURT REPORTS [1997] SUPP. 6 S.C.R.

A Selection Committee headed by the Central Vigilance Commissioner.

3. In view of the importance of the post of Director, Enforcement
Directorate, it shall be upgraded to that of an Additional Secretary/Special
Secretary to the Government.

B 4. Officers of the Enforcement Directorate handling sensitive assign-
ments shall be provided adequate security to enable them to discharge their
functions fearlessly.

5. Extensions of tenure upto the level of Joint Director in the
Enforcement Directorate should be decided by the said Committee headed
c by the Central Vigilance Commissioner.

6. There shall be no premature media publicity by the CBI/Enforce-
ment Directorate.

7. Adjudication/commencement of prosecution shall be made by the
D Enforcement Directorate within a period of one year.

8. The Director, Enforcement Directorate shall monitor and ensure
speedy completion of investigations/adjudications and launching of
prosecutions. Revenue Secretary must review their progress regularly.
E 9. For speedy conduct of investigations abroad, the procedure to
approve filing of applications for Letters Rogatory shall be streamlined
and, if necessary, Revenue Secretary authorised to grant the approval.

10. A comprehensive circular shall be published by the Directorate
F to inform the public about the procedures/systems of its functioning for the
sake of transparency.

11. In-house legal advice mechanism shall be strengthened by ap-
pointment of competent legal advisers in the CBI/Directorate of Enforce-
ment.
G
12. The Annual Report of the Department of Revenue shall contain
a detailed account on the working of the Enforcement Directorate.

Ill. NODAL AGENCY

H 1. A Nodal Agency headed by the Home Secretary with Member
VINEETv. U.O.L[VERMA, C.J.] 651

(Investigation), Central Board of Direct Taxes, Director General, Revenue A
Intelligence, Director, Enforcement and Director, CBI as members, shall
be constituted for coordinated action in cases having politico-bureaucrat-
criminal nexus.

2. The Nodal Agency shall meet at least once every month.
B
3. Working and efficacy of the Nodal Agency should be watched for
about one year so as to improve it upon the basis of the experience gained
within this period.

IV. PROSECUTION AGENCY
c
L A panel of competent lawyers of experience and impeccable
reputation shall be prepared with the advice of the Attorney General. Their
services shall be utilised as Prosecuting Counsel in cases of significance.
Even during the course of investigation of an offence, the advice of a lawyer
chosen from the panel should be taken by the CBI/Enforcement Direc- D
tor ate.

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 of duty,
if any, of the concerned officer. In such cases, strict action should be taken E
against the officer found guilty of dereliction of duty.

3. The preparation of the panel of lawyers with the approval of the
Attorney General shall be completed within three months.

4. Steps shall be taken immediately for the constitution of an able F
and impartial agency comprising persons of unimpeachable integrity to
perform functions akin to those of the Director of Prosecutions in U.K. On
the constitution of such a body, the task of supervising prosecutions
launched by the CBI/Enforcement Directorate shall be entrusted to it.
G
5. Till the constitution of the aforesaid body, Special Counsel shall
be appointed for the conduct of important trials on the recommendation
of the Attorney General or any other law officer designated by him.

The learned amicus rnriae had urged us to issue directions for the
appointment of an authority akin to the Special or Independent Counsel H
652 SUPREME COURT REPORTS [1997) SUPP. 6 S.C.R.

A in the United States of America for the investigation of charges in politi-
cally sensitive matters and for the prosecution of those cases and to ensure
that appointments to sensitive posts in the CBI and other enforcement
agencies and transfers therefrom were not made hy the political executive.
We are of the view that the time for these drastic steps has not come. It is
our hope that it never will, for we entertain the belief that the investigative
B
agencies shall function far better now, having regard to all that has hap-
pened since these writ petitions were admitted and to the directions which
arc contained in this judgment. The personnel of the enforcement agencies
should not now lack the courage and independence to go about their task
as they should, even where those to be investigated are prominent and
c powerful persons.

In view of the problem in the States being even more acute, as
elaborately discussed in the Report of the National Police Commission
(1979); there is urgent need for the State Governments also to set up
D credible mechanism for selection of the Police Chief in the States. The
Central Government must pursue the matter with the State Governments
and ensure that a similar mechanism, as indicated above, is set up in each
State for the selection/appointment, tenure, transfer and posting of not
merely the Chief of the State Police but also all police officers of the rank
of Superintendent of Police and above. It is shocking to hear, a matter of
E common knowledge, that in some States the tenure of a Superintendent of
Police is on an average only a few months and transfers are made for
whimsical reasons. Apart from demoralising the police force, it has also
the adverse effect of politicizing the personnel. It is, therefore, essential
that prompt measures are taken by the Central Government within the
ambit of their constitutional powers in the federation to impress upon the
F
State Governments that such a practice is alien to the envisaged constitu-
tional machinery. The situation described in the National Police
Commission~s Report (1979) was alarming and it has become much worse
by now. The desperation of the Union Home Minister in his letters to the
State Governments, placed before us at the hearing, reveal a distressing
G situation which must be cured, if the rule of law is to prevail. No action
within the Constitutional Scheme found necessary to remedy the situation
is too stringent in these circumstances.

In the result, we strike down Directive No. 4.7(3) of the Single
H Directive quoted above and issue the above directions, which have to be
VINEETv. U.0.1.[VERMA, CJ.] 653
construed in the light of the earlier discussion. The Report of the Inde- A
pendent Review Committee (IRC) and its recommendations which arc
similar to this extent can be read, if necessary, for a' proper appreciation
of these directions. To the extent we agree with the conclusions and
recommendations of the IRC, and that is a large area, we have adopted
the same in the formulation of the above direct.ions. These directions
require the strict compliance/adherence of the Union of India and all
B
concerned.

The writ petitions are disposed of in the above terms.

Oiminal Misc. Petition Nos. 5879-5882 of 1997
c
In view of the disposal of the writ petitions in the manner indicated
above and in the facts and circumstances of the case, we do not consider
it necessary now to examine the appointment of Shri R.C. Sharma as
Director, CBI. Moreover, the tenure of Shri Sharma as Director, CBI is to
end soon. We make it clear that Shri Sharma is not to be continued as CBI
D
Director beyond the date of expiry of his present tenure. Accordingly, these
Cr!. M. Ps. are disposed of in this manner.

In view of the withdrawal of C.W.P. No. 2992 of 1997 in the Delhi
High Court as required by this Court's order dated 11.9.1997, no further
order for the disposal of C.W.P. No. 2992 of 1997 is necessary.

S.M. Petitions disposed of.

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