PC Act - More Time Taken For Preliminary Enquiry Not A Ground To Quash Criminal Proceedings : Supreme Court

The Supreme Court has observed that whatever enquiry is conducted at the stage of Preliminary Enquiry, by no stretch of imagination, can be considered as investigation under the code of criminal procedure which can only be after registration of the FIR.

The Court also observed that merely because some time is taken for conducting preliminary enquiry, that cannot be a ground to quash the criminal proceedings for an offence under the Prevention of Corruption Act.

The bench of Justices MR Shah and AS Bopanna was considering an appeal against the High Court's judgement in which the Court in exercise of its extraordinary jurisdiction quashed the criminal proceedings and declared Rule 3.16 of the Vigilance Manual, 2008 dealing with the Preliminary Enquiry (PE) as ultra vires,being in direct conflict with the Top Court's judgement in Lalita Kumari v. Government of Uttar Pradesh.

Terming that High Court's observation with regards to Rule 3.16 as erroneous, the bench in The State of Jammu and Kashmir v Dr Saleem ur Rehman observed that,

"While holding a Preliminary Enquiry under Clause 3.16, whatever is conducted will be in the form of enquiry into the allegations to consider whether any prima facie case is made out or not which requires further investigation after registering the FIR or not. While considering the prima facie case for the purpose of registering the FIR, some enquiry/investigation is bound to be there, however, the same shall be only for the purpose of finding out a prima facie case for the purpose of registration of the FIR only. Whatever enquiry is conducted at the stage of Preliminary Enquiry, by no stretch of imagination, will be considered as investigation under the code of criminal procedure which can only be after registration of the FIR."

"Even otherwise, merely because while holding a Preliminary Enquiry a detailed enquiry is made into the allegations made against the respondent which, as observed hereinabove, can be said to be only for the purpose of finding out a prima facie case for the purpose of registration of the FIR and merely because some more time is taken in conducting the Preliminary Enquiry before registering the FIR, the entire criminal proceedings cannot be quashed. There shall not be any prejudice caused to the accused at the stage of holding Preliminary Enquiry which as observed hereinabove shall only be for the purpose of satisfying whether any prima facie case is made out with respect to the allegations made in the complaint which requires further investigation after registering the FIR or not. Therefore, the High Court has materially erred in holding and declaring Clause 3.16 as ultra vires"

Factual Background

An FIR was registered u/s 5(1)(d) r/w 5(2) of the J&K Prevention of Corruption Act, 2006 ('J&K PC Act, 2006') and Section 120B of the Ranbir Penal Code ('RPC') against Dr Saleem ur Rehman ("respondent") alleging that during 2010-11, the Director Health Services, Kashmir along with the other accused persons misappropriated the huge amount of government money by way of effecting purchases of sub-standard medical kits under National Rural Health Mission (NRHM) at highly exorbitant rates and in violation of the conditions of supply orders placed by the department.

Aggrieved, the respondent approached the High Court seeking quashing of criminal proceedings. Reliance was placed on the judgements in State of Haryana v. Bhajan Lal, 1992 Supp. (1) SCC 335 and Lalita Kumari v. Government of Uttar Pradesh AIR 2014 SC 187.

Case Before High Court

The High Court while quashing the criminal proceedings made the following observations on the questions raised by the respondent:

(1) there was a non-compliance of the mandatory provision under Section 3 of the J&K PC Act, 2006 inasmuch as no special and separate reasoned order was passed by the authorising officer while conferring authority on a non-designated officer as per second proviso to Section 3;

(2) prior sanction of the Magistrate for the offence under Section 120B as required under Section 155 of the J&K Cr.P.C. was not obtained;

(3) there was a delay in conducting the preliminary verification and by holding the preliminary verification the authority entered into the domain of investigation which was not permissible as held by this Court in the case of Lalita Kumari (supra); and

(4) the allegations made in the FIR even if accepted to be true in its entirety were legally not tenable.

Aggrieved, the State approached the Top Court

Submissions Of Counsel(s)

Submissions On State's Behalf

Senior Advocate R. Venkataramani submitted that the requirement of giving reasons for the authorisation referred to in the second proviso to Section 3 is misconceived.

To substantiate his contention, senior counsel submitted that the proviso itself did not contemplate the giving of reasons for the authorisation of power to investigate and secondly, the power to authorise being purely administrative based on expediency and public policy, no reasons were required to be given. It was submitted that the matter of delegation of the power to investigate upon a non-designated officer, did not involve rights of any party.

The actions taken under the second proviso were not subject to any appeal, or revision, senior counsel also submitted.

With regards to the issue as to whether an investigation in respect of offences under the Prevention of Corruption Act, when coupled with the offence of conspiracy should always be subject to a prior sanction by the Magistrate, Senior Counsel argued that the same had to be seen from the perspective that merely because the offence of conspiracy may be involved, investigation into the substantive offences which are cognizable should not await a sanction from the Magistrate, as that would lead to considerable delay and uncertainty in the threshold investigation steps.

"Having regard to the wide spectrum of statutory offences to be investigated under ever increasing special statutes, it would be unwise to thwart the investigation and the prosecution on the touchstone of irregularities, if any, in the conduct of preliminary investigations and registrations of FIR", Senior Counsel submitted.

He also argued that Rule 3.16 of the Vigilance Manual, 2008 was a well- drawn scheme fitting in squarely with the provisions of Sections 4 & 5 of the Cr.P.C., 1973.

Submissions On Respondent's Behalf

Opposing State's appeal, Senior Advocate R Basant submitted that in the facts and circumstances of the case and on true interpretation of Section 3 of J&K PC Act, 2006 and in the absence of prior sanction of the Magistrate under Section 155 of the J&K Cr.P.C., the High Court has rightly quashed the criminal proceedings initiated against the respondent.

Senior counsel also submitted that the High Court had rightly observed that under the pretext of the Preliminary Enquiry (PE), the investigating agency could not go in detail and verify the veracity of the complaint before registration of an FIR. He further submitted that the High Court had rightly declared Rule 3.16 of the Vigilance Manual, 2008 dealing with Preliminary Enquiry as ultra vires.

Supreme Court's Analysis

High Court Has Committed Grave Error In Quashing Entire Criminal Proceedings Holding That Authorisation In Favour Of Inspector Nisar Hussain Was Bad In Law

Observing that the authorisation granted to Inspector Nisar Hussain could not be said to be illegal and/or invalid, the bench in its judgement authored by Justice MR Shah said that,

"on a plain reading of the second proviso to Section 3, only two requirements are required to be satisfied, namely, (i) authorisation in writing by an officer of the Vigilance Organisation not below the rank of Assistant Superintendent of Police to an officer of not below the rank of Sub-Inspector of Police to investigate such offences; and (ii) such officer authorised may investigate the offences so specified in the order of authorisation. Therefore, as such, there is no requirement of giving either special reasons or there is no requirement to mention reasons. What is required to be considered is whether there is an application of mind with respect to offences and the relevant provisions with respect to authorisation. Considering the authorisation reproduced hereinabove, it cannot be said that such authorisation authorising Inspector Nisar Hussain to investigate the FIR for the offences under Sections 5(1)(d) r/w 5(2) of the J&K PC Act, 2006 and 120B of the RPC can be said to be vitiated and/or can be said to be void which warrants quashing of the entire criminal proceedings including the FIR."

Merely Because An Offence Of Conspiracy Is Involved Investigation Into Substantive Offence Which Is Cognizable Is Not Required To Await Magistrate's Sanction

With regards High Court quashing the proceedings on failure to obtain prior sanction u/s 155 of J & K CrPC , the bench said that,

"The offence under the Prevention of Corruption Act is a substantive offence and the investigation in respect of the offence under the PC Act, when considered and coupled with the offence of conspiracy, there is no requirement of prior sanction of the Magistrate. Merely because the offence of the conspiracy may be involved,investigation into the substantive offence, i.e in the present case, offence under the PC Act which is cognizable is not required to await a sanction from the Magistrate, as that would lead to a considerable delay and affect the investigation and it will derail the investigation."

Merely Because Some More Time Is Taken In Conducting The Preliminary Enquiry Before Registering The FIR The Entire Criminal Proceedings Cannot Be Quashed

Terming High Court's observations of declaring clause 3.16 ultra vires as erroneous, the bench further observed that,

"Even otherwise, merely because while holding a Preliminary Enquiry a detailed enquiry is made into the allegations made against the respondent which, as observed hereinabove, can be said to be only for the purpose of finding out a prima facie case for the purpose of registration of the FIR and merely because some more time is taken in conducting the Preliminary Enquiry before registering the FIR, the entire criminal proceedings cannot be quashed. There shall not be any prejudice caused to the accused at the stage of holding Preliminary Enquiry which as observed herein above shall only be for the purpose of satisfying whether any prima facie case is made out with respect to the allegations made in the complaint which requires further investigation after registering the FIR or not. Therefore, the High Court has materially erred in holding and declaring Clause 3.16 as ultra vires."

On the aspect of High Court quashing the proceedings on the ground of respondent not being vicariously liable in the absence of main conspirators, bench observed that,

"Private Limited Companies and/or their in-charge persons is concerned, it is to be noted that the allegations against the respondent are in respect of his individual capacity. Besides the Directors of the Private Limited Companies, respondent no.1 and other officials have been arrayed as an accused. Therefore, there is no question of any vicarious liability and the observations made by the High Court that in absence of main conspirators – Private Limited Companies and/or their in-charge persons, respondent no.1 cannot be held liable is unsustainable and cannot be accepted."

Case Title: The State of Jammu and Kashmir v Dr Saleem ur Rehman| CRIMINAL APPEAL NO. 1170 of 2021

Citation: LL 2021 SC 618

Coram: Justices MR Shah and AS Bopanna

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