[Prevention Of Corruption Act] CBI Can File Final Report Even If No Offence Is Revealed During Probe: Kerala High Court

Justice K. Babu observed that while the FIR should allege offences under the PC Act for the CBI to start an investigation under Section 17 of the Act, it does not stop them from filing a final report alleging only non-PC Act offences.

The petitioner was allegedly involved in a crime of availing credit facilities from a bank after submitting false and forged documents relating to a land not in existence as collateral security. The petitioner was the bank's Panel Valuer for the valuation report. As per the allegations, he joined the conspiracy and prepared a false sketch of the property with a description and valuation.

An FIR was registered by the CBI, alleging offences under Section 120B r/w 420(cheating), 467(forgery of valuable security) and 471 (using as genuinely a forged document) of IPC and Section 13(2) r/w 13(1)(d) (criminal misconduct by a public servant) of the PC Act. During the investigation, it was revealed that no public servants were involved in the crime, and therefore, no offence under Section 13(2) r/w 13(1)(d) of the PC Act was revealed. The investigating officer submitted the Final Report before the Special Judge. The Special Court directed the officer to submit it before the jurisdictional Court. Thereby, the report was submitted before the Chief Judicial Magistrate's Court, Ernakulam. The petitioner has approached the High Court to quash the criminal proceedings.

The petitioner alleged that when there is no PC offence, the CBI is divested of the power of investigation and submitting the final report.

The Court noted that as per Section 17 of the PC Act, an Inspector of Police of the Delhi Police Establishment is authorized to investigate any offence punishable under the PC Act. The Court said that the authority of CBI is derived from the Delhi Police Establishment Act. The Court further observed that as per the scheme of the PC Act, the investigating officer empowered under Section 17 to investigate into any offence under PC Act also has the authority to investigate into a non – PC offence which is connected with any PC offence. However, the existence of an FIR alleging offence under the PC Act is a sina qua non for exercising the power of investigation as provided under Section 17 of the PC Act.

CBI not divested of powers when no offence is revealed under PC Act

On the question if whether the CBI is divested of the power of investigation once the offences under the PC Act are not revealed, the court observed that the offences under PC Act is not investigated independently. The Court observed that throughout the investigation, the inter-relationship with offences under PC Act and non-PC Act offences subsist. The Court said that if the CBI finds that offences under PC Act is not revealed, it shall submit a final report revealing the non – PC Act offences.

“Throughout the process of investigation the interrelationship between the PC Act and the non-PC Act offences subsists. Every investigation shall culminate in a report under Section 173(2) of Cr.PC. Where the investigating agency finds that the offence under the PC Act is not revealed, the investigation shall end in a report under Section 173(2) Cr.PC revealing the non-PC Act offences.”

The Court also held that it is established by Supreme Court judgments that even the complete absence of valid authorization in law would not automatically vitiate the investigation and it has to be judged on the basis of prejudice caused to the accused. The Court held that at this stage, it finds no prejudice against the petitioner due to the investigation.

The Court further held that in a case where no offence under the PC Act is revealed, the final report shall not be placed before the Special Judge under the PC Act. The Court held that the Special Court can try non-PC offences only when it is connected to a PC offence.

The petitioner contended that the case was committed to the Special Court for CBI cases. The High Court after going through the committal proceedings and proceedings in Sessions Court observed that there was no committal to the Special Court. Only one summons was issued to the petitioner with the seal of the Special Court SPE/ CBI, Ernakulam. The Court said that this was just a clerical error. The court to which the case was made over to – the Additional Sessions Court – III – was also the Special Court for SPE/ CBI cases. The Court held that the error in the name of the Court in summons will not affect the jurisdiction of the Court in anyway and will not cause prejudice to the accused.

The Court observed that there are prima facie allegations pointing to the involvement of the petitioner. Also, the trial court is at the stage of examination of the witnesses. The Court held that this was not a fit case to quash the proceedings. Accordingly, the petition was dismissed.

Counsel for the Petitioner: Adv. V. Subramanian (Party – in -person)

Counsel for the Respondents: Advocates Sreelal Warriar (Special GP CBI), Leo Lukose

Case No: WP(Crl.) 1118 of 2024

Case Title: V. Subramanian v Union of India and Others

Citation: 2025 LiveLaw (Ker) 168