PC Act – more time taken for preliminary enquiry not a ground to quash criminal proceedings: SC

In a very significant observation, the Apex Court has as recently as on October 29, 2021 in a learned, laudable, landmark and latest judgment titled The State of Jammu and Kashmir vs Dr Saleem Ur Rehman in Criminal Appeal No. 1170 of 2021 in exercise of its criminal appellate jurisdiction observed without mincing any words 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 be only 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. Very rightly so!

To start with, this brief, brilliant and balanced judgment authored by Justice MR Shah for himself and Justice AS Bopanna sets the ball rolling by first and foremost observing in para 1 that, “Feeling aggrieved and dissatisfied with the impugned judgment and order dated 07.05.2018 passed by the High Court of Jammu & Kashmir at Srinagar in O.W.P. No. 1961/2015, by which the High Court in exercise of its extra-ordinary jurisdiction has quashed the criminal proceedings being FIR No. 32/2012 and has declared Rule 3.16 of the Vigilance Manual, 2008 dealing with the Preliminary Enquiry (PE) being in direct conflict with the Constitution Bench Judgment of this Court in the case of Lalita Kumari v. Government of Uttar Pradesh, reported in AIR 2014 SC 187 = 2014 (2) SCC 1, and consequently has declared the same ultra vires, the State has preferred the present appeal.”

Briefly stated, the Bench then envisages in para 2 that, “That an FIR being FIR No. 32/2012, Police Station, VOK was registered against the respondent herein under Section 5(1)(d) r/w 5(2) of the J&K Prevention of Corruption Act, 2006 (hereinafter referred to as the ‘J&K PC Act, 2006’) and Section 120B of the Ranbir Penal Code (hereinafter referred to as the ‘RPC’) alleging inter alia 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.”

Truth be told, the Bench then points out in para 4 that, “By the impugned judgment and order, the High Court has quashed the entire criminal proceedings initiated against the respondent for the aforesaid offences by holding that:

(1) there is 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 is 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 are legally not tenable.”

While continuing in the same vein, the Bench then also reveals in para 4.1 that, “Holding above, the High Court has quashed the preliminary verification No. 34/2011, FIR No. 32/2012, Police Station, Vigilance Organisation Kashmir and the resultant investigation of the FIR. The High Court has also quashed the Entrustment Order dated 16.11.2012 passed by the Senior Superintendent of Police, VOK, Srinagar authorising the investigating officer to investigate the case/offences. The High Court has also declared Rule 3.16 of the Vigilance Manual, 2008 dealing with Preliminary Enquiry (PE) as ultra vires on the ground that the same is in direct conflict with the decision of this Court in the case of Lalita Kumari (supra).”

Needless to say, the Bench then remarks in para 5 that, “Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the State of Jammu & Kashmir has preferred the present appeal.”

Be it noted, the Bench then observes in para 8.6 that, “In the present case also, it cannot be said that there was any nonapplication of mind on the part of the Senior Superintendent of Police authorising the inspector Nisar Hussain to enquire into the FIR for the offences under Sections 5(1)(d) r/w 5(2) of the J&K PC Act, 2006 and 120-B of the Ranbir Penal Code. It is required to be noted that Inspector Nisar Hussain who was authorised to investigate the FIR for the aforesaid offences was also authorised to arrest the accused persons whenever and wherever necessary. It is also required to be noted that in the said authorisation it has been specifically mentioned that he will conduct the investigation of the case under the supervision of the Superintendent of Police (BKB). Therefore, all precautions are taken by the Senior Superintendent of Police authorising the Inspector Nisar Hussain to investigate the FIR for the offences under the J&K PC Act, 2006. Even otherwise, it is required to be noted 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. Therefore, as such, the High Court has committed a grave error in quashing the entire criminal proceedings holding that authorisation in favour of Inspector Nisar Hussain was bad in law, relying upon the observations made by this Court in the case of Bhajan Lal (supra), which has been subsequently explained by this court in the case of Ram Singh (supra). We are of the opinion that in the facts and circumstances of the case and considering the authorisation read with the second proviso to Section 3, authorisation cannot be said to be illegal and/or invalid.”

It is also worth noting that the Bench then observes in para 9 that, “Now so far as the finding recorded by the High Court for non-compliance of Section 155 of J&K Cr.P.C. is concerned, it is to be noted that the High Court has observed that for an investigating agency to investigate the group of offences which include the non-cognizable one, it must obtain a sanction from the concerned Magistrate before launching the investigation and in the present case no such sanction from the concerned Magistrate has been obtained is concerned, it is to be noted that the substantive offences against the respondent herein were under J&K PC Act, 2006 and as per Section 3 of the Act, all offences under the Act are cognizable and non-bailable. As such, the aforesaid issue is squarely covered against the respondent in view of the decision of this Court in the case of Pravin Chandra Mody(supra). In paragraph 6, it is observed and held as under:

“6. Section 156(2) provides that where a police officer enquires into an offence under Section 156(1) his action cannot be called into question on the ground that he was not empowered to investigate the offence. The enquiry was an integrated one, being based on the same set of facts. Even if the offence under the Essential Commodities Act may not be cognizable — though it is not alleged by the appellant that it is non-cognizable — the police officer would be competent to include it in the charge-sheet under Section 173 with respect to a cognizable offence. In Ram Krishna Dalmia v. State [AIR (1958) Pb. 172], Falshaw, J (as he then was) observed that the provisions of Section 155(1) of the Criminal Procedure Code, must be regarded as applicable to those cases where the information given to the police is solely about a non-cognizable offence. Where the information discloses a cognizable as well as a non-cognizable offence the police officer is not debarred from investigating any non-cognizable offence which may arise out of the same facts. He can include that non-cognizable offence in the charge-sheet which he presents for a cognizable offence. We entirely agree. Both the offences if cognizable could be investigated together under Chapter XIV of the Code and also if one of them was a non-cognizable offence.””

Without mincing any words, the Bench then clearly lays down in para 10 that, “In the present case, 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. Therefore, the High Court has erred in quashing the criminal proceedings on the ground that as the offence under Section 120B which is a non-cognizable, prior sanction as required under Section 155 of J&K Cr.P.C. is not obtained. The view taken by the High Court is just contrary to the law laid down by this Court in the case of Pravin Chandra Mody (supra), which has been subsequently relied upon by this Court in the cases of Brij Lal Palta (supra); Satya Narain Musadi (supra); Madan Lal (supra); and Bhanwar Singh (supra).”

Furthermore, the Bench then observes in para 11 that, “The impugned judgment and order passed by the High Court insofar as holding Rule 3.16 of the Vigilance Manual, 2008 as ultra vires is concerned, it is required to be noted that even Rule 3.16 can be said to be in consonance with the observations and the law laid down by this Court in the case of Lalita Kumari (supra). Rule 3.16 reads as under:

“CLAUSE 3.16 – PRELIMINARY ENQUIRY (PE)

When a complaint or information discloses adequate material indicating misconduct on the part of public servant which needs a detailed verification prior to registration of a case u/s 154 Cr.P.C., a Preliminary Enquiry (PE) can be ordered. A PE should normally be completed in a period of six months. The PE will be registered on a given proforma (Annexure K). Sometimes courts also order an enquiry by the State Vigilance Organisation. Such preliminary enquiries should also be registered after approval of the Commissioner of Vigilance. A PE may be converted into FIR, with the prior concurrence of central office, as soon as sufficient material becomes available to show that, prima facie, commission of a cognizable offence under Prevention of Corruption Act is made out. When the material available indicates ingredients of misconduct alone and not criminal misconduct, a self-contained note should be sent to the appropriate disciplinary authority for departmental action.””

It cannot be glossed over that the Bench then minces no words to observe in para 12 that, “On a close reading of Rule/Clause 3.16, it can be seen that even the same can be said to be in the interest of the accused and/or a person against whom the allegations are made and to safeguard the accused against frivolous complaints. As per Clause 3.16 only after the Preliminary Enquiry is conducted and there is a prima facie case found, an FIR is required to be registered. Considering the nature of offences, a detailed enquiry is required and therefore it is observed in Clause 3.16 that a PE should be completed normally within a period of six months. It is the case on behalf of the respondent and even as observed and held by the High Court in the impugned judgment and order as per the law laid down by this Court in the case of Lalita Kumari (supra), a detailed investigation into the allegations on merits is not required by holding Preliminary Enquiry and that such enquiry is to be completed within a period of 7 days is concerned, it is to be noted that in the case of Lalita Kumari (supra), it is not held that if the Preliminary Enquiry is not completed within a period of 7 days, the entire criminal proceedings would be void and the same are to be quashed.”

Most significantly, the Bench then waxes eloquent to holds in para 13 that, “So far as the submission on behalf of the respondent that in the present case by conducting a Preliminary Enquiry, detailed investigation has been made and only thereafter the FIR is registered and that at the time of Preliminary Enquiry, investigation is not permissible since the FIR is lodged is concerned, the aforesaid submission seems to be attractive but has no substance. 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.”

As it turned out, the Bench then observed in para 14 that, “Now so far as the 4th ground/question on which the High Court has quashed the criminal proceedings, namely, the respondent cannot be held vicariously liable in the absence of main conspirators – 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. The High Court has erred in quashing the entire criminal proceedings on the aforesaid ground.”

Finally, the Bench then holds in para 15 that, “In view of the above and for the reasons stated above, the impugned judgment and order passed by the High Court quashing the entire criminal proceedings for the offences under Sections 5(1)(d) r/w 5(2) of the J&K PC Act, 2006 and 120B of the Ranbir Penal Code arising out of FIR No. 32/2012 and quashing and setting aside the Entrustment Order dated 16.11.2012 passed by the Senior Superintendent of Police, VOK, Srinagar authorising the 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 Ranbir Penal Code and holding and declaring Rule/Clause 3.16 of the Vigilance Manual, 2008 dealing with Preliminary Enquiry (PE) as ultra vires is unsustainable and deserves to be quashed and set aside and is hereby quashed and set aside. FIR/criminal proceedings against the respondent being FIR No., 32/2012 for the offences under Sections 5(1)(d) r/w 5(2) of the J&K PC Act, 2006 and 120B of the Ranbir Penal Code is to be investigated and proceeded further by the authorised officer expeditiously.”

In conclusion, the Apex Court has made it pretty clear that more time taken for preliminary enquiry cannot be a ground to quash criminal proceedings for an offence under the Prevention of Corruption Act. Para 13 forms the cornerstone of this judgment which we have already discussed above. All the courts must always adhere to what has been laid down by a Bench of Apex Court comprising of Justice MR Shah and Justice AS Bopanna in this leading case so commendably, cogently, composedly and also convincingly! There can be no denying it!

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