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

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 • •

p. 600

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 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 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 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 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 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

p. 602

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, 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 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 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 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 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

p. 604

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 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 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, 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 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 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 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

p. 606

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

p. 608

' 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 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 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 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 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 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 ••

p. 610

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 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 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 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 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

p. 612

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 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 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 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 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 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 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 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 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

p. 614

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;

2Copy pinpoint2. 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.

3Copy pinpoint3. 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 ensure:

VINEETv. U.O.L[VERMA, CJ.] 615

(a) that offences alleged to have been committed by any person, 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

4Copy pinpoint4. 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

p. 616

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 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 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 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 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

p. 618

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 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 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

p. 620

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.

5Copy pinpoint5. 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.

6Copy pinpoint6. 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 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 approve filing of applications for Letters Rogatory.

VINEETv. U.0.1.[VERMA, CJ.] 621

( c) The Directorate of Enforcement should be delegated powers 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 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 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 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

p. 622

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 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 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 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 shall witness implementation within 6-8 weeks.

VINEETv. U.O.I.[VERMA, CJ.] 623

5.3. The Committee recommends that the Directorate should take 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 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 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 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

p. 624

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.)

7Copy pinpoint7. Central Government to pursue with the State Governments to set up a credible mechanism for selection of Police Chief D (para 3.3) •

8Copy pinpoint8. Director CBI to have a minimum tenure of 2 years (para 8.4) .. )-

9Copy pinpoint9. Transfer of incumbent Director CBI would need endorse- ment of the Selection Committee (para 8.5) E

10Copy pinpoint10. Director CBI to ensure full freedom for allocation of work within the Agency, including constitution of investigation teams (para 8.6)

11Copy pinpoint11. 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)

12Copy pinpoint12. Change in the existing Tenure Rules not recommended (para 8.8) G

13Copy pinpoint13. Proposals for improvement of infrastructure, methods of in- vestigation, etc., to be decided urgently (para 8.9.2.)

14Copy pinpoint14. No need for creation of a permanent core group in. the CBI H (para 8.9.3)

p. 626

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

15Copy pinpoint15. The Revenue Department to consult Attorney General regarding measures against conclusion of cases being thwarted by stay orders, etc. jpara 4.l(d)) F

16Copy pinpoint16. 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) ].

18Copy pinpoint18. Comprehensive circular to be published by the Directorate .. to inform public about procedures/systems of its functioning (para 5.l(c)l H

p. 628

19Copy pinpoint19. In-house legal advice mechanism to be strengthened (para 5.2)

20Copy pinpoint20. Proposals for strengthening the Directorate to be imple- mented within 8 weeks (para 5.2)

21Copy pinpoint21. Directorate to establish· a grievance redressal mechanism (para 5.3)

22Copy pinpoint22. Committee headed by Central Vigilance Commissioner to decide complaints of arbitrary action by Directorate officials (para 5.3) c

23Copy pinpoint23. 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)

24Copy pinpoint24. Annual Report of the Department of Revenue to contain an - :--

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

25Copy pinpoint25. 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 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 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

p. 630

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 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 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 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 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

p. 632

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 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 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 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 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 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

p. 634

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 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 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

p. 636

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 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 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 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

p. 638

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 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 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 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 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

p. 640