Jammu & Kashmir High Court - Srinagar Bench
Dr. Saleem Ur Rehman vs State Of Jk & Ors. on 7 May, 2018
Author: Ali Mohammad Magrey
Bench: Ali Mohammad Magrey
HIGH COURT OF JAMMU AND KASHMIR
AT SRINAGAR
OWP No. 1961/2015
Date of Judgement: 7th of May, 2018.
Dr. Saleem Ur Rehman
Vs.
State of J&K and Others
Coram:
Hon'ble Mr. Justice Ali Mohammad Magrey, Judge.
Whether approved for reporting: Yes.
Appearance:
For the Petitioner(s): Mr. Salih Pirzada, Advocate.
For the Respondent(s): Mr. M. A. Rathore, AAG.
01. The petitioner has come up to this Court invoking its extraordinary jurisdiction to undo the injustice sought to be meted out to him. The subject matter of challenge in the instant petition is the FIR No.32/2012 registered at Police Station, Vigilance Organization, Kashmir (VOK), on the 16th day of November, 2012, for the commission of offences punishable under Sections 5(1) (2), 5(2) Prevention of Corruption Act, Svt., 2006 and 120-B of the Ranbir Penal Code (RPC).
OWP No. 1961/2015 Page 1 of 6002. Sheared of unnecessary details, the facts giving rise to the present petition are that the writ petitioner, while serving as Director Health Services, Kashmir, Vigilance Organization, Kashmir, registered a case, FIR No. 32/2012, against the petitioner and other accused officers alleging therein that during the year 2010-11, the substandard drug kits were procured from Central Public Sector Enterprises (CPSEs) in deviation of the Preference Purchase Policy (PPP), Government of India, thereby causing undue advantage to the suppliers and corresponding loss to the State exchequer.
03. Heard, the learned counsel for the parties, perused the material on record and considered the matter.
04. The facts leading to the filing of the instant petition, briefly and as stated by the petitioner in this petition, are that under the framework of the National Rural Health Mission (NRHM), the drug kits were required to be purchased from the Central Public Sector Enterprises (CPSEs) and their subsidiaries, as per the Purchase Preference Policy (PPP) of the Government of India and as directed by the Mission Director, NRHM, Jammu & Kashmir, vide letter dated 28th of December, 2010. Before approaching the Central Public Sector Enterprises (CPSEs), the petitioner took up the matter with the approved State Purchase Committees vide communication dated 27th of January, 2011, with regard to the approval of the rate contract. In pursuance to the said OWP No. 1961/2015 Page 2 of 60 communication, the Purchase Committee No.1 assented to effect the purchase in accordance with the rules, however, the Purchase Committee No.2 did not respond, which was intimated to the Mission Director, NRHM, vide letter dated 7th of February, 2011. The Mission Director, vide communication dated 12th of March, 2011, directed immediate procurement of the drug kits. Subsequently, a Committee of four members was constituted on the 12th of March, 2011, and tender notices were published in national Dailies, inviting bids by or before the 22nd of March, 2011. The department, as stated, received four tenders quoting equal rates for the items and, as per the Resolution of the Board of Members, it was unanimously recommended to purchase the drug kits from all the four CPSEs on equal share basis and the payment to the respective CPSEs was made through e-banking/ account payee cheques. On 16th of November, 2012, FIR No. 32/2012 came to be registered at Police Station, Vigilance Organization Kashmir (VOK), for the commission of offences punishable under Sections 5(1) (2), 5(2) of the Prevention of Corruption Act, Svt., 2006 and Section 120(B) of the Ranbir Penal Code (R.P.C.), with regard to the transaction of purchase of drug kits under the National Rural Health Mission Scheme, by the Directorate of Health Services, Kashmir, for the year 2010-2011. The FIR is registered against the petitioner, the then Director Health Services, Members of the tender Opening Committee, officers/ official of NRHM, Members of the Verifying Committee, and Suppliers. The OWP No. 1961/2015 Page 3 of 60 petitioner, in the capacity of the then Director, Health Services, Kashmir, has been implicated in the case and served with the questionnaire dated 6th of April, 2015, which stands replied by the petitioner vide explanation dated 29th of April, 2015.
05. The FIR, impugned in this petition, is registered with regard to the transaction of purchase of drug kits under National Rural Health Mission Scheme, by the Directorate of Health Services, Kashmir, for the year 2011-2011, against the petitioner, the then Director Health Services, Members of the tender opening Committee, officers/ officials of the NRHM, Members of the Verifying Committee and Suppliers.
06. A perusal of the case diary and the material on record does not involve the petitioner in the commission of offences attributed to him in the impugned FIR. The petitioner has, admittedly, joined the post of Director, Health Services, Kashmir, when the process of purchase of the drug kits under the National Rural Health Mission Scheme, was already completed. Nothing has been brought on record or disclosed in the investigation regarding the role of the petitioner in the commission of offences attributed to him. Therefore, when the whole scanning of the case does not involve the petitioner, there is no option for the Court, but to quash the proceedings against the petitioner.
OWP No. 1961/2015 Page 4 of 6007. On the basis of arguments advanced by Mr. Salih Pirzada, learned counsel for the petitioner, the following aspects of law fall for consideration:
a) Whether Section 3 of the Prevention of Corruption Act is a mandatory provision and its non adherence vitiates the investigation?
b) Whether prior sanction of a Magistrate under Section 155 Jammu & Kashmir Cr.P.C. is mandatory for investigating cognizable offences along with non-
cognizable?
c) Whether under the pretext of Preliminary Verification the investigating agency can verify the veracity of a complaint before registration of FIR?
d) Whether an offence like that of Criminal Conspiracy can be committed by a juridical person like a company?
08. The Learned Counsel for the petitioner argued that the investigation under Prevention of Corruption Act, 2006 Svt. (hereinafter as PC Act) is controlled by Section 3 of the Act and carries a non obstante clause which precludes the procedure of investigation under Cr.P.C. The amended section makes all the offences under the PC Act cognizable. The section further contains two provisos which in effect create an embargo on the mode of investigation. As per the first proviso inter alia, no police officer OWP No. 1961/2015 Page 5 of 60 below the rank of DSP shall investigate any offence under the PC Act without the order of the Magistrate. The second proviso creates an exception to the condition provided in the first proviso. As per the second proviso, inter alia, an officer of the Vigilance Organisation of and above the rank of Sub Inspector of Police may investigate such offences but if specially authorised in writing by an officer of the Vigilance Organisation not below the rank of Assistant Superintendent of Police. Mr. Salih Pirzada asserted that in the instant case, the investigation of the FIR under challenge is entrusted to Inspector Nisar Hussain of Vigilance Organization Kashmir (Respondent no. 5). This officer being a non-designated officer for the purposes of Section 3, must be specially authorised by an officer of Vigilance Organisation not below the rank of ASP in terms of the second proviso by way of a separate and a reasoned order, for carrying the investigation. It was emphasized by the Learned Counsel that the authority conferred upon such authorising officer of the Vigilance Organisation being a statutory one, can neither be arbitrary nor unreasonable. Therefore, the authorising officer while conferring authority upon a non- designated investigating officer, which in the instant case is an Inspector, has to grant the same by a special and a separate reasoned order. Section 3, as per Mr. Salih Pirzada, is a mandatory provision and the statutory obligations created under it must be adhered to. Any deviation from the same would render the entire investigation void. The Learned Counsel for the petitioner OWP No. 1961/2015 Page 6 of 60 reiterated that in the instant case there is no reasoned authorization order, for conferring special power of investigation upon the Inspector. Such order according to him cannot be a mechanical one and thus has to reveal the reasons for deviating to an exceptional course of investigation. Absence of the reasons from the order, if any, would also render the order as nullity. As a corollary, the investigation is also rendered void. Therefore, the investigation in the instant case being unauthorized is liable to be quashed. Mr. Pirzada placed reliance on State of Haryana v. Bhajan Lal 1992 Supp. (1) SCC 335 in which the Hon'ble Supreme Court while discussing Section 5-A of the Prevention of Corruption Act, 1947 (Central) which corresponds to Section 3 of our PC Act, though with some changes, has quashed the investigation therein for non adherence to the mandatory provision of Section 5-A.
09. Learned Counsel for the petitioner while taking the attention of the Court towards investigation into cases of criminal conspiracy and argued that the punishment of criminal conspiracy as provided under section 120-B RPC is dichotomised; a party to a criminal conspiracy to commit an offence is punishable with death, imprisonment for life or rigorous imprisonment for a term of 2 years or upwards shall be punished in the same manner as he had abetted the same offence, a party to a criminal conspiracy other than a criminal conspiracy to commit an offence punishable as per the first part shall be punished with an imprisonment for a term of 6 OWP No. 1961/2015 Page 7 of 60 months. Under Schedule II Chapter V-A, the mode of investigation for Section 120-B also stands dichotomised. For the first part, the offence is cognizable. However, for the second part, the offence of criminal conspiracy is non-cognizable. As per Mr. Salih Pirzada, learned counsel for the petitioner, in the instant case, the allegation of criminal conspiracy is for an offence under Prevention of Corruption Act which carries a punishment of one year and may extend to 7 years and also fine. Hence, the allegation of conspiracy is attracted by Section 120-B (2) which makes it a non- cognizable offence. He accentuated that Section 155 Cr.P.C. creates a restriction on the Investigation Agency to investigate a non-cognizable offence without the order of a Magistrate. Non- adherence to such embargo is tantamount to vitiation of investigation. He again placed reliance on the dictum of law as laid down in State of Haryana v/s Bhajan Lal 1992 Supp. (1) SCC
335.
10. Mr. Pirzada drew the attention of this Court towards an important facet of law regarding preliminary verification which is launched prior to the registration of FIR. He argued that the Investigating Agency before the registration of FIR had registered a Preliminary Verification, during which the Investigating agency admittedly in the FIR have examined the following aspects:
a) Various communications of NRHM;
OWP No. 1961/2015 Page 8 of 60
b) Communications of Directorate of Health Services Srinagar
as well as Jammu;
c) Guidelines issued by Ministry of Health and Family Welfare,
Government of India;
d) Rates on which Drug Kits were purchased during the year
2009-2010;
e) The corrigendum issued by Director Health Services,
Kashmir;
f) The alleged fact that the supplies were allegedly made by
private agencies from Indore and not by CPSEs.
11. The Learned Counsel further stated that the FIR in paragraph 8 reveals that on the basis of in-depth verification, the allegations against the petitioner were prima facie established. He reiterated that the scope of Preliminary Verification is not to examine the veracity of the allegations contained in a complaint, but only to see whether a cognizable offence is made out or not. The provisions of Cr.P.C. cannot be amplified to such an extent which can enable the Investigating Agency to carry out an in-depth analysis of a complaint while examining documents and formulating opinions. The Learned Counsel placed reliance on a judgment of the Karnataka High Court; Christy Fried Gram Industry and Ors. Vs. State of Karnataka and Ors. [2016 CriLJ 482], in which the High Court while placing reliance on Hon'ble Supreme Court Judgment of State of UP v. Bhagwant Kishore OWP No. 1961/2015 Page 9 of 60 Joshi, [AIR 1964 SC 221 (paragraph 8)] which holds investigation to consist of the following steps:
"i. Proceeding to the spot, ii. Ascertainment of the facts and circumstances of the case, iii. Discovery and arrest of the suspected offender.
iv. Collection of evidence.
v. Formation of opinion."
As per the Learned Counsel for the petitioner, the Investigating Agency in the instant case under the garb of Preliminary Verification has in effect carried out investigation of the matter. No provision under the entire Cr.P.C. grants authority upon the Investigating Agency to investigate an offence prior to the registration of FIR. Mr. Pirzada emphasized that investigation commences with the registration of FIR and not otherwise under Preliminary Verification. He placed reliance on the Constitution Bench judgement of the Hon'ble Supreme Court in the case of Lalita Kumari v. Government Of UP [AIR 2014 SC 187].
12. On the basis of the dictum of law as laid down in Lalita Kumari's (Supra) case, the petitioner argued that preliminary verification cannot be used to verify the veracity of a complaint and that a preliminary verification cannot exceed more than 7 days. Therefore, as per the Learned Counsel for the petitioner, Investigating Agency has registered the FIR on the basis of information gathered during the illegal investigation launched OWP No. 1961/2015 Page 10 of 60 under the pretext of Preliminary Verification. Hence, the impugned FIR being an outcome of illegality is liable to be quashed. He placed reliance on Christie Fried Gram Industries v/s State of Karnataka (Supra).
13. The Learned Counsel for the petitioner has lastly argued that the contents of the FIR allege conspiracy between the officials of NRHM, Directorate of Health Services, Tender Committee, members of the verifying committee and the suppliers. The suppliers, who are private limited companies, are the alleged beneficiaries. During the course of investigation, as per Mr. Pirzada, the name of the then Director, who held the office till 31.03.2011 and during whose tenure the entire tendering process including the allocation of bids culminated, was dropped. The members of NRHM were also dropped from the purview of investigation. The petitioner, who held the charge since 01.04.2011 when the contract under question was already complete, was however, roped in the alleged conspiracy. The conspiracy was alleged to be hatched between officials of NRHM, the then Director Health Services, Kashmir, the Private Limited Companies, etc. As per the petitioner, after the investigating agency excluded the alleged main conspirators, i.e., the officials of NRHM and the then Director Health Services Kashmir from the investigation the only alleged conspirators that are left are inter alia; the petitioner and the private limited companies. Mr. Pirzada adverted the Court's attention towards the opening term that the OWP No. 1961/2015 Page 11 of 60 legislature has used in Section under Chapter V-A, dealing with criminal conspiracy, i.e., "whoever". The interpretative significance of the term as per the Learned Counsel is essential in imputing the offence of criminal conspiracy. He argued that the sine quo non of any offence under criminal jurisprudence is mens rea. So, the term "whoever" as used under Section 120-B includes only a person who is capable of possessing a guilty mind. The Learned Counsel argued that while juxtaposing this proposition of criminal law to the instant case, it can been deduced that a private limited company has been attributed with an offence of criminal conspiracy. A company, as per his submissions, even though a juridical person does not possess a mind similar to that of a natural person and thus is incapable of possessing mens rea. A juridical person like a private limited company is doli incapax, meaning thereby that if a company is incapable of possessing mens rea, it cannot commit an offence of criminal conspiracy. Therefore, the term "whoever" under Chapter V-A including Section 120-B does not include a company. Mr. Pirzada placed reliance on an authority on Penal Code R.A. Nelson's Indian Penal Code, 11th Edn. Pg. 830.
14. Mr. Salih Pirzada, learned counsel for the petitioner argued that a Company does not function on its own but through persons running its affairs which include Directors, Managers, etc. An offence alleged to be committed by a company cannot be imputed automatically to the persons running its affairs by way of vicarious liability. The general principle under criminal jurisprudence is that OWP No. 1961/2015 Page 12 of 60 there is no vicarious liability under criminal law unless specified under a Statute. The Income Tax Act 1961, The Drugs and Cosmetics Act 1940, The Negotiable Instruments Act, 1881 contain specific provisions which make the person running the affairs of a company vicariously liable for the offences committed by the company. However, the Ranbir Penal Code does not contain any provision which creates such vicarious liability. He placed reliance on the following judgments of the Hon'ble Supreme Court:
i. Sunil Bharti Mittal v. CBI (2015) 4 SCC 609 ii. Sham Sunder v. State of Haryana 13 (1989) 4 SCC 630 iii. Hira Lal Hari Lal Bhagwati v. CBI (2003) 5 SCC 257 iv. R. Kalyani v. Janak C. Mehta (2009) 1 SCC 516
15. The Learned Counsel or the petitioner lastly placed reliance upon an authority of law; "Halsbury Laws of England (Fourth Edition, Butterwoths, 1976), Vol. 11 at page 42, Paragraph 55, which as per him reiterates the same principle of law.
16. Mr. Rathore, Learned Additional Advocate General, while justifying the action of the investigating agency has argued that the prayer for issuance of writ of certiorari seeking quashment of the impugned FIR and writ of mandamus for not conducting investigation cannot be granted because the investigation has already culminated in the manner prescribed under law. The Learned Counsel reiterated that the allegation of corruption stand proved against the petitioner and that the FIR has culminated into OWP No. 1961/2015 Page 13 of 60 investigation and thus the FIR cannot be quashed as the relief has become infructuous. He further submits that the FIR discloses commission of offence and under such a circumstance FIR cannot be quashed. Learned Additional Advocate General placed reliance upon a judgment of this Hon'ble Court in the case of Dilar Singh and Ors. v. State of J&K [2017 (1) SLJ 437]. The relevant portion of the judgment is extracted below:
"7. It is well settled that inherent powers under Section 561-A Cr.P.C. because of their plentitude are to be exercised rarely, sparingly and with due circumspection. The court in view of exercise of powers under Section 561-A Cr.P.C. is not expected to hijack trial proceedings pending before Trial Court or investigation from Investigating Officer and assume its role to sift evidence and find out whether investigation or trial should proceed. It is only to prevent abuse of process of court and prevent miscarriage of justice that inherent powers are to be exercised."
He further placed reliance on Abdul Rashid Lone v. State of J&K [2017 (1) SLJ 213] in which this Court has reiterated the above position of law of sparing exercise of inherent jurisdiction by this Court.
17. The Learned AAG while rebutting the claim of the petitioner with regard to investigation of Section 120-B being non-cognizable, states that the offence under Section 120-B is not itself, but it becomes an offence when the object for which conspiracy is entered into becomes an offence and in the present case object OWP No. 1961/2015 Page 14 of 60 conspired was to commit the act of corruption by abusing the official position. Therefore, as per him, Section 120-B becomes a warrants case under Chapter V-A of Schedule 2nd of Cr.P.C., because the offence which is the object of conspiracy is an offence under Section 5 (2) and punishable by imprisonment upto 7 years.
18. Mr. Rathore further submitted that a police officer can investigate a non-cognizable offence without an order of a magistrate, if he investigates cognizable offence along with a non cognizable one, and if ultimately from the investigation only the cognizable offence is established, the investigation of non- cognizable offence so conducted cannot be said to be bad. He has placed his reliance on a judgment of Punjab and Haryana High Court titled Chattar Singh v. State of Haryana [1980 CRI. LJ 315].
19. Learned AAG has further argued that the Inspector who was entrusted with the investigation of the instant case has been granted the authority by the SSP, VOK, by passing an order as required under Section 3 of the PC Act. He further submits that the preliminary verification does not suffer from any infirmity as it has been carried out in harmony with the Vigilance Manual. With regards to the offence committed by a company, learned AAG, Mr. Rathore submits that the offence of conspiracy may be entered into by the persons running the affairs of the company. Lastly, Mr. Rathore submits that the ground taken by the petitioner regarding registration of two FIRs on the same transaction including the one OWP No. 1961/2015 Page 15 of 60 registered at Police Station, Vigilance Organization Jammu (FIR No. 19/2011) is misplaced as both the FIRs are registered on different transactions and against different persons. For this he places reliance on the judgment of Hon'ble Supreme Court in the case of Anju Chaudhary v. State of UP. [(2013) 6 SCC 384]. The relevant paragraphs of the judgment are reproduced as under:
"40. It is true that law recognizes common trial or a common FIR being registered for one series of acts so connected together as to form the same transaction as contemplated Under Section 220 of the Code. There cannot be any straight jacket formula, but this question has to be answered on the facts of each case. This Court in the case of Mohan Baitha v. State of Bihar (2001) 4 SCC 350, held that the expression 'same transaction' from its very nature is incapable of exact definition. It is not intended to be interpreted in any artificial or technical sense. Common sense in the ordinary use of language must decide whether or not in the very facts of a case, it can be held to be one transaction.
41. It is not possible to enunciate any formula of universal application for the purpose of determining whether two or more acts constitute the same transaction. Such things are to be gathered from the circumstances of a given case indicating proximity of time, unity or proximity of place, continuity of action, commonality of purpose or design. Where two incidents are of different times with involvement of different persons, there is no commonality and the purpose thereof different and they emerge from different circumstances, it will not be possible for the Court to take a view that they form part of the same transaction and therefore, there could be a common FIR or OWP No. 1961/2015 Page 16 of 60 subsequent FIR could not be permitted to be registered or there could be common trial.
42. Similarly, for several offences to be part of the same transaction, the test which has to be applied is whether they are so related to one another in point of purpose or of cause and effect, or as principal and subsidiary, so as to result in one continuous action. Thus, where there is a commonality of purpose or design, where there is a continuity of action, then all those persons involved can be accused of the same or different offences "committed in the course of the same transaction".
On the basis of the above submission the Learned AAG prays that the petition be dismissed.
20. The questions for determination primarily rest on:
a) Whether Section 3 of the Prevention of Corruption Act is a mandatory provision and its non adherence vitiates the investigation?
The basic postulate of criminal law is that a criminal statue is to be given strict interpretation as intended by the legislature. Any deviation from this golden principle would render the purpose of criminal justice system inert. Section 3 of the PC Act, which was substituted by Act IX of 1983 (S.2), provides an impermeable safeguard for a person accused of an offence under the PC Act. The basic object behind incorporation of Section 3 in the Act is to prevent the public servant from harassment and victimization. The scheme of this provision is to install a successful mechanism of OWP No. 1961/2015 Page 17 of 60 investigation without rendering the public servant open to vexatious proceedings by petty and lower rank police officers. Such a protection provided by the legislature to the accused is not implicit from the interpretation of the Section 3 but has been enunciated. One of the most powerful provisions in a statute is a non obstante clause. Section 3 possesses a non obstante clause which precludes the procedure of investigation as provided under the Code of Criminal Procedure Svt. 1989 (1933 AD). Accordingly, the procedure for investigation that must be adopted is the one as provided under Section 3 of the PC Act. The investigation under PC Act is controlled by Section 3 of the Act. The Section makes offences under Section 161, Section 165, Section 165-A of the Ranbir Penal Code and the offence under Section 5 of the PC Act as cognizable. However, in 2014 by way of an amendment all the offences under the PC Act are made cognizable. Section 3 consists of two provisos which place a restriction on the procedure of investigation. As per the first proviso, no police officer below the rank of DSP shall investigate any offence under the PC Act without the order of the Magistrate. The second proviso, which was inserted by Act XXI of 1958, provides an exception to the restriction as placed by the first proviso. It lays down that an officer of the Vigilance Organisation of and above the rank of Sub Inspector of Police may investigate offences under the PC Act, but has to be specially authorised in writing by an officer of the Vigilance Organization not below the rank of Assistant OWP No. 1961/2015 Page 18 of 60 Superintendent of Police. The record submitted by the learned AAG, Mr. Rathore contains an Entrustment Order passed by Senior Superintendent of Police, VOK, Srinagar. The same is reproduced below:
"Office of the Sr. Superintendent of Police Vigilance Organization Kashmir, Srinagar Entrustment Order Investigation of case FIR no. 32/2011 u/s 5(1)(d) r/w 5(2) J&K PC Act Svt. 2006 and Section 120-B RPC P/S Vigilance Organization, Srinagar is hereby entrusted to Insp. Nisar Hussain no. 4136/NGO. He is authorized u/s 3 PC Act, Svt. 2006 r/w Section 56 of Cr PC to arrest the accused person(s) whenever and wherever necessary.
He will conduct investigation of the case under the supervision of Superintendent of Police (BKB).
Sr. Superintendent of Police Vigilance Organization, Kashmir, Srinagar No. SSP-VOK-FIR-3134-35 Dated: 16.11.2012 Copy to the Commissioner of Vigilance, J&K, Jammu for favour of information and record.
Sr. Superintendent of Police Vigilance Organization, Kashmir, Srinagar"
21. An Inspector, of the Vigilance Organization, for the purpose of Section 3 is a non-designated officer and must be specially authorised by the authorised officer of Vigilance Organisation. The power to grant such an authority is statutory and discretionary one. Such statutory discretion should be exercised reasonably without OWP No. 1961/2015 Page 19 of 60 any arbitrariness. The order in terms of the second provision of Section 3 must be separate and a reasoned order. It is well settled position of law that reasons substitute subjectivity with objectivity. Such discretionary power if exercised must be done by explicitly mentioning the reasons which persuaded the authorising officer to take recourse to an exceptional measure in deviation to the general statutory protection rule of investigation. The statutory protection conferred upon the accused cannot be siphoned arbitrarily and without assigning any reasons. The above reproduced Entrustment Order dated 16.11.2012 is manifestly mechanical and bereft of any reasons. The order seems to have been passed in a casual and perfunctory manner by the authorising officer of the Vigilance Organization, who has thereby failed to discharge his statutory obligation.
22. In State of Haryana v. Bhajan Lal 1992 Supp. (1) SCC 335 the Hon'ble Supreme Court while discussing the scope, object and the effect of non-adherence to Section 5-A (which corresponds to our Section 3 of J&K PC Act, with some legislative changes), quashed the investigation therein. Ratnavel Pandian, J'. while speaking for the Bench stated as follows:
"114. Section 5-A(1) of the Act with the relevant provisos reads thus:
5-A. Investigation into cases under this Act.-- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (5 of 1898), no police officer below the rank, --OWP No. 1961/2015 Page 20 of 60
(a) in the case of the Delhi Special Police Establishment, of an Inspector of Police;
(b) in the presidency towns of Calcutta and Madras, of an Assistant Commissioner of Police;
(c) in the presidency town of Bombay, of a Superintendent of Police; and
(d) elsewhere, of a Deputy Superintendent of Police, shall investigate any offence punishable under Section 161, Section 165 or Section 165-A of the Indian Penal Code (45 of 1860) or under Section 5 of this Act without the order of a Presidency Magistrate or a Magistrate of the first class, as the case may be, or make any arrest therefor without a warrant:
Provided that if a police officer not below the rank of an Inspector of Police is authorised by the State Government in this behalf by general or special order, he may also investigate any such offence without the order of a Presidency Magistrate or a Magistrate of the first class, as the case may be, or make arrest therefor without a warrant:
Provided further that an offence referred to in clause (e) of sub-section (1) of Section 5 shall not be investigated without the order of a police officer not below the rank of a Superintendent of Police."
115. Section 5-A of the Act as it originally stood, was inserted by the Prevention of Corruption (Second Amendment) Act 59 of 1952 based on the recommendations of the committee of Members of Parliament under the chairmanship of Dr Bakshi Tek Chand. The said section as it stands now was substituted by Act 40 of 1964, the main object of which is to protect the public servant against harassment and victimization. (See State of M.P. v. Mubarak Ali [1959 Supp 2 SCR 201 : AIR 1959 SC 707 : 1959 Cri LJ 921 :
(1960) 1 LLJ 36] ). In A.C. Sharma v. Delhi Administration [(1973) 1 SCC 726 : 1973 SCC (Cri) 608 : (1973) 3 SCR 477] , Dua, J. said that the scheme of OWP No. 1961/2015 Page 21 of 60 this provision is for effectively achieving the object of successful investigation into the serious offences mentioned in Section 5 of the Act without unreasonably exposing the public servant concerned to frivolous and vexatious proceedings. A Constitution Bench of this Court in A.R. Antulay v. R.S. Nayak [(1984) 2 SCC 500 : 1984 SCC (Cri) 277 : (1984) 2 SCR 914, 941] at page 941 has observed that "Section 5-A is a safeguard against investigation of offences by public servants, by petty or lower rank police officers".
116. According to Section 5-A, notwithstanding anything contained in the Code, no police officer below the rank specified in clauses (a) to (d) of Section 5-A(1), shall investigate any offence punishable under Section 161, 165 or 165-A of the IPC or under Section 5 of the Act without the order of a Presidency Magistrate or a Magistrate of the first class as the case may be or make arrest therefor without a warrant. There are two provisos to that section. As per the first proviso, if a police officer not below the rank of an Inspector of Police is authorized by the State Government, either by general or special order, he may investigate any such offence without the order of a Magistrate or make arrest therefore without a warrant. According to the second proviso, an offence referred to in clause (e) of sub- section (1) of Section 5 shall not be investigated without the order of a police officer not below the rank of a Superintendent of Police.
117. It means that a police officer not below the rank of an Inspector of Police authorized by the State Government in terms of the first proviso can take up the investigation of an offence referred to in clause (e) of Section 5(1) only on a separate and independent order of a police officer not below the rank of a Superintendent of Police. To say in other words, a strict compliance of the second proviso is an additional legal requirement to that of the first proviso for conferring a OWP No. 1961/2015 Page 22 of 60 valid authority on a police officer not below the rank of an Inspector of Police to investigate an offence falling under clause (e) of Section 5(1) of the Act. This is clearly spelt out from the expression "further provided"
occurring in the second proviso.
118. A conjoint reading of the main provision, Section 5- A(1) and the two provisos thereto, shows that the investigation by the designated police officer is the rule and the investigation by an officer of a lower rank is an exception.
119. It has been ruled by this Court in several decisions that Section 5-A of the Act is mandatory and not directory and the investigation conducted in violation thereof bears the stamp of illegality but that illegality committed in the course of an investigation does not affect the competence and the jurisdiction of the court for trial and where the cognizance of the case has in fact been taken and the case is proceeded to termination, the invalidity of the preceding investigation does not vitiate the result unless miscarriage of justice has been caused thereby. See (1) H.N. Rishbud and Inder Singh v. State of Delhi [(1955) 1 SCR 1150 : AIR 1955 SC 196 : 1955 Cri LJ 526] ; (2) Major E.G. Barsay v. State of Bombay [(1962) 2 SCR 195 : AIR 1961 SC 1762 : (1961) 2 Cri LJ 828] ; (3) Munna Lal v. State of Uttar Pradesh [(1964) 3 SCR 88 : AIR 1964 SC 28 : (1964) 1 Cri LJ 11] ; (4) S.N. Bose v. State of Bihar[(1968) 3 SCR 563 : AIR 1968 SC 1292 : 1968 Cri LJ 1484] ; (5) Muni Lal v. Delhi Administration [(1971) 2 SCC 48 : 1971 SCC (Cri) 407] and (6) Khandu Sonu Dhobi v. State of Maharashtra [(1972) 3 SCC 786 : 1972 SCC (Cri) 854 :
(1972) 3 SCR 510] . However, in Rishbud case [(1955) 1 SCR 1150 : AIR 1955 SC 196 : 1955 Cri LJ 526] and Muni Lal case [(1971) 2 SCC 48 : 1971 SCC (Cri) 407] , it has been ruled that if any breach of the said mandatory proviso relating to investigation is brought to OWP No. 1961/2015 Page 23 of 60 the notice of the court at an early stage of the trial, the court will have to consider the nature and extent of the violation and pass appropriate orders as may be called for to rectify the illegality and cure the defects in the investigation.
120. Coming to the facts of the present case under consideration, the investigation did not proceed and could not be proceeded with, since the High Court by an interlocutory order restrained the investigation even at the initial stage, i.e. on the date when rule nisi was issued in the writ petition. Therefore, it is the appropriate stage for examination of the question as to whether the necessary requirements contemplated under Section 5-A(1) in permitting the Inspector of Police, are strictly complied with or not.
121. For the proper understanding of the reasoning which we would like to give touching the question of the validity of the authority of appellant 3, we would like to reproduce the Government Order dated July 26, 1975 which reads as follows:
"Haryana Government, Home Department, ORDER No. 4816-3H-75/22965July 26, 1975 Conferred by the first proviso to sub-section (1) of Section 5-A of the Prevention of Corruption Act, 1947, the Governor of Haryana hereby authorises all the Inspectors of Police under the administrative control of the Inspector General of Police, Haryana to investigate offences under Section 5 of the said Act.
S.D. Bhandari Secretary to Government, Haryana Home Department"
122. The subsequent Government Order dated April 19, 1988 is on the same lines of the above government order.
OWP No. 1961/2015 Page 24 of 60123. On the strength of the above government order of 1975, it has been rightly contended that appellant 3 (Inspector of Police), though not a designated officer has been legally authorised by the State Government in exercise of its powers under the first proviso of Section 5-A(1) to investigate the offences falling under Section 5 of the Act, namely, the offences enumerated in clauses (a) to (e) of Section 5(1) of the Act.
124. Now what remains for consideration is whether there is any valid order of the SP permitting appellant 3 to investigate the offence falling under clause (e) of sub-section (1) of Section 5. As we have already mentioned in the earlier part of this judgment, the SP (appellant 2) has given the one word direction on November 21, 1987 'investigate'. The question is whether the one word direction 'investigate' would amount to an 'order' within the meaning of second proviso of Section 5 2DA(1).
125. In H.N. Rishbud case [(1955) 1 SCR 1150 : AIR 1955 SC 196 : 1955 Cri LJ 526] at page 1165 while examining the order of a Magistrate contemplated under Section 5-A(1), it has been observed: (SCR p. 1165) "When a Magistrate is approached for granting such permission he is expected to satisfy himself that there are good and sufficient reasons for authorising an officer of a lower rank to conduct the investigation. The granting of such permission is not to be treated by a Magistrate as a mere matter of routine but it is an exercise of his judicial discretion having regard to the policy underlying it. In our opinion, therefore, when such a breach is brought to the notice of the court at an early stage of the trial the court will have to consider the nature and extent of the violation and pass appropriate orders for such re-investigation as may be called for, wholly or partly ...."
OWP No. 1961/2015 Page 25 of 60126. The above dictum has been approved in Mubarak Ali case [1959 Supp 2 SCR 201 : AIR 1959 SC 707 :
1959 Cri LJ 921 : (1960) 1 LLJ 36] , the facts of which disclose that the District Magistrate before whom an application was submitted by the Sub-Inspector seeking permission under Section 5-A passed the order reading "permission granted". Subba Rao, J. as he then was while speaking for the bench disapproved such casual order and expressed that the Magistrate did not realise the significance of this order giving permission but only mechanically issued the order and stated thus: (SCR p.
210) "... in a case where an officer other than the designated officer, seeks to make an investigation, he should get the order of a Magistrate empowering him to do so before he proceeds to investigate and it is desirable that the order giving the permission should ordinarily, on the face of it, disclose the reasons for giving the permission."
127. Hegde, J. in S.N. Bose case [(1968) 3 SCR 563 :
AIR 1968 SC 1292 : 1968 Cri LJ 1484] following the maxim in Mubarak Ali case [1959 Supp 2 SCR 201 :
AIR 1959 SC 707 : 1959 Cri LJ 921 : (1960) 1 LLJ 36] has expressed his opinion in the following words: (SCR p. 568) "It is surprising that even after this Court pointed out the significance of Section 5-A in several decisions there are still some Magistrates and police officers who continue to act in a casual manner. It is obvious that they are ignorant of the decisions of this Court."
128. The conspectus of the above decisions clearly shows that the granting of permission under Section 5- A authorising an officer of lower rank to conduct the investigation is not to be treated by a Magistrate as a mere matter of routine, but it is an exercise of his judicial discretion having regard to the policy underlying and the order giving the permission should, on the face OWP No. 1961/2015 Page 26 of 60 of it, disclose the reasons for granting such permission. It is, therefore, clear in the light of the above principle of law that the Superintendent of Police or any police officer of above rank while granting permission to a non-designated police officer in exercise of his power under the second proviso to Section 5-A(1), should satisfy himself that there are good and sufficient reasons to entrust the investigation with such police officer of a lower rank and record his reasons for doing so; because the very object of the legislature in enacting Section 5-A is to see that the investigation of offences punishable under Section 161, 165 or 165-A of Indian Penal Code as well as those under Section 5 of the Act should be done ordinarily by the officers designated in clauses (a) to (d) of Section 5-A(1). The exception should be for adequate reasons which should be disclosed on the face of the order. In this connection, it is worthy to note that the strict compliance with Section 5-A(1) becomes absolutely necessary, because Section 5-A(1) expressly prohibits police officers, below certain ranks, from investigating into offences under Sections 161, 165 and 165-A, IPC and under Section 5 of the Act without orders of Magistrates specified therein or without authorisation of the State Government in this behalf and from effecting arrests for those offences without a warrant. See also A.C. Sharma v. Delhi Administration [(1973) 1 SCC 726 : 1973 SCC (Cri) 608 : (1973) 3 SCR 477] .
129. In the present case, there is absolutely no reason, given by the SP in directing the SHO to investigate and as such the order of the SP is directly in violation of the dictum laid down by this Court in several decisions which we have referred to above. Resultantly, we hold that appellant 3, SHO is not clothed with the requisite legal authority within the meaning of the second proviso of Section 5-A(1) of the Act to investigate the offence under clause (e) of Section 5(1) of the Act."
OWP No. 1961/2015 Page 27 of 60This position of law has been reiterated in Union of India v T. Nathamuni (2014) 16 SCC 285 (paras 11-16) and State Inspector of Police Vishakhapatanam v. Surya Sankara Karri [(2006) 7 SCC 172 (paragraph13)].
23. In the light of the above discussion and the law laid down by the Hon'ble Supreme Court, I hold the provisions of Section 3 of Prevention of Corruption Act, Svt. 2006 as mandatory and any departure from the procedure enunciated under it would render the entire investigation void ab initio.
24. The second question that demands determination is;
b) Whether prior sanction of a Magistrate under Section 155 J&K Cr.P.C. is mandatory for investigating cognizable offences along with non-cognizable?
25. Chapter V-A of Schedule II, Cr.P.C. provides for a bifurcated mode of investigation for an offence under Section 120-B. For Criminal Conspiracy to commit an offence punishable with death, imprisonment for life or rigorous imprisonment for a term of 2 years or upwards shall be punished as if he has abetted the same offence. For conspiracy of other offences the punishment is imprisonment not exceeding six (6) months. Under Chapter V-A of Schedule II, Cr.P.C., the first part of section 120-B is cognizable. However, the second part is non-cognizable. Criminal conspiracy for an offence under Prevention of Corruption Act carries a OWP No. 1961/2015 Page 28 of 60 punishment of one year and may extend to 7 years and also fine. The conspiracy for an offence under Section 5 (1)(d) corresponds to Section 120-B (2) which makes it a non-cognizable offence under the Schedule. The embargo placed by Section 155 Cr.P.C. precludes the Investigation Agency in absence of a sanction order of a Magistrate. Non-adherence to such embargo is tantamount to vitiation of investigation. The rebuttal of Learned AAG, that such an offence of conspiracy is cognizable is misdirected, therefore, is rejected. Mr. Rathore placed reliance on a judgement of Punjab and Haryana High Court titled Chattar Singh v. State of Haryana 1980 CRI. LJ 315. The Hon'ble High Court in this case has held as follows:
"5. I find no merit in the case set up in the petition and assed by Mr. Chaudhry. The FIR that was ordered to be registered and in fact, registered included an offence which was cognizable, that is, the offence under Section 160 IPC. The moment an FIR is registered with cognizable offence, that gives jurisdiction to the police to investigate the case. The investigation cannot be faulted on the ground that the offence that was registered was in fact not made out from the facts disclosed in the FIR. At that stage, it is a question of view that a police official recording the FIR takes, as decisions of the courts are not before him to guide him and again, it is a moot point as to what amounts to an affray. It is not beyond the pale of possibility that another Court or another Judge may take an entirely different view of the matter than the one taken in the three decisions that have been cited by Mr. Chaudhry. If, therefore, one of the many offences that the F. I. R. disclosed, was cognizable, then it was open to the police to investigate even in the non-OWP No. 1961/2015 Page 29 of 60
cognizable offences also. Therefore, the investigation suffers from no illegality and, consequently, the cognizance taken by the Magistrate on the police report has to be held to be legal. Hence, no case is made out for quashing the proceedings pending before the Magistrate.
26. Chattar Singh's (supra) case as relied upon by Mr. Rathore is of no precedential value in terms of the submissions made by Mr. Salih Pirzada, learned counsel for the petitioner that there is a distinction, inter alia, between Jammu & Kashmir Code of Criminal Procedure, Svt. 1989 (1933 AD) and the Central Code of Criminal Procedure, 1973 with respect to Section 155. Under the Indian Cr.P.C. there is a fourth sub-clause to Section 155 which deems offences to be cognizable where at least one amongst the offences is cognizable and the rest non-cognizable.
Section 155, Cr.P.C. 1973 (Indian) reads as under:
"155. Information as to non-cognizable cases and investigation of such cases.
(1) When information is given to an officer in charge of a police station of the commission within the limits of such station of a non-cognizable offence, he shall enter or cause to be entered the substance of the information in a book to be kept by such officer in such form as the State Government may prescribe in this behalf, and refer the informant to the Magistrate.
(2) No police officer shall investigate a non-cognizable case without the order of a Magistrate having power to try such case or commit the case for trial.OWP No. 1961/2015 Page 30 of 60
(3) Any police officer receiving such order may exercise the same powers in respect of the investigation (except the power to arrest without warrant) as an officer in charge of a police station may exercise in a cognizable case.
(4) Where a case relates to two or more offences of which at least one is cognizable, the case shall be deemed to be a cognizable case, notwithstanding that the other offences are non- cognizable."
27. However, such provision has not been incorporated in Jammu & Kashmir Cr.P.C. and for an Investigation Agency to investigate a group of offences which include a non-cognizable one, it must obtain a sanction from the concerned Magistrate before launching the investigation. In the instant case, the Investigating Agency has not obtained requisite sanction as is evident from the record submitted by Mr. Rathore. Moreover Learned AAG has justified the absence of the sanction order from the Magistrate. Therefore the decision of Punjab and Haryana High Court will not come to the rescue of the respondents as it has been delivered on the basis of the Central Cr.P.C, 1973. In Bhajan Lal's (supra) case the Hon'ble Supreme Court vis-à-vis Section 155 Cr.P.C. has held as follows:
"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power u/art. 226 or the inherent powers u/s. 482 of the Code which we have extracted and OWP No. 1961/2015 Page 31 of 60 reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any Court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised
1. Where the allegations made in the First Information Report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused
2. Where the allegations in the First Information Report and other materials, if any, accompanying the F.I.R. do not disclose a cognizable offence, justifying an investigation by police officers u/s. 156 (1) of the Code except under an order of a Magistrate within the purview of S. 155(2) of the Code
3. Where the uncontroverted allegations made in the FIR or complaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused
4. Where, the allegations in the F.I.R. do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under S. 155(2) of the Code
5. Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused
6. Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act OWP No. 1961/2015 Page 32 of 60 (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party
7. Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge".
(Emphasis Supplied) The second limb of argument vis-à-vis Section 120-B where Mr. Rathore tried to justify the absence of Magistrate's sanction under Section 155 Cr.P.C. is that the offence under Section 120-B is not an offence in itself, however, it becomes an offence when the object for which conspiracy is entered into becomes an offence. To scrutinize the veracity of such an argument, it is essential to examine a few precedents on the subject. In Chandiram and Ors. v. Emperor AIR 1926 Sindh 174, it was held as under:
"1. We think there has been some confusion is the Courts below as to the law of conspiracy. The ingredients of the offence of conspiracy are: (1) That there should be an agreement between the persons who are alleged to conspire; and (2) that the agreement should be: (i) for doing an illegal act, or (ii) for doing by illegal means an act which may not itself be illegal. It must be remembered that conspiracy is a substantive offence and has nothing to do with abetment. It is to be remembered also that though an overt act may be specified in the charge yet this is not (except when the end of the conspiracy is not to commit an offence) necessary. In any case the overt act or acts is or are introduced not as OWP No. 1961/2015 Page 33 of 60 partially constituting the offence but as giving information and example as to what the conspiracy was. Nor is there any limit to the number of overt acts which can be given in the charge. The accused is not charged with committing them, but with committing the offence of conspiracy in the course of which these events took place. It is thus clear that it may be specified in a charge that a certain act has been committed which could not possibly be committed by one of the alleged conspirators; nevertheless such conspirator may be guilty of that conspiracy in the course of which such act was committed. Thus Lady Rochford might well have been charged with conspiracy to commit high treason in connexion with the seduction of Anne Boleyn.
(Emphasis Supplied) In Firozuddin Basheeruddin and ors. V. State of Kerela [(2001) 7 SCC 596], the Hon'ble Supreme Court held as under:
"25. Conspiracy is not only a substantive crime. It also serves as a basis for holding one person liable for the crimes of others in cases where application of the usual doctrines of complicity would not render that person liable. Thus, one who enters into a conspiratorial relationship is liable for every reasonably foreseeable crime committed by every other member of the conspiracy in furtherance of its objectives, whether or not he knew of the crimes or aided in their commission. The rationale is that criminal acts done in furtherance of a conspiracy may be sufficiently dependent upon the encouragement and support of the group as a whole to warrant treating each member as a causal agent to each act. Under this view, which of the conspirators committed the substantive offence would be less significant in determining the defendants liability than the fact that the crime was performed as a part of a larger division of OWP No. 1961/2015 Page 34 of 60 labor to which the accused had also contributed his efforts."
28. Interpreting the provisions in Sections 120A and 120B of the IPC, this Court in the case of Yash Pal Mittal v. State of Punjab (1977) 4 SCC 540 in para 9 at pages 543 & 544, made the following observations :
"9.The offence of criminal conspiracy under Section 120- A is a distinct offence introduced for the first time in 1913 in Chapter V-A of the Penal Code. The very agreement, concert or league is the ingredient of the offence. It is not necessary that all the conspirators must know each and every detail of the conspiracy as long as they are co- conspirators in the main object of the conspiracy. There may be so many devices and techniques adopted to achieve the common goal of the conspiracy and there may be division of performances in the chain of actions with one object to achieve the real end of which every collaborator must be aware and in which each one of them must be interested. There must be unity of object or purpose but there may be plurality of means sometimes even unknown to one another, amongst the conspirators. In achieving the goal several offences may be committed by some of the conspirators even unknown to the others. The only relevant factor is that all means adopted and illegal acts done must be and purported to be in furtherance of the object of the conspiracy even though there may be sometimes misfire or overshooting by some of the conspirators. Even if some steps are resorted to by one or two of the conspirators without the knowledge of the others it will not affect the culpability of those others when they are associated with the object of the conspiracy. The significance of criminal conspiracy under Section 120-A is brought out pithily by this Court in Major E.G.Barsay v. State of Bombay (1962) 2 SCR 195 thus:
"The gist of the offence is an agreement to break the law. The parties to such an agreement will be guilty of criminal conspiracy, though the illegal act agreed OWP No. 1961/2015 Page 35 of 60 to be done has not been done. So too, it is not an ingredient of the offence that all the parties should agree to do a single illegal act. It may comprise the commission of a number of acts. Under Section 43 of the Indian Penal Code, an act would be illegal if it is an offence or if it is prohibited by law. Under the first charge the accused are charged with having conspired to do three categories of illegal acts, and the mere fact that all of them could not be convicted separately in respect of each of the offences has no relevancy in considering the question whether the offence of conspiracy has been committed. They are all guilty of the offence of conspiracy to do illegal acts, though for individual offences all of them may not be liable."
We are in respectful agreement with the above observations with regard to the offence of criminal conspiracy."
The offence of criminal conspiracy on the basis of above judgments, is, therefore, without a doubt distinct and a substantive offence and is absolutely not dependent upon commission of the resultant offence. As a result, the argument of Mr. Rathore is in- cohesive with the dictum of law regarding criminal conspiracy.
28. Hence the investigation launched by the respondents in absence of a valid sanction by the magistrate as provided under Section 155 J&K Cr.P.C. is illegal. Accordingly, the second question is answered.
29. The third question of law that requires determination is:
OWP No. 1961/2015 Page 36 of 60c) Whether under the pretext of Preliminary Verification the investigating agency can verify the veracity of a complaint before registration of FIR?
30. The limited scope of Preliminary Verification is to determine whether a cognizable offence is made out from the contents of the information or not. The State Vigilance Organization is a statutory body formed under Section 10 of PC Act, Svt. 2006. The Vigilance Manual, 2008 formulated on the lines of CBI Manual, was formed drafted by the Vigilance Organization and its adoption was approved by the State Government on 19.06.2008. This authorization is a part of the Vigilance Manual. Therefore, like the CBI Manual, the Vigilance Manual, 2008 is statutory in nature. The Vigilance Organization also carries Preliminary Enquiry in terms of the procedure as provided under the Vigilance Manual, 2008. The procedure dealing with Preliminary Enquiry is provided under Chapter 3, which deals with complaints. The excerpt of the Chapter is reproduced as under:
"Preliminary Enquiry (PE) 3.16 When a complaint or information discloses adequate material indicating misconduct on the part of a public servant which needs a detailed verification prior to registration of a cases u/s 154 Cr.P.C., a 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. Sometimes courts also order an enquiry by the State Vigilance Commission. Such preliminary enquiries should also be registered after approval of OWP No. 1961/2015 Page 37 of 60 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, a prima facie commission of a cognizable offence under the Prevention of Corruption Act is made out"
In Christy Fried Gram Industry and Ors. Vs. State of Karnataka and Ors. 2016 CriLJ 482, the Karnataka High Court placed reliance on a Supreme Court Judgment of State of UP v. Bhagwant Kishore Joshi, AIR 1964 SC 221 (para 8) which held the investigation to consist of the following steps:
"i. Proceeding to the spot, ii. Ascertainment of the facts and circumstances of the case, iii. Discovery and arrest of the suspected offender.
iv. Collection of evidence.
v. Formation of opinion."
31. In the instant case Preliminary Verification no. 34/2011 was registered by the Respondent-Vigilance Organization on 30.09.2011. The verification culminated into an FIR only on 16.11.2012. Admittedly, the PV continued for over a year. Moreover, the contents of the FIR, the reply affidavit filed on behalf of respondent no. 2 (VOK), it is manifest that the investigating agency has examined various documents and carried out exhaustive analysis of the matter. The investigating agency has ventured way beyond the peripheries of Preliminary Enquiry and has examined the correspondences between Directorate of Health Services, Kashmir and NRHM, communications of Directorate of OWP No. 1961/2015 Page 38 of 60 Health Services Srinagar as well as Jammu. The investigating agency has examined the Guidelines issued by Ministry of Health and Family Welfare, Government of India and has drawn a conclusion while juxtaposing the same with the purchase of the Drug Kits. A comparative analysis of the rates on which Drug Kits were purchased during the year 2009-2010 and 2010-2011 has also been made. The corrigendum issued by Director Health Services, Kashmir, has also been scrutinized during Preliminary Enquiry. Paragraph 8 of the FIR makes it clear that the investigating agency has amassed enormous material with minute details during the course of Preliminary Enquiry. Such an in-depth enquiry in the submissions of Mr. Salih Pirzada, learned counsel for the petitioner, amounts to investigation before registration of FIR. As rightly pointed out by him, the provisions of Cr.P.C. cannot be amplified to such an extent which can enable the Investigating Agency to carry out an in-depth analysis of a complaint while examining documents and formulating opinions.
32. The Constitution Bench of the Hon'ble Supreme Court in the case of Lalita Kumari v. Govt. of UP [AIR 2014 SC 187] has held as under:
"Conclusion/Directions:
111. In view of the aforesaid discussion, we hold:
(i) Registration of FIR is mandatory under Section 154 of the Code, if the information discloses commission of a OWP No. 1961/2015 Page 39 of 60 cognizable offence and no preliminary inquiry is permissible in such a situation.
(ii) If the information received does not disclose a cognizable offence but indicates the necessity for an inquiry, a preliminary inquiry may be conducted only to ascertain whether cognizable offence is disclosed or not.
(iii) If the inquiry discloses the commission of a cognizable offence, the FIR must be registered. In cases where preliminary inquiry ends in closing the complaint, a copy of the entry of such closure must be supplied to the first informant forthwith and not later than one week.
It must disclose reasons in brief for closing the complaint and not proceeding further.
(iv) The police officer cannot avoid his duty of registering offence if cognizable offence is disclosed. Action must be taken against erring officers who do not register the FIR if information received by him discloses a cognizable offence.
(v) The scope of preliminary inquiry is not to verify the veracity or otherwise of the information received but only to ascertain whether the information reveals any cognizable offence.
(vi) As to what type and in which cases preliminary inquiry is to be conducted will depend on the facts and circumstances of each case. The category of cases in which preliminary inquiry may be made are as under:
(a) Matrimonial disputes/family disputes (b Commercial offences
(c) Medical negligence cases
(d) Corruption cases OWP No. 1961/2015 Page 40 of 60
(e) Cases where there is abnormal delay/laches in initiating criminal prosecution, for example, over 3 months delay in reporting the matter without satisfactorily explaining the reasons for delay.
The aforesaid are only illustrations and not exhaustive of all conditions which may warrant preliminary inquiry.
(vii) While ensuring and protecting the rights of the accused and the complainant, a preliminary inquiry should be made time bound and in any case it should not exceed 7 days. The fact of such delay and the causes of it must be reflected in the General Diary entry.
(viii) Since the General Diary/Station Diary/Daily Diary is the record of all information received in a police station, we direct that all information relating to cognizable offences, whether resulting in registration of FIR or leading to an inquiry, must be mandatorily and meticulously reflected in the said Diary and the decision to conduct a preliminary inquiry must also be reflected, as mentioned above.
112. With the above directions, we dispose of the reference made to us. List all the matters before the appropriate Bench for disposal on merits."
(Emphasis supplied)
33. As per the law laid down in Lalita Kumari's (supra) case, the Investigating Agency has carried a discreet Preliminary Enquiry, which has been amplified to such an extent that it entered the domain of investigation. No provision under the entire Code of Criminal Procedure grants authority upon the Investigating Agency to investigate an offence prior to the registration of FIR. The Constitution Bench (Supra) of the Hon'ble Supreme Court has also OWP No. 1961/2015 Page 41 of 60 held that verification cannot be used to verify the veracity of a complaint and that a preliminary verification cannot exceed more than 7 days. The FIR in the instant case is an outcome of an illegal investigation carried out by the respondent. In Christie Fried Gram Industries v/s State of Karnataka (supra), in which the investigating agency had, under the pretext of discreet preliminary verification, in effect investigated the case. The High Court of Karnataka, inter alia, on this ground had quashed the FIR therein. The High Court in this case (supra) held as follows:
"21. The points that arise for consideration are that:
(1) Whether the investigation and preliminary enquiry prior to registration of FIR is permissible in law? And if not what is the effect?
(2) Whether in the absence of alleging offence under Section 7 & 11 of Prevention of Corruption Act, non-
public servants (petitioners in Writ Petitions), can be prosecuted?
(3) Whether the Lokayuktha Police is empowered to initiate proceedings and investigate in respect of food related offences, when under Food Safety and Standards Act, 2006, a separate authority and complete mechanism is provided which has the exclusive jurisdiction to deal with it?
(4) Search warrant issued and seizure made based on that is vitiated thereby vitiating the entire proceedings as contended by the petitioners?
(5) Whether the petitioners have made out a case for quashing the proceedings?"
OWP No. 1961/2015 Page 42 of 6022. My answer to the above points are in favour of the petitioners for the following reasons:
"Point No. 1. Whether the investigation and preliminary enquiry prior to registration of FIR is permissible in law? And if not what is the effect?"
23. It is not disputed by the respondent prosecution that in the present case investigation has taken place prior to registration of F.I.R. but learned counsel for Lokayukta claims that it is only a discrete enquiry.
24. An anonymous complaint was filed against the Director of Women and Child Development Department on 5.10.2010. The Superintendent of Police, Lokayuktha, Bangalore City Division entrusted the matter to Smt. H R Radhamani, Dy. S.P for investigation. Accordingly, Smt. Radhamani investigated the matter, and reported vide report dated 30.1.2011 that husband of Smt. Shamala Iqbal, Director of Women and Child Development Department had misused her name and interfered in the work of the department and indulged in corruption. Thereafter Sri Anil Kumar, Inspector of Lokayuktha took over the investigation and submitted his report dated 9.2.2012 to the effect that contents of the complaint are true and to ascertain the further particulars and collect information he listed out as many as 10 places to be raided and the persons named therein.
25. On 7.3.2012 statement of Mrs. Priya Udupi was recorded. The learned counsel for Lokayukta sought to contend initially that it is only a typographical mistake, actually her statement was recorded on 7.3.2013. In the final report dated 2.3.2013, there is a reference with regard to statement of Mrs. Priya Udupi, which falsifies the initial contention of the Lokayukta that it was recorded on 7.3.2013. By way of memo dated 8.9.2015 filed by the prosecution, it is sought to contend that her statement was recorded on 21.3.2012 basing the same OWP No. 1961/2015 Page 43 of 60 on case diary extract. Statement of Mrs. Priya Udupi is produced along with the application filed by the petitioners in the writ petitions on 9.9.2015. It clearly indicates the date as 7.3.2012. Therefore, it cannot be concluded that her statement was recorded on 21.3.2012 on the basis of extract of case diary.
26. Mrs. Priya Udupi was the earlier employee of Christy Fried Gram Industry and she was dismissed from service. Based on the above materials the FIR came to be registered on 8.3.2012 before Karnataka Lokayuktha Police, Bangalore. There is about 18 months' investigation prior to registration of F.I.R.
27. It is true, Lokayuktha has got suo motto power under Section 9(3) of Karnataka Lokayukta Act to investigate a matter on any complaint or on any information. Rule 5(3) of Karnataka Lokayukta Act specifies, all complaints, even if it is not submitted in the prescribed format shall be placed before Lokayukta or Upa Lokayukta as the case may be. In the instant case, no such procedure is adopted, instead, the Lokayukta Police themselves assumed jurisdiction and started enquiry against the above legal provisions.
28. It is the contention of the Lokayukta, they had conducted discrete preliminary enquiry to ascertain the truth. Prior to the pronouncement of judgment in Lalita Kumari vs., Government of U P & others, (2014) 2 SCC 1, there is neither any provision under Code of Criminal Procedure nor any settled law providing for conducting preliminary enquiry. However, after the pronouncement in the above case, preliminary enquiry can be conducted not exceeding 7 days. In this regard, reliance is placed on the decision in State of UP vs., Bhagwant Kishore Joshi, AIR 1964 SC 221. In para 8 of the judgment itself, the investigation stated to consist the following steps:
"i. Proceeding to the spot, OWP No. 1961/2015 Page 44 of 60 ii. Ascertainment of the facts and circumstances of the case, iii. Discovery and arrest of the suspected offender. iv. Collection of evidence.
v. Formation of opinion."
In the instant case, Dy. S.P Radhamani conducted the investigation, made note, collected documents and submitted report and further investigation was taken over by Mr. Anilkumar who seized the documents from DWCD and recorded the statement of Ms. Priya Udupi, which does not fall under the definition of preliminary enquiry. The preliminary enquiry is to be without questioning any witness and without making any notes from the documents seized.
29. The learned counsel for the petitioners placed reliance on decision in Rajeevan vs., State of Kerala reported in CD J 2003 SC 323. The relevant portion in Para-12 of the judgment is to the following effect:
"Delay in lodging FIR quite often results in embellishment which is a creature of afterthought. On account of delay the report not only gets bereft of the advantage of spontaneity, danger creeps in of the introducing of coloured version exaggerated account, concocted story as a result of deliberation and consultation."
30. The petitioners in the writ petitions placed reliance on decision in Lalita Kumari vs., State of U.P. & others (2014) 2 SCC 1 and contended that registration of F.I.R before conducting investigation is mandatory. The Hon'ble Supreme Court dealt with a direct question in the aforesaid decision that, whether a police officer is bound to register a first information report upon receiving any information relating to commission of a cognizable offence under Section 154 of Code of Criminal OWP No. 1961/2015 Page 45 of 60 Procedure, 1973 or the police officer has the power to conduct a 'preliminary inquiry' in order to test the veracity of such information before registering the same. The Supreme Court took note of observation of the Committee on Reforms of Criminal Justice System in Para-102 which is as follows:
"7.19.1 According to the Section 154 of the Code of Criminal Procedure the officer incharge of the police station is mandated to register every information oral or written relating to the commission of cognizable offence. Non registration of cases is a serious complaint against the police. Besides, the complainant gets an opportunity to consult his friends, relatives and sometimes even lawyers and often tend to exaggerate the crime and implicate innocent persons. This eventually has the adverse effect at the trial. The information should be reduced in writing by the SH, if given orally, without any loss of time so that the first version of the alleged crime comes on record.
7.20.11 It has come to the notice of the Committee that even in cognizable cases quite often the police officers do not entertain the complaint and send the complainant away saying that the offence is not cognizable. Sometimes, the police twist facts to bring the case within the cognizable category even though it is non cognizable, due to political or other pressures or corruption. This menace can be stopped by making it obligatory on the police officer to register every complaint received by him. Breach of this duty should become an offence punishable in law to prevent misuse of the power by the police officer."
The Hon'ble Supreme Court has held in Para-120.7 that while ensuring and protecting the rights of the accused and the complainant, a preliminary inquiry should be made time-bound and in any case it should not exceed 7 OWP No. 1961/2015 Page 46 of 60 days. The fact of such delay and the causes of it must be reflected in the General Diary entry. It is further held in Para-120.8 that since the General Diary/Station Diary/Daily Diary is the record of all information received in a police station, Supreme Court directed that all information relating to cognizable offences, whether resulting in registration of FIR or leading to an inquiry, must be mandatorily and meticulously reflected in the said diary and the decision to conduct a preliminary inquiry must also be reflected.
31. The learned counsel for the petitioners placed reliance on the decision in L Shankar Murthy & others vs., State by Lokayuktha Police, reported in 2012(5) Kar.L.J. 545 where this Court has dealt with the effect of investigation prior to registration therein. Paras-33, 35, 45 and 46 read as follows:
"33. The scheme of Cr P C also makes it clear that, Section 157 of Cr PC gives power to the police officer to take up investigation only after sending a report to the Magistrate, and power to take cognizance of such offence where the officer concerned, from the information received or otherwise, has reason to suspect the commission of an offence which he is empowered to investigate under Section 156 of Cr P C, he shall follow the requirements of Section 157 before embarking upon the investigation. It is, therefore, clear from the aforesaid provisions of Cr P C that the police officer concerned cannot proceed with the investigation without first registering the case upon the information received by him.
35. In the light of the foresaid position in the law laid down by the Apex Court in particular in the aforementioned cases, the entire proceeding leading to conducting the seizure panchanama even without registering the cases as required under Section 154 of OWP No. 1961/2015 Page 47 of 60 the Cr.P.C. is illegal, contrary to law and is in violation of the mandatory provisions of the Cr.P.C. and the act on the part of the Police Officer concerned is nothing but an act which could be termed as abuse of the process of law.
45.....as of now, the settled position in law is registering the case upon the information received is sine qua non before proceeding to take up the investigation.
46. Thus, the entire procedure followed by the concerned Police Officer is an abuse of the process of law and, therefore, I have no hesitation in agreeing with the contentions put forward by the learned Counsel for the petitioners that these cases are fit enough to be brought within the rarest of rare cases and in order to prevent abuse of the process of law and to meet the ends of justice, exercise of inherent power conferred under Section 482 of the Cr.P.C, therefore, becomes imperative and inevitable".
32. It is to be mentioned here that the aforesaid Shankaramoorthy case was challenged by the Lokayuktha police before the Hon'ble Supreme Court and the Apex court declined to interfere.
33. The petitioners further placed reliance on the decision in Girishchandra & another v. State of Lokayuktha Police, Yadgir, reported in 2013(5) Kar.L.J. 470 (DB) and the Hon'ble Division Bench of this Court has held as follows:
"In a situation where an offence is committed right in the presence of a Police Officer, it would be imprudent to insist that he should rush to the police station to record the FIR. The Police Officer should immediately act, like apprehending the accused, sending the victim to medical treatment etc., and thereafter registration of FIR would be an ideal investigation procedure. Otherwise, in all OWP No. 1961/2015 Page 48 of 60 other type of cases, registration of FIR is mandatory since an FIR is to be sent to the Court at the earliest stage, so that no manipulating and tampering of facts would be possible".
39. From the above, it is clear that the prosecution is not justified in conducting investigation before registration of FIR in the guise of preliminary enquiry and investigation for a period of about 18 months is beyond the 7 days period said to be permissible as laid down in Lalita Kumari's case referred to supra.
40. FIR in a criminal case is a vital and valuable piece of evidence though not a substantive piece of material. The object of registering FIR in respect of commission of an offence is to obtain early information regarding the nature of crime and names of the culprits and part played by them as well as names of the eye-witnesses present at the time of incident. Delay in lodging the FIR, loses the advantage of spontaneity, danger creeps in of the introduction of coloured version, exaggerated account or concocted story as a result of large number of consultations/deliberations. Promptly lodged FIR reflects first hand information as to what has happened, and who was responsible for such an offence.
41. In the circumstances, the Lokayukta police have committed grave error of law in proceeding to conduct a preliminary enquiry for a substantial period of about 18 months before registering the FIR and such a preliminary enquiry without registering the FIR is impermissible in law vitiating the entire proceedings and it is abuse of process of the Court. Accordingly, the Point No. 1 is answered."
34. Placing reliance on the above mentioned decisions and the discussion above, it can be safe to hold that in the instant case also the investigating agency have acted in dilation of powers OWP No. 1961/2015 Page 49 of 60 conferred upon it by carrying out full-fledged investigation under the pretext of Preliminary Enquiry/Verification for over a year. The formulation of opinion upon thorough examination of evidence during Preliminary Enquiry over a long period of time is a method foreign to criminal procedure. Such procedure adopted by the Investigating Agency is a coloured one and carries all the postulates of an investigation as understood under the Cr.P.C. This Court in such situations where there is grave miscarriage of justice and where the process established by law has been abused, cannot show reluctance from interfering. Therefore, this ground urged by the Learned Counsel for the petitioner, is sustained.
35. The fourth and the last question which falls for determination is:
d) Whether an offence like that of Criminal Conspiracy can be committed by a juridical person like a company?
36. Conspiracy in the instant case is alleged between the officials of NRHM, Directorate of Health Services, Tender Committee, members of the verifying committee and the suppliers. The suppliers, who are private limited companies, are the alleged beneficiaries. The Director, namely Dr. Mohammad Amin Wani, who held the office till 31.03.2011 and during whose tenure the entire tendering process culminated, and the members of NRHM were dropped from the purview of investigation as is evident from OWP No. 1961/2015 Page 50 of 60 communication dated 31.03.2012 written by the Director, Health Services Kashmir to the Enquiry Officer (BKB), VOK, Srinagar and communication dated 21.07.2015 written by Joint Director Prosecution (Vig), J&K, Srinagar to Commissioner Secretary to Government, General Administrative Department, J&K, Srinagar. The petitioner assumed the charge of the Director, Health Services Kashmir admittedly on 01.04.2011 when the contract under question, as per the petitioner, was already complete. He was however, was still roped in the alleged conspiracy. After the investigating agency excluded the alleged conspirators, i.e., the officials of NRHM and the then Director Health Services Kashmir from the investigation the only alleged conspirators that are left are inter alia; the petitioner and the private limited companies. To understand the legal concept of criminal conspiracy, the provisions of Chapter V-A require interpretation in the light of various authorities of law.
37. "Whoever" at the opening of Sections under Chapter V-A, and its qualifications vis-à-vis criminal conspiracy is of a pivotal significance. It would eventually determine whether a juridical person like a company can commit an offence of Criminal Conspiracy, which in the instant case they are charged with. The basic postulate of any offence is possession of mens rea. The term "whoever" as used under Section 120-B includes only a person who is capable of possessing a guilty mind. In the present case, private limited companies have been attributed with an offence of OWP No. 1961/2015 Page 51 of 60 criminal conspiracy. A company not being a natural person is doli incapax, i.e., incapable of possessing mens rea. Therefore, the term "whoever" under Chapter V-A including Section 120-B does not include a company. This issue has been dealt with in an authority on Penal Code; R.A. Nelson's Indian Penal Code, 11th Edn. Pg. 830. The excerpt from the authority is reproduced as under:
"The IPC does not contain any provision similar to that in the Income tax act, 1961, which specifically states that a company being a person within the meaning of word as defined in s. 11, IPC can be punished for offences involving mens rea as an essential ingredient. The Income Tax Act, Essential Commodities Act, the Prevention of Food Adulteration Act, etc. do contain specific provisions to deal with the offences by companies1 Prosecution against the company which being a juridical person is, in a sense, doli incapax, and it cannot commit an offence of cheating within the meaning of s 415, which involves criminal intention to deceive others. The same is also true in respect of the offences of conspiracy which involves a guilty mind to do an illegal thing. Therefore, although a person who is victim of deception can be company, the perpetrator of deception cannot be a body corporate like a company or association. It can only be a natural person who is capable of having mens rea to commit the offence. Consequently, the words 'whoever' occurring at the beginning of ss 415 and 120B cannot include in its sweep, a juridical person like a company. In view of this position the objection raised on behalf of the 1 Motorola Incorporated v. Union of India (2004) Cr LJ 1576 (Bom.) (Originally Footnote no. 77) OWP No. 1961/2015 Page 52 of 60 petitioner to the maintainability of the complaint will have to be upheld.2
38. The basic postulate of criminal law is that there is no vicarious liability unless specified under a Statute. A company functions through the persons who are in charge of it and an offence committed by a company cannot be vicariously imputed to the persons running it. Such criminal vicarious liability can be attributed only if it is provided under a particular Statute. As stated by Mr. Pirzada, learned counsel for the petitioner, The Income Tax Act 1961, The Drugs and Cosmetics Act 1940, The Negotiable Instruments Act, 1881 contain specific provisions which make the person running the affairs of a company vicariously liable for the offences committed by the company. Such specific provisions which create vicarious liability in the abovementioned Statutes are absent from the Ranbir Penal Code. The Hon'ble Supreme Court has dealt with the issue of criminal vicarious liability many a time. The relevant paragraphs of the following judgments are as under:
Sunil Bharti Mittal v. CBI (2015) 4 SCC 609 "(ii) Principle of "alter ego", as applied
32. The moot question is whether the aforesaid proposition, to proceed against the appellants is backed by law? In order to find the answer, let us scan through the case law that was cited during the arguments.
33. First case which needs to be discussed is Iridium India (supra). Before we discuss the facts of this case, it would be relevant to point out that the question as to 2 Ibid (Originally Footnote no. 78) OWP No. 1961/2015 Page 53 of 60 whether a company could be prosecuted for an offence which requires mens rea had been earlier referred to in a Constitution Bench of five Judges in the case of Standard Chartered Bank v. Directorate of Enforcement3. The Constitution Bench had held that a company can be prosecuted and convicted for an offence which requires a minimum sentence of imprisonment. In para 8 of the judgment, the Constitution Bench clarified that the Bench is not expressing any opinion on the question whether a corporation could be attributed with requisite mens rea to prove the guilt. Para 8 reads as under:
"8. It is only in a case requiring mens rea, a question arises whether a corporation could be attributed with requisite mens rea to prove the guilt. But as we are not concerned with this question in these proceedings, we do not express any opinion on that issue."
64. So far as India is concerned, the legal position has been clearly stated by the Constitution Bench judgment of this Court in Standard Chartered Bank v. Directorate of Enforcement (2005) 4 SCC 530. On a detailed consideration of the entire body of case laws in this country as well as other jurisdictions, it has been observed as follows: (SCC p. 541, para 6) "6. There is no dispute that a company is liable to be prosecuted and punished for criminal offences. Although there are earlier authorities to the effect that corporations cannot commit a crime, the generally accepted modern rule is that except for such crimes as a corporation is held incapable of committing by reason of the fact that they involve personal malicious intent, a corporation may be subject to indictment or other criminal process, although the criminal act is committed through its agents."
35. It is abundantly clear from the above that the principle which is laid down is to the effect that the criminal intent of the "alter ego" of the company, that is the personal 3 (2005) 4 SCC 530 OWP No. 1961/2015 Page 54 of 60 group of persons that guide the business of the company, would be imputed to the company/corporation. The legal proposition that is laid down in the aforesaid judgment is that if the person or group of persons who control the affairs of the company commit an offence with a criminal intent, their criminality can be imputed to the company as well as they are "alter ego" of the company.
36. In the present case, however, this principle is applied in an exactly reverse scenario. Here, company is the accused person and the learned Special Magistrate has observed in the impugned order that since the appellants represent the directing mind and will of each company, their state of mind is the state of mind of the company and, therefore, on this premise, acts of the company is attributed and imputed to the appellants. It is difficult to accept it as the correct principle of law. As demonstrated hereinafter, this proposition would run contrary to the principle of vicarious liability detailing the circumstances under which a direction of a company can be held liable.
(iii) Circumstances when Director/Person in charge of the affairs of the company can also be prosecuted, when the company is an accused person:
37. No doubt, a corporate entity is an artificial person which acts through its officers, directors, managing director, chairman etc. If such a company commits an offence involving mens rea, it would normally be the intent and action of that individual who would act on behalf of the company. It would be more so, when the criminal act is that of conspiracy. However, at the same time, it is the cardinal principle of criminal jurisprudence that there is no vicarious liability unless the statute specifically provides so.
Sham Sunder v. State of Haryana 13 (1989) 4 SCC 630 "9. But we are concerned with a criminal liability under penal provision and not a civil liability. The penal provision OWP No. 1961/2015 Page 55 of 60 must be strictly construed in the first place. Secondly, there is no vicarious liability in criminal law unless the statute takes that also within its fold. Section 10 does not provide for such liability. It does not make all the partners liable for the offence whether they do business or not."
Hira Lal Hari Lal Bhagwati v. CBI (2003) 5 SCC 257 "30. In our view, under the penal law, there is no concept of vicarious liability unless the said statute covers the same within its ambit. In the instant case, the -said law which prevails in the field i.e. the Customs Act, 1962 the appellants have been thereinunder wholly discharged and the GCS granted immunity from prosecution."
R. Kalyani v. Janak C. Mehta (2009) 1 SCC 516 "32. Allegations contained in the FIR are for commission of offences under a general statute. A vicarious liability can be fastened only by reason of a provision of a statute and not otherwise. For the said purpose, a legal fiction has to be created. Even under a special statute when the vicarious criminal liability is fastened on a person on the premise that he was in charge of the affairs of the company and responsible to it, all the ingredients laid down under the statute must be fulfilled. A legal fiction must be confined to the object and purport for which it has been created."
39. The principle of vicarious liability under Criminal Statues finds an illustrative description in "Halsbury Laws of England (Fourth Edition, Butterwoths, 1976), Vol. 11 at page 42, paragraph 55, the excerpt of which is reproduced as under:
"55. Statutory offences of strict liability. Even where an offence is one of strict liability, vicarious liability can arise OWP No. 1961/2015 Page 56 of 60 only where this appears to have been the intention of the legislature..."
40. On the basis of the above position of law and the law laid down by the Hon'ble Supreme Court, neither the accused private limited companies nor their in-charge persons can be held liable for any offence as alleged in the FIR. The petitioner who joined the office (01.04.2011) when the entire tendering process as well as the contract was complete cannot by any stretch of imagination or any amplified interpretation of Criminal Statutes be held liable in absence of the main conspirators. Dropping of the main conspirators from the ambit of conspiracy and the legal embargo placed on vicarious liability disintegrate the fabric of criminal conspiracy. Therefore, the allegations made in the FIR, even if accepted to be true in its entirety, are legally not tenable.
41. Apart from the legal repercussions of the actions of respondents, the purchase in question appears to be materialized after inviting tenders from CPSE's upon the instructions issued by Mission Director vide letter dated 12.03.2011 which is on record. It is urged that there was no occasion to conduct post tendering negotiations in context to the Circular of State Vigilance Commission, taken on record through rejoinder affidavit filed by the petitioner. Bidding of uniform rates by CPSEs (Central Public Sector Undertakings) does not seem unusual in reference to letter of Ministry of Chemicals & Fert. Department, Government of India dated 23rd Feb 2007 pertaining to purchases from CPSEs under OWP No. 1961/2015 Page 57 of 60 the Preference Purchase Policy adopted by the Government. The price index of previous year, i.e., 2011 loses significance on account of black listing of supplier for sub standard supplies which becomes discernible from the letter dated 03.03.2010 of Controller of Stores, Jammu, accompanying the rejoinder affidavit. These documents have not been controverted by the Learned Counsel for respondents. Mere omission to bargain after tendering as asserted by the respondents does not by itself attach criminality especially when prefaced with the guidelines to the contrary.
42. Another aspect which cannot be ignored is that there is no departmental enquiry or report to suggest misappropriation of amount entrusted with the petitioner or any expert finding to hold the spuriousness of drugs as asserted in the reply of respondents. Moreover, no official from NRHM is bracketed as accused in the list exhibited in letter dated 21.07.2015 of Vigilance Organization to snap their collaboration with the petitioner in the perpetration of alleged offence which further erodes the element of conspiracy otherwise put forth in the FIR. No investigative material has been brought on record by the respondents to suggest the pecuniary gain derived by the petitioner while misusing his official position or diversion of funds beyond contracted rates.
43. The learned counsel for the petitioner has not laid stress on the overlapping of FIRs and the distinction urged about the irregularity while drawing a distinction between the tenor of FIR OWP No. 1961/2015 Page 58 of 60 under Section 154 and 157 Cr.P.C. Therefore, this Court will not go into scrutiny of such question. The petitioner has also questioned the conduct of respondent no. 5 during the course of investigation. This Court cannot go into such disputed actual aspects, but the petitioner is left with liberty to invoke appropriate remedy.
44. On the basis of facts of the case and the position of law as discussed above, I therefore hold as under:
i. Section 3 of Jammu & Kashmir Prevention of Corruption Act, Svt. 2006 is a mandatory provision and non- adherence renders the investigation void.
ii. The impugned investigation for offence under Section 120-B (2), being without a sanction of Magistrate under Section 155 Cr.P.C. is also illegal.
iii. The Investigating agency has illegally investigated the case prior to the registration of FIR under the pretext of Preliminary Verification for over a year.
45. Directions:
I. In the above circumstances, the Preliminary Verification no.
34/2011, the impugned FIR No. 32/2012, Police Station, Vigilance Organization Kashmir, and the resultant investigation of the FIR are hereby quashed, as being illegal.OWP No. 1961/2015 Page 59 of 60
II. As a corollary, I also quash the Entrustment Order dated 16.11.2012 passed by Senior Superintendent of Police, VOK, Srinagar as being devoid of reasons.
III. Rule 3.16 of the Vigilance Manual, 2008 dealing with Preliminary Enquiry (PE) being in direct conflict with the Constitution Bench Judgment of the Hon'ble Supreme Court in Lalita Kumari (supra) is declared ultra vires.
46. The record produced by Mr. M. A. Rathore, learned AAG, for perusal of the Court, is returned to him in the open Court.
47. The petition is allowed as above. However, there will be no order as to costs.
(Ali Mohammad Magrey) Judge SRINAGAR 7th May, 2018 "TAHIR"
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