Supreme Court Upholds CBI’s Power to Further Investigate After Closure Report in Corruption Case (28 April 2023)

Date of the Judgment: 28 April 2023
Citation: 2023 INSC 375
Judges: Justice Surya Kant and Justice J.B. Pardiwala
Can a criminal investigation be reopened after it has been closed? The Supreme Court of India recently addressed this crucial question in a case involving allegations of corruption against a public servant. The Court clarified that the Central Bureau of Investigation (CBI) has the power to conduct further investigation even after a closure report has been accepted by a court, if new evidence emerges. This judgment reinforces the principle that the pursuit of justice should not be hampered by procedural technicalities. The majority opinion was authored by Justice J.B. Pardiwala.

Case Background

The case revolves around allegations of disproportionate assets against D. Dwarakanadha Reddy, an appraiser in the Customs Department, and his family. In 2006, the CBI registered a case against Reddy and his wife, D. Sujana Reddy, based on information that they had acquired assets disproportionate to their known sources of income between 2001 and 2005.

Initially, the CBI filed a closure report in 2008, stating that there was insufficient evidence to prosecute. The Special Court accepted this report in 2009. However, in 2013, the CBI sought permission to reopen the case, claiming that new evidence had emerged. The Special Court granted this request, and the CBI initiated further investigation. This led to a fresh chargesheet against Reddy, his wife, and his brother-in-law, Hemendra Reddy.

Timeline

Course of Proceedings

The Madras High Court initially dismissed a petition by D. Dwarakanadha Reddy to quash the summons for further investigation, upholding the Special Court’s decision to allow further investigation. However, later, a different bench of the same High Court quashed the chargesheet, ruling that the Special Court lacked the power to permit further investigation after accepting the closure report. The High Court also noted that the earlier order was passed without considering the judgment in Vinay Tyagi v. Irshad Ali alias Deepak and Others (2013) 5 SCC 762. This conflicting view led the CBI to appeal to the Supreme Court.

Legal Framework

The judgment primarily interprets Section 173 of the Code of Criminal Procedure, 1973 (CrPC), which deals with police reports after investigation. Specifically, the court focused on:

• Section 173(2) CrPC: This section mandates the police to submit a report to the Magistrate upon completion of the investigation. It includes details such as the names of the parties, the nature of the information, and whether an offense appears to have been committed.
• Section 173(8) CrPC: This crucial provision states that “Nothing in this section shall be deemed to preclude further investigation in respect of an offence after a report under sub-section (2) has been forwarded to the Magistrate…”. It allows for further investigation even after a report has been submitted, and requires the police to forward a further report to the Magistrate if additional evidence is found.

Arguments

CBI’s Arguments:

• The CBI argued that Section 173(8) of the CrPC allows for further investigation even after a closure report has been accepted by the court, especially when new evidence surfaces.
• The CBI contended that the Special Court had rightly permitted further investigation based on new material and that a coordinate bench of the High Court had already upheld this view.
• The CBI stated that the High Court had erred in overlooking the earlier order of the coordinate bench which had considered the decision of the Supreme Court in Vinay Tyagi (supra).

Accused’s Arguments:

• The accused argued that the acceptance of a closure report terminates the proceedings, barring any further investigation.
• They contended that further investigation is only permissible if a matter is pending before the court, which was not the case after the closure report was accepted.
• The accused submitted that allowing further investigation after four years from the closure report would violate their right to a speedy trial.
• They also argued that the chargesheet was filed without the mandatory order from a police officer not below the rank of Superintendent of Police, as required under Section 17 of the Prevention of Corruption Act, 1988.

Issues Framed by the Supreme Court

The Supreme Court framed the following key issue:

1. Whether the High Court was justified in quashing the entire prosecution instituted by the CBI against the accused persons on the ground that the CBI could not have undertaken further investigation under sub section (8) of Section 173 of the CrPC and filed a chargesheet having once already submitted a final report under sub section (2) of the Section 173 of the CrPC (closure report)?

The Court also considered the following sub-issue:

• Whether the Special Court could have taken cognizance upon the chargesheet filed by the CBI based on further investigation having once already filed a closure report in the past and the same having been accepted by the court concerned at the relevant point of time?

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on several precedents to reach its decision. These authorities were categorized by the legal point they supported:

On the Power of Police to Investigate:

• King-Emperor v. Khwaja Nazir Ahmad, Vol. LXXI Indian Appeals, 203 (Privy Council): This case established the statutory right of the police to investigate cognizable crimes without interference from the judiciary.
• H.N. Rishbud v. State of Delhi, AIR 1955 SC 196 (Supreme Court of India): This case held that the court can order reinvestigation to cure any illegality in the investigation.
• Divakar Singh v. A. Ramamurthi Naidu, AIR 1919 Mad 751 (Madras High Court): This case recognized the police’s right to conduct multiple investigations based on new information.

On Further Investigation Under Section 173(8) CrPC:

• Sri Bhagwan Samardha Sreepada Vallabha Venkata Vishwanandha Maharaj v. State of A.P., (1999) 5 SCC 740 (Supreme Court of India): This case affirmed the police’s power to conduct further investigation even after the court has taken cognizance, with the caveat that the police should seek formal permission from the court.
• Hasanbhai Valibhai Qureshi v. State of Gujarat, (2004) 5 SCC 347 (Supreme Court of India): This case emphasized that the prime consideration for further investigation is to arrive at the truth and do justice, and delay should not hinder further investigation.
• Ram Lal Narang v. State (Delhi Administration), (1979) 2 SCC 322 (Supreme Court of India): This case held that the police’s power to further investigate is not exhausted by the Magistrate taking cognizance of the offense.
• State of Andhra Pradesh v. A.S. Peter, (2008) 2 SCC 383 (Supreme Court of India): This case clarified that further investigation is a statutory right of the police and does not require prior permission from the Magistrate.
• Nirmal Singh Kahlon v. State of Punjab, (2009) 1 SCC 441 (Supreme Court of India): This case stated that the power to further investigate under Section 173(8) is an enabling provision.
• Vinay Tyagi v. Irshad Ali alias Deepak and Others, (2013) 5 SCC 762 (Supreme Court of India): This case defined “further investigation” and stated that it is a continuation of the earlier investigation, not a fresh one. It also stated that the Magistrate has the power to direct further investigation.
• Vinubhai Haribhai Malaviya v. State of Gujarat, (2019) 17 SCC 1 (Supreme Court of India): This case held that a Magistrate can order further investigation at any stage before the trial commences.

On the Magistrate’s Power:

• Union Public Service Commission v. S. Papaiah, (1997) 7 SCC 614 (Supreme Court of India): This case held that the Magistrate can direct the CBI to “further investigate” and collect further evidence under Section 173(8) of the CrPC.

On Further Investigation After Closure Report:

• State of Rajasthan v. Aruna Devi, (1995) 1 SCC 1 (Supreme Court of India): This case held that acceptance of a final report does not bar the Magistrate from taking cognizance if fresh material comes to light after further investigation.
• K. Chandrasekhar v. State of Kerala, (1998) 5 SCC 223 (Supreme Court of India): This case distinguished between “further investigation” and “re-investigation,” stating that further investigation is a continuation of the earlier investigation.
• N.P. Jharia v. State of M.P., (2007) 7 SCC 358 (Supreme Court of India): This case held that further investigation is permissible even after a final report has been submitted.
• Kari Choudhary v. Mst. Sita Devi, (2002) 1 SCC 714 (Supreme Court of India): This case allowed for further investigation even after a final report had been submitted, emphasizing that the ultimate object of investigation is to find the truth.

On Judicial Discipline:

• Official Liquidator v. Dayanand, (2008) 10 SCC 1 (Supreme Court of India): This case emphasized the importance of judicial discipline and the need for predictability and certainty in law.

Judgment

The Supreme Court held that the High Court was incorrect in quashing the chargesheet. The Court stated that Section 173(8) of the CrPC clearly allows for further investigation even after a closure report has been accepted. The Court emphasized that further investigation is a continuation of the earlier investigation and not a fresh investigation. It also clarified that there is no need to recall or review the order accepting the closure report before ordering further investigation.

The Court also addressed the issue of conflicting views between coordinate benches of the High Court, emphasizing that judicial discipline requires a reference to a larger bench when a judge disagrees with a previous decision of a coordinate bench.

How each authority was viewed by the Court?

The Court relied on various authorities to support its reasoning. The Court cited King-Emperor v. Khwaja Nazir Ahmad* to emphasize the statutory right of the police to investigate without judicial interference. The Court referred to H.N. Rishbud v. State of Delhi* to highlight the court’s power to order reinvestigation to cure any illegality. The Court also cited Divakar Singh v. A. Ramamurthi Naidu* to support the police’s right to conduct multiple investigations based on new information. The Court relied on Sri Bhagwan Samardha Sreepada Vallabha Venkata Vishwanandha Maharaj v. State of A.P.* to affirm the police’s power to conduct further investigation even after cognizance. The Court cited Hasanbhai Valibhai Qureshi v. State of Gujarat* to emphasize that the prime consideration for further investigation is to arrive at the truth. The Court referred to Ram Lal Narang v. State (Delhi Administration)* to clarify that the police’s power to further investigate is not exhausted by the Magistrate taking cognizance. The Court also cited State of Andhra Pradesh v. A.S. Peter* to clarify that further investigation is a statutory right of the police. The Court relied on Nirmal Singh Kahlon v. State of Punjab* to state that the power to further investigate under Section 173(8) is an enabling provision. The Court cited Vinay Tyagi v. Irshad Ali alias Deepak and Others* to define “further investigation” and state that it is a continuation of the earlier investigation. The Court referred to Vinubhai Haribhai Malaviya v. State of Gujarat* to hold that a Magistrate can order further investigation at any stage before the trial commences. The Court cited Union Public Service Commission v. S. Papaiah* to hold that the Magistrate can direct the CBI to “further investigate”. The Court relied on State of Rajasthan v. Aruna Devi* to hold that acceptance of a final report does not bar the Magistrate from taking cognizance if fresh material comes to light. The Court cited K. Chandrasekhar v. State of Kerala* to distinguish between “further investigation” and “re-investigation.” The Court referred to N.P. Jharia v. State of M.P.* to hold that further investigation is permissible even after a final report has been submitted. The Court also cited Kari Choudhary v. Mst. Sita Devi* to allow for further investigation even after a final report had been submitted. The Court relied on Official Liquidator v. Dayanand* to emphasize the importance of judicial discipline.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to ensure a fair and thorough investigation. The Court emphasized that the pursuit of justice should not be hampered by procedural technicalities, particularly when new evidence surfaces. The Court also stressed the importance of judicial discipline and the need for consistency in judicial pronouncements.

Logical Reasoning:

The Court considered the argument that further investigation would delay the trial but noted that the pursuit of truth and justice is paramount and should not be sacrificed for the sake of expediency. The Court also rejected the argument that the accused’s rights to a speedy trial were being violated, stating that the need for a fair trial outweighs the need for a speedy one.

The Court also addressed the argument that the chargesheet was filed without the mandatory order from a police officer not below the rank of Superintendent of Police, as required under Section 17 of the Prevention of Corruption Act, 1988. The Court did not delve into this issue, stating that it was a question of fact and a matter of record that should be addressed by the trial court.

The Court quoted from the judgment:

• “Nothing in this section shall be deemed to preclude further investigation in respect of an offence after a report under sub-section (2) has been forwarded to the Magistrate…”
• “Further investigation, therefore, is the continuation of the earlier investigation and not a fresh investigation or reinvestigation to be started ab initio wiping out the earlier investigation altogether.”
• “The mere fact that there may be further delay in concluding the trial should not stand in the way of further investigation if that would help the court in arriving at the truth and do real and substantial as well as effective justice.”

There were no dissenting opinions in this case.

Key Takeaways

• The CBI and other investigating agencies have the power to conduct further investigation under Section 173(8) of the CrPC, even after a closure report has been accepted by the court.
• There is no need to recall or review the order accepting the closure report before ordering further investigation.
• Further investigation is a continuation of the earlier investigation and not a fresh one.
• The pursuit of truth and justice is paramount and should not be hampered by procedural technicalities or concerns about delay.
• Judicial discipline requires that when a judge disagrees with a view of a coordinate bench, the matter should be referred to a larger bench.

Directions

The Supreme Court directed the Special Court to proceed further with the trial of the accused persons in accordance with law.

Development of Law

This judgment reinforces the interpretation of Section 173(8) of the CrPC, clarifying that the power to further investigate is not extinguished by the acceptance of a closure report. It also reaffirms the importance of judicial discipline and the need for consistency in judicial pronouncements. The ratio decidendi of the case is that further investigation is permissible under Section 173(8) of the CrPC even after a closure report has been accepted by the court, and such an investigation does not require the recalling or quashing of the order accepting the closure report. This clarifies and reinforces the existing position of law.

Conclusion

The Supreme Court’s judgment in this case settles the legal position on the power of investigating agencies to conduct further investigations after a closure report has been accepted. The Court’s decision emphasizes the importance of pursuing justice and truth, even if it means reopening cases when new evidence comes to light. This ruling is significant for maintaining the integrity of the criminal justice system and ensuring that no guilty person escapes prosecution due to procedural technicalities.