Supreme Court Upholds Corruption Charges: State of Telangana vs. Sri Managipet (2019)

Date of the Judgment: 06 December 2019

Citation: 2019 INSC 1234

Judges: L. Nageswara Rao, J. and Hemant Gupta, J.

Can a re-employed officer, authorized by the State, initiate a valid investigation under the Prevention of Corruption Act? This was one of the key questions before the Supreme Court of India in this case. The court also examined whether a preliminary inquiry is mandatory before registering a First Information Report (FIR) in corruption cases. The Supreme Court overturned the High Court’s decision, upholding the corruption charges against the accused officer.

The judgment was delivered by a two-judge bench comprising Justice L. Nageswara Rao and Justice Hemant Gupta, with Justice Hemant Gupta authoring the opinion.

Case Background

The case began with an FIR registered on 9th November 2011, against Sri Managipet @ Mangipet Sarveshwar Reddy, an Officer on Special Duty (OSD) in the Ranga Reddy District. The FIR was based on information that he had amassed assets disproportionate to his known sources of income during his service.

The allegations included the acquisition of six multi-storied buildings, one commercial complex, 27 plots, 26 acres of land, and three vehicles, totaling approximately Rs. 3,55,61,500. The accused officer’s probable income was estimated at Rs. 60,00,000, with expenditures around Rs. 23,00,000, leaving savings of Rs. 37,00,000. The disproportionate assets were valued at Rs. 3,18,61,500.

A charge sheet was filed on 9th October 2017, after an investigation involving 114 witnesses. The High Court, however, quashed the charge sheet, leading to the current appeal before the Supreme Court.

Timeline

Course of Proceedings

The High Court of Judicature at Hyderabad partly allowed the petition filed by the Accused Officer under Section 482 of the Code of Criminal Procedure, 1973, quashing the proceedings arising out of the FIR. The High Court held that there was no proper authorization to register the crime and that the informant could not be the investigating officer. The High Court did not accept the grounds raised by the Accused Officer regarding the lack of a preliminary inquiry, sanction, and delay in the investigation.

The State of Telangana appealed against the High Court’s decision, while the Accused Officer challenged the High Court’s rejection of his other grounds for quashing the charge sheet.

Legal Framework

The case primarily revolves around the interpretation of the Prevention of Corruption Act, 1988, specifically Section 13(1)(e) and Section 17. Section 13(1)(e) of the Act deals with criminal misconduct by a public servant who is in possession of assets disproportionate to their known sources of income.

Section 17 of the Prevention of Corruption Act, 1988, outlines who is authorized to investigate offenses under the Act. It states that a police officer not below the rank of a Deputy Superintendent of Police (DSP) can investigate such offenses. However, an offense under Section 13(1)(e) cannot be investigated without an order from a police officer not below the rank of a Superintendent of Police (SP). The section reads:

“17. Persons authorised to investigate.—Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no police officer below the rank,—
a)xxxxxx
b)xxxxxx
c)elsewhere, of a Deputy Superintendent of Police or a police officer of equivalent rank, shall investigate any offence punishable under this Act without the order of a Metropolitan 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 Metropolitan 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 13 shall not be investigated without the order of a police officer not below the rank of a Superintendent of Police.”

The Court also considered Article 162 of the Constitution of India, which pertains to the executive power of the State, and Article 310, which discusses the tenure of office of persons serving the Union or a State.

Arguments

Arguments by the State of Telangana:

• The State argued that Sri K. Sampath Kumar, the Joint Director of the Anti-Corruption Bureau (ACB), was validly re-employed by the State Government and had the authority to authorize Ch. Sudhakar, DSP, to register the case.
• The State contended that the High Court erred in applying the principles of contract employment from the case of Union Public Service Commission v. Girish Jayanti Lal Vaghela & Ors. [ (2006) 2 SCC 482 ] to a case of re-employment of a retired government servant.
• The State asserted that the executive power of the State under Article 162 of the Constitution allows for re-employment, which supplements and does not supplant statutory rules.
• The State argued that the authorization given to Ch. Sudhakar was valid under Section 17 of the Prevention of Corruption Act, 1988.
• The State relied on the de facto doctrine, stating that the actions of Sri K. Sampath Kumar, while discharging his duties as Joint Director, were valid because they were in the public interest and not for his personal benefit.

Arguments by the Accused Officer:

• The Accused Officer argued that the High Court was correct in quashing the charge sheet as the re-employed officer, Sri K. Sampath Kumar, had no authority to authorize the investigation.
• The Accused Officer contended that a preliminary inquiry was mandatory before registering the FIR, based on the judgments in Lalita Kumari v. Government of Uttar Pradesh & Ors. [ (2014) 2 SCC 1 ] and State by Karnataka Lokayukta Police Station, Bengaluru v. M.R. Hiremath [ (2019) 7 SCC 515 ].
• The Accused Officer also argued that there was no sanction before filing the report and that there was a delay in the investigation that prejudiced his rights.
• The Accused Officer contended that the amended provisions of the Prevention of Corruption Act, 1988, should apply as the Amending Act came into force before the filing of the charge sheet.

Submissions

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the High Court was justified in quashing the charge sheet on the ground that the re-employed officer did not have the authority to authorize the investigation.
2. Whether the High Court was correct in holding that the informant cannot be the investigating officer.
3. Whether a preliminary inquiry is mandatory before registering an FIR in corruption cases.
4. Whether the lack of sanction before filing the report warrants quashing of the proceedings.
5. Whether the amended provisions of the Prevention of Corruption Act, 1988, are applicable to the case.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on several authorities to reach its decision:

On Re-employment and Executive Power:

• Union Public Service Commission v. Girish Jayanti Lal Vaghela & Ors. [(2006) 2 SCC 482] – Distinguished by the Court, as it pertained to contractual employment and not re-employment.
• P.H. Paul Manoj Pandian v. P. Veldurai [(2011) 5 SCC 214] – Cited to support the view that the executive power of the State is coterminous with its legislative power.
• Bishambhar Dayal Chandra Mohan & Ors. v. State of Uttar Pradesh & Ors. [(1982) 1 SCC 39] – Cited to emphasize that the executive power of the State cannot be circumscribed if it does not go against the Constitution or any law.

On the De Facto Doctrine:

• Gokaraju Rangaraju v. State of Andhra Pradesh [(1981) 3 SCC 132] – Cited to support the application of the de facto doctrine.
• Pulin Behari Das v. King Emperor [1911 SCC OnLine Cal 159 : (1911-12) 16 CWN 1105] – Cited to explain the historical basis of the de facto doctrine.
• Pushpadevi M. Jatia v. M. L. Wadhawan, Additional Secretary, Government of India and Ors. [(1987) 3 SCC 367] – Cited as an example of the de facto doctrine being applied to an executive appointment.
• P.S. Menon v. State of Kerala [AIR 1970 Ker 165] – Cited to explain the policy behind the de facto doctrine.
• P. Mahamani v. Tamil Nadu Magnesite, Ltd., Salem & Ors. [(1993) 2 LLN 353] – Cited to explain the difference between a de facto officer and an intruder.
• Veerendra Kumar Gautam & Ors. v. Karuna Nidhan Upadhyay & Ors. [(2016) 14 SCC 18] – Cited as a recent reiteration of the de facto doctrine.

On Preliminary Inquiry and FIR Registration:

• Lalita Kumari v. Government of Uttar Pradesh & Ors. [(2014) 2 SCC 1] – Explained that preliminary inquiry is not mandatory in all cases, particularly in corruption cases.
• State by Karnataka Lokayukta Police Station, Bengaluru v. M.R. Hiremath [(2019) 7 SCC 515] – Explained the scope of preliminary inquiry.
• State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335] – Cited to explain when an FIR can be quashed.

On Informant and Investigating Officer:

• Mohan Lal v. State of Punjab [(2018) 17 SCC 627] – Held to be prospective in application.
• Varinder Kumar v. State of Himachal Pradesh [2019 SCC OnLine SC 170] – Clarified that the judgment in Mohan Lal was prospective.

On Sanction:

• K. Kalimuthu v. State by DSP [(2005) 4 SCC 512] – Held that the question of sanction can be considered at any stage of the proceedings.
• Vinod Kumar Garg v. State (Government of National Capital Territory of Delhi) [Criminal Appeal No. 1781 of 2009 decided on 27th November, 2019] – Held that an irregularity in investigation does not vitiate conviction unless it causes prejudice.

On Applicability of Amended Provisions:

• M. Soundararajan v. State through the Deputy Superintendant of Police, Vigilance and Anti Corruption, Ramanathapuram [Crl. A. (MD) No. 488 of 2018 and Crl. M.P. (MD) No. 8712 of 2018 decided on 30th October, 2018] – Distinguished by the Court, as the FIR was registered before the amendment.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• Union Public Service Commission v. Girish Jayanti Lal Vaghela & Ors. [(2006) 2 SCC 482] – Distinguished by the Court, as it pertained to contractual employment and not re-employment.
• P.H. Paul Manoj Pandian v. P. Veldurai [(2011) 5 SCC 214] – Approved and followed to support the view that the executive power of the State is coterminous with its legislative power.
• Bishambhar Dayal Chandra Mohan & Ors. v. State of Uttar Pradesh & Ors. [(1982) 1 SCC 39] – Approved and followed to emphasize that the executive power of the State cannot be circumscribed if it does not go against the Constitution or any law.
• Gokaraju Rangaraju v. State of Andhra Pradesh [(1981) 3 SCC 132] – Approved and followed to support the application of the de facto doctrine.
• Pulin Behari Das v. King Emperor [1911 SCC OnLine Cal 159 : (1911-12) 16 CWN 1105] – Approved and followed to explain the historical basis of the de facto doctrine.
• Pushpadevi M. Jatia v. M. L. Wadhawan, Additional Secretary, Government of India and Ors. [(1987) 3 SCC 367] – Approved and followed as an example of the de facto doctrine being applied to an executive appointment.
• P.S. Menon v. State of Kerala [AIR 1970 Ker 165] – Approved and followed to explain the policy behind the de facto doctrine.
• P. Mahamani v. Tamil Nadu Magnesite, Ltd., Salem & Ors. [(1993) 2 LLN 353] – Approved and followed to explain the difference between a de facto officer and an intruder.
• Veerendra Kumar Gautam & Ors. v. Karuna Nidhan Upadhyay & Ors. [(2016) 14 SCC 18] – Approved and followed as a recent reiteration of the de facto doctrine.
• Lalita Kumari v. Government of Uttar Pradesh & Ors. [(2014) 2 SCC 1] – Explained and distinguished, stating that preliminary inquiry is not mandatory in all cases, particularly in corruption cases.
• State by Karnataka Lokayukta Police Station, Bengaluru v. M.R. Hiremath [(2019) 7 SCC 515] – Explained the scope of preliminary inquiry.
• State of Haryana v. Bhajan Lal [1992 Supp (1) SCC 335] – Referred to, to explain when an FIR can be quashed.
• Mohan Lal v. State of Punjab [(2018) 17 SCC 627] – Held to be prospective in application.
• Varinder Kumar v. State of Himachal Pradesh [2019 SCC OnLine SC 170] – Approved and followed to clarify that the judgment in Mohan Lal was prospective.
• K. Kalimuthu v. State by DSP [(2005) 4 SCC 512] – Approved and followed to hold that the question of sanction can be considered at any stage of the proceedings.
• Vinod Kumar Garg v. State (Government of National Capital Territory of Delhi) [Criminal Appeal No. 1781 of 2009 decided on 27th November, 2019] – Approved and followed to hold that an irregularity in investigation does not vitiate conviction unless it causes prejudice.
• M. Soundararajan v. State through the Deputy Superintendant of Police, Vigilance and Anti Corruption, Ramanathapuram [Crl. A. (MD) No. 488 of 2018 and Crl. M.P. (MD) No. 8712 of 2018 decided on 30th October, 2018] – Distinguished by the Court, as the FIR was registered before the amendment.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Validity of Re-employment: The Court held that the re-employment of Sri K. Sampath Kumar was a valid exercise of the State’s executive power under Article 162 of the Constitution. The Court emphasized that re-employment is different from initial appointment and does not require compliance with Article 16.
• Application of the De Facto Doctrine: The Court applied the de facto doctrine, stating that the acts of Sri K. Sampath Kumar were valid because he was acting in the public interest under the color of lawful authority. The Court emphasized that the doctrine was necessary to maintain the supremacy of the law and to preserve peace and order in the community.
• Interpretation of Section 17 of the Prevention of Corruption Act: The Court held that the authorization given to Ch. Sudhakar by Sri K. Sampath Kumar was valid under Section 17 of the Act. The Court also clarified that a preliminary inquiry is not mandatory in all corruption cases.
• Prospective Application of Mohan Lal Judgment: The Court stated that the judgment in Mohan Lal v. State of Punjab [(2018) 17 SCC 627], which held that the informant and the investigating officer cannot be the same person, was prospective and did not apply to this case.
• Sanction and Delay: The Court held that the lack of sanction before filing the report and the delay in the investigation were not grounds for quashing the proceedings. The Court stated that the sanction could be produced during the course of the trial.
• Applicability of Amended Provisions: The Court held that the amended provisions of the Act were not applicable to this case, as the FIR was registered before the amendment.

Sentiment Analysis of Court’s Reasoning

The Court’s reasoning was heavily influenced by the need to uphold the rule of law and ensure that public officials are held accountable for corruption. The Court emphasized the importance of the de facto doctrine in maintaining the integrity of public institutions and the need to avoid technicalities that could undermine the fight against corruption. The Court also emphasized that a preliminary inquiry is not mandatory in all corruption cases and that the focus should be on whether the information disclosed a cognizable offense.

Fact:Law

The Court’s reasoning showed a balanced approach between factual considerations and legal principles.

Logical Reasoning

Issue 1: Validity of Authorization

Issue 2: Informant as Investigating Officer

Issue 3: Preliminary Inquiry

Issue 4: Lack of Sanction

Issue 5: Applicability of Amended Provisions

Key Takeaways

• Re-employment of Government Servants: The judgment clarifies that the re-employment of retired government servants is a valid exercise of the State’s executive power under Article 162 of the Constitution. Such re-employment does not require compliance with Article 16, which relates to appointments to public posts.
• De Facto Doctrine: The case reaffirms the applicability of the de facto doctrine in validating the actions of public officials who are acting under the color of lawful authority, even if their appointments are later found to be irregular. This doctrine is crucial for maintaining the continuity and integrity of public institutions.
• Preliminary Inquiry in Corruption Cases: The judgment clarifies that a preliminary inquiry is not mandatory in all corruption cases. The necessity of a preliminary inquiry depends on the specific facts and circumstances of each case. An FIR can be registered if the information discloses a cognizable offense.
• Informant and Investigating Officer: The judgment confirms that the prohibition on the informant being the investigating officer, as laid down in Mohan Lal v. State of Punjab [(2018) 17 SCC 627], is prospective in nature.
• Sanction for Prosecution: The judgment clarifies that the lack of sanction before filing the report is not a ground for quashing the proceedings. The sanction can be produced during the course of the trial.
• Applicability of Amended Provisions: The judgment clarifies that the amended provisions of the Prevention of Corruption Act, 1988, are not applicable to cases where the FIR was registered before the amendment.

Conclusion

The Supreme Court’s decision in State of Telangana vs. Sri Managipet @ Mangipet Sarveshwar Reddy (2019) is a significant judgment that clarifies several important legal principles related to corruption cases. The Court upheld the validity of investigations authorized by re-employed officers, reaffirmed the application of the de facto doctrine, and clarified the scope of preliminary inquiries in corruption cases. The judgment emphasizes the importance of holding public officials accountable for corruption and ensures that technicalities do not undermine the fight against corruption. The Supreme Court set aside the High Court’s decision, thereby reinstating the corruption charges against the accused officer, and remanding the case back to the trial court for further proceedings.