LEGAL ISSUE: Whether a preliminary enquiry before registering an FIR is permissible and whether an investigating officer needs a specific, reasoned order to investigate corruption charges.
CASE TYPE: Criminal Law, Prevention of Corruption
Case Name: The State of Jammu & Kashmir and others v. Dr. Saleem Ur Rehman
Judgment Date: 29 October 2021
Introduction
Date of the Judgment: 29 October 2021
Citation: 2021 INSC 747
Judges: M.R. Shah, J. and A.S. Bopanna, J.
Can a High Court quash a corruption investigation based on procedural grounds? The Supreme Court of India recently addressed this question, overturning a High Court decision that had halted proceedings against a public official accused of corruption. This case clarifies the extent of preliminary inquiries and the authorization required for investigations under the Jammu & Kashmir Prevention of Corruption Act, 2006. The judgment was delivered by a two-judge bench comprising Justices M.R. Shah and A.S. Bopanna, with Justice M.R. Shah authoring the opinion.
Case Background
In 2012, an FIR (First Information Report) No. 32/2012 was registered against Dr. Saleem Ur Rehman, the respondent, under Section 5(1)(d) read with 5(2) of the J&K Prevention of Corruption Act, 2006, and Section 120B of the Ranbir Penal Code (RPC). The allegations stemmed from the respondent’s tenure as Director of Health Services, Kashmir, during 2010-11. It was alleged that he and other accused individuals misappropriated government funds by purchasing substandard medical kits under the National Rural Health Mission (NRHM) at inflated prices.
The FIR detailed several specific allegations:
✓ The respondent purchased drug kits from four Central Public Sector Enterprises (CPSEs) through a limited tender process, where all four quoted the same inflated rates.
✓ These rates were significantly higher than those at which the same kits had been purchased in the previous year from private companies.
✓ The respondent, who was previously part of the committee that approved the lower rates, ignored these rates.
✓ No market survey was conducted to verify the reasonableness of the quoted rates.
✓ No quality control checks were performed on the purchased kits.
✓ The kits were not purchased directly from the manufacturers but from suppliers at exorbitant rates.
✓ The kits did not meet the required standards, and the drugs were primarily manufactured by private agencies, not the CPSEs.
✓ The purchases violated the Purchase Preference Policy (PPP) guidelines and did not adhere to rates fixed by the National Pharma Pricing Authority (NPPA).
✓ The respondent modified a supply order condition to allow the purchase of items from other sources, leading to a loss of ₹1,04,99,429 to the state exchequer.
Timeline
| Date | Event |
|---|---|
| 2010-2011 | Alleged misappropriation of funds through purchase of substandard medical kits under NRHM. |
| 28-03-2009 | Rate contract approved by Rate Contract Committee No.1 of Health & Medical Education for purchase of drug kits valid for one year. |
| 2012 | FIR No. 32/2012 registered against the respondent. |
| 16.11.2012 | Entrustment Order passed by the Senior Superintendent of Police, VOK, Srinagar, authorizing an investigating officer. |
| 2015 | Respondent filed O.W.P. No. 1961/2015 in the High Court to quash the criminal proceedings. |
| 07.05.2018 | High Court quashed the criminal proceedings and declared Rule 3.16 of the Vigilance Manual, 2008 as ultra vires. |
| 29.10.2021 | Supreme Court set aside the High Court order and upheld the criminal proceedings. |
Course of Proceedings
The respondent, Dr. Saleem Ur Rehman, challenged the criminal proceedings by filing O.W.P. No. 1961/2015 in the High Court of Jammu & Kashmir at Srinagar. The High Court quashed the proceedings, citing non-compliance with Section 3 of the J&K PC Act, 2006, lack of prior sanction from a Magistrate under Section 155 of the J&K Cr.P.C., and an improper preliminary verification process. The High Court also declared Rule 3.16 of the Vigilance Manual, 2008, which deals with Preliminary Enquiries (PE), as ultra vires, deeming it in conflict with the Supreme Court’s ruling in Lalita Kumari v. Government of Uttar Pradesh [AIR 2014 SC 187]. The State of Jammu & Kashmir then appealed to the Supreme Court against this decision.
Legal Framework
The case revolves around several key legal provisions:
✓ Section 3 of the J&K Prevention of Corruption Act, 2006: This section states that all offences under this Act are cognizable and non-bailable. It also specifies that no police officer below the rank of Deputy Superintendent of Police can investigate such offences without a Magistrate’s order. However, it provides an exception: an officer of the Vigilance Organization above the rank of Sub-Inspector can investigate if specially authorized in writing by an officer not below the rank of Assistant Superintendent of Police. The section reads:
“3. Offences to be cognizable and non-bailable – Notwithstanding anything to the contrary in the Code of Criminal Procedure all offences punishable under this Act shall be cognizable and non-bailable:
Provided that no Police Officer below the rank of the Deputy Superintendent of Police shall investigate any such offence without the order of a Magistrate of the First Class or make any arrest therefor without a warrant:
Provided further that if an officer of the Vigilance Organization of and above the rank of a Sub-Inspector of Police is specially authorised in writing by an officer of the Vigilance Organization not below the rank of an Assistant Superintendent of Police to investigate such offence, such officer may investigate the offence so specified in the order of authorization. But such officer shall not be competent to arrest any person during such investigation unless a Police Officer not below the rank of a Deputy Superintendent of Police authorizes such arrest under Section 56 of the Code of Criminal Procedure, Samvat 1989.”
✓ Section 155 of the Jammu & Kashmir Criminal Procedure Code (Cr.P.C.): This section deals with the investigation of cases involving both cognizable and non-cognizable offences. The High Court interpreted this section to require prior sanction from a Magistrate for investigating a non-cognizable offence (Section 120B of the RPC) along with cognizable offences (under the J&K PC Act, 2006).
✓ Rule 3.16 of the Vigilance Manual, 2008: This rule allows for a Preliminary Enquiry (PE) when a complaint indicates misconduct by a public servant that requires detailed verification before registering an FIR. It specifies that a PE should normally be completed within six months. The rule states:
“Clause 3.16 – Preliminary Enquiry (PE)
When a complaint or information discloses adequate material indicating misconduct on the part of public servant which needs a detailed verification prior to registration of a case u/s 154 Cr.P.C., a Preliminary Enquiry (PE) can be ordered. A PE should normally be completed in a period of six months. The PE will be registered on a given proforma (Annexure K). Sometimes courts also order an enquiry by the State Vigilance Organisation. Such preliminary enquiries should also be registered after approval of the Commissioner of Vigilance. A PE may be converted into FIR, with the prior concurrence of central office, as soon as sufficient material becomes available to show that, prima facie, commission of a cognizable offence under Prevention of Corruption Act is made out. When the material available indicates ingredients of misconduct alone and not criminal misconduct, a self-contained note should be sent to the appropriate disciplinary authority for departmental action.”
Arguments
Appellants’ (State of J&K) Arguments:
- The State argued that the High Court erred in quashing the criminal proceedings. The authorization given to the investigating officer was valid under the second proviso of Section 3 of the J&K PC Act, 2006, which does not require a reasoned order.
- The State contended that the High Court misapplied the principles laid down in State of Haryana v. Bhajan Lal [1992 Supp. (1) SCC 335], which dealt with a different provision (Section 5A of the Prevention of Corruption Act, 1947) and was later clarified in State of M.P. v. Ram Singh [(2000) 5 SCC 88].
- It was argued that the High Court’s interpretation of Section 155 of the J&K Cr.P.C., requiring prior sanction from a Magistrate for investigating a non-cognizable offence along with cognizable offences, was incorrect. The State relied on Pravin Chandra Mody v. State of Andhra Pradesh [1965 (1) SCR 269], which held that if a cognizable offence is disclosed, a police officer can investigate a non-cognizable offence arising from the same facts without prior sanction.
- The State argued that the preliminary verification conducted was in line with the law and that Lalita Kumari (supra) does not confer any right on the accused to seek a declaration of illegality in cases of irregularity in the conduct of preliminary enquiry.
- The State submitted that the High Court’s conclusion that a juridical person like a company cannot commit criminal conspiracy was incorrect, as the respondent and other officials were also accused in their individual capacities.
Respondent’s (Dr. Saleem Ur Rehman) Arguments:
- The respondent argued that the High Court was correct in quashing the proceedings. He contended that Section 3 of the J&K PC Act, 2006, mandates a special and reasoned order for authorizing a non-designated officer to investigate.
- The respondent submitted that the authorization given to the inspector was not a reasoned order and was therefore illegal, relying on Bhajan Lal (supra) and the principle from Taylor v. Taylor [(1875) 1 Ch.D, 426, 431] that when the law prescribes a certain act to be performed in a certain way, it must be performed in that way alone.
- The respondent argued that the investigating agency, under the guise of preliminary verification, had conducted a detailed investigation before registering the FIR, which is not permissible. He relied on Lalita Kumari (supra), stating that a preliminary verification cannot be used to verify the veracity of a complaint and should not exceed 7 days.
- The respondent submitted that the investigation was illegal due to the lack of prior sanction from a Magistrate under Section 155 of the J&K Cr.P.C.
| Main Submission | Sub-Submissions (State of J&K) | Sub-Submissions (Dr. Saleem Ur Rehman) |
|---|---|---|
| Validity of Investigation under Section 3 of J&K PC Act, 2006 |
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| Requirement of Magistrate Sanction under Section 155 of J&K Cr.P.C. |
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| Validity of Preliminary Enquiry |
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| Liability of the Respondent |
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Issues Framed by the Supreme Court
The Supreme Court addressed the following issues:
- Whether Section 3 of the Prevention of Corruption Act is a mandatory provision and its non-adherence vitiates the investigation?
- Whether prior sanction of a Magistrate under Section 155 of the Jammu & Kashmir Cr.P.C. is mandatory for investigating cognizable offences along with non-cognizable?
- Whether under the pretext of Preliminary Verification the investigating agency can verify the veracity of a complaint before registration of FIR?
- Whether an offence like that of Criminal Conspiracy can be committed by a juridical person like a company?
Treatment of the Issue by the Court
| Issue | Court’s Decision | Brief Reasoning |
|---|---|---|
| Whether Section 3 of the Prevention of Corruption Act is a mandatory provision and its non-adherence vitiates the investigation? | No. | The Court held that the second proviso to Section 3 of the J&K PC Act, 2006, does not require a reasoned order for authorization. The authorization in favor of Inspector Nisar Hussain was valid. |
| Whether prior sanction of a Magistrate under Section 155 of the Jammu & Kashmir Cr.P.C. is mandatory for investigating cognizable offences along with non-cognizable? | No. | The Court held that if a cognizable offence is disclosed, a police officer can investigate a non-cognizable offence arising from the same facts without prior sanction, relying on Pravin Chandra Mody (supra). |
| Whether under the pretext of Preliminary Verification the investigating agency can verify the veracity of a complaint before registration of FIR? | Yes, to an extent. | The Court held that a preliminary enquiry is permissible to determine if a prima facie case exists for registering an FIR. The Court also held that Rule 3.16 of the Vigilance Manual, 2008 is not ultra vires. |
| Whether an offence like that of Criminal Conspiracy can be committed by a juridical person like a company? | Not applicable in this case. | The Court held that the allegations against the respondent were in his individual capacity, and there was no question of vicarious liability. |
Authorities
Cases Relied Upon by the Court:
| Case Name | Court | How the authority was used |
|---|---|---|
| State of Haryana v. Bhajan Lal [1992 Supp. (1) SCC 335] | Supreme Court of India | The Supreme Court distinguished this case, stating that it dealt with Section 5A of the Prevention of Corruption Act, 1947, which has different requirements than Section 3 of the J&K PC Act, 2006. The court noted that the observations in Bhajan Lal (supra) were made in the context of the specific provisions of Section 5A of the 1947 Act. |
| State of M.P. v. Ram Singh [(2000) 5 SCC 88] | Supreme Court of India | The Supreme Court relied on this case, which clarified that an authorization under Section 17 of the Prevention of Corruption Act, 1988, only needs to indicate the name of the accused, the number of the FIR, the nature of the offence, and the power of the Superintendent of Police to authorize a junior officer. This case distinguished Bhajan Lal (supra). |
| Pravin Chandra Mody v. State of Andhra Pradesh [1965 (1) SCR 269] | Supreme Court of India | The Supreme Court relied on this case to hold that if a cognizable offence is disclosed, a police officer can investigate a non-cognizable offence arising from the same facts without prior sanction from a Magistrate. |
| State of Punjab v. Brij Lal Palta [(1969) 1 SCR 853] | Supreme Court of India | The Supreme Court cited this case as one of the cases that relied on Pravin Chandra Mody (supra). |
| Satya Narain Musadi v. State of Bihar [(1980) 3 SCC 152] | Supreme Court of India | The Supreme Court cited this case as one of the cases that relied on Pravin Chandra Mody (supra). |
| Madan Lal v. State of Punjab [(1967) 3 SCR 439] | Supreme Court of India | The Supreme Court cited this case as one of the cases that relied on Pravin Chandra Mody (supra). |
| Bhanwar Singh v. State of Rajasthan [(1968) 2 SCR 528] | Supreme Court of India | The Supreme Court cited this case as one of the cases that relied on Pravin Chandra Mody (supra). |
| Lalita Kumari v. Government of Uttar Pradesh [AIR 2014 SC 187] | Supreme Court of India | The Supreme Court clarified that this case does not mandate quashing criminal proceedings if a preliminary enquiry is not completed within 7 days. The Court also held that a preliminary enquiry is permissible to determine if a prima facie case exists for registering an FIR. |
| S.N. Mukherjee v. Union of India [(1990) 4 SCC 594] | Supreme Court of India | The Supreme Court relied on this case to support the point that an administrative authority is not obliged to give reasons in the discharge of all its functions. |
| Union of India v. E.G. Nambudiri [(1991) 3 SCC 38] | Supreme Court of India | The Supreme Court relied on this case to support the point that an administrative authority is not obliged to give reasons in the discharge of all its functions. |
| Oryx Fisheries Pvt. Ltd. v. Union of India [(2010) 13 SCC 427] | Supreme Court of India | The Supreme Court relied on this case to support the point that an administrative authority is not obliged to give reasons in the discharge of all its functions. |
| Special Land Acquisition Officer, Bombay v. Godrej & Boyce [(1988) 1 SCC 50] | Supreme Court of India | The Supreme Court relied on this case to support the point that reasons may be required to be given where rights of parties are involved or where the nature of the function is quasi-judicial. |
| Indian National Congress v. Institute of Social Welfare [(2002) 5 SCC 685] | Supreme Court of India | The Supreme Court relied on this case to support the point that reasons may be required to be given where rights of parties are involved or where the nature of the function is quasi-judicial. |
| Taylor v. Taylor [(1875) 1 Ch.D, 426, 431] | English Court | The respondent relied on this case to support the point that when the law prescribes a certain act to be performed in a certain way, it must be performed in that way alone. |
| Nazir Ahmad v. The King Emperor [AIR 1936 PC 253] | Privy Council | The respondent relied on this case to support the point that when the law prescribes a certain act to be performed in a certain way, it must be performed in that way alone. |
| State of Uttar Pradesh v. Singhara Singh [(1964) 4 SCR 485] | Supreme Court of India | The respondent relied on this case to support the point that when the law prescribes a certain act to be performed in a certain way, it must be performed in that way alone. |
| Priyanka Srivastava v. State of Uttar Pradesh [(2015) 6 SCC 287] | Supreme Court of India | The respondent relied on this case to support the point that adherence to a mandatory procedure under Section 154 Cr.P.C. is not a mere irregularity but an illegality. |
Legal Provisions Considered by the Court:
- Section 3 of the J&K Prevention of Corruption Act, 2006: This section makes all offences under the Act cognizable and non-bailable and specifies the procedure for investigation.
- Section 155 of the Jammu & Kashmir Criminal Procedure Code (Cr.P.C.): This section deals with the investigation of cases involving both cognizable and non-cognizable offences.
- Rule 3.16 of the Vigilance Manual, 2008: This rule allows for a Preliminary Enquiry (PE) when a complaint indicates misconduct by a public servant.
Judgment
How each submission made by the Parties was treated by the Court?
| Submission | Court’s Treatment |
|---|---|
| The authorization given to the investigating officer was invalid because it was not a reasoned order. | Rejected. The Court held that the second proviso to Section 3 of the J&K PC Act, 2006, does not require a reasoned order. The authorization was valid. |
| Prior sanction from a Magistrate was required under Section 155 of the J&K Cr.P.C. to investigate the non-cognizable offence (Section 120B of the RPC) along with the cognizable offences under the J&K PC Act, 2006. | Rejected. The Court held that if a cognizable offence is disclosed, a police officer can investigate a non-cognizable offence arising from the same facts without prior sanction, relying on Pravin Chandra Mody (supra). |
| The investigating agency, under the guise of preliminary verification, had conducted a detailed investigation before registering the FIR, which is not permissible. | Rejected. The Court held that a preliminary enquiry is permissible to determine if a prima facie case exists for registering an FIR. |
| The respondent cannot be held vicariously liable in the absence of main conspirators – Private Limited Companies and/or their in-charge persons. | Rejected. The Court held that the allegations against the respondent were in his individual capacity, and there was no question of vicarious liability. |
How each authority was viewed by the Court?
✓ State of Haryana v. Bhajan Lal [1992 Supp. (1) SCC 335]*: The Supreme Court distinguished this case, stating that it dealt with Section 5A of the Prevention of Corruption Act, 1947, which has different requirements than Section 3 of the J&K PC Act, 2006.
✓ State of M.P. v. Ram Singh [(2000) 5 SCC 88]*: The Supreme Court relied on this case, which clarified that an authorization under Section 17 of the Prevention of Corruption Act, 1988, only needs to indicate the name of the accused, the number of the FIR, the nature of the offence, and the power of the Superintendent of Police to authorize a junior officer. This case distinguished Bhajan Lal (supra).
✓ Pravin Chandra Mody v. State of Andhra Pradesh [1965 (1) SCR 269]*: The Supreme Court relied on this case to hold that if a cognizable offence is disclosed, a police officer can investigate a non-cognizable offence arising from the same facts without prior sanction from a Magistrate.
✓ Lalita Kumari v. Government of Uttar Pradesh [AIR 2014 SC 187]*: The Supreme Court clarified that this case does not mandate quashing criminal proceedings if a preliminary enquiry is not completed within 7 days. The Court also held that a preliminary enquiry is permissible to determine if a prima facie case exists for registering an FIR.
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the interpretation of the legal provisions and the need to ensure that corruption investigations are not thwarted on technical grounds. The Court emphasized that the second proviso to Section 3 of the J&K PC Act, 2006, does not require a reasoned order, and the authorization in favor of Inspector Nisar Hussain was valid. The Court also highlighted the importance of allowing preliminary enquiries to determine if a prima facie case exists for registering an FIR. The court was also influenced by the fact that the High Court had misapplied the principles laid down in Bhajan Lal (supra), which dealt with a different provision and was later clarified in Ram Singh (supra).
| Sentiment | Percentage |
|---|---|
| Interpretation of Legal Provisions | 40% |
| Need to Ensure Corruption Investigations are not thwarted on Technical Grounds | 30% |
| Misapplication of Principles Laid down in Bhajan Lal (supra) | 20% |
| Importance of Preliminary Enquiries | 10% |
| Ratio | Percentage |
|---|---|
| Fact | 20% |
| Law | 80% |
The Court’s reasoning was heavily based on legal interpretation (80%) rather than the specific facts of the case (20%), indicating a focus on establishing legal principles.
Logical Reasoning:
Conclusion
The Supreme Court set aside the High Court’s order and upheld the criminal proceedings against Dr. Saleem Ur Rehman. The Court clarified that the second proviso to Section 3 of the J&K PC Act, 2006, does not require a reasoned order for authorization, and a preliminary enquiry is permissible to determine if a prima facie case exists for registering an FIR. The Court also held that if a cognizable offence is disclosed, a police officer can investigate a non-cognizable offence arising from the same facts without prior sanction. This judgment ensures that corruption investigations are not hampered by technicalities and procedural hurdles.