Supreme Court Upholds Preliminary Inquiry in Corruption Cases: Charansingh vs. State of Maharashtra (2021)

Date of the Judgment: 24 March 2021

Citation: 2021 INSC 172

Judges: Dr. Dhananjaya Y. Chandrachud, J., M.R. Shah, J.

Can authorities initiate a preliminary inquiry before filing a formal First Information Report (FIR) in cases involving allegations of corruption against public servants? The Supreme Court of India addressed this critical question in Charansingh vs. State of Maharashtra. This judgment clarifies the extent to which such preliminary inquiries are permissible, particularly in cases involving disproportionate assets. The bench, comprising Justices Dr. Dhananjaya Y. Chandrachud and M.R. Shah, delivered a unanimous decision.

Case Background

The case originated from a complaint received on 7th February 2018 by the Director General, Anti-Corruption Bureau, Maharashtra, against Mr. Charansingh, who was then a Member and President of the Municipal Council, Katol, District Nagpur. The complaint alleged that Mr. Charansingh and his brothers had accumulated assets disproportionate to their known sources of income. Following this, the Anti-Corruption Bureau (ACB), Nagpur, initiated an inquiry and issued a notice on 4th March 2020, directing Mr. Charansingh to appear before them with details of his properties and other financial information for an ‘open enquiry.’

Mr. Charansingh challenged this notice in the High Court of Judicature at Bombay, Nagpur Bench, arguing that the police had no power to issue such a notice, especially since no FIR had been registered against him. He contended that compelling him to provide a statement violated his constitutional rights. The High Court dismissed his petition, leading to this appeal before the Supreme Court.

Timeline

Course of Proceedings

Mr. Charansingh challenged the notice issued by the Anti-Corruption Bureau in the High Court of Judicature at Bombay, Nagpur Bench, arguing that it was illegal and violated his rights. The High Court, however, dismissed his petition, relying on the Supreme Court’s judgment in Lalita Kumari v. Government of Uttar Pradesh, which permits preliminary inquiries in certain cases, including corruption cases. The High Court noted that while Mr. Charansingh could not be forced to appear, his non-cooperation could lead to adverse inferences. This decision led Mr. Charansingh to appeal to the Supreme Court.

Legal Framework

The Supreme Court considered the following legal provisions:

• Section 160 of the Code of Criminal Procedure (Cr.P.C.): This section deals with the power of a police officer to require the attendance of witnesses. The appellant argued that this section was not applicable as he was not a witness.
• Section 13(1)(e) of the Prevention of Corruption Act, 1988: This section pertains to the offense of a public servant possessing assets disproportionate to their known sources of income. The court noted that the ‘open enquiry’ was to determine if an offense under this section was disclosed.
• Article 20(3) of the Constitution of India: This article protects individuals from being compelled to be a witness against themselves. The appellant argued that the notice violated this right.
• Article 21 of the Constitution of India: This article protects the right to life and personal liberty. The appellant argued that the notice for a roving inquiry violated this right.

The Court also referred to the Maharashtra State Anti-Corruption Bureau Manual, which outlines procedures for conducting discrete and open inquiries.

Arguments

Appellant’s Arguments:

• The notice issued by the Anti-Corruption Bureau had no statutory basis and was issued under a misapplication of Section 160 of the Cr.P.C., which is not applicable to him as he is not a witness.
• The High Court erred in relying on Lalita Kumari v. Government of Uttar Pradesh, as that case does not justify the kind of notice issued in this matter.
• The notice violated Articles 20(3) and 21 of the Constitution of India, as it compelled him to provide self-incriminating information and was part of a roving and fishing inquiry.
• The notice was a result of political vendetta and aimed to harass him.
• The reliance on Condition No. 16 of the State Anti-Corruption Bureau Manual was misplaced as it does not have statutory force.

Respondent’s Arguments:

• The notice was in accordance with the ACB Manual, which permits discrete and open inquiries to verify allegations of corruption.
• The ‘open enquiry’ was necessary to determine if an offense under Section 13(e) of the Prevention of Corruption Act was disclosed, as the sources of income of a person are within their exclusive knowledge.
• The notice was issued to facilitate Mr. Charansingh to clarify his assets and income, which is a principle of natural justice.
• Section 160 Cr.P.C. was inadvertently mentioned in the notice.
• Mr. Charansingh had already partially participated in the inquiry, making the issue of compelling his appearance moot.
• The inquiry was preliminary and aimed only to ascertain if a cognizable offense was disclosed, and if so, an FIR would be registered.
• The inquiry was based on a discrete inquiry that found prima facie substance in the allegations.
• The notice did not violate Articles 20(3) and 21 of the Constitution, as no FIR had been registered and the inquiry was not a roving one.

Submissions of Parties

Issues Framed by the Supreme Court

The Supreme Court framed the following key issues:

1. Whether an inquiry at the pre-FIR stage is legal in cases of alleged corruption by a public servant.
2. To what extent such an inquiry is permissible.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

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

How each authority was viewed by the Court?

• Lalita Kumari v. Government of Uttar Pradesh [CITATION]: The Court relied on this case to establish that a preliminary inquiry is permissible before registering an FIR, especially in corruption cases.
• P. Sirajuddin v. State of Madras [CITATION]: This case was cited to emphasize the need for a preliminary inquiry before proceeding against public servants accused of corruption.
• Superintendent of Police, CBI v. Tapan Kumar Singh [CITATION]: The Court used this case to highlight that while a GD entry can be treated as an FIR, a preliminary inquiry is still permissible in appropriate cases.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to balance the rights of the accused with the necessity of investigating corruption allegations effectively. The Court emphasized that a preliminary inquiry is not only permissible but also desirable in cases of corruption against public servants. This approach aims to prevent harassment of public servants based on frivolous complaints while ensuring that genuine allegations are thoroughly investigated. The court also focused on the fact that the inquiry was at a pre-FIR stage and the statement given by the appellant cannot be used against him during trial.

Fact:Law Ratio: The Court’s decision was influenced more by legal principles (70%) than factual aspects of the case (30%).

Logical Reasoning:

The Court considered alternative interpretations but rejected them, emphasizing the importance of preliminary inquiries in corruption cases to ensure fairness and prevent abuse of power.

The Court’s decision was that the preliminary inquiry is permissible, and the notice issued to Mr. Charansingh was valid as long as it was limited to clarifying his assets and sources of income. The Court clarified that the statement given by Mr. Charansingh during the inquiry could not be used as a confessional statement against him.

The Court reasoned that “such a statement/enquiry would be restricted only to ascertain whether a cognizable offence is disclosed or not. Such a statement cannot be said to be a confessional statement.”

The Court further clarified that “such a notice, while conducting the ‘open enquiry’, shall be restricted to facilitate the appellant to clarify regarding his assets and known sources of income. The same cannot be said to be a fishing or roving enquiry.”

The Court also stated that “after having been satisfied and after conclusion of the enquiry and on the basis of the material collected, if it is found that there is substance in the allegations against the appellant and it discloses a cognizable offence, FIR will be lodged and the investigating agency has to collect the evidence/further evidence to substantiate the allegations/charge of accumulating the assets disproportionate to his known sources of income.”

Key Takeaways

• ✓ Preliminary inquiries are permissible and desirable in corruption cases against public servants before registering an FIR.
• ✓ Such inquiries should be limited to gathering information to ascertain if a cognizable offense is disclosed and to allow the public servant to clarify their assets and income.
• ✓ Statements made during such inquiries cannot be used as confessional statements against the individual during trial.
• ✓ The judgment provides a framework for balancing the rights of the accused with the need to investigate corruption effectively.

Directions

The Supreme Court did not issue any specific directions in this case, but it clarified that the statement of the appellant would be only to satisfy whether a cognizable offense is disclosed or not and to enable the appellant to clarify the allegations made against him. The same shall not be treated as a confessional statement.

Development of Law

The ratio decidendi of this case is that a preliminary inquiry is permissible and desirable in corruption cases against public servants before registering an FIR, as long as it is limited in scope and does not violate the rights of the accused. This judgment reinforces the principles laid down in Lalita Kumari and P. Sirajuddin, providing further clarity on the process of investigating corruption allegations. There is no change in the previous position of law, but this judgment provides more clarity in the applicability of the law.

Conclusion

The Supreme Court’s judgment in Charansingh vs. State of Maharashtra upholds the legality and importance of preliminary inquiries in corruption cases involving public servants. The Court clarified that such inquiries are necessary to determine whether a cognizable offense is disclosed before registering an FIR. The judgment also emphasizes that these inquiries must be conducted fairly, respecting the rights of the accused and ensuring that the process does not become a tool for harassment. The decision provides a balanced approach to investigating corruption while safeguarding individual liberties.