If CBI chooses not to hold Preliminary Enquiry, accused cannot demand it as matter of right in every case of corruption & disproportionate assets, reiterates Apex Court

Read Judgment: Central Bureau of Investigation & Anr. vs. Thommandru Hannah Vijayalakshmi @ T. H. Vijayalakshmi  & Anr.

Pankaj Bajpai

New Delhi, October 14, 2021: While setting aside the judgment of the Telangana High Court quashing the FIR and any proceedings pursuant to it in disproportionate assets & corruption case, the Supreme Court has opined that the High Court has gone far beyond the ambit of its jurisdiction by virtually conducting a Trial in an effort to absolve the respondents. 

A Larger Bench of Justice Dr. D.Y. Chandrachud, Justice Vikram Nath and Justice B.V. Nagarathna observed that at the stage of quashing of an FIR where the Court only has to ascertain whether the FIR prima facie makes out the commission of a cognizable offence, reliance on the documents produced by the opposite party to quash the FIR would be contrary to fundamental principles of law. 

The background of the case was that an FIR in a disproportionate assets case was quashed by Telangana High Court inter alia observing that the CBI should have conducted a Preliminary Enquiry under the Central Bureau of Investigation (Crime) Manual 2005 before registration of the FIR.

On behalf of the CBI, it was contended that the CBI Manual does not make it mandatory to conduct a Preliminary Enquiry before the registration of the FIR and its provisions are directory. 

Opposing the same, the counsel on behalf of the respondent urged that a Preliminary Enquiry before the registration of an FIR is a necessary requirement in cases of alleged corruption involving public servants, including those of Disproportionate Assets, since undue haste would lead to registration of frivolous and untenable complaints which could affect the careers of these officials. 

After considering the submissions, the Apex Court found that the Single Judge of the Telangana High Court had acted completely beyond the settled parameters which govern the power to quash an FIR, and had donned the role of a Chartered Accountant. 

“The Single Judge has enquired into the material adduced by the respondents, compared it with the information provided by the CBI in the FIR and their counter-affidavit, and then pronounced a verdict on the merits of each individual allegation raised by the respondents largely relying upon the documents filed by them (by considering them to be ‘known sources of income’ within the meaning of Section 13(1)(e) of the Prevention of Corruption Act)”, observed the Apex Court. 

The Division Bench of the Top Court elaborated that such exercise of quashing of FIR has been justified by the High Court on account of the appellant not having conducted a Preliminary Enquiry and hence, not having addressed the respondents’ objections relying upon the documents adduced by them. 

The reasons provided by the Single Judge for entering into the merits of the dispute while quashing the FIR were specious, especially so considering the finding that the CBI need not hold a Preliminary Enquiry mandatorily, added the Bench. 

The Apex Court reiterated that while exercising its jurisdiction under Article 226 of the Constitution to adjudicate on a petition seeking the quashing of an FIR, the High Court should have only considered whether the contents of the FIR – as they stand and on their face – prima facie make out a cognizable offence. 

In a Preliminary Enquiry, the CBI is allowed access to documentary records and speak to persons just as they would in an investigation, which entails that information gathered can be used at the investigation stage as well, and hence, conducting a Preliminary Enquiry would not take away from the ultimate goal of prosecuting accused persons in a timely manner, added the Apex Court. 

However, speaking for the Bench, Justice D.Y Chandrachud clarified that if the CBI chooses not to hold a Preliminary Enquiry, the accused cannot demand it as a matter of right. 

As clarified by this Court in State of Telangana vs. Managipet, the purpose of Lalita Kumari vs. Govt. of UP and others , noting that a Preliminary Enquiry is valuable in corruption cases was not to vest a right in the accused but to ensure that there is no abuse of the process of law in order to target public servants,observed the Bench.

Therefore, the Top Court directed CBI to continue with its investigation based upon the FIR.