Supreme Court rules CBI preliminary enquiry not mandatory when information received discloses cognizable offence

The Supreme Court on Friday ruled that a Preliminary Enquiry by CBI is not mandatory when the information received discloses the commission of a cognizable offence based on the credible information received.

A Bench presided by Justice D.Y. Chandrachud, Justice Vikram Nath and Justice B.V. Nagarathna set aside the order of the Telangana High Court quashing the FIR pertaining to offences under section 13 (1) (e) of Prevention of Corruption Act lodged against Commissioner of Income Tax, Hyderabad when she was Commissioner of Income Tax, Tamil Nadu & Pondicherry and her husband (a sitting MLA and Minister in the State government of Andhra Pradesh) and it was observed that the High Court has gone far beyond the ambit of its jurisdiction by virtually conducting a trial in an effort to absolve the accused.

The bench observed that the value and weight to be ascribed to the documents (Income Tax Returns, Statement under CCS Rules, Affidavits under RP Act) submitted by the accused is a matter of trial. The bench while keeping in view of two Supreme Court cases Kedari Lal and J. Jayalalitha observed that the Income Tax Return would not be definitive evidence in providing if the “source” of one’s income was lawful since the Income Tax Department is not responsible for investigating that.

The bench, thus, concluded 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 respondents to quash the FIR would be contrary to fundamental principles of law.

ASG Aishwarya Bhati, appearing on behalf of CBI, argued that CBI Manual does not make it mandatory to conduct a Preliminary Enquiry before the registration of the FIR and its provisions are directory and also that Preliminary Enquiry is only conducted when the information received is not sufficient to register a Regular Case. However, when the information available is adequate to register a Regular Case since it discloses the commission of a cognizable offence, no Preliminary Enquiry is necessary. The accused will be given a chance to express their stand during the investigation as any intimation of the same beforehand will risk the tampering of evidences by the accused persons.

Senior Counsel Siddharth Luthra and Siddharth Dave, appearing for the respondents, submitted that since no assets of the respondent are in State of Tamil Nadu, but in State of Andhra Pradesh, the jurisdiction of the High Court of Telangana under Art. 266 of the Constitution be exercised liberally while quashing the FIR to prevent the Abuse of Process of law. Also that, Para 9.1 of the CBI manual states the conduct of Preliminary Enquiry before registering of FIR in order to collect sufficient material which prima facie establishes the commission of offence as emphasized in the judgement of Shashikant and Nirmal Singh Kahlon. 

The Apex Court further observed that the decision in Lalita Kumari wherein the Constitutional Bench held that it is not mandatory to conduct the Preliminary Enquiry when information received discloses the commission of a cognizable offence. The bench made it clear that, 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. 

The facts of the case state that an FIR was lodged by CBI’s Anti-Corruption branch on the basis of “source information” received by the CBI ACB Chennai against the accused for allegedly being in possession of assets disproportionate to her known sources of income for the year 2010 to 2016. The main grievance of the accused was that a preliminary inquiry was supposed to be conducted before the registration of the FIR. Thereafter, the two accused moved the Telangana High Court stating that the FIR is politically motivated, no preliminary inquiry was conducted, and particulars in FIR did not disclose any prima facie offence and there are over-valued assets and under-valued income shown. 

The High Court quashed the said FIR wherein the Single Judge observed that the income of the respondents can be ascertained by the Income Tax Returns, Information submitted to their department and affidavit filed under the Representation of People Act 1951and that CBI ought to conduct a preliminary enquiry before registering the FIR. Accordingly, CBI challenged the above order in the Apex Court.

Read the Judgment here;