Supreme Court strike down Directive No. 4.7(3) of the Single Directive

http://upcpri.blogspot.in/2014/05/supreme-court-strike-down-directive-no.html

Equivalent Citation: AIR1998SC889, 1996 1 AWC(Supp)465SC,
1998CriLJ1208, 1998(1)GLT11, JT1997(10)SC247, 1999(1)SCALE442,
(1998)1SCC226, [1997]Supp6SCR595
IN THE SUPREME COURT OF INDIA
Writ Petition (Crl.) Nos. 340-343 of 1993
Decided On: 18.12.1997
Appellants: Vineet Narain and Ors.
Vs.
Respondent: Union of India (UOI) and Anr.
Hon'ble Judges:
J. S. Verma, C.J., S.P. Bharucha and S.C. Sen, JJ.
Counsels:
For Appellant/Petitioner/Plaintiff: Anil B. Divan, Sr. Adv. (Amicus
curiae), Abani Kumar Sahu, A.K. Panda, Mukul Mudgal and Anil Nauriya,
Advs
For Respondents/Defendant: Ashok H. Desai, Attorney General for India
and K.N. Bhat, Additional Solicitor General, Pallav Shishodia,
Anuradha Bindra and P. Parameswaran, Advs.
Acts/Rules/Orders:
Constitution of India - Articles 14, 21, 32, 141, 142 and 144; ; Delhi
Special Police Establishment Act, 1946 - Sections 3, 4 and 4(1);
Prevention of Corruption Act, 1947 - Sections 5 and 6; Prevention of
Corruption (Amendment) Act, 1988 - Sections 19
Cases Referred:
Vineet Narain v. Union of India, MANU/SC/0926/1996; Anukul Chandra
Pradhan v. Union of India, MANU/SC/1258/1996; K. Veeraswami v. Union
of India, MANU/SC/0610/1991; R. v. Metropolitan Police Commr. (1968)1
All ER 763 (1968) 2 QB 118 (1968) 2 WLR 893, CA; Abhinandan Jha v.
Dinesh Mishra, MANU/SC/0054/1967; Lakshmi Kant Pandey v. Union of
India, MANU/SC/0054/1984; Dr. Subramanian Swamy v. Director, CBI and
Ors. WP (C) No. 38 of 1997; State of Bihar and Anr. etc. v. J.A.C.
Saldanha and Ors. MANU/SC/0253/1979; Union of India v. Sushil Kumar
Modi and Ors. MANU/SC/1167/1997; Erach Sain Kanga Etc. v. Union of
India and Anr. Writ Petition No. 2632 of 1978 Etc. Etc.; State of W.B.
and Ors. Etc. v. Sampat Lal and Ors. Etc. MANU/SC/0126/1984; Union
Carbide Corporation and Ors. v. Union of India and
Ors.MANU/SC/0058/1992; Delhi Judicial Service Assn. Etc. v. State of
Gujarat and Ors. Etc. MANU/SC/0473/1991; Delhi Development Authority,
v. Skipper Construction Co. (P) Ltd. and Anr. MANU/SC/0497/1996;
Dinesh Trivedi, M.P. and Ors. v. Union of India and Ors.
MANU/SC/1138/1997; Supreme Court Advocates-on-Record Assn. and Ors. v.
Union of India (Iind Judges case) MANU/SC/0073/1994; R. v. Secy. of
State for Foreign and Commonwealth Affairs (1995) 1 WLR 386; Vishakha
and Ors. v. State of Rajasthan and Ors. MANU/SC/0786/1997
Case Note:
Constitution - duties - petition filed as public interest litigation
alleging that Government agencies like CBI and revenue authorities had
failed to perform their duties - as they failed to investigate matters
arising out of 'jain diaries' which disclosed nexus between
politicians and criminals - writ of mandamus issued to authorities to
comply with it - Central Government directed to take all measures
necessary to ensure that CBI function effectively and efficiently and
viewed as non-partisan agency.

HELD See paras 1, 5, 7 and 60

JUDGMENT
J.S. Verma, C.J.
1. These writ petitions under Article 32 of the Constitution of India
brought in public interest, to begin with, did not appear to have the
potential of escalating to the dimensions they reached or to give rise
to several issues of considerable significance to the implementation
of rule of law, which they have, during their progress. They began as
yet another complaint of inertia by the Central Bureau of
Investigation (CBI) in matters where the accusation made was against
high dignitaries. It was not the only matter of its kind during the
recent past. The primary question was : Whether it is within the
domain of judicial review and it could be an effective instrument for
activating the investigative process which is under the control of
executive ? The focus was on the question, whether any judicial remedy
is available in such a situation? However, as the case progressed, it
required innovation of a procedure within the constitutional scheme of
judicial review to permit intervention by the court to find a solution
to the problem. This case had helped to develop a procedure within the
discipline of law for the conduct of such a proceeding in similar
situations. It has also generated awareness of the need of probity in
public life and provided a mode of enforcement of accountability in
public life. Even though the matter was brought to the court by
certain individuals claiming to represent public interest, yet as the
case progressed, in keeping with the requirement of public interest,
the procedure devised was to appoint the petitioners' counsel as the
amicus curiae and to make such orders from time to time as were
consistent with public interest. Intervention in the proceedings by
everyone else was shut out but permission was granted to all, who so
desired, to render such assistance as they could, and to provide the
relevant material available with them to the amicus curiae for being
placed before the court for its consideration. In short, the
proceedings in this matter have had great educative value and it does
appear that it has helped in future decision making and functioning of
the public authorities.
2. We must at. the outset place on record our great appreciation of
the assistance rendered by the amicus curiae, Shri Anil B. Divan and
the lawyers assisting him, namely, Shri Abani Kumar Sahu, Shri Anil
Kumar Panda, Shri Mukul Mudgal, Shri Anil Nauriya and also Ms. Latha
Krishnamurthy. We also place on record equal appreciation of the law
officers and the team which has assisted them in these proceedings. At
the commencement of the proceedings, the then Solicitor General Shri
Dipankar P. Gupta appeared for the Union of India and the government
agencies. Later after Dipankar P, Gupta demitted office, the Attorney
General Shri Ashok H. Desai appeared in this case throughout. The law
officers and their team of assistants, namely Shri K.N. Bhat,
Additional Solicitor General, Shri Pallav Shishodia, Shri P.
Parmeswaran and Ms. Anuradha Bindra, rendered very able assistance
throughout and discharged the duty expected of law officers. All of
them, at great personal inconvenience and expense, rose to
extraordinary heights in keeping with the true traditions of the Bar.
In essence, everyone of them discharged the role of amicus curiae,
without, at any stage, adopting the adversarial stance. If it has been
possible to achieve some success in these proceedings to improve and
innovate the procedure and fructify new ideas for betterment of the
polity, it is only because of the positive response of the Bar and the
assistance rendered by it. We must also record our appreciation of the
officers of the CBI and the Revenue Department who actively
participated in these proceedings and showed a definite improvement in
their perception of the rule of law as the case progressed; and their
ability to perform improved once they were assured of protection in
the honest discharge of their duties.
3. This experience revealed to us the need for the insulation of these
agencies from any extraneous influence to ensure the continuance of
the good work they have commenced. It is this need which has impelled
us to examine the structure of these agencies and to consider the
necessary steps which would provide permanent insulation to the
agencies against extraneous influences to enable them to discharge
their duties in the manner required for proper implementation of the
rule of law. Permanent measures are necessary to avoid the need of
every matter being brought to the court for taking ad hoc measures to
achieve the desired results. This is the occasion for us to deal with
the structure, Constitution and the permanent measures necessary for
having a fair and impartial agency. The faith and commitment to the
rule of law exhibited by all concerned in these proceedings is the
surest guarantee of the survival of democracy of which rule of law is
the bedrock. The basic postulate of the concept of equality : 'Be you
ever so high, the law is above you', has governed all steps taken by
us in these proceedings.
Facts
4. A brief narration of the facts of this case is necessary; On 25th
March, 1991, one Ashfak Hussain Lone, alleged to be an Official of the
terrorist organisation Hizbul Mujahideen, was arrested in Delhi.
Consequent upon his interrogation, raids were conducted by the Central
Bureau of Investigation (CBI) on the premises of Surender Kumar Jain,
his brothers, relations and businesses. Along with Indian and foreign
currency, the CBI seized two diaries and two note books from the
premises. They contained detailed accounts of vast payments made to
persons identified only by initials. The initials corresponded to the
initials of various high ranking politicians, in power and out of
power, and of high ranking bureaucrats. Nothing having been done in
the matter of investigating the Jains or the contents of their
diaries, the present writ petitions were filed on 4th October, 1993,
in the public interest under Article 32 of the Constitution of India.
5. The gist of the allegations in the writ petitions is that
Government agencies like the CBI and the revenue authorities had
failed to perform their duties and legal obligations inasmuch as they
had failed to investigate matters arising out of the seizure of the
"Jain diaries"; that the apprehension of terrorists had led to the
discovery of financial support to them by clandestine and illegal
means using tainted funds obtained through 'havala' transactions; that
this had also disclosed a nexus between politicians, bureaucrats and
criminals, who were recipients of money from unlawful sources, given
for unlawful consideration; that the CBI and other Government agencies
had failed to investigate the matter, take it to its logical
conclusion and prosecute all persons who were found to have committed
an offence; that this was done with a view to protect the persons
involved, who were very influential and powerful; that the matter
disclosed a nexus between crime and corruption at high places in
public life and it posed a serious threat to the integrity, security
and economy of the nation; that probity in public life, the rule of
law and the preservation of democracy required that the Government
agencies be compelled to duly perform their legal obligations and to
proceed in accordance with law against every person involved,
irrespective of where he was placed in the political hierarchy. The
writ petitions prayed, inter alia, for the following reliefs :
"(a) that the above said offences disclosed by the facts mentioned in
the petition be directed to be investigated in accordance with law;
(b) that this Hon'ble Court may be pleased to appoint officers of the
police or others in whose integrity, independence and competence this
Hon'ble Court has confidence for conducting and/or supervising the
said investigation;
(c) that suitable directions be given by this Hon'ble Court and orders
issued to ensure that the culprits are dealt with according to law;

xxx xxx xxx

(f) that directions be given so that such evil actions on the part of
(he investigating agencies and their political superiors are not
repeated in future."
6. It will be seen that the reliefs sought in the writ petitions fall
into two broad classes. The first class relates to investigations in
the matter of the "Jain diaries". The second class [prayer (f)]
relates to the manner in which investigations of offences of a similar
nature that may occur hereafter should be conducted.
Procedure adopted
7. We have taken the view that, given the political personalities of
the people to be investigated in the "Jain diaries" case and the time
already lost in commencing the investigations, it was advantageous not
to hear the matter through and issue a writ of mandamus, leaving it to
the authorities to comply with it, but to keep the matter pending
while the investigations were being carried on, ensuring that this was
done by monitoring them from time to time and issuing orders in this
behalf.
8. Our reasoned orders are dated 18.4.1995, 16.1.1996 (1996) 2 Scale
SP 42, 30.1.1996 MANU/SC/0926/1996 : [1996]1SCR1053 : [1996]1SCR1053 ,
22.2.1996 (1996) 2 Scale SP 84, 1.3.1996 [1997] 4 SCC 778, 13.3.1996
(1996) 4 Scale SP 3, 1.5.1996 (1996) 4 Scale SP 56, 26.7.1996 (1996) 6
Scale SP 24, 9.7.1997 (1997) 5 Scale 254. Orders in similar matters,
being the orders dated 12.2.1996 (1996) 3 Scale SP 35, 2.4.1996,
26.4.1996 (1996) 4 Scale SP 71, 26.7.1996 (1996) 6 Scale SP 23 and
7.10.1996 MANU/SC/1258/1996 : (1996)6SCC354 : (1996)6SCC354 in Writ
Petition (Civil) No. 640 of 1995-Anukul Chandra Pradhan v. Union of
India and Others, and orders dated 24.2.1997 and 18.3.1997 in Writ
Petition (Civil) No. 38 of 1997 - Dr. Subramaniam Swamy v. Director,
CBI and Ors., are also relevant.
9. The sum and substance of these orders is that the CBI and other
Governmental agencies had not carried out their public duty to
investigate the offences disclosed; that none stands above the law so
that an alleged offence by him is not required to be investigated;
that we would monitor the investigations, in the sense that we would
do what we permissibly could to see that the investigations progressed
while yet ensuring that we did not direct or channel those
investigations or in any other manner prejudice the right of those who
might be accused to a full and fair trial. We made it clear that the
task of the monitoring court would end the moment a charge-sheet was
filed in respect of a particular investigation and that the ordinary
processes of the law would then take over. Having regard to the
direction in which the investigations were leading, we found it
necessary to direct the CBI not to report the progress of the
investigations to the person occupying the highest office in the
political executive; this was done to eliminate any impression of bias
or lack of fairness or objectivity and to maintain the credibility of
the investigations. In short, the procedure adopted was of 'continuing
mandamus'.
10. Even after this matter was brought to the court complaining of the
inertia of CBI and the other agencies to investigate into the offences
because of the alleged involvement of several persons holding high
offices in the executive, for quite some time the disinclination of
the agencies to proceed with the investigation was apparent. The
accusation, if true, revealed a nexus between high ranking politicians
and bureaucrats who were alleged to have been funded by a source
linked with the source funding the terrorists. In view of the funding
also through foreign currency, some undesirable foreign elements
appeared to be connected. This revealed a grave situation posing a
serious threat even to the unity and integrity of the nation. The
serious threat posed to the Indian polity could not be underscored.
The obvious need for an expeditious and thorough probe which had
already been delayed for several years could not but be countenanced.
The continuing inertia of the agencies to even commence a proper
investigation could not be tolerated any longer. In view of the
persistence of that situation, it became necessary as the proceedings
progressed to make some orders which would activate the CBI and the
other agencies to at least commence a fruitful investigation. Merely
issuance of a mandamus directing the agencies to perform their task
would be futile and, therefore, it was decided to issue directions
from time to time and keep the matter pending requiring the agencies
to report the progress of investigation so that monitoring by the
court could ensure continuance of the investigation. It was,
therefore, decided to direct the CBI and other agencies to complete
the investigation expeditiously, keeping the court informed from time
to time of the progress of the investigation so that the court
retained siesin of the matter till the investigation was completed and
the chargesheets were filed in the competent court for being dealt
with, thereafter, in accordance with law.
11. The first order to this effect was made on 5.12.1994 when the CBI
Director was required to personally supervise the investigations
carried on by the CBI as the overall incharge and to report to the
court the progress made from time to time. The true scope of the
matter was indicated in an order dated 30th January, 1996 [reported in
MANU/SC/0926/1996 : [1996]1SCR1053 : [1996]1SCR1053 as under :
"The true scope of this writ petition has been indicated during the
earlier hearings. At this stage, when some charge sheets have been
tiled in the Special Court and there is considerable publicity in the
media regarding this matter, with some speculation about its true
scope, it is appropriate to make this order to form a part of the
record.
The gist of the allegations in the writ petition are that Government
agencies, like the CBI and the revenue authorities have failed to
perform their duties and legal obligations inasmuch as they have
failed to properly investigate matters arising out of the seizure of
the so called "Jain Diaries" in certain raids conducted by the CBI. It
is alleged that the apprehending of certain terrorists led to the
discovery of financial support to them by clandestine and illegal
means, by use of tainted funds obtained through 'havala' transactions;
that this also disclosed a nexus between several important
politicians, bureaucrats and criminals, who are all recipients of
money from unlawful sources given for unlawful considerations; that
the CBI and other Government agencies have failed to fully investigate
into the mater and take it to the logical end point of the trial and
to prosecute all persons who have committed any crime; that this is
being done with a view to protect the persons involved, who are very
influential and powerful in the present set up; that the matter
discloses a definite nexus between crime and corruption in public life
at high places in the country which poses a serious threat to the
integrity, security and economy of the nation; that probity in public
life, to prevent erosion of the rule of law and the preservation of
democracy in the country, requires that the Government agencies be
compelled to duly perform their legal obligations and to proceed in
accordance with law against each and every person involved,
irrespective of the height at which he is placed in the power set up.
The facts and circumstances of the present case do indicate that it is
of utmost public importance that this matter is examined thoroughly by
this Court to ensure that all Government agencies, entrusted with the
duty to discharge their functions and obligations in accordance with
law, do so, bearing in mind constantly the concept of equality
enshrined in the Constitution and the basic tenet of rule of law : "Be
you ever so high, the law is above you". Investigation into every
accusation made against each and every person on a reasonable basis,
irrespective of the position and status of that person, must be
conducted and completed expeditiously, This is imperative to retain
public confidence in the impartial working of the Government agencies.
In this proceeding we are not concerned with the merits of the
accusations or the individuals alleged to be involved, but only with
the performance of the legal duly by the Government agencies to
fairly, properly and fully investigate into every such accusation
against every person, and to take the logical final action in
accordance with law.
In case of persons against whom a prima facie case is made out and a
charge sheet is filed in the competent court, it is that court which
will then deal with that case on merits, in accordance with law.
However, if in respect of any such person the final report after full
investigation is that no prima facie case is made out to proceed
further, so that the case must be closed against him, that report must
be promptly submitted to this Court for its satisfaction that the
concerned authorities have not failed to perform their legal
obligations and have reasonably come to such conclusion. No such
report having been submitted by the CBI or any other agency till now
in this Court, action on such a report by this Court would be
considered, if and when that occasion arises. We also direct that no
settlement should be arrived at nor any offence compounded by any
authority without prior leave of this Court.
We may add that on account of the great public interest involved in
this matter, the CBI and other Government agencies must expedite their
action to complete the task and prevent pendency of this matter beyond
the period necessary. It is needless to observe that the results
achieved so far do not match the available time and opportunity for a
full investigation ever since the matter came to light. It is of
utmost national significance that no further time is lost in
completion of the task."
12. Relevant portions of other significant orders dated 1.3.1996
reported in [1997] 4 SCC 778 and 9.7.1997 [reported in 1997 5 Scale
254 read as under :
Order dated 01.03.1996 :

"... ... ...

V. Criminal Misc. Petition Nos. 1153-5611996 :
We have heard Shri Anil Diwan and the learned Solicitor General.
Insofar as the larger relief of suitable guidelines is sought therein,
that matter is deferred for consideration at the appropriate later
stage of these proceedings. As for the interim relief claimed in the
application, it is sufficient for us to direct as stated hereafter.
To eliminate any impression of bias and avoid erosion of credibility
of the investigations being made by the C.B.I, and any reasonable
impression of lack of fairness and objectivity therein, it is directed
that the C.B.I, would not lake any instructions from, report to, or
furnish any particulars thereof to any authority personally interested
in or likely to be affected by the outcome of the investigations into
any accusation. This direction applies even in relation to any
authority which exercises administrative control over the C.B.I. by
virtue of the office he holds, without any exception. We may add that
this also accords with what the Learned Solicitor General has very
fairly submitted before us about the mode of functioning of the C.B.I.
in this matter.
We also place on record the further statement made by the learned
Solicitor General on instructions from the C.B.I. Director that
neither the C.B.I. Director nor any of his officers has been reporting
to any authority about any particulars relating to these
investigations. No further direction in this behalf is necessary at
this stage."
Order dated 09.07.1997 :
"The question pertaining to interference with or shifting of any of
the officer in any of the investigative teams of the C.B.I, or any
other connected investigative agency such as the Enforcement
Directorate in the several matters under investigation by them which
are being monitored by this Court and some of the High Courts, is
under consideration by this Court in this matter which is being heard
by a 3-Judge Bench and for this reason the same question even though
raised in some other pending matters in this Court is not being
considered therein. It is, therefore, inappropriate that the same
question or any question connected with it in any manner be
entertained or dealt with by any other court including any High Court
in any of the matters before it. It has become necessary to say so in
view of the fact that we are informed that the same question in
different forms is being raised in some other courts including High
Courts by different persons. The question being comprehensively dealt
with by this 3-Judge Bench in this matter by this Court, we make it
clear that no other court including any High Court will entertain or
deal with the same in any direct or indirect manner. Such a course is
essential in public interest.

... ... ..."

13. It is significant that the machinery of investigation started
moving as a result of these orders and after investigation of the
allegations made against several persons on the basis of the contents
of the Jain Diaries, chargesheets were filed in the competent court in
the first instance against 14 persons, as reported to the court on
22.2.1996. Chargesheets against many other persons were filed in the
competent court thereafter as reported later from time to time. In
all, 34 chargesheets against 54 persons have been filed on this basis.
Thus, as indicated earlier, the purpose of these proceedings to the
extent to the complaint of inertia of the investigating agencies come
to an end with the filing of these chargesheets, since the merits of
the accusation against each individual has, thereafter, to be
considered and dealt with by the competent court at the trial, in
accordance with law. Trial in the competent court is now a separate
proceeding.
14. After the commencement of these proceedings, some other matters of
a similar nature came to this Court in which the inaction of the
investigating agencies to investigate into some serious offences was
alleged. Two such significant matters arc Writ Petition (Civil) No.
640 of 1995 -Anukul Chandra Pradhan v. Union of India and Others - and
Writ Petition (Civil) No. 38 of 1997 - Dr. Subramaniam Swamy v.
Director, CBI and Ors. These cases revealed a serious situation
eroding the rule of law, where the accusation was against persons
holding high offices and wielding power. Relevant portions of some
significant orders made in the above two cases read as under :-
Anukul Chandra Pradhan
Order dated 12.02.1996 [reported in (1996) 3 Scale SP 35/ :
"We do not consider it appropriate to permit any intervention in (his
matter. Shri Anil Diwan has been requested by us to appear as Amicus
Curias in this matter. He has kindly agreed to do so. It is open to
anyone who so desires, to assist Shri Anil Diwan and to make available
to him whatever material he chooses to rely on in public interest to
enable Shri Diwan to effectively and properly discharge functions as
Amicus Curias. Except for this mode of assistance to the learned
Amicus Curiae, we do not permit any person either to be impleaded as
party or to appear as an intcr-venor. In our opinion, this is
necessary (or expeditious disposal of the matter and to avoid the
locus on the crux of the matter getting diffused in the present case
by the appearance of many persons acting independently in the garb of
public interest.

... ... ...

Order dated 02.04.1996

... ... ...

Learned S.G. as well as Shri Anil Diwan, learned counsel, are heard.
The Secretary, Revenue Shri Sivaraman, the C.B.I. Director - Shri K.
Vijay Rama Rao and the Commissioner of Police - Shri Nikhil Kumar arc
also present. We direct that from now each of these three officers
would be overall incharge of the investigations which are being
carried on by their respective departments pertaining to the matters
within the scope of this Writ Petition. Learned S.G. on instructions
prayed for deferring the further hearing to enable the above, officers
to report the progress made in the investigations by these agencies on
the next date."
Order dated 07.10.1996 /reported in MANU/SC/1258/1996 : (1996)6SCC354
: (1996)6SCC354 :

"... ... ...

In accordance with the directions so given, it has been reported to us
that chargesheets have been filed by the C.B.I, in two cases and the
Delhi Police in one case which they were investigating. These cases
are ;

(1) St. Kilts' Forgery Case (v filed by C.R.I.) (2) Lakhubhai Pathak
Cheating Case (Chargesheet filed by C.B.I.) (3) Rajendra Jain Case
(Chargesheet filed by Delhi Police)

In view of the fact that chargesheet has been filed under Section 173
Criminal Procedure Code in each of the above three cases in the
competent court, it is that court which is now to deal with the case
on merits, in accordance with law. Any direction considered necessary
for further investigation, if any, or to proceed against any other
person who also appears to have committed any offence in that
transaction, is within the domain of the concerned court according to
the procedure prescribed by law. The purpose of this proceeding is to
command performance of the duty under law to properly investigate into
the accusation of commission of the crime and to file a chargesheet in
the competent court, if a prima facie case is made out. This purpose
has been served in the above three cases, in respect of which no
further action in this proceeding is called for.
Accordingly, this proceeding has come to an end, in so far as it
relates to the above three criminal cases. For the remaining part, it
is to continue till the end result prescribed by law is achieved. The
concerned court in which the chargesheet has been filed has to proceed
entirely in accordance with law without the slightest impression that
there is any parallel proceeding in respect of the same matter pending
in this court.
We may also observe, that the concerned court dealing with the above
matters has to bear in mind that utmost expedition in the trial and
its early conclusion is necessary for the ends of justice and
credibility of the judicial process. Unless prevented by any dilatory
tactics of the accused, all trials of this kind involving public men
should be concluded most expeditiously, preferably within three months
of commencement of the trial. This is also the requirement of speedy
trial read into Article 21.
A note of caution may be appropriate. No occasion should arise for an
impression that the publicity attaching to these matters has tended to
dilute the emphasis on the essentials of a fair trial and the basic
principles of jurisprudence including the presumption of innocence of
the accused unless found guilty at the end of the trial. This
requirement, undoubtedly has to be kept in view during the entire
trial. It is reiterated, that any observation made by this Court for
the purpose of the proceedings pending here has no bearing on the
merits of the accusation, and is not to influence the trial in any
manner. Care must be taken to ensure that the credibility of the
judicial process is not undermined in any manner.
This proceeding is to continue in respect of the remaining matter only
which arc incomplete.

... ... ...

Dr. Subramaniam Swamy
Order dated 24.02.1997:

"... ... ...

It is also made clear to the petitioner that the petition having been
entertained as a public interest litigation in view of the public
interest involved, the locus of the petitioner is confined only to
assisting the court through amicus curiae appointed by the court and
that the petitioner has no independent or additional right in the
conduct or hearing of the proceedings hereafter.
We request Shri Anil B. Divan, Sr. Advocate to appear as amicus curiae
in this case...."
Order dated 18.03. 1997:

"... ... ...

In accordance with the practice followed by the Court in other similar
pending matters, we also direct that any person wishing to bring any
material or point before this Court for consideration in this behalf
may do so by furnishing the same to Shri Anil B. Divan, the learned
amicus curiae who would take the necessary steps in accordance with
the need and relevance thereof, to place it before this Court in this
proceeding."
In-camera proceedings
15. During the monitoring of the investigations, the Solicitor
General/Attorney General, from time to time, reported the progress
made during the course of investigation, in order to satisfy us that
the agencies were not continuing to drag their feet and the
"continuing mandamus" was having the effect of making the agencies
perform their statutory function. The procedure adopted by us was
merely to hear what they had to report or the CBI Director and the
Revenue Secretary had to tell us to be satisfied that the earlier
inaction was not persisting. We maintained this stance throughout. We
also ensured that no observation of any kind was made by us nor was
any response given which may be construed as our opinion about the
merits of the case or the accusation against any accused. We also did
not identify or name any accused during performance of this task. At
the very outset, the then Solicitor General Shri Dipankar P. Gupta
requested that a part of the proceedings be held 'in camera' to enable
him to state certain facts and, if necessary, place before us
material, the secrecy of which was required to be maintained for
integrity of the investigation and also to avoid any prejudice to the
concerned accused. In these circumstances, such a procedure was
adopted only to the extent necessary for this purpose, in the interest
of justice, and that is how a part of some hearings was held in
camera. This innovation in the procedure was made, on request, to
reconcile the interest of justice with that of the accused.
16. It is settled that the requirement of a public hearing in a court
of law for a fair trial is subject to the need of proceedings being
held in camera to the extent necessary in public interest and to avoid
prejudice to the accused. We consider it appropriate to mention these
facts in view of the nature of these proceedings wherein innovations
in procedure were required to be made from time to time to sub-serve
the public interest, avoid any prejudice to the accused and to advance
the cause of justice. The medium of "continuing mandamus", was a new
tool forged because of the peculiar needs of this matter.
17. Inertia was the common rule whenever the alleged offender was a
powerful person. Thus, it became necessary to take measures to ensure
permanency in the remedial effect to prevent reversion to inertia of
the agencies in such matters.
18. Everyone against whom there is reasonable suspicion of committing
a crime has to be treated equally and similarly under the law and
probity in public life is of great significance. The Constitution and
working of the investigating agencies revealed the lacuna of its
inability to perform whenever powerful persons were involved. For this
reason, a close examination of the Constitution of these agencies and
their control assumes significance. No doubt, the overall control of
the agencies and responsibility of their functioning has to be in the
executive, but then a scheme giving the needed insulation from
extraneous influences even of the controlling executive, is
imperative. It is this exercise which became necessary in these
proceedings for the future. This is the surviving scope of these writ
petitions.
Point for consideration
19. As a result of the debate in these proceedings and the experience
gained thereby the Union of India came to realise that an in- depth
study of the selection of personnel of these agencies, particularly
the CBI and the Enforcement Directorate of the Revenue Department, and
their functioning is necessary. The Government of India, sharing this
perception, by an Order No. S/7937/SS(ISP)/93 dated 9th July, 1993
constituted a Committee headed by the then Home Secretary Shri N.N.
Vohra to take stock of all available information about the activities
of crime syndicates/mafia organisations which had developed links
with, and were being protected by, government functionaries and
political personalities. It was stated that on the basis of
recommendations of the Committee the Government shall determine the
need, if any, to establish a special organization/agency to regularly
collect information and pursue cases against such elements. The
Committee was headed by the then Home Secretary Shri N.N. Vohra and
had as its Members-Secretary (Revenue), Director, Intelligence Bureau,
Director, CBI, Joint Secretary (PP), Ministry of Home Affairs. The
Committee gave its recommendations dated 5.10.1993. It has made
scathing comments and has painted a dismal picture of the existing
scene. It has said that the network of the mafia is virtually running
a parallel government pushing the State apparatus into irrelevance.
The Committee recommended the creation of a nodal agency under the
Ministry of Home Affairs for the collation and compilation of all
information received from Intelligence Bureau (IB), Central Bureau of
Investigation (CBI) and Research and Analysis Wing (R & AW) and the
various agencies under the Department of Revenue. The report is
significant for the dismal picture of the existing scenario which
discloses a powerful nexus between the bureaucracy and politicians
with the mafia gangs, smugglers and the underworld. The report of the
Vohra Committee is the opinion of some top bureaucrats and it
confirmed our worst suspicions focusing the need of improving the
procedure for Constitution and monitoring the functioning of
intelligence agencies. There is, thus, no doubt that this exercise
cannot be delayed further.
20. The same perception of the Government of India led it to
constitute another Committee by Order No. 226/2/97-AVD-II dated 8th
September, 1997 comprising of Shri B.G. Deshmukh, former Cabinet
Secretary, Shri N.N. Vohra, Principal Secretary to the Prime Minister
and Shri S.V. Giri, Central Vigilance Commissioner, called the
Independent Review Committee (IRC). The order reads as under :
"WHEREAS the Government of India is of the opinion that it is
necessary to set up a Committee for going into the matters mentioned
hereinafter;
2. NOW, THEREFORE, a Committee of the following is hereby set up :-

(i) Shri B.G. Deshmukh, Former Cabinet Secretary< (ii) Shri N.N.
Vohra, Principal Secretary to the Prime Minister (iii) Shri S.V. Giri
Central Vigilance Commissioner

Shri N.N. Vohra shall act as Convenor.
3. The terms of reference of the Committee are as under :-
(i) To monitor the functioning of the nodal agency established by the
Ministry of Home Affairs in pursuance of the recommendations of the
Vohra Committee Report.
(ii) To examine the present structure and working of the Central
Bureau of Investigation (CBI), the Enforcement Directorate and related
agencies to suggest the changes, if any, needed to ensure :
(a) that offences alleged to have been committed by any person,
particularly those in positions of high authority, are registered,
investigated and prosecuted fairly and expeditiously, ensuring
against, inter alia, external pressure, arbitrary withdrawals or
transfers of personnel etc., and ensuring adequate protection to the
concerned functionaries to effectively discharge their duties and
responsibilities;
(b) that there are sufficient checks and balances to ensure that the
powers of investigation and prosecution are not misused;
(c) that there are no arbitrary restrictions to the initiation of
investigations or launching of prosecutions.
4. The Committee should give its report with regard to the items
mentioned in paragraph 3(ii) above within a period of 3 months."
21. Before we refer to the report of the Independent Review Committee
(IRC), it would be appropriate at this stage to refer to the Single
Directive issued by the Government which requires prior sanction of
the designated authority to initiate the investigation against
officers of the Government and the Public Sector Undertakings (PSUs),
nationalised banks above a certain level. The Single Directive is a
consolidated set of instructions issued to the CBI by the various
Ministries/Departments in this behalf. It was first issued in 1969 and
thereafter amended on many occasions. The Single Directive contains
certain instructions to the CBI regarding modalities of initiating an
inquiry of registering a case against certain categories of civil
servants. Directive No. 4.7(3) in its present form is as under :-
"4.7(3) (i) In regard to any person who is or has been a decision
making level officer (Joint Secretary or equivalent or above in the
Central Government or such officers as are or have been on deputation
to a Public Sector Undertaking; officers of the Reserve Bank of India
of the level equivalent to Joint Secretary or above in the Central
Government, Executive Directors and above of the SEBI and Chairman &
Managing Director and Executive Directors and such of the Bank
officers who are one level below the Board of Nationalised Banks),
there should be prior sanction of the Secretary of the
Ministry/Department concerned before SPE takes up any enquiry (PE or
RC), including ordering search in respect of them. Without such
sanction, no enquiry shall be initiated by the SPE.
(ii) All cases referred to the administrative Ministries/Departments
by CBI for obtaining necessary prior sanction as aforesaid, except
those pertaining to any officer of the rank of Secretary or Principal
Secretary, should be disposed of by them preferably within a period of
two months of the receipt of such a reference. In respect of the
officers of the rank of Secretary or Principal Secretary to
Government, such references should be made by the Director, CBI to the
Cabinet Secretary for consideration of a Committee consisting of the
Cabinet Secretary as its Chairman and the Law Secretary and the
Secretary (Personnel) as its members. The Committee should dispose of
all such reference preferably within two months from the date of
receipt of such a reference by the Cabinet Secretary.
(iii) When there is any difference of opinion between the Director,
CBI and the Secretary of the Administrative Ministry/Department in
respect of an officer up to the rank of Additional Secretary or
equivalent, the matter shall be referred by CBI to Secretary
(Personnel) for placement before the Committee referred to in Clause
(ii) above. Such a matter should be considered and disposed of by the
Committee preferably within two months from the date of receipt of
such a reference by Secretary (Personnel).
(iv) In regard to any person who is or has been Cabinet Secretary,
before SPE takes any step of the kind mentioned in (i) above the case
should be submitted to the Prime Minister for orders."
22. We were informed that the above Directive, in this application, is
limited to officials at decision making levels in the Government and
certain other public institutions like the RBI, SEBI, nationalised
banks, etc. and its scope is limited to official acts. The stated
objective of the Directive is to protect decision making level
officers from the threat and ignominy of malicious and vexatious
inquiries/investigations. It is said that such protection to officers
at the decision making level is essential to protect them and to
relieve them of the anxiety from the likelihood of harassment for
taking honest decisions. It was also stated that absence of any such
protection to them could adversely affect the efficiency and efficacy
of these institutions because of the tendency of such officers to
avoid taking any decisions which could later lead to harassment by any
malicious and vexatious inquiries/investigations. It was made clear
that the Directive does not extend to any extraneous or non-official
acts of the government functionaries and a time frame has been
prescribed for grant of sanction in such cases to prevent any
avoidable delay.
23. Two questions arise in relation to Directive No. 4.7(3) of the
Single Directive, namely, its propriety/legality and the extent of its
coverage, if it be valid.
24. The learned Attorney General categorically stated in response to
our repeated query that the Single Directive acts as a restriction
only on the CBI but is inapplicable against the general power of the
State Police to register and investigate any such offence under the
general law, i.e. CrPC. He added that it is also not an inhibition
against a complaint being lodged under the Cr.P.C. before the
competent court for any such offence. The Single Directive was sought
to be supported by the Attorney General on the ground that the CBI
being a special agency created by the Central Government, it: was
required to function according to the mandate of the Central
Government which has constituted this special agency for specified
purpose. The desirability of the Single Directive was supported by the
learned Attorney General on the ground that the officers at the
decision making level need this protection against malicious or
vexatious investigations in respect of honest decisions taken by them.
We were also informed that during hearing of this matter when this
aspect was being debated, the Ministry of Finance has set up a High
Power Board of experts in finance and a retired High Court Judge to
examine the merits in every case for the purpose of grant of sanction
to the CBI for recording the information and investigating into any
such offence, and a time frame for the decision has also been
specified. Similarly, in the case of government servants, the
authority for grant of sanction with a provision for appeal in case
the sanction is declined has been provided. It was submitted that such
a structure to regulate the grant of sanction by a high authority
together with a time frame to avoid any delay is sufficient to make
the procedure reasonable and to provide for an objective decision
being taken for the grant of sanction within the specified time. It
was urged that refusal of sanction with reasons would enable judicial
review of that decision in case of any grievance against refusal of
the sanction. Reliance was placed by the learned Attorney General on
the decisions of this Court in K. Veeraswami v. Union of India and
Others, MANU/SC/0610/1991 : (1992)IILLJ53bSC and State of Bihar and
Another Etc. v. J.A.C. Saldanha and Others, MANU/SC/0253/1979 :
1980CriLJ98 to support the argument of legality of the Single
Directive. We shall advert to this aspect later.
25. The provision made for deciding the question of grant of sanction
in the cases of officers to whom the Single Directive applies is, as
under :
OFFICE MEMORANDUM DATED FEBRUARY 17, 1997 OF THE RESERVE BANK OF
INDIA, CENTRAL OFFICE, DEPARTMENT OF ADMINISTRATION & PERSONNEL
MANAGEMENT
"Advisory Board on bank frauds
It has been decided to set-up an 'Advisory Board on bank frauds' to
advise the Bank on the cases referred the Central Bureau of
Investigation either directly or through the Ministry of Finance for
investigation/registration of cases against bank officers of the rank
of General Manager and above. The Constitution of the Board will be as
under :

Shri S.S. Tarapore, Chairman Ex-Deputy Governor Reserve Bank of India
Justice Shri B.V. Chavan Member Retd. Judge of Bombay High Court &
Member, Reserve Bank of India Services Board. Shri B.N. Bhagwal,
Member Retd. Secretary, Government of India. Shri Satish Sawhney,
Member Retd. Director General of Police Maharashtra. Shri Y.H.
Malegam, Mamber



Chartered Accountant & Senior Partner in M/s. S.S. Billimoria & Co."

26. Another action taken by the Government of India is, as under :-
Letter No. I 11011/33/95-IS DI(B) dated 1st /2nd August, 1995 of
Ministry of Home Affairs, Government of India
"Government had through its Order No. S- 7937/SS(ISP)/93 dated 9th
July, 1993 constituted a Committee under the Chairmanship of former
Home Secretary (Shri N.N. Vohra) to take stock of all available
information about the activities of the crime syndicates/mafia
organisations which had developed links with and were being protected
by Government functionaries and political personalities. The Vohra
Committee in its Report submitted to the Government recommended a
Nodal Set-up directly under the Home Secretary to which all existing
intelligence and enforcement agencies of the Government shall promptly
pass on any information which they may come across, relating to links
of crime syndicates with functionaries of the Government and political
personalities.
2. Accordingly, Government have now decided to set up a Group under
the Chairmanship of the Home Secretary to act as a Nodal Set-up to
collect and collate the information and to decide on the action that
is required to be taken to ensure that the nexus of criminals with
businessmen, politicians or bureaucrats is broken.
(3) The Group shall comprise :

(i) Home Secretary, Chairman (ii) Secretary (Revenue) Member (iii)
Director, IB Member (iv) Director, CBI Member (v) Secretary, R & AW
Member

4. It is felt that it would be necessary for this Group to interact
with various State Governments in order to both make use of such
information as may be available with the States as well as to utilise
the expertise of the relevant agencies of the State Governments. For
this purpose, the above Group would interact appropriately from time
to time with Chief Secretaries and other senior functionaries of the
State Governments.
5. All the Intelligence and enforcement agencies under the Government
like the Intelligence Bureau, the CBI and various bodies functioning
under the Department of Revenue shall forthwith report to the Home
Secretary whenever substantive information/evidence of collusion of
officials/politicians with criminal syndicates comes to their
knowledge in the course of their working. The Group shall meet
periodically to decide upon the action required to be taken and
identify an agency or agencies to take up further investigations. The
Nodal Group would also review the information in the above context
already available with the various agencies and decide upon the follow
up action that is required to be taken.
6. This issues with the approval of Home Minister."
Report of IRC
27. The IRC has in its report accepted the legality of the Single
Directive placing reliance on the decision of this Court in K.
Veeraswami (supra). Alter considering the functions of the CBI and the
Directorate of Enforcement, it has made certain recommendations which
are as under :-
"MEASURES FOR SPEEDY INVESTIGATIONS AND TRIALS
4.1. The Committee recommends that the following measures should be
taken to ensure speedy investigations and trials :
(a) Special Courts should be got established at identified stations to
deal exclusively with FERA offences so that cases can be decided
speedily.
(b) To ensure against delays in investigations abroad, the Revenue
Secretary should be the competent authority to approve filing of
applications for Letters Rogatory.
(c) The Directorate of Enforcement should be delegated powers to
appoint special counsels for conducting trials, who may also act as
legal advisers for the Department in respect of the cases entrusted to
them.
(d) In many of the major cases of the Directorate, the suspects have
been able to abuse the process of law by stalling the investigations
at the initial stages through litigation at various levels, obtaining
stay orders from High Courts and injunctions on flimsy grounds. In
consultation with the Attorney General, the Revenue Department may
examine the possibility of making a representation to the Apex Court
to consider issuing appropriate directions so that the pace and
progress of cases is not thwarted by interlocutory procedures or stay
orders issued by the Courts below.
(e) Taking into account the instances in which suspected persons have
been able to stall investigations on alleged health grounds, the
Revenue Department should approach the Ministry of Health to establish
standing medical boards in identified cities to examine such persons.
Such boards should comprise outstanding medical experts of
unimpeachable integrity. The Courts can be requested to refer the
prayer of the accused for staying proceedings on health grounds to
such medical boards before passing judgment."
"CHECKS AND BALANCES
5.1. The Directorate must be provided adequate financial and
administrative delegations to enable it to exercise autonomy in the
conduct and pursuit of investigations without let or hindrance. Side
by side, it is necessary to provide appropriate checks and balances to
ensure against miscarriage of justice. In this context, the Committee
recommends the following :
(a) The Revenue Department should undertake regular review of the
progress of cases before the Directorate. To enable this, the
Directorate should regularly furnish information regarding the number
of cases instituted, progress of investigations, cases settled in
adjudication and those put to Courts. The Committee note that while
such information is already being supplied in reply to Parliament
Questions, information to be placed before the Parliamentary
Committee/Standing Committee, etc', there is no established procedure
for the Directorate to furnish relevant information in a well devised
format.
(b) The present system of the Directorate furnishing fortnightly
reports providing statistical information and brief outline of the
cases taken up for investigation should be further fine tuned. These
reports should be carefully examined by the Revenue Department to
ensure that the Directorate is performing its functions efficiently.
The Revenue Secretary should hold regular review meeting with the
Director Enforcement, also involving the Director Revenue Intelligence
and other concerned officers.
(c) Guidelines relating to interrogation, prosecution, adjudication,
time frame for completion of investigation, etc., have been issued by
the Directorate from time to time. These guidelines should be
comprehensively reviewed and, based thereon, a circular should be
released for the information of the public at large, to enable all
concerned to know the systems and procedures followed by the
Directorate. This shall contribute to greater transparency. This
effort should be concluded within 2-3 months.
5.2. It is important that the Directorate lays down a clearly spelt
out time frame for the completion of investigation, launching of
prosecution and completion of adjudication proceedings and for the
Director to ensure that the prescribed time limits are strictly
adhered to. The Committee are of the view that the Directorate would
be able to more efficiently discharge its functions if immediate steps
are taken to upgrade the level and quality of its in-house legal
advice mechanism. At our request, the Cabinet Secretary convened a
meeting with the Revenue Department, Enforcement Directorate and other
concerned officers to consider various proposals for strengthening the
Directorate. The Committee hope that the various decisions taken at
the Cabinet Secretary's level shall witness implementation within 6-8
weeks.
5.3. The Committee recommends that the Directorate should take time
bound steps to establish a grievances redressal mechanism to promptly
deal with complaints received from the public against actions of the
Enforcement Directorate. Insofar as complaints of arbitrary action by
senior officers of the Directorate are concerned, the Committee
recommends that these should be looked into by a Committee headed by
the Central Vigilance Commissioner and comprising Revenue Secretary,
Director General Revenue Intelligence, Enforcement Director and a
senior representative of the Ministry of Law.
5.4. As regards the pursuit of cases which appear to have a
politico-beaurocrai-criminal nexus, the Home Secretary agreed with the
Committee's suggestion that the Nodal Agency in the Home Ministry
(chaired by Home Secretary) shall also include Member (Investigation)
of the Central Board of Direct Taxes, Director General Revenue
Intelligence and the Director Enforcement as members.
5.5. The Committee recommends that the Annual Report of the Department
of Revenue should have a section devoted exclusively to the
functioning of the Enforcement Directorate. This report should
highlight the number of cases taken up for investigation by ED, raids
and searches conducted, amount of Indian and foreign currency seized
etc. The report should also indicate the number of persons arrested,
prosecutions launched and convictions ordered by the Courts. The
Committee feels that enhanced public knowledge about the work being
done by the Directorate shall demystify its operations and contribute
to improved public confidence."
"SUMMARY OF RECOMMENDATIONS I. CBI AND CVC
1. CVC to be conferred statutory status; appointment of Central
Vigilance Commissioner to be made under the hand and seal of the
President (para 4.2.)
2. Constitution of a Committee for selection of CVC (para 4.3.)
3. CVC to overvieCBI's functioning (para 5)
4. CBI's reporting to Government to be streamlined without diluting
its functional autonomy (para 3.3)
5. CVC to have a separate section in its Annual Report on the CBI's
functioning after the supervisory function is transferred to it (para
6)
6. Constitution of a Selection Committee for identifying a panel of
names for selection of Director CBI; final selection to be made by ACC
from such panel (para 8.2.)
7. Central Government to pursue with the State Governments to set up a
credible mechanism for selection of Police Chief (para 3.3)
8. Director CBI to have a minimum tenure of 2 years (para 8.4)
9. Transfer of incumbent Director CBI would need endorsement of the
Selection Committee (para 8.5)
10. Director CBI to ensure full freedom for allocation of work within
the Agency, including Constitution of investigation teams (para 8.6)
11. Selection/extension of tenure of officers upto to the level of
Joint Director (JD) to be decided by a Board under Central Vigilance
Commissioner; .ID and above would need the approval of ACC (para 8.7)
12. Change in the existing Tenure Rules not recommended (para 8.8)
13. Proposals for improvement of infrastructure, methods of
investigation, etc., to be decided urgently (para 8.9.2.)
14. No need for creation of a permanent core group in the CBI (para 8.9.3)
15. Severe disciplinary action against officers who deviate from
prescribed investigation procedures (para 9.1.)
16. Director CBI to be responsible for ensuring time limits for filing
charge sheets in courts (para 9.2)
17. Document on CBI's functioning to be published within three months (para 9.4)
18. Essential to protect officers at the decision making levels from
vexatious enquiries/prosecutions (para 10.6)
19. Secretaries to adhere strictly to prescribe time frames for grant
of permission for registration of PE/RC. CBI to be free to proceed if
decision not conveyed within the specified lime (para 10.9)
20. Secretary of Administrative Ministry to convey a decision
regarding registration of PE/RC within 2 months of receipt of request.
If not satisfied with decision, Director CBI free to make fresh
reference to the Committee headed by Cabinet Secretary within a period
of four weeks and the latter to decide thereon within a period of four
weeks (para 10.10)
21. Protection under the Single Directive not to cover offences like
bribery, when prima-facie established in a successful trap (para
10.12)
22. Cases of disproportionate assets of Central Government and All
India Services Officers to be brought within the ambit of the Single
Directive (para 10.13)
23. Time limit of 3 months for sanction for prosecution. Where
consultation is required with the Attorney General or the Solicitor
General, additional time of one month could be allowed (paras 10.14
and 10.15)
24. Government to undertake a review of the various types of offences
notified for investigation by the CBI to retain focus on
anti-corruption activities which is its primary objective (para 11..I)
25. Cases falling within the jurisdiction of the State Police which do
not have inter-state or inter-national ramifications should not be
handed over to CBI by States/Courts (para 11.2)
26. Government to establish Special Courts for the trial of CBI cases (11.3)
27. Severe action against officials found guilty of high handed-ness;
prompt action against those officials chastised by the Courts (para
11.4)
28. Director CBI to conduct regular appraisal of personnel to weed out
the corrupt and inefficient, and maintain strict discipline within the
organisation (para 11.5)
II. ENFORCEMENT DIRECTORATE
1. Selection Committee headed by Central Vigilance Commissioner to
recommend panel for appointment of Director Enforcement by the ACC
(para 2.2)
2. Director Enforcement to have minimum tenure of 2 years. For his
premature transfer, the Selection Committee headed by Central
Vigilance Commissioner to make suitable recommendations to the ACC
(para 2.3.)
3. Post of Director Enforcement to be upgraded to that of Additional
Secretary/Special Secretary to the Government (para 2.4)
4. Officers of the Enforcement Directorate handling sensitive
assignments to be provided adequate security for enabling fearless
discharge of their functions (para 2.5)
5. Extension of tenures up to the level of Joint Directors in the
Enforcement Directorate to be decided by a Committee headed by Central
Vigilance Commissioner (para 2.6)
6. Proposals for foreign visits to conduct investigations to be
cleared by the Revenue Secretary and the Financial Adviser (para 2.7)
7. While enjoying full internal autonomy Enforcement Directorate to he
made accountable. Responsibility of Government to ensure efficient and
impartial functioning (para 3.1)
8. Premature media publicity to be ensured against (para 3.3)
9. Adjudication proceedings prosecution to be finalised by the
Enforcement Directorate within a period of one year (para 3.4)
10. Director Enforcement to monitor speedy completion of investigation
and launching of adjudications/prosecution. Revenue Secretary to
review regularly (para 3.4)
11. The Director Enforcement to keep close watch against vexations
search; action against functionaries who act without due care (para
3.5)
12. Special Courts to be established to deal with FER A offences for
speedy completion of trials [para 4.1.(a)]
13. For speedy conduct of investigations abroad, Revenue Secretary be
authorised to approve filing of applications for Letters Rogatory
[para 4.1(b)
14. The Enforcement Directorate to be delegated powers to appoint
Special Counsels for trials [para 4.1(C)]
15. The Revenue Department to consult Attorney General regarding
measures against conclusion of cases being thwarted by stay orders,
etc. (para 4.1(d)]
16. Revenue Department to approach Health Ministry to establish
Standing Medical Boards in identified cities for examination of
accused persons seeking deferment of proceedings on health grounds
[para 4.1(c)]
17. Revenue Department to undertake regular reviews of cases pending
with the Directorate [para 5.1(a) and (b)].
18. Comprehensive circular to be published by the Directorate to
inform public about procedures/systems of its functioning [para
5.l(c)]
19. In-house legal advice mechanism to be strengthened (para 5.2)
20. Proposals for strengthening the Directorate to be implemented
within 8 weeks (para 5.2)
21. Directorate to establish a grievance redressal mechanism (para 5.3)
22. Committee headed by Central Vigilance Commissioner to decide
complaints of arbitrary action by Directorate officials (para 5.3)
23. Nodal Agency headed by Home Secretary on
politico-beaurocrai-criminal nexus to include Member investigation
CBDT, Director General Revenue Intelligence and Director Enforcement
as members (para 5.4)
24. Annual Report of the Department of Revenue to contain an
exhaustive section on the working of the Enforcement Directorate (para
5.5)
25. Suitable incentives to be provided to functionaries of Enforcement
Directorate at various levels, to attract best material, to be decided
within two months (para 6.1)
III. NODAL AGENCY ON CRIMINAL NEXUS
1. Requirements of inter-agency co-ordination at field unit level to
be evolved by Home Secretary (para 2.1)
2. NA's functioning to be watched for some time before considering
need for structural changes (para 3)
3. Home Secretary will hold meetings of NA every month (para 3)"
28. The reference to paragraphs within brackets at the end of each
recommendation is to the paragraphs of the report containing
discussion pertaining to the Central Bureau of Investigation (CBI) and
the Central Vigilance Commission (CVC) in Part I and Directorate of
Enforcement in Part II of the report. These recommendations have,
therefore, to be read along with the discussion in the corresponding
paras in Part I and Part II of the report.
Need for Court's intervention
29. The IRC is a body constituted by the Central Government itself as
a result of its perception that the Constitution and functioning of
the CBI, CVC and Directorate of Enforcement require a close scrutiny
in the background of the recent unsatisfactory functioning of these
agencies with a view to improve their functioning. The view taken by
the IRC is a reaffirmation of this belief shared by everyone. The
preface to the report indicates the reason for the Constitution of the
IRC and says that "In the past several years, there has been
progressive increase in allegations of corruption involving public
servants. Understandably, cases of this nature have attracted
heightened media and public attention. A general impression appears to
have gained ground that the concerned Central investigating agencies
are subject to extraneous pressures and have been indulging in
dilatory tactics in not bringing the guilty to book. The decisions of
higher courts to directly monitor investigations in certain cases have
added to the aforesaid belief." There can thus be no doubt that there
is need for the exercise we were called upon to perform and which has
occasioned consideration of this crucial issued by this Court in
exercise of its powers conferred by the Constitution of India. The
conclusions reached by the IRC and the recommendation it has made for
improving the functioning and thereby the image of these agencies is a
further reaffirmation of this general belief. There can also be no
doubt that the conclusions reached by the IRC and its recommendations
are the minimum which require immediate acceptance and implementation
in a, bid to arrest any further decay of the polity. It follows that
the exercise to be performed now by this Court is really to consider
whether any modifications/additions are required to be made to the
recommendations of the IRC for achieving the object for which the
Central Government itself constituted the IRC. We are informed by the
learned Attorney General that further action on the report of the IRC
could not be taken so far because of certain practical difficulties
faced by the Central Government but there is no negative reaction to
the report given by the Central Government.
30. The only caveat entered by the Attorney General is on the basis of
a note by an individual Minister in the Central Cabinet in which
emphasis has been laid that the ultimate responsibility for the
functioning of these agencies to the Parliament is that of the
concerned Minister and this aspect may be kept in mind. It has been
specifically mentioned that the Minister would remain the final
disciplinary authority and would have the power to refer complaints
against the agency or its officers to an appropriate authority for
necessary action. There can be no quarrel with the Minister's ultimate
responsibility to the Parliament for the functioning of these agencies
and he being the final disciplinary authority in respect of the
officers of the agency with power to refer complaints them to the
appropriate authority. Some other specific powers of the Minister were
indicated as under :-
1. The Minister has the power to review the working of the agencies
which are under his Department.
2. The Minister has the power to give broad policy directions
regarding investigation and prosecution of classes or categories of
cases.
3. The Minister has the power to appraise the quality of the work of
the Head of the agency as well as other senior officers of the agency.
4. The Minister has t he power to call for information regarding
progress of cases.
31. It is sufficient to say that the Minister's general power to
review the working of the agency and to give broad policy directions
regarding the functioning of the agencies and to appraise the quality
of the work of the Head of the agency and other officers as the
executive head is in no way to be diluted. Similarly, the Minister's
power to call for information generally regarding the cases being
handled by the agencies is not to be taken away. However, all the
powers of the Minister are subject to the condition that none of them
would extend to permit the Minister to interfere with the course of
investigation and prosecution in any individual case and in that
respect the concerned officers are to be governed entirely by the
mandate of law and the statutory duty cast upon them.
32. It is useful to remember in this context what this Court has on
several occasions in the past said about the nature of duty and
functions of Police officers in the investigation of an offence. It is
sufficient to refer to one of them, namely, Union of India and Others
v. Sushil Kumar Modi and Others, MANU/SC/1167/1997 : 1997CriLJ1168 ,
(Bihar Fodder Scam case), wherein it was said, as under :-
4. At the outset, we would indicate that the nature of proceedings
before the High Court is somewhat similar to those pending in this
Court in Vineet Narain v. Union of India, MANU/SC/0926/1996 :
[1996]1SCR1053 and Anukul Chandra Pradhan v. Union of India,
MANU/SC/1258/1996 : (1996)6SCC354 and, therefore, the High Court is
required to proceed with the matter in a similar manner. It has to be
borne in mind that the purpose of these proceedings is essentially to
ensure performance of the statutory duty by the CBI and the other
government agencies in accordance with law for the proper
implementation of the rule of law. To achieve this object a fair,
honest and expeditious investigation into every reasonable accusation
against each and every person reasonably suspected of involvement in
the alleged offences has to be made strictly in accordance with law.
The duty of the Court in such proceedings is, therefore, to ensure
that the CBI and other government agencies do their duty and do so
strictly in conformity with law. In these proceedings, the Court is
not required to go into the merits of the accusation or even to
express any opinion thereon, which is a matter for consideration by
the competent court in which the charge-sheet is filed and the accused
have to face trial. It is, therefore, necessary that not even an
observation relating to the merits of the accusation is made by the
Court in these proceedings lest in prejudice the accused at the trial.
The nature of these proceedings may be described as that of
"continuing mandamus" to require performance of its duty by the CBI
and the other government agencies concerned. The agencies concerned
must bear in mind and, if needed, be reminded of the caution
administered by Lord Denning in this behalf in R. v. Metropolitan
Police Commr. [1968] 1 All ER 763/(1968) 2 QB 118. Indicating the duty
of the Commissioner of Police, Lord Denning stated thus : (All ER p.
769)
"I have no hesitation, however in holding that, like every constable
in the land, he should be, and is, independent of the executive. He is
not subject to the orders of the Secretary of State,...I hold it to be
the duly of the Commissioner of Police, as it is of every chief
constable, to enforce the law of the land. He must take steps so to
post his men that crimes may be detected; and that honest citizens may
go about their affairs in peace. He must decide whether or not
suspected persons are to be prosecuted; and if need be, bring the
prosecution or see that it is brought; but in all these things he is
not the servant of anyone, save of the law itself. No Minister of the
Crown can tell him that he must, or must not, keep observation on this
place or that; or that he must, or must not prosecute this man or that
one. Nor can any police authority tell him so. The responsibility for
law enforcement lies on him. He is answerable to the law and to the
law alone."
The nature of such a proceeding in a court of law was also indicated
by Lord Denning, as under :
"A question may be raised as to the machinery by which he could be
compelled to do his duty. On principle, it seems to me that once a
duty exists, there should be a means of enforcing it. This duty can be
enforced. I think, either by action at the suit of the Attorney
General; or by the prerogative order of mandamus."
(emphasis supplied)
There can hardly be any doubt that the obligation of the police in our
constitutional scheme is no less.
5. According to the CrPC, 1973 the formation of the opinion as to
whether or not there is a case to place the accused for trial is that
of the police officer making the investigation and the final step in
the investigation is to be taken only by the police and by no other
authority, see Abhinandan Jha v. Dinesh Mishra, MANU/SC/0054/1967 :
1968CriLJ97 . This must be borne in mind as also that the scope and
purpose of a proceeding like the present is to ensure a proper and
faithful performance of its duty by the police officer by resort to
the prerogative writ of mandamus."
33. The Minister's power in these matters has, therefore, to be
understood as circumscribed by these limitations under the law.
History of CBI
34. It is useful to refer at this stage to the history of the CBI. The
Special Police Establishment was formed during the World War II when
large sums of public money were being spent in connection with the War
and there arose enormous potential for corruption amongst the officers
dealing with the supplies. An executive order was made by the
Government of India in 1941 setting up the Special Police
Establishment (SPE) under a DIG in the then Department of War. The
need for a central government agency to investigate cases of bribery
and corruption by the Central Government servants continued and,
therefore, the Delhi Special Police Establishment Act was brought into
force in 1946. Under this Act, the superintendence of the Special
Police Establishment was transferred to the Home Department and its
functions were enlarged to cover all departments of the Government of
India. The jurisdiction of the SPE extended to all the Union
Territories and could also be extended to the States with the consent
of the concerned State Governments. Then the SPE was put under the
charge of Director, Intelligence Bureau. Later in 1948 a post of
Inspector General of Police, SPE was created and the organisation was
placed under his charge. The Central Bureau of Investigation was
established on 1.4.1963 vide Government of India's Resolution No.
4/31/61-T/MHA. This was done to meet the felt need of having a central
police agency at the disposal of the Central Government to investigate
into cases not only of bribery and corruption but also those relating
to the breach of central fiscal laws, frauds in government departments
and PSUs and other serious crimes. On enlargement of the role of CBI
and Economic Offences Wing was added to the existing Divisions of the
CBI. In 1987 two Divisions were created in the CBI known as
Anti-Corruption Division and Special Crimes Division, the latter
dealing with cases of conventional crimes besides economic offences.
In 1994 due to increased workload relating to bank frauds and economic
offences a separate Economic Offences Wing was established in CBI with
the result that since then the CBI has three Investigation Divisions,
namely, Anti-Corruption Division, Special Crimes Division and Economic
Offences Division. Further particulars thereof are not necessary in
the present context.
35. We are informed that almost all the State Governments have given
concurrence for extension of the jurisdiction of the Delhi Special
Police Establishment in the States with the exception of only a few.
The result is that for all practical purposes, the jurisdiction in
respect of all such offences is exercised in the consenting States
only by the CBI and not by the Slate Police. This is the significance
of the role of the CBI in such matters and, therefore, technically the
additional jurisdiction under the general law of the State Police in
these matters is of no practical relevance. The pragmatic effect of
the Single Directive is, therefore, to inhibit investigation against
the specified category of officers without sanction in accordance with
the Single Directive.
36. Validity of Directive No. 4.7(3) of the Single Directive
37. We may now refer to the two decisions on which specific reliance
has been placed by the learned Attorney General before us as well as
the IRC in its report.
38. The decision in J.A.C. Saldanha (supra) is on Section 3 of the
Police Act, 1861 and deals with the ambit and scope of State
Government's power of 'superintendence' thereunder. It was held in
J.A.C. Saldanha (supra) (hat the power of superintendence of the State
Government includes its power to direct further investigation under
Section 173(8) Cr.P.C. That was a case in which there was occasion to
require further investigation because of the unsatisfactory nature of
the investigation done earlier of a cognizable offence. Thus, in that
case the power of superintendence was exercised for directing further
investigation to complete an unsatisfactory investigation of a
cognizable offence to promote the cause of justice and not to subvert
it by preventing investigation. In our opinion, in the present
context, that decision has no application to support the issuance of
the Single Directive in exercise of the power of superintendence,
since the effect of the Single Directive might thwart investigation of
a cognizable offence and not to promote the cause of justice by
directing further investigation leading to a prosecution.
39. The other decision of this Court is in K. Veeraswami (supra). That
was a decision in which the majority held that the Prevention of
Corruption Act applies even to the Judges of the High Court and the
Supreme Court. After taking that view, it was said by the majority
(per Shetty, J.) that in order to protect the independence of
judiciary, it was essential that no criminal case shall be registered
under Section 154 Cr.P.C. against a Judge of the High Court or of the
Supreme Court unless the Chief Justice of India is consulted and he
assents to such an action being taken. The learned Attorney General
contended that this decision is an authority for the proposition that
in case of high officials, the requirement of prior
permission/sanction from a higher officer or Head of the Department is
permissible and necessary to save the concerned officer from
harassment caused by a malicious or vexatious prosecution. We are
unable to accept this submission.
40. The position of Judges of High Courts and Supreme Court, who are
constitutional functionaries, is distinct, and the independence of
judiciary, keeping it free from any extraneous influence, including
that from executive, is the rationale of the decision in K.
Veerasawami (supra). In strict terms the Prevention of Corruption Act,
1946 could not be applied to the superior Judges and, therefore, while
bringing those Judges within the purview of the Act yet maintaining
the independence of judiciary, this guideline was issued as a
direction by the Court. The feature of independence of judiciary has
no application to the officers covered by the Single Directive. The
need for independence of judiciary from the executive influence does
not arise in the case of officers belonging to the executive. We have
no doubt that the decision in K. Veeraswami (supra) has no application
to the wide proposition advanced by the learned Attorney General to
support the Single Directive. For the same reason, reliance on that
decision by the IRC to uphold the Single Directive is misplaced.
41. The question, however, is whether, without the aid of these
decisions, the Single Directive can be upheld. In this context,
meaning of the word "superintendence" in Section 4(1) of the Delhi
Special Police Establishment Act, 1946 requires consideration.
42. The Delhi Special Police Establishment Act, 1946 is an Act to make
provision for the Constitution of a special police force in Delhi for
the investigation of certain offences in the Union Territories for the
superintendence and administration of the said force and for the
extension to other areas of the powers and jurisdiction of members of
the said force in regard to the investigation of the said offences.
Section 6 of the Act requires consent of the State Government to
exercise powers and jurisdiction under the Act by the Delhi Special
Police Establishment. This is because 'Police' is a State subject,
being in List II, Entry 2 of the Seventh Schedule. For this reason,
the learned Attorney General contended that the power and jurisdiction
of the State Police in respect of an offence within its jurisdiction
remains intact and is not inhibited by the Single Directive; and that
the CBI alone is inhibited thereby. Section 2 of the Act deals with
Constitution and powers of the Special Police Establishment (SPE).
This is how the CBI has been constituted. Section 3 provides for
offences to be investigated by the SPE and says that the offences or
class of offences to be investigated by the agency may be specified by
notification in the Official Gazette by the Central Government.
43. Section 3 of the Police Act, 1861 is in pari materia with Section
4 of the Delhi Special Police Establishment Act, 1946. These Sections
read as under :-
Section 3 of the Police Act, 1861 :
"3 Superintendence in the State Government.- The superintendence of
the police throughout a general police district shall vest in and
shall be exercised by the State Government to which such district is
subordinate, and except as authorised under the provisions of this
Act, no person, officer or Court shall be empowered by the State
Government to supersede or control any police functionary.
Sections 3 and 4 of the Delhi Special Police Establishment Act, 1946 :
Offences to be investigated by S.P.E.
3. The Central Government may, by notification in the Official Gazette
specify the offences or classes of offences which are to be
investigated by the Delhi Special Police Establishment.
Superintendence & Administration of S.P.E.
4(1) The Superintendence of the Delhi Special Police Establishment
shall vest in the Central Government.
(2) The administration of the said police establishment shall vest in
an officer appointed in this behalf by the Central Government who
shall exercise in respect of that police establishment such of the
powers exercisable by an Inspector-General of Police in respect of the
police force in a State, as the Central Government may specify in this
behalf."
44. The meaning of the word "superintendence" in Section 4(1) of the
Delhi Special Police Act, 1946 determines the scope of the authority
of the Central Government in this context.
45. There can be no doubt that the overall administration of the said
force, i.e., CBI vests in the Central Government, which also includes,
by virtue of Section 3, the power to specify the offences or class of
offences which are to be investigated by it. The general
superintendence over the functioning of the Department and
specification of the offences which are to be investigated by the
agency is not the same as and would not include within it the control
of the initiation and the actual process of investigation, i.e.,
direction. Once the CBI is empowered to investigate an offence
generally by its specification under Section 3, the process of
investigation, including its initiation, is to be governed by the
statutory provisions which provide for the initiation and manner of
investigation of the offence. This is not an area which can be
included within the meaning of "superintendence" in Section 4(1).
46. It is, therefore, the notification made by the Central Government
under Section 3 which confers and determines the jurisdiction of the
CBI to investigate an offence; and once that jurisdiction is attracted
by virtue of the notification under Section 3, the actual
investigation is to be governed by the statutory provisions under the
general law applicable to such investigations. This appears to us the
proper construction of Section 4(1) in the context, and it is in
harmony with the scheme of the Act, and Section 3 in particular. The
word "superintendence" in Section 4(1) cannot be construed in a wider
sense to permit supervision of the actual investigation of an offence
by the CBI contrary to the manner provided by the statutory
provisions. The broad proposition urged on behalf of the Union of
India that it can issue any directive to the CBI to curtail or inhibit
its jurisdiction to investigate an offence specified in the
notification issued under Section 3 by a directive under Section 4(1)
of the Act cannot be accepted. The jurisdiction of the CBI to
investigate an offence is to be determined with reference to the
notification issued under Section 3 and not by any separate order not
having that character.
47. This view does not conflict with the decision in J.A.C. Saldanha
(supra) as earlier indicated. In Saldanha, the question was whether an
unsatisfactory investigation already made could be undertaken by
another officer for further investigation of the offence so that the
offence was properly investigated as required by law, and it was not
to prevent the investigation of an offence. The Single Directive has
the effect of restraining recording of FIR and initiation of
investigation and not of proceeding with investigation, as in
Saldanha. No authority to permit control of statutory powers exercised
by the police to investigate an offence within its jurisdiction has
been cited before us except K. Veeraswami which we have already
distinguished. The view we take accords not only with reason but also
with the very purpose of the law and is in consonance with the basic
tenet of the rule of law.
48. Once the jurisdiction is conferred on the CBI to investigate an
offence by virtue of notification under Section 3 of the Act, the
powers of investigation are governed by the statutory provisions and
they cannot be estopped or curtailed by any executive instruction
issued under Section 4(1) thereof. This result follows from the fact
that conferment of jurisdiction is under Section 3 of the Act and
exercise of powers of investigation is by virtue of the statutory
provisions governing investigation of offences. It is settled that
statutory jurisdiction cannot be subject to executive control.
49. There is no similarity between a mere executive order requiring
prior permission or sanction for investigation of the offence and the
sanction needed under the statute for prosecution. The requirement of
sanction for prosecution being provided in the very statute which
enacts the offence, the sanction for prosecution is a pre-requisite
for the court to take cognisance of the offence. In the absence of any
statutory requirement of prior permission or sanction for
investigation, it cannot be imposed as a condition precedent for
initiation of the investigation once jurisdiction is conferred on the
CBI to investigate the offence by virtue of the notification under
Section 3 of the Act. The word "superintendence" in Section 4(1) of
the Act in the context must be construed in a manner consistent with
the other provisions of the Act and the general statutory powers of
investigation which govern investigation even by the CBI. The
necessity of previous sanction for prosecution is provided in Section
6 of the Prevention of Corruption Act, 1947 (Section 19 of the 1988
Act) without which no court can take cognizance of an offence
punishable under Section 5 of that Act. There is no such previous
sanction for investigation provided for either in the Prevention of
Corruption Act or the Delhi Special Police Establishment Act or in any
other statutory provision. The above is the only manner in which
Section 4(1) of the Act can be harmonised with Section 3 and the other
statutory provisions.
50. The Single Directive has to be examined in this background. The
law does not classify offenders differently for treatment thereunder,
including investigation of offences and prosecution for offences,
according to their status in life. Every person accused of committing
the same offence is to be dealt with in the same manner in accordance
with law, which is equal in its application to everyone. The Single
Directive is applicable only to certain persons above the specified
level who are described as "decision making officers". The question is
whether any distinction can be made for them for the purpose of
investigation of an offence of which they arc accused.
51. Obviously, where the accusation of corruption is based on direct
evidence and it does not require any inference to be drawn dependent
on the decision making process, there is no rational basis to classify
them differently. In other words, if the accusation be of bribery
which is supported by direct evidence of illegal gratification by
them, including trap cases, it is obvious that no other factor is
relevant and the level or status of the offender is irrelevant. It is
for this reason that it was conceded that such cases, i.e., of
bribery, including trap cases, are outside the scope of the Single
Directive. After some debate at the Bar, no serious attempt was made
by the learned Attorney General to support inclusion within the Single
Directive of cases in which the offender is alleged to be in
possession of disproportionate assets. It is clear that the accusation
of possession of disproportionate assets by a person is also based on
direct evidence and no factor pertaining to the expertise of decision
making is involved therein. We have, therefore, no doubt that the
Single Directive cannot include within its ambit cases of possession
of disproportionate assets by the offender. The question now is only
with regard to cases other than those of bribery, including trap
cases, and of possession of disproportionate assets being covered by
the Single Directive.
52. There may be other cases where the accusation cannot be supported
by direct evidence and is a matter of inference of corrupt motive for
the decision, with nothing to prove directly any illegal gain to the
decision maker. Those are cases in which the inference drawn is that
the decision must have been made for a corrupt motive because the
decision could not have been reached otherwise by an officer at that
level in the hierarchy. This is, therefore, an area where the opinion
of persons with requisite expertise in decision making of that kind is
relevant and, may be even decisive in reaching the conclusion whether
the allegation requires any investigation to be made. In view of the
fact that the CBI or the Police force does not have the expertise
within its fold for the formation of the requisite opinion in such
cases, the need for the inclusion of such a mechanism comprising of
experts in the field as a part of the infrastructure of the CBI is
obvious, to decide whether the accusation made discloses grounds for a
reasonable suspicion of the commission of an offence and it requires
investigation. In the absence of any such mechanism within the
infrastructure of the CBI, comprising of experts in the field who can
evaluate the material for the decision to be made, introduction
therein of a body of experts having expertise of the kind of business
which requires the decision to be made, can be appreciated. But then,
the final opinion is to be of the CBI with the aid of that advice and
not that of anyone else. It would be more appropriate to have such a
body within the infrastructure of the CBI itself.
53. The Single Directive cannot, therefore, be upheld as valid on the
ground of it being permissible in exercise of the power of
superintendence of the Central Government under Section 4(1) of the
Act. The matter has now to be considered de hors the Single Directive.
Power of the Supreme Court
54. In view of the common perception shared by everyone including the
Government of India and the Independent Review Committee (IRC) of the
need for insulation of the CBI from extraneous influence of any kind,
it is imperative that some action is urgently taken to prevent the
continuance of this situation with a view to ensure proper
implementation of the rule of law. This is the need of equality
guaranteed in the Constitution. The right to equality in a situation
like this is that of the Indian polity and not merely of a few
individuals. The powers conferred on this Court by the Constitution
are ample to remedy this defect and to ensure enforcement of the
concept of equality.
55. There are ample powers conferred by Article 32 read with Article
142 to make orders which have the effect of law by virtue of Article
141 and there is mandate to all authorities to act in aid of the
orders of this Court as provided in Article 144 of the Constitution.
In a catena of decisions of this Court, this power has been recognised
and exercised, if need be, by issuing necessary directions to fill the
vacuum till such time the legislature steps in to cover the gap or the
executive discharges its role. It is in the discharge of this duty
that the IRC was constituted by the Government of India with a view to
obtain its recommendations after an indepth study of the problem in
order to implement them by suitable executive directions till proper
legislation is enacted. The report of the IRC has been given to the
Government of India but because of certain difficulties in the present
context, no further action by the executive has been possible. The
study having been made by a Committee considered by the Government of
India itself as an expert body, it is safe to act on the
recommendations of the IRC to formulate the directions of this Court,
to the extent they are of assistance. In the remaining area, on the
basis of the study of the IRC and its recommendation, suitable
directions can be formulated to fill the entire vacuum. This is the
exercise we propose to perform in the present case since this exercise
can no longer be delayed. It is essential and indeed the
constitutional obligation of this Court under the aforesaid provisions
to issue the necessary directions in this behalf. We now consider
formulation of the needed directions in the performance of this
obligation. The directions issued herein for strict compliance are to
operable till such time as they are replaced by suitable legislation
in this behalf.
56. There is another aspect of rule of law which is of equal
significance. Unless a proper investigation is made and it is followed
by an equally proper prosecution, the effort made would not bear
fruition. The recent experience in the field of prosecution is also
discouraging. To emphasise this point, some reference has to be made
to a large number of prosecutions launched as a result of monitoring
by the court in this matter which have resulted in discharge of the
accused at the threshold. It took several years for the CBI to
commence investigation and that too as a result of the monitoring by
this Court. It is not as if the CBI, on conclusion of the
investigation, formed the opinion that no case was made out for
prosecution so that the earlier inaction may have been justified. The
CBI did file numerous chargesheets which indicated that in its view a
prima facie case for prosecution had been made out. This alone is
sufficient to indicate that the earlier inaction was unjustified.
However, discharge of the accused on filing of the chargesheet
indicates, irrespective of the ultimate outcome of the matters pending
in the higher courts, that the trial court at least was not satisfied
that a prima fade case was made out by the investigation. These facts
are sufficient to indicate that either the investigation or the
prosecution or both were lacking. A similar result of discharge of the
accused in such a large number of cases where chargesheets had been
filed by the CBI is not consistent with any other inference. The need
for a strong and competent prosecution machinery and not merely a fair
and competent investigation by the CBI can hardly be overemphasised.
This is the occasion for us to take the view that a suitable machinery
for prosecution of the cases filed in court by the CBI is also
essential to ensure discharge of its full responsibility by the CBI.
Unless a competent prosecution follows a fair and competent
investigation, the exercise in the ultimate analysis would be futile.
Investigation and prosecution are inter-related and improvement of
investigation without improving the prosecution machinery is of no
practical significance. We would, therefore, consider the aspect of
prosecution also in the formulation of the guidelines.
57. In exercise of the powers of this Court under Article 32 read with
Article 142, guidelines and directions have been issued in a large
number of cases and a brief reference to a few of them is sufficient.
In Erach Sain Kanga Etc. v. Union of India and Anr., (Writ Petition
No. 2632 of 1978 Etc. Etc.) decided on 20th March, 1979, the
Constitution Bench laid down certain guidelines relating to Emigration
Act. In Lakshmi Kant Pandey v. Union of India, (in re : Foreign
Adoption), MANU/SC/0054/1984 : [1984]2SCR795 , guidelines for adoption
of minor children by foreigners were laid down. Similarly in State of
West Bengal and Ors. Etc. v. Sampat Lal and Ors. Etc.,
MANU/SC/0126/1984 : 1985CriLJ516 , K. Veeraswami v. Union of India and
Others, MANU/SC/0610/1991 : (1992)IILLJ53bSC , Union Carbide
Corporation and Others v. Union of India and Others, MANU/SC/0058/1992
: AIR1992SC248 , Delhi Judicial Service Association Etc. v. State of
Gujarat and Others Etc. (Nadiad Case), MANU/SC/0478/1991 :
1991CriLJ3086 , Delhi Development Authority v. Skipper Construction
Co. (P) Ltd. And Another, MANU/SC/0497/1996 : AIR1996SC2005 and Dinesh
Trivedi, M.P. and Others v. Union of India and Others,
MANU/SC/1138/1997 : [1997]3SCR93 , guidelines were laid down having
the effect of law, requiring rigid compliance. In Supreme Court
Advocates-on- Record Association and Others v. Union of India (IInd
Judges case), MANU/SC/0073/1994 : AIR1994SC268 , a Nine Judge Bench
laid down guidelines and norms for the appointment and transfer of
Judges which are being rigidly followed in the matter of appointments
of High Court and Supreme Court Judges and transfer of High Court
Judges. More recently in Vishakha and Others v. State of Rajasthan and
Others, MANU/SC/0786/1997 : AIR1997SC3011 , elaborate guidelines have
been laid down for observance in work places relating to sexual
harassment of working women. In Vishaka, it was said :
"The obligation of this court under Article 32 of the Constitution for
the enforcement of these fundamental rights in the absence of
legislation must be viewed along with the role of judiciary envisaged
in the Beijing Statement of Principles of the Independence of the
Judiciary in the LAWASIA region. These principles were accepted by the
Chief Justices of Asia and the Pacific at Beijing in 1995(*) [As
amended at Manila, 28th August, 1997] as those representing the
minimum standards necessary to be observed in order to maintain the
independence and effective functioning of the judiciary. The
objectives of the judiciary mentioned in the Beijing Statement are :
"Objectives of the Judiciary :
10. The objectives and functions of the Judiciary include the following;
(a) to ensure that all persons are able to live securely under the Rule of Law;
(b) to promote, within the proper limits of the judicial function, the
observance and the attainment of human rights; and
(c) to administer the law impartially among persons and between
persons and the State."
Thus, an exercise of this kind by the court is now a well settled
practice which has taken firm roots in our constitutional
jurisprudence. This exercise is essential to fill the void in the
absence of suitable legislation to cover the field.
58. As pointed out in Vishakha (supra), it is the duty of the
executive to fill the vacuum by executive orders because its field is
coterminous with that She legislature, and where there is inaction
even by the executive for whatever reason, the judiciary must step in,
in exercise of its constitutional obligations under the aforesaid
provisions to provide a solution till such time as the legislature
acts to perform its role by enacting proper legislation to cover the
field.
59. On this basis, we now proceed to give the directions enumerated
hereafter for rigid compliance till such time as the legislature steps
in to substitute them by proper legislation. These directions made
under Article 32 read with Article 142 to implement the rule of law
wherein the concept of equality enshrined in Article 14 is embedded,
have the force of law under Article 141 and by virtue of Article 144,
it is the duty of all authorities, civil and judicial, in the
territory of India to act in aid of this Court. In the issuance of
these directions, we have accepted and are reiterating as far as
possible the recommendations made by the IRC.
60. It is a similar perception in England which has led to the
Constitution of a Committee headed by Lord Nolan on 'Standards in
Public Life'. In Volume 1 of Lord Nolan's Report (1995), the general
recommendations made are :
General recommendations
4. Some of our conclusions have general application across the entire service :
Principles of public life
5. The general principles of conduct which underpin public life need
to be restated. We have done this. The seven principles of
selflessness, integrity, objectivity, accountability, openness,
honesty and leadership arc set out in full on page 14.
Codes of Conduct
6. All public bodies should draw up Codes of Conduct incorporating
these principles.
Independent Scrutiny
7. Internal systems for maintaining standards should be supported by
independent scrutiny.
Education
8. More needs to be done to promote and reinforce standards of conduct
in public bodies, in particular through guidance and training,
including induction training."
61. The Seven Principles of Public Life are stated in the Report by
Lord Nolan, thus :
"The Seven Principles of Public Life
Selflessness
Holders of public office should take decisions solely in terms of the
public interest. They should not do so in order to gain financial or
other material benefits for themselves, their family, or their
friends.
Integrity
Holders of public office should not place themselves under any
financial or other obligation to outside individuals or organisation
that might influence them in the performance of their official duties.
Objectivity
In carrying out public business, including making public appointments,
awarding contracts, or recommending individuals for rewards and
benefits, holders of public office should make choices on merit.
Accountability
Holders of public office are accountable for their decisions and
actions to the public and must submit themselves to whatever scrutiny
is appropriate to their office.
Openness
Holders of public office should be as open as possible about all the
decisions and actions that they take. They should give reasons for
their decisions and restrict information only when the wider public
interest clearly demands.
Honesty
Holders of public office have a duty to declare any private interests
relating to their public duties and to take steps to resolve any
conflicts arising in a way that protects the public interest.
Leadership
Holders of public office should promote and support these principles
by leadership and example."
62. These principles of public life arc of general application in
every democracy and one is expected to bear them in mind while
scrutinising the conduct of every holder of a public office. It is
trite that the holders of public offices are entrusted with certain
power to be exercised in public interest alone and, therefore, the
office is held by them in trust for the people. Any deviation from the
path of rectitude by any of the them amounts to a breach of trust and
must be severely dealt with instead of being pushed under the carpet.
If the conduct amounts an offence, it must be promptly investigated
and the offender against whom a prima jade, case is made out should be
prosecuted expeditiously so that the majesty of law is upheld and the
rule of law vindicated. It is the duly of the judiciary to enforce the
rule of law and, therefore, to guard against erosion of the rule of
law.
63. The adverse impact of lack of probity in public life leading to a
high degree of corruption is manifold. It also has adverse effect on
foreign investment and funding from the International Monetary Fund
and the World Bank who have warned that future aid to under-developed
countries may be subject to the requisite steps being taken to
eradicate corruption, which prevents international aid from reaching
those for whom it is meant. Increasing corruption has led to
investigative journalism which is of value to a free society. The need
to highlight corruption in public life through the medium of public
interest litigation invoking judicial review may be frequent in India
but is not unknown in other countries : R v. Secretary of State for
Foreign and Commonwealth Affairs (1955) 1 WLR 386.
64. Of course, the necessity of desirable procedures evolved by court
rules to ensure that such a litigation is properly conducted and
confined only to matters of public interest is obvious. This is the
effort made in these proceedings for the enforcement of fundamental
rights guaranteed in the Constitution in exercise of powers conferred
on this Court for doing complete justice in a cause. It cannot be
doubted that there is a serious human rights aspect involved in such a
proceeding because the prevailing corruption in public life, if
permitted to continue unchecked, has ultimately the deleterious effect
of eroding the Indian polity.
65. As a result of the aforesaid discussion, we hereby direct as under :-
I CENTRAL BUREAU OF INVESTIGATION (CBI) AND CENTRAL VIGILANCE COMMISSION (CVC)
1. The Central Vigilance Commission (CVC) shall be given statutory status.
2. Selection for the post of Central Vigilance Commissioner shall be
made by a Committee comprising the Prime Minister, Home Minister and
the Leader of the Opposition from a panel of outstanding civil
servants and others with impeccable integrity, to be furnished by the
Cabinet Secretary. The appointment shall be made by the President on
the basis of the recommendations made by the Committee. This shall be
done immediately.
3. The CVC shall be responsible for the efficient functioning of the
CBI. While Government shall remain answerable for the CBI's
functioning, to introduce visible objectivity in the mechanism to be
established for over viewing the CBI's working, the CVC shall be
entrusted with the responsibility of superintendence over the CBPs
functioning. The CBI shall V report to the CVC about cases taken up by
it for investigation; progress of investigations; cases in which
chargesheets are filed and their progress. The CVC shall review the
progress of all cases moved by the CBI for sanction of prosecution of
public servants which are pending with the competent authorities,
specially those in which sanction has been delayed or refused.
4. The Central Government shall take all measures necessary to ensure
that the CBI functions effectively and efficiently and is viewed as a
non-partisan agency.
5. The CVC shall have a separate section in its Annual Report on the
CBl's functioning alter the supervisory function is transferred to it.
6. Recommendations for appointment of the Director, CBI shall be made
by a Committee headed by the Central Vigilance Commissioner with the
Home Secretary and Secretary (Personnel) as members. The views of the
incumbent Director shall be considered by the Committee for making the
best choice. The Committee shall draw up a panel of IPS officers on
the basis of their seniority, integrity, experience in investigation
and anti-corruption work. The final selection shall be made by the
Appointments Committee of the Cabinet (ACC) from the panel recommended
by the Selection Committee. If none among the panel is found suitable,
the reasons thereof shall be recorded and the Committee asked to draw
up a fresh panel.
7. The Director, CBI shall have a minimum tenure of two years,
regardless of the date of his superannuation. This would ensure that
an officer suitable in all respects is not ignored merely because he
has less than two years to superannuate from the date of his
appointment.
8. The transfer of an incumbent Director, CBI in an extraordinary
situation, including the need for him to take up a more important
assignment, should have the approval of the Selection Committee.
9. The Director, CBI shall have full freedom for allocation of work
within the agency as also for constituting teams for investigations.
Any change made by the Director, CBI in the Head of an investigative
team should be for cogent reasons and for improvement in
investigation, the reasons being recorded.
10. Selection/extension of tenure of officers upto the level of Joint
Director (JD) shall be decided by a Board comprising the Central
Vigilance Commissioner, Home Secretary and Secretary (Personnel) with
the Director, CBI providing the necessary inputs. The extension of
tenure or premature repatriation of officers upto the level of Joint
Director shall be with final approval of (his Board. Only cases
pertaining to (he appointment or extension of (enure of officers of
the rank of Joint Director or above shall be referred to the
Appointments Committee of the Cabinet (ACC) for decision.
11. Proposals for improvement of infrastructure, methods of
investigation, etc. should be decided urgently. In order to strengthen
CBI's in-house expertise, professionals from the revenue, banking and
security sectors should be inducted into the CBI.
12. The CBI Manual based on statutory provisions of the Cr.P.C.
provides essential guidelines for the CBI's functioning. It is
imperative that the CBI adheres scrupulously to the provisions in the
Manual in relation to its investigative functions, like raids, seizure
and arrests. Any deviation from the established procedure should be
viewed seriously and severe disciplinary action taken against the
concerned officials.
13. The Director, CBI shall be responsible for ensuring the filing of
chargesheets in courts within the stipulated time limits, and the
matter should be kept under constant review by the Director, CBI.
14. A document on CBI's functioning should be published within three
months to provide the general public with a feedback on investigations
and information for redress of genuine grievances in a manner which
does not compromise with the operational requirements of the CBI.
15. Time limit of three months for grant of sanction for prosecution
must be strictly adhered to. However, additional time of one month may
be allowed where consultation is required with the Attorney General
(AG) or any other law officer in the AG's office.
16. The Director, CBI should conduct regular appraisal of personnel to
prevent corruption and/or inefficiency in the agency.
II. ENFORCEMENT DIRECTORATE
1. A Selection Committee headed by the Central Vigilance Commissioner
and including the Home Secretary, Secretary (Personnel) and Revenue
Secretary, shall prepare a panel for appointment of the Director,
Enforcement Directorate. The appointment to the post of Director shall
be made by the Appointments Committee of the Cabinet (ACC) from the
panel recommended by the Selection Committee.
2. The Director, Enforcement Directorate like the Director, CBI shall
have a minimum tenure of two years. In his case also, premature
transfer for any extraordinary reason should be approved by the
aforesaid Selection Committee headed by the Central Vigilance
Commissioner.
3. In view of the importance of the post of Director, Enforcement
Directorate, it shall be upgraded to that of an Additional
Secretary/Special Secretary to the Government.
4. Officers of the Enforcement Directorate handling sensitive
assignments shall be provided adequate security to enable them to
discharge their functions fearlessly.
5. Extensions of tenure upto the level of Joint Director in the
Enforcement Directorate should be decided by the said Committee headed
by the Central Vigilance Commissioner.
6. There shall be no premature media publicity by the CBI/Enforcement
Directorate.
7. Adjudication/commencement of prosecution shall be made by the
Enforcement Directorate within a period of one year.
8. The Director, Enforcement Directorate shall monitor and ensure
speedy completion of investigations/adjudications and launching of
prosecutions. Revenue Secretary must review their progress regularly.
9. For speedy conduct of investigations abroad, the procedure to
approve filing of applications for Letters Rogatory shall be
streamlined and, if necessary, Revenue Secretary authorised to grant
the approval.
10. A comprehensive circular shall be published by the Directorate to
inform the public about the procedures/systems of its functioning for
the sake of transparency.
11. In-house legal advice mechanism shall be strengthened by
appointment of competent legal advisers in the CBI/Directorate of
Enforcement.
12. The Annual Report of the Department of Revenue shall contain a
detailed account on the working of the Enforcement Directorate.
III. NODAL AGENCY
1. A Nodal Agency headed by the Home Secretary with Member
(Investigation), Central Board of Direct Taxes, Director General,
Revenue Intelligence, Director, Enforcement and Director, CBI as
members, shall he constituted for coordinated action in cases having
politico-bureaucrat-criminal nexus.
2. The Nodal Agency shall meet at least once every month.
3. Working and efficacy of the Nodal Agency should be watched for
about one year so as to improve it upon the basis of the experience
gained within this period.
IV. PROSECUTION AGENCY
1. A panel of competent lawyers of experience and impeccable
reputation shall be prepared with the advice of the Attorney General.
Their services shall be utilised as Prosecuting Counsel in cases of
significance. Even during the course of investigation of an offence,
the advice of a lawyer chosen from the panel should be taken by the
CBI/Enforcement Directorate.
2. Every prosecution which results in the discharge or acquittal of
the accused must be reviewed by a lawyer on the panel and, on the
basis of the opinion given, responsibility should be fixed for
dereliction of duly, if any, of the concerned officer. In such cases,
strict action should be taken against the officer found guilty of
dereliction of duty,
3. The preparation of the panel of lawyers with the approval of the
Attorney General shall be completed within three months.
4. Steps shall be taken immediately for the Constitution of an able
and impartial agency comprising persons of unimpeachable integrity to
perform functions akin to those of the Director of Prosecutions in
U.K. On the Constitution of such a body, the task of supervising
prosecutions launched by the CBI/Enforcement Directorate shall be
entrusted to it.
5. Till the Constitution of the aforesaid body, Special Counsel shall
be appointed for the conduct of important trials on the recommendation
of the Attorney General or any other law officer designated by him.
66. The learned amicus curiae had urged us to issue directions for the
appointment of an authority akin to the Special or Independent Counsel
in the United States of America for the investigation of charges in
politically sensitive matters and for the prosecution of those cases
and to ensure that appointments to sensitive posts in the CBI and
other enforcement agencies and transfers therefrom were not made by
the political executive. We are of the view that the time for these
drastic steps has not come. It is our hope that it never will, for we
entertain the belief that the investigative agencies shall function
far better now, having regard to all that has happened since these
writ petitions were admitted and to the directions which are contained
in this judgment. The personnel of the enforcement agencies should not
now lack the courage and independence to go about their task as they
should, even where those to be investigated are prominent and powerful
persons.
67. In view of the problem in the States being even more acute, as
elaborately discussed in the Report of the National Police Commission
(1979), there is urgent need for the State Governments also to set up
credible mechanism for selection of the Police Chief in the States.
The Central Government must pursue the matter with the State
Governments and ensure that a similar mechanism, as indicated above,
is set up in each State for the selection/appointment, tenure,
transfer and posting of not merely the Chief of the State Police but
also all police officers of the rank of Superintendent of Police and
above. It is shocking to hear, a matter of common knowledge, that in
some States the tenure of a Superintendent of Police is on an average
only a few months and transfers are made for whimsical reasons. Apart
from demoralising the police force, it has also the adverse effect of
politicizing the personnel. It is, therefore, essential that prompt
measures are taken by the Central Government within the ambit of their
constitutional powers in the federation to impress upon the State
Governments that such a practice is alien to the envisaged
constitutional machinery. The situation described in the National
Police Commission's Report (1979) was alarming and it has become much
worse by now. The desperation of the Union Home Minister in his
letters to the State Governments, placed before us at the hearing,
reveal a distressing situation which must be cured, if the rule of law
is to prevail. No action within the Constitutional Scheme found
necessary to remedy the situation is too stringent in these
circumstances.
68. In the result, we strike down Directive No. 4.7(3) of the Single
Directive quoted above and issue the above directions, which have to
be construed in the light of the earlier discussion. The Report of the
Independent Review Committee (IRC) and its recommendations which are
similar to this extent can be read, if necessary, for a proper
appreciation of these directions. To the extent we agree with the
conclusions and recommendations of the IRC, and that is a large area,
we have adopted the same in the formulation of the above directions.
These directions require the strict compliance/adherence of the Union
of India and all concerned.
69. The writ petitions are disposed of in the above terms.
Criminal Misc. Petition Nos. 5879-5882 of 1997
70. In view of the disposal of the writ petitions in the manner
indicated above and in the facts and circumstances of the case, we do
not consider it necessary now to examine the appointment of Shri R.C.
Sharma as Director, CBI. Moreover, the tenure of Shri Sharma as
Director, CBI is to end soon. We make it clear that Shri Sharma is not
to be continued as CBI Director beyond the date of expiry of his
present tenure. Accordingly, these Crl. M. Ps. are disposed of in this
manner.
71. In view of the withdrawal of C.W.P. No. 2992 of 1997 in the Delhi
High Court as required by this Court's order dated 11.9.1997, no
further order for the disposal of C.W.P. No. 2992 of 1997 is
necessary.