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Monday, March 19, 2012

By the impugned order, on a petition under Section 482 of the Code of Criminal Procedure, 1973 (for short "the Code"), the investigation initiated by the Vigilance Department of the State Government into the allegations of irregularities in the receipt of excess quota, recycling of rice and distress sale of paddy by one M/s Haldipada Rice Mill, a proprietary concern of the respondent, has been quashed. - For all these reasons, in our opinion, High Court's interference with the investigation was totally unwarranted and therefore, the impugned order cannot be sustained. We, accordingly, allow the appeal, quash and set aside the impugned judgment and restore the investigation initiated against the respondent and direct the Vigilance Cell of the State to proceed with and complete the investigation expeditiously, in accordance with law.


                                                           REPORTABLE

                       IN THE SUPREME COURT OF INDIA

                  CRIMINAL APPELLATE JURISDICTION


                  C
                     RI
                           MINAL APPEAL NO.546 OF 2012

       (Arising out of S.L.P. (Criminal) No. 5667 of 2008)



  STATE OF ORISSA & ORS.                           --      APPELLANTS


                                   VERSUS


  UJJAL KUMAR BURDHAN                              --      RESPONDENT




                                J U D G M E N T



D.K. JAIN, J.:



1. Leave granted.




2. This appeal by special leave, assails the judgment dated 12th


   February,   2008,   rendered   by   a   learned   Single   Judge   of   the


   High Court of Orissa at Cuttack.  By the impugned order, on a


   petition   under   Section   482   of   the   Code   of   Criminal


   Procedure,   1973   (for   short   "the   Code"),   the   investigation


   initiated   by   the   Vigilance   Department   of   the   State


   Government   into   the   allegations   of   irregularities   in   the


   receipt of excess quota, recycling of rice and distress sale of


   paddy by one M/s Haldipada Rice Mill, a proprietary concern


   of the respondent, has been quashed.





                                                                            1


3.  On receipt of a complaint, the civil supply department of the


   State   Government   initiated   an   inquiry   against   the   said


   concern,   relating   to   the   processing   of   paddy   for   and   on


   behalf of the Food Corporation of India.   Preliminary inquiry


   conducted   by   the   Food   and   Supply   department   revealed


   certain irregularities in the procurement and milling of paddy


   by   the   respondent.   A   subsequent   departmental   inquiry


   recommended   initiation   of   a   proper   administrative   action


   against the respondent. Consequently, the State Government


   directed   the   Vigilance   Cell   of   the   Police   department   to


   conduct a preliminary inquiry regarding the alleged criminal


   acts.




4. In   the   meantime,   on   filing   of   a   Writ   Petition,   being   W.P.


   No.8315 of 2005, by the respondent, a Division Bench of the


   High   Court   while   ordering   the   issue   of   the   enforcement


   certificate   to   the   respondent   pending   the   ongoing   inquiry,


   directed   the   completion   of   the   said   inquiry   within   twelve


   weeks   of   the   receipt   of   that   order.   In   compliance   with   that


   order, the Civil Supply Department of the State Government


   issued   enforcement   certificate   to   the   respondent.   However,


   the   respondent   filed   yet   another   Writ   Petition,   being   W.P.


   No.10761 of 2005,  inter-alia,  praying for quashing of inquiry


                                                                               2


  proceedings   initiated   by   the   State   vigilance   department   on


  the   ground   that   an   inquiry   had   already   been   conducted   on


  the same complaint by the department concerned.  By way of


  an   interim   order,   the   High   Court   directed   the   State


  Government   not   to   take   any   coercive   action   against   the


  respondent   till   further   orders.   As   a   result   thereof,   the


  preliminary  inquiry came to a standstill. For a similar relief,


  respondent  filed  another  petition,  being  Crl.M.C.No.2808 of


  2006 under Section 482 of the Code in which the impugned


  order   has   been   passed.     Aggrieved   by   the   said   order,   the


  State Government as also its two functionaries, viz. Director-


  cum-Addl.   D.G.P.,   Vigilance   and   Dy.   Superintendent   of


  Police, Vigilance Cell have preferred this appeal.




5. Mr. Suresh Chandra Tripathy, learned counsel appearing for


  the   appellants   submitted   that   it   is   settled   law   that   a


  preliminary   inquiry   ought   not   to   be   quashed   by   the   High


  Court in exercise of its jurisdiction under Section 482 of the


  Code. He argued that the High Court was not at all justified in


  interfering with the investigation at the threshold even before


  the   registration   of   an   FIR,   particularly   when   in   his   report


  dated   4th  June   2005,   the   civil   supply   officer   had   reported


  fabrication   and   forgery   of   accounts   maintained   by   the


                                                                            3


   respondent   as   also   violation   of   the   guidelines   laid   down   in


   the   Food   and   Procurement   Policy   for   the   marketing   season


   2004-2005.     Referring   us   to   the   order   dated   18th  July   2005,


   passed   by   a   Division   Bench   of   the   High   Court   in   W.P.(C)


   No.8315   of   2005,   whereby,   as   aforesaid,   a   direction   was


   issued   for   expediting   the   inquiry,   learned   counsel   stressed


   that having observed that if in the inquiry any irregularity is


   established,   the   respondent   could   be   proceeded   under   the


   relevant   provisions   of   law,   the   High   Court   committed   a


   serious   illegality   in   law   in   quashing   the   same


   inquiry/investigation.




6. Per   contra,  Mr.   Randhir   Jain,   learned   counsel   appearing   for


   the   respondent   supported   the   impugned   judgment   and


   submitted   that   the   respondent   was   being   harassed   by


   repeated   investigations   on   the   same   set   of   facts.   It   was


   alleged that the inquiry was ordered at the behest of an Ex-


   M.L.A. who belonged to the ruling party and with whom the


   respondent   shared   a   long   history   of   animosity   and


   antagonism. He thus, contended that the appeal deserved to


   be dismissed.





                                                                             4


7. It   is   true   that   the   inherent   powers   vested   in   the   High   Court


    under Section 482 of the Code are very wide.  Nevertheless,


    inherent   powers   do   not   confer   arbitrary   jurisdiction   on   the


    High Court to act according to whims or caprice.  This extra-


    ordinary   power   has   to   be   exercised   sparingly   with


    circumspection   and   as   far   as   possible,   for   extra-ordinary


    cases,   where   allegations   in   the   complaint   or   the   first


    information   report,   taken   on   its   face   value   and   accepted   in


    their entirety do not constitute the offence alleged.   It needs


    little emphasis that unless a case of gross abuse of power is


    made   out   against   those   incharge   of   investigation,   the   High


    Court   should   be   loath   to   interfere   at   the     early/premature


    stage of investigation.




8. In  State  of  West  Bengal  and  Ors.  Vs.  Swapan  Kumar  Guha


    and   Ors.1,   emphasising   that   the   Court   will   not   normally


    interfere with an investigation and will permit the inquiry into


    the alleged offence, to be completed, this Court highlighted


    the necessity of a proper investigation observing thus:



        "An investigation is carried on for the purpose of

        gathering   necessary   materials   for   establishing

        and proving an offence which is disclosed. When

        an offence is disclosed, a proper investigation in

        the   interests   of   justice   becomes   necessary   to


1 (1982) 1 SCC 561: 1982 SCC (Cri) 283: (1982) 3 SCR 121



                                                                                  5


        collect materials for establishing the offence, and

        for bringing the offender to book. In the absence

        of   a   proper   investigation   in   a   case   where   an

        offence is disclosed, the offender may succeed in

        escaping from the consequences and the offender

        may go unpunished to the detriment of the cause

        of justice and the society at large. Justice requires

        that   a   person   who   commits   an   offence   has   to   be

        brought   to   book   and   must   be   punished   for   the

        same.  If   the   court   interferes   with   the   proper

        investigation in a case where an offence has been

        disclosed,   the   offence   will   go   unpunished   to   the

        serious detriment of the welfare of the society and

        the cause of the justice suffers. It is on the basis of

        this   principle   that   the   court   normally   does   not

        interfere with the investigation of a case where an

        offence has been disclosed....Whether an offence

        has   been   disclosed   or   not   must   necessarily

        depend   on   the   facts   and   circumstances   of   each

        particular   case....If   on   a   consideration   of   the

        relevant   materials,   the   court   is   satisfied   that   an

        offence   is   disclosed,   the   court   will   normally   not

        interfere   with   the   investigation   into   the   offence

        and will generally allow the investigation into the

        offence   to   be   completed   for   collecting   materials

        for proving the offence."

                                      (emphasis supplied by us)




9. On   a   similar   issue   under   consideration,   in  Jeffrey   J.


    Diermeier   &   Anr.  Vs.  State   of   West   Bengal   &   Anr.2,   while


    explaining the scope and ambit of the inherent powers of the


    High   Court   under   Section   482   of   the   Code,   one   of   us   (D.K.


    Jain, J.) speaking for the Bench, has observed as follows:



        "20......The   section   itself   envisages   three

        circumstances   under   which   the   inherent

        jurisdiction may be exercised, namely, (i) to give


2 (2010) 6 SCC 243



                                                                                6


       effect to an order under the Code; (ii) to prevent

       abuse   of   the   process   of   Court;   and   (iii)   to

       otherwise   secure   the   ends   of   justice.

       Nevertheless,  it is neither possible nor desirable

       to   lay   down   any   inflexible   rule   which   would

       govern the exercise of inherent jurisdiction of the

       Court. Undoubtedly, the power possessed by the

       High Court under the said provision is very wide

       but   it   is   not   unlimited.   It   has   to   be   exercised

       sparingly,   carefully   and   cautiously, ex   debito

       justitiae to do real and substantial justice for which

       alone the court exists. It needs little emphasis that

       the   inherent   jurisdiction   does   not   confer   an

       arbitrary   power   on   the   High   Court   to   act

       according to whim or caprice. The power exists to

       prevent   abuse   of   authority   and   not   to   produce

       injustice."



10.    Bearing  in mind the afore-said legal position with regard


  to the scope and width of the power of the High Court under


  Section  482  of  the  Code,  we   are   constrained   to  hold  that  in


  the   fact-situation   at   hand,   the   impugned   decision   is   clearly


  indefensible. In the present case, the S.P., Vigilance Cell, had


  merely approved the opening of an inquiry and converted it


  into   a   Cell   File.     The   preliminary   inquiry   was   yet   to


  commence   and   an   FIR   was   yet   to   be   lodged.     In   the   first


  instance, the High Court stayed the preliminary inquiry by an


  interim order in the Writ Petition, and then by the impugned


  judgment   quashed   the   same.   It   goes   without   saying   that


  commencement   and   completion   of   an   investigation   is


  necessary to test the veracity of the alleged commission of an


                                                                             7


  offence.  Any kind of hindrance or obstruction of the process


  of law from taking its normal course, without any supervening


  circumstances, in a casual manner, merely on the whims and


  fancy of the court tantamounts to miscarriage of justice, which


  seems to be the case here.




11.We are convinced that the circumstances that have weighed


  with   the   High   Court,   do   not   justify   the   conclusion   it   has


  arrived   at.     The   High   Court   has   allowed   the   petition   under


  Section 482 of the Code,  inter-alia,  on the following grounds;


  firstly,   the   enforcement   certificate   had   been   issued   to   the


  respondent   which   evidences   compliance   with   the   Rice   and


  Paddy   Procurement   (Levy)   and   Restriction   on   sale   and


  Movement  Order,  1982.    The  observation  came to  be made


  by losing sight of the fact that the said enforcement certificate


  had  been  issued  pursuant  to the order dated  18th  July 2005,


  passed   by   the   High   Court   in   W.P.   (C)   No.8315   of   2005.


  Secondly,   two   inquires   on   the   same   facts   had   already   been


  conducted,   wherein   the   respondent   had   been   exonerated.


  The   High   Court   has   committed   a   grave   error   of   fact   in


  observing   that   the   respondent   had   been   exonerated   in   the


  two inquiries held previously as both the inquiry reports had


  in fact concluded that the respondent had committed serious


                                                                            8


    irregularities and proper action needs to be initiated against


    him.   As   far   as   the   two   previous   inquiries   are   concerned,   it


    may   also   be   noted   that   those   inquiries   were   departmental


    inquiries   and   what   has   been   quashed   by   the   impugned


    judgment   is   the   initiation   of   police   investigation.   Both   the


    inquiries are entirely different in nature; operate in different


    fields and have different object and consequences.




12.Further,   the   impugned   order   also   notes   that   in   view   of   the


    arbitration   agreement   between   the   agent   and   the


    Government, all the alleged violations fell within the purview


    of   Arbitration   and   Conciliation   Act,   1996   and   therefore,   the


    respondent could not be held liable for any criminal offence.


    This   observation   is   against   the   well   settled   principle   of   law


    that the existence of an arbitration agreement cannot take the


    criminal   acts   out   of   the   jurisdiction   of   the   courts   of   law.   On


    this   aspect,   in  S.W.   Palanitkar   &   Ors.  Vs.  State   of   Bihar   &


    Anr.3, this Court has echoed the following views:



        "22. Looking to the complaint and the grievances

        made   by   the   complainant   therein   and   having

        regard   to   the   agreement,   it   is   clear   that   the

        dispute   and   grievances   arise   out   of   the   said

        agreement. Clause 29 of the agreement provides

        for reference to arbitration in case of disputes or

        controversy   between   the   parties   and   the   said


3 (2002) 1 SCC 241



                                                                                     9


      clause is wide enough to cover almost all sorts of

      disputes arising out of the agreement. As a matter

      of   fact,   it   is   also   brought   to   our   notice   that   the

      complainant   issued   a   notice   dated   3-10-1997   to

      the   appellants   invoking   this   arbitration   clause

      claiming   Rs.15   lakhs.   It   is   thereafter   the   present

      complaint was filed. For the alleged breach of the

      agreement   in  relation   to  commercial  transaction,

      it is open to the Respondent 2 to proceed against

      the   appellants   for   his   redressal   for   recovery   of

      money by way of damages for the loss caused, if

      any. Merely because there is an arbitration clause

      in   the   agreement,   that   cannot   prevent   criminal

      prosecution   against   the   accused   if   an   act

      constituting   a   criminal   offence   is   made   out   even

      prima facie."

                                               (Emphasis supplied)




13.The   High   Court   has   also   adversely   commented   upon   the


   progress of the preliminary inquiry and has recorded that no


   new   material   has   been   placed   on   record   by   the   Vigilance


   Cell.   This   has   been   recorded   without   having   regard   to   the


   fact   that   the   High   Court   by   another   order,   dated   5th


   September  2005,   had,   by   way  of  an   interim   order,   directed


   the State Government not to take any coercive steps against


   the respondent, with the result that there was no occasion for


   the department concerned to bring to the fore any material to


   unravel the truth. It is also pertinent to note here that the High


   Court  had itself,  by  order dated  18th  July, 2005 directed  the


   completion   of   inquiry   within   a   set   time-frame   of   twelve


   weeks,   which   was   subsequently   interjected   by   an   interim


                                                                                 1


   order and finally the entire investigation/inquiry came to be


   quashed   by   the   impugned   judgment.   It   seems   incongruous


   that in the first instance the court set into motion the process


   of law only to ultimately quash it on the specious plea that it


   would cause unnecessary embarrassment to the respondent.



14.     For   all   these   reasons,   in   our   opinion,   High   Court's


   interference   with   the   investigation   was   totally   unwarranted


   and therefore, the impugned order cannot be sustained.  We,


   accordingly,   allow   the   appeal,   quash   and   set   aside   the


   impugned   judgment   and   restore   the   investigation   initiated


   against   the   respondent   and   direct   the   Vigilance   Cell   of   the


   State   to   proceed   with   and   complete   the   investigation


   expeditiously, in accordance with law.





                                                   ..................................................

                                                (D.K. JAIN, J.)





                                              .................................................

                                              (ANIL R. DAVE, J.)

                                       

                                             

 NEW DELHI;

 MARCH 19, 2012

ARS



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