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CASE NO.:

Appeal (crl.) 829 of 2001

PETITIONER:

HEMANT DHASMANA

Vs.

RESPONDENT:

CENTRAL BUREAU OF INVESTIGATION AND ANR.

DATE OF JUDGMENT: 17/08/2001

BENCH:

K.T. Thomas & S.N. Variava

JUDGMENT:

THOMAS, J.

Leave granted.

A complainant, after investigation, was transposed as

an accused. Such a prodigy happened in this case. A trap

to catch a big fish (Chief Commissioner of Income Tax) was

orchestrated by the Central Bureau of Investigation (the

CBI for short) with a bewitching bait, but still he did

not bite it. But the appellant says that two sons of the

said Chief Commissioner collected the bulky cash offered to

their father. On such a complaint the CBI conducted

investigation. After the investigation the CBI turned

against the complainant/appellant and ordered him to be

prosecuted for giving false information with intent to

cause the public servant use his lawful power to the

detriment of the public. However, the final report laid by

the CBI was not acceptable to the Special Judge and he

directed further investigation into the matter but the High

Court reversed the said direction by the impugned order.

Appellant styles himself as a disciple of one Swami

Rama, a non-resident Indian, who founded a Trust by name

Himalayan Institute of Medical Sciences at Dehra Dun with

high profile public personage shown as its patrons. The

Trust had a lot of income tax problems. Appellant felt

that the then Commissioner of Income Tax, Meerut, was

troubling the Trust and its founder with notices frequently

issued. It was in the said context that they approached

B.P. Gupta, Chief Commissioner of Income Tax, Kanpur (the

third respondent) for redressal of their grievances.

Appellant claims to have forwarded a complaint to the

DIG of CBI, New Delhi on 6.3.1996, complaining that at the

behest of Respondent No.3 the Trust people including the

appellant contacted Janardhan Gupta (the son of the third

respondent) who demanded Rs. 20 lacs to be paid to his

father as bribe and after a lot of haggling, the amount was

reduced to Rs.10 lacs and that the amount should be paid to

the third respondent within two days.

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What happened thereafter, according to the version of

the appellant, can be summarised as follows:

On 8.3.1996, CBI made all preparations for a trap.

The team of CBI officers reached the house of one Roshan

Lal who was the treasurer of the Trust and waited for the

opportune time to hand over the bribe amount to the third

respondent. A micro-cassette supplied by the CBI to the

appellant with which he recorded the conversation between

the appellant and Janardhan Gupta (the fourth respondent)

and his father (the third respondent). At the pre-arranged

time a bag containing the cash was handed over to Sudhanshu

Gupta, another son of the third respondent,(he is fifth

respondent in this appeal) at his residence in the presence

of the fourth respondent. The signal was then transmitted

to the CBI officers who made a swoop and surrounded the

house and caught the fifth respondent. The bag containing

the cash was recovered from below the bed of the house of

the third respondent. The investigation thereupon was

commenced by the CBI.

When the investigation concluded the CBI filed its

final report before the Special Judge, Anti Corruption

(Central) Lucknow. In the final report the case was given

a totally reverse picture. The CBI exonerated the third,

fourth and the fifth respondents in full measure and wanted

the court to initiate prosecution proceedings against the

appellant for the offence under Sections 182 and 211 of the

Indian Penal Code. The CBI took the stand in strident tone

that the complaint made by the appellant is not only false

but it was aimed at deterring the Income Tax officials from

discharging their functions fearlessly. It was a calculated

move to forestall the strong measures devised against Swami

Rama and the Trust founded by him, according to the CBI.

The Special Judge on receipt of the aforesaid final

report issued notice to the appellant and after hearing him

ordered the CBI to re-investigate the matter. The operative

part of that order is extracted below:

Under these circumstances perusal of the

final report submitted shows that the

investigation of the case was not properly

conducted and this final report was

submitted without properly going through the

provisions contained in the Cr.P.C. and

Prevention of Corruption Act. It is also

necessary to point out that preliminary

investigation was conducted by Sh.V.K.

Gupta, DIG (CBI). In my view, in this

situation it would be proper that this case

is again investigated by DIG level officer.

The final report, not being legitimate is

liable to be rejected. The final report is

therefore rejected and the Director CBI, New

Delhi is ordered to depute an officer of the

rank of DIG in this matter who would

investigate this case afresh and submit his

report.

The CBI moved the High Court of Allahabad in

revision, against the said order of the Special Judge. The

contention of the CBI before the High Court of Allahabad

was that the alleged micro-cassettes of the tape recorded

conversation purported to have made between the appellant

and the fourth respondent were neither attested by any

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independent witness nor recorded by any officials of the

CBI nor authenticated by it and that it was a self-managed

cassette of the appellant. The learned Single Judge of the

High Court who passed the impugned order expressed like

this:

On a consideration of the entire materials

submitted along with the report and made

available before the learned Special Judge,

there was no case for any fresh

investigation or for any further

investigation. It has been mentioned above

that further investigation could only be

ordered when some other evidence was in

sight and was not collected or was left

over, and could help the merit of the case.

In the instant case every relevant material

was collected and no material was left over,

and every such material so collected was

made the basis of the final report and thus

every material was placed before the Special

Judge.

The High Court deprecated the direction of the

Special Judge for specifying an officer of the DIG rank of

the CBI to conduct the investigation. Learned Single Judge

of the High Court upheld the contention of the CBI that an

officer of the rank of DIG is mainly a supervisory officer

and the CBI Manual contains the measures to be adopted for

conducting investigation. In the view of the High Court

the order of the Special Judge is clearly against Section

173(8) of the Code of Criminal Procedure (for short the

Code). This is how the High Court has expressed on that

aspect in the final portion of the impugned judgment:

The Special Judge could have either

rejected or could have accepted the final

report under the circumstances of the case

after applying his judicial mind and after

recording the basis of his opinion. There

was no sense in ordering the fresh

investigation in the circumstances of the

case in disregard of provisions of Section

173(8) of the Code and making the entire

investigation a futile exercise. It was not

a case of further investigation. The order

is bad in law.

Ultimately the learned Single Judge, after setting

aside the order of the Special Judge, directed him to

consider the materials before him once again and to pass

suitable orders in accordance with law.

Learned counsel for the appellant contended that the

High Court should not have interfered with the order of the

Special Judge, particularly when the said order did not

contain any final conclusion on the report. According to

him, all that the Special Judge said was that further

investigation should be conducted. At any rate, the CBI

recovered 10 lakhs of rupees from the house of the third

respondent and hence a further investigation would have

only helped the CBI to know how it reached there and

through whom, etc., contended the counsel.

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Mr. Altaf Ahmad, learned Additional Solicitor General,

submitted that the conclusion of the CBI was based on the

materials collected by them and that was filtered at

different levels of the organisation of the CBI. The final

report was laid only when the CBI was convinced of the

conclusions reached therein.

The real question is not whether the conclusion

reached by the CBI had been subjected to verification or

supervision at different departmental level. Nor even

whether the conclusion is correct. When the final report

is laid after conclusion of the investigation the Court has

the power to consider the same and issue notice to the

complainant to be heard in case the conclusions in the

final report are not in concurrence with the allegations

made by them. Though the investigation was conducted by

the CBI the provisions under Chapter XII of the Code would

apply to such investigation. The police referred to in the

Chapter, for the purpose of investigation, would apply to

the officer/officers of the Delhi Police Establishment Act.

On completion of the investigation the report has to be

filed by the CBI in the manner provided in Section 173(2)

of the Code, with the exception that the magistrate

referred to in the section would be understood as a Special

Judge when the offence involved are under the Prevention of

Corruption Act, 1988.

The first sub-section to Section 173 says that the

investigation shall be completed without unnecessary delay.

It is sub-section (2) which contemplates the report on

conclusion of the investigation. It reads thus:

(2)(i) As soon as it is completed, the

officer in charge of the police station

shall forward to a Magistrate empowered to

take cognizance of the offence on a police

report, a report in the form prescribed by

the State Government, stating-

(a) the names of the parties; (b)

the nature of the information;

(c) the names of the persons

who appear to be acquainted

with the circumstances of the

case; (d) whether any offence

appears to have been committed

and, if so, by whom; (e)

whether the accused has been

arrested; (f) whether he has

been released on his bond and,

if so, whether with or without

sureties; (g) whether he has

been forwarded in custody

under section 170.

(ii) The officer shall also communicate, in

such manner as may be prescribed by the

State Government, the action taken by him,

to the person, if any, by whom the

information relating to the commission of

the offence was first given.

When the report is filed under the Sub-section the

magistrate (in this case the Special Judge) has to deal

with it by bestowing his judicial consideration. If the

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report is to the effect that the allegations in the

original complaint were found true in the investigation, or

that some other accused and/or some other offences were

also detected, the Court has to decide whether cognizance

of the offences should be taken or not on the strength of

that report. We do not think that it is necessary for us

to vex our mind, in this case, regarding that aspect when

the report points to the offences committed by some

persons. But when the report is against the allegations

contained in the complaint and concluded that no offence

has been committed by any person it is open to the Court to

accept the report after hearing the complainant at whose

behest the investigation had commenced. If the Court feels,

on a perusal of such a report that the alleged offences

have in fact been committed by some persons the Court has

the power to ignore the contrary conclusions made by the

investigating officer in the final report. Then it is open

to the Court to independently apply its mind to the facts

emerging therefrom and can even take cognizance of the

offences which appear to him to have been committed, in

exercise of his power under Section 190(1)(b) of the Code.

The third option is the one adumbrated in Section 173(8) of

the Code. That sub-section reads thus:

Nothing in this section shall be deemed to

preclude further investigation in respect of

an offence after a report under sub-section

(2) has been forwarded to the Magistrate

and, where upon such investigation, the

officer in charge of the police station

obtains further evidence, oral or

documentary, he shall forward to the

magistrate a further report or reports

regarding such evidence in the form

prescribed; and the provisions of sub-

sections (2) to (6) shall, as far as may be,

apply in relation to such report or reports

as they apply in relation to a report

forwarded under sub-section (2).

Although the said sub-section does not, in specific

terms, mention about the powers of the Court to order

further investigation the power of the police to conduct

further investigation envisaged therein can be triggered

into motion at the instance of the Court. When any such

order is passed by a court which has the jurisdiction to do

so it would not be a proper exercise of revisional powers

to interfere therewith because the further investigation

would only be for the ends of justice. After the further

investigation, the authority conducting such investigation

can either reach the same conclusion and reiterate it or it

can reach a different conclusion. During such extended

investigation the officers can either act on the same

materials or on other materials which may come to their

notice. It is for the investigating agency to exercise its

power when it is put back to that track. If they come to

the same conclusion it is of added advantage to the persons

against whom the allegations were made, and if the

allegations are found false again the complainant would be

in trouble. So from any point of view the Special Judges

direction would be of advantage for the ends of justice.

It is too premature for the High Court to predict that the

investigating officer would not be able to collect any

further material at all. That is an area which should have

been left to the investigating officer to survey and

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recheck.

In Bhagwant Singh vs. Commissioner of Police and anr.

{1985(2) SCC 537} a three-Judge Bench of this Court has

said, though in a slightly different context, that three

options are open to the court on receipt of a report under

Section 173(2) of the Code, when such report states that no

offence has been committed by the persons accused in the

complaint. They are:

(1) The court may accept and drop the

proceedings; or

(2) The court may disagree with the report

and take cognizance of the offence and

issue process if it takes the view that

there is sufficient ground for

proceeding further; or

(3) The court may direct further

investigation to be made by the police.

Another three Judge Bench in M/s. India Carat Pvt.

Ltd. vs. State of Karnataka and anr. {1989 (2) SCC 132} has

stated thus:

The position is, therefore, now well

settled that upon receipt of a police report

under Section 173(2) a Magistrate is

entitled to take cognizance of an offence

under Section 190(1)(b) of the Code even if

the police report is to the effect that no

case is made out against the accused. The

Magistrate can take into account the

statements of the witnesses examined by the

police during the investigation and take

cognizance of the offence complained of and

order the issue of process to the accused.

Section 190(1)(b) does not lay down that a

Magistrate can take cognizance of an offence

only if the investigating officer gives an

opinion that the investigation has made out

a case against the accused. The Magistrate

can ignore the conclusion arrived at by the

investigating officer and independently

apply his mind to the facts emerging from

the investigation and take cognizance of the

case, if he thinks fit, in exercise of his

powers under Section 190(1)(b) and direct

the issue of process to the accused.

In Union Public Service Commission vs. S. Papaiah and

ors. {1997 (7) SCC 614} a two Judge Bench considered the

scope of Section 173(8) of the Code in extenso. Dr.A.S.

Anand, J (as the learned Chief Justice then was) after

extracting Section 173(8) of the Code has observed thus:

The Magistrate could, thus in exercise of

the powers under Section 173(8) Cr.P.C.

direct the CBI to further investigate the

case and collect further evidence keeping in

view the objection raised by the appellant

to the investigation and the new report to

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be submitted by the investigating officer

would be governed by sub-sections (2) to (6)

of Section 173 Cr.P.C.

When the Special Judge has opted to order for a

further investigation the High Court should have stated to

the CBI to comply with that direction. Nonetheless, we are

in agreement with the observation of the learned Single

Judge of the High Court that the Special Judge or the

magistrate could not direct that a particular police

officer or even an officer of a particular rank should

conduct such further investigation. It is not within the

province of the magistrate while exercising the power under

Section 173(8) to specify any particular officer to conduct

such investigation, not even to suggest the rank of the

officer who should conduct such investigation.

In the result, we allow this appeal and set aside the

judgment under challenge. However, while restoring the

order of the Special Judge we make it clear that the

direction made by the Special Judge that further

investigation shall be conducted by an officer of the DIG

rank of the CBI, will stand deleted. We make it abundantly

clear that we have not considered the merits of the

allegations made against the respondent or the conclusions

reached by the CBI in the report already laid before a

Special Judge. Hence, further investigation as ordered by

the Special Judge can be conducted untrammeled by any of

the observations made by the Special Judge or by us.

J

[ K.T. Thomas ]

J

[ S.N. Variava ]

August 17, 2001.